SECOND AMENDED AND RESTATED
CREDIT AGREEMENT
This Second Amended and Restated Credit Agreement, dated as of June 14,
1996, is among ProNet Inc., The First National Bank of Chicago, individually
and as Agent, and the other financial institutions signatory hereto. The
parties hereto agree as follows:
W I T N E S S E T H :
WHEREAS, the Borrower (this, and other capitalized terms, shall have the
respective meanings set forth in Article I), certain of the lenders named
herein and certain other lenders (collectively, the "Existing Lenders") and
the Agent entered into that certain Amended and Restated Credit Agreement,
dated as of February 9, 1995, as amended from time to time prior to the date
hereof (said Credit Agreement, as so amended, being herein called the
"Existing Credit Agreement"), in which the Existing Lenders agreed to make
loans to the Borrower in an aggregate principal amount of $125,000,000
(herein called the "Existing Credit Facility");
WHEREAS, the Borrower, the Existing Lenders and the Agent desire to
restructure the Existing Credit Facility so as to (i) add or replace certain
financial institutions as Lenders thereunder, (ii) increase the aggregate
commitments of the Lenders thereunder to $300,000,000, (iii) amend and
restate various other provisions in the Existing Credit Agreement, (iv)
provide for the continuation of all obligations, liabilities and indebtedness
of the Borrower to the Lenders arising under or in connection with the
Existing Credit Agreement (the "Existing Obligations") to the extent not
repaid on the Restructuring Date, and (v) continue, without release or
termination, all security interests and guaranties created in favor of the
Agent and the Lenders in connection with the Existing Credit Agreement; and
WHEREAS, pursuant to the terms of this Agreement, on the Restructuring
Date, (i) the Existing Credit Facility shall be replaced by increased credit
facilities having an Aggregate Commitment of $300,000,000, comprised of an
Aggregate Facility A Commitment of $50,000,000 and an Aggregate Facility B
Commitment of $250,000,000 (herein collectively called the "Restated Credit
Facility"), (ii) all Existing Obligations of the Borrower outstanding as of
the Restructuring Date under the Existing Credit Facility shall, to the
extent not repaid on the Restructuring Date, be deemed to be obligations
outstanding under the Restated Credit Facility, (iii) the Lenders which are
not Exiting Lenders shall become parties hereto, and the Exiting Lenders
shall cease to be parties hereto, and (iv) the Existing Credit Agreement,
together with all exhibits and schedules thereto, shall be amended and
restated to read in its entirety in the form of this Agreement, together with
all exhibits and schedules hereto;
NOW, THEREFORE, in consideration of the undertakings set forth herein and
other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which
the Borrower or any of its Subsidiaries (i) acquires any going business or
all or substantially all of the assets of any firm, corporation or division
thereof, whether through purchase of assets, merger or otherwise, (ii)
purchases or otherwise acquires any asset or assets from any Person having an
aggregate purchase price (including the amount of any debt assumed in
connection with such asset or assets) in excess of $10,000,000 (other than
purchases made in the ordinary course of business), or (iii) directly or
indirectly acquires (in one transaction or as the most recent transaction in
a series of transactions) at least a majority (in number of votes) of the
securities of a corporation which have ordinary voting power for the election
of directors (other than securities having such power only by reason of the
happening of a contingency) or a majority (by percentage or voting power) of
the outstanding partnership interests of a partnership.
"Advance" means a Facility A Advance or a Facility B Advance, as the
context may require.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A
Person shall be deemed to control another Person if the controlling Person
owns 10% or more of any class of voting securities (or other ownership
interests) of the controlled Person or possesses, directly or indirectly, the
power to direct or cause the direction of the management or policies of the
controlled Person, whether through ownership of stock, by contract or
otherwise.
"Agent" means The First National Bank of Chicago in its capacity as agent
for the Lenders pursuant to Article X, and not in its individual capacity as
a Lender, and any successor Agent appointed pursuant to Article X.
"Aggregate Commitment" means the Aggregate Facility A Commitment and the
Aggregate Facility B Commitment, collectively.
"Aggregate Facility A Commitment" means the aggregate of the Facility A
Commitments of all the Lenders, as reduced from time to time pursuant to the
terms hereof.
-2-
"Aggregate Facility B Commitment" means the aggregate of the Facility B
Commitments of all the Lenders, as reduced from time to time pursuant to the
terms hereof.
"Agreement" means this Second Amended and Restated Credit Agreement, as
it may be amended or modified and in effect from time to time.
"Agreement Accounting Principles" means generally accepted accounting
principles as in effect from time to time, applied in a manner consistent
with that used in preparing the financial statements referred to in Section
5.4.
"Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (i) the Corporate Base Rate for such day and (ii) the
sum of Federal Funds Effective Rate for such day plus 1/2% per annum.
"Annualized Operating Cash Flow" means, at any date of determination
thereof, the product of (i) Operating Cash Flow for the complete fiscal
quarter ending on or most recently ended prior to such date of determination,
multiplied by (ii) four.
"Applicable Law" means, with respect to any Lender at any time, the laws
of any jurisdiction applicable to Loans made by such Lender to the Borrower
hereunder, including, without limitation, laws prescribing the maximum rates
of interest on loans and extensions of credit.
"Applicable Margin" is defined in Section 2.4.
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Assumed Taxes" means (i) with respect to any Significant Sale, an
amount equal to such percentage as the Borrower estimates in good faith to be
its effective tax rate of the taxable gain for federal and state income tax
purposes with respect to such Significant Sale, and (ii) with respect to any
Equity Issuance, an amount equal to such incremental annual increase in
taxes, if any, as the Borrower estimates in good faith shall be payable for
the fiscal year in which such Equity Issuance occurs as a direct result of
such Equity Issuance.
"Authorizations" means all approvals, orders, authorizations, consents,
franchises, licenses, certificates and permits from, the FCC, applicable PUCs
and other federal, state and local regulatory or governmental bodies and
authorities, including any subdivision thereof.
"Authorized Officer" means any of the Chief Executive Officer, President
or Chief Financial Officer of the Borrower, acting singly.
-3-
"Borrower" means ProNet Inc., a Delaware corporation, and its successors
and assigns.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Borrowing Notice" is defined in Section 2.8.
"Business Day" means (i) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago, New York City and San Francisco
for the conduct of substantially all of their commercial lending activities
and on which dealings in United States dollars are carried on in the London
interbank market and (ii) for all other purposes, a day (other than a
Saturday or Sunday) on which banks generally are open in Chicago, New York
City and San Francisco for the conduct of substantially all of their
commercial lending activities.
"Capital Expenditures" of a Person means the aggregate amount of all
purchases or acquisitions of items considered to be capital items under
Agreement Accounting Principles, including, without limitation, all
expenditures relating to property, plant or equipment which would be
capitalized on a balance sheet of such Person in accordance with Agreement
Accounting Principles (net of aggregate net proceeds realized by such Person
from the sale or other disposition in the ordinary course of business of
items considered to be capital items).
"Capitalized Lease" of a Person means any lease of Property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
"Change in Control" means (i) the Board of Directors of the Borrower
shall cease to consist of a majority of Continuing Directors; or (ii) either
of Xxxxxx Xxxxxx or Xxxx Xxxxxx shall cease to be a member of the Board of
Directors of the Borrower, whether by resignation, removal or otherwise, and
six months shall have elapsed since the date of such resignation, removal or
other cessation.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Collateral" means "Collateral" under and as defined in the Collateral
Documents.
-4-
"Collateral Documents" means, collectively, the Pledge Agreement, the
Security Agreement, the Subsidiary Security Agreement and any and all other
pledge agreements, security agreements, mortgages and financing statements
which may be executed and delivered by the Borrower and its Subsidiaries
pursuant to or in connection with this Agreement, as the same may be amended
or modified and in effect from time to time.
"Commitments" means, as to any Lender, its Facility A Commitment and its
Facility B Commitment, collectively.
"Compliance Certificate" means a compliance certificate in substantially
the form of Exhibit "C" hereto, with appropriate insertions, signed by an
Authorized Officer, showing the calculations necessary to determine
compliance with this Agreement and stating that no Default or Unmatured
Default exists, or if any Default or Unmatured Default exists, describing the
nature thereof and any action the Borrower is taking or proposes to take with
respect thereto.
"Condemnation" is defined in Section 7.8.
"Contingent Obligation" of a Person means any agreement, undertaking or
arrangement between such Person and any other Person (any such other Person
being referred to as a "Guaranty Beneficiary") by which such Person assumes,
guarantees, endorses, contingently agrees to purchase or provide funds for
the payment of, or otherwise becomes or is contingently liable upon, the
obligation or liability of any other Person (any such other Person being
referred to as a "Primary Obligor"), or agrees with or for the benefit of any
Guaranty Beneficiary to maintain the net worth or working capital or other
financial condition of any Primary Obligor, or otherwise assures any creditor
of such Primary Obligor against loss, including, without limitation, any
comfort letter, operating agreement, take-or-pay contract or application for
a Letter of Credit but excluding (i) any endorsement of instruments for
deposit or collection in the ordinary course of business and (ii) customary
representations, warranties and indemnities made in connection with (a)
Permitted Acquisitions, (b) the Acquisition of Contact Communications, Inc.,
Contact Communications of Massachusetts, Inc., Contact Communications of
Pennsylvania, Inc., The Message Express, Inc. and Electronic Tracking
Systems, Inc., and (c) customer contracts entered into in the ordinary course
of business.
"Continuing Directors" means the directors of the Borrower on the date of
execution of this Agreement.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower or any of its Subsidiaries,
are treated as a single employer under Section 414 of the Code.
"Conversion/Continuation Notice" is defined in Section 2.9.
-5-
"Corporate Base Rate" means a rate per annum equal to the corporate base
rate of interest announced by First Chicago from time to time, changing when
and as said corporate base rate changes.
"Default" means an event described in Article VII.
"Embarc Acquisition" means the Acquisition by Contact Communications Inc.
from EMBARC Communication Services, Inc. ("EMBARC") of a nationwide data
transmission license issued by the FCC for operation in the United States of
the 931.9125 MHz frequency, together with certain related licenses,
authorizations, and approvals and transmission facilities, pursuant to the
terms of the Embarc Asset Purchase Agreement.
"Embarc Asset Purchase Agreement" means that certain Asset Purchase
Agreement dated as of April 19, 1996 by and among EMBARC, Motorola, Inc., the
Borrower and Contact Communications Inc. ("Contact"), together with all
exhibits, schedules, amendments, modifications or supplements thereto and all
documents, instruments or agreements executed and/or delivered pursuant
thereto or in connection therewith, PROVIDED that any amendments,
modifications or supplements shall have been consented to by (a) the Agent,
in the case of any amendments, modifications or supplements which are not
materially disadvantageous to the Lenders, or (b) the Required Lenders, in
all other cases.
"Equity Issuance" means the issuance by the Borrower of any shares of any
class of common stock or warrants in respect thereof or other equity
interests (which other equity interests shall be acceptable to the Required
Lenders) other than (i) stock issued by the Borrower as payment of all or any
portion of the deferred purchase price for a Permitted Acquisition, (ii)
options issued pursuant to the Borrower's 1987 Incentive Stock Option Plan,
the Borrower's 1983 Stock Option Plan, or the Borrower's Non-Employee
Director Stock Option Plan, and (iii) securities of the Borrower issued
pursuant to the Borrower's 1994 Employee Stock Purchase Plan.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"ETS Agreement" means that certain Agreement dated June 15, 1988 among
the Borrower, Texas Instruments Incorporated and Electronic Tracking System,
Inc.
"Eurodollar Advance" means an Advance which bears interest at a
Eurodollar Rate.
"Eurodollar Base Rate" means, with respect to a Eurodollar Advance for
the relevant Interest Period, the rate determined by the Agent to be the rate
at which deposits in U.S. dollars are offered by First Chicago (or, in the
event First Chicago is not a Lender, the Lender having the largest
Commitment) to first-class banks in the London interbank market at
approximately 11 a.m. (London time) two Business Days
-6-
prior to the first day of such Interest Period, in the approximate amount of
the relevant Eurodollar Loan of First Chicago (or, in the event First Chicago
is not a Lender, the Lender having the largest Commitment) and having a
maturity approximately equal to such Interest Period.
"Eurodollar Loan" means a Loan which bears interest at a Eurodollar Rate.
"Eurodollar Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the sum of (i) the quotient of (a) the Eurodollar
Base Rate applicable to such Interest Period, divided by (b) one minus the
Reserve Requirement (expressed as a decimal) applicable to such Interest
Period, plus (ii) the Applicable Margin as in effect from time to time. The
Eurodollar Rate shall be rounded to the next higher multiple of 1/16 of 1% if
the rate is not such a multiple.
"Excess Cash Flow" means, for any fiscal year of the Borrower, (i)
Operating Cash Flow minus (ii) the sum of (a) voluntary and mandatory
principal payments made on the Advances and scheduled principal payments made
on other Indebtedness, (b) net increases (or minus net decreases) in working
capital (excluding cash and the current portion of long-term Indebtedness),
(c) Capital Expenditures, (d) Interest Expense and (e) federal and state
income taxes paid, all calculated for such fiscal year for the Borrower and
its Subsidiaries on a consolidated basis in accordance with Agreement
Accounting Principles consistently applied.
"Existing Credit Agreement" is defined in the recitals hereto.
"Existing Credit Facility" is defined in the recitals hereto.
"Existing Lenders" is defined in the recitals hereto.
"Existing Obligations" is defined in the recitals hereto.
"Exiting Lenders" means The Bank of New York, Bank One, Texas, N.A.,
Fleet Bank, N.A., formerly known as Shawmut Bank Connecticut, N.A., and Royal
Bank of Canada.
"Facility A Advance" means a borrowing hereunder consisting of the
aggregate amount of the several Facility A Loans made by the Lenders to the
Borrower of the same Type and, in the case of Eurodollar Advances, for the
same Interest Period.
"Facility A Commitment" means, for each Lender, the obligation of such
Lender to make Facility A Loans not exceeding the amount set forth opposite
its signature below or as set forth in any Notice of Assignment relating to
any assignment that has become effective pursuant to Section 12.3.2, as such
amount may be modified from time to time pursuant to the terms hereof.
-7-
"Facility A Loan" means, with respect to a Lender, such Lender's portion
of any Facility A Advance.
"Facility A Note" means a promissory note, in substantially the form of
Exhibit "A-1" hereto, duly executed by the Borrower and payable to the order
of a Lender in the amount of its Facility A Commitment, including any
amendment, modification, renewal or replacement of such promissory note.
"Facility B Advance" means a borrowing hereunder consisting of the
aggregate amount of the several Facility B Loans made by the Lenders to the
Borrower of the same Type and, in the case of Eurodollar Advances, for the
same Interest Period.
"Facility B Commitment" means, for each Lender, the obligation of such
Lender to make Facility B Loans not exceeding the amount set forth opposite
its signature below or as set forth in any Notice of Assignment relating to
any assignment that has become effective pursuant to Section 12.3.2, as such
amount may be modified from time to time pursuant to the terms hereof.
"Facility B Loan" means, with respect to a Lender, such Lender's portion
of any Facility B Advance.
"Facility B Note" means a promissory note, in substantially the form of
Exhibit "A-2" hereto, duly executed by the Borrower and payable to the order
of a Lender in the amount of its Facility B Commitment, including any
amendment, modification, renewal or replacement of such promissory note.
"Facility B Revolving Credit Termination Balance" means the aggregate
principal amount of Facility B Advances outstanding on the Facility B
Revolving Credit Termination Date after giving effect to any Facility B
Advances made or repaid on such date.
"Facility B Revolving Credit Termination Date" means June 30, 1998 or
such earlier date on which the Aggregate Facility B Commitment shall have
been reduced to zero or terminated in whole or in part pursuant to Section
2.2, 2.5 or 8.1.
"Facility Termination Date" means December 31, 2003 or such earlier date
on which the Aggregate Commitment shall have been reduced to zero or
terminated in whole pursuant to Section 2.2, 2.5 or 8.1.
"FCC" means the Federal Communications Commission or any other regulatory
body which succeeds to the functions of the Federal Communications Commission.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not
a Business Day, for the
-8-
immediately preceding Business Day) by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day which is a Business Day, the
average of the quotations at approximately 10 a.m. (Chicago time) on such day
on such transactions received by the Agent from three Federal funds brokers
of recognized standing selected by the Agent in its sole discretion.
"First Chicago" means The First National Bank of Chicago in its individual
capacity, and its successors.
"Fixed Charge Coverage Ratio" means, as at any date of determination
thereof, the ratio of (i) (a) Annualized Operating Cash Flow minus (b) the
sum of Capital Expenditures (other than Capital Expenditures made with Net
Cash Proceeds (1) realized from the Equity Issuance which occurred on
December 21, 1994 or (2) realized from any other Equity Issuance and included
in the calculation of the Reduction Amount in respect of such Equity
Issuance) and federal and state income taxes paid by the Borrower and its
Subsidiaries for the period of four consecutive fiscal quarters ending on or
most recently ended prior to such date of determination, to (ii) Fixed
Charges for the four consecutive fiscal quarters ending on or most recently
ended prior to such date of determination.
"Fixed Charges" means, for any period of calculation, the sum (without
duplication) of (a) all payments of principal on Indebtedness (other than
Capitalized Lease Obligations) required to be made during such period, and
(b) Interest Expense during such period, all calculated for the Borrower and
its Subsidiaries on a consolidated basis in accordance with Agreement
Accounting Principles consistently applied.
"Floating Rate" means, for any day, a rate per annum equal to (i) the
Alternate Base Rate for such day plus (ii) the Applicable Margin as in
effect on such day, in each case changing when and as the Alternate Base Rate
changes.
"Floating Rate Advance" means an Advance which bears interest at the
Floating Rate.
"Floating Rate Loan" means a Loan which bears interest at the Floating
Rate.
"Indebtedness" of a Person means, without duplication, such Person's (i)
obligations for borrowed money, (ii) obligations representing the deferred
purchase price of Property or services (other than accounts payable arising
in the ordinary course of such Person's business payable on terms customary
in the trade), (iii) obligations, whether or not assumed, secured by Liens or
payable out of the proceeds or production from property now or hereafter
owned or acquired by such Person, (iv) obligations which are evidenced by
notes, acceptances, or other instruments, (v) Capitalized Lease Obligations,
(vi) net liabilities under interest rate swap, exchange or cap agreements,
(vii) reimbursement obligations in respect of Letters of Credit, whether
contingent or fixed, and (viii) Contingent Obligations.
-9-
"Interest Expense" means, for any period of calculation, all interest,
whether paid in cash or accrued as a liability, on Indebtedness during such
period (including imputed interest on Capitalized Lease Obligations and
further including, without limitation, interest accrued on the 1996 Senior
Subordinated Indebtedness both during and after the time the proceeds thereof
are held in the Teletouch Escrow), all calculated for such period for the
Borrower and its Subsidiaries on a consolidated basis in accordance with
Agreement Accounting Principles consistently applied.
"Interest Period" means, with respect to a Eurodollar Advance, a period
of one, two, three, six or, to the extent consented to by all the Lenders,
twelve months (which consent, which need not be in writing, shall be
communicated by the Lenders to the Agent promptly upon its request in the
event the Borrower has requested a twelve month Interest Period in respect of
any Eurodollar Advance), commencing on a Business Day selected by the
Borrower pursuant to this Agreement. Such Interest Period shall end on (but
exclude) the day which corresponds numerically to such date one, two, three,
six or twelve months thereafter, provided, however, that if there is no such
numerically corresponding day in such next, second, third, sixth or twelfth
succeeding month, such Interest Period shall end on the last Business Day of
such next, second, third, sixth or twelfth succeeding month. If an Interest
Period would otherwise end on a day which is not a Business Day, such
Interest Period shall end on the next succeeding Business Day, provided,
however, that if said next succeeding Business Day falls in a new calendar
month, such Interest Period shall end on the immediately preceding Business
Day.
"Investment" of a Person means any loan, advance (other than commission,
travel and similar advances to officers and employees made in the ordinary
course of business), extension of credit (other than accounts receivable
arising in the ordinary course of business on terms customary in the trade),
deposit account or contribution of capital by such Person to any other Person
or any investment in, or purchase or other acquisition of, the stock,
partnership interests, notes, debentures or other securities of any other
Person made by such Person.
"Key Operating Statistics" means, for any period of calculation, current
pager totals, additions to pagers, revenues, Operating Cash Flow and Capital
Expenditures, all calculated for such period for the Borrower and its
Subsidiaries on a consolidated basis.
"Lenders" means the lending institutions (other than the Exiting Lenders)
listed on the signature pages of this Agreement and their respective
successors and assigns.
"Lending Installation" means, with respect to a Lender or the Agent, any
office, branch, subsidiary or affiliate of such Lender or the Agent.
-10-
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).
"Loan" means a Facility A Loan or a Facility B Loan, as the context may
require.
"Loan Documents" means, collectively, this Agreement, the Notes, the
Collateral Documents, and all other agreements, documents or instruments
executed and delivered by the Borrower pursuant to or in connection with this
Agreement, as the same may be amended or modified and in effect from time to
time.
"Material Adverse Effect" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise), results of operations,
or prospects of the Borrower and its Subsidiaries taken as a whole, (ii) the
ability of the Borrower to perform any of its obligations under the Loan
Agreement or of any Subsidiary to perform any of its material obligations under
any Subsidiary Document, or (iii) the validity or enforceability of any of the
Transaction Documents or the rights or remedies of the Agent or the Lenders
thereunder.
"Maximum Amount" means, with respect to each Loan by each Lender at any
time, the maximum of interest which, under any Applicable Law, such Lender is
permitted to charge with respect to such Loan.
"Net Cash Proceeds" means (i) with respect to any Significant Sale, cash
(freely convertible into U.S. dollars) received, on or after the date of
consummation of such Significant Sale, by the Borrower or any of its
Subsidiaries from such Significant Sale, after (a) deduction of Assumed Taxes,
(b) payment of all brokerage commissions and other fees and expenses related to
such Significant Sale (including, without limitation, reasonable attorneys' fees
and closing costs and environmental remediation costs required in connection
with such Significant Sale), (c) deduction of appropriate amounts to be provided
by the Borrower as a reserve, in accordance with generally accepted accounting
principles, against any liabilities retained by the Borrower or any of its
Subsidiaries after such Significant Sale, which liabilities are associated with
the asset or assets being sold, including, without limitation, pension and other
post-employment benefit liabilities and liabilities related to environmental
matters or against any indemnification obligations associated with such
Significant Sale, and (d) deduction for the amount of any Indebtedness (other
than the Obligations) secured by the respective asset or assets being sold,
which Indebtedness is required to be repaid as a result of such Significant
Sale; (ii) with respect to any incurrence of Indebtedness
-11-
(including, without limitation, Subordinated Indebtedness), cash (freely
convertible into U.S. dollars) received, on or after the date of incurrence
of such Indebtedness, by the Borrower from the incurrence of such
Indebtedness after (a) payment of all reasonable attorneys' fees and closing
costs associated with such incurrence of Indebtedness, (b) deduction of all
deposits, escrow amounts, or other reserves required to be maintained by the
Borrower in connection with such Indebtedness, and (c) deductions for the
amount of any other Indebtedness (other than the Obligations) which is
required to be repaid concurrently with the incurrence of such Indebtedness;
and (iii) with respect to any Equity Issuance, cash (freely convertible into
U.S. dollars) (including any cash received by way of deferred payment
pursuant to a promissory note, or otherwise, but only as and when received)
received, on or after the date of such Equity Issuance, by the Borrower from
such Equity Issuance, net of reasonable transaction costs and Assumed Taxes.
"1995 Indenture" means that certain Indenture dated as of June 15, 1995 and
amended as of June 15, 1996 between the Borrower and First Interstate Bank of
Texas, N.A., as Trustee.
"1995 Senior Subordinated Indebtedness" means any and all Indebtedness of
the Borrower evidenced or governed by or outstanding under the 1995 Indenture.
"1996 Indenture" means that certain Indenture dated as of June 5, 1996
between the Borrower and Bank One, Columbus, N.A., as Trustee.
"1996 Senior Subordinated Indebtedness" means any and all Indebtedness of
the Borrower evidenced or governed by or outstanding under the 1996 Indenture.
"Note" means a Facility A Note or a Facility B Note, as the context may
require.
"Notice of Assignment" is defined in Section 12.3.2.
"Obligations" means all unpaid principal of and accrued and unpaid interest
on the Notes, all accrued and unpaid fees and all expenses, reimbursements,
indemnities and other obligations of the Borrower or any of its Subsidiaries to
the Lenders or to any Lender, the Agent or any indemnified party hereunder
arising under the Loan Documents.
"Operating Cash Flow" means, for any period of calculation, an amount equal
to (a) the sum of (i) pre-tax income or deficit, as the case may be, (ii)
Interest Expense (to the extent deducted in computing pre-tax income), (iii)
depreciation and amortization expense (including the amortization of Capitalized
Leases) and other non-cash expense items (to the extent deducted in computing
pre-tax income), (iv) extraordinary losses or losses on sales of assets (to the
extent deducted in computing pre-tax operations and any non-operating income),
and (v) adjustments to operating expenses in connection with any Permitted
Acquisitions, as set forth in the then most
-12-
recently delivered Compliance Certificate, minus (b) extraordinary income or
gains on sales of assets and any non-operating income, all calculated for
such period for the Borrower and its Subsidiaries on a consolidated basis in
accordance with Agreement Accounting Principles consistently applied,
provided that, in the case of a consolidation with a Subsidiary that is not a
Wholly-Owned Subsidiary (a "Partially-Owned Subsidiary"), Operating Cash Flow
of such Partially-Owned Subsidiary to be included in the foregoing
calculation shall be limited to a percentage thereof equal to the percentage
of the outstanding securities of such Partially-Owned Subsidiary having
ordinary voting power as shall be owned or controlled during such period,
directly or indirectly, by the Borrower or one or more of its Wholly-Owned
Subsidiaries or the Borrower and one or more of its Wholly-Owned
Subsidiaries. In the case of the Permitted Acquisition of a Subsidiary by
the Borrower or any other Subsidiary during any period of calculation, the
definition of Operating Cash Flow shall, for the purposes of calculating the
Senior Leverage Ratio or Total Leverage Ratio only, be adjusted to give
effect to such Permitted Acquisition, as if such Permitted Acquisition
occurred on the first day of such period, by increasing, if positive, or
decreasing, if negative, Operating Cash Flow by the Operating Cash Flow of
such newly acquired Subsidiary during such period prior to the date of such
Permitted Acquisition. In the case of any Subsidiary sold, transferred or
otherwise disposed of by the Borrower or any Subsidiary during any period of
calculation, the definition of Operating Cash Flow shall, for the purposes of
calculating the Senior Leverage Ratio or Total Leverage Ratio only, be
adjusted to give effect to such sale, transfer or other disposition, as if
such disposition occurred on the first day of such period, by decreasing, if
positive, or increasing, if negative, Operating Cash Flow by the Operating
Cash Flow of such Subsidiary during such period prior to the date of such
disposition.
"Paging Services" means the provision of mobile communications or data
using radio frequencies, including, without limitation, one-way paging services.
"Participants" is defined in Section 12.2.1.
"Payment Date" means the last day of each March, June, September and
December.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"PCS Entity" means a Person that is engaged in rendering (or in in the
process of acquiring Authorizations to render) Personal Communications Services
(as defined in 47 C.F.R. Section 24.5), including Broadband PCS and Narrowband
PCS (as such terms are defined in 47 C.F.R. Section 24.5), but excluding one-way
paging services.
"PCS Investment" of a Person means an Investment made by such Person in a
PCS Entity.
-13-
"Permitted Acquisition" means, at any time of determination, any
Acquisition by the Borrower or any Subsidiary of a business or entity (other
than a PCS Entity) deriving at least 80% of its net revenues from Paging
Services with respect to which each of the following requirements is then met:
(1) Such Acquisition has been approved and recommended by the board
of directors of the entity to be acquired.
(2) (a) The aggregate consideration, including, without limitation
the purchase price therefor and any assumption of debt (other than
accounts payable and deferred revenue obligations arising in the
ordinary course of business) for such Acquisition (singly or together
with a group of related Acquisitions) does not exceed $35,000,000 (or,
if such Acquisition or group of related Acquisitions are made solely
with the Net Cash Proceeds of Subordinated Indebtedness and/or an
Equity Issuance, $50,000,000); or (b) the Required Lenders shall have
given their prior written consent to such Acquisition and such
Acquisition shall have been consummated on terms and conditions
satisfactory to the Required Lenders; or (c) such Acquisition is one
of the pending transactions to which Teletouch is a party as of the
Restructuring Date and which are described on Schedule "4" hereto,
PROVIDED that such Acquisitions shall constitute Permitted
Acquisitions only (1) so long as they are consummated pursuant to
terms substantially similar to those set forth in the applicable
purchase agreement described in Schedule "4" hereto (or such other
form of purchase agreement as shall be satisfactory to the Required
Lenders), and (2) from and after the date the Teletouch Acquisition
has been consummated in accordance with the terms of the Teletouch
Merger Agreement and this Agreement.
(3) The Borrower, such Subsidiary and/or the entity to be acquired,
as appropriate, shall have furnished to the Agent, no later than five
(5) Business Days following the consummation of such Acquisition, such
documents as shall be required pursuant to Section 2.19.
(4) Prior to and after giving effect to such Acquisition, no Default
or Unmatured Default shall exist.
Notwithstanding the foregoing, the Embarc Acquisition shall constitute a
Permitted Acquisition so long as:
(A) The Embarc Acquisition is consummated (i.e. the purchase price
shall have been paid and all other conditions precedent to closing
shall have been satisfied) on or prior to September 30, 1996 on
substantially the terms set forth in the Embarc Asset Purchase
Agreement.
-14-
(B) The aggregate consideration (including, without limitation, the
purchase price therefor and any assumption of debt (other than
accounts payable and deferred revenue obligations arising in the
ordinary course of business, assumed liabilities for site leases, a
transponder lease and a maintenance contract, and other assumed
liabilities not in excess of $500,000)) for the Embarc Acquisition
shall not exceed $43,000,000.
(C) At the time of consummation of the Embarc Acquisition, there shall
have been no material adverse change in the business, Property,
prospects, condition (financial or otherwise) or results of operations
of the Borrower and its Subsidiaries since December 31, 1995 which
could reasonably be expected to have a Material Adverse Effect.
(D) The Borrower shall have furnished to the Agent (with sufficient
copies for the Lenders), not less than 30 days prior to consummation
of such Acquisition, (w) income and balance sheet projections in
respect of the Borrower and its Subsidiaries, after giving effect to
such Acquisition, covering a period of time equal to the remaining
term of this Agreement, (x) a schedule of proposed adjustments to
operating expenses in connection with such Acquisition, (y) copies of
the executed Embarc Asset Purchase Agreement, and (z) such other
information in respect of such Acquisition as the Agent or any Lender
shall have reasonably requested.
(E) At the time of consummation of the Embarc Acquisition, all of the
requirements set forth in clauses (1) and (4) of the definition of
"Permitted Acquisition" set forth above shall have been satisfied.
(F) The Borrower shall have furnished to the Agent, no later than five
(5) Business Days following the consummation of the Embarc
Acquisition, such documents as shall be required pursuant to Section
2.19.
Further notwithstanding the foregoing, the Teletouch Acquisition shall
constitute a Permitted Acquisition so long as:
(A) At the time of consummation of the Teletouch Acquisition, the
condition precedent to the effectiveness of this Agreement set forth
in Section 4.1(xv) shall have been met.
(B) Such Acquisition is consummated on substantially the terms and
conditions set forth in the Teletouch Merger Agreement.
(C) At the time of consummation of the Teletouch Acquisition, all of
the requirements set forth in clauses (1) and (4) of the definition of
"Permitted Acquisition" set forth above shall have been satisfied.
-15-
(D) The Borrower and the Teletouch Merger Subsidiary shall have
furnished to the Agent, no later than five (5) Business Days following
the consummation of the Teletouch Acquisition, such documents as shall
be required pursuant to Section 2.19.
"Person" means any natural person, corporation, firm, joint venture,
partnership, association, enterprise, trust or other entity or organization, or
any government or political subdivision or any agency, department or
instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered by Title IV
of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which the Borrower or any member of the Controlled Group may have any
liability.
"Pledge Agreement" means that certain Pledge Agreement dated as of June 30,
1994 by and between the Borrower and the Agent, as agent thereunder for the
ratable benefit of the Lenders, as previously amended, as further amended as of
the Restructuring Date pursuant to an amendment in the form of Exhibit "F"
hereto, and as the same may be further amended or modified and in effect from
time to time.
"Pro Forma Debt Service" means, as at any date of determination thereof,
the sum of (i) Pro Forma Interest Expense plus (ii) scheduled principal payments
on Indebtedness, all calculated for the first four complete consecutive fiscal
quarters ending after such date of determination for the Borrower and its
Subsidiaries on a consolidated basis in accordance with Agreement Accounting
Principles consistently applied.
"Pro Forma Debt Service Ratio" means, as at any date of determination
thereof, the ratio of (i) Annualized Operating Cash Flow as at such date of
determination to (ii) Pro Forma Debt Service as at such date of determination.
"Pro Forma Interest Expense" means, as at any date of determination, the
product of (i) average Indebtedness (including Indebtedness in respect of any
portion of the principal of the 1996 Senior Subordinated Indebtedness held in
the Teletouch Escrow) outstanding for the first four complete consecutive fiscal
quarters ending after such date of determination times (ii) the weighted average
of the interest rates on Indebtedness in effect on such date of determination,
all calculated for the Borrower and its Subsidiaries on a consolidated basis in
accordance with Agreement Accounting Principles consistently applied.
"Property" of a Person means any and all property, whether real, personal,
tangible, intangible, or mixed, of such Person, or other assets owned, leased or
operated by such Person.
"PUC" means a state public utility commission or analogous state or local
regulatory or governmental authority.
-16-
"Purchasers" is defined in Section 12.3.1.
"Rate Hedging Obligations" of a Person means any and all obligations of
such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all
agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, exchange rates or
forward rates applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, dollar-denominated or
cross-currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collar protection agreements, forward rate
currency or interest rate options, puts and warrants, and (ii) any and all
cancellations, buy backs, reversals, terminations or assignments of any of the
foregoing.
"Reduction Amount" means, with respect to an Equity Issuance, an amount
equal to the excess, if any, of (i) 50% of the Net Cash Proceeds realized by the
Borrower in respect of such Equity Issuance over (ii) the aggregate amount of
such Net Cash Proceeds used by the Borrower or its Subsidiaries during the
Reduction Period (and not included in the calculation of the Reduction Amount in
respect of any other Equity Issuance) to finance Permitted Acquisitions,
Investments (other than those permitted under Section 6.17) specifically
designated by the Required Lenders, and Capital Expenditures made in connection
with the expansion of existing paging systems of the Borrower or any of its
Subsidiaries.
"Reduction Date" means, with respect to an Equity Issuance, the date which
is the earlier to occur of (i) the first anniversary of the date on which such
Equity Issuance occurs and (ii) December 31, 2003.
"Reduction Period" means, with respect to an Equity Issuance, the period
from the date on which such Equity Issuance occurs to and including the
Reduction Date in respect of such Equity Issuance.
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor thereto or other
regulation or official interpretation of said Board of Governors relating to
reserve requirements applicable to member banks of the Federal Reserve System.
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.
"Reportable Event" means a reportable event as defined in Section 4043 of
ERISA and the regulations issued under such section, with respect to a Plan,
excluding,
-17-
however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days of
the occurrence of such event, provided, however, that a failure to meet the
minimum funding standard of Section 412 of the Code and of Section 302 of
ERISA shall be a Reportable Event regardless of the issuance of any such
waiver of the notice requirement in accordance with either Section 4043(a) of
ERISA or Section 412(d) of the Code.
"Required Lenders" means (i) prior to the Facility B Revolving Credit
Termination Date, Lenders in the aggregate having at least 51% of the Aggregate
Commitment, or, if the Aggregate Commitment has been terminated, Lenders in the
aggregate holding at least 51% of the aggregate unpaid principal amount of the
outstanding Advances thereunder, and (ii) from and after the Facility B
Revolving Credit Termination Date, Lenders in the aggregate having at least 51%
of the sum of (a) the Aggregate Facility A Commitment, or, if the Aggregate
Facility A Commitment has been terminated, Lenders in the aggregate holding at
least 51% of the aggregate unpaid principal amount of the outstanding Advances
thereunder, and (b) the aggregate unpaid principal amount of the outstanding
Facility B Advances.
"Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities.
"Restated Credit Facility" is defined in the recitals hereto.
"Restructuring Date" means the date on which this Agreement shall have
become effective pursuant to Section 4.1.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Secured Obligations" means, collectively, (i) the Obligations and (ii) all
Rate Hedging Obligations owing to one or more Lenders.
"Security Agreement" means that certain Security Agreement dated as of June
30, 1994 by and between the Borrower and the Agent, as agent thereunder for the
ratable benefit of the Lenders, as previously amended, as further amended
pursuant to an amendment in substantially the form of Exhibit "G" hereto, and as
the same may be further amended or modified and in effect from time to time.
"Senior Leverage Ratio" means, as at any date of determination thereof, the
ratio of (i) (a) all Indebtedness (excluding Subordinated Indebtedness)
outstanding as at such date of determination minus (b) so long as no Default or
Unmatured Default shall exist on such date of determination and no Advances
shall be outstanding hereunder, cash on hand in excess of $1,000,000 to (ii)
Annualized Operating Cash Flow as at such date of determination, all calculated
for the Borrower and its Subsidiaries on a
-18-
consolidated basis in accordance with Agreement Accounting Principles
consistently applied.
"Shell Subsidiary" means any Subsidiary which (a) has no material assets or
liabilities, or (b) was formed solely for the purpose of a Permitted Acquisition
and has no material assets or liabilities other than an initial equity
contribution not in excess of $10,000, and such Subsidiary's rights and
obligations under any Acquisition agreement to which it is a party, provided
that such Subsidiary shall cease to be a Shell Subsidiary upon consummation of
such Permitted Acquisition.
"Significant Sale" means any sale, lease, transfer or other disposition
(including, without limitation, any disposition accomplished by way of a merger)
(the "Sale") of any Property of the Borrower or any of its Subsidiaries to any
other Person (other than any sale, lease, transfer or other disposition
contemplated by Section 6.14) which (i) together with all Property previously or
contemporaneously sold, leased, transferred or otherwise disposed of during the
fiscal year in which such Sale occurs, contributed to or accounted for more than
10% of Operating Cash Flow (as calculated for the complete fiscal quarter ending
on or most recently ended prior to the date on which such Sale is consummated,
which calculation may be estimated if such Sale is consummated prior to the date
on which the delivery of the financial statements for such fiscal quarter are
required to be delivered pursuant to Section 6.1 and shall be adjusted, if
necessary, upon the delivery of such financial statements) or (ii) together with
all other Property sold, leased, transferred or otherwise disposed of during the
period from the Restructuring Date to and including the date on which such Sale
is consummated, contributed to or accounted for, in the aggregate, Operating
Cash Flow (as calculated for the complete fiscal quarter ending on or most
recently ended prior to the date on which such Sale is consummated, which
calculation may be estimated if such Sale is consummated prior to the date on
which the delivery of the financial statements for such fiscal quarter are
required to be delivered pursuant to Section 6.1 and shall be adjusted, if
necessary, upon the delivery of such financial statements) in an amount greater
than 20% of Operating Cash Flow (as calculated for the fiscal quarter ending on,
or most recently ended prior to, the Restructuring Date).
"Single Employer Plan" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
"Subordinated Indebtedness" of a Person means, collectively, (i) with
respect to the Borrower, the 1995 Senior Subordinated Indebtedness and the 1996
Senior Subordinated Indebtedness and (ii) with respect to the Borrower or any
other Person, any other Indebtedness of such Person which is subordinated in
right of payment to the Secured Obligations pursuant to a written agreement in
form and substance satisfactory to the Required Lenders.
"Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be
-19-
owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, association, joint venture or similar business
organization more than 50% of the ownership interests having ordinary voting
power of which shall at the time be so owned or controlled. Unless otherwise
expressly provided, all references herein to a "Subsidiary" shall mean a
Subsidiary of the Borrower.
"Subsidiary Documents" means, collectively, the Subsidiary Guaranty and the
Subsidiary Security Agreement.
"Subsidiary Guaranty" means that certain Guaranty dated as of June 30, 1994
executed by the Borrower's Subsidiaries in favor of the Agent, as agent
thereunder for the ratable benefit of the Lenders, as previously amended, as
further amended pursuant to an amendment in substantially the form of Exhibit
"H" hereto, and as the same may be further amended or modified and in effect
from time to time.
"Subsidiary Security Agreement" means that certain Security Agreement dated
as of June 30, 1994 by and between the Borrower's Subsidiaries and the Agent, as
agent thereunder for the ratable benefit of the Lenders, as previously amended,
as further amended pursuant to an amendment in substantially the form of Exhibit
"I" hereto, and as the same may be further amended or modified and in effect
from time to time.
"Substantial Portion" means, with respect to the Property of the Borrower
and its Subsidiaries, Property which (i) represents more than 10% of the
consolidated assets of the Borrower and its Subsidiaries as would be shown in
the consolidated financial statements of the Borrower and its Subsidiaries as at
the last day of the fiscal quarter ending on or most recently ended prior to the
date on which such determination is made, or (ii) is responsible for more than
10% of the consolidated net sales of the Borrower and its Subsidiaries or
Operating Cash Flow, as reflected in the financial statements referred to in
clause (i) above.
"Teletouch" means Teletouch Communications, Inc., a Delaware corporation.
"Teletouch Acquisition" means the Acquisition of Teletouch by the Teletouch
Merger Subsidiary pursuant to the Teletouch Merger Agreement.
"Teletouch Escrow" means the escrow established in respect of the net
proceeds of the 1996 Senior Subordinated Indebtedness pursuant to the Teletouch
Escrow Agreement.
"Teletouch Escrow Agreement" means that certain Escrow Agreement dated June
5, 1996 among the Borrower, Bank One, Texas, N.A., as escrow agent, and Bank
One, Columbus, N.A., as trustee, together with any amendments, modifications and
supplements thereto, PROVIDED that any such amendments, modifications or
supplements shall have been consented to by (a) the Agent, in the case of any
amendments,
-20-
modifications or supplements which are not materially disadvantageous to the
Lenders, or (b) the Required Lenders, in all other cases.
"Teletouch Merger Agreement" means that certain Agreement and Plan of
Merger dated as of April 15, 1996 among Borrower, the Teletouch Merger
Subsidiary and Teletouch, together with all exhibits, schedules, amendments,
modifications or supplements thereto and all documents, instruments or
agreements executed and/or delivered pursuant thereto or in connection
therewith, PROVIDED that any such amendments, modifications or supplements shall
have been consented to by (a) the Agent, in the case of any amendments,
modifications or supplements which are not materially disadvantageous to the
Lenders, or (b) the Required Lenders, in all other cases.
"Teletouch Merger Subsidiary" means ProNet Subsidiary, Inc., a Delaware
corporation and a Wholly-Owned Subsidiary of the Borrower.
"Total Leverage Ratio" means, as at any date of determination thereof, the
ratio of (i) (a) all Indebtedness (including Subordinated Indebtedness other
than Indebtedness in respect of any portion of the principal of the 1996 Senior
Subordinated Indebtedness held in the Teletouch Escrow) outstanding as at such
date of determination minus (b) so long as, on such date of determination, no
Default or Unmatured Default shall exist and no Advances shall be outstanding
hereunder, cash on hand in excess of $1,000,000 to (ii) Annualized Operating
Cash Flow as at such date of determination, all calculated for the Borrower and
its Subsidiaries on a consolidated basis in accordance with Agreement Accounting
Principles consistently applied.
"Transaction Documents" means, collectively, the Loan Documents and the
Subsidiary Documents.
"Type" means, with respect to any Advance, its nature as a Floating Rate
Advance or Eurodollar Advance.
"Unfunded Liabilities" means the amount (if any) by which the present value
of all vested nonforfeitable benefits under all Single Employer Plans exceeds
the fair market value of all such Plan assets allocable to such benefits, all
determined as of the then most recent valuation date for such Plans.
"Unmatured Default" means an event which but for the lapse of time or the
giving of notice, or both, would constitute a Default.
"Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all of the
outstanding voting securities of which shall at the time be owned or controlled,
directly or indirectly, by such Person or one or more Wholly-Owned Subsidiaries
of such Person, or by such Person and one or more Wholly-Owned Subsidiaries of
such Person, or (ii) any partnership, association, joint venture or similar
business organization 100% of the ownership interests having ordinary voting
power of which shall at the time be so owned or controlled.
-21-
The foregoing definitions shall be equally applicable to both the singular
and plural forms of the defined terms.
ARTICLE II
THE CREDITS
2.1. COMMITMENTS. (i) From and including the date of this Agreement and
prior to the Facility Termination Date, each Lender severally agrees, on the
terms and conditions set forth in this Agreement, to make Facility A Loans to
the Borrower from time to time in amounts not to exceed in the aggregate at any
one time outstanding the amount of its Facility A Commitment. Subject to the
terms of this Agreement, the Borrower may borrow, repay and reborrow Facility A
Loans under this Section 2.1(i) at any time prior to the Facility Termination
Date. The Facility A Commitments to lend hereunder shall expire on the Facility
Termination Date.
(ii) From and including the date of this Agreement and prior to the
Facility B Revolving Credit Termination Date, each Lender severally agrees, on
the terms and conditions set forth in this Agreement, to make Facility B Loans
to the Borrower from time to time in amounts not to exceed in the aggregate at
any one time outstanding the amount of its Facility B Commitment. Subject to
the terms of this Agreement, the Borrower may borrow, repay and reborrow
Facility B Loans under this Section 2.1(ii) at any time prior to the Facility B
Revolving Credit Termination Date. The Facility B Commitments to lend hereunder
shall expire on the Facility B Revolving Credit Termination Date.
2.2. REQUIRED PAYMENTS; REQUIRED REDUCTIONS OF AGGREGATE COMMITMENT.
(i) On each Payment Date after the Facility B Revolving Credit
Termination Date, commencing September 30, 1998, the Borrower shall
make a mandatory payment on the Facility B Advances equal to the
lesser of (a) the aggregate unpaid principal amount of the Facility
B Advances outstanding and (b) an amount equal to the percentage of
the Facility B Revolving Credit Termination Balance set forth
opposite each such Payment Date:
Each Payment Date % of Facility B Revolving Credit
Occurring During Period Termination Balance
-------------------------------------------------------------------
7/1/98 through 12/31/98 3.50%
1/1/99 through 12/31/99 3.75%
1/1/00 through 12/31/00 4.50%
1/1/01 through 12/31/01 5.00%
1/1/02 through 12/31/02 5.00%
1/1/03 through 12/31/03 5.00%
-22-
(ii) On or before June 30 of each fiscal year, commencing June 30,
1999, the Borrower shall make a mandatory payment on the Advances
outstanding in an amount equal to 50% of Excess Cash Flow, if any,
for the immediately preceding fiscal year, such payment to be
applied as specified in clause (1) or clause (2), as applicable, of
Section 2.2(vi)(a).
(iii) In the event so requested by the Required Lenders,
concurrently with the consummation of any Significant Sale by the
Borrower or any of its Subsidiaries (which Significant Sale shall
have been consented to by the Required Lenders) or on such later
date as the Required Lenders shall specify, the Borrower shall make
a mandatory payment on the Advances outstanding in such amount as
the Required Lenders shall specify not in excess of 100% (or, in the
case of a Significant Sale of non-paging assets, 50%) of the Net
Cash Proceeds realized by the Borrower or such Subsidiary from such
Significant Sale, such payment to be applied as specified in clause
(1) or clause (2), as applicable, of Section 2.2(vi)(b).
(iv) In the event so requested by the Required Lenders, concurrently
with the incurrence or issuance of any Subordinated Indebtedness of
the Borrower (which incurrence or issuance shall have been consented
to by the Required Lenders but excluding any such Subordinated
Indebtedness the proceeds of which are used to finance, in whole or
in part, the Teletouch Acquisition) or on such later date as the
Required Lenders shall specify, the Borrower shall make a mandatory
payment on the Advances outstanding in such amount as the Required
Lenders shall specify not in excess of 100% of the Net Cash Proceeds
realized by the Borrower or such Subsidiary from such incurrence or
issuance, such payment to be applied as specified in clause (1) or
clause (2), as applicable, of Section 2.2(vi)(c); PROVIDED that the
foregoing mandatory payment shall not be required if, after giving
effect to the issuance or incurrence of such Subordinated
Indebtedness, the Total Leverage Ratio, calculated on a PRO FORMA
basis as of the date of such issuance or incurrence, is equal to or
less than 4.5:1.0.
(v) In the event so requested by the Required Lenders, on the
Reduction Date in respect of any Equity Issuance (other than an
Equity Issuance the proceeds of which are used to finance, in whole
or in part, the Teletouch Acquisition) or on such later date as the
Required Lenders shall specify, the Borrower shall make a mandatory
payment on the Advances outstanding in such amount as the Required
Lenders shall specify not in excess of the Reduction Amount in
respect of such Equity Issuance, such payment to be applied as
specified in Section 2.2(vi)(a)(1), in the case of any Reduction
Date occurring prior to the Facility B Revolving Credit
-23-
Termination Date, or as specified in Section 2.2(vi)(a)(2), in the
case of any Reduction Date occurring from and after the Facility B
Revolving Credit Termination Date. Notwithstanding anything in this
Agreement to the contrary (x) the Borrower agrees that, promptly
upon receipt thereof, the Net Cash Proceeds realized from any Equity
Issuance will be used by the Borrower first (before being used for
any other purpose) to cure any breach of Section 6.4.2 or Default
resulting therefrom which may exist at the time of the realization
of such Net Cash Proceeds; and (y) the mandatory payment pursuant to
this Section 2.2(v) shall not be required if, after giving effect to
such Equity Issuance, the Total Leverage Ratio, calculated on a PRO
FORMA basis as of the date of such issuance, is equal to or less
than 4.5:1.0.
(vi) (a)(1) All mandatory payments made prior to the Facility B
Revolving Credit Termination Date pursuant to Sections 2.2(ii) and
2.2(v) shall be applied as follows: (x) first, the Aggregate
Facility B Commitment shall be automatically and permanently reduced
by the amount of any such required payment until the Aggregate
Facility B Commitment shall have been reduced to zero, and
immediately upon any such reduction, the Borrower shall repay the
then outstanding principal balance of the Facility B Advances to the
extent such principal balance exceeds the Aggregate Facility B
Commitment as so reduced, and (y) thereafter, the remaining amount
of any such required payment shall be applied to reduce the then
outstanding principal balance of the Facility A Advances, provided
that the Aggregate Facility A Commitment shall not be permanently
reduced by the amount so applied; and (2) all mandatory payments
made from and after the Facility B Revolving Credit Termination Date
pursuant to Sections 2.2(ii) and 2.2(v) shall be applied (x) first,
to reduce the amount of the mandatory payments of the Facility B
Advances required under Section 2.2(i) in the inverse order of
maturity thereunder, until all such Advances shall have been repaid
in full, and (y) thereafter, to reduce the then outstanding
principal balance of the Facility A Advances, provided that the
Aggregate Facility A Commitment shall not be permanently reduced by
the amount so applied.
(b)(1) All mandatory payments made prior to the Facility B Revolving
Credit Termination Date pursuant to Section 2.2(iii) shall be
applied as follows: (x) first, the Aggregate Facility B Commitment
shall be automatically and permanently reduced by the amount of any
such required payment until the Aggregate Facility B Commitment
shall have been reduced to zero, and immediately upon any such
reduction, the Borrower shall repay the then outstanding principal
balance of the Facility B Advances to the extent such principal
balance exceeds the Aggregate Facility B Commitment as so reduced,
and (y) thereafter, the Aggregate Facility A Commitment shall be
automatically and permanently reduced by the remaining amount of any
such required
-24-
payment until the Aggregate Facility A Commitment shall have been
reduced to zero, and immediately upon any such reduction, the
Borrower shall repay the then outstanding principal balance of the
Facility A Advances to the extent such principal balance exceeds the
Aggregate Facility A Commitment as so reduced; and (2) all mandatory
payments made from and after the Facility B Revolving Credit
Termination Date pursuant to Section 2.2(iii) shall be applied as
follows: (x) first, to reduce the amount of the mandatory payments
of the Facility B Advances required under Section 2.2(i) in the
inverse order of maturity thereunder, until all such Advances shall
have been repaid in full, and (y) thereafter, the Aggregate Facility
A Commitment shall be automatically and permanently reduced by the
remaining amount of any such required payment until the Aggregate
Facility A Commitment shall have been reduced to zero, and
immediately upon any such reduction, the Borrower shall repay the
then outstanding principal balance of the Facility A Advances to the
extent such principal balance exceeds the Aggregate Facility A
Commitment as so reduced.
(c)(1) All mandatory payments made prior to the Facility B Revolving
Credit Termination Date pursuant to Section 2.2(iv) shall be applied
(x) first to reduce the principal balance of the aggregate Facility B
Advances outstanding until all such Advances shall have been repaid in
full, and (y) thereafter, to reduce the principal balance of the
aggregate Facility A Advances outstanding until all such Advances
shall have been repaid in full, provided that neither the Aggregate
Facility A Commitment nor the Aggregate Facility B Commitment shall be
permanently reduced by any amounts so applied; and (2) all mandatory
payments made from and after the Facility B Revolving Credit
Termination Date pursuant to Section 2.2(iv) shall be applied (x)
first, to reduce the amount of the mandatory payments of the Facility
B Advances required under Section 2.2(i) in the inverse order of
maturity thereunder, until all such Advances shall have been repaid in
full, and (y) thereafter, to reduce the then outstanding principal
balance of the Facility A Advances until all such Advances shall have
been repaid in full, provided that the Aggregate Facility A Commitment
shall not be permanently reduced by the amount so applied.
(vii) All unpaid Obligations shall be paid in full by the Borrower on
the Facility Termination Date.
2.3. RATABLE LOANS. Each Facility A Advance hereunder shall consist of
Facility A Loans made from the several Lenders ratably in proportion to the
ratio that their respective Facility A Commitments bear to the Aggregate
Facility A Commitment, and each Facility B Advance hereunder shall consist of
Facility B Loans made from the several Lenders ratably in proportion to the
ratio that their respective Facility B Commitments bear to the Aggregate
Facility B Commitment.
-25-
2.4. TYPES OF ADVANCES; APPLICABLE MARGIN.
(i) The Advances may be Floating Rate Advances or Eurodollar
Advances, or a combination thereof, selected by the Borrower in
accordance with Sections 2.8 and 2.9.
(ii) The Applicable Margin for Advances shall be subject to adjustment
(upwards or downwards, as appropriate) based on the Total Leverage
Ratio as set forth below. The Total Leverage Ratio shall be
determined from the then most recent quarterly or annual financial
statements and Compliance Certificate delivered by the Borrower
pursuant to Sections 6.1(i), 6.1(ii) and 6.1(iii). The adjustment, if
any, to the Applicable Margin shall be effective commencing on the
fifth Business Day after the delivery of such financial statements and
Compliance Certificate. Until five Business Days after the initial
financial statements and Compliance Certificate for the fiscal quarter
ending June 30, 1996 shall have been delivered hereunder, the
Applicable Margin for Floating Rate Advances shall be 1.125% and the
Applicable Margin for Eurodollar Advances shall be 2.375%. If the
Borrower shall at any time fail to furnish to the Lenders the
financial statements and Compliance Certificate required to be
delivered pursuant to Section 6.1(i), 6.1(ii) or 6.1(iii) within the
time period prescribed therein, then the maximum Applicable Margin
shall apply until the fifth Business Day after the delivery of such
financial statements and Compliance Certificate.
-26-
Applicable Margin Applicable Margin
Total for Floating for Eurodollar
Leverage Ratio Rate Advances Advances
-------------- ----------------- -----------------
Greater than
5.5:1.0 1.25% 2.50%
Less than or
equal to 5.5:1.0
but greater than
5.0:1.0 1.125% 2.375%
Less than or equal
to 5.0:1.0 but greater
than 4.5:1.0 1.00% 2.25%
Less than or equal
to 4.5:1.0 but greater
than 4.0:1.0 .75% 2.00%
Less than or equal
to 4.0:1.0 but greater
than 3.5:1.0 .50% 1.75%
Less than or equal
to 3.5:1.0 but greater
than 3.0:1.0 .25% 1.50%
Less than or equal
to 3.0:1.0 but greater
than 2.5:1.0 0% 1.25%
Less than or equal
to 2.5:1.0 0% 1.00%
2.5. COMMITMENT FEE; REDUCTIONS IN AGGREGATE COMMITMENT. The Borrower
agrees to pay to the Agent for the account of each Lender (i) a commitment fee
of (i) 1/2% per annum, at any time at which the Total Leverage Ratio is equal to
or greater than 4.0:1.0, or (b) 3/8% per annum, at any time the Total Leverage
Ratio is less than 4.0:1.0, in each case on the average daily unborrowed portion
of such Lender's Facility A Commitment from the Restructuring Date to and
including the Facility Termination Date, payable on each Payment Date hereafter
and on the Facility Termination Date, and (ii) a commitment fee of (a) 1/2% per
annum, at any time at which the Total Leverage Ratio is equal to or greater than
4.0:1.0, or (b) 3/8% per annum, at any time the Total Leverage Ratio is less
than 4.0:1.0, in each case on the
-27-
average daily unborrowed portion of such Lender's Facility B Commitment from
the Restructuring Date to and including the Facility B Revolving Credit
Termination Date, payable on each Payment Date hereunder and on the Facility
B Revolving Credit Termination Date. For purposes of this Section 2.5, the
Total Leverage Ratio shall be determined on a quarterly basis as described in
Section 2.4(ii). The Borrower may permanently reduce the Aggregate Facility
A Commitment and/or the Aggregate Facility B Commitment in whole, or in part
ratably among the Lenders having a Facility A Commitment or a Facility B
Commitment, as applicable, in integral multiples of $500,000, upon at least
three Business Days' written notice to the Agent, which notice shall specify
the amount of any such reduction, provided, however, that the amount of the
Aggregate Facility A Commitment may not be reduced below the aggregate
principal amount of the outstanding Facility A Advances nor may the Aggregate
Facility B Commitment be reduced below the aggregate principal amount of the
outstanding Facility B Advances. All accrued and unpaid commitment fees
shall be payable on the effective date of any termination of the obligations
of the Lenders to make Loans hereunder.
2.6. MINIMUM AMOUNT OF EACH ADVANCE. Each Eurodollar Advance shall be in
the minimum amount of $1,000,000 (and in multiples of $100,000 if in excess
thereof), and each Floating Rate Advance shall be in the minimum amount of
$100,000 (and in multiples of $100,000 if in excess thereof), provided, however,
that any Floating Rate Advance which is a Facility A Advance may be in the
amount of the unused Aggregate Facility A Commitment and any Floating Rate
Advance which is a Facility B Advance may be in the amount of the unused
Aggregate Facility B Commitment.
2.7. OPTIONAL PRINCIPAL PAYMENTS. The Borrower may from time to time pay,
without penalty or premium, all outstanding Floating Rate Advances, or, in
integral multiples of $250,000, any portion of the outstanding Floating Rate
Advances upon one Business Day's prior notice to the Agent. A Eurodollar
Advance may not be paid prior to the last day of the applicable Interest Period.
Principal payments made pursuant to this Section 2.7 prior to the Facility B
Revolving Credit Termination Date shall be applied first, to reduce the
aggregate outstanding principal balance of the Facility B Advances until all
such Advances shall have been repaid in full, and thereafter to reduce the
aggregate outstanding principal balance of the Facility A Advances until all
such Advances shall have been repaid in full, and neither the Aggregate
Facility A Commitment nor the Aggregate Facility B Commitment shall be
permanently reduced by the amount so applied. Principal payments made pursuant
to this Section 2.7 after the Facility B Revolving Credit Termination Date shall
be applied, at the Borrower's option, either (a) to reduce the amount of
mandatory payments of the Facility B Advances required under Section 2.2(i) in
the inverse order of maturity or (b) to reduce the aggregate outstanding
principal balance of the Facility A Advances (but the Aggregate Facility A
Commitment shall not be permanently reduced by the amount so applied).
-28-
2.8. METHOD OF SELECTING TYPES AND INTEREST PERIODS FOR NEW ADVANCES. The
Borrower shall select the Type of Advance, the Commitments under which such
Advance is to be made and, in the case of each Eurodollar Advance, the Interest
Period applicable to each Eurodollar Advance from time to time. The Borrower
shall give the Agent irrevocable notice (a "Borrowing Notice") not later than
10:00 a.m. (Chicago time) at least one Business Day before the Borrowing Date of
each Floating Rate Advance, and three Business Days before the Borrowing Date
for each Eurodollar Advance, specifying:
(i) the Borrowing Date, which shall be a Business Day, of such
Advance,
(ii) the aggregate amount of such Advance,
(iii) whether such Advance constitutes a Facility A Advance or a
Facility B Advance, as selected by the Borrower,
(iv) the Type of Advance selected, and
(v) in the case of each Eurodollar Advance, the Interest Period
applicable thereto.
Not later than noon (Chicago time) on each Borrowing Date, each Lender shall
make available its Loan or Loans, in funds immediately available in Chicago to
the Agent at its address specified pursuant to Article XIII. The Agent will
make the funds so received from the Lenders available to the Borrower at the
Agent's aforesaid address.
2.9. CONVERSION AND CONTINUATION OF OUTSTANDING ADVANCES. Floating Rate
Advances shall continue as Floating Rate Advances unless and until such Floating
Rate Advances are converted into Eurodollar Advances. Each Eurodollar Advance
shall continue as a Eurodollar Advance until the end of the then applicable
Interest Period therefor, at which time such Eurodollar Advance shall be
automatically converted into a Floating Rate Advance unless the Borrower shall
have given the Agent a Conversion/Continuation Notice requesting that, at the
end of such Interest Period, such Eurodollar Advance continue as a Eurodollar
Advance for the same or another Interest Period. Subject to the terms of
Section 2.6, the Borrower may elect from time to time to convert all or any part
of an Advance of any Type into any other Type or Types of Advances; provided
that any conversion of any Eurodollar Advance shall be made on, and only on, the
last day of the Interest Period applicable thereto. The Borrower shall give the
Agent irrevocable notice (a "Conversion/Continuation Notice") of each conversion
of an Advance or continuation of a Eurodollar Advance not later than 10:00 a.m.
(Chicago time) at least one Business Day, in the case of a conversion into a
Floating Rate Advance, or three Business Days, in the case of a conversion into
or continuation of a Eurodollar Advance, prior to the date of the requested
conversion or continuation, specifying:
-29-
(i) the requested date which shall be a Business Day, of such
conversion or continuation;
(ii) the aggregate amount and Type of the Advance which is to be
converted or continued;
(iii) whether the Advance to be converted or continued was originally
made as a Facility A Advance or a Facility B Advance; and
(iv) the amount and Type(s) of Advance(s) into which such Advance is
to be converted or continued and, in the case of a conversion into or
continuation of a Eurodollar Advance, the duration of the Interest
Period applicable thereto.
2.10. CHANGES IN INTEREST RATE, ETC. Each Floating Rate Advance shall
bear interest on the outstanding principal amount thereof, for each day from and
including the date such Advance is made or is converted from a Eurodollar
Advance into a Floating Rate Advance pursuant to Section 2.9 to but excluding
the date it becomes due or is converted into a Eurodollar Advance pursuant to
Section 2.9 hereof, at a rate per annum equal to the Floating Rate for such day.
Changes in the rate of interest on that portion of any Advance maintained as a
Floating Rate Advance will take effect simultaneously with each change in the
Alternate Base Rate. Each Eurodollar Advance shall bear interest from and
including the first day of the Interest Period applicable thereto to (but not
including) the last day of such Interest Period at the interest rate determined
as applicable to such Eurodollar Advance. No Interest Period may end after the
Facility Termination Date. The Borrower shall select Interest Periods so that
it is not necessary to repay any portion of a Eurodollar Advance prior to the
last day of the applicable Interest Period in order to make a mandatory
repayment required pursuant to Section 2.2(i).
2.11. RATES APPLICABLE AFTER DEFAULT. Notwithstanding anything to the
contrary contained in Section 2.8 or 2.9, during the continuance of a Default or
Unmatured Default the Required Lenders may, at their option, by notice to the
Borrower (which notice may be revoked at the option of the Required Lenders
notwithstanding any provision of Section 8.2 requiring unanimous consent of the
Lenders to changes in interest rates), declare that no Advance may be made as,
converted into or continued as a Eurodollar Advance. During the continuance of
(a) a Default under Section 7.2, 7.6 or 7.7, or (b) at the option of the
Required Lenders, by notice to the Borrower (which notice may be revoked at the
option of the Required Lenders notwithstanding any provision of Section 8.2
requiring unanimous consent of the Lenders to changes in interest rates), any
other Default, (i) each Eurodollar Advance shall bear interest for the remainder
of the applicable Interest Period at the Eurodollar Rate otherwise applicable to
such Interest Period plus 2% per annum and (ii) each Floating Rate Advance shall
bear interest at a rate per annum equal to the Floating Rate otherwise
applicable to Floating Rate Advance, plus 2% per annum.
-30-
2.12. METHOD OF PAYMENT. All payments of the Obligations hereunder
shall be made, without setoff, deduction, or counterclaim, in immediately
available funds to the Agent at the Agent's address specified pursuant to
Article XIII, or at any other Lending Installation of the Agent specified in
writing by the Agent to the Borrower, by noon (local time) on the date when due
and shall be applied ratably by the Agent among the Lenders. Each payment
delivered to the Agent for the account of any Lender shall be delivered promptly
by the Agent to such Lender in the same type of funds that the Agent received at
its address specified pursuant to Article XIII or at any Lending Installation
specified in a notice received by the Agent from such Lender. The Agent is
hereby authorized to charge the account of the Borrower maintained with First
Chicago for each payment of principal, interest and fees as it becomes due
hereunder.
2.13. NOTES; TELEPHONIC NOTICES. Each Lender is hereby authorized to
record the principal amount of each of its Facility A Loans and Facility B
Loans, and each repayment thereof, on the schedule attached to its applicable
Note, provided, however, that the failure to so record shall not affect the
Borrower's obligations under any such Note. The Borrower hereby authorizes the
Lenders and the Agent to extend, convert or continue Advances, effect selections
of Types of Advances, effect selections of the Commitments under which Advances
are to be made, and to transfer funds based on telephonic notices made by any
person or persons the Agent or any Lender in good faith believes to be acting on
behalf of the Borrower. The Borrower agrees to deliver promptly to the Agent a
written confirmation, if such confirmation is requested by the Agent or any
Lender, of each telephonic notice signed by an Authorized Officer. If the
written confirmation differs in any material respect from the action taken by
the Agent and the Lenders, the records of the Agent and the Lenders shall govern
absent manifest error.
2.14. INTEREST PAYMENT DATES; INTEREST AND FEE BASIS. Interest accrued
on each Floating Rate Advance shall be payable on each Payment Date, commencing
with the first such date to occur after the date hereof, on any date on which
such Floating Rate Advance is prepaid, whether due to acceleration or otherwise,
and at maturity. Interest accrued on that portion of the outstanding principal
amount of any Floating Rate Advance converted into a Eurodollar Advance on a day
other than a Payment Date in respect of Floating Rate Advances shall be payable
on the date of conversion. Interest accrued on each Eurodollar Advance shall be
payable on the last day of its applicable Interest Period, on any date on which
such Eurodollar Advance is prepaid, whether by acceleration or otherwise, and at
maturity. Interest accrued on each Eurodollar Advance having an Interest Period
longer than three months shall also be payable on the last day of each
three-month interval during such Interest Period. Interest on Floating Rate
Advances shall be calculated for actual days elapsed on the basis of a 365 (or,
when appropriate, 366) day year; interest on Eurodollar Advances and commitment
fees shall be calculated for actual days elapsed on the basis of a 360-day year.
Interest shall be payable for the day an Advance is made but not for the day of
any payment on the amount paid if payment is received prior to noon (local time)
at the place of payment. If any payment of principal of or interest on an
Advance shall become due on a day which is not a Business Day, such payment
shall be made on the
-31-
next succeeding Business Day and, in the case of a principal payment, such
extension of time shall be included in computing interest in connection with
such payment.
2.15. NOTIFICATION OF ADVANCES, INTEREST RATES, PREPAYMENTS AND
COMMITMENT REDUCTIONS. Promptly after receipt thereof, the Agent will notify
each Lender of the contents of each Aggregate Commitment reduction notice,
Borrowing Notice, Conversion/Continuation Notice, and repayment notice received
by it hereunder. The Agent will notify each Lender of the interest rate
applicable to each Eurodollar Advance promptly upon determination of such
interest rate and will give each Lender prompt notice of each change in the
Alternate Base Rate. Each Lender shall notify the Agent, not later than eleven
months after receipt of notice from the Borrower pursuant to Section 6.1(x) in
respect of any Equity Issuance, as to whether or not such Lender elects to
request the Borrower to make a mandatory payment in respect of such Equity
Issuance pursuant to Section 2.2(v).
2.16. LENDING INSTALLATIONS. Each Lender may book its Loans at any
Lending Installation selected by such Lender and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to any
such Lending Installation and the Notes shall be deemed held by each Lender for
the benefit of such Lending Installation. Each Lender may, by written or telex
notice to the Agent and the Borrower, designate a Lending Installation through
which Loans will be made by it and for whose account Loan payments are to be
made.
2.17. NON-RECEIPT OF FUNDS BY THE AGENT. Unless the Borrower or a
Lender, as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (i) in the case of a Lender, the
proceeds of a Loan or (ii) in the case of the Borrower, a payment of principal,
interest or fees to the Agent for the account of the Lenders, that it does not
intend to make such payment, the Agent may assume that such payment has been
made. The Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption.
If such Lender or the Borrower, as the case may be, has not in fact made such
payment to the Agent, the recipient of such payment shall, on demand by the
Agent, repay to the Agent the amount so made available together with interest
thereon in respect of each day during the period commencing on the date such
amount was so made available by the Agent until the date the Agent recovers such
amount at a rate per annum equal to (i) if the recipient of such payment is a
Lender, the Federal Funds Effective Rate for such day or (ii) if the recipient
of such payment is the Borrower, the interest rate applicable to the relevant
Loan.
2.18. WITHHOLDING TAX EXEMPTION. At least five Business Days prior to
the first date on which interest or fees are payable hereunder for the account
of any Lender, each Lender that is not incorporated or organized under the laws
of the United States of America, or a state thereof, agrees that it will deliver
to each of the Borrower and the Agent two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224, certifying in either case that such
Lender is entitled to receive payments under this Agreement and the Notes
without deduction or withholding of any
-32-
United States federal income taxes. Each Lender which so delivers a Form 1001
or 4224 further undertakes to deliver to each of the Borrower and the Agent
two additional copies of such form (or a successor form) on or before the
date that such form expires (currently, three successive calendar years for
Form 1001 and one calendar year for Form 4224) or becomes obsolete or after
the occurrence of any event requiring a change in the most recent forms so
delivered by it, and such amendments thereto or extensions or renewals
thereof as may be reasonably requested by the Borrower or the Agent, in each
case certifying that such Lender is entitled to receive payments under this
Agreement and the Notes without deduction or withholding of any United States
federal income taxes, unless an event (including without limitation any
change in treaty, law or regulation) has occurred prior to the date on which
any such delivery would otherwise be required which renders all such forms
inapplicable or which would prevent such Lender from duly completing and
delivering any such form with respect to it and such Lender advises the
Borrower and the Agent that it is not capable of receiving payments without
any deduction or withholding of United States federal income tax.
2.19. COLLATERAL SECURITY; FURTHER ASSISTANCE.
(i) Pursuant to the Existing Credit Agreement, the Borrower granted,
or caused to be granted, to the Agent, for the ratable benefit of the
Agent and the Lenders, as security for the payment of the Secured
Obligations, a Lien on and security interest in all of the following,
whether now or hereafter existing or acquired: (a) all of the shares
of capital stock of the Subsidiaries now or hereafter directly owned
by the Borrower and all proceeds thereof, all as more specifically
described in the Pledge Agreement; (b) certain of the assets now or
hereafter directly owned by the Borrower and all proceeds thereof, all
as more specifically described in the Security Agreement; and (c)
certain of the assets now or hereafter directly owned by its
Subsidiaries and all proceeds thereof, all as more specifically
described in the Subsidiary Security Agreement. The Borrower hereby
reaffirms and confirms the continuing legality, validity and
enforceability of the Pledge Agreement and the Security Agreement and
the Liens created thereby.
(ii) No later than five (5) Business Days following the consummation
of any Permitted Acquisition or the formation of any new Subsidiary
of the Borrower which is permitted hereunder, the Borrower shall:
(a) In the case of a Permitted Acquisition of stock by the
Borrower or the formation of a new Subsidiary, (1) deliver to
the Agent, as Agent for the Lenders, (A) all of the certificates
representing the capital stock (or other instruments or
securities evidencing ownership) of such new Subsidiary which is
being acquired or formed, beneficially owned by the Borrower, as
additional collateral for the Secured Obligations, to be held by
-33-
the Agent in accordance with the terms of the Pledge Agreement,
together with stock powers duly executed in blank and (B) a
revised Schedule "1" containing an accurate list of all then
existing Subsidiaries of the Borrower (including without
limitation any Subsidiaries acquired or formed in connection with
such Permitted Acquisition) and setting forth their respective
jurisdictions of incorporation and the percentage of their
respective capital stock owned by the Borrower or other
Subsidiaries, and (2) cause such new Subsidiary which is being
acquired or formed to deliver to the Agent, (A) duly executed
counterpart signature pages to each of the Subsidiary Documents,
in the forms attached respectively thereto as Annex I, together
with authorization to attach such signature pages to the
Subsidiary Documents, the effect of which shall be that as of the
date set forth on such signature pages, such new Subsidiary shall
become a party to each such Subsidiary Document and be bound by
the terms thereof, (B) revised or supplemented exhibits to the
Subsidiary Security Agreement to take account of such new
Subsidiary and the Collateral being pledged by such new
Subsidiary pursuant to the Subsidiary Security Agreement,
together with authorization to attach such revised or
supplemented exhibits to the Subsidiary Security Agreement, and
(C) such Uniform Commercial Code financing statements and public
utility mortgages, if any, as shall be required to perfect the
security interest of the Agent in the Collateral being pledged by
such new Subsidiary pursuant to the Subsidiary Security Agreement
(other than as contemplated by Section 4.1.3 of the Subsidiary
Security Agreement).
(b) In the case of a Permitted Acquisition of assets by
the Borrower, deliver to the Agent such Uniform Commercial Code
financing statements and public utility mortgages as shall be
required to perfect the security interest of the Agent and the
Lenders in the assets being so acquired (other than as
contemplated by Section 4.1.3 of the Security Agreement).
(c) Provide to the Agent, (1) a certified copy of the
relevant purchase agreement, together with all exhibits,
amendments, waivers and supplements thereto, all of which shall
be in form and substance satisfactory to the Agent, (2) in the
case of a Permitted Acquisition, copies of all Authorizations
required in connection with such Permitted Acquisition or
formation of such new Subsidiary, and (3) such other
documentation (including, without limitation, articles of
incorporation, by-laws and resolutions) which in the reasonable
opinion of the Agent is
-34-
necessary or advisable in connection with such Permitted
Acquisition or formation of such new Subsidiary.
Notwithstanding the foregoing provisions of Section 2.19(ii), in the
case of Shell Subsidiaries that have been formed solely for the
purpose of a Permitted Acquisition, the requirements of Section 2.19
shall not be required to be satisfied until five (5) Business Days
following the consummation of the relevant Permitted Acquisition.
(iii) In connection with any exercise by the Agent or any Lender
of its right and remedies under the Collateral Documents, it may be
necessary to obtain the prior consent or approval of certain
Persons, including but not limited to the FCC, applicable PUCs
and other governmental authorities. Upon the exercise by the
Agent or any Lender of any power, right, privilege or remedy
pursuant to any Collateral Document which requires any consent,
approval, registration, qualification or authorization of any
Person, the Borrower will execute and deliver, or will cause the
execution and delivery of, all applications, certificates,
instruments, and other documents and papers that the Agent or
such Lender may be required to obtain for such consent, approval,
registration, qualification or authorization. Without limiting
the generality of the foregoing, the Borrower will use its best
efforts to obtain from the appropriate Persons the necessary
consents and approvals, if any: (a) for the transfer, if
required for the effectuation of clause (b) below, to the Agent
or the Lenders upon the occurrence of a Default, of any
Authorization in respect of the operations of the Borrower or any
of its Subsidiaries; (b) for the effectuation of any sale or
sales of Pledged Stock (as defined in the Pledge Agreement) upon
the occurrence of a Default; and (c) for the exercise of any
other right or remedy of the Agent or any Lender under any
Collateral Document. The Agent and the Lenders will cooperate
with the Borrower in preparing the filing with the FCC, any
applicable PUC and any other Persons of all requisite
applications required to be obtained by the Borrower under this
Section 2.19(iii).
ARTICLE III
CHANGE IN CIRCUMSTANCES
3.1. YIELD PROTECTION. If any law or any governmental or
quasi-governmental rule, regulation, policy, guideline or directive (whether or
not having the force of law), or any interpretation thereof, or the compliance
of any Lender therewith,
(i) subjects any Lender or any applicable Lending Installation to any
tax, duty, charge or withholding on or from payments due from the
Borrower (excluding federal taxation of the overall net income of any
-35-
Lender or applicable Lending Installation), or changes the basis of
taxation of payments to any Lender in respect of its Loans or other
amounts due it hereunder, or
(ii) imposes or increases or deems applicable any reserve, assessment,
insurance charge, special deposit or similar requirement against
assets of, deposits with or for the account of, or credit extended
by, any Lender or any applicable Lending Installation (other than
reserves already taken into account in determining the interest rate
applicable to Eurodollar Advances by virtue of the inclusion in the
definition of "Eurodollar Rate"), or
(iii) imposes any other condition the result of which is to increase
the cost to any Lender or any applicable Lending Installation of
making, funding or maintaining loans or reduces any amount
receivable by any Lender or any applicable Lending Installation
in connection with loans, or requires any Lender or any
applicable Lending Installation to make any payment calculated by
reference to the amount of loans held or interest received by it,
by an amount deemed material by such Lender,
then, within 15 days of demand by such Lender, the Borrower shall pay such
Lender that portion of such increased expense incurred or reduction in an amount
received which such Lender determines is attributable to making, funding and
maintaining its Loans and its Commitment.
3.2. CHANGES IN CAPITAL ADEQUACY REGULATIONS. If a Lender determines the
amount of capital required or expected to be maintained by such Lender, any
Lending Installation of such Lender or any corporation controlling such Lender
is increased as a result of a Change, then, within 15 days of demand by such
Lender, the Borrower shall pay such Lender the amount necessary to compensate
for any shortfall in the rate of return on the portion of such increased capital
which such Lender determines is attributable to this Agreement, its Loans or its
obligation to make Loans hereunder (after taking into account such Lender's
policies as to capital adequacy). "Change" means (i) any change after the date
of this Agreement in the Risk-Based Capital Guidelines or (ii) any adoption of
or change in any other law, governmental or quasi-governmental rule, regulation,
policy, guideline, interpretation, or directive (whether or not having the force
of law) after the date of this Agreement which affects the amount of capital
required or expected to be maintained by any Lender or any Lending Installation
or any corporation controlling any Lender. "Risk-Based Capital Guidelines"
means (i) the risk-based capital guidelines in effect in the United States on
the date of this Agreement, including transition rules, and (ii) the
corresponding capital regulations promulgated by regulatory authorities outside
the United States implementing the July 1988 report of the Basle Committee on
Banking Regulation and Supervisory Practices Entitled "International Convergence
of Capital Measurements and Capital Standards," including transition rules, and
any amendments to such regulations adopted prior to the date of this Agreement.
-36-
3.3. AVAILABILITY OF TYPES OF ADVANCES. If any Lender determines that
maintenance of its Eurodollar Loans at a suitable Lending Installation would
violate any applicable law, rule, regulation, or directive, whether or not
having the force of law, or if the Required Lenders determine that (i) deposits
of a type and maturity appropriate to match fund Eurodollar Advances are not
available or (ii) the interest rate applicable to a Eurodollar Advance does not
accurately reflect the cost of making or maintaining such Eurodollar Advance,
then the Agent shall suspend the availability of the Eurodollar Advance and
require any Eurodollar Advances to be repaid or converted to Floating Rate
Advances.
3.4. FUNDING INDEMNIFICATION. If any payment of a Eurodollar Advance
occurs on a date which is not the last day of the applicable Interest Period,
whether because of acceleration, prepayment or otherwise, or a Eurodollar
Advance is not made on the date specified by the Borrower for any reason other
than default by the Lenders, the Borrower will indemnify each Lender for any
loss or cost incurred by it resulting therefrom, including, without limitation,
any loss or cost in liquidating or employing deposits acquired to fund or
maintain the Eurodollar Advance.
3.5. LENDER STATEMENTS; SURVIVAL OF INDEMNITY. To the extent reasonably
possible, each Lender shall designate an alternate Lending Installation with
respect to its Eurodollar Loans to reduce any liability of the Borrower to such
Lender under Sections 3.1 and 3.2 or to avoid the unavailability of a Eurodollar
Advance under Section 3.3, so long as such designation is not disadvantageous to
such Lender in such Lender's sole and absolute discretion. Each Lender shall
deliver a written statement of such Lender as to the amount due, if any, under
Section 3.1, 3.2 or 3.4. Such written statement shall set forth in reasonable
detail the calculations upon which such Lender determined such amount and shall
be final, conclusive and binding on the Borrower in the absence of manifest
error. Determination of amounts payable under such Sections in connection with
a Eurodollar Loan shall be calculated as though each Lender funded its
Eurodollar Loan through the purchase of a deposit of the type and maturity
corresponding to the deposit used as a reference in determining the Eurodollar
Rate applicable to such Loan, whether in fact that is the case or not. Unless
otherwise provided herein, the amount specified in the written statement shall
be payable on demand after receipt by the Borrower of the written statement.
The obligations of the Borrower under Sections 3.1, 3.2 and 3.4 shall survive
payment of the Obligations and termination of this Agreement.
-37-
ARTICLE IV
CONDITIONS PRECEDENT
4.1. RESTRUCTURING DATE AND INITIAL ADVANCE. The Restructuring Date shall
not occur and the Lenders shall not be required to make the initial Advance
hereunder unless the Borrower has furnished to the Agent, with sufficient copies
for the Lenders, each dated or dated as of the Restructuring Date (or such
earlier date as shall be acceptable to the Lenders):
(i) A certificate from the Secretary or an Assistant Secretary of
the Borrower and each Subsidiary stating that there have been no
changes to the respective Certificates of Incorporation or Bylaws of
such Person since the date of the most recent certification in respect
thereof under the Existing Credit Agreement, and copies of
certificates of existence and good standing with respect to the
Borrower and each Subsidiary, all certified (within 30 days of the
Restructuring Date) by the appropriate governmental office in the
jurisdiction of incorporation of the Borrower or such Subsidiary, as
the case may be.
(ii) Copies, certified by the Secretary or an Assistant Secretary
of (a) the Borrower, of its Board of Directors' resolutions
authorizing the execution of the Loan Documents and (b) each
Subsidiary, of its Board of Directors' resolutions authorizing the
execution of the Subsidiary Documents.
(iii) An incumbency certificate, executed by (a) the Secretary or an
Assistant Secretary of the Borrower, which shall identify by name and
title and bear the signature of the officers of the Borrower
authorized to sign the Loan Documents and to make borrowings
hereunder, and (b) the Secretary or an Assistant Secretary of each
Subsidiary, which shall identify by name and title and bear the
signature of the officers of such Subsidiary authorized to sign the
Subsidiary Documents, upon which certificates the Agent and the
Lenders shall be entitled to rely until informed of any change in
writing by the Borrower or any Subsidiary, as the case may be.
(iv) A written opinion of (a) Xxxxxx and Xxxxx, L.L.P., special
counsel for the Borrower and its Subsidiaries, addressed to the
Lenders in substantially the form of Exhibit "B-1" hereto, and
(b) and a written opinion of Xxxxxx, Xxxxxx, Xxxxx & Xxxxxxxx,
special FCC counsel for the Borrower and its Subsidiaries,
addressed to the Lenders in substantially the form of Exhibit "B-2"
hereto.
(v) Facility A Notes and Facility B Notes payable to the order of
each of the Lenders.
-38-
(vi) An amendment to the Pledge Agreement in substantially the form
of Exhibit "F" hereto, duly executed by the Borrower, together with
the stock certificates representing all of the outstanding shares of
capital stock of each of the Subsidiaries pledged thereunder and
stock powers duly executed in blank to the extent not previously
delivered.
(vii) An amendment to the Security Agreement in substantially the
form of Exhibit "G" hereto, duly executed by the Borrower, together
with (a) executed financing statements and public utility mortgages,
if any, to be recorded or filed in the appropriate public offices in
each jurisdiction which the Agent or any Lender deems necessary or
advisable to perfect the security interest created thereby, (b)
certificates of insurance in respect of the insurance required to be
maintained thereunder and (c) copies of Lien searches, in form and
substance satisfactory to the Lenders, conducted in each
jurisdiction which the Agent or any Lender deems necessary or
advisable.
(viii) An amendment to the Subsidiary Guaranty in substantially the
form of Exhibit "H" hereto, duly executed by each of the Subsidiaries
of the Borrower.
(ix) An amendment to the Subsidiary Security Agreement in
substantially the form of Exhibit "I" hereto, duly executed by each
of the Subsidiaries of the Borrower, together with (a) executed
financing statements and public utility mortgages, if any, to be
recorded or filed in the appropriate public offices in each
jurisdiction which the Agent or any Lender deems necessary or
advisable to perfect the security interest created thereby,
(b) certificates of insurance in respect of the insurance required
to be maintained thereunder and (c) copies of Lien searches, in form
and substance satisfactory to the Lenders, conducted in each
jurisdiction which the Agent or any Lender deems necessary or
advisable.
(x) Evidence satisfactory to the Lenders and their respective counsel
that the Borrower shall have made all filings and registrations and
obtained all Authorizations which are or may be required
prerequisites to the validity, enforceability or non-voidability of
the Transaction Documents or the pledge of the capital stock of the
Subsidiaries required to be delivered pursuant to the Pledge
Agreement.
(xi) Evidence satisfactory to the Lenders and their respective
counsel that the Borrower shall have paid, or concurrently with the
making of such Advance will pay, in full, to all Existing Lenders
(whether or not such Existing Lenders are Lenders hereunder), all
principal and all accrued and unpaid interest and fees owing to such
Existing Lenders under the Existing Credit Agreement as of the
Restructuring Date.
-39-
(xii) Written money transfer instructions, in substantially the form
of Exhibit "E" hereto, addressed to the Agent and signed by an
Authorized Officer, together with such other related money transfer
authorizations as the Agent may have reasonably requested.
(xiii) Such fees as shall be payable to the Agent and to First Chicago
Capital Markets, Inc. pursuant to the letter agreement referred to
in Section 10.12, upon receipt of which the Agent shall pay to the
Lenders such upfront fees as shall have been agreed to in the offer
letter dated May 14, 1996 to each such Lender.
(xiv) Evidence satisfactory to the Lenders of receipt by the
Borrower of Net Cash Proceeds of not less than $175,000,000 from
an Equity Issuance (other than the Equity Issuance to Teletouch
which is to occur after the Restructuring Date pursuant to the terms
of the Teletouch Merger Agreement in an amount determined as set
forth in the Teletouch Merger Agreement) and/or the issuance of the
1996 Senior Subordinated Indebtedness, of which not less than
$75,000,000 shall be proceeds of an Equity Issuance (it being
understood that for purposes of this Section 4.1(xv), funds
deposited in the Teletouch Escrow by the Underwriters (as defined
in the Teletouch Escrow Agreement) shall be deemed proceeds received
by the Borrower).
(xv) Such other documents as any Lender or its counsel may have
reasonably requested.
4.2. EACH ADVANCE. The Lenders shall not be required to make any Advance,
unless on the applicable Borrowing Date:
(i) There exists no Default or Unmatured Default.
(ii) The representations and warranties contained in Article V are
true and correct as of such Borrowing Date except to the extent any
such representation or warranty is stated to relate solely to an
earlier date, in which case such representation or warranty shall be
true and correct on and as of such earlier date.
(iii) Such Advance is permitted to be incurred by the terms of all
indentures or other instruments creating or evidencing Subordinated
Indebtedness of the Borrower, and will constitute "Senior Debt"
thereunder.
(iv) All legal matters incident to the making of such Advance shall
be satisfactory to the Lenders and their counsel.
-40-
Each Borrowing Notice with respect to each such Advance shall constitute a
representation and warranty by the Borrower that the conditions contained in
Sections 4.2(i), (ii) and (iii) have been satisfied. Any Lender may require a
duly completed Compliance Certificate as a condition to making an Advance.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:
5.1. CORPORATE EXISTENCE AND STANDING. Each of the Borrower and its
Subsidiaries is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation and has all
requisite authority to conduct its business in each jurisdiction in which the
failure to have such authority could reasonably be expected to have a Material
Adverse Effect.
5.2. AUTHORIZATION AND VALIDITY. The Borrower has the corporate power and
authority and legal right to execute and deliver the Loan Documents and to
perform its obligations thereunder. The execution and delivery by the Borrower
of the Loan Documents and the performance of its obligations thereunder have
been duly authorized by proper corporate proceedings, and the Loan Documents
constitute legal, valid and binding obligations of the Borrower enforceable
against the Borrower in accordance with their terms, except as enforceability
may be limited by bankruptcy, insolvency, moratorium or similar laws affecting
the enforcement of creditors' rights generally.
5.3. NO CONFLICT; GOVERNMENT CONSENT. Neither the execution and delivery
by the Borrower of the Loan Documents, nor the consummation of the transactions
therein contemplated, nor compliance with the provisions thereof will violate
any law, rule, regulation, order, writ, judgment, injunction, decree or award
binding on the Borrower or any of its Subsidiaries or the Borrower's or any
Subsidiary's articles of incorporation or by-laws or the provisions of any
indenture, instrument or agreement to which the Borrower or any of its
Subsidiaries is a party or is subject, or by which it, or its Property, is
bound, or conflict with or constitute a default thereunder, or result in the
creation or imposition of any Lien in, of or on the Property of the Borrower or
a Subsidiary pursuant to the terms of any such indenture, instrument or
agreement (other than any violation of or default under the Existing Credit
Agreement (which agreement is being terminated concurrently with the
effectiveness of this Agreement) resulting from the Borrower's execution of this
Agreement or borrowing of Advances hereunder). No Authorization is required to
authorize, or is required in connection with the execution, delivery and
performance of, or the legality, validity, binding effect or enforceability of,
any of the Transaction Documents.
5.4. FINANCIAL STATEMENTS. The December 31, 1995, consolidated audited
financial statements of the Borrower and its Subsidiaries heretofore delivered
to the Lenders were prepared in accordance with generally accepted accounting
principles in effect on the date such statements were prepared and fairly
present the consolidated
-41-
financial condition and operations of the Borrower and its Subsidiaries at
such date and the consolidated results of their operations for the period
then ended.
5.5. MATERIAL ADVERSE CHANGE. Since December 31, 1995, there has been no
change in the business, Property, prospects, condition (financial or otherwise)
or results of operations of the Borrower and its Subsidiaries which could
reasonably be expected to have a Material Adverse Effect.
5.6. TAXES. The Borrower and its Subsidiaries have filed all United States
federal tax returns and all other tax returns which are required to be filed and
have paid all taxes due pursuant to said returns or pursuant to any assessment
received by the Borrower or any of its Subsidiaries, except such taxes, if any,
as are being contested in good faith and as to which adequate reserves have been
provided. None of the United States income tax returns of the Borrower and its
Subsidiaries have been audited by the Internal Revenue Service. No tax liens
have been filed and no claims are being asserted with respect to any such taxes.
The charges, accruals and reserves on the books of the Borrower and its
Subsidiaries in respect of any taxes or other governmental charges are adequate.
5.7. LITIGATION AND CONTINGENT OBLIGATIONS. Except as set forth on Schedule
"3" hereto, there is no litigation, arbitration, governmental investigation,
proceeding or inquiry pending or, to the knowledge of any of their officers,
threatened against or affecting the Borrower or any of its Subsidiaries which
could reasonably be expected to have a Material Adverse Effect. Other than any
liability incident to such litigation, arbitration or proceedings, the Borrower
has no material contingent obligations not provided for or disclosed in the
financial statements referred to in Section 5.4 or in other public documents
filed by Borrower with the Securities and Exchange Commission, so long as copies
of such other public documents have been delivered to the Lenders by the
Borrower promptly upon the filing thereof in accordance with Section 6.1(ix).
5.8. SUBSIDIARIES. Schedule "1" hereto, as revised from time to time
pursuant to Section 2.19(ii)(a), or as revised from time to time to identify
Subisidiaries which are or have become Shell Subsidiaries, contains an accurate
list of all of the presently existing Subsidiaries of the Borrower, setting
forth their respective jurisdictions of incorporation and the percentage of
their respective capital stock owned by the Borrower or other Subsidiaries and
identifying whether or not such Subsidiary is a Shell Subsidiary. All of the
issued and outstanding shares of capital stock of such Subsidiaries have been
duly authorized and issued and are fully paid and non-assessable.
5.9. ERISA. Neither the Borrower nor any of its Subsidiaries has any Plan.
5.10. ACCURACY OF INFORMATION. No information, exhibit or report
furnished by the Borrower or any of its Subsidiaries to the Agent or to any
Lender in connection with the negotiation of, or compliance with, the
Transaction Documents contained any
-42-
material misstatement of fact or omitted to state a material fact or any fact
necessary to make the statements contained therein not misleading.
5.11. REGULATION U. Margin stock (as defined in Regulation U)
constitutes less than 25% of those assets of the Borrower and its Subsidiaries
which are subject to any limitation on sale, pledge, or other restriction
hereunder.
5.12. MATERIAL AGREEMENTS. Neither the Borrower nor any of its
Subsidiaries is a party to any agreement or instrument or subject to any charter
or other corporate restriction which could reasonably be expected to have a
Material Adverse Effect. Neither the Borrower nor any Subsidiary is in default
in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any agreement or instrument evidencing or
governing Indebtedness or any other agreement to which it is a party, which
default could reasonably be expected to have a Material Adverse Effect.
5.13. COMPLIANCE WITH LAWS. The Borrower and its Subsidiaries have
complied in all material respects with all applicable statutes, rules,
regulations, orders and restrictions of any domestic or foreign government or
any instrumentality or agency thereof, having jurisdiction over the conduct of
their respective businesses or the ownership of their respective Property,
except where the failure to so comply could not reasonably be expected to have a
Material Adverse Effect. Neither the Borrower nor any Subsidiary has received
any written notice to the effect that its operations are not, on the date on
which this representation is made or deemed made, in material compliance with
any of the requirements of applicable federal, state and local environmental,
health and safety statutes and regulations or the subject of any federal or
state investigation evaluating whether any remedial action is needed to respond
to a release of any toxic or hazardous waste or substance into the environment,
which non-compliance or remedial action could reasonably be expected to have a
Material Adverse Effect.
5.14. OWNERSHIP OF PROPERTIES. Except as set forth on Schedule "2"
hereto, on the date of this Agreement, the Borrower and its Subsidiaries will
have good title, free of all Liens other than those permitted by Section 6.19,
to all of the Property and assets reflected in the financial statements as owned
by it.
5.15. INVESTMENT COMPANY ACT. Neither the Borrower nor any Subsidiary
thereof is an "investment company" or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
5.16. PUBLIC UTILITY HOLDING COMPANY ACT. Neither the Borrower nor any
Subsidiary is a "holding company" or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
-43-
ARTICLE VI
COVENANTS
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
6.1. FINANCIAL REPORTING. The Borrower will maintain, for itself and each
Subsidiary, a system of accounting established and administered in accordance
with generally accepted accounting principles, and furnish to the Lenders:
(i) Within 90 days after the close of each of its fiscal years, an
unqualified audit report certified by independent certified public
accountants, acceptable to the Lenders, prepared in accordance with
Agreement Accounting Principles on a consolidated and consolidating
basis (consolidating statements need not be certified by such
accountants) for itself and its Subsidiaries, including balance sheets
as of the end of such period, related profit and loss and
reconciliation of surplus statements, and a statement of cash flows,
accompanied by (a) any management letter prepared by said accountants,
and (b) a certificate of said accountants that, in the course of their
examination necessary for their certification of the foregoing, they
have obtained no knowledge of any Default or Unmatured Default, or if,
in the opinion of such accountants, any Default or Unmatured Default
shall exist, stating the nature and status thereof.
(ii) Within 45 days after the close of the first three quarterly
periods of each of its fiscal years, for itself and its Subsidiaries,
consolidated and consolidating unaudited balance sheets as at the
close of each such period and consolidated and consolidating profit
and loss and reconciliation of surplus statements and a statement of
cash flows for the period from the beginning of such fiscal year to
the end of such quarter, all certified by its chief financial officer.
(iii) Together with the financial statements required under Sections
6.1(i) and 6.1(ii), a Compliance Certificate showing the calculations
necessary to determine compliance with this Agreement and stating that
no Default or Unmatured Default exists, or if any Default or Unmatured
Default exists, stating the nature and status thereof.
(iv) Within 20 days after the last day of each month, a consolidated
unaudited profit and loss statement for the Borrower and its
Subsidiaries for the period of six consecutive calendar months ending
on the last day of such month, all certified by its chief financial
officer, and reports of Key Operating Statistics by market for the
previous month.
-44-
(v) Within 270 days after the close of each fiscal year, a statement
of the Unfunded Liabilities of each Plan, if any, certified as correct
by an actuary enrolled under ERISA.
(vi) As soon as possible and in any event within 10 days after the
Borrower knows that any Reportable Event has occurred with respect to
any Plan, a statement, signed by the chief financial officer of the
Borrower, describing said Reportable Event and the action which the
Borrower proposes to take with respect thereto.
(vii) As soon as possible and in any event within 10 days after receipt
by the Borrower, a copy of (a) any notice or claim to the effect that
the Borrower or any of its Subsidiaries is or may be liable to any
Person as a result of the release by the Borrower, any of its
Subsidiaries, or any other Person of any toxic or hazardous waste or
substance into the environment, and (b) any notice alleging any
violation of any federal, state or local environmental, health or
safety law or regulation by the Borrower or any of its Subsidiaries,
which, in either case, could reasonably be expected to have a Material
Adverse Effect.
(viii) Promptly upon the furnishing thereof to the shareholders of the
Borrower, copies of all financial statements, reports and proxy
statements so furnished.
(ix) Promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other regular reports
which the Borrower or any of its Subsidiaries files with the Securities
and Exchange Commission, and all material reports which the Borrower or
any of its Subsidiaries files with the FCC or any applicable PUC.
(x) As soon as possible and in any event within 10 days after the
occurrence thereof, notice of the occurrence of any Significant Sale,
the incurrence or issuance of any Indebtedness or Subordinated
Indebtedness, or the occurrence of any Equity Issuance, together with
a statement setting forth the amount of Net Cash Proceeds realized
therefrom and the date so realized (or expected to be realized).
(xi) Together with each delivery of financial statements pursuant to
clauses (i) and (ii) above, a report in reasonable detail setting
forth the aggregate amount of all Investments in Shell Subsidiaries as
of the last day of the period covered by such financial statements,
certified by its chief financial officer.
(xii) Such other information (including non-financial information) as
the Agent or any Lender may from time to time reasonably request.
-45-
6.2. USE OF PROCEEDS. The Borrower will, and will cause each Subsidiary
to, use the proceeds of the Advances (i) to refinance the principal and accrued
and unpaid interest and fees outstanding under the Existing Credit Agreement
which, pursuant to Section 4.1(xii), are required to be paid on the
Restructuring Date to all of the Existing Lenders, (ii) to finance Permitted
Acquisitions, (iii) for Capital Expenditures and (iv) for general corporate
purposes. The Borrower will not, nor will it permit any Subsidiary to, use any
of the proceeds of the Advances to purchase or carry any "margin stock" (as
defined in Regulation U) or to make any PCS Investment or Acquisition other than
a Permitted Acquisition.
6.3. NOTICE OF DEFAULT, ETC. The Borrower will, and will cause each
Subsidiary to, give prompt notice in writing to the Lenders of (i) the
occurrence of any Default or Unmatured Default and of any other development,
financial or otherwise, which could reasonably be expected to have a Material
Adverse Effect, (ii) the receipt by the Borrower or any Subsidiary of any notice
from any federal, state or local governmental or regulatory body or authority of
the expiration without renewal, termination, material modification or suspension
of, or institution of any proceedings to terminate, materially modify, or
suspend, any Authorization granted by the FCC, any applicable PUC or any other
Authorization now or hereafter held by the Borrower or any of its Subsidiaries
which is required to provide Paging Services in compliance with all applicable
laws and regulations, or (iii) any federal, state or local statute, regulation
or ordinance or judicial or administrative order limiting or controlling the
operations of the Borrower or any of its Subsidiaries which has been issued or
adopted hereafter and which is of material adverse importance or effect in
relation to the operation of the Borrower or any of its Subsidiaries.
6.4. FINANCIAL RATIOS.
6.4.1. TOTAL LEVERAGE RATIO. The Borrower and its Subsidiaries
will maintain, on a consolidated basis as at the last day of each
fiscal quarter ending during the periods set forth below, a Total
Leverage Ratio not greater than the ratio set forth below opposite
each such period:
PERIOD RATIO
--------------------------------------------------------
Restructuring Date through and
including 12/31/97 5.75:1.0
1/1/98 through and including 6/30/98 5.50:1.0
7/1/98 through and including 12/31/98 5.00:1.0
1/1/99 through and including 6/30/99 4.50:1.0
-46-
7/1/99 through and including 12/31/99 4.00:1.0
1/1/00 through and including 6/30/00 3.50:1.0
7/1/00 and thereafter 3.00:1.0
6.4.2. FIXED CHARGE COVERAGE RATIO. The Borrower and its
Subsidiaries will maintain, on a consolidated basis as at the last day
of each fiscal quarter ending during the periods set forth below, a
Fixed Charge Coverage Ratio not less than the ratio set forth below
opposite each such period:
PERIOD RATIO
--------------------------------------------------------
Restructuring Date through and
including 6/30/98 1.50:1.0
7/1/98 and thereafter 1.10:1.0
6.4.3. PRO FORMA DEBT SERVICE RATIO. The Borrower and its
Subsidiaries will maintain, on a consolidated basis as at the last day
of each fiscal quarter, a Pro Forma Debt Service Ratio not less than
1.50 to 1.0.
6.4.4. SENIOR LEVERAGE RATIO. The Borrower and its Subsidiaries
will maintain, on a consolidated basis as at the last day of each
fiscal quarter ending during the periods set forth below, a Senior
Leverage Ratio not greater than the ratio set forth below opposite
each such period:
PERIOD RATIO
--------------------------------------------------------
Restructuring Date through and
including 12/31/97 3.75:1.0
1/1/98 through and including 6/30/98 3.50:1.0
7/1/98 through and including 12/31/98 3.00:1.0
1/1/99 through and including 6/30/99 2.50:1.0
-47-
7/1/99 and thereafter 2.00:1.0
6.5. CONDUCT OF BUSINESS; MAINTENANCE OF AUTHORIZATIONS. The Borrower
will, and will cause each Subsidiary to, (i) carry on and conduct its business
in substantially the same manner and in substantially the same fields of
enterprise as it is presently conducted or in such other fields of enterprise as
may be approved by the Required Lenders pursuant to Section 6.17(xii); (ii) to
do all things necessary to remain duly incorporated, validly existing and in
good standing as a domestic corporation in its jurisdiction of incorporation and
maintain all requisite authority to conduct its business in each jurisdiction in
which the failure to so maintain such authority could reasonably be expected to
have a Material Adverse Effect, provided that (A) after or concurrently with (a)
the transfer to the Borrower by each of Contact Communications, Inc., a New York
corporation ("Contact New York"), Contact Communications of Massachusetts, Inc.
and Contact Communications of Pennsylvania, Inc. (collectively, the "Liquidating
Subsidiaries") of all of the stock of Contact Communications Inc., a Delaware
corporation ("Contact Delaware"), held by such Liquidating Subsidiary, and (b)
the pledge of such stock by the Borrower pursuant to the Pledge Agreement, each
such Liquidating Subsidiary may be dissolved, and (B) Shell Subsidiaries may be
dissolved; and (iii) do all things necessary to renew, extend and continue in
effect all Authorizations which may at any time and from time to time be
necessary to provide Paging Services in compliance with all applicable laws and
regulations where the failure to so renew, extend or continue in effect or to so
comply could reasonably be expected to have a Material Adverse Effect.
6.6. TAXES. The Borrower will, and will cause each Subsidiary to, pay when
due all taxes, assessments and governmental charges and levies upon it or its
income, profits or Property, except those which are being contested in good
faith by appropriate proceedings and with respect to which adequate reserves
have been set aside.
6.7. INSURANCE. The Borrower will, and will cause each Subsidiary to,
maintain with financially sound and reputable insurance companies insurance on
all their Property in such amounts and covering such risks as is consistent with
sound business practice, and the Borrower will furnish to any Lender upon
request full information as to the insurance carried.
6.8. COMPLIANCE WITH LAWS. The Borrower will, and will cause each
Subsidiary to, comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject, including
without limitation, all rules and regulations promulgated by the FCC or any
applicable PUC and those relating to environmental, health and safety
protection, where the failure to so comply could reasonably be expected,
singularly or in the aggregate, to have a Material Adverse Effect. The Borrower
will, and will cause each Subsidiary to, within ten days after receipt thereof,
notify the Banks of the receipt by the Borrower or such Subsidiary of written
notice of any violation of any applicable laws, rules or regulations relating to
environmental, health and safety protection, which violation could reasonably be
expected to have a Material Adverse Effect.
-48-
6.9. MAINTENANCE OF PROPERTIES. The Borrower will, and will cause each
Subsidiary to, do all things necessary to maintain, preserve, protect and keep
its Property in good repair, working order and condition, and make all necessary
and proper repairs, renewals and replacements so that its business carried on in
connection therewith may be properly conducted at all times.
6.10. INSPECTION. Subject to Section 9.16, the Borrower will, and will
cause each Subsidiary to, permit the Agent, by its representative and agents
(or, if a Default shall have occurred and be continuing, the Lenders, by
their respective representatives and agents), to inspect any of the Property,
corporate books and financial records of the Borrower and each Subsidiary, to
examine and make copies of the books of accounts and other financial records
of the Borrower and each Subsidiary, and to discuss the affairs, finances and
accounts of the Borrower and each Subsidiary with, and to be advised as to
the same by, their respective officers all at such reasonable times and
intervals as the Lenders may designate and, if practicable, upon reasonable
prior notice to the Borrower.
6.11. DIVIDENDS. The Borrower will not, nor will it permit any
Subsidiary to, declare or pay any dividends on its capital stock (other than
dividends payable in its own capital stock) or redeem, repurchase or
otherwise acquire or retire any of its capital stock at any time outstanding,
except (i) dividends declared and paid by any Subsidiary to the Borrower or
to a Wholly-Owned Subsidiary, and (ii) so long as no Default or Unmatured
Default has occurred and is continuing or will result therefrom, (A)
redemptions by the Borrower of any capital stock issued as payment of all or
any portion of the deferred purchase price for any Permitted Acquisition
(other than the Acquisition of the assets of Carrier Paging Systems, Inc.) or
(B) redemptions for aggregate liquidation preference value plus accrued
dividends of up to $18,000,000 of Series A Preferred Stock of Teletouch
within 30 days after the Teletouch Acquisition.
6.12. INDEBTEDNESS. The Borrower will not, nor will it permit any
Subsidiary to, create, incur or suffer to exist any Indebtedness, except:
(i) The Loans.
(ii) Indebtedness existing on the date hereof and described in
Schedule "2" hereto.
(iii) Indebtedness of the Borrower to any Wholly-Owned Subsidiary or
of any Wholly-Owned Subsidiary to the Borrower or any other Wholly-
Owned Subsidiary, subject to the provisions of Section 6.20.
(iv) Contingent Obligations permitted under Section 6.18.
(v) Indebtedness of the Borrower or any Subsidiary arising with
respect to the deferred payment of all or any portion of the purchase
-49-
price of any Permitted Acquisition, whether evidenced by a promissory
note, non-competition agreement, retention agreement or otherwise.
(vi) Additional Indebtedness which, when added to the Indebtedness
referred to in Section 6.12(ii), shall not exceed, in the aggregate
for the Borrower and its Subsidiaries, $5,000,000 at any one time
outstanding, provided that neither the Borrower nor any Subsidiary
shall create or incur any such additional Indebtedness if a Default or
Unmatured Default exists or will exist after giving effect thereto.
(vii) Indebtedness of the Borrower not in excess of $500,000 at any
one time outstanding created pursuant to the ETS Agreement.
(viii) Subordinated Indebtedness of the Borrower.
(ix) Indebtedness assumed in connection with any Permitted
Acquisition so long as such Indebtedness is to be repaid in full
concurrently with the consummation of such Permitted Acquisition.
6.13. MERGER. The Borrower will not, nor will it permit any Subsidiary
to, merge or consolidate with or into any other Person, except that (i) a
Subsidiary may merge with the Borrower or a Wholly-Owned Subsidiary and (ii) the
Borrower or a Subsidiary may merge or consolidate with any other Person pursuant
to a Permitted Acquisition, provided that (a) the Borrower or such Subsidiary,
as applicable shall be the surviving entity and (b) after giving effect thereto,
no Default or Unmatured Default shall exist.
6.14. SALE OF ASSETS. The Borrower will not, nor will it permit any
Subsidiary to, lease, sell or otherwise dispose of its Property, to any other
Person except:
(i) Sales of inventory in the ordinary course of business.
(ii) Sales or other dispositions of Property which is obsolete or no
longer used or useful in the business of the Borrower or any of its
Subsidiaries.
(iii) Subject to the provisions of Section 6.20, transfers of Property
by Borrower or any Subsidiary to the Borrower or to a Wholly-Owned
Subsidiary so long as, in the case of transfers to a Wholly-Owned
Subsidiary, all documents and other items required to be delivered by
or in respect of such Subsidiary pursuant to Section 2.19(ii) have
been so delivered.
(iv) Sales of capital stock of the Borrower which is held as treasury
stock.
-50-
(v) The contribution to the Borrower by the Liquidating Subsidaries
(as defined in Section 6.5) of all of the stock of Contact
Communications Inc., as contemplated by Section 6.5.
6.15. SALE OF ACCOUNTS. The Borrower will not, nor will it permit any
Subsidiary to, sell or otherwise dispose of any notes receivable or accounts
receivable, with or without recourse, except pursuant to Section 6.14(iii) or
(iv).
6.16. SALE AND LEASEBACK. The Borrower will not, nor will it permit any
Subsidiary to, sell or transfer any of its Property in order to concurrently
or subsequently lease as lessee such or similar Property.
6.17. INVESTMENTS AND ACQUISITIONS. The Borrower will not, nor will it
permit any Subsidiary to, make or suffer to exist any Investments (including
without limitation, loans and advances to, and other Investments in,
Subsidiaries), or commitments therefor, or to create any Subsidiary or to
become or remain a partner in any partnership or joint venture, or to make
any Acquisition of any Person, except:
(i) Short-term obligations of, or fully guaranteed by, the United
States of America.
(ii) Commercial paper rated A-l or better by Standard and Poor's
Corporation or P-l or better by Xxxxx'x Investors Service, Inc.
(iii) Demand deposit accounts maintained in the ordinary course of
business.
(iv) Certificates of deposit and time deposits which are fully
insured by the Federal Deposit Insurance Corporation or are issued
by or maintained with any Lender or any other commercial bank
(whether domestic or foreign) having capital and surplus in excess
of $100,000,000.
(v) Interest bearing deposit accounts (which may be represented by
certificates of deposit) which are fully insured by the Federal
Deposit Insurance Corporation or are maintained with any Lender or
any other commercial bank having capital and surplus in excess of
$100,000,000.
(vi) Permitted Acquisitions.
(vii) The creation of, and Investments in, (a) the Teletouch Merger
Subsidiary, and (c) other Subsidiaries, subject in each case to the
provisions of Section 6.20.
(viii) Investments in limited partnerships engaged in rendering
Paging Services, related services or research and development of
technology for Paging Services, provided that such Investments
(a) do not exceed in the
-51-
aggregate for the Borrower and its Subsidiaries, (1) during any
fiscal year ending prior to January 1, 1998, $2,000,000, and (2)
during any fiscal year thereafter, an amount equal to 50% of Excess
Cash Flow for the immediately preceding fiscal year.
(ix) Loans and advances (a) from the Borrower to any Wholly-Owned
Subsidiary or (b) from any Wholly-Owned Subsidiary to the Borrower or
any other Wholly-Owned Subsidiary.
(x) PCS Investments, provided that (a) such PCS Investments,
together with other Investments described in clause (xii) below,
shall not exceed, in the aggregate for the Borrower and its
Subsidiaries at any one time outstanding, $20,000,000, (b) each such
PCS Investment shall be made solely with that portion of the Net Cash
Proceeds realized from Equity Issuances which is not included in the
calculation of any Reduction Amount or subject to any mandatory
payment pursuant to Section 2.2(v), (c) the PCS Entity in which any
such PCS Investment is made shall not be a Subsidiary and neither the
Borrower nor any Subsidiary shall have any liability in respect of
any such PCS Entity or any such PCS Entity's liabilities or
obligations, and (d) prior to and after giving effect to any such PCS
Investment, no Default or Unmatured Default shall exist.
(xi) Existing Investments in Subsidiaries and other Investments in
existence on the date hereof and described in Schedule "1" hereto.
(xii) Acquisitions of assets related to, or a business or entity
engaged in, lines of business other than Paging Services so long as
(a) the aggregate consideration (including, without limitation, the
purchase price therefor and any assumption of debt (other than
accounts payable and deferred revenue obligations arising in the
ordinary course of business) for all such Acquisitions during the
term of this Agreement does not exceed $5,000,000 in the aggregate,
(b) such other lines of business have been consented to by the
Required Lenders, and (c) the aggregate amount of all such
Acquisitions (determined as set forth in clause (a) above), together
with all Investments permitted under clause (x) above, shall not
exceed, in the aggregate for the Borrower and its Subsidiaries at any
one time outstanding, $20,000,000.
6.18. CONTINGENT OBLIGATIONS. The Borrower will not, nor will it permit
any Subsidiary to, make or suffer to exist any Contingent Obligation
(including, without limitation, any Contingent Obligation with respect to the
obligations of a Subsidiary), except (i) the Subsidiary Guaranty, (ii) other
Contingent Obligations existing on the date hereof and described in Schedule
"2" hereto, and (iii) guarantees of performance given by the Borrower in
respect of a Permitted Acquisition by a Subsidiary or in respect of an
Investment permitted by Section 6.17(xii).
-52-
6.19. LIENS. The Borrower will not, nor will it permit any Subsidiary
to, create, incur, or suffer to exist any Lien in, of or on the Property of the
Borrower or any of its Subsidiaries, except:
(i) Liens for taxes, assessments or governmental charges or levies
on its Property if the same shall not at the time be delinquent or
thereafter can be paid without penalty, or are being contested in
good faith and by appropriate proceedings and for which adequate
reserves in accordance with generally accepted principles of
accounting shall have been set aside on its books.
(ii) Liens imposed by law, such as carriers', warehousemen's and
mechanics' liens and other similar liens arising in the ordinary
course of business which secure payment of obligations not more than
60 days past due or which are being contested in good faith by
appropriate proceedings and for which adequate reserves shall have
been set aside on its books.
(iii) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions, or other
social security or retirement benefits, or similar legislation.
(iv) Utility easements, building restrictions and such other
encumbrances or charges against real property as are of a nature
generally existing with respect to properties of a similar character
and which do not in any material way affect the marketability of the
same or interfere with the use thereof in the business of the
Borrower or the Subsidiaries.
(v) Lessors' interests under Capitalized Leases.
(vi) Purchase money Liens on Property acquired by the Borrower or
any of its Subsidiaries to secure the purchase price thereof or to
secure Indebtedness incurred solely for the purpose of financing the
acquisition of such Property, provided that (a) such Liens shall
attach solely to the Property acquired or purchased and any
improvements thereon and (b) the Indebtedness secured by such Liens
shall not exceed, in the aggregate for the Borrower and its
Subsidiaries, $5,000,000 at any one time outstanding.
(vii) Good-faith pledges or deposits made to secure performance of
bids, tenders, contracts (other than for the repayment of borrowed
money) or leases, not in excess of 20% of the aggregate amount due
thereunder, or to secure statutory obligations, surety or appeal
bonds, or indemnity, performance or other similar bonds in the
ordinary course of business.
-53-
(viii) Liens on capital stock of the Borrower which is held as
treasury stock.
(ix) Claims in respect of escrowed funds deposited in connection
with any Permitted Acquisition, specifically including any claims
which the holders of, or the trustee in respect of, the 1996 Senior
Subordinated Indebtedness may have on the funds in the Teletouch
Escrow.
(x) Liens existing on the date hereof and described in Schedule
"2" hereto.
(xi) Liens in favor of the Agent and the Lenders granted pursuant
to any Collateral Document.
6.20. SHELL SUBSIDIARIES. Notwithstanding any provision of this
Agreement to the contrary, the aggregate amount of Investments in, and loans
and advances or transfers of Property to, Shell Subsidiaries by Borrower or
any of its Subsidiaries shall not exceed $500,000 in the aggregate in respect
of all such Subsidiaries during the term of this Agreement
6.21. AFFILIATES. The Borrower will not, nor will it permit any
Subsidiary to, enter into any transaction (including, without limitation, the
purchase or sale of any Property or service) with, or make any payment or
transfer to, any Affiliate (other than transactions between the Borrower and
its Subsidiaries, so long as such transactions are otherwise permitted
hereunder and so long as, after giving effect to any such transaction, the
Liens in favor of the Agent and the Lenders granted pursuant to the
Collateral Documents are not impaired) except in the ordinary course of
business and pursuant to the reasonable requirements of the Borrower's or
such Subsidiary's business and upon fair and reasonable terms no less
favorable to the Borrower or such Subsidiary than the Borrower or such
Subsidiary would obtain in a comparable arms-length transaction.
6.22. SUBORDINATED INDEBTEDNESS. The Borrower will not, and will not
permit any Subsidiary to, make any amendment or modification to the
indenture, note or other agreement evidencing or governing any Subordinated
Indebtedness, or directly or indirectly voluntarily prepay, defease or in
substance defease, purchase, redeem, retire or otherwise acquire, any
Subordinated Indebtedness; PROVIDED, HOWEVER, that the Borrower may redeem
the 1996 Senior Subordinated Indebtedness out of funds on deposit in the
Teletouch Escrow as permitted or required by Section 3.10 of the 1996
Indenture and Section 3 of the Teletouch Escrow Agreement.
6.23. RATE HEDGING OBLIGATIONS. The Borrower will, at all times on and
after the date which is 60 days following the Restructuring Date, cause the
Interest Expense on not less than 50% of the aggregate principal amount of
all outstanding Indebtedness of the Borrower to be effectively fixed for an
average weighted maturity of at least two
-54-
(2) years (or such other period of time as the Borrower and the Agent shall
agree upon) at a prevailing market rate through either or both of (a) loans
or other financial accommodations being interest at a fixed rate or (b) an
interest rate exchange or insurance agreement or agreements with one or more
financial institutions acceptable to the Required Lenders in their reasonable
discretion.
ARTICLE VII
DEFAULTS
The occurrence of any one or more of the following events shall
constitute a Default:
7.1. Any representation or warranty made or deemed made by or on behalf
of the Borrower or any of its Subsidiaries to the Lenders or the Agent under
or in connection with this Agreement, any other Transaction Document, any
Loan, or any certificate or information delivered in connection with this
Agreement or any other Transaction Document shall be materially false on the
date as of which made.
7.2. Nonpayment of principal of any Note when due, or nonpayment of
interest upon any Note or of any commitment fee or other Obligations within
ten days after the same becomes due.
7.3. The breach by the Borrower of any of the terms or provisions of any
of Sections 6.2, 6.3, 6.4, 6.11, 6.13 through 6.18, inclusive, and 6.22.
7.4. The breach by the Borrower (other than a breach which constitutes a
Default under Section 7.1, 7.2 or 7.3) of any of the terms or provisions of
this Agreement which is not remedied within thirty days after written notice
from the Agent or any Lender.
7.5. Failure of the Borrower or any of its Subsidiaries to pay when due
any Indebtedness in excess of, singularly or in the aggregate, $5,000,000
("Significant Indebtedness"); or the default by the Borrower or any of its
Subsidiaries in the performance of any term, provision or condition contained
in any agreement under which any such Significant Indebtedness was created
or is governed, or any other event shall occur or condition exist, the effect
of which is to cause, or to permit the holder or holders of such Indebtedness
to cause, such Significant Indebtedness to become due prior to its stated
maturity; or any such Significant Indebtedness of the Borrower or any of its
Subsidiaries shall be declared to be due and payable or required to be
prepaid (other than by a regularly scheduled payment) prior to the stated
maturity thereof; or the Borrower or any of its Subsidiaries shall not pay,
or admit in writing its inability to pay, its debts generally as they become
due.
-55-
7.6. The Borrower or any of its Subsidiaries shall (i) have an order for
relief entered with respect to it under the Federal bankruptcy laws as now or
hereafter in effect, (ii) make an assignment for the benefit of creditors,
(iii) apply for, seek, consent to, or acquiesce in, the appointment of a
receiver, custodian, trustee, examiner, liquidator or similar official for it
or any Substantial Portion of its Property, (iv) institute any proceeding
seeking an order for relief under the Federal bankruptcy laws as now or
hereafter in effect or seeking to adjudicate it a bankrupt or insolvent, or
seeking dissolution, winding up, liquidation, reorganization, arrangement,
adjustment or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or fail to file
an answer or other pleading denying the material allegations of any such
proceeding filed against it, (v) take any corporate action to authorize or
effect any of the foregoing actions set forth in this Section 7.6 or (vi)
fail to contest in good faith any appointment or proceeding described in
Section 7.7.
7.7. Without the application, approval or consent of the Borrower or any
of its Subsidiaries, a receiver, trustee, examiner, liquidator or similar
official shall be appointed for the Borrower or any of its Subsidiaries or
any Substantial Portion of its Property, or a proceeding described in Section
7.6(iv) shall be instituted against the Borrower or any of its Subsidiaries
and such appointment continues undischarged or such proceeding continues
undismissed or unstayed for a period of 60 consecutive days.
7.8. Any court, government or governmental agency shall condemn, seize or
otherwise appropriate, or take custody or control of (each a "Condemnation"),
all or any portion of the Property of the Borrower and its Subsidiaries
which, when taken together with all other Property of the Borrower and its
Subsidiaries so condemned, seized, appropriated, or taken custody or control
of, during the twelve-month period ending with the month in which any such
Condemnation occurs, constitutes a Substantial Portion.
7.9. The Borrower or any of its Subsidiaries shall fail within 60 days to
pay, bond or otherwise discharge any judgment or order for the payment of
money in excess of $5,000,000, which is not stayed on appeal or otherwise
being appropriately contested in good faith.
7.10. The Unfunded Liabilities of all Single Employer Plans shall
exceed, in the aggregate, $50,000 or any Reportable Event shall occur in
connection with any Plan.
7.11. The Borrower or any of its Subsidiaries shall be the subject of any
proceeding pertaining to the release by the Borrower or any of its
Subsidiaries of any toxic or hazardous waste or substance into the
environment, or any violation by the Borrower or any of its Subsidiaries of
any federal, state or local environmental, health or safety law or
regulation, which, in either case, if adversely determined, could (after
-56-
taking into account indemnification, insurance and other reimbursement
obligations of other responsible parties) reasonably be expected to have a
Material Adverse Effect.
7.12. The occurrence of any "default", as defined in any Transaction
Document (other than this Agreement or the Notes), or the breach of any of
the terms or provisions of any Transaction Document (other than this
Agreement or the Notes), which default or breach continues beyond any period
of grace therein provided.
7.13. Any Collateral Document shall for any reason fail to create a valid
and perfected first priority security interest in any collateral purported to
be covered thereby, except as permitted by the terms of any Collateral
Document, or any Collateral Document or the Subsidiary Guaranty shall fail to
remain in full force or effect or any action shall be taken to discontinue or
to assert the invalidity or unenforceability of any Collateral Document or
the Subsidiary Guaranty, or the Borrower or any Subsidiary shall fail to
comply with any of the terms or provisions of any Collateral Document or the
Subsidiary Guaranty.
7.14. (i) Any Authorization necessary for the ownership of any paging
business of the Borrower or any of its Subsidiaries or essential for the
Borrower's or any of its Subsidiaries' provision of Paging Services shall
expire, and on or prior to such expiration, the same shall not have been
renewed or replaced by another Authorization authorizing substantially the
same operations by the Borrower or any Subsidiary; or (ii) any Authorization
necessary for the ownership of any paging business of the Borrower or any of
its Subsidiaries or essential for the Borrower's or any of its Subsidiaries'
provision of Paging Services shall be cancelled, revoked, terminated,
rescinded, annulled, suspended or modified in a materially adverse respect,
or shall no longer be in full force and effect, or the grant or the
effectiveness thereof shall have been stayed, vacated, reversed or set aside,
and such action shall be no longer subject to further administrative or
judicial review (provided, however, that neither of the foregoing events
described in clause (i) or (ii) of this Section 7.14 shall constitute a
Default if such loss of any such Authorization could not reasonably be
expected to have a Material Adverse Effect or to materially adversely affect
the value of the Collateral).
7.15. Any Change in Control shall occur; or any 'Change of Control' under
and as defined in any indenture or instrument evidencing or creating any
Subordinated Indebtedness of the Borrower shall occur.
-57-
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1. ACCELERATION. If any Default described in Section 7.6 or 7.7
occurs with respect to the Borrower, the obligations of the Lenders to make
Loans hereunder shall automatically terminate and the Obligations shall
immediately become due and payable without any election or action on the part
of the Agent or any Lender. If any other Default occurs, the Required
Lenders may terminate or suspend the obligations of the Lenders to make Loans
hereunder, or declare the Obligations to be due and payable, or both,
whereupon the Obligations shall become immediately due and payable, without
presentment, demand, protest or notice of any kind, all of which the Borrower
hereby expressly waives.
8.2. AMENDMENTS. Subject to the provisions of this Article VIII, the
Required Lenders (or the Agent with the consent in writing of the Required
Lenders) and the Borrower or any Subsidiary, as the case may be, may enter
into agreements supplemental hereto for the purpose of adding or modifying
any provisions to the Transaction Documents or changing in any manner the
rights of the Lenders or the Borrower hereunder or waiving any Default
hereunder; provided, however, that no such supplemental agreement shall,
without the consent of all of the Lenders:
(i) Extend the maturity of any Loan or Note or forgive all or any
portion of the principal amount thereof, or reduce the rate of
interest thereon or fees payable hereunder or change the time of
payment of interest thereon or fees payable hereunder.
(ii) Reduce the percentage specified in the definition of Required
Lenders.
(iii) Extend the Facility B Revolving Credit Termination Date or
the Facility Termination Date, or reduce the amount or extend the
payment date for, the mandatory payments required under Section 2.2,
or increase the amount of any Commitment of any Lender hereunder, or
permit the Borrower or any Subsidiary to assign its rights under any
Transaction Document.
(iv) Amend this Section 8.2.
(v) Except as provided in the Collateral Documents, release or
substitute any guarantor or release all or a substantial portion of
the Collateral; PROVIDED that, in the event any Shell Subsidiary is
dissolved in accordance with the provisions of Section 6.5, Agent
may, without the consent of the Lenders, release such Shell
Subsidiary from its obligations under the Subsidiary Guaranty and
may release any Liens granted by or in respect of such Shell
Subsidiary pursuant to any of the Collateral Documents.
-58-
No amendment of any provision of this Agreement relating to the Agent shall
be effective without the written consent of the Agent. The Agent may waive
payment of the fee required under Section 12.3.2 without obtaining the
consent of any other party to this Agreement.
8.3. PRESERVATION OF RIGHTS. No delay or omission of the Lenders or the
Agent to exercise any right under the Transaction Documents shall impair such
right or be construed to be a waiver of any Default or an acquiescence
therein, and the making of a Loan notwithstanding the existence of a Default
or the inability of the Borrower to satisfy the conditions precedent to such
Loan shall not constitute any waiver or acquiescence. Any single or partial
exercise of any such right shall not preclude other or further exercise
thereof or the exercise of any other right, and no waiver, amendment or other
variation of the terms, conditions or provisions of the Transaction Documents
whatsoever shall be valid unless in writing signed by the Lenders required
pursuant to Section 8.2, and then only to the extent in such writing
specifically set forth. All remedies contained in the Transaction Documents
or by law afforded shall be cumulative and all shall be available to the
Agent and the Lenders until the Obligations have been paid in full.
8.4 SUBORDINATED INDEBTEDNESS. During the continuance of a Default or
an Unmatured Default the Agent may, and, upon the direction of the Required
Lenders, shall, give "blockage" notices under and as permitted by the terms
of the indentures or other instruments evidencing or creating any
Subordinated Indebtedness of Borrower.
ARTICLE IX
GENERAL PROVISIONS
9.1. SURVIVAL OF REPRESENTATIONS. All representations and warranties of
the Borrower contained in this Agreement shall survive delivery of the Notes
and the making of the Loans herein contemplated.
9.2. GOVERNMENTAL REGULATION. Anything contained in this Agreement to
the contrary notwithstanding, no Lender shall be obligated to extend credit
to the Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
9.3. TAXES. Any taxes (excluding federal income taxes on the overall
net income of any Lender) or other similar assessments or charges made by any
governmental or revenue authority in respect of the Transaction Documents
shall be paid by the Borrower, together with interest and penalties, if any.
9.4. HEADINGS. Section headings in the Transaction Documents are for
convenience of reference only, and shall not govern the interpretation of any
of the provisions of the Transaction Documents.
-59-
9.5. ENTIRE AGREEMENT. The Transaction Documents and the letter
agreement referred to in Section 10.12 embody the entire agreement and
understanding among the Borrower, the Subsidiaries, the Agent and the Lenders
and supersede all prior agreements and understandings among the Borrower, the
Subsidiaries, the Agent and the Lenders relating to the subject matter
thereof.
9.6. SEVERAL OBLIGATIONS; BENEFITS OF THIS AGREEMENT. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other (except to the extent to which the
Agent is authorized to act as such). The failure of any Lender to perform
any of its obligations hereunder shall not relieve any other Lender from any
of its obligations hereunder. This Agreement shall not be construed so as to
confer any right or benefit upon any Person other than the parties to this
Agreement and their respective successors and assigns.
9.7. EXPENSES; INDEMNIFICATION. THE BORROWER SHALL REIMBURSE THE AGENT
FOR ANY COSTS, INTERNAL CHARGES AND OUT-OF-POCKET EXPENSES (INCLUDING
REASONABLE ATTORNEYS' FEES AND TIME CHARGES OF ATTORNEYS FOR THE AGENT, WHICH
ATTORNEYS MAY BE EMPLOYEES OF THE AGENT) PAID OR INCURRED BY THE AGENT IN
CONNECTION WITH THE PREPARATION, NEGOTIATION, EXECUTION, DELIVERY, REVIEW,
AMENDMENT, MODIFICATION, AND ADMINISTRATION OF THE TRANSACTION DOCUMENTS.
THE BORROWER ALSO AGREES TO REIMBURSE THE AGENT AND THE LENDERS FOR ANY
COSTS, INTERNAL CHARGES AND OUT-OF-POCKET EXPENSES (INCLUDING ATTORNEYS' FEES
AND TIME CHARGES OF ATTORNEYS FOR THE AGENT AND THE LENDERS, WHICH ATTORNEYS
MAY BE EMPLOYEES OF THE AGENT OR THE LENDERS) PAID OR INCURRED BY THE AGENT
OR ANY LENDER IN CONNECTION WITH THE COLLECTION AND ENFORCEMENT OF THE
TRANSACTION DOCUMENTS. THE BORROWER FURTHER AGREES TO INDEMNIFY THE AGENT
AND EACH LENDER, ITS DIRECTORS, OFFICERS AND EMPLOYEES AGAINST ALL LOSSES,
CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, LIABILITIES AND EXPENSES (INCLUDING,
WITHOUT LIMITATION, ALL EXPENSES OF LITIGATION OR PREPARATION THEREFOR
WHETHER OR NOT THE AGENT OR ANY LENDER IS A PARTY THERETO) WHICH MAY BE
IMPOSED ON, INCURRED BY OR ASSERTED AGAINST ANY OF THEM ARISING OUT OF OR
RELATING TO THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS, THE TRANSACTIONS
CONTEMPLATED HEREBY OR THE DIRECT OR INDIRECT APPLICATION OR PROPOSED
APPLICATION OF THE PROCEEDS OF ANY LOAN HEREUNDER, PROVIDED THAT NO SUCH
AGENT, LENDER, DIRECTOR, OFFICER OR EMPLOYEE SHALL HAVE A RIGHT TO BE
INDEMNIFIED OR HELD HARMLESS HEREUNDER FOR ANY LOSSES, CLAIMS, DAMAGES,
PENALTIES, JUDGMENTS, LIABILITIES AND EXPENSES INCURRED BY REASON OF ITS OWN
GROSS
-60-
NEGLIGENCE OR WILLFUL MISCONDUCT. THE OBLIGATIONS OF THE BORROWER UNDER THIS
SECTION 9.7 SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT.
9.8. NUMBERS OF DOCUMENTS. All statements, notices, closing documents,
and requests hereunder shall be furnished to the Agent with sufficient
counterparts so that the Agent may furnish one to each of the Lenders.
9.9. ACCOUNTING. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement
Accounting Principles, except that any calculation or determination which is
to be made on a consolidated basis shall be made for the Borrower and all its
Subsidiaries, including those Subsidiaries, if any, which are unconsolidated
on the Borrower's audited financial statements.
9.10. SEVERABILITY OF PROVISIONS. Any provision in any Transaction
Document that is held to be inoperative, unenforceable, or invalid in any
jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable,
or invalid without affecting the remaining provisions in that jurisdiction or
the operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Transaction Documents are
declared to be severable.
9.11. NONLIABILITY OF LENDERS. The relationship between the Borrower and
the Lenders and the Agent shall be solely that of borrower and lender.
Neither the Agent nor any Lender shall have any fiduciary responsibilities to
the Borrower. Neither the Agent nor any Lender undertakes any responsibility
to the Borrower to review or inform the Borrower of any matter in connection
with any phase of the Borrower's business or operations.
9.12. CHOICE OF LAW. THE TRANSACTION DOCUMENTS (OTHER THAN THOSE
CONTAINING A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE
OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
9.13. CONSENT TO JURISDICTION. EACH PARTY HERETO HEREBY IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR
ILLINOIS STATE COURT SITTING IN CHICAGO IN ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO ANY TRANSACTION DOCUMENTS AND THE BORROWER HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING
MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY
OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN
-61-
SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN
SHALL LIMIT THE RIGHT OF THE AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST
THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION.
9.14. WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT AND EACH LENDER
HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN
ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY TRANSACTION
DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.
9.15. COMPLIANCE WITH APPLICABLE LAWS. It is not the intent of the
Borrower, the Agent or the Lenders to make an agreement in violation of
Applicable Law. Regardless of any provision in any Transaction Document, no
Lender shall be entitled to receive, collect or apply, as interest on the
Loans, any amount in excess of the Maximum Amount. If any Lender ever
receives, collects or applies, as interest, any such excess, such amount
which would be excessive interest shall be deemed a partial repayment of
principal and treated hereunder as such; and if principal is paid in full,
any remaining excess shall be paid to the Borrower. In determining whether
or not the interest paid or payable, under any specific contingency, exceeds
the Maximum Amount, the Borrower and each Lender shall, to the maximum extent
permitted under Applicable Law, (i) characterize any nonprincipal payment as
an expense, fee or premium rather than as interest, (ii) exclude voluntary
prepayments and the effect thereof, and (iii) amortize, prorate, allocate and
spread in equal parts, the total amount of interest throughout the entire
contemplated term of the Obligations so that the interest rate is uniform
throughout the entire term of the Obligations; provided, however, that if the
Loans are paid and performed in full prior to the end of the full
contemplated term of the Obligations, and if the interest received for the
actual period of existence thereof exceeds the Maximum Amount, each Lender
shall refund to the Borrower the amount of the Loans owing, and, in such
event, each Lender shall not be subject to any penalties provided by
Applicable Law for contracting for, charging or receiving interest in excess
of the Maximum Amount. This Section 9.15 shall control every other provision
of all agreements pertaining to the transactions contemplated by or contained
in the Transaction Documents.
9.16. CONFIDENTIALITY. Each Lender agrees to hold any non-public
information which it may receive from the Borrower pursuant to this Agreement
in confidence, except for disclosure (i) to other Lenders (and, provided they
agree to be bound by this Section 9.16, to their respective Affiliates),
(ii) to legal counsel, accountants, and other professional advisors to that
Lender or to a Transferee provided that such Persons agree to be bound by
this Section 9.16, (iii) to regulatory officials, (iv) to any Person as
requested pursuant to or as required by law, regulation, or legal process,
(v) to any Person in connection with any legal proceeding to which that
Lender is a party, and (vi) permitted by Section 12.4.
-62-
9.17. RESTRUCTURING TRANSACTIONS. The Borrower, each Lender, each
Exiting Lender and the Agent agree that on the Restructuring Date the
following transactions shall be deemed to occur automatically, without
further action by any party hereto:
(i) The Existing Credit Facility shall be replaced by the Restated
Credit Facility and the Existing Credit Agreement shall be deemed to be
amended and restated in its entirety in the form of this Agreement;
(ii) Each Exiting Lender shall cease to be a party hereto and shall
have no further obligation to extend credit hereunder;
(iii) All Existing Obligations, to the extent not paid on the
Restructuring Date, shall be renewed, extended and restated hereunder and
shall continue to be outstanding hereunder and, as such, shall constitute
Obligations hereunder, and nothing herein shall be construed to deem such
Existing Obligations paid. Each Existing Lender shall, promptly after
receipt of (a) the payment in immediately available funds of all amounts
owing to such Existing Lender pursuant to Section 4.1(xi), and (b) its
Notes hereunder (in the case of Lenders only), return to the Borrower the
promissory note (marked "Superseded" or, in the case of Exiting Lenders,
"Cancelled") received by it in connection with the Existing Credit
Agreement.
The Borrower, each Lender, each Exiting Lender and the Agent agree that
(a) the restructuring transactions provided in the foregoing clauses (i),
(ii) and (iii) shall not be effective until the conditions set forth in
Section 4.1 are satisfied and the initial Advance shall have been made
hereunder; (b) all terms and conditions of the Existing Credit Agreement
which are amended and restated by this Agreement shall remain effective until
such amendment and restatement becomes effective hereunder; (c) the
representations, warranties and covenants set forth herein shall become
effective concurrently with the making of the initial Advance hereunder; and
(d) this Agreement (other than Section 9.7) shall terminate if the
Restructuring Date shall not have occurred on or prior to June 30, 1996.
Each Exiting Lender's execution hereof shall be deemed to evidence only
its agreement with this Section 9.17 and its consent, solely in its capacity
as an Existing Lender under the Existing Credit Agreement, to the amendments
of the Existing Credit Agreement embodied herein.
-63-
ARTICLE X
THE AGENT
10.1. APPOINTMENT. The First National Bank of Chicago is hereby
appointed Agent hereunder and under each other Transaction Document, and each
of the Lenders irrevocably authorizes the Agent to act as the agent of such
Lender. The Agent agrees to act as such upon the express conditions contained
in this Article X and in the other Transaction Documents. Each of the
Lenders authorizes the Agent to execute on behalf of such Lender each of the
Collateral Documents (including, without limitation, the amendments thereto
in substantially the form of Exhibits "F", "G" and "I" hereto) and the
amendment to the Subsidiary Guaranty in substantially the form of Exhibit "H"
hereto (the terms of which shall be binding on such Lender). The Agent shall
not have a fiduciary relationship in respect of the Borrower or any Lender by
reason of this Agreement or any other Transaction Document.
10.2. POWERS. The Agent shall have and may exercise such powers under
the Transaction Documents as are specifically delegated to the Agent by the
terms of each thereof, together with such powers as are reasonably incidental
thereto. The Agent shall have no implied duties to the Lenders, or any
obligation to the Lenders to take any action thereunder except any action
specifically provided by the Transaction Documents to be taken by the Agent.
10.3. GENERAL IMMUNITY. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to the Borrower, the Lenders or
any Lender for any action taken or omitted to be taken by it or them
hereunder or under any other Transaction Document or in connection herewith
or therewith except for its or their own gross negligence or willful
misconduct.
10.4. NO RESPONSIBILITY FOR LOANS, RECITALS, ETC. Neither the Agent nor
any of its directors, officers, agents or employees shall be responsible for
or have any duty to ascertain, inquire into, or verify (i) any statement,
warranty or representation made in connection with any Transaction Document
or any borrowing hereunder; (ii) the performance or observance of any of the
covenants or agreements of any obligor under any Transaction Document,
including, without limitation, any agreement by an obligor to furnish
information directly to each Lender; (iii) the satisfaction of any condition
specified in Article IV, except receipt of items required to be delivered to
the Agent; (iv) the validity, effectiveness or genuineness of any Transaction
Document or any other instrument or writing furnished in connection
therewith; or (v) the perfection, priority, condition, value or sufficiency
of any of the Collateral. The Agent shall have no duty to disclose to the
Lenders information that is not required to be furnished by the Borrower to
the Agent at such time, but is voluntarily furnished by the Borrower to the
Agent (either in its capacity as Agent or in its individual capacity).
10.5. ACTION ON INSTRUCTIONS OF LENDERS. The Agent shall in all cases
be fully protected in acting, or in refraining from acting, hereunder and
under any other Transaction Document in accordance with written instructions
signed by the Required
-64-
Lenders (or, if required by the terms of Section 8.2, all of the Lenders) and
such instructions and any action taken or failure to act pursuant thereto
shall be binding on all of the Lenders and on all holders of Notes. The
Agent shall be fully justified in failing or refusing to take any action
hereunder and under any other Transaction Document unless it shall first be
indemnified to its satisfaction by the Lenders pro rata against any and all
liability, cost and expense that it may incur by reason of taking or
continuing to take any such action.
10.6. EMPLOYMENT OF AGENTS AND COUNSEL. The Agent may execute any of
its duties as Agent hereunder and under any other Transaction Document by or
through employees, agents, and attorneys-in-fact and shall not be answerable
to the Lenders, except as to money or securities received by it or its
authorized agents, for the default or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. The Agent shall be
entitled to advice of counsel concerning all matters pertaining to the agency
hereby created and its duties hereunder and under any other Transaction
Document.
10.7. RELIANCE ON DOCUMENTS; COUNSEL. The Agent shall be entitled to
rely upon any Note, notice, consent, certificate, affidavit, letter,
telegram, statement, paper or document believed by it to be genuine and
correct and to have been signed or sent by the proper person or persons, and,
in respect to legal matters, upon the opinion of counsel selected by the
Agent, which counsel may be employees of the Agent.
10.8. AGENT'S REIMBURSEMENT AND INDEMNIFICATION. The Lenders agree to
reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (i) for any amounts not reimbursed by the Borrower for which the
Agent is entitled to reimbursement by the Borrower under the Transaction
Documents, (ii) for any other expenses incurred by the Agent on behalf of the
Lenders, in connection with the preparation, execution, delivery,
administration and enforcement of the Transaction Documents and (iii) for any
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind and nature whatsoever
which may be imposed on, incurred by or asserted against the Agent in any way
relating to or arising out of the Transaction Documents or any other document
delivered in connection therewith or the transactions contemplated thereby,
or the enforcement of any of the terms thereof or of any such other
documents, provided that no Lender shall be liable for any of the foregoing
to the extent they arise from the gross negligence or willful misconduct of
the Agent. The obligations of the Lenders under this Section 10.8 shall
survive payment of the Obligations and termination of this Agreement.
10.9. RIGHTS AS A LENDER. In the event the Agent is a Lender, the Agent
shall have the same rights and powers hereunder and under any other
Transaction Document as any Lender and may exercise the same as though it
were not the Agent, and the term "Lender" or "Lenders" shall, at any time
when the Agent is a Lender, unless the context otherwise indicates, include
the Agent in its individual capacity. The Agent may accept deposits from,
lend money to, and generally engage in any kind of trust,
-65-
debt, equity or other transaction, in addition to those contemplated by this
Agreement or any other Transaction Document, with the Borrower or any of its
Subsidiaries in which the Borrower or such Subsidiary is not restricted
hereby from engaging with any other Person.
10.10. LENDER CREDIT DECISION. Each Lender acknowledges that it has,
independently and without reliance upon the Agent or any other Lender and
based on the financial statements prepared by the Borrower and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and the other Transaction
Documents. Each Lender also acknowledges that it will, independently and
without reliance upon the Agent or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue
to make its own credit decisions in taking or not taking action under this
Agreement and the other Transaction Documents.
10.11. SUCCESSOR AGENT. The Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower, such resignation to
be effective upon the appointment of a successor Agent or, if no successor
Agent has been appointed, forty-five days after the retiring Agent gives
notice of its intention to resign. The Agent may be removed at any time with
or without cause by written notice received by the Agent from the Required
Lenders, such removal to be effective on the date specified by the Required
Lenders. Upon any such resignation or removal, the Required Lenders shall
have the right to appoint, on behalf of the Borrower and the Lenders, a
successor Agent (which successor Agent, so long as no Default shall have
occurred and be continuing, shall be approved by the Borrower, which approval
shall not be unreasonably withheld or delayed). If no successor Agent shall
have been so appointed by the Required Lenders within thirty days after the
resigning Agent's giving notice of its intention to resign, then the
resigning Agent may appoint, on behalf of the Borrower and the Lenders, a
successor Agent (which successor Agent, so long as no Default shall have
occurred and be continuing, shall be approved by the Borrower, which approval
shall not be unreasonably withheld or delayed). If the Agent has resigned or
been removed and no successor Agent has been appointed, the Lenders may
perform all the duties of the Agent hereunder and the Borrower shall make all
payments in respect of the Obligations to the applicable Lender and for all
other purposes shall deal directly with the Lenders. No successor Agent
shall be deemed to be appointed hereunder until such successor Agent has
accepted the appointment. Any such successor Agent shall be a commercial
bank having capital and retained earnings of at least $50,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the resigning or removed Agent.
Upon the effectiveness of the resignation or removal of the Agent, the
resigning or removed Agent shall be discharged from its duties and
obligations hereunder and under the Transaction Documents. After the
effectiveness of the resignation or removal of an Agent, the provisions of
this Article X shall continue in effect for the benefit of such Agent in
respect of any actions taken or omitted to be
-66-
taken by it while it was acting as the Agent hereunder and under the other
Transaction Documents.
10.12. AGENT'S FEE; ARRANGER'S FEE. The Borrower agrees to pay to the
Agent, for its own account, and to First Chicago Capital Markets, Inc. (the
"Arranger") the fees agreed to by the Borrower, the Agent and the Arranger
pursuant to that certain letter agreement dated May 20, 1996, or as otherwise
agreed upon from time to time.
10.13. COLLATERAL RELEASES. The Lenders hereby empower and authorize the
Agent to execute and deliver to the Borrower any such agreements, documents
or instruments as shall be necessary or appropriate to effect any releases of
Collateral permitted by the terms of the Collateral Documents or which shall
have been approved by the Required Lenders (or, if required by the terms of
Section 8.2, all of the Lenders) in writing.
ARTICLE XI
SETOFF; RATABLE PAYMENTS
11.1. SETOFF. In addition to, and without limitation of, any rights of
the Lenders under applicable law, if the Borrower becomes insolvent, however
evidenced, or any Default or Unmatured Default occurs, any and all deposits
(including all account balances, whether provisional or final and whether or
not collected or available) and any other Indebtedness at any time held or
owing by any Lender to or for the credit or account of the Borrower may be
offset and applied toward the payment of the Obligations owing to such
Lender, whether or not the Obligations, or any part hereof, shall then be due.
11.2. RATABLE PAYMENTS. If any Lender, whether by setoff or otherwise,
has payment made to it upon its Loans (other than payments received pursuant
to Section 3.1, 3.2 or 3.4) in a greater proportion than that received by any
other Lender, such Lender agrees, promptly upon demand, to purchase a portion
of the Loans held by the other Lenders so that after such purchase each
Lender will hold its ratable proportion of Loans. If any Lender, whether in
connection with setoff or amounts which might be subject to setoff or
otherwise, receives collateral or other protection for its Obligations or
such amounts which may be subject to setoff, such Lender agrees, promptly
upon demand, to take such action necessary such that all Lenders share in the
benefits of such collateral ratably in proportion to their Loans. In case
any such payment is disturbed by legal process, or otherwise, appropriate
further adjustments shall be made.
-67-
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1. SUCCESSORS AND ASSIGNS. The terms and provisions of the
Transaction Documents shall be binding upon and inure to the benefit of the
Borrower and the Lenders and their respective successors and assigns, except
that (i) the Borrower shall not have the right to assign its rights or
obligations under the Loan Documents and (ii) any assignment by any Lender
must be made in compliance with Section 12.3. Notwithstanding clause (ii) of
this Section, any Lender may at any time, without the consent of or notice to
the Borrower or the Agent, assign all or any portion of its rights under this
Agreement and its Notes to a Federal Reserve Bank; provided, however, that no
such assignment shall release the transferor Lender from its obligations
hereunder. The Agent may treat the payee of any Note as the owner thereof
for all purposes hereof unless and until such payee complies with Section
12.3 in the case of an assignment thereof or, in the case of any other
transfer, a written notice of the transfer is filed with the Agent. Any
assignee or transferee of a Note agrees by acceptance thereof to be bound by
all the terms and provisions of the Transaction Documents. Any request,
authority or consent of any Person, who at the time of making such request or
giving such authority or consent is the holder of any Note, shall be
conclusive and binding on any subsequent holder, transferee or assignee of
such Note or of any Note or Notes issued in exchange therefor.
12.2. PARTICIPATIONS.
12.2.1. PERMITTED PARTICIPANTS; EFFECT. Any Lender may, in the
ordinary course of its business and in accordance with applicable law, at
any time sell to one or more banks or other entities ("Participants")
participating interests in any Loan owing to such Lender, any Note held by
such Lender, any of the Commitments of such Lender or any other interest of
such Lender under the Transaction Documents. In the event of any such sale
by a Lender of participating interests to a Participant, such Lender's
obligations under the Transaction Documents shall remain unchanged, such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, such Lender shall remain the holder of any
such Note for all purposes under the Transaction Documents, all amounts
payable by the Borrower under this Agreement shall be determined as if such
Lender had not sold such participating interests, and the Borrower and the
Agent shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under the Transaction
Documents.
12.2.2. VOTING RIGHTS. Each Lender shall retain the sole right to
approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Transaction Documents other
than any amendment, modification or waiver with respect to any Loan or
Commitment in which such Participant has an interest which forgives
principal, interest or fees or reduces the interest rate or fees payable
with respect to any such Loan or
-68-
Commitment, postpones any date fixed for any regularly-scheduled payment of
principal (including, without limitation, any payment of principal required
to be made pursuant to Section 2.2 (i) or (ii), or, after a request therefor
by the Required Lenders, Section 2.2 (iii), (iv) or (v)) of, or interest or
fees on, any such Loan or Commitment, releases any guarantor of any such
Loan or releases any substantial portion of the collateral, if any, securing
any such Loan.
12.2.3. BENEFIT OF SETOFF. The Borrower agrees that each Participant
shall be deemed to have the right of setoff provided in Section 11.1 in
respect of its participating interest in amounts owing under the
Transaction Documents to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under the
Transaction Documents, provided that each Lender shall retain the right of
setoff provided in Section 11.1 with respect to the amount of participating
interests sold to each Participant. The Lenders agree to share with each
Participant, and each Participant, by exercising the right of setoff
provided in Section 11.1, agrees to share with each Lender, any amount
received pursuant to the exercise of its right of setoff, such amounts to
be shared in accordance with Section 11.2 as if each Participant were a
Lender.
12.3. ASSIGNMENTS.
12.3.1. PERMITTED ASSIGNMENTS. Any Lender may, in the ordinary
course of its business and in accordance with applicable law, at any time
assign to one or more banks or other entities ("Purchasers") all or any
part of its rights and obligations under the Transaction Documents;
provided that the amount of the Commitment or Advances being assigned
pursuant to each such assignment by a Lender (other than an assignment to a
Purchaser which is a Lender or an Affiliate thereof), determined as of the
date of such assignment, shall not be less than the lesser of (i)
$5,000,000 and (ii) the Commitment of such assigning Lender (determined as
of the date of such assignment). Such assignment shall be substantially in
the form of Exhibit "D" hereto or in such other form as may be agreed to by
the parties thereto. The consent of the Borrower and the Agent, which
consent shall not be unreasonably withheld or delayed, shall be required
prior to an assignment becoming effective with respect to a Purchaser which
is not a Lender or an Affiliate thereof, provided, however, that, if a
Default shall have occurred and be continuing on the date of such
assignment, the consent of the Borrower shall not be required.
12.3.2. EFFECT; EFFECTIVE DATE. Upon (i) delivery to the Agent of a
notice of assignment, substantially in the form attached as Exhibit "I" to
Exhibit "D" hereto (a "Notice of Assignment"), together with any consents
required by Section 12.3.1, and (ii) payment of a $4,000 fee to the Agent
for processing such assignment, such assignment shall become effective on
the effective date specified in such Notice of Assignment. The Notice of
Assignment shall contain a representation by the Purchaser to the effect
that none of the consideration used to make the purchase of the Commitment
and Loans under
-69-
the applicable assignment agreement are "plan assets" as defined under ERISA
and that the rights and interests of the Purchaser in and under the
Transaction Documents will not be "plan assets" under ERISA. On and after
the effective date of such assignment, such Purchaser shall for all purposes
be a Lender party to this Agreement and any other Transaction Document
executed by the Lenders and shall have all the rights and obligations of a
Lender under the Transaction Documents, to the same extent as if it were an
original party hereto, and no further consent or action by the Borrower, the
Lenders or the Agent shall be required to release the transferor Lender with
respect to the percentage of the Aggregate Commitment and Loans assigned to
such Purchaser. Upon the consummation of any assignment to a Purchaser
pursuant to this Section 12.3.2, the transferor Lender, the Agent and the
Borrower shall make appropriate arrangements so that replacement Notes are
issued to such transferor Lender and new Notes or, as appropriate,
replacement Notes, are issued to such Purchaser, in each case in principal
amounts reflecting their respective Commitments, as adjusted pursuant to
such assignment.
12.3.3. PRO RATA ASSIGNMENTS. Notwithstanding anything contained
herein to the contrary, no assignment to any Purchaser of any portion of a
Lender's Facility A Commitment or Facility A Loans shall be made other than
in conjunction with a proportionately equal assignment to such Purchaser of
such Lender's Facility B Commitment and Facility B Loans, nor shall any
assignment to any Purchaser of any Lender's Facility B Commitment or
Facility B Loans be made other than in conjunction with a proportionately
equal assignment to such Purchaser of such Lender's Facility A Commitment
and Facility A Loans.
12.4. DISSEMINATION OF INFORMATION. The Borrower authorizes each Lender
to disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Transaction Documents by operation of law (each a
"Transferee") and any prospective Transferee any and all information in such
Lender's possession concerning the creditworthiness of the Borrower and its
Subsidiaries; provided that each Transferee and prospective Transferee agrees
to be bound by Section 9.16 of this Agreement.
12.5. TAX TREATMENT. If any interest in any Transaction Document is
transferred to any Transferee which is organized under the laws of any
jurisdiction other than the United States or any State thereof, the
transferor Lender shall cause such Transferee, concurrently with the
effectiveness of such transfer, to comply with the provisions of Section 2.18.
-70-
ARTICLE XIII
NOTICES
13.1. GIVING NOTICE. Except as otherwise permitted by Section 2.13
with respect to borrowing notices, all notices and other communications provided
to any party hereto under this Agreement or any other Transaction Document shall
be in writing or by telex or by facsimile and addressed or delivered to such
party at its address set forth below its signature hereto or at such other
address as may be designated by such party in a notice to the other parties.
Any notice, if mailed and properly addressed with postage prepaid, shall be
deemed given when received; any notice, if transmitted by telex or facsimile,
shall be deemed given when transmitted (answerback confirmed in the case of
telexes).
13.2. CHANGE OF ADDRESS. The Borrower, the Agent and any Lender may
each change the address for service of notice upon it by a notice in writing to
the other parties hereto.
-71-
ARTICLE XIV
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one agreement, and any of the parties hereto may
execute this Agreement by signing any such counterpart. This Agreement shall be
effective when it has been executed by the Borrower, the Agent and the Lenders
and each party has notified the Agent by telex or telephone, that it has taken
such action.
* * *
-72-
IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent have executed
this Agreement as of the date first above written.
COMMITMENTS PRONET INC.
By:
--------------------------------
Xxx Xxxxxxxx
Senior Vice President
0000 XXX Xxxxxxx
Xxxxxx, Xxxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xx. Xxx Xxxxxxxx
Senior Vice President
Facility A Commitment: THE FIRST NATIONAL BANK OF CHICAGO,
$25,000,000 Individually and as Agent
By:
--------------------------------
Facility B Commitment: C. Xxxx Xxxxxxx
$125,000,000 Vice President
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Mr. C. Xxxx Xxxxxxx
Vice President
-73-
Facility A Commitment: XXXXX FARGO BANK (TEXAS), NATIONAL
$8,333,333.34 ASSOCIATION
Facility B Commitment: By:
--------------------------------
$41,666,666.66 Print Name:
Title:
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xx. Xxxxxxx X. X. Xxxx
Vice President
Facility A Commitment: UNION BANK OF CALIFORNIA, N.A.
$8,333,333.33
By:
--------------------------------
Facility B Commitment: Print Name:
$41,666,666.67 Title:
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xx. Xxxx Xxxxxxxx
Vice President
-74-
COMMITMENTS
Facility A Commitment: XXXXXX BROTHERS, INC.
$8,333,333.33
By:
Facility B Commitment: Print Name:
$41,666,666.67 Title:
3 World Financial Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xx. Xxxxxxx Xxxxxxx
DOCUMENT NUMBER: CREDIT.7
11-12-96
-75-
EXITING LENDERS
THE BANK OF NEW YORK
By:
-------------------------------------
Print Name:
-----------------------------
Title:
----------------------------------
BANK ONE, TEXAS, N.A.
By:
-------------------------------------
Print Name:
-----------------------------
Title:
----------------------------------
FLEET NATIONAL BANK, formerly known as
SHAWMUT BANK CONNECTICUT, N.A.
By:
-------------------------------------
Print Name:
-----------------------------
Title:
----------------------------------
ROYAL BANK OF CANADA
By:
-------------------------------------
Print Name:
-----------------------------
Title:
----------------------------------
-76-
EXHIBIT "A-1"
FACILITY A NOTE
$
, l9
ProNet Inc., a Delaware corporation (the "Borrower"), promises to pay to
the order of _______________________________ (the "Lender") the lesser of the
principal sum of__________________________ Dollars or the aggregate unpaid
principal amount of all Facility A Loans made by the Lender to the Borrower
pursuant to Article II of the Agreement (as hereinafter defined) referred to,
in immediately available funds at the main office of The First National Bank
of Chicago in Chicago, Illinois, as Agent, together with interest on the
unpaid principal amount hereof at the rates and on the dates set forth in the
Agreement. The Borrower shall pay the principal of and accrued and unpaid
interest on the Facility A Loans in full on the Facility Termination Date and
shall make such mandatory payments as are required to be made under the terms
of Article II of the Agreement.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual
practice, the date and amount of each Facility A Loan and the date and amount
of each principal payment hereunder.
This Note is one of the Notes issued pursuant to, and is entitled to the
benefits of, the Second Amended and Restated Credit Agreement, dated as of
June 14, 1996 (which, as it may be amended or modified and in effect from
time to time, is herein called the "Agreement") among the Borrower, the
lenders party thereto, including the Lender, and The First National Bank of
Chicago, as Agent, to which Agreement, as it may be amended from time to
time, reference is hereby made for a statement of the terms and conditions
governing this Note, including the terms and conditions under which this Note
may be prepaid or its maturity date accelerated. This Note is secured
pursuant to the Pledge Agreement, the Security Agreement and the Subsidiary
Security Agreement and guaranteed pursuant to the Subsidiary Guaranty, all as
more specifically described in the Agreement, and reference is made thereto
for a statement of the terms and provisions thereof. Capitalized terms used
herein and not otherwise defined herein are used with the meanings attributed
to them in the Agreement.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND
NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS, BUT GIVING EFFECT TO
FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
PRONET INC.
-77-
By:
---------------------------------
Xxx Xxxxxxxx
Senior Vice President
-78-
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
FACILITY A NOTE OF PRONET INC.
DATED JUNE 14, l996
PRINCIPAL MATURITY
AMOUNT OF OF INTEREST PRINCIPAL UNPAID
DATE FACILITY A LOAN PERIOD PAID AMOUNT BALANCE
---- --------------- ----------- --------- -------
-79-
EXHIBIT "A-2"
FACILITY B NOTE
$
, 19
ProNet Inc., a Delaware corporation (the "Borrower"), promises to pay to
the order of _____________________________ (the "Lender") the lesser of the
principal sum of Dollars or the aggregate unpaid principal
amount of all Facility B Loans made by the Lender to the Borrower pursuant to
Article II of the Agreement (as hereinafter defined) referred to, in immediately
available funds at the main office of The First National Bank of Chicago in
Chicago, Illinois, as Agent, together with interest on the unpaid principal
amount hereof at the rates and on the dates set forth in the Agreement. The
Borrower shall pay the principal of and accrued and unpaid interest on the
Facility B Loans in full on the Facility Termination Date and shall make such
mandatory payments as are required to be made under the terms of Article II of
the Agreement.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date and amount of each Facility B Loan and the date and amount of each
principal payment hereunder.
This Note is one of the Notes issued pursuant to, and is entitled to the
benefits of, the Second Amended and Restated Credit Agreement, dated as of June
14, 1996 (which, as it may be amended or modified and in effect from time to
time, is herein called the "Agreement") among the Borrower, the lenders party
thereto, including the Lender, and The First National Bank of Chicago, as Agent,
to which Agreement, as it may be amended from time to time, reference is hereby
made for a statement of the terms and conditions governing this Note, including
the terms and conditions under which this Note may be prepaid or its maturity
date accelerated. This Note is secured pursuant to the Pledge Agreement, the
Security Agreement and the Subsidiary Security Agreement and guaranteed pursuant
to the Subsidiary Guaranty, all as more specifically described in the Agreement,
and reference is made thereto for a statement of the terms and provisions
thereof. Capitalized terms used herein and not otherwise defined herein are
used with the meanings attributed to them in the Agreement.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT
THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL
LAWS APPLICABLE TO NATIONAL BANKS.
PRONET INC.
-80-
By:
----------------------------------
Xxx Xxxxxxxx
Senior Vice President
-81-
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
FACILITY B NOTE OF PRONET INC.
DATED JUNE 14, l996
PRINCIPAL MATURITY
AMOUNT OF OF INTEREST PRINCIPAL UNPAID
DATE FACILITY A LOAN PERIOD PAID AMOUNT BALANCE
---- --------------- ----------- --------- -------
-82-
EXHIBIT "B-1"
FORM OF OPINION
June 14, 1996
To the Lenders who are parties to the
Credit Agreement described below
Ladies and Gentlemen:
We have acted as special counsel to ProNet Inc., a Delaware corporation
(the "Borrower", in connection with the execution and delivery of the Second
Amended and Restated Credit Agreement dated as of June 14, 1996 (the "Credit
Agreement") among the Borrower, the Lenders party thereto and The First National
Bank of Chicago, as Agent, providing for advances in an aggregate principal
amount not exceeding $300,000,000 at any one time outstanding. We have also
acted as special counsel to Electronic Tracking Systems Inc., a Delaware
corporation, Contact Communications, Inc., a New York corporation, The Message
Express, Inc., a New York corporation, Contact Communications of Massachusetts,
Inc., a Massachusetts corporation, Contact Communications of Pennsylvania, Inc.,
a Pennsylvania corporation, Beepers To Go, Inc., a Delaware corporation,
Professional Communications Systems, Inc., a Texas corporation, and Contact
Communications Inc., a Delaware corporation [MORE?] (collectively, the
"Subsidiaries") in connection with their execution and delivery of the Amended
Subsidiary Guaranty and the Amended Subsidiary Security Agreement (as defined
herein). This opinion is being delivered pursuant to Section 4.1(v) of the
Credit Agreement. Unless otherwise defined herein, capitalized terms have the
meanings attributed to them in the Credit Agreement.
In our capacity as such counsel, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of the following:
1. The Credit Agreement; [ADD NOTES]
2. The Pledge Agreement, dated as of June 30, 1994, as amended by
that certain Amendment dated as of February 9, 1995 and that certain
Amendment dated June 14, 1996 (as so amended, the "Amended Pledge
Agreement"), executed by the Borrower and the Agent;
3. The Security Agreement, dated as of June 30, 1994, as amended by
that certain Amendment dated as of February 9, 1995 and that certain
-83-
Amendment dated June 14, 1996 (as so amended, the "Amended Security
Agreement"), executed by the Borrower and the Agent;
4. The Guaranty, dated as of June 30, 1994, as amended by that
certain Amendment dated as of February 9, 1995 and that certain
Amendment dated June 14, 1996 (as so amended, the "Amended
Subsidiary Guaranty"), executed by the Subsidiaries in favor of
the Agent;
5. The Security Agreement, dated as of June 30, 1994, as amended
by that certain Amendment dated as of February 9, 1995 and that
certain Amendment dated June 14, 1996 (as so amended, the "Amended
Subsidiary Security Agreement"), executed by the Subsidiaries and
the Agent;
6. Financing Statements (herein so called) on Form UCC-1, naming the
Agent as secured party and the Borrower or a Subsidiary, as the case
may be, as debtor, which Financing Statements have been or are to be
filed in the filing offices listed on Exhibit A hereto.
The documents referred to in items 1, 2, 3, 4 and 5 above are hereinafter
collectively referred to as the "Subject Documents". The documents referred to
in items 2, 3 and 5 are sometimes referred to collectively as the "Collateral
Documents". Unless otherwise indicated, references in this opinion to the "UCC"
shall mean the Uniform Commercial Code as in effect on the date hereof in the
State of Texas.
In rendering the opinions expressed below, we have also examined the
originals or conformed copies of such corporate records, agreements, bylaws, and
instruments of the Borrower and the Subsidiaries, certificates of public
officials and of officers of such Persons, and such other documents and records,
and such matters of law, as we have deemed appropriate as a basis for the
opinions hereinafter expressed.
Based upon the foregoing and subject to the qualifications and limitations
as set forth herein, we are of the opinion that:
l. Each of the Borrower and the Subsidiaries (a) is a corporation
validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated, and (b) is duly qualified
to transact business as a foreign corporation in the jurisdictions set
forth on Exhibit B hereto, which, to our knowledge, are all
jurisdictions where the nature of the business conducted by the
Borrower or such Subsidiary makes such qualification necessary,
except where a failure to be so qualified would not have a Material
Adverse Effect.
2. The execution and delivery by the Borrower of the Subject
Documents to which it is a party, and the performance by the Borrower
-84-
of the Obligations have been duly authorized by all necessary
corporate action and proceedings on the part of the Borrower and
will not;
(a) require the consent of the shareholders of the Borrower;
(b) conflict with the certificates of incorporation or
bylaws of the Borrower, or violate any applicable law, rule, or
regulation, or, to our knowledge, any order, writ, judgment,
injunction, decree, or award binding on the Borrower;
(c) to our knowledge, result in or require the creation or
imposition of any Lien upon any of the assets of the Borrower
pursuant to the provisions of any indenture, agreement, or
instrument binding upon the Borrower and identified by the
Borrower as being material to the business or financial condition
of the Borrower and the Subsidiaries taken as a whole; or
(d) to our knowledge, constitute a default under any
indenture, agreement, or instrument binding upon the Borrower and
identified by the Borrower as being material to the business or
financial condition of the Borrower and the Subsidiaries taken
as a whole.
3. The Subject Documents to which the Borrower is a party have been
duly executed and delivered by the Borrower and constitute the legal,
valid, and binding obligations of the Borrower, enforceable against
the Borrower in accordance with their respective terms.
4. The execution and delivery by each Subsidiary of the Amended
Subsidiary Guaranty and the Amended Subsidiary Security Agreement, and
the performance by each Subsidiary of its obligations thereunder have
been duly authorized by all necessary corporate action and proceedings
on the part of such Subsidiary and will not;
(a) require the consent of the shareholders of such
Subsidiary;
(b) conflict with the certificates of incorporation or
bylaws of such Subsidiary, or violate any applicable law, rule,
or regulation, or, to our knowledge, any order, writ, judgment,
injunction, decree, or award binding on such Subsidiary;
(c) to our knowledge, result in or require the creation or
imposition of any Lien upon any of the assets of such Subsidiary
pursuant to the provisions of any indenture,
-85-
agreement, or instrument binding upon such Subsidiary and
identified by such Subsidiary as being material to the business
or financial condition of the Borrower and the Subsidiaries taken
as a whole; or
(d) to our knowledge, constitute a default under any
indenture (including, without limitation, the 1996 Indenture and
the 0000 Xxxxxxxxx), agreement, or instrument binding upon such
Subsidiary and identified by such Subsidiary as being material to
the business or financial condition of the Borrower and the
Subsidiaries taken as a whole.
5. The Amended Subsidiary Guaranty and the Amended Subsidiary
Security Agreement have been duly executed and delivered by each such
Subsidiary and constitute the legal, valid, and binding obligations of
such Subsidiary, enforceable against such Subsidiary in accordance
with their respective terms.
6. To our knowledge, there is no litigation or proceeding against the
Borrower or the Subsidiaries, which, if adversely determined, would
have a Material Adverse Effect.
7. No authorization, consent, approval, adjudication, or order of any
governmental authority which has not been obtained is required in
connection with the execution, delivery, and performance by the
Borrower or any Subsidiary of the Subject Documents to which it is a
party or in connection with the payment by the Borrower of the
Obligations or the payment by any Subsidiary of the Maximum Amount (as
defined in the Amended Subsidiary Guaranty).
8. The provisions of the Amended Pledge Agreement are sufficient to
create in favor of the Agent, for the benefit of the Lenders, a valid
security interest in all of the Borrower's right, title and interest
in and to the Pledged Stock (as defined in the Amended Pledge
Agreement), and so long as the Pledged Stock is in the possession of
the Agent, the Agent has a fully perfected security interest in all of
the Borrower's right, title and interest in and to the Pledged Stock
as collateral security for the Secured Obligations, except as follows:
(i) in the case of the issuance of additional shares or other
distributions in respect of the Pledged Stock or additional
instruments (as such term is defined in Article 9 of the UCC), the
security interests of the Agent therein will be perfected only if
possession thereof is obtained in accordance with the provisions of
the Amended Pledge Agreement, and (ii) in the case of non-identifiable
cash proceeds, continuation of perfection of the Agent's security
interest therein is limited to the extent set forth in Section 9.306
of the UCC. Assuming that the Agent has no notice at the time of
taking possession
-86-
thereof of any adverse claims to the Pledged Stock referred to therein,
and assuming none of the shares of Pledged Stock are also represented
by one or more certificates not duly cancelled and in the possession
of the issuer, the security interest created by the Amended Pledge
Agreement in all of the Borrower's right, title, and interest in the
presently issued and outstanding Pledged Stock referred to therein is
subject to no equal or prior Lien, except for Liens permitted by
Section 6.19 of the Credit Agreement.
9. The provisions of the Amended Security Agreement and the Amended
Subsidiary Security Agreement (collectively, the "Security
Agreements") are sufficient to create in favor of the Agent, for the
benefit of the Lenders, a security interest in all of the right, title
and interest of the Borrower or the Subsidiaries, as the case may be,
in those items and types of Collateral described in the respective
Security Agreements in which a security interest may be created under
Article 9 of the UCC. The Financing Statements have been duly executed
by the Borrower or a Subsidiary, as the case may be, and are in proper
form under the UCC for filing in the appropriate filing offices
indicated on Exhibit A hereto. The description of the Collateral set
forth in the Financing Statements is sufficient to perfect a security
interest created by the relevant Security Agreement in all right,
title and interest of the Borrower or the Subsidiaries, as the case
may be, in those items and types of Collateral described in the
respective Security Agreements in which a security interest may be
perfected by the filing of a financing statement under the UCC, except
as follows:
(i) in the case of instruments (as such term is defined in
Article 9 of the UCC) not constituting part of chattel paper (as
such term is defined in the UCC), or in the case of the issuance
of additional shares or other distributions of additional
instruments in respect of any capital stock, the security
interests of the Agent, for the benefit of the Lenders, therein
cannot be perfected by the filing of the Financing Statements,
but will be perfected if possession thereof is obtained in
accordance with the provisions of the relevant Security
Agreement;
(ii) in the case of motor vehicles for which certificates of title
have been issued and for which the exclusive manner of perfecting
a security interest is by noting the Agent's security interest on
the certificate of title in accordance with applicable law, the
Agent's security interest therein cannot be perfected by the
filing of the Financing Statements but will be perfected if the
Agent's security interest is so noted;
-87-
(iii) in the case of registered trademarks, trade names, patents,
and copyrights, perfection of the security interest therein
must be made by appropriate filing in the United States Patent
and Trademark Office or the United States Copyright Office; and
(iv) in the case of all Collateral, Article 9 of the UCC requires
the filing of continuation statements within the period of six
months prior to the expiration of five years from the date of the
original filings in order to maintain the effectiveness of the
filings referred to in this paragraph;
(v) in the case of property which becomes Collateral after the
date hereof, Section 552 of the Federal Bankruptcy Code limits
the extent to which property acquired by a debtor after the
commencement of a case under the Federal Bankruptcy Code may be
subject to a security interest arising from a security agreement
entered into by the debtor before the commencement of such case;
and
(vi) removal of equipment, inventory, or documents (as such terms
are defined in the UCC) included in the Collateral from the
applicable jurisdiction may result in the lapse of perfection of
the security interest of the Agent.
We call to your attention that the perfection of the security interests
created by the Security Agreements will be terminated (i) as to any Collateral
acquired by the Borrower or either Subsidiary, as the case may be, more than
four months after the Borrower or such Subsidiary, as the case may be, changes
its name, identity, or corporate structure so as to make the Financing
Statements seriously misleading, unless new appropriate financing statements
indicating the new name, identity, or corporate structure of the Borrower or
such Subsidiary, as the case may be, are properly filed before the expiration of
such four months, and (ii) as to any Collateral consisting of accounts and
general intangibles (both as defined in the UCC), four months after the Borrower
or either Subsidiary, as the case may be, changes its chief executive office to
a new jurisdiction outside of its current state (or, if earlier, when perfection
under the laws of Texas would have ceased as set forth in subparagraph (ii)
above), unless such security interests are perfected in such new jurisdiction
before that termination.
The foregoing opinions are subject to the following assumptions,
limitations, and qualifications:
A. We have assumed (i) the genuineness of all signatures of, and,
except with respect to the Borrower and the Subsidiaries, the authority
of, persons signing the documents referred to in the opinions expressed
herein on behalf of parties thereto, (ii) the authenticity of all
documents submitted to us as originals, (iii) the conformity to
authentic original
-88-
documents of all documents submitted to us as certified, conformed,
or photostatic copies, (iv) the due authorization, execution, and
delivery of the Subject Documents by the parties thereto other than
the Borrower and the Subsidiaries and the enforceability of the
Subject Documents against such other parties, (v) that all documents,
books, and records made available to us by the Borrower and the
Subsidiaries are accurate and complete, (vi) that all information
contained in all documents reviewed by this firm is true and correct,
(vii) that the laws of any jurisdiction other than Texas that govern
any of the documents reviewed by this firm do not modify the terms
that appear in any such document; and (viii) that value will be given
by the Lenders to the Borrower under the Subject Documents.
B. We have additionally assumed that (i) every usury savings clause
contained in the Subject Documents will be complied with by the
Lenders, (ii) no fees, sums or other benefits, direct or indirect,
including any compensating balance requirements or fees in lieu
thereof, have been paid to or received by or are, or may be payable to
or receivable by, the Lenders, except as set forth in the Subject
Documents, (iii) any expenses reimbursable to the Lenders in
connection with the Subject Documents have been and will be limited to
the actual costs incurred and paid to third parties or have been and
will be for services rendered separate and apart from the lending of
money, and (iv) the Borrower and the Subsidiaries have rights in their
respective personal property encumbered by the Subject Documents.
C. The opinions expressed herein are limited to the laws of the State
of Texas, the General Corporation Law of the State of Delaware, and the
federal laws of the United States of America (collectively referred to
as the "Included Laws"). You should be aware that this firm is not
admitted to the practice of law in the State of Delaware and the
opinion herein as to the General Corporation Law of the State of
Delaware is based solely upon the unofficial compilation thereof
contained in the Xxxxxxxx-Xxxx Legal & Financial Services DELAWARE
LAWS ANNOTATED at _______________________, 1996.
D. We note that the Subject Documents provide that they are to be
governed by the laws of states other than the State of Texas. While we
express no opinion with respect to the laws of such other states
(except the General Corporation Law of the State of Delaware), we have
assumed, with your consent, and without any independent investigation,
that the applicable internal laws of such other states are the same as
the applicable internal laws of the State of Texas.
E. The opinions expressed above regarding the enforceability of the
Subject Documents are subject to: (i) laws relating to bankruptcy,
-89-
insolvency, fraudulent conveyance, fraudulent transfer,
reorganization, rearrangement, liquidation, conservatorship,
moratorium, and other similar laws affecting the enforcement of
creditors' rights generally or the collection of debtors' obligations
generally; (ii) general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law);
(iii) standards of commercial reasonableness and good faith; and (iv)
other applicable laws, rules, regulations, court decisions, and
constitutional requirements in and of the State of Texas, the State of
Delaware, or the United States of America, limiting or affecting the
exercise of remedies under the Subject Documents; provided that any
limitations imposed by such other applicable laws, rules, regulations,
court decisions, and constitutional requirements will not in our
opinion, materially interfere with the practical realization by the
Lenders of the rights and benefits intended to be conferred on them by
the Subject Documents, though such limitations may result in a delay
of such practical realization (and we express no opinion with respect
to the economic consequences, if any, of any such delays).
F. We express no opinion with respect to: (i) the enforceability of
provisions in the Subject Documents relating to delay or omission of
enforcement of rights or remedies, or waivers of defenses, or waivers
of jury trials, or waivers of benefits of appraisement, valuation,
stay, extension, moratorium, redemption, statutes of limitation, or
other nonwaivable benefits bestowed by operation of law; (ii) the
lawfulness or enforceability of exculpation clauses, confession of
judgment clauses, clauses relating to releases of unmatured claims,
clauses purporting to waive unmatured rights, severability clauses,
and clauses similar in substance or nature to those expressed in the
foregoing clause (i) and this clause (ii), insofar as any of the
foregoing are contained in the Subject Documents; (iii) the
enforceability of any provision contained in any of the Subject
Documents permitting the Agent to exercise voting or corporate rights
with respect to the Pledged Stock (as defined in the Collateral
Documents and herein so called) or other equity interests prior to the
Agent's foreclosing on the Pledged Stock or such other equity
interests; (iv) title to any property encumbered by the Subject
Documents (however, for purposes of rendering the opinions in
Paragraphs 8 and 9 above, we have assumed that the Borrower and the
Subsidiaries have rights, titles, and interests in the Collateral);
(v) except as expressly set forth herein, the perfection or priority
of any security interest or lien created by the Collateral Documents;
(vi) the lawfulness under Texas usury laws of the rate or amount of
interest contracted to be paid pursuant to the Notes; (vii) the
applicability of federal or state securities or "blue sky" laws with
respect to the transactions contemplated by the Subject Documents;
(viii) the ability of the Agent to obtain the appointment of a
receiver for any of the Collateral other than
-90-
in accordance with the provisions of TEX. CIV. PRAC. & REM. CODE XXX.
Section 64.001 (Xxxxxx 1986); (ix) the ability of the Agent or the
Lenders to be indemnified (and the rights of contribution thereunder)
for liabilities resulting from or based upon the Agent's or any
Lender's negligence or violation of federal or state laws or public
policy related thereto; or (ix) the Communications Act of 1934, as
amended, the rules and regulations of the Federal Communications
Commission or of any state or local public utility commission or
similar authority, or any proceedings pending before the Federal
Communications Commission or any such state or local public utility
commission or similar authority.
G. In connection with the opinions expressed above, we wish to point
out that provisions of certain of the Subject Documents which permit
any party thereto to take action or make determinations may be subject
to a requirement that such action be taken or such determinations be
made on a reasonable basis and in good faith.
H. With respect to the opinions expressed in Paragraphs 8 and 9
above, we express no opinion concerning the validity, enforceability or
attachment of any Lien purportedly granted by the Collateral Documents
in the following (and we call your attention to the fact that the
Lenders' security interest in certain of such Collateral may not be
perfected by filing financing statements under the UCC): (i) causes of
action; (ii) any Collateral subject to the jurisdiction of a
regulatory body or agency whose consent is required before such
property may be subject to any Lien; (iii) letters of credit; (iv)
accounts receivable to the extent that they are subject to the Federal
Assignment of Claims Act; (v) personal property affixed to real
property in such manner as to become a fixture under the laws of any
state in which the Collateral may be located; (vi) any Collateral that
consists or will consist of real estate (including a lease or rents
thereunder), consumer goods, farm products, timber, minerals, and the
like (including oil and gas) or accounts resulting from the sale
thereof, or goods or items which are subject to (a) a statute or
treaty of the United States which provides for a national or
international registration or a national or international certificate
of title for the perfection of a security interest therein or which
specifies a place of filing different from that specified in the UCC
for filing to perfect such security interest (including, without
limitation, Liens), (b) a certificate of title statute of any
jurisdiction; or (vii) any interest in or claim in or under any policy
of insurance or unearned premium, except a claim to proceeds payable
by reason of loss or damage under insurance policies maintained by the
Borrower or a Subsidiary with respect to equipment and inventory as
required by and in compliance with the relevant Security Agreement.
-91-
I. Whenever an opinion herein is qualified by the phrase "to our
knowledge," our examination has been limited to (i) our review of
the representations and warranties made by the Borrower and the
Subsidiaries in the Subject Documents, certain corporate records
of the Borrower and the Subsidiaries, and a certificate of certain
officers of the Borrower and the Subsidiaries with respect to the
matters contained in such opinion, and (ii) discussions with the
officers and representatives of the Borrower and the Subsidiaries
with respect to the matters contained in such opinion, and, except
for such examination, we have made no independent investigations
as to the accuracy or completeness of any representations,
warranties, data, or other information, written or oral, made or
furnished to us by the Borrower or the Subsidiaries. Furthermore,
when used in this opinion "to our knowledge," and similar phrases
do not include constructive knowledge or inquiry knowledge, and
are limited to the conscious awareness of facts and information by
lawyers in our Dallas office who have had active involvement in
rendering legal services in connection with the transactions
contemplated by the Subject Documents. You are advised that our
engagement by the Borrower and the Subsidiaries has been limited
to specific matters about which we have been consulted;
consequently, there may exist matters of a legal nature involving
the Borrower and the Subsidiaries about which we have not advised
or represented the Borrower or the Subsidiaries and of which we
have no knowledge.
J. In connection with the opinion expressed in PARAGRAPH 1 as it
relates to the good standing of any Subsidiary incorporated in
Massachusetts, we wish to point out that we have relied upon a
current Certificate of Existence issued by the Secretary of The
Commonwealth of Massachusetts which verifies that such company has
legal existence and is in good standing with such office; however
such good standing certificate does not specifically address the
status of payment of franchise taxes by such company in such
jurisdiction.
K. This opinion speaks as of the date hereof, and we undertake
no, and hereby disclaim any, obligation to advise you of any
change in any matter set forth herein, whether based on a change
in the law, a change in any fact relating to the Borrower or any
other Person, or any other circumstance.
This letter is furnished solely for your benefit in connection with the
transactions referred to in the Subject Documents and may not, without our
permission, be circulated to, or relied upon by, any other Person, except your
assignees and participants, bank supervisory authorities, and your auditors and
attorneys, or as required by law or order of a court or other legal process.
Very truly yours,
By:
-92-
EXHIBIT "B-2"
FORM OF OPINION OF FCC COUNSEL
June 14, 1996
The Lenders Parties to
the Credit Agreement Described Below
c/o The First National Bank of Chicago
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Gentlemen:
We are special communications counsel for ProNet Inc., a Delaware
corporation (the "Borrower"), and have represented the Borrower in connection
with its execution and delivery of a Second Amended and Restated Credit
Agreement dated as of June 14, 1996 (the "Agreement") among the Borrower, The
First National Bank of Chicago, as Agent, and the Lenders named therein. We
have also acted as special communications counsel for Contact Communications,
Inc., Contact Communications of Massachusetts, Inc., Contact Communications of
Pennsylvania, Inc., Professional Communications Systems, Inc., The Message
Express, Inc., Beepers To Go, Inc. and Contact Communications Inc. [OTHERS?]
(together, the "Subsidiaries") as to certain matters, but do not represent any
other subsidiaries or Affiliates of the Borrower. All capitalized terms used in
this opinion and not defined otherwise herein shall have the meanings attributed
to them in the Agreement.
We have examined the Agreement, the Notes, the Pledge Agreement, as amended
by the Amendment thereto dated as of February 9, 1995 and the Amendment thereto
dated June 14, 1996, the Security Agreement, as amended by the Amendment thereto
dated as of February 9, 1995 and the Amendment thereto dated June 14, 1996, the
Subsidiary Security Agreement, as amended by the Amendment thereto dated as of
February 9, 1995 and the Amendment thereto dated June 14, 1996, and the
Subsidiary Guaranty, as amended by the Amendment thereto dated as of February 9,
1995 and the Amendment thereto dated June 14, 1996 (collectively, the "Loan
Documents") and such other matters of fact and law which we deem necessary in
order to render this opinion. Our opinion is limited to the provisions of the
Communications Act of 1934, as amended, 47 U.S.C. Sections 151 et seq. (the
"Communications Act"), and we express no opinion and assume no responsibility as
to the applicability of any other laws. No opinion is rendered with respect to
any supplement, amendment or revision to any of the Loan Documents, or with
respect to any facts or circumstances, or enactment of new laws, rules or
regulations or amendments to existing laws, rules or regulations, occurring
subsequent to the date of this opinion.
-93-
For the purposes of rendering this opinion, we have also examined such
certificates and records of the Federal Communications Commission (the "FCC")
and such other documents as in our judgment are necessary or appropriate to
enable us to render the opinions expressed below. In addition, we have
assumed, without independent examination or verification, (i) the genuineness
of the signatures and authority of persons signing all documents in
connection with which this opinion is rendered, (ii) the authenticity of all
documents submitted to us as originals, (iii) the conformity to authentic
original documents of all documents submitted to us as certified, conformed,
or photostatic copies, and (iv) the power and authority of the Borrower, the
Agent and other signatories to enter into and perform their respective
obligations under the Loan Documents.
In addition, as to matters of fact only, we have relied, to the extent we
deem such reliance proper, upon certificates and statements, as applicable,
of certain representatives of the Borrower, as well as statements of certain
public officials, as to which we have made no independent investigation. We
have also relied upon records routinely available for public inspection at
the FCC. Furthermore, we have assumed the completeness of the public files
maintained by the FCC and the accuracy and authenticity of all documents
contained therein; provided, however, that we have no reason to believe that
any of the public files we examined in rendering this opinion are inaccurate
or incomplete.
In rendering this opinion, we have not conducted an independent field
inspection or other technical or engineering evaluation of the plant and
facilities that have been constructed or are operating pursuant to the FCC
licenses of the Borrower or the Subsidiaries. Such a field inspection or
technical or engineering evaluation is beyond the scope of our representation
of the Borrower. Accordingly, we express no opinion with respect to matters
about which we would not know without conducting such a field inspection or
evaluation.
Based upon the foregoing, it is our opinion that:
1. The execution and delivery of the Loan Documents by the Borrower and
the Subsidiaries, and the performance by the Borrower and the Subsidiaries of
their respective obligations arising under the Loan Documents will not
violate the Communications Act or any law, rule, regulation, or order of the
FCC.
2. The execution and delivery of the Loan Documents do not constitute
the transfer, assignment or disposition in any manner, voluntarily or
involuntarily, directly or indirectly, of any license issued as of this date
by the FCC to the Borrower or the Subsidiaries, or the transfer of control of
the Borrower or any Subsidiary, within the meaning of Section 310(d) of the
Communications Act.
3. Based solely upon our review of the records actually available for
public inspection at the FCC and our inquiry to representatives of the
Borrower, there is no
-94-
FCC proceeding pending or threatened against the Borrower or any Subsidiary
which, if adversely determined, would have a Material Adverse Effect.
4. No approval, authorization, consent, adjudication or order of the
FCC is required to be obtained by the Borrower or any Subsidiary in
connection with (a) the execution and delivery of the Loan Documents, (b) the
borrowings under the Agreement, (c) the pledge of any of the Collateral, (d)
the payment or performance by the Borrower of the Obligations under the Loan
Documents or (e) the payment or performance by any Subsidiary of its
obligations under the Loan Documents.
5. In rendering this opinion, we call your attention to, and qualify
our opinion in view of, the following:
(a) Under the Communications Act, the sale or other disposition of
the Collateral (as such term is defined in the Pledge Agreement, the Security
Agreement or the Subsidiary Security Agreement, as the case may be) and the
exercise of certain other rights and remedies conferred upon you by the Loan
Documents, or by applicable law might constitute an assignment, or transfer
of control of the holder, of an FCC license, authorization or permit
requiring for its consummation the prior consent of the FCC, either by order
or public notice, granted upon an appropriate application therefor.
(b) You have not requested us to express any opinion, and we
express none, as to the creation or perfection of security interests in FCC
licenses, permits and authorizations. To the extent that any provision of
the Loan Documents contemplates the creation of a direct security interest in
any FCC license, the FCC has prohibited such interest and, accordingly, any
such provision would probably constitute a violation of the Communications
Act and the FCC's rules, regulations or policies and thus be unenforceable.
This opinion may be relied upon only by the Agent, the Lenders, the
Participants, and the Purchasers and their respective successors and assigns
and only in connection with the transactions contemplated by the Loan
Documents.
Very truly yours,
Xxxxxx, Xxxxxx, Xxxxx & Xxxxxxxx, Chartered
By:
Xxxxxx X. Xxxxx
-95-
EXHIBIT "C"
COMPLIANCE CERTIFICATE
To: The Lenders parties to the
Credit Agreement Described Below
This Compliance Certificate is furnished pursuant to that certain Second
Amended and Restated Credit Agreement dated as of June 14, 1996 (as amended,
modified, renewed or extended from time to time, the "Agreement") among the
Borrower, the Lenders party thereto and The First National Bank of Chicago, as
Agent. Capitalized terms used herein and not otherwise defined herein are used
with the meanings attributed to them in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected __________________________ of the Borrower;
2. I have reviewed the terms of the Agreement and I have made, or have
caused to be made under my supervision, a detailed review of the
transactions and conditions of the Borrower and its Subsidiaries
during the accounting period covered by the attached financial
statements;
3. The examinations described in paragraph 2 did not disclose, and I
have no knowledge of, the existence of any condition or event which
constitutes a Default or Unmatured Default during or at the end of the
accounting period covered by the attached financial statements or as
of the date of this Certificate, except as set forth below; and
4. Schedule I attached hereto sets forth financial data and
computations evidencing the Borrower's compliance with certain
covenants of the Agreement and the determination of the Applicable
Margin, all of which data and computations are true, complete and
correct.
Described below are the exceptions, if any, to paragraph 3 by listing, in
detail, the nature of the condition or event, the period during which it has
existed and the action which the Borrower has taken, is taking, or proposes to
take with respect to each such condition or event:
The foregoing certifications, together with the computations set forth in
Schedule I hereto and the financial statements delivered with this Certificate
in support hereof, are made and delivered this _____ day of ________________,
19__.
-96-
SCHEDULE I TO COMPLIANCE CERTIFICATE
Schedule of Compliance as of with
Provisions of Sections 6.4.1, 6.4.2, 6.4.3, 6.4.4 of
the Agreement and Calculation of Excess Cash Flow
ANNUALIZED
OPERATING CASH FLOW
FISCAL QUARTER
ENDING _______________
i. Pre-tax income or (loss)
ii. Interest Expense
iii. Depreciation expense
iv. Amortization expense
v. Non-cash expenses
(to the extent deducted in
calculation of pre-tax income)
vi. Extraordinary losses or losses
on sales of assets (to the extent
deducted in pre-tax operations
and non-operating income)
Total of (i) through (vi)
viii. (Less) Extraordinary income or
gains on sales of assets and any
non-operating income included in
calculation of pre-tax income or loss
-97-
OPERATING CASH FLOW
ANNUALIZED OPERATING CASH FLOW $
6.4.1. TOTAL LEVERAGE RATIO
i. Indebtedness (including Subordinated Indebtedness other
than any portion of the principal of the 1996 Senior
Subordinated Indebtedness held in the Teletouch Escrow)
outstanding on Computation Date $
ii. Annualized Operating Cash Flow on Computation Date $
TOTAL LEVERAGE RATIO (RATIO OF (i) TO (ii)) : 1.0
-----------
REQUIRED: : 1.0
-------------------
NOTE: ALSO USED TO DETERMINE APPLICABLE MARGIN.
6.4.2 FIXED CHARGE COVERAGE RATIO
i. Annualized Operating Cash Flow on Computation Date, $
minus Capital Expenditures made during the previous
four fiscal quarters ending on the Computation Date
(other than Capital Expenditures made with Net Cash
Proceeds of an Equity Issuance and included in the
calculation of the Reduction Amount in respect
of such Equity Issuance), minus federal and state
income taxes paid by the Borrower and Subsidiaries
for the previous four fiscal quarters ending on the
Computation Date
ii. a. Scheduled principal payments on Indebtedness $
(other than Capitalized Lease Obligations)
for the previous four fiscal quarters ending
on the Computation Date
b. Interest Expense the previous four fiscal quarters + $
ending on the Computation Date
iii. Total (Sum of ii(a) and (b)) $
FIXED CHARGE COVERAGE RATIO (RATIO OF (i) TO (iii)) : 1.0
-----------------------------
REQUIRED: : 1.0
------------------
-98-
6.4.3. PRO FORMA DEBT SERVICE RATIO
i. Annualized Operating Cash Flow on the $
Computation Date
ii. a. Pro Forma Interest Expense for the four $
consecutive fiscal quarters ending after
the Computation Date
b. Scheduled principal payments on $
Indebtedness for the four fiscal
quarters ending after the Computation
Date
iii. Total (sum of ii(a) and (b)) $
PRO FORMA DEBT SERVICE RATIO (RATIO OF (i) TO (iii)) : 1.0
--------------------------
REQUIRED: : 1.0
------------------
6.4.4 SENIOR LEVERAGE RATIO
i. Indebtedness (excluding Subordinated Indebtedness)
outstanding on Computation Date $
ii. Annualized Operating Cash Flow on Computation Date $
SENIOR LEVERAGE RATIO (RATIO OF (i) TO (ii)) : 1.0
--------------
REQUIRED: : 1.0
------------------
-99-
EXCESS CASH FLOW RECAPTURE
Four Quarters Ending
i. Operating Cash Flow on the Computation Date $
ii. Voluntary and mandatory principal payments
made on Advances and scheduled principal
payments made on other Indebtedness $
iii. Net increases (decreases) in working capital
(excluding cash and the current portion of
long-term Indebtedness) $
iv. Capital Expenditures $
v. Interest Expense $
vi. Federal and state income taxes paid $
vii. Total of (ii) through (vi) $
viii. Difference between (i) and (vii) $
ix. Excess Cash Flow Recapture (50% of (viii)) $
-100-
EXHIBIT "D"
ASSIGNMENT AGREEMENT
This Assignment Agreement (this "Assignment Agreement") between
________________________ (the "Assignor") and _______________________ (the
"Assignee") is dated as of ___________________, ____. The parties hereto
agree as follows:
1. PRELIMINARY STATEMENT. The Assignor is a party to a Credit Agreement
(which, as it may be amended, modified, renewed or extended from time to time is
herein called the "Credit Agreement") described in Item 1 of Schedule 1 attached
hereto ("Schedule 1"). Capitalized terms used herein and not otherwise defined
herein shall have the meanings attributed to them in the Credit Agreement.
2. ASSIGNMENT AND ASSUMPTION. The Assignor hereby sells and assigns to
the Assignee, and the Assignee hereby purchases and assumes from the Assignor,
an interest in and to the Assignor's rights and obligations under the Credit
Agreement such that after giving effect to such assignment the Assignee shall
have purchased pursuant to this Assignment Agreement the percentage interest
specified in Item 3 of Schedule 1 of all outstanding rights and obligations
under the Credit Agreement relating to the facilities listed in Item 3 of
Schedule 1 and the other Transaction Documents. The aggregate Commitments (or
Loans, if the applicable Commitment has been terminated) purchased by the
Assignee hereunder are set forth in Item 4 of Schedule 1.
3. EFFECTIVE DATE. The effective date of this Assignment Agreement (the
"Effective Date") shall be the later of the date specified in Item 5 of Schedule
1 or two Business Days (or such shorter period agreed to by the Agent) after a
Notice of Assignment substantially in the form of Exhibit "I" attached hereto
has been delivered to the Agent. Such Notice of Assignment must include any
consents required to be delivered to the Agent by Section 12.3.1 of the Credit
Agreement. In no event will the Effective Date occur if the payments required
to be made by the Assignee to the Assignor on the Effective Date under Sections
4 and 5 hereof are not made on the proposed Effective Date. The Assignor will
notify the Assignee of the proposed Effective Date no later than the Business
Day prior to the proposed Effective Date. As of the Effective Date, (i) the
Assignee shall have the rights and obligations of a Lender under the Transaction
Documents with respect to the rights and obligations assigned to the Assignee
hereunder and (ii) the Assignor shall relinquish its rights and be released from
its corresponding obligations under the Transaction Documents with respect to
the rights and obligations assigned to the Assignee hereunder.
-101-
4. PAYMENTS OBLIGATIONS. On and after the Effective Date, the Assignee
shall be entitled to receive from the Agent all payments of principal, interest
and fees with respect to the interest assigned hereby. The Assignee shall
advance funds directly to the Agent with respect to all Loans and reimbursement
payments made on or after the Effective Date with respect to the interest
assigned hereby. [In consideration for the sale and assignment of Loans
hereunder, (i) the Assignee shall pay the Assignor, on the Effective Date, an
amount equal to the principal amount of the portion of all Floating Rate Loans
assigned to the Assignee hereunder and (ii) with respect to each Eurodollar Loan
made by the Assignor and assigned to the Assignee hereunder which is outstanding
on the Effective Date, (a) on the last day of the Interest Period therefor or
(b) on such earlier date agreed to by the Assignor and the Assignee or (c) on
the date on which any such Eurodollar Loan either becomes due (by acceleration
or otherwise) or is prepaid (the date as described in the foregoing clauses (a),
(b) or (c) being hereinafter referred to as the "Payment Date"), the Assignee
shall pay the Assignor an amount equal to the principal amount of the portion of
such Eurodollar Loan assigned to the Assignee which is outstanding on the
Payment Date. If the Assignor and the Assignee agree that the Payment Date for
such Eurodollar Loan shall be the Effective Date, they shall agree to the
interest rate applicable to the portion of such Loan assigned hereunder for the
period from the Effective Date to the end of the existing Interest Period
applicable to such Eurodollar Loan (the "Agreed Interest Rate") and any interest
received by the Assignee in excess of the Agreed Interest Rate shall be remitted
to the Assignor. In the event interest for the period from the Effective Date
to but not including the Payment Date is not paid by the Borrower with respect
to any Eurodollar Loan sold by the Assignor to the Assignee hereunder, the
Assignee shall pay to the Assignor interest for such period on the portion of
such Eurodollar Loan sold by the Assignor to the Assignee hereunder at the
applicable rate provided by the Credit Agreement. In the event a prepayment of
any Eurodollar Loan which is existing on the Payment Date and assigned by the
Assignor to the Assignee hereunder occurs after the Payment Date but before the
end of the Interest Period applicable to such Eurodollar Loan, the Assignee
shall remit to the Assignor the excess of the prepayment penalty paid with
respect to the portion of such Eurodollar Loan assigned to the Assignee
hereunder over the amount which would have been paid if such prepayment penalty
was calculated based on the Agreed Interest Rate. The Assignee will also
promptly remit to the Assignor (i) any principal payments received from the
Agent with respect to Eurodollar Loans prior to the Payment Date and (ii) any
amounts of interest on Loans and fees received from the Agent which relate to
the portion of the Loans assigned to the Assignee hereunder for periods prior to
the Effective Date, in the case of Floating Rate Loans or fees, or the Payment
Date, in the case of Eurodollar Loans, and not previously paid by the Assignee
to the Assignor.]* In the event that either party hereto receives any payment
to which the other party hereto is entitled under this Assignment Agreement,
then the party receiving such amount shall promptly remit it to the other party
hereto.
*Each Assignor may insert its standard payment provisions in lieu of the payment
terms included in this Exhibit.
-102-
5. FEES PAYABLE BY THE ASSIGNEE. The Assignee shall pay to the Assignor
a fee on each day on which a payment of interest or commitment fees is made
under the Credit Agreement with respect to the amounts assigned to the Assignee
hereunder (other than a payment of interest or commitment fees for the period
prior to the Effective Date or, in the case of Eurodollar Loans, the Payment
Date, which the Assignee is obligated to deliver to the Assignor pursuant to
Section 4 hereof). The amount of such fee shall be the difference between (i)
the interest or fee, as applicable, paid with respect to the amounts assigned to
the Assignee hereunder and (ii) the interest or fee, as applicable, which would
have been paid with respect to the amounts assigned to the Assignee hereunder if
each interest rate was of 1% less than the interest rate paid by the
Borrower or if the commitment fee was of 1% less than the commitment fee
paid by the Borrower, as applicable. In addition, the Assignee agrees to pay
% of the recordation fee required to be paid to the Agent in connection with
this Assignment Agreement.
6. REPRESENTATIONS OF THE ASSIGNOR; LIMITATIONS ON THE ASSIGNOR'S
LIABILITY. The Assignor represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim created by the Assignor. It is
understood and agreed that the assignment and assumption hereunder are made
without recourse to the Assignor and that the Assignor makes no other
representation or warranty of any kind to the Assignee. Neither the Assignor
nor any of its officers, directors, employees, agents or attorneys shall be
responsible for (i) the due execution, legality, validity, enforceability,
genuineness, sufficiency or collectability of any Transaction Document,
including without limitation, documents granting the Assignor and the other
Lenders a security interest in assets of the Borrower or any guarantor, (ii) any
representation, warranty or statement made in or in connection with any of the
Transaction Documents, (iii) the financial condition or creditworthiness of the
Borrower or any guarantor, (iv) the performance of or compliance with any of the
terms or provisions of any of the Transaction Documents, (v) inspecting any of
the Property, books or records of the Borrower, (vi) the validity,
enforceability, perfection, priority, condition, value or sufficiency of any
collateral securing or purporting to secure the Loans or (vii) any mistake,
error of judgment, or action taken or omitted to be taken in connection with the
Loans or the Transaction Documents.
7. REPRESENTATIONS OF THE ASSIGNEE. The Assignee (i) confirms that it
has received a copy of the Credit Agreement, together with copies of the
financial statements requested by the Assignee and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment Agreement, (ii) agrees that it will,
independently and without reliance upon the Agent, the Assignor or any other
Lender and based on such documents and information at it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under the Transaction Documents, (iii) appoints and authorizes the Agent
to take such action as agent on its
-103-
behalf and to exercise such powers under the Transaction Documents as are
delegated to the Agent by the terms thereof, together with such powers as are
reasonably incidental thereto, (iv) agrees that it will perform in accordance
with their terms all of the obligations which by the terms of the Transaction
Documents are required to be performed by it as a Lender, (v) agrees that its
payment instructions and notice instructions are as set forth in the
attachment to Schedule 1, (vi) confirms that none of the funds, monies,
assets or other consideration being used to make the purchase and assumption
hereunder are "plan assets" as defined under ERISA and that its rights,
benefits and interests in and under the Transaction Documents will not be
"plan assets" under ERISA, and (vii) attaches the forms prescribed by the
Internal Revenue Service of the United States certifying that the Assignee is
entitled to receive payments under the Transaction Documents without
deduction or withholding of any United States federal income taxes.**
**to be inserted if the Assignee is not incorporated under the laws of the
United States, or a state thereof.
8. INDEMNITY. The Assignee agrees to indemnify and hold the Assignor
harmless against any and all losses, costs and expenses (including, without
limitation, reasonable attorneys' fees) and liabilities incurred by the Assignor
in connection with or arising in any manner from the Assignee's non-performance
of the obligations assumed under this Assignment Agreement.
9. SUBSEQUENT ASSIGNMENTS. After the Effective Date, the Assignee shall
have the right pursuant to Section 12.3.1 of the Credit Agreement to assign the
rights which are assigned to the Assignee hereunder to any entity or person,
provided that (i) any such subsequent assignment does not violate any of the
terms and conditions of the Transaction Documents or any law, rule, regulation,
order, writ, judgment, injunction or decree and that any consent required under
the terms of the Transaction Documents has been obtained and (ii) unless the
prior written consent of the Assignor is obtained, the Assignee is not thereby
released from its obligations to the Assignor hereunder, if any remain
unsatisfied, including, without limitation, its obligations under Sections 4, 5
and 8 hereof.
10. REDUCTIONS OF AGGREGATE COMMITMENT. If any reduction in the Aggregate
Facility A Commitment or the Aggregate Facility B Commitment occurs between the
date of this Assignment Agreement and the Effective Date, the percentage
interest specified in Item 3 of Schedule 1 shall remain the same, but the dollar
amount purchased shall be recalculated based on the reduced Aggregate Facility A
Commitment or Aggregate Facility B Commitment, as the case may be.
-104-
11. ENTIRE AGREEMENT. This Assignment Agreement and the attached Notice
of Assignment embody the entire agreement and understanding between the parties
hereto and supersede all prior agreements and understandings between the parties
hereto relating to the subject matter hereof.
12. GOVERNING LAW. This Assignment Agreement shall be governed by the
internal law, and not the law of conflicts, of the State of Illinois.
13. NOTICES. Notices shall be given under this Assignment Agreement in
the manner set forth in the Credit Agreement. For the purpose hereof, the
addresses of the parties hereto (until notice of a change is delivered) shall be
the address set forth in the attachment to Schedule 1.
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
Agreement by their duly authorized officers as of the date first above written.
[NAME OF ASSIGNOR]
By:
Title:
----------------------------------
----------------------------------------------------------------
[NAME OF ASSIGNEE]
By:
Title:
-105-
SCHEDULE 1
to Assignment Agreement
1. Description and Date of Credit Agreement: Second Amended and Restated
Credit Agreement dated as of June 14, 1996 [as amended] among ProNet Inc.,
the Lenders party thereto and The First National Bank of Chicago, as Agent.
2. Date of Assignment Agreement: __________________, 19
3. Amounts (As of Date of Item 2 above):
a. Total of Commitments
(Loans)* under
Credit Agreement ___________
(i) Aggregate Facility A
Commitment $
(ii) Aggregate Facility B
Commitment $
(iii) Aggregate Commitment $
b. Assignee's Percentage
of each of the Commitments
purchased under the
Assignment Agreement** %
c. Amount of Assigned Share in
each of the Commitments
purchased under the
Assignment Agreement __________
Amount of Assigned Share of
Facility A Loans: $
Amount of Assigned Share of
Facility B Loans: $
Total: $
4. Assignee's* Commitment Amount
Purchased Hereunder: __________
Facility A Commitment: $
-106-
Facility B Commitment: $
Total: $
5. Proposed Effective Date:
Accepted and Agreed:
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
By: By:
Title: Title:
* If a Commitment has been terminated, insert outstanding Loans in place of
Commitment
** Percentage taken to 10 decimal places
-107-
Attachment to SCHEDULE 1 to ASSIGNMENT AGREEMENT
Attach Assignor's Administrative Information Sheet, which must
include notice address for the Assignor and the Assignee
-108-
EXHIBIT "I"
to Assignment Agreement
NOTICE OF ASSIGNMENT
, 19
To: [PRONET INC.]*
[NAME OF AGENT]
From: [NAME OF ASSIGNOR] (the "Assignor")
[NAME OF ASSIGNEE] (the "Assignee")
1. We refer to that Credit Agreement (the "Credit Agreement") described
in Item 1 of Schedule 1 attached hereto ("Schedule 1"). Capitalized terms used
herein and not otherwise defined herein shall have the meanings attributed to
them in the Credit Agreement.
2. This Notice of Assignment (this "Notice") is given and delivered to
****[the Borrower and]**** the Agent pursuant to Section 12.3.2 of the Credit
Agreement.
3. The Assignor and the Assignee have entered into an Assignment
Agreement, dated as of ___________, 19__ (the "Assignment"), pursuant to which,
among other things, the Assignor has sold, assigned, delegated and transferred
to the Assignee, and the Assignee has purchased, accepted and assumed from the
Assignor the percentage interest specified in Item 3 of Schedule 1 of all
outstandings, rights and obligations under the Credit Agreement relating to the
facilities listed in Item 3 of Schedule 1. The Effective Date of the Assignment
shall be the later of the date specified in Item 5 of Schedule 1 or two Business
Days (or such shorter period as agreed to by the Agent) after this Notice of
Assignment and any consents and fees required by Sections 12.3.1 and 12.3.2 of
the Credit Agreement have been delivered to the Agent, provided that the
Effective Date shall not occur if any condition precedent agreed to by the
Assignor and the Assignee has not been satisfied.
*To be included only if consent must be obtained from the Borrower pursuant to
Section 12.3.1 of the Credit Agreement.
-109-
4. The Assignor and the Assignee hereby give to the Borrower and the
Agent notice of the assignment and delegation referred to herein. The
Assignor will confer with the Agent before the date specified in Item 5 of
Schedule 1 to determine if the Assignment Agreement will become effective on
such date pursuant to Section 3 hereof, and will confer with the Agent to
determine the Effective Date pursuant to Section 3 hereof if it occurs
thereafter. The Assignor shall notify the Agent if the Assignment Agreement
does not become effective on any proposed Effective Date as a result of the
failure to satisfy the conditions precedent agreed to by the Assignor and the
Assignee. At the request of the Agent, the Assignor will give the Agent
written confirmation of the satisfaction of the conditions precedent.
5. The Assignor or the Assignee shall pay to the Agent on or before the
Effective Date the processing fee of $4,000 required by Section 12.3.2 of the
Credit Agreement.
6. If Notes are outstanding on the Effective Date, the Assignor and the
Assignee request and direct that the Agent prepare and cause the Borrower to
execute and deliver new Notes or, as appropriate, replacements Notes, to the
Assignor and the Assignee. The Assignor and, if applicable, the Assignee each
agree to deliver to the Agent the original Notes received by it from the
Borrower upon its receipt of new Notes in the appropriate amounts.
7. The Assignee advises the Agent that notice and payment instructions
are set forth in the attachment to Schedule 1.
8. The Assignee hereby represents and warrants that none of the funds,
monies, assets or other consideration being used to make the purchase pursuant
to the Assignment are "plan assets" as defined under ERISA and that its rights,
benefits, and interests in and under the Transaction Documents will not be "plan
assets" under ERISA.
9. The Assignee authorizes the Agent to act as its agent under the
Transaction Documents in accordance with the terms thereof. The Assignee
acknowledges that the Agent has no duty to supply information with respect to
the Borrower or the Transaction Documents to the Assignee until the Assignee
becomes a party to the Credit Agreement.*
*May be eliminated if Assignee is a party to the Credit Agreement prior to the
Effective Date.
NAME OF ASSIGNOR NAME OF ASSIGNEE
By: By:
Title: Title:
-110-
ACKNOWLEDGED [AND CONSENTED TO] ACKNOWLEDGED [AND CONSENTED TO]
BY [NAME OF AGENT] BY [PRONET INC.]
By: By:
Title: Title:
[Attach photocopy of Schedule 1 to Assignment]
-111-
EXHIBIT "E"
LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION
To: The First National Bank of Chicago,
as Agent (the "Agent") under the Credit Agreement Described Below.
Re: Second Amended and Restated Credit Agreement, dated as of June 14, 1996 (as
the same may be amended or modified, the "Agreement"), among ProNet Inc.
(the "Borrower"), the Lenders party thereto and The First National Bank of
Chicago, as Agent. Capitalized terms used herein and not otherwise defined
herein are used with the meanings attributed to them in the Agreement.
The Agent is specifically authorized and directed to act upon the following
standing money transfer instructions with respect to the proceeds of Advances or
other extensions of credit from time to time until receipt by the Agent of a
specific written revocation of such instructions by the Borrower, provided,
however, that the Agent may otherwise transfer funds as hereafter directed in
writing by the Borrower in accordance with Section 13.1 of the Agreement or
based on any telephonic notice made in accordance with Section 2.13 of the
Agreement.
Facility Identification Number(s)
Customer/Account Name
Transfer Funds To
For Account No. ---------------------
Reference/Attention To
Authorized Officer (Customer Representative) Date
(Please Print) Signature
Bank Officer Name Date
(Please Print) Signature
(Deliver Completed Form to Credit Support Staff For Immediate Processing)
-112-
EXHIBIT "F"
SECOND AMENDMENT TO PLEDGE AGREEMENT
THIS SECOND AMENDMENT TO PLEDGE AGREEMENT (this "Amendment") is entered
into as of the 14th day of June, 1996 by and between ProNet Inc. (the
"Borrower") and The First National Bank of Chicago, as agent (the "Agent") for
the Lenders (as hereinafter defined).
W I T N E S S E T H :
WHEREAS, the Borrower has entered into an Amended and Restated Credit
Agreement, dated as of February 9, 1995, as amended prior to the date hereof (as
so amended, the "Existing Credit Agreement"), with the lenders named therein
(collectively called the "Existing Lenders"), and the Agent;
WHEREAS, pursuant to the Existing Credit Agreement, the Borrower executed a
Pledge Agreement dated as of June 30, 1994, as amended as of February 9, 1995
(the "Existing Pledge Agreement") in favor of the Agent;
WHEREAS, the Borrower, certain of the Existing Lenders, certain additional
Lenders and the Agent have entered into a Second Amended and Restated Credit
Agreement of even date herewith (as the same may be further amended or modified
and in effect from time to time, the "Credit Agreement"); and
WHEREAS, the execution and delivery of this Amendment is a condition
precedent to the effectiveness of the Credit Agreement;
NOW, THEREFORE, for and in consideration of the premises contained herein,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. DEFINED TERMS. Capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to such terms in the Existing
Pledge Agreement, as amended hereby.
2. AMENDMENT TO EXISTING PLEDGE AGREEMENT. The first recital to the
Existing Pledge Agreement is hereby amended to read in its entirety as follows:
"WHEREAS, the Borrower has entered into a Credit Agreement, dated as
of June 30, 1994, as amended by that certain Amendment No. 1 dated as of
September 27, 1994, and as amended and restated by that certain Amended and
Restated Credit Agreement dated as of February 9, 1995 (as from time to
time amended) and as further amended and restated by that certain Second
Amended and Restated Credit Agreement dated as of June 14, 1996 (as so
amended and restated and as the same may be further amended or modified and
in effect from
-113-
time to time, the "Credit Agreement"), with the lenders named therein
(said Lenders, together with their respective successors and assigns,
collectively called the "Lenders") and the Agent;"
3. REPRESENTATIONS AND WARRANTIES. In order to induce the Agent to enter
into this Amendment, the Borrower represents and warrants that:
3.1. The representations and warranties set forth in Section 4 of the
Existing Pledge Agreement, as hereby amended, are true, correct and complete on
the date hereof as if made on and as of the date hereof, except as such
representations and warranties by their terms are made solely as of a prior
date. There exists no Default on the date hereof.
3.2. The execution and delivery by the Borrower of this Amendment have
been duly authorized by proper corporate proceedings and this Amendment, and the
Existing Pledge Agreement, as amended by this Amendment, constitute legal, valid
and binding obligations of the Borrower enforceable in accordance with their
terms, except as enforceability may be limited by bankruptcy, insolvency,
moratorium or similar laws affecting the enforcement of creditors' rights
generally.
3.3. Neither the execution and delivery by the Borrower of this
Amendment, nor the consummation of the transactions herein contemplated, nor
compliance with the provisions hereof will violate any law, rule, regulation,
order, writ, judgment, injunction, decree or award binding on the Borrower or
any Subsidiary or the Borrower's articles of incorporation or by-laws or the
provisions of any indenture, instrument or agreement to which the Borrower or
any Subsidiary is a party or is subject, or by which it, or its property, is
bound, or conflict with or constitute a default thereunder.
4. MISCELLANEOUS.
4.1. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH THE PROVISIONS OF, THE INTERNAL LAWS (AND NOT THE
LAW OF CONFLICTS) OF THE STATE OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS
APPLICABLE TO NATIONAL BANKS.
4.2. EXPENSES. The Borrower agrees to pay the Agent upon demand for
all reasonable expenses, including reasonable fees of attorneys and paralegals
for the Agent (who may be employees of the Agent), incurred by the Agent in
connection with the preparation, negotiation and execution of this Amendment and
any document required to be furnished in connection herewith.
-114-
4.3. SUCCESSORS. This Amendment shall be binding upon and shall inure
to the benefit of the Borrower, the Lenders and the Agent and their respective
successors and assigns.
4.4. CONFIRMATION OF THE EXISTING PLEDGE AGREEMENT. The Existing
Pledge Agreement, as amended hereby, shall remain in full force and effect and
is hereby ratified, approved and confirmed in all respects.
4.5. REFERENCE TO THE AGREEMENT. Each reference in the Existing
Pledge Agreement to "this Agreement," "hereunder," "hereof," or words of like
import, and each reference to the Existing Pledge Agreement in any and all
agreements, instruments, documents, notes, certificates and other writings of
every kind and nature, shall, except where the context otherwise requires, be
deemed a reference to the Existing Pledge Agreement, amended hereby.
4.6. COUNTERPARTS: EFFECTIVE DATE. This Amendment may be executed in
any number of counterparts, all of which taken together shall constitute one
agreement, and any of the parties hereto may execute this Amendment by signing
any such counterpart. This Amendment shall be effective as of the Restructuring
Date when it has been executed by the Borrower and the Agent.
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the
date first above written.
PRONET INC.
By:
-----------------------------
Xxx Xxxxxxxx
Senior Vice President
THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
By:
-----------------------------
C. Xxxx Xxxxxxx
Vice President
-115-
EXHIBIT "G"
SECOND AMENDMENT TO SECURITY AGREEMENT
THIS SECOND AMENDMENT TO SECURITY AGREEMENT (this "Amendment") is entered
into as of June 14, 1996 by and between ProNet Inc. (the "Borrower") and The
First National Bank of Chicago, as Agent (the "Agent") for the Lenders (as
hereinafter defined).
W I T N E S S E T H :
WHEREAS, the Borrower has entered into an Amended and Restated Credit
Agreement, dated as of February 9, 1995, as amended prior to the date hereof
(as the same may be amended or modified and in effect from time to time, the
"Existing Credit Agreement"), with the lenders named therein (collectively
called the "Existing Lenders") and Agent;
WHEREAS, pursuant to the Existing Credit Agreement, the Borrower executed a
Security Agreement dated as of June 30, 1994, as amended as of February 9, 1995
(the "Existing Security Agreement") in favor of the Agent;
WHEREAS, the Borrower, certain of the Existing Lenders, certain additional
Lenders and the Agent have entered into a Second Amended and Restated Credit
Agreement of even date herewith (as the same may be further amended or modified
and in effect from time to time, the "Credit Agreement"); and
WHEREAS, the execution and delivery of this Amendment is a condition
precedent to the effectiveness of the Credit Agreement;
NOW, THEREFORE, for and in consideration of the premises contained herein,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. DEFINED TERMS. Capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to such terms in the Existing
Security Agreement, as amended hereby.
2. AMENDMENTS TO EXISTING SECURITY AGREEMENT.
2.1. The first recital to the Existing Security Agreement is hereby amended
to read in its entirety as follows:
"WHEREAS, the Borrower has entered into a Credit Agreement, dated as
of June 30, 1994, as amended by that certain Amendment No. 1 dated as of
September 27, 1994, and as amended and restated by that certain Amended and
Restated Credit Agreement dated as of February 9, 1995 (as from time to
time amended) and as further amended and restated by that certain Second
Amended
-116-
and Restated Credit Agreement dated as of June 14, 1996 (as so amended
and restated and as the same may be further amended or modified and
in effect from time to time, the "Credit Agreement"), with the lenders
named therein (said Lenders, together with their respective successors and
assigns, collectively called the "Lenders") and the Agent;"
2.2. Exhibit "A" to the Existing Security Agreement is hereby amended to
read in its entirety in the form of Schedule I hereto.
3. REPRESENTATIONS AND WARRANTIES. In order to induce the Agent to enter
into this Amendment, the Borrower represents and warrants that:
3.1. The representations and warranties set forth in Section 3 of the
Existing Security Agreement, as hereby amended, are true, correct and complete
on the date hereof as if made on and as of the date hereof, except as such
representations and warranties by their terms are made solely as of a prior
date. There exists no Default on the date hereof.
3.2. The execution and delivery by the Borrower of this Amendment have
been duly authorized by proper corporate proceedings and this Amendment, and the
Existing Security Agreement, as amended by this Amendment, constitute legal,
valid and binding obligations of the Borrower enforceable in accordance with
their terms, except as enforceability may be limited by bankruptcy, insolvency,
moratorium or similar laws affecting the enforcement of creditors' rights
generally.
3.3. Neither the execution and delivery by the Borrower of this
Amendment, nor the consummation of the transactions herein contemplated, nor
compliance with the provisions hereof will violate any law, rule, regulation,
order, writ, judgment, injunction, decree or award binding on the Borrower or
any Subsidiary or the Borrower's articles of incorporation or by-laws or the
provisions of any indenture, instrument or agreement to which the Borrower or
any Subsidiary is a party or is subject, or by which it, or its property, is
bound, or conflict with or constitute a default thereunder.
4. MISCELLANEOUS.
4.1. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH THE PROVISIONS OF, THE INTERNAL LAWS (AND NOT THE
LAW OF CONFLICTS) OF THE STATE OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS
APPLICABLE TO NATIONAL BANKS.
4.2. EXPENSES. The Borrower agrees to pay the Agent upon demand for
all reasonable expenses, including reasonable fees of attorneys and paralegals
for the Agent (who may be employees of the Agent), incurred by the Agent in
connection
-117-
with the preparation, negotiation and execution of this Amendment and any
document required to be furnished in connection herewith.
4.3. SUCCESSORS. This Amendment shall be binding upon and shall inure
to the benefit of the Borrower, the Lenders and the Agent and their respective
successors and assigns.
4.4. CONFIRMATION OF THE EXISTING SECURITY AGREEMENT. The Existing
Security Agreement, as amended hereby, shall remain in full force and effect and
is hereby ratified, approved and confirmed in all respects.
4.5. REFERENCE TO THE AGREEMENT. Each reference in the Existing
Security Agreement to "this Agreement," "hereunder," "hereof," or words of like
import, and each reference to the Existing Security Agreement in any and all
agreements, instruments, documents, notes, certificates and other writings of
every kind and nature, shall, except where the context otherwise requires, be
deemed a reference to the Existing Security Agreement, amended hereby.
4.6. COUNTERPARTS: EFFECTIVE DATE. This Amendment may be executed in
any number of counterparts, all of which taken together shall constitute one
agreement, and any of the parties hereto may execute this Amendment by signing
any such counterpart. This Amendment shall be effective as of the Restructuring
Date when it has been executed by the Borrower and the Agent.
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the
date first above written.
PRONET INC.
By:
Xxx Xxxxxxxx
Senior Vice President
THE FIRST NATIONAL BANK OF CHICAGO, as Agent
By:
C. Xxxx Xxxxxxx
Vice President
-118-
SCHEDULE I
-119-
EXHIBIT "H"
SECOND AMENDMENT TO GUARANTY
THIS SECOND AMENDMENT TO GUARANTY (this "Amendment") is executed as of the
14th day of June, 1996, by and between each of the Subsidiaries listed on the
signature page hereof (each a "Guarantor" and collectively the "Guarantors") and
The First National Bank of Chicago, as Agent (the "Agent") for the Lenders (as
hereinafter defined).
W I T N E S S E T H :
WHEREAS, ProNet Inc. (the "Borrower"), entered into that certain Amended
and Restated Credit Agreement dated as of February 9, 1995, as amended prior to
the date hereof (as so amended, the "Existing Credit Agreement"), with certain
lenders party thereto (collectively, the "Existing Lenders") and the Agent;
WHEREAS, pursuant to the Existing Credit Agreement, the Guarantors executed
a Guaranty dated as of June 30, 1994, as amended or supplemented prior to the
date hereof (as so amended, the "Existing Subsidiary Guaranty"), in favor of the
Agent;
WHEREAS, the Borrower, certain of the Existing Lenders, certain additional
Lenders, and the Agent have entered into a Second Amended and Restated Credit
Agreement of even date herewith (as the same may be further amended or modified
and in effect from time to time, the "Credit Agreement); and
WHEREAS, execution and delivery of this Amendment is a condition precedent
to the effectiveness of the Credit Agreement;
WHEREAS, certain of the proceeds of the Advances made to the Borrower under
the Credit Agreement will be advanced to the Guarantors, and thus, the
Obligations are being incurred for and will inure to the benefit of the
Guarantors (which benefits are hereby acknowledged);
WHEREAS, in consideration of the benefits that inure to the Guarantors, and
in order to induce the Lenders to make Advances under the Credit Agreement to
the Borrower, the Guarantors desire to enter into this Amendment;
NOW, THEREFORE, for and in consideration of the premises contained herein,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. DEFINED TERMS. Capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to such terms in the Existing
Subsidiary Guaranty, as amended hereby.
-120-
2. AMENDMENTS TO EXISTING SUBSIDIARY GUARANTY.
2.1. The first recital to the Existing Subsidiary Guaranty is hereby
amended to read in its entirety as follows:
"WHEREAS, ProNet Inc. (the "Borrower") has entered into a Credit
Agreement, dated as of June 30, 1994, as amended by that certain Amendment
No. 1 dated as of September 27, 1994, as amended and restated by that
certain Amended and Restated Credit Agreement dated as of February 9, 1995
(as from time to time amended) and as further amended and restated by that
certain Second Amended and Restated Credit Agreement dated as of June 14,
1996 (as so amended and restated and as the same may be further amended or
modified and in effect from time to time, the "Credit Agreement"),
providing for the making of Loans as contemplated therein;"
2.2. Annex I to the Existing Subsidiary Guaranty is hereby amended to
read in its entirety in the form of Schedule I hereto.
3. REPRESENTATIONS AND WARRANTIES. In order to induce the Agent to enter
into this Amendment, each Guarantor represents and warrants that:
3.1. The representations and warranties set forth in Section 6 of the
Existing Subsidiary Guaranty, as hereby amended, are true, correct and complete
on the date hereof as if made on and as of the date hereof, except as such
representations and warranties by their terms are made solely as of a prior
date.
3.2. The execution and delivery by such Guarantor of this Amendment
have been duly authorized by proper corporate proceedings and this Amendment,
and the Existing Subsidiary Guaranty, as amended by this Amendment, constitute
legal, valid and binding obligations of such Guarantor enforceable in accordance
with their terms, except as enforceability may be limited by bankruptcy,
insolvency, moratorium or similar laws affecting the enforcement of creditors'
rights generally.
3.3. Neither the execution and delivery by such Guarantor of this
Amendment, nor the consummation of the transactions herein contemplated, nor
compliance with the provisions hereof will violate any law, rule, regulation,
order, writ, judgment, injunction, decree or award binding on such Guarantor or
such Guarantor's articles of incorporation or by-laws or the provisions of any
indenture, instrument or agreement to which such Guarantor is a party or is
subject, or by which it, or its property, is bound, or conflict with or
constitute a default thereunder.
4. MISCELLANEOUS.
-121-
4.1. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH THE PROVISIONS OF, THE INTERNAL LAWS (AND NOT THE
LAW OF CONFLICTS) OF THE STATE OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS
APPLICABLE TO NATIONAL BANKS.
4.2. EXPENSES. Each Guarantor agrees to pay (to the extent not so
paid by the Borrower) the Agent upon demand for all reasonable expenses,
including reasonable fees of attorneys and paralegals for the Agent (who may be
employees of the Agent), incurred by the Agent in connection with the
preparation, negotiation and execution of this Amendment and any document
required to be furnished in connection herewith.
4.3. SUCCESSORS. This Amendment shall be binding upon and shall inure
to the benefit of each Guarantor, the Lenders and the Agent and their respective
successors and assigns.
4.4. CONFIRMATION OF THE EXISTING SUBSIDIARY GUARANTY. The Existing
Subsidiary Guaranty, as amended hereby, shall remain in full force and effect
and is hereby ratified, approved and confirmed in all respects.
4.5. REFERENCE TO THE AGREEMENT. Each reference in the Existing
Subsidiary Guaranty to "this Agreement," "this Guaranty," "hereunder," "hereof,"
or words of like import, and each reference to the Existing Subsidiary Guaranty
in any and all agreements, instruments, documents, notes, certificates and other
writings of any kind and nature, shall, except where the context otherwise
requires, be deemed a reference to the Existing Subsidiary Guaranty, as amended
hereby.
4.6. COUNTERPARTS: EFFECTIVE DATE. This Amendment may be executed in
any number of counterparts, all of which taken together shall constitute one
agreement, and any of the parties hereto may execute this Amendment by signing
any such counterpart. This Amendment shall be effective as of the date first
above written when it has been executed by each of the undersigned Guarantors
and the Agent.
-122-
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of
the date first above written.
BEEPERS TO GO, INC.
CONTACT COMMUNICATIONS OF MASSACHUSETTS, INC.
CONTACT COMMUNICATIONS OF PENNSYLVANIA, INC.
CONTACT COMMUNICATIONS, INC.
ELECTRONIC TRACKING SYSTEMS, INC.
PROFESSIONAL COMMUNICATIONS SYSTEMS, INC.
THE MESSAGE EXPRESS, INC.
CONTACT COMMUNICATIONS INC.
METROPOLITAN HOUSTON PAGING SERVICES, INC.
A. G. R. ELECTRONICS, INC.
PRONET SUBSIDIARY, INC.
By:
-------------------------------------
Xxx Xxxxxxxx
Vice President - Finance of each of the foregoing
corporations
THE FIRST NATIONAL BANK OF CHICAGO, as Agent
By:
-------------------------------------
C. Xxxx Xxxxxxx
Vice President
-123-
SCHEDULE I
Annex I to Guaranty
[Form of Counterpart Signature Page to Guaranty]
By signing below, [each of] the undersigned (i) becomes a Guarantor under
the Guaranty, dated as of June 30, 1994, as amended (the "Guaranty"), executed
by the Guarantors party thereto in favor of The First National Bank of Chicago,
as Agent, to which this signature page is attached and made a part of, (ii)
makes the representations and warranties set forth in Section 6 of the Guaranty
and (iii) agrees to be bound by the terms of the Guaranty.
[Guarantor]
Date: By:
-------------------------------
Name:
Title:
[Guarantor]
Date: By:
-------------------------------
Name:
Title:
-124-
EXHIBIT "I"
SECOND AMENDMENT TO SECURITY AGREEMENT
THIS SECOND AMENDMENT TO SECURITY AGREEMENT (this "Amendment") is entered
into as of June 14, 1996 by and between each of the Subsidiaries listed on the
signature page hereof (each a "Grantor" and collectively the "Grantors") and The
First National Bank of Chicago, as Agent (the "Agent") for the Lenders (as
hereinafter defined).
W I T N E S S E T H :
WHEREAS, ProNet Inc. (the "Borrower"), entered into that certain Amended
and Restated Credit Agreement, dated as of February 9, 1995, as amended prior to
the date hereof (as so amended, the "Existing Credit Agreement"), with certain
lenders party thereto (collectively, the "Existing Lenders") and the Agent;
WHEREAS, pursuant to the Existing Credit Agreement, the Grantors executed a
Security Agreement, dated as of June 30, 1994, as amended or supplemented prior
to the date hereof (as so amended, the "Existing Subsidiary Security
Agreement"), in favor of the Agent;
WHEREAS, the Borrower, certain of the Existing Lenders, certain additional
Lenders, and the Agent have entered into a Second Amended and Restated Credit
Agreement of even date herewith (as the same may be further amended or modified
and in effect from time to time, the "Credit Agreement); and
WHEREAS, execution and delivery of this Amendment is a condition precedent
to the effectiveness of the Credit Agreement;
WHEREAS, certain of the proceeds of the Advances made to the Borrower under
the Credit Agreement will be advanced to the Grantors, and thus, the Obligations
are being incurred for and will inure to the benefit of the Grantors (which
benefits are hereby acknowledged);
WHEREAS, in consideration of the benefits that inure to the Grantors, and
in order to induce the Lenders to make Advances under the Credit Agreement to
the Borrower, the Grantors desire to enter into this Amendment;
NOW, THEREFORE, for and in consideration of the premises contained herein,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
-125-
1. DEFINED TERMS. Capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to such terms in the Existing
Subsidiary Security Agreement, as amended hereby.
2. AMENDMENT TO EXISTING SUBSIDIARY SECURITY AGREEMENT.
2.1. The first recital to the Existing Subsidiary Security Agreement
is hereby amended to read in its entirety as follows:
"WHEREAS, ProNet Inc. (the "Borrower") has entered into a Credit
Agreement, dated as of June 30, 1994, as amended by that certain Amendment
No. 1 dated as of September 27, 1994, as amended and restated by that
certain Amended and Restated Credit Agreement dated as of February 9, 1995
(as from time to time amended) and as further amended and restated by that
certain Second Amended and Restated Credit Agreement dated as of June 14,
1996 (as so amended and restated and as the same may be further amended or
modified and in effect from time to time, the "Credit Agreement"),
providing for the making of Loans as contemplated therein;"
2.2. Xxxxxxxx "X", "X" and "C" to the Existing Subsidiary Security
Agreement are hereby amended to read in their entirety in the form of Schedule I
hereto.
2.3. Annex I to the Existing Subsidiary Security Agreement is hereby
amended to read in its entirety in the form of Schedule II hereto.
3. REPRESENTATIONS AND WARRANTIES. In order to induce the Agent to enter
into this Amendment, each Grantor represents and warrants that:
3.1. The representations and warranties set forth in Section 3 of the
Existing Subsidiary Security Agreement, as hereby amended, are true, correct and
complete on the date hereof as if made on and as of the date hereof, except as
such representations and warranties by their terms are made solely as of a prior
date.
3.2. The execution and delivery by such Grantor of this Amendment have
been duly authorized by proper corporate proceedings and this Amendment, and the
Existing Subsidiary Security Agreement, as amended by this Amendment, constitute
legal, valid and binding obligations of such Grantor enforceable in accordance
with their terms, except as enforceability may be limited by bankruptcy,
insolvency, moratorium or similar laws affecting the enforcement of creditors'
rights generally.
3.3. Neither the execution and delivery by such Grantor of this
Amendment, nor the consummation of the transactions herein contemplated, nor
compliance with the provisions hereof will violate any law, rule, regulation,
order, writ, judgment, injunction, decree or award binding on such Grantor or
such Grantor's articles of incorporation or by-laws or the provisions of any
indenture, instrument or
-126-
agreement to which such Grantor is a party or is subject, or by which it, or
its property, is bound, or conflict with or constitute a default thereunder.
4. MISCELLANEOUS.
4.1. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH THE PROVISIONS OF, THE INTERNAL LAWS (AND NOT THE
LAW OF CONFLICTS) OF THE STATE OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS
APPLICABLE TO NATIONAL BANKS.
4.2. EXPENSES. Each Grantor agrees to pay (to the extent not so paid
by the Borrower) the Agent upon demand for all reasonable expenses, including
reasonable fees of attorneys and paralegals for the Agent (who may be employees
of the Agent), incurred by the Agent in connection with the preparation,
negotiation and execution of this Amendment and any document required to be
furnished in connection herewith.
4.3. SUCCESSORS. This Amendment shall be binding upon and shall inure
to the benefit of each Grantor, the Lenders and the Agent and their respective
successors and assigns.
4.4. CONFIRMATION OF THE EXISTING SUBSIDIARY SECURITY AGREEMENT. The
Existing Subsidiary Security Agreement, as amended hereby, shall remain in full
force and effect and is hereby ratified, approved and confirmed in all respects.
4.5. REFERENCE TO THE AGREEMENT. Each reference in the Existing
Subsidiary Security Agreement to "this Agreement," "this Security Agreement,"
"hereunder," "hereof," or words of like import, and each reference to the
Existing Subsidiary Security Agreement in any and all agreements, instruments,
documents, notes, certificates and other writings of any kind and nature, shall,
except where the context otherwise requires, be deemed a reference to the
Existing Subsidiary Security Agreement, as amended hereby.
4.6. COUNTERPARTS: EFFECTIVE DATE. This Amendment may be executed in
any number of counterparts, all of which taken together shall constitute one
agreement, and any of the parties hereto may execute this Amendment by signing
any such counterpart. This Amendment shall be effective as of the date first
above written when it has been executed by each of the undersigned Grantors and
the Agent.
-127-
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the
date first above written.
BEEPERS TO GO, INC.
CONTACT COMMUNICATIONS OF MASSACHUSETTS, INC.
CONTACT COMMUNICATIONS OF PENNSYLVANIA, INC.
CONTACT COMMUNICATIONS, INC.
ELECTRONIC TRACKING SYSTEMS, INC.
PROFESSIONAL COMMUNICATIONS SYSTEMS, INC.
THE MESSAGE EXPRESS, INC.
CONTACT COMMUNICATIONS INC.
METROPOLITAN HOUSTON PAGING SERVICES, INC.
A. G. R. ELECTRONICS, INC.
PRONET SUBSIDIARY, INC.
By:
-------------------------------------
Xxx Xxxxxxxx
Vice President - Finance of each of the foregoing
corporations
THE FIRST NATIONAL BANK OF CHICAGO, as Agent
By:
-------------------------------------
C. Xxxx Xxxxxxx
Vice President
-128-
SCHEDULE I
-129-
EXHIBIT "A"
(See Sections 3.4, 3.5, 3.6 and 4.1.6 of Security Agreement)
Chief Executive Office and Mailing Address:
Location(s) of Receivables Records (if different from Chief Executive Office
above):
Locations of Inventory and Equipment:
TRADE NAME/TRADEMARKS:
-130-
EXHIBIT "B"
List of Pledged Securities
(See Section 3.11 of Security Agreement)
A. STOCKS:
ISSUER CERTIFICATE NUMBER NUMBER OF SHARES
---------------------------------------------------------------------------
X. XXXXX:
ISSUER NUMBER FACE AMOUNT COUPON RATE MATURITY
---------------------------------------------------------------------------
C. GOVERNMENT SECURITIES:
ISSUER NUMBER TYPE FACE AMOUNT COUPON RATE MATURITY
---------------------------------------------------------------------------
-131-
EXHIBIT "C"
List of Instruments
(See Section 3.8 of Security Agreement)
-132-
SCHEDULE II
Annex I to Security Agreement
[Form of Counterpart Signature Page to Security Agreement]
By signing below, [each of] of the undersigned (i) becomes a Grantor under
the Security Agreement, dated as of June 30, 1994, as amended (the "Security
Agreement"), between the Grantors party thereto and The First National Bank of
Chicago, as Agent, to which this signature page is attached and made a part of,
(ii) makes the representations and warranties set forth in Section 3 of the
Security Agreement and (iii) agrees to be bound by the terms of the Security
Agreement.
[Name of Subsidiary]
By:
Name:
Title:
Date:
-133-
SCHEDULE "1"
SUBSIDIARIES AND OTHER INVESTMENTS
(See Sections 5.8 and 6.17)
Investment Owned Amount of Percent Jurisdiction of
In By Investment Ownership Organization
-----------------------------------------------------------------------
-134-
SCHEDULE "2"
INDEBTEDNESS, CONTINGENT OBLIGATIONS AND LIENS
(See Sections 5.14, 6.12, 6.18 and 6.19)
Maturity
Indebtedness Indebtedness Property and Amount
Incurred By Owed To Encumbered (If Any) Of Indebtedness
---------------------------------------------------------------------------
-135-
SCHEDULE "3"
LITIGATION
-136-
SCHEDULE "4"
PENDING TELETOUCH ACQUISITIONS
-137-
$300,000,000
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
among
PRONET INC.,
THE LENDERS PARTY HERETO,
and
THE FIRST NATIONAL BANK OF CHICAGO, as Agent
dated as of JUNE 14, 1996
TABLE OF CONTENTS
PAGE
----
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II THE CREDITS. . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.1. Commitments. . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.2. Required Payments; Required Reductions of Aggregate Commitment . . 22
2.3. Ratable Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.4. Types of Advances; Applicable Margin . . . . . . . . . . . . . . . 26
2.5. Commitment Fee; Reductions in Aggregate Commitment . . . . . . . . 27
2.6. Minimum Amount of Each Advance . . . . . . . . . . . . . . . . . . 28
2.7. Optional Principal Payments. . . . . . . . . . . . . . . . . . . . 28
2.8. Method of Selecting Types and Interest Periods for New Advances. . 29
2.9. Conversion and Continuation of Outstanding Advances. . . . . . . . 29
2.10. Changes in Interest Rate, etc. . . . . . . . . . . . . . . . . . . 30
2.11. Rates Applicable After Default . . . . . . . . . . . . . . . . . . 30
2.12. Method of Payment. . . . . . . . . . . . . . . . . . . . . . . . . 31
2.13. Notes; Telephonic Notices. . . . . . . . . . . . . . . . . . . . . 31
2.14. Interest Payment Dates; Interest and Fee Basis . . . . . . . . . . 31
2.15. Notification of Advances, Interest Rates, Prepayments
and Commitment Reductions. . . . . . . . . . . . . . . . . . . . 32
2.16. Lending Installations. . . . . . . . . . . . . . . . . . . . . . . 32
2.17. Non-Receipt of Funds by the Agent. . . . . . . . . . . . . . . . . 32
2.18. Withholding Tax Exemption. . . . . . . . . . . . . . . . . . . . . 32
2.19. Collateral Security; Further Assistance. . . . . . . . . . . . . . 33
ARTICLE III CHANGE IN CIRCUMSTANCES . . . . . . . . . . . . . . . . . . . . 35
3.1. Yield Protection . . . . . . . . . . . . . . . . . . . . . . . . . 35
3.2. Changes in Capital Adequacy Regulations. . . . . . . . . . . . . . 36
3.3. Availability of Types of Advances. . . . . . . . . . . . . . . . . 37
3.4. Funding Indemnification. . . . . . . . . . . . . . . . . . . . . . 37
3.5. Lender Statements; Survival of Indemnity . . . . . . . . . . . . . 37
ARTICLE IV CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . 38
4.1. Restructuring Date and Initial Advance . . . . . . . . . . . . . . 38
4.2. Each Advance . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE V REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . . 41
5.1. Corporate Existence and Standing . . . . . . . . . . . . . . . . . 41
5.2. Authorization and Validity . . . . . . . . . . . . . . . . . . . . 41
5.3. No Conflict; Government Consent. . . . . . . . . . . . . . . . . . 41
5.4. Financial Statements . . . . . . . . . . . . . . . . . . . . . . . 41
5.5. Material Adverse Change. . . . . . . . . . . . . . . . . . . . . . 42
5.6. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
5.7. Litigation and Contingent Obligations. . . . . . . . . . . . . . . 42
5.8. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
5.9. ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
5.10. Accuracy of Information. . . . . . . . . . . . . . . . . . . . . . 42
PAGE
----
5.11. Regulation U . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
5.12. Material Agreements. . . . . . . . . . . . . . . . . . . . . . . . 43
5.13. Compliance With Laws . . . . . . . . . . . . . . . . . . . . . . . 43
5.14. Ownership of Properties. . . . . . . . . . . . . . . . . . . . . . 43
5.15. Investment Company Act . . . . . . . . . . . . . . . . . . . . . . 43
5.16. Public Utility Holding Company Act . . . . . . . . . . . . . . . . 43
ARTICLE VI COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
6.1. Financial Reporting . . . . . . . . . . . . . . . . . . . . . . . 44
6.2. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . 46
6.3. Notice of Default, etc. . . . . . . . . . . . . . . . . . . . . . 46
6.4. Financial Ratios. . . . . . . . . . . . . . . . . . . . . . . . . 46
6.4.2. Fixed Charge Coverage Ratio . . . . . . . . . . . . . . . . . . . 47
6.4.3. Pro Forma Debt Service Ratio. . . . . . . . . . . . . . . . . . . 47
6.4.4. Senior Leverage Ratio . . . . . . . . . . . . . . . . . . . . . . 47
6.5. Conduct of Business; Maintenance of Authorizations. . . . . . . . 48
6.6. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
6.7. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
6.8. Compliance with Laws. . . . . . . . . . . . . . . . . . . . . . . 48
6.9. Maintenance of Properties . . . . . . . . . . . . . . . . . . . . 49
6.10. Inspection. . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
6.11. Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
6.12. Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . . 49
6.13. Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
6.14. Sale of Assets. . . . . . . . . . . . . . . . . . . . . . . . . . 50
6.15. Sale of Accounts. . . . . . . . . . . . . . . . . . . . . . . . . 51
6.16. Sale and Leaseback. . . . . . . . . . . . . . . . . . . . . . . . 51
6.17. Investments and Acquisitions. . . . . . . . . . . . . . . . . . . 51
6.18. Contingent Obligations. . . . . . . . . . . . . . . . . . . . . . 51
6.19. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
6.20. Shell Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . 54
6.21. Affiliates. . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
6.22. Subordinated Indebtedness . . . . . . . . . . . . . . . . . . . . 54
ARTICLE VII DEFAULTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
ARTICLE VIII ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES . . . . . . . . 58
8.1. Acceleration. . . . . . . . . . . . . . . . . . . . . . . . . . . 58
8.2. Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
8.3. Preservation of Rights. . . . . . . . . . . . . . . . . . . . . . 59
8.4 Subordinated Indebtedness . . . . . . . . . . . . . . . . . . . . 59
ARTICLE IX GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . 59
9.1. Survival of Representations . . . . . . . . . . . . . . . . . . . 59
9.2. Governmental Regulation . . . . . . . . . . . . . . . . . . . . . 59
9.3. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
9.4. Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
PAGE
----
9.5. Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . . 60
9.6. Several Obligations; Benefits of this Agreement . . . . . . . . . 60
9.7. EXPENSES; INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . 60
9.8. Numbers of Documents. . . . . . . . . . . . . . . . . . . . . . . 61
9.9. Accounting. . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
9.10. Severability of Provisions. . . . . . . . . . . . . . . . . . . . 61
9.11. Nonliability of Lenders . . . . . . . . . . . . . . . . . . . . . 61
9.12. CHOICE OF LAW . . . . . . . . . . . . . . . . . . . . . . . . . . 61
9.13. CONSENT TO JURISDICTION . . . . . . . . . . . . . . . . . . . . . 61
9.14. WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . . . . . . . . . 62
9.15. Compliance with Applicable Laws . . . . . . . . . . . . . . . . . 62
9.16. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . 62
9.17. Restructuring Transactions. . . . . . . . . . . . . . . . . . . . 63
ARTICLE X THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
10.1. Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
10.2. Powers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
10.3. General Immunity. . . . . . . . . . . . . . . . . . . . . . . . . 64
10.4. No Responsibility for Loans, Recitals, etc. . . . . . . . . . . . 64
10.5. Action on Instructions of Lenders . . . . . . . . . . . . . . . . 64
10.6. Employment of Agents and Counsel. . . . . . . . . . . . . . . . . 65
10.7. Reliance on Documents; Counsel. . . . . . . . . . . . . . . . . . 65
10.8. Agent's Reimbursement and Indemnification . . . . . . . . . . . . 65
10.9. Rights as a Lender. . . . . . . . . . . . . . . . . . . . . . . . 65
10.10. Lender Credit Decision. . . . . . . . . . . . . . . . . . . . . . 66
10.11. Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . 66
10.12. Agent's Fee; Arranger's Fee . . . . . . . . . . . . . . . . . . . 67
10.13. Collateral Releases . . . . . . . . . . . . . . . . . . . . . . . 67
ARTICLE XI SETOFF; RATABLE PAYMENTS . . . . . . . . . . . . . . . . . . . . 67
11.1. Setoff. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
11.2. Ratable Payments. . . . . . . . . . . . . . . . . . . . . . . . . 67
ARTICLE XII BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS . . . . . . . 68
12.1. Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . 68
12.2. Participations. . . . . . . . . . . . . . . . . . . . . . . . . . 68
12.2.1. Permitted Participants; Effect. . . . . . . . . . . . . . . . . . 68
12.2.2. Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . . . 68
12.2.3. Benefit of Setoff . . . . . . . . . . . . . . . . . . . . . . . . 69
12.3. Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
12.3.1. Permitted Assignments . . . . . . . . . . . . . . . . . . . . . . 69
12.3.2. Effect; Effective Date. . . . . . . . . . . . . . . . . . . . . . 69
12.3.3. Pro Rata Assignments. . . . . . . . . . . . . . . . . . . . . . . 70
12.4. Dissemination of Information. . . . . . . . . . . . . . . . . . . 70
12.5. Tax Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . 70
ARTICLE XIII NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
PAGE
----
13.1. Giving Notice . . . . . . . . . . . . . . . . . . . . . . . . . . 71
13.2. Change of Address . . . . . . . . . . . . . . . . . . . . . . . . 71
ARTICLE XIV COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . . . . . . 72
EXHIBIT "A-1" FACILITY A NOTE . . . . . . . . . . . . . . . . . . . . . . . 77
EXHIBIT "A-2" FACILITY B NOTE . . . . . . . . . . . . . . . . . . . . . . . 80
EXHIBIT "B-1" FORM OF OPINION . . . . . . . . . . . . . . . . . . . . . . . 83
EXHIBIT "B-2" FORM OF OPINION OF FCC COUNSEL. . . . . . . . . . . . . . . . 93
EXHIBIT "C" COMPLIANCE CERTIFICATE. . . . . . . . . . . . . . . . . . . . . 96
EXHIBIT "D" ASSIGNMENT AGREEMENT. . . . . . . . . . . . . . . . . . . . . . 101
EXHIBIT "E" LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION. . . . . . . . . 112
EXHIBIT "F" SECOND AMENDMENT TO PLEDGE AGREEMENT. . . . . . . . . . . . . . 113
EXHIBIT "G" SECOND AMENDMENT TO SECURITY AGREEMENT. . . . . . . . . . . . . 116
EXHIBIT "H" SECOND AMENDMENT TO GUARANTY. . . . . . . . . . . . . . . . . . 120
EXHIBIT "I" SECOND AMENDMENT TO SECURITY AGREEMENT. . . . . . . . . . . . . 125
SCHEDULE "1" SUBSIDIARIES AND OTHER INVESTMENTS . . . . . . . . . . . . . . 134
SCHEDULE "2" INDEBTEDNESS, CONTINGENT OBLIGATIONS AND LIENS . . . . . . . . 135
SCHEDULE "3" LITIGATION . . . . . . . . . . . . . . . . . . . . . . . . . . 136
SCHEDULE "4" PENDING TELETOUCH ACQUISITIONS . . . . . . . . . . . . . . . . 137
