EXHIBIT 10.73
[EXECUTION COPY]
$100,000,000
REVOLVING CREDIT AGREEMENT
dated as of
March 31, 1998
among
AMSC Acquisition Company, Inc.,
American Mobile Satellite Corporation,
The Banks Listed Herein,
Xxxxxx Guaranty Trust Company of New York,
as Documentation Agent,
and
Toronto Dominion (Texas), Inc.,
as Administrative Agent
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TABLE OF CONTENTS
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ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions..................................................1
SECTION 1.02. Accounting Terms and Determinations.........................21
ARTICLE 2
THE CREDITS
SECTION 2.01. Commitments to Lend.........................................21
SECTION 2.02. Method of Borrowing.........................................21
SECTION 2.03. Notes.......................................................23
SECTION 2.04. Maturity of Loans...........................................24
SECTION 2.05. Interest Rates..............................................24
SECTION 2.06. Commitment Fees.............................................25
SECTION 2.07. Optional Termination or Reduction of Commitments............26
SECTION 2.08. Method of Electing Interest Rates...........................26
SECTION 2.09. Mandatory Termination and Reduction of Commitments..........28
SECTION 2.10. Optional Prepayments........................................29
SECTION 2.11. General Provisions as to Payments...........................29
SECTION 2.12. Funding Losses..............................................30
SECTION 2.13. Computation of Interest and Fees............................30
ARTICLE 3
CONDITIONS
SECTION 3.01. Closing.....................................................31
SECTION 3.02. Borrowings..................................................33
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Corporate Existence and Power...............................34
SECTION 4.02. Corporate Authorization; No Contravention...................34
SECTION 4.03. Government Approvals........................................34
SECTION 4.04. Binding Effect..............................................35
SECTION 4.05. Litigation..................................................35
SECTION 4.06. No Default..................................................35
SECTION 4.07. ERISA Compliance............................................36
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SECTION 4.08. Title to Property...........................................37
SECTION 4.09. Taxes.......................................................37
SECTION 4.10. Financial Condition.........................................37
SECTION 4.11. Environmental Matters.......................................38
SECTION 4.12. Regulated Entities..........................................38
SECTION 4.13. Subsidiaries................................................39
SECTION 4.14. Insurance...................................................39
SECTION 4.15. Business....................................................39
SECTION 4.16. Disclosure..................................................39
ARTICLE 5
COVENANTS
SECTION 5.01. Information.................................................40
SECTION 5.02. Certificates; Other Information.............................40
SECTION 5.03. Notices.....................................................41
SECTION 5.04. Conduct of Business; Preservation of Corporate Existence....43
SECTION 5.05. Maintenance of Property.....................................43
SECTION 5.06. Maintenance of Insurance....................................43
SECTION 5.07. Payment of Obligations......................................47
SECTION 5.08. Compliance with Laws........................................47
SECTION 5.09. Inspection of Property and Books and Records................47
SECTION 5.10. Environmental Laws..........................................48
SECTION 5.11. Use of Proceeds.............................................48
SECTION 5.12. No Subsidiaries.............................................48
SECTION 5.13. Government Approvals........................................48
SECTION 5.14. Further Assurances..........................................48
SECTION 5.15. Limitation on Liens.........................................49
SECTION 5.16. Disposition of Assets, Consolidations and Mergers...........50
SECTION 5.17. Employee Contracts and Arrangements.........................52
SECTION 5.18. Investments.................................................52
SECTION 5.19. Transactions with Affiliates................................52
SECTION 5.20. Compliance with ERISA.......................................52
SECTION 5.21. Restricted Payments.........................................53
SECTION 5.22. Accounting Changes..........................................53
SECTION 5.23. Limitation on Indebtedness..................................53
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ARTICLE 6
DEFAULTS
SECTION 6.01. Events of Default...........................................54
SECTION 6.02. Notice of Default...........................................59
ARTICLE 7
THE AGENTS
SECTION 7.01. Appointment and Authorization...............................59
SECTION 7.02. Agents and Affiliates.......................................59
SECTION 7.03. Action by Agents............................................59
SECTION 7.04. Consultation with Experts...................................59
SECTION 7.05. Liability of Agents.........................................59
SECTION 7.06. Indemnification.............................................60
SECTION 7.07. Credit Decision.............................................60
SECTION 7.08. Successor Agent.............................................60
SECTION 7.09. Agents' Fees................................................61
ARTICLE 8
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair....61
SECTION 8.02. Illegality..................................................61
SECTION 8.03. Increased Cost and Reduced Return...........................62
SECTION 8.04. Taxes.......................................................64
SECTION 8.05. Base Rate Loans Substituted for Affected Euro-Dollar
Loans.......................................................65
ARTICLE 9
PARENT GUARANTY
SECTION 9.01. The Parent Guaranty.........................................66
SECTION 9.02. Guaranty Unconditional......................................66
SECTION 9.03. Discharge Only Upon Payment in Full; Restatement in
Certain Circumstances.......................................67
SECTION 9.04. Waiver by the Parent Guarantor..............................67
SECTION 9.05. Subrogation.................................................68
SECTION 9.06. Stay of Acceleration........................................68
SECTION 9.07. Subordination...............................................68
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ARTICLE 10
MISCELLANEOUS
SECTION 10.01. Notices.....................................................70
SECTION 10.02. No Waivers..................................................70
SECTION 10.03. Expenses; Indemnification...................................71
SECTION 10.04. Sharing of Set-offs.........................................71
SECTION 10.05. Amendments and Waivers......................................72
SECTION 10.06. Successors and Assigns......................................72
SECTION 10.07. Collateral..................................................74
SECTION 10.08. Governing Law; Submission to Jurisdiction...................74
SECTION 10.09. Counterparts; Integration; Effectiveness....................74
SECTION 10.10. Waiver of Jury Trial........................................75
SECTION 10.11. Confidentiality.............................................75
COMMITMENT SCHEDULE
PRICING SCHEDULE
DISCLOSURE SCHEDULE
EXHIBIT A - Note
EXHIBIT B - Opinion of Counsel for the Parent Guarantor and the Borrower
EXHIBIT C - Opinion of Special Counsel for the Agents
EXHIBIT D - Assignment and Assumption Agreement
EXHIBIT E - Subsidiary Guaranty
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REVOLVING CREDIT AGREEMENT
AGREEMENT dated as of March 31, 1998 among AMSC ACQUISITION COMPANY, INC.,
AMERICAN MOBILE SATELLITE CORPORATION, the BANKS listed on the signature pages
hereof, XXXXXX GUARANTY TRUST COMPANY OF NEW YORK, as Documentation Agent, and
TORONTO DOMINION (TEXAS), INC., as Administrative Agent.
The parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. The following terms, as used herein, have the
following meanings:
"ACTEL" means African Continental Telecommunications Ltd.
"ACTEL Agreement" means the agreement among AMSC Subsidiary Corporation,
the Parent Guarantor and ACTEL, dated as of December 2, 1997, pursuant to which
the Borrower will lease its MSAT-2 satellite to ACTEL, as in effect on the
Effective Date.
"Acquisition" means the acquisition by the Borrower of 100% of the capital
stock or other equity interests of XXXXX pursuant to the XXXXX Purchase
Agreement.
"Adjusted London Interbank Offered Rate" has the meaning set forth in
Section 2.05(b).
"Administrative Agent" means Toronto Dominion (Texas), Inc. in its capacity
as administrative agent for the Banks hereunder, and its successors in such
capacity.
"Administrative Questionnaire" means, with respect to each Bank, an
administrative questionnaire in the form prepared by the Administrative Agent
and submitted to the Administrative Agent (with a copy to the Borrower) duly
completed by such Bank.
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"Affiliate" means, as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. A Person shall be deemed to control another Person if the
controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person, whether
through the ownership of voting securities, by contract or otherwise. Without
limitation, any director, executive officer or beneficial owner of 25% or more
of the equity of a Person shall, for the purposes of this Agreement, be deemed
to control the other Person, and each Shareholder Guarantor shall be deemed to
be an Affiliate.
"Agents" means the Administrative Agent and the Documentation Agent, and
"Agent" means either of the foregoing.
"AMRC Holdings" means AMRC Holdings, Inc., a Delaware corporation, and its
successors.
"Applicable Lending Office" means, with respect to any Bank, (i) in the
case of its Base Rate Loans, its Domestic Lending Office and (ii) in the case of
its Euro-Dollar Loans, its Euro-Dollar Lending Office.
"XXXXX" means, collectively, Motorola XXXXX Acquisition, Inc., a Delaware
corporation, Motorola XXXXX, Inc., a Delaware corporation, XXXXX Holding
Company, a New York general partnership, Radio Data Network Holding Corporation,
a Delaware corporation, and XXXXX Company, a New York general partnership.
"XXXXX Purchase Agreement" means the Stock Purchase Agreement dated as of
December 31, 1997 among the Borrower, the Parent Guarantor, Motorola Inc.,
Motorola XXXXX Acquisition, Inc. and Motorola XXXXX, Inc.
"Asset Sale" means any sale, lease or other disposition (including any such
transaction effected by way of merger or consolidation and the Satellite Lease
Arrangements) by the Parent Guarantor or any of its Subsidiaries of any asset,
including without limitation any sale-leaseback transaction, whether or not
involving a capital lease, but excluding (i) dispositions of inventory, cash,
cash equivalents and other cash management investments and obsolete, unused or
unnecessary equipment and undeveloped real estate, in each case in the ordinary
course of business and (ii) dispositions to the Parent Guarantor or a Subsidiary
of the Parent Guarantor.
"Assignee" has the meaning set forth in Section 10.06(c).
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"Availability Period" means the period from and including the Closing Date
to but not including the Termination Date.
"Bank" means each bank listed on the signature pages hereof, each Assignee
which becomes a Bank pursuant to Section 10.06(c), and their respective
successors.
"Baron Capital" means Baron Capital Partners, L.P., a Delaware limited
partnership.
"Baron Capital Guaranty" means the Guaranty, dated as of March 31, 1998,
made by Baron Capital to the Administrative Agent for its own benefit and the
benefit of the Banks, as the same may be amended from time to time.
"Baron Capital Letter of Credit" means the Letter of Credit dated March 31,
1998 issued by The Bank of New York for the account of Baron Capital for the
benefit of the Administrative Agent on behalf of the Banks.
"Base Rate" means, for any day, a rate per annum equal to the higher of (i)
the Prime Rate for such day and (ii) the sum of 5/8 of 1% plus the Federal Funds
Rate for such day.
"Base Rate Loan" means (i) a Loan which bears interest at the Base Rate
pursuant to the applicable Notice of Borrowing or Notice of Interest Rate
Election or the provisions of Article 8 or (ii) an overdue amount which was a
Base Rate Loan immediately before it became overdue.
"Borrower" means AMSC Acquisition Company, Inc., a Delaware corporation,
and its successors.
"Borrowing" means a borrowing hereunder consisting of Loans made to the
Borrower on the same day pursuant to Article 2, all of which Loans are of the
same Type (subject to Article 8) and, except in the case of Base Rate Loans,
have the same initial Interest Period. A Borrowing is a "Base Rate Borrowing" if
such Loans are Base Rate Loans or a "Euro-Dollar Borrowing" if such Loans are
Euro-Dollar Loans.
"Capital Lease Obligations" means all monetary obligations of a Person
under any leasing or similar arrangement which, in accordance with GAAP, is
classified as a capital lease.
"Cash Equivalents" means:
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(a) securities issued or fully guaranteed or insured by the United States
Government or any agency thereof and backed by the full faith and credit of the
United States having maturities of not more than twelve months from the date of
acquisition;
(b) certificates of deposit, time deposits, Eurodollar time deposits, or
bankers' acceptances having in each case a tenor of not more than six months,
issued by any Bank, or by any U.S. commercial bank having combined capital and
surplus of not less than $500,000,000 whose short term securities are rated both
A-1 or higher by Standard & Poor's Corporation and P-1 or higher by Xxxxx'x
Investors Services, Inc.;
(c) commercial paper of an issuer rated either at least A-1 by Standard &
Poor's Ratings Group, a division of XxXxxx-Xxxx, Inc. and/or P-1 by Xxxxx'x
Investors Service Inc. and in either case having a tenor of not more than three
months;
(d) repurchase agreements fully collateralized by securities issued by
United States Government agencies; and
(e) money market mutual funds invested in the instruments permitted by
clauses (a), (b), (c) and (d) above.
"CERCLA" has the meaning specified in the definition "Environmental Laws".
"Change In Control" means (i) any person or group of persons (within the
meaning of Section 13 or 14 of the Securities Exchange Act of 1934, as amended)
(other than any Shareholder Guarantor, AT&T Wireless Services, Inc. or Motorola,
Inc.) shall have beneficial ownership (within the meaning of Rule 13d-3
promulgated by the Securities and Exchange Commission under said Act) of more
than 25% of the outstanding capital stock of the Parent Guarantor, (ii) Xxxxxx
shall have beneficial ownership of less than 25% of the outstanding capital
stock of the Parent Guarantor, except solely as a result of the issuance of
additional capital stock by the Parent Guarantor to Persons other than Xxxxxx,
in which case a Change of Control under this clause (iii) shall not occur unless
Xxxxxx shall have beneficial ownership of less than 10% of the outstanding
capital stock of the Parent Guarantor, (iv) during any period of 24 consecutive
calendar months, individuals who were directors of the Parent Guarantor on the
first day of such period shall cease to constitute a majority of the board of
directors of the Parent Guarantor (ignoring for this purpose replacements of
stockholder-designated directors by successor directors designated by the same
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stockholder or group of stockholders), or (iv) the Parent Guarantor shall cease
to own all of the outstanding capital stock of the Borrower.
"Closing Date" means the date on or after the Effective Date on which the
Documentation Agent shall have received the documents specified in or pursuant
to Section 3.01(a).
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor statute.
"Commitment" means any Tranche A Commitment, Tranche B Commitment or
Tranche C Commitment, and "Commitments" means any or all of the foregoing, as
the context may require.
"Commitment Fee Percentage" means a rate per annum determined in accordance
with the Pricing Schedule.
"Commitment Reduction Date" means each March 31, June 30, September 30 and
December 31 from and including June 30, 2002 to but excluding the Termination
Date.
"Commitment Schedule" means the Commitment Schedule attached hereto.
"Communications Asset" means a terrestrial or satellite antenna, licensed
site, base station, communications ground segment, network operations center or
other telecommunications facility (other than a satellite).
"Consolidated Capital Expenditures" means, for any period, the additions to
property, plant and equipment of the Borrower and its Consolidated Subsidiaries
for such period, as determined in accordance with GAAP.
"Consolidated Current Assets" means at any date the consolidated current
assets of the Borrower and its Consolidated Subsidiaries determined as of such
date.
"Consolidated Current Liabilities" means at any date (i) the consolidated
current liabilities of the Borrower and its Consolidated Subsidiaries plus (ii)
the Contingent Obligations of the Borrower and its Consolidated Subsidiaries
with respect to the current liabilities of any Person (other than the Borrower
and its Consolidated Subsidiaries), all determined as of such date.
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"Consolidated Net Working Investment" means at any date Consolidated
Current Assets (exclusive of cash and cash equivalents) minus Consolidated
Current Liabilities (exclusive of Indebtedness).
"Consolidated Subsidiary" means at any date and with respect to any Person,
any Subsidiary or other entity the accounts of which would be consolidated with
those of such Person in its consolidated financial statements if such statements
were prepared as of such date.
"Contingent Obligation" means, as applied to any Person, any direct or
indirect liability of that Person with respect to any Indebtedness, lease,
dividend, letter of credit or other obligation (the "primary obligations") of
another Person (the "primary obligor"), including, without limitation, any
obligation of that Person, whether or not contingent, (a) to purchase,
repurchase or otherwise acquire such primary obligations or any property
constituting direct or indirect security therefor, or (b) to advance or provide
funds (i) for the payment or discharge of any such primary obligation, or (ii)
to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency or any balance sheet item, level
of income or financial condition of the primary obligor, or (c) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation, or (d) otherwise to assure or hold harmless
the holder of any such primary obligation against loss in respect thereof, or
(e) to purchase or otherwise acquire, or otherwise to assure a creditor against
loss in respect of any Indebtedness. For purposes of this definition, the amount
of any Contingent Obligation shall be deemed to be an amount equal to the
maximum reasonably anticipated liability in respect thereof.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, undertaking, contract,
indenture, mortgage, deed of trust or other instrument, document or agreement to
which such Person is a party or by which it or any of its property is bound.
"Controlled Group" means the Parent Guarantor, the Borrower and all Persons
(whether or not incorporated) under common control or treated as a single
employer with the Parent Guarantor, the Borrower or any of their respective
Subsidiaries pursuant to Section 414(b), (c), (m) or (o) of the Code.
"Default" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
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"Disclosure Schedule" means the Disclosure Schedule of even date herewith
attached hereto and hereby made part of this Agreement.
"Documentation Agent" means Xxxxxx Guaranty Trust Company of New York in
its capacity as documentation agent for the Banks hereunder, and its successors
in such capacity.
"dollars" means United States dollars.
"Domestic Business Day" means any day except a Saturday, Sunday or other
day on which commercial banks in New York City are authorized by law to close.
"Domestic Lending Office" means, as to each Bank, its office located at its
address set forth in its Administrative Questionnaire (or identified in its
Administrative Questionnaire as its Domestic Lending Office) or such other
office as such Bank may hereafter designate as its Domestic Lending Office by
notice to the Borrower and the Administrative Agent.
"Effective Date" means the date this Agreement becomes effective in
accordance with Section 10.09.
"Environmental Claim" means all claims, however asserted, by any
Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law or for injury to the
environment or threat to public health, personal injury (including sickness,
disease or death), property damage, natural resources damage, or otherwise
alleging liability or responsibility for damages (punitive or otherwise),
cleanup, removal, remedial or response costs, restitution, civil or criminal
penalties, injunctive relief, or other type of relief, resulting from or based
upon (a) the presence, placement, discharge, emission or release (including
intentional and unintentional, negligent and non-negligent, sudden or
non-sudden, accidental or non-accidental placements, spills, leaks, discharges,
emissions or releases) of any Hazardous Material at, in or from property,
whether or not owned by the Borrower, or (b) any other circumstances forming the
basis of any violation, or alleged violation, of any Environmental Law.
"Environmental Laws" means all applicable federal, state, local and foreign
laws, statutes, common law duties, judicial decisions, rules, regulations,
ordinances, judgements and codes, together with all administrative orders,
requests, licenses, authorizations and permits of, and agreements with, any
Governmental Authorities, in each case relating to the environment, health and
safety or to emissions, discharges or releases, or the manufacture,
7
distribution, use, treatment, storage, disposal, transport or handling, of
pollutants, contaminants, wastes or toxic or hazardous substances; including, as
they may be amended from time to time, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("CERCLA"), the Clean Air Act, the
Federal Water Pollution Control Act of 1972, the Solid Waste Disposal Act, the
Federal Resource Conservation and Recovery Act, the Toxic Substances Control Act
and the Emergency Planning and the Community Right-to-Know Act of 1986.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA Event" means (a) a Reportable Event with respect to a Qualified Plan
or a Multiemployer Plan; (b) a withdrawal by any member of the Controlled Group
from a Qualified Plan subject to Section 4063 of ERISA during a plan year in
which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA);
(c) a complete or partial withdrawal by any member of the Controlled Group from
a Multiemployer Plan; (d) the filing of a notice of intent to terminate, the
treatment of a plan amendment as a termination under Section 4041 or 4041A of
ERISA or the commencement of proceedings by the PBGC to terminate a Qualified
Plan or Multiemployer Plan subject to Title IV of ERISA; (e) a failure to make
required contributions to a Qualified Plan or Multiemployer Plan; (f) an event
or condition which might reasonably be expected to constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Qualified Plan or Multiemployer Plan; (g) the imposition of any
liability under Title IV of ERISA, other than PBGC premiums due but not
delinquent under Section 4007 of ERISA, upon any member of the Controlled Group;
(h) an application for a funding waiver or any extension of any amortization
period pursuant to Section 412 of the Code with respect to any Qualified Plan;
or (i) any member of the Controlled Group engages in or otherwise becomes liable
for a non-exempt prohibited transaction.
"Escrow Letter" means the letter agreement dated March 31, 1998 from the
Borrower to the Banks and the Agents.
"Euro-Dollar Business Day" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Bank, its office, branch or
affiliate located at its address set forth in its Administrative Questionnaire
(or identified in its Administrative Questionnaire as its Euro-Dollar Lending
Office) or such other office, branch or affiliate of such Bank as it may
8
hereafter designate as its Euro-Dollar Lending Office by notice to the Borrower
and the Administrative Agent.
"Euro-Dollar Loan" means (i) a Loan which bears interest at a Euro-Dollar
Rate pursuant to the applicable Notice of Borrowing or Notice of Interest Rate
Election or (ii) an overdue amount which was a Euro-Dollar Loan immediately
before it became overdue.
"Euro-Dollar Margin" means a rate per annum determined in accordance with
the Pricing Schedule.
"Euro-Dollar Rate" means a rate of interest determined pursuant to Section
2.05(b) on the basis of an Adjusted London Interbank Offered Rate.
"Euro-Dollar Reserve Percentage" has the meaning set forth in Section
2.05(b).
"Event of Default" has the meaning set forth in Section 6.01.
"Excess Cash Flow" means, for any fiscal year of the Borrower, (i) the net
income of the Borrower and its Consolidated Subsidiaries for such fiscal year,
determined on a consolidated basis for such fiscal year, plus (ii) to the extent
deducted in determining such net income, the aggregate amount of depreciation
and amortization and other similar non-cash charges for such fiscal year, plus
(iii) to the extent deducted in determining such net income, the aggregate
amount of income tax expense (other than cash taxes paid by the Borrower and its
Consolidated Subsidiaries during such fiscal year) plus (minus) (iv) the amount,
if any, of any decrease (increase) in Consolidated Net Working Investment
between the beginning and the end of such year minus (v) Consolidated Capital
Expenditures for such fiscal year and minus (vi) the aggregate amount of
scheduled principal payments of Indebtedness of the Borrower and its
Consolidated Subsidiaries paid during such fiscal year by the Borrower or any of
its Consolidated Subsidiaries, determined on a consolidated basis.
"Existing Credit Facilities" means the $75,000,000 Credit Agreement dated
as of June 28, 1996 among AMSC Subsidiary Corporation, the Parent Guarantor, the
Banks listed therein, Xxxxxx Guaranty Trust Company of New York, as
Documentation Agent, and Toronto Dominion (Texas), Inc., as Administrative
Agent, together with the Loan Documents referred to therein, and the
$150,000,000 Credit Agreement dated as of June 28, 1996 among AMSC Subsidiary
Corporation, the Parent Guarantor, the Banks listed therein, Xxxxxx Guaranty
9
Trust Company of New York, as Documentation Agent, and Toronto Dominion (Texas),
Inc., as Administrative Agent, together with the Loan Documents referred to
therein.
"FCC" means the Federal Communications Commission or any successor thereto.
"FCC Licenses" means the licenses identified in the Disclosure Schedule,
together with each other material FCC license obtained by the Parent Guarantor
or any Subsidiary of the Parent Guarantor.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/100th of 1%) 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 by the Federal Reserve Bank of New York on the Domestic Business Day
next succeeding such day, provided that (i) if such day is not a Domestic
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Domestic Business Day as so published on the
next succeeding Domestic Business Day, and (ii) if no such rate is so published
on such next succeeding Domestic Business Day, the Federal Funds Rate for such
day shall be the average rate quoted to The Toronto-Dominion Bank on such day on
such transactions as determined by the Administrative Agent.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board (or agencies with similar functions of
comparable stature and authority within the accounting profession), or in such
other statements by such other entity as may be in general use by significant
segments of the U.S. accounting profession, which are applicable to the
circumstances as of the date of determination.
"Government Approvals" means any authorizations, consents, approvals,
licenses (including FCC licenses), leases, rulings, permits, tariffs, rates,
certifications, exemptions, filings or registrations by or with any Governmental
Authority required to be obtained or held by the Borrower.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
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"Group of Loans" means at any time a group of Loans consisting of (i) all
Loans which are Base Rate Loans at such time or (ii) all Euro-Dollar Loans
having the same Interest Period at such time, provided that, if a Loan of any
particular Bank is converted to or made as a Base Rate Loan pursuant to Article
8, such Loan shall be included in the same Group or Groups of Loans from time to
time as it would have been in if it had not been so converted or made.
"Guaranty Issuance Agreement" means the Guaranty Issuance Agreement dated
as of March 31, 1998, among Xxxxxx, SingTel, Baron Capital, the Borrower and the
Parent Guarantor.
"Guaranty Issuance Agreement Event of Default" has the meaning set forth in
the Guaranty Issuance Agreement.
"Hazardous Materials" means all those substances which are regulated by, or
which may form the basis of liability under, any Environmental Law, including
all substances identified under any Environmental Law as a pollutant,
contaminant, waste, solid waste, hazardous material, hazardous substance or
toxic substance, including petroleum or any petroleum derived substance or
byproduct.
"Xxxxxx" means Xxxxxx Electronics Corporation, a Delaware corporation.
"Xxxxxx Bridge Loan Agreement" means the Bridge Loan Agreement dated as of
December 30, 1997 by and among AMSC Subsidiary Corporation, the Parent Guarantor
and Xxxxxx Communications Satellite Services, Inc.
"Xxxxxx Guaranty" means the Guaranty, dated as of March 31, 1998, made by
Xxxxxx to the Administrative Agent for its own benefit and the benefit of the
Banks, as the same may be amended from time to time.
"Indebtedness" of any Person means without duplication, (a) all
indebtedness for borrowed money; (b) all obligations issued, undertaken or
assumed as the deferred purchase price of capital assets; (c) all reimbursement
obligations with respect to surety bonds, letters of credit, bankers'
acceptances and similar instruments (in each case, whether or not matured),
excluding performance bonds, letters of credit and similar undertakings in the
ordinary course of business of the Borrower, to the extent that such
undertakings do not secure an obligation for borrowed money or the deferred
purchase price of a capital asset; (d) all obligations evidenced by notes,
bonds, debentures or similar instruments, including obligations so evidenced
incurred in connection with the acquisition of property, assets or businesses,
excluding performance bonds, letters of credit and similar undertakings in the
ordinary course of business of the Borrower, to the extent that such
11
undertakings do not secure an obligation for borrowed money or the deferred
purchase price of a capital asset; (e) all indebtedness created or arising under
any conditional sale or other title retention agreement, or incurred as
financing, in either case with respect to property acquired by the Person (even
though the rights and remedies of the seller or bank under such agreement in the
event of default are limited to repossession or sale of such property); (f) all
Capital Lease Obligations; (g) all net obligations with respect to Rate
Contracts; (h) sale-leaseback financings; (i) all Contingent Obligations; and
(j) all Indebtedness referred to in paragraphs (a) through (i) above secured by
any Lien upon or in property (including accounts and contract rights) owned by
such Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness. For purposes of this definition, (i) any
Indebtedness of the Borrower to the Parent Guarantor which is subordinated to
the Obligations on terms and conditions satisfactory to the Agents, (ii) any
Indebtedness of the Borrower to a Subsidiary of the Borrower, (iii) any
Indebtedness of a Subsidiary of the Borrower to or from the Borrower or another
Subsidiary of the Borrower and (iv) any Indebtedness of Sales Corporation to the
Parent Guarantor or the Borrower consisting of loans of amounts that would
otherwise have been spent by the Borrower in connection with its sales and
marketing activities shall be excluded.
"Indemnitee" has the meaning set forth in Section 10.03(b).
"Interest Period" means, with respect to each Euro-Dollar Loan, the period
commencing on the date of borrowing specified in the applicable Notice of
Borrowing or on the date specified in the applicable Notice of Interest Rate
Election and ending one, two, three or six months thereafter, as the Borrower
may elect in the applicable notice; provided that:
(a) any Interest Period which would otherwise end on a day which is not a
Euro-Dollar Business Day shall be extended to the next succeeding Euro-Dollar
Business Day unless such Euro-Dollar Business Day falls in another calendar
month, in which case such Interest Period shall end on the next preceding
Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar Business Day
of a calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall, subject to
clause (c) below, end on the last Euro-Dollar Business Day of a calendar month;
and
(c) any Interest Period which would otherwise end after the Termination
Date shall end on the Termination Date.
12
"Investment" means any investment in any Person, whether by means of share
purchase, capital contribution, loan, Contingent Obligation, time deposit or
otherwise (but not including any demand deposit).
"Joint Venture" means any corporation, association, partnership, joint
venture or other business entity of which more than 10% but of which 50% or less
of the voting stock or other equity interests is owned or controlled directly or
indirectly by the Parent Guarantor or any of its Subsidiaries.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, charge or deposit arrangement, encumbrance, lien (statutory or
other) or preference, priority or other security interest or preferential
arrangement of any kind or nature whatsoever (including, without limitation,
those created by, arising under or evidenced by any conditional sale or other
title retention agreement, the interest of a lessor under a Capital Lease
Obligation, any financing lease having substantially the same economic effect as
any of the foregoing, or the filing of any financing statement naming the owner
of the asset to which such lien relates as debtor, under the UCC or any
comparable law) and any contingent or other agreement to provide any of the
foregoing.
"Loan" means any Tranche A Loan, Tranche B Loan or Tranche C Loan, and
"Loans" means any or all of the foregoing, as the context may require.
"Loan Documents" means this Agreement, each Subsidiary Guaranty, the
Shareholder Guaranties, the Baron Capital Letter of Credit, all Rate Contracts
between the Borrower and any of the Banks and all agreements, instruments and
documents executed and delivered in connection herewith and therewith, each as
amended, supplemented, waived or otherwise modified from time to time.
"London Interbank Offered Rate" has the meaning set forth in Section
2.05(b).
"Major Casualty Event" means any loss of or damage to property through one
or more related events for which the Parent Guarantor or any of its Subsidiaries
receives any insurance proceeds under any casualty insurance policy or any
condemnation of property (or any transfer or disposition of property in lieu of
condemnation) for which the Parent Guarantor or any of its Subsidiaries receives
a condemnation award or other compensation, with respect to which the aggregate
amount of such proceeds, award or other compensation exceeds $1,000,000.
13
"Major Contractual Obligations" means the obligations of the Parent
Guarantor or any Subsidiary thereof under the ACTEL Lease Agreement and the TMI
Purchase Agreement.
"Material Adverse Effect" means a material adverse change in, or a material
adverse effect upon, any of (a) the operations, business, properties, condition
(financial or otherwise) of either the Parent Guarantor Group taken as a whole
or the Borrower and its Subsidiaries taken as a whole; (b) the ability or
prospective ability of the Parent Guarantor or the Borrower to perform under any
Loan Document or any Major Contractual Obligation; or (c) the legality,
validity, binding effect or enforceability of any Loan Document.
"MSAT-1" means the satellite that is the subject of the TMI Purchase
Agreement.
"MSAT-2" means the satellite that is the subject of the ACTEL Lease
Agreement.
"Multiemployer Plan" means a "multiemployer plan" (within the meaning of
Section 4001(a)(3) of ERISA) to which any member of the Controlled Group makes,
is making, or is obligated to make contributions or has made, or been obligated
to make, contributions.
"Net Cash Proceeds" means, with respect to any Reduction Event, an amount
equal to the cash proceeds (including lease payments) received by the Parent
Guarantor or any of its Subsidiaries (excluding the proceeds received by any
member of the Parent Guarantor Group other than the Borrower and its
Subsidiaries to the extent the Reduction Percentage (as defined in the Term
Credit Agreement) thereof is applied to the prepayment of Loans (as defined in
the Term Credit Agreement) from or in respect of such Reduction Event, less any
out-of-pocket costs and expenses (excluding administrative expenses and
overhead) reasonably incurred by such Person in respect of such Reduction Event;
provided that Net Cash Proceeds shall exclude any insurance proceeds received by
the Parent Guarantor or any of its Subsidiaries in respect of the loss of or
damage to MSAT-2 and required to be paid by the Parent Guarantor or such
Subsidiary to ACTEL or its permitted assigns; provided, further, that Net Cash
Proceeds received by the Parent Guarantor or any of its Subsidiaries in respect
of any period under the ACTEL Lease Agreement shall be reduced by the amount
paid by the Parent Guarantor or such Subsidiary during such period under the TMI
Purchase Agreement and, without duplication, the amount paid by the Parent
Guarantor or such Subsidiary during such period for up to $50,000,000 of
insurance for MSAT-1 required to be obtained hereunder or required to be
obtained by the Shareholder Guarantors.
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"Notes" means promissory notes of the Borrower, substantially in the form
of Exhibit A hereto, evidencing the obligation of the Borrower to repay the
Loans, and "Note" means any one of such promissory notes issued hereunder.
"Notice of Borrowing" has the meaning set forth in Section 2.02(a).
"Notice of Interest Rate Election" has the meaning set forth in Section
2.08(a).
"Notice of Lien" means any "notice of lien" or similar document intended to
be filed or recorded with any court, registry, recorder's office, central filing
office or Governmental Authority for the purpose of evidencing, creating,
perfecting or preserving the priority of a Lien securing obligations owing to a
Governmental Authority.
"Obligations" means all Loans, and other Indebtedness, advances, debts,
liabilities, and obligations, owing by the Borrower to any Bank, any Agent, or
any other Person required to be indemnified under any Loan Document, of any kind
or nature, present or future, whether or not evidenced by any note, guaranty or
other instrument, arising under this Agreement, under any other Loan Document,
whether or not for the payment of money, whether arising by reason of an
extension of credit, loan, guaranty, indemnification or in any other manner,
whether direct or indirect (including those acquired by assignment), absolute or
contingent, due or to become due, now existing or hereafter arising and however
acquired.
"Offering Memorandum" means the Preliminary Offering Memorandum dated March
9, 1998 relating to units consisting of Senior Notes and warrants to purchase
common stock of the Parent Guarantor.
"Parent" means, with respect to any Bank, any Person controlling such Bank.
"Parent Guarantor" means American Mobile Satellite Corporation, a Delaware
corporation, and its successors.
"Parent Guarantor Group" means the Parent Guarantor and its Consolidated
Subsidiaries.
"Participant" has the meaning set forth in Section 10.06(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
15
"Permitted Liens" has the meaning set forth in Section 5.15.
"Person" means an individual, a corporation, a limited liability company, a
partnership, an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
"Plan" means an employee benefit plan (as defined in Section 3(3) of ERISA)
which any member of the Controlled Group sponsors or maintains or to which any
member of the Controlled Group makes or is obligated to make contributions and
includes any Multiemployer Plan or Qualified Plan.
"Pricing Schedule" means the Pricing Schedule attached hereto.
"Prime Rate" means the rate of interest publicly announced by The
Toronto-Dominion Bank in New York City from time to time as its Prime Rate.
"Principal Subsidiary" means at any time any Subsidiary of the Parent
Guarantor, except Subsidiaries (other than the Borrower) which at such time have
been designated by the Parent Guarantor (by notice to the Administrative Agent,
which may be amended from time to time) as nonmaterial and which, if aggregated
and considered as a single subsidiary, would not meet the definition of a
"significant subsidiary" contained as of the date hereof in Regulation S-X of
the Securities and Exchange Commission.
"Qualified Plan" means a pension plan (as defined in Section 3(2) of ERISA)
intended to be tax-qualified under Section 401(a) of the Code and which any
member of the Controlled Group sponsors, maintains, or to which it makes or is
obligated to make contributions or has made contributions at any time during the
immediately preceding period covering at least five (5) plan years, but
excluding any Multiemployer Plan.
"Quarterly Date" means March 31, June 30, September 30 and December 31.
"Rate Contracts" means interest rate and currency swap agreements, cap,
floor and collar agreements, interest rate insurance, currency spot and forward
contracts and other agreements or arrangements designed to provide protection
against fluctuations in interest or currency exchange rates; provided that such
agreements or arrangements are documented under master netting agreements.
"Reduction Event" means (i) any Asset Sale, (ii) the issuance of any equity
securities by the Parent Guarantor or any of its Subsidiaries (other than equity
16
securities (x) issued pursuant to any stock option, stock purchase or other plan
intended to benefit or compensate the officers, directors or employees of the
Parent Guarantor, the Borrower or any Principal Subsidiary, but only to the
extent that the Net Cash Proceeds thereof in any fiscal year of the Parent
Guarantor do not exceed the sum of (A) $2,000,000 plus (B) the aggregate amount
by which such Net Cash Proceeds were less than $2,000,000 in each prior fiscal
year of the Parent Guarantor after the date hereof, (y) issued to the Parent
Guarantor or any of its Subsidiaries or (z) issued by AMRC Holdings or any of
its Subsidiaries) or (iii) the occurrence of a Major Casualty Event. The
description of any transaction as falling within the above definition does not
affect any limitation on such transaction imposed by Article 5 of this
Agreement.
"Reduction Percentage" means (i) in respect of an Asset Sale (other than
the Satellite Lease Arrangements) or a Major Casualty Event, 100%, (ii) in
respect of the Satellite Lease Arrangements, 100% for the first $25,000,000 of
Net Cash Proceeds with respect thereto and 75% for any such additional Net Cash
Proceeds, (iii) in respect of Excess Cash Flow, 100% or (iv) in respect of the
issuance of equity securities (other than (x) to a member of the Parent
Guarantor Group or (y) to a Shareholder Guarantor as part of a private placement
to one or more Shareholder Guarantors) by the Parent Guarantor or any Subsidiary
thereof, 50%.
"Reference Banks" means the principal London offices of Xxxxxx Guaranty
Trust Company of New York, The Toronto-Dominion Bank and any other Bank which is
appointed a Reference Bank by the Agents after consultation with the Borrower,
and "Reference Bank" means any one of such Reference Banks.
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"Reportable Event" means any of the events set forth in Section 4043 of
ERISA or the regulations thereunder, a withdrawal from a Plan described in
Section 4063 of ERISA, or a cessation of operations described in Section 4062(e)
of ERISA.
"Required Banks" means at any time Banks having more than 50% of the
aggregate amount of the Commitments or, if the Commitments shall have been
terminated, holding Notes evidencing more than 50% of the aggregate unpaid
principal amount of the Loans.
"Requirement of Law" means, as to any Person, any law (statutory or
common), treaty, rule or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon the Person or
any of its property or to which the Person or any of its property is subject; in
17
any case, non-compliance with which by either of the Parent Guarantor or the
Borrower or their Subsidiaries could reasonably be expected to have a Material
Adverse Effect.
"Responsible Officer" means, with respect to any Person, the Chief
Executive Officer, the President or a duly authorized Vice President or, with
respect to financial matters, the Chief Financial Officer or the Treasurer, of
such Person.
"Sales Corporation" means American Mobile Satellite Sales Corporation, a
Delaware corporation.
"Satellite Lease Arrangements" means the sale or lease of MSAT-2 pursuant
to the ACTEL Agreement or a replacement agreement (an "MSAT-2 Lease Agreement")
provided that any such replacement agreement shall be on commercially reasonable
terms, and provided that (A) the consideration received by the Borrower in
respect of such sale or lease (x) consists solely of cash and (y) constitutes
fair market value (as determined by the Board of Directors of the Borrower set
forth in a resolution thereof delivered to the Administrative Agent, which
determination shall be based upon an opinion or appraisal issued by an appraisal
or investment banking firm of national standing); (B) the Borrower shall have
acquired (through purchase or lease) capacity on MSAT-1 or a reasonable
substitute thereof either (x) pursuant to the TMI Purchase Agreement or (y) any
other agreement with a term not less than the maximum term of the MSAT-2 Lease
Agreement then in effect and otherwise on commercially reasonable terms if (in
the case of this clause (y)) in the opinion of a nationally recognized
independent expert (a) the capacity acquired pursuant to such replacement
agreement is sufficient to permit the Borrower to conduct its operations as
conducted and as contemplated to be conducted through the term of the MSAT-2
Lease Agreement then in effect and (b) the total consideration paid by the
Borrower for such replacement satellite capacity is no greater than the fair
market value thereof.
"Senior Notes" means the Borrower's 12 1/4% Senior Notes due 2008.
"Shareholder Guarantor Security Agreement" means the Reimbursement Security
and Pledge Agreement dated as of March 31, 1998 between the Parent Guarantor and
Xxxxxx.
"Shareholder Guarantors" means Xxxxxx, SingTel and Baron Capital.
"Shareholder Guaranties" means the Xxxxxx Guaranty, the SingTel Guaranty
and the Baron Capital Guaranty.
18
"SingTel" means Singapore Telecommunications Ltd., a corporation organized
under the laws of Singapore.
"SingTel Guaranty" means the Guaranty, dated as of March 31, 1998, made by
SingTel to the Administrative Agent for its own benefit and the benefit of the
Banks, as the same may be amended from time to time.
"Subsidiary" means, as to any Person, any corporation or other entity of
which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by such Person.
"Subsidiary Guaranty" means each Subsidiary Guaranty between the
Administrative Agent and a Subsidiary of the Borrower, substantially in the form
of Exhibit E hereto.
"Term Credit Agreement" means the Term Credit Agreement dated as of the
date hereof among the Parent Guarantor, the Agents and the other banks party
thereto, as the same may be amended, supplemented, restated or otherwise
modified from time to time.
"Termination Date" means March 31, 2003, or, if such day is not a
Euro-Dollar Business Day, the next succeeding Euro-Dollar Business Day unless
such Euro-Dollar Business Day falls in another calendar month, in which case the
Termination Date shall be the next preceding Euro-Dollar Business Day.
"TMI Purchase Agreement" means the Satellite Purchase Agreement dated as of
December 4, 1997 between TMI Communications and Company, Limited Partnership and
the Parent Guarantor.
"Tranche A Commitment" means (i) with respect to each Bank listed on the
Commitment Schedule, the amount set forth opposite its name under the heading
"Tranche A Commitments" in the Commitment Schedule and (ii) with respect to any
Assignee, the amount of the transferor Bank's Tranche A Commitment assigned to
such Assignee pursuant to Section 10.06, in each case as such amount may be
reduced from time to time pursuant to Section 2.07 or 2.09 or changed as a
result of an assignment pursuant to Section 10.06.
"Tranche B Commitment" means (i) with respect to each Bank listed on the
Commitment Schedule, the amount set forth opposite its name under the heading
"Tranche B Commitments" in the Commitment Schedule and (ii) with respect to any
Assignee, the amount of the transferor Bank's Tranche B Commitment assigned to
19
such Assignee pursuant to Section 10.06, in each case as such amount may be
reduced from time to time pursuant to Section 2.07 or 2.09 or changed as a
result of an assignment pursuant to Section 10.06.
"Tranche C Commitment" means (i) with respect to each Bank listed on the
Commitment Schedule, the amount set forth opposite its name under the heading
"Tranche C Commitments" in the Commitment Schedule and (ii) with respect to any
Assignee, the amount of the transferor Bank's Tranche C Commitment assigned to
such Assignee pursuant to Section 10.06, in each case as such amount may be
reduced from time to time pursuant to Section 2.07 or 2.09 or changed as a
result of an assignment pursuant to Section 10.06.
"Tranche A Loan" means a loan made by a Bank pursuant to Section 2.01 as a
Tranche A Loan.
"Tranche B Loan" means a loan made by a Bank pursuant to Section 2.01 as a
Tranche B Loan.
"Tranche C Loan" means a loan made by a Bank pursuant to Section 2.01 as a
Tranche C Loan.
"Type", when used in reference to any Loan or Borrowing, refers to whether
the rate of interest on such Loan, or on the Loans compromising such Borrowing,
is determined by reference to the Euro-Dollar Rate or the Base Rate.
"UCC" means the Uniform Commercial Code as in effect in any jurisdiction.
"Unfunded Pension Liabilities" means the excess of a Plan's accrued
benefits, as defined in Section 3(23) of ERISA, over the current value of that
Plan's assets, as defined in Section 3(26) of ERISA.
"United States" means the United States of America, including the States
and the District of Columbia, but excluding its territories and possessions.
"Vendor Financing Indebtedness" means Indebtedness incurred by a member of
the Parent Guarantor Group the proceeds of which are utilized solely to acquire
ground-based Communications Assets.
"Withdrawal Liabilities" means, as of any determination date, the aggregate
amount of the liabilities, if any, pursuant to Section 4201 of ERISA if the
Controlled Group made a complete withdrawal from all Multiemployer Plans and any
increase in contributions pursuant to Section 4243 of ERISA.
20
SECTION 1.02. Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with GAAP as
in effect from time to time, applied on a basis consistent (except for changes
concurred in by the Parent Guarantor's and the Borrower's independent public
accountants) with the most recent audited consolidated or combined financial
statements of each the Parent Guarantor, the Parent Guarantor Group or the
Borrower and its Consolidated Subsidiaries, as the case may be, delivered to the
Banks; provided that, if the Parent Guarantor or the Borrower notifies the
Administrative Agent that it wishes to amend the definition of "Excess Cash
Flow" in Section 1.01 or any covenant in Article 5 to eliminate the effect of
any change in GAAP on the operation of such covenant (or if the Administrative
Agent notifies the Parent Guarantor and the Borrower that the Required Banks
wish to amend Section 1.01 or Article 5 for such purpose), then the Parent
Guarantor's and the Borrower's compliance with such covenant shall be determined
on the basis of GAAP in effect immediately before the relevant change in GAAP
became effective, until either such notice is withdrawn or such covenant is
amended in a manner satisfactory to the Parent Guarantor, the Borrower and the
Required Banks.
ARTICLE 2
THE CREDITS
SECTION 2.01. Commitments to Lend. During the Availability Period, each
Bank severally agrees, on the terms and conditions set forth in this Agreement,
to lend to the Borrower from time to time amounts not to exceed in the aggregate
the amount of its Commitments. Each Borrowing under this Section shall be in an
aggregate principal amount of $5,000,000 or any larger multiple of $1,000,000
(except that any such Borrowing may be in the aggregate amount of the unused
Commitments), shall be made from the several Banks ratably in proportion to
their respective Commitments and shall be made by each Bank as Tranche A Loans,
Tranche B Loans and Tranche C Loans ratably in proportion to its Tranche A
Commitment, Tranche B Commitment and Tranche C Commitment. Within the foregoing
limits, the Borrower may borrow under this Section, prepay Loans to the extent
permitted by Section 2.10 and reborrow at any time during the Availability
Period under this Section.
SECTION 2.02. Method of Borrowing. (a) The Borrower shall give the
Administrative Agent irrevocable telephonic notice, confirmed immediately in
21
writing (a "Notice of Borrowing"), not later than 10:30 A.M. (New York City
time) on (x) the Domestic Business Day before each Base Rate Borrowing and (y)
the third Euro-Dollar Business Day before each Euro-Dollar Borrowing,
specifying:
(i) the date of such Borrowing, which shall be a Domestic Business Day
in the case of a Base Rate Borrowing or a Euro-Dollar Business Day in
the case of a Euro-Dollar Borrowing;
(ii) the aggregate amount of such Borrowing;
(iii) whether the Loans comprising such Borrowing are to bear interest
initially at the Base Rate or a Euro-Dollar Rate; and
(iv) in the case of a Euro-Dollar Borrowing, the duration of the
Interest Period applicable thereto, subject to the provisions of the
definition of Interest Period.
In no event shall the total number of Groups of Loans at any one time
outstanding exceed ten, and each Group of Loans shall at all times consist of
Tranche A Loans, Tranche B Loans and Tranche C Loans of the Banks ratably in
proportion to their respective Tranche A Commitments, Tranche B Commitments and
Tranche C Commitments.
(b) Upon receipt of a Notice of Borrowing, the Administrative Agent shall
promptly notify each Bank of the contents thereof, of such Bank's ratable share
of such Borrowing and of the portion thereof which shall be made as a Tranche A
Loan, a Tranche B Loan and a Tranche C Loan.
(c) Not later than 12:00 Noon (New York City time) on the date of each
Borrowing, each Bank shall make available its ratable share of such Borrowing,
in Federal or other funds immediately available in New York City, to the
Administrative Agent at its address referred to in Section 5.03. Unless the
Administrative Agent determines that any applicable condition specified in
Article 3 has not been satisfied, the Administrative Agent will make the funds
so received from the Banks available to the Borrower at the Administrative
Agent's aforesaid address.
(d) Unless the Administrative Agent shall have received notice from a Bank
prior to the date of any Borrowing that such Bank will not make available to the
Administrative Agent such Bank's share of such Borrowing, the Administrative
Agent may assume that such Bank has made such share available to the
Administrative Agent on the date of such Borrowing in accordance with subsection
22
(c) of this Section and the Administrative Agent may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding amount.
If and to the extent that such Bank shall not have so made such share available
to the Administrative Agent, such Bank and the Borrower severally agree to repay
to the Administrative Agent forthwith on demand such corresponding amount
together with interest thereon, for each day from the date such amount is made
available to the Borrower until the date such amount is repaid to the
Administrative Agent, at (i) in the case of the Borrower, a rate per annum equal
to the higher of the Federal Funds Rate and the interest rate applicable thereto
pursuant to Section 2.05 and (ii) in the case of such Bank, the Federal Funds
Rate. If such Bank shall repay to the Administrative Agent such corresponding
amount, such amount so repaid shall constitute such Bank's Loan included in such
Borrowing for purposes of this Agreement.
SECTION 2.03. Notes. (a) The Tranche A Loans, Tranche B Loans and Tranche C
Loans of each Bank shall each be evidenced by a single Note payable to the order
of such Bank for the account of its Applicable Lending Office in an amount equal
to the aggregate unpaid principal amount of such Bank's Tranche A Loans, Tranche
B Loans and Tranche C Loans, as the case may be. Each reference in this
Agreement to the "Notes" of a Bank shall be deemed to refer to and include any
or all of the Notes of such Bank described in this Section, as the context may
require.
(b) Each Bank may, by notice to the Borrower and the Administrative Agent,
request that its Tranche A Loans, Tranche B Loans and Tranche C Loans of a
particular Type be evidenced by a separate Note in an amount equal to the
aggregate unpaid principal amount of such Loans. Each such Note shall be in
substantially the form of Exhibit A hereto with appropriate modifications to
reflect the fact that it evidences solely Loans of the relevant Type.
(c) Upon receipt of each Bank's Notes pursuant to Section 3.01(a), the
Documentation Agent shall forward such Notes to such Bank. Each Bank shall
record the date, amount and Type of each Loan made by it and the date and amount
of each payment of principal made by the Borrower with respect thereto on the
appropriate Note, and may, if such Bank so elects in connection with any
transfer or enforcement of any of its Notes, endorse on the schedule forming a
part thereof appropriate notations to evidence the foregoing information with
respect to each Loan then outstanding thereunder; provided that the failure of
any Bank to make any such recordation or endorsement shall not affect the
obligations of the Borrower hereunder or under the Notes. Each Bank is hereby
irrevocably authorized by the Borrower so to endorse its Notes and to attach to
and make a part of its Notes a continuation of any such schedule as and when
required.
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SECTION 2.04. Maturity of Loans. Any Loans outstanding on the Termination
Date (together with accrued interest thereon) shall be due and payable on such
date.
SECTION 2.05. Interest Rates. (a) Each Base Rate Loan shall bear interest
on the outstanding principal amount thereof, for each day from the date such
Loan is made until it becomes due, at a rate per annum equal to the Base Rate
for such day. Such interest shall be payable quarterly in arrears on each
Quarterly Date and, with respect to the principal amount of any Base Rate Loan
converted to a Euro-Dollar Loan, on each date a Base Rate Loan is so converted.
Any overdue principal of or interest on any Base Rate Loan shall bear interest,
payable on demand, for each day until paid at a rate per annum equal to the sum
of 2% plus the rate otherwise applicable to Base Rate Loans for such day.
(b) Each Euro-Dollar Loan shall bear interest on the outstanding principal
amount thereof, for each day during each Interest Period applicable thereto, at
a rate per annum equal to the sum of the Euro-Dollar Margin for such day plus
the Adjusted London Interbank Offered Rate applicable to such Interest Period.
Such interest shall be payable for each Interest Period on the last day thereof
and, if such Interest Period is longer than three months, at intervals of three
months after the first day thereof.
The "Adjusted London Interbank Offered Rate" applicable to any Interest
Period means a rate per annum equal to the quotient obtained (rounded upward, if
necessary, to the next higher 1/10,000 of 1%) by dividing (i) the applicable
London Interbank Offered Rate by (ii) 1.00 minus the Euro-Dollar Reserve
Percentage.
The "London Interbank Offered Rate" applicable to any Interest Period means
the average (rounded upward, if necessary, to the next higher 1/16 of 1%) of the
respective rates per annum at which deposits in dollars are offered to each of
the Reference Banks in the London interbank market at approximately 11:00 A.M.
(London time) two Euro-Dollar Business Days before the first day of such
Interest Period in an amount approximately equal to the principal amount of the
Euro-Dollar Loan of such Reference Bank to which such Interest Period is to
apply and for a period of time comparable to such Interest Period.
"Euro-Dollar Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars in
24
respect of "Eurocurrency liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of any Bank to United
States residents). The Adjusted London Interbank Offered Rate shall be adjusted
automatically on and as of the effective date of any change in the Euro-Dollar
Reserve Percentage.
(c) Any overdue principal of or interest on any Euro-Dollar Loan shall bear
interest, payable on demand, for each day until paid at a rate per annum equal
to the higher of (i) the sum of 2% plus the Euro-Dollar Margin for such day plus
the quotient obtained (rounded upward, if necessary, to the next higher 1/10,000
of 1%) by dividing (x) the average (rounded upward, if necessary, to the next
higher 1/16 of 1%) of the respective rates per annum at which one day (or, if
such amount due remains unpaid more than three Euro-Dollar Business Days, then
for such other period of time not longer than six months as the Administrative
Agent may select) deposits in dollars in an amount approximately equal to such
overdue payment due to each of the Reference Banks are offered to such Reference
Bank in the London interbank market for the applicable period determined as
provided above by (y) 1.00 minus the Euro-Dollar Reserve Percentage (or, if the
circumstances described in clause (a) or (b) of Section 8.01 shall exist, at a
rate per annum equal to the sum of 2% plus the rate applicable to Base Rate
Loans for such day) and (ii) the sum of 2% plus the Euro-Dollar Margin for such
day plus the Adjusted London Interbank Offered Rate applicable to such Loan at
the date such payment was due.
(d) The Administrative Agent shall determine each interest rate applicable
to the Loans hereunder. The Administrative Agent shall give prompt notice to the
Borrower and the participating Banks of each rate of interest so determined, and
its determination thereof shall be conclusive in the absence of manifest error.
(e) Each Reference Bank agrees to use its best efforts to furnish
quotations to the Administrative Agent as contemplated by this Section. If any
Reference Bank does not furnish a timely quotation, the Administrative Agent
shall determine the relevant interest rate on the basis of the quotation or
quotations furnished by the remaining Reference Bank or Banks or, if none of
such quotations is available on a timely basis, the provisions of Section 8.01
shall apply.
SECTION 2.06. Commitment Fees. During the Availability Period, the Borrower
shall pay to the Administrative Agent for the account of the Banks ratably in
proportion to their Commitments a commitment fee equal to the Commitment Fee
25
Percentage per annum of the daily amount by which the aggregate amount of the
Commitments exceeds the aggregate outstanding principal amount of the Loans.
Such commitment fee shall accrue from and including the Effective Date to but
excluding the date of termination of the Commitments in their entirety, and
shall be payable quarterly in arrears on each Quarterly Date and on the date of
termination of the Commitments in their entirety. Any overdue fees shall bear
interest, payable on demand, for each day until paid at a rate per annum equal
to the sum of 2% plus the rate otherwise applicable to Base Rate Loans for such
day.
SECTION 2.07. Optional Termination or Reduction of Commitments. (a) During
the Availability Period, the Borrower may, upon at least three Domestic Business
Days' notice to the Administrative Agent, (i) terminate the Commitments at any
time, if no Loans are outstanding at such time, or (ii) ratably reduce from time
to time by an aggregate amount of $5,000,000 or a larger multiple of $1,000,000,
the aggregate amount of the Commitments in excess of the aggregate outstanding
principal amount of the Loans. Each reduction of Commitments pursuant to this
Section 2.07 shall be applied ratably to the respective Tranche A Commitments,
Tranche B Commitments and Tranche C Commitments of the Banks.
(b) Upon receipt of a notice of reduction pursuant to this Section, the
Administrative Agent shall promptly notify each Bank of the contents thereof, of
such Bank's ratable share of such reduction and of the portion thereof
applicable to the Tranche A Commitments, Tranche B Commitments and Tranche C
Commitments, and such notice shall not thereafter be revocable by the Borrower.
SECTION 2.08. Method of Electing Interest Rates. (a) The Loans included in
each Borrowing shall bear interest initially at the type of rate specified by
the Borrower in the applicable Notice of Borrowing. Thereafter, the Borrower may
from time to time elect to change or continue the type of interest rate borne by
each Group of Loans (subject in each case to the provisions of Article 8), as
follows:
(i) if such Loans are Base Rate Loans, the Borrower may elect to
convert such Loans to Euro-Dollar Loans as of any Euro-Dollar
Business Day and
(ii) if such Loans are Euro-Dollar Loans, the Borrower may elect
to convert such Loans to Base Rate Loans or elect to continue
such Loans as Euro-Dollar Loans for an additional Interest
Period, subject to Section 2.12 in the case of any such
conversion or continuation effective on any day other than the
last day of the then current Interest Period applicable to such
Loans.
26
Each such election shall be made by giving irrevocable telephonic notice,
confirmed immediately in writing (a "Notice of Interest Rate Election") to the
Administrative Agent not later than 10:30 A.M. (New York City time) on the third
Euro-Dollar Business Day before the conversion or continuation selected in such
notice is to be effective. A Notice of Interest Rate Election may, if it so
specifies, apply to only a portion of the aggregate principal amount of the
relevant Group of Loans; provided that (i) such portion is allocated ratably
among the Loans comprising such Group and (ii) the portion to which such Notice
applies, and the remaining portion to which it does not apply, are each
$5,000,000 or any larger multiple of $1,000,000.
(b) Each Notice of Interest Rate Election shall specify:
(i) the Group of Loans (or, subject to the last sentence of
Section 2.02(a), portion thereof) to which such notice applies;
(ii) the date on which the conversion or continuation selected in
such notice is to be effective, which shall comply with the
applicable clause of subsection (a) above;
(iii) if the Loans comprising such Group are to be converted, the
new Type of Loans and, if the Loans being converted are to be
Euro-Dollar Loans, the duration of the next succeeding Interest
Period applicable thereto; and
(iv) if such Loans are to be continued as Euro-Dollar Loans for
an additional Interest Period, the duration of such additional
Interest Period.
Each Interest Period specified in a Notice of Interest Rate Election shall
comply with the provisions of the definition of Interest Period set forth in
Section 1.01.
(c) If, upon the expiration of any Interest Period applicable to any
Eurodollar Loan, the Borrower has not given a timely Notice of Interest Rate
Election with respect to such Loan, the Administrative Agent shall be deemed to
have received a Notice of Interest Rate Election from the Borrower with respect
to such Loan requesting that such Loan be converted into a Base Rate Loan on the
last day of the Interest Period applicable to such Loan.
(d) Upon receipt of a Notice of Interest Rate Election from the Borrower
pursuant to subsection (a) above or a deemed receipt of a Notice of Interest
27
Rate Election pursuant to subsection (c) above, the Administrative Agent shall
promptly notify each Bank of the contents thereof and such notice shall not
thereafter be revocable by the Borrower.
(e) An election by the Borrower to change or continue the rate of interest
applicable to any Group of Loans pursuant to this Section shall not constitute a
"Borrowing" subject to the provisions of Section 3.02.
SECTION 2.09. Mandatory Termination and Reduction of Commitments. (a) The
Commitments shall terminate on the last day of the Availability Period.
(b) On each Commitment Reduction Date, the Commitments shall be reduced by
$10,000,000; provided that if, during the 90-day period ending on and including
such Commitment Reduction Date, the Commitments shall have been reduced pursuant
to clause (c) below, the Commitments shall be reduced only by the amount, if
any, by which $10,000,000 is greater than the amount by which the Commitments
were reduced during such 90-day period pursuant to clause (c) below.
(c) In addition:
(i) in the event that the Parent Guarantor or any of its
Subsidiaries shall at any time, or from time to time, receive
after the date hereof any Net Cash Proceeds of any Reduction
Event, the Commitments shall be reduced by an amount equal to the
Reduction Percentage of such Net Cash Proceeds on the date of
receipt of such Net Cash Proceeds; and
(ii) on each date on which the Borrower is required to notify the
Administrative Agent of the Excess Cash Flow for any fiscal year
pursuant to Section 5.02(b), the Commitments shall be reduced by
an amount equal to the Reduction Percentage of Excess Cash Flow
for such fiscal year.
(d) Each reduction of Commitments pursuant to this Section shall be applied
ratably to the respective Tranche A Commitments, Tranche B Commitments and
Tranche C Commitments of the Banks. The amount of any reduction of the
Commitments pursuant to Section 2.07 or subsection (c) of this Section shall be
applied to reduce the amount of subsequent scheduled reductions of the
Commitments pursuant to subsections (a) and (b) above in inverse order of
maturity; provided that if the Commitments are reduced pursuant to subsection
(c) above less than 90 days prior to a Commitment Reduction Date, then the
portion, if any, of such reduction not greater than (i) $10,000,000 less (ii)
the aggregate amount of similar reductions made less than 90 days prior to such
Commitment Reduction Date shall be applied in direct order of maturity.
28
(e) On the date of any reduction of the Commitments pursuant to subsection
(b) or (c) above, the Borrower shall repay such principal amount of each Bank's
outstanding Tranche A Loans, Tranche B Loans and Tranche C Loans, if any, as may
be necessary so that after such repayment the aggregate outstanding principal
amount of such Bank's Tranche A Loans, Tranche B Loans and Tranche C Loans does
not exceed the amount of such Bank's Tranche A Commitments, Tranche B Commitment
and Tranche C Commitment as so reduced. The Borrower shall give the
Administrative Agent at least five Euro-Dollar Business Days' notice of each
prepayment of Euro-Dollar Loans required pursuant to this subsection.
SECTION 2.10. Optional Prepayments. (a) Subject in the case of any
Euro-Dollar Borrowing to Section 2.12, the Borrower may, upon at least one
Domestic Business Day's notice to the Administrative Agent, prepay any Group of
Base Rate Loans, or upon at least three Euro-Dollar Business Days' notice to the
Administrative Agent, prepay any Group of Euro-Dollar Loans, in each case in
whole at any time, or from time to time in part in amounts aggregating
$5,000,000 or any larger multiple of $1,000,000, by paying the principal amount
to be prepaid together with accrued interest thereon to the date of prepayment.
Each such optional prepayment shall be applied to prepay ratably the Tranche A
Loans, Tranche B Loans and Tranche C Loans of the several Banks included in such
Group.
(b) Upon receipt of a notice of prepayment pursuant to this Section, the
Administrative Agent shall promptly notify each Bank of the contents thereof and
of such Bank's ratable share of such prepayment and such notice shall not
thereafter be revocable by the Borrower.
SECTION 2.11. General Provisions as to Payments. (a) The Borrower shall
make each payment of principal of, and interest on, the Loans and of fees
hereunder, not later than 12:00 Noon (New York City time) on the date when due,
in Federal or other funds immediately available in New York City, to the
Administrative Agent at its address referred to in Section 5.03. The
Administrative Agent will promptly distribute to each Bank its ratable share of
each such payment received by the Administrative Agent for the account of the
Banks, to be applied ratably to the Tranche A Loans, the Tranche B Loans and the
Tranche C Loans of the Banks. Whenever any payment of principal of, or interest
on, the Base Rate Loans or of fees shall be due on a day which is not a Domestic
Business Day, the date for payment thereof shall be extended to the next
succeeding Domestic Business Day. Whenever any payment of principal of, or
interest on, the Euro-Dollar Loans shall be due on a day which is not a
Euro-Dollar Business Day, the date for payment thereof shall be extended to the
29
next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day
falls in another calendar month, in which case the date for payment thereof
shall be the next preceding Euro-Dollar Business Day. If the date for any
payment of principal is extended by operation of law or otherwise, interest
thereon shall be payable for such extended time.
(b) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Banks hereunder
that the Borrower will not make such payment in full, the Administrative Agent
may assume that the Borrower has made such payment in full to the Administrative
Agent on such date and the Administrative Agent may, in reliance upon such
assumption, cause to be distributed to each Bank on such due date an amount
equal to the amount then due such Bank. If and to the extent that the Borrower
shall not have so made such payment, each Bank shall repay to the Administrative
Agent forthwith on demand such amount distributed to such Bank together with
interest thereon, for each day from the date such amount is distributed to such
Bank until the date such Bank repays such amount to the Administrative Agent, at
the Federal Funds Rate.
SECTION 2.12. Funding Losses. If the Borrower makes any payment of
principal with respect to any Euro-Dollar Loan or any Euro-Dollar Loan is
converted (pursuant to Article 2, 6 or 8 or otherwise) on any day other than the
last day of an Interest Period applicable thereto, or the last day of an
applicable period fixed pursuant to Section 2.05(c), or if the Borrower fails to
borrow or prepay any Euro-Dollar Loans after notice has been given to any Bank
in accordance with Section 2.02(a), 2.09 or 2.10, the Borrower shall reimburse
each Bank within 15 days after demand for any resulting loss or expense incurred
by it (or by an existing or prospective Participant in the related Loan),
including (without limitation) any loss incurred in obtaining, liquidating or
employing deposits from third parties, but excluding loss of margin for the
period after any such payment or conversion or failure to borrow or prepay,
provided that such Bank shall have delivered to the Borrower a certificate as to
the amount of such loss or expense, which certificate shall be conclusive in the
absence of manifest error.
SECTION 2.13. Computation of Interest and Fees. Interest based on the Prime
Rate and commitment fees hereunder shall be computed on the basis of a year of
365 days (or 366 days in a leap year) and paid for the actual number of days
elapsed (including the first day but excluding the last day). All other interest
shall be computed on the basis of a year of 360 days and paid for the actual
number of days elapsed (including the first day but excluding the last day).
30
ARTICLE 3
CONDITIONS
SECTION 3.01. Closing. The closing hereunder shall occur upon satisfaction
of the following conditions:
(a) the Documentation Agent shall have received all of the following, in
form and substance satisfactory to the Documentation Agent and in sufficient
copies for each Bank:
(i) duly executed Notes for the account of each Bank dated on or
before the Closing Date complying with the provisions of Section
2.03;
(ii) the articles or certificate of incorporation of each of the
Borrower, the Parent Guarantor, the Borrower's Subsidiaries and
the Shareholder Guarantors (other than Baron Capital) as in
effect on the Closing Date, certified by the Secretary of State
or equivalent official of the jurisdiction of incorporation of
such Person as of a recent date and by the Secretary or Assistant
Secretary of such Person as of the Closing Date, and the bylaws
of such Person as in effect on the Closing Date, certified by the
Secretary or Assistant Secretary of such Person as of the Closing
Date;
(iii) a good standing certificate for each of the Borrower and
the Parent Guarantor from the Secretary of State of its state of
incorporation and each state where the Borrower is qualified to
do business as a foreign corporation as of a recent date,
together with a bring-down certificate by telex or telecopy,
dated the Closing Date;
(iv) copies of the resolutions of the board of directors of (x)
the Borrower approving and authorizing the execution, delivery
and performance by the Borrower of this Agreement and the other
Loan Documents to be delivered by it and authorizing the
borrowing of the Loans, certified as of the Closing Date by the
Secretary or an Assistant Secretary of the Borrower, and (y) each
of the Parent Guarantor, the Borrower's Subsidiaries and the
Shareholder Guarantors (other than Baron Capital) approving and
authorizing the execution, delivery and performance by such
Person of all Loan Documents to be delivered by it, certified as
of the Closing Date by the Secretary or an Assistant Secretary of
such Person;
(v) a certificate of the Secretary or an Assistant Secretary of
each of the Borrower, the Parent Guarantor, each of the
31
Borrower's Subsidiaries and each Shareholder Guarantor (other
than Baron Capital) certifying the names and true signatures of
its officers authorized to execute, deliver and perform, as
applicable, all Loan Documents to be delivered by it hereunder;
(vi) a certificate signed by a Responsible Officer of each of the
Borrower and the Parent Guarantor, dated as of the Closing Date,
stating that each of the conditions set forth in Sections 3.01(b)
through (e) is satisfied as of such date;
(vii) a Subsidiary Guaranty executed by each Subsidiary of the
Borrower;
(viii) written advice relating to such Lien and judgment searches
as either Agent shall have requested of the Parent Guarantor and
the Borrower, and such termination statements or other documents
as may be necessary to release any Lien in favor of any third
party not otherwise permitted by Section 5.15;
(ix) an opinion of (w) Xxxxx X. Xxxxx, counsel to the Borrower
and the Parent Guarantor, substantially in the form of Exhibit B
hereto, (x) counsel reasonably satisfactory to the Agents to each
Shareholder Guarantor, in form and substance satisfactory to the
Documentation Agent, and (y) Xxxxx Xxxx & Xxxxxxxx, special
counsel to the Agents, substantially in the form of Exhibit C
hereto;
(x) a copy of the financial statements of the Parent Guarantor
referred to in Section 4.10(a) and (b), certified by a
Responsible Officer of the Parent Guarantor;
(xi) a Shareholder Guaranty duly executed by each Shareholder
Guarantor, the Baron Capital Letter of Credit and the Escrow
Letter; and
(xii) all documents the Documentation Agent may reasonably
request relating to the existence of the Borrower, any of the
Borrower's Subsidiaries, the Parent Guarantor or any Shareholder
Guarantor, the corporate authority for and the validity of this
Agreement, the Notes or the Shareholder Guaranties, and any other
matters relevant hereto, all in form and substance satisfactory
to the Documentation Agent;
(b) all costs, accrued and unpaid fees and expenses (including, without
limitation, participation fees and legal fees and expenses) to the extent then
due and payable on the Closing Date by the Borrower hereunder shall have been
paid;
32
(c) the Borrower and the Parent Guarantor shall have received proceeds (net
of fees and interest reserves) of not less than $140,000,000 from the issuance
of the Senior Notes, all conditions to the Acquisition (including receipt of any
approvals of the FCC) shall have been satisfied and the Acquisition shall have
been consummated;
(d) the Xxxxxx Bridge Loan Agreement shall have been terminated and all
amounts payable thereunder shall have paid in full; and
(e) the Existing Credit Facilities shall have been terminated and all
amounts payable thereunder shall have been paid in full.
The Documentation Agent shall promptly notify the Borrower and the Banks of the
Closing Date, and such notice shall be conclusive and binding on all parties
hereto.
SECTION 3.02. Borrowings. The obligation of any Bank to make a Loan on the
occasion of any Borrowing is subject to the satisfaction of the following
conditions:
(a) the fact that the Closing Date shall have occurred on or prior to March
31, 1998;
(b) receipt by the Administrative Agent of a Notice of Borrowing as
required by Section 2.02(a);
(c) the fact that, immediately after any Borrowing, the aggregate
outstanding principal amount of the Loans will not exceed the aggregate amount
of the Commitments;
(d) the fact that, immediately before and after such Borrowing, no Default
shall have occurred and be continuing; and
(e) the fact that the representations and warranties of the Borrower and
the Parent Guarantor contained in the Loan Documents shall be true on and as of
the date of such Borrowing.
Each Borrowing hereunder shall be deemed to be a representation and warranty by
the Borrower and the Parent Guarantor on the date of such Borrowing as to the
facts specified in clauses (b) through (e) of this Section.
33
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Each of the Borrower and the Parent Guarantor represents and warrants (in
each case after giving effect to the Acquisition; provided that for periods
prior to the Effective Date, the representations and warranties with respect to
XXXXX are made to the Borrower's and the Parent Guarantor's best knowledge in
reliance on the representations and warranties in the XXXXX Purchase Agreement)
that, except as set forth in the section (if any) of the Disclosure Schedule
corresponding to the Section heading below:
SECTION 4.01. Corporate Existence and Power. Each of the Parent Guarantor,
the Borrower, and each of its Principal Subsidiaries and Subsidiaries,
respectively, (a) is a corporation duly incorporated, validly existing and in
good standing under the laws of the jurisdiction of its incorporation; (b) has
the power and authority and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted; (c)
is duly qualified as a foreign corporation, licensed and in good standing under
the laws of each jurisdiction where its ownership, lease or operation of
property or the conduct of its business requires such qualification; and (d) is
in compliance with all Requirements of Law except, in the case of clauses (c)
and (d), where the failure to be so qualified or in compliance could not
reasonably be expected to have a Material Adverse Effect.
SECTION 4.02. Corporate Authorization; No Contravention. The execution,
delivery and performance by each of the Parent Guarantor and its Subsidiaries of
any Loan Document to which it is a party have been duly authorized by all
necessary corporate action and do not and will not: (a) contravene the terms of
such Person's certificate of incorporation, bylaws or other organization
document; (b) conflict with or result in any breach or contravention of, or the
creation of any Lien under, any indenture, agreement, lease, instrument,
Contractual Obligation, injunction, order, decree or undertaking to which such
Person is a party; or (c) violate any Requirement of Law.
SECTION 4.03. Government Approvals. All material Government Approvals
heretofore required to be obtained have been duly obtained, were validly issued,
are in full force and effect, are not subject to appeal and are held in the name
of, or for the benefit of, the appropriate Persons. There is no proceeding
pending or, to the best knowledge of the Borrower or the Parent Guarantor,
threatened against the Parent Guarantor or any of its Subsidiaries, or any
property of the Parent Guarantor or any of its Subsidiaries, which seeks, or may
reasonably be expected, to rescind, terminate, materially adversely modify or
suspend any of the FCC Licenses. There has not occurred any event that would
34
make unlikely the delivery or issuance as anticipated of, and when and as needed
all such Government Approvals. No such Government Approval already obtained is
subject to any restriction, condition, limitation or other provision that would
have a Material Adverse Effect. The information set forth in each application
submitted by the Parent Guarantor, the Borrower or any of their respective
Subsidiaries in connection with each such Government Approval is accurate and
complete in all material respects taken as a whole, except for statements or
omissions which could not reasonably be expected to affect adversely the
validity of such Government Approvals. No other material consent, approval or
authorization of, or declaration or filing with, any other Person is required in
connection with the execution, delivery, performance, validity or enforceability
of this Agreement or any other Loan Document.
SECTION 4.04. Binding Effect. This Agreement and each other Loan Document
to which the Parent Guarantor or any of its Subsidiaries is a party constitute
the legal, valid and binding obligations of such Person, enforceable against
such Person in accordance with their respective terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, or similar laws affecting
the enforcement of creditors' rights generally or by equitable principles
relating to enforceability.
SECTION 4.05. Litigation. Except for matters arising after the Effective
Date which could not reasonably be expected to have a Material Adverse Effect,
there are no actions, suits, proceedings, claims or disputes pending, or to the
best knowledge of the Parent Guarantor or the Borrower, threatened or
contemplated at law, in equity, in arbitration or before any Governmental
Authority, against the Parent Guarantor or any of its Subsidiaries or any of
their respective properties which: (a) purport to affect or pertain to this
Agreement, or any Loan Document, or any of the transactions contemplated hereby
or thereby; or (b) if determined adversely to the Parent Guarantor or any of its
Subsidiaries, could have a Material Adverse Effect. No injunction, writ,
temporary restraining order or any order of any nature has been issued by any
court or other Governmental Authority purporting to enjoin or restrain the
execution, delivery and performance of this Agreement or any other Loan
Document, or directing that the transactions provided for herein or therein not
be consummated as herein or therein provided.
SECTION 4.06. No Default. No Default or Event of Default exists or would
result from the incurring of Obligations by the Parent Guarantor or any of its
Subsidiaries under any Loan Document. Neither the Parent Guarantor nor any of
its Subsidiaries is in default under or with respect to any Contractual
Obligation in any respect which, individually or together with all such
defaults, could have a Material Adverse Effect.
35
SECTION 4.07. ERISA Compliance. (a) Section 4.07 of the Disclosure Schedule
lists all Plans maintained or sponsored by the Parent Guarantor or the Borrower
or to which either of them is obligated to contribute, and separately identifies
Plans intended to be Qualified Plans and Multiemployer Plans. All written
descriptions thereof provided to the Agents are true and complete in all
material respects. Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other Federal or state law,
including all requirements under the Code or ERISA for filing reports (which are
true and correct in all material respects as of the date filed), and benefits
have been paid in accordance with the provisions of the Plan. Each Qualified
Plan has been determined by the IRS to qualify under Section 401 of the Code,
and to the best knowledge of the Parent Guarantor and the Borrower nothing has
occurred which would cause the loss of such qualification.
(b) There is no outstanding liability under Title IV of ERISA with respect
to any Plan maintained or sponsored by any member of the Controlled Group (as to
which the Parent Guarantor or the Borrower is or may be liable), nor with
respect to any Plan to which any member of the Controlled Group contributes or
is obligated to contribute (wherein the Parent Guarantor or the Borrower is or
may be liable). No Plan maintained or sponsored by the Parent Guarantor or the
Borrower provides medical or other welfare benefits or extends coverage relating
to such benefits beyond the date of a participant's termination of employment
with the Parent Guarantor or Borrower, except to the extent required by Section
4980B of the Code and at the sole expense of the participant or the beneficiary
of the participant to the fullest extent permissible under such Section of the
Code. Each of the Parent Guarantor and the Borrower has complied in all material
respects with the notice and continuation coverage requirements of Section 4980B
of the Code.
(c) No ERISA Event has occurred or is reasonably expected to occur with
respect to any Plan maintained or sponsored by the Parent Guarantor or the
Borrower or to which the Parent Guarantor or the Borrower is obligated to
contribute. There are no pending or, to the best knowledge of the Parent
Guarantor and the Borrower, threatened claims, actions or lawsuits, other than
routine claims for benefits in the usual and ordinary course, asserted or
instituted against (i) any Plan maintained or sponsored by the Parent Guarantor
or the Borrower or its assets, (ii) any member of the Controlled Group with
respect to any Qualified Plan of the Parent Guarantor or the Borrower, or (iii)
any fiduciary with respect to any Plan for which the Parent Guarantor or the
Borrower may be directly or indirectly liable, through indemnification
obligations or otherwise. Neither the Parent Guarantor nor the Borrower has
incurred or reasonably expects to incur (i) any liability (and no event has
occurred which, with the giving of notice under Section 4219 of ERISA, would
36
result in such liability) under Section 4201 of ERISA with respect to a
Multiemployer Plan or (ii) any liability under Title IV of ERISA (other than
premiums due and not delinquent under Section 4007 of ERISA) with respect to a
Plan. Neither the Parent Guarantor nor the Borrower has transferred any Unfunded
Pension Liability outside of the Controlled Group or otherwise engaged in a
transaction that could be subject to Section 4069 or 4212(c) of ERISA.
(d) Neither the Parent Guarantor nor the Borrower has engaged, directly or
indirectly, in a non-exempt prohibited transaction (as defined in Section 4975
of the Code or Section 406 of ERISA) in connection with any Plan, which
transaction could have a Material Adverse Effect.
SECTION 4.08. Title to Property. Each of the Parent Guarantor and its
Principal Subsidiaries and the Borrower and its Subsidiaries has good record and
marketable title in fee simple to or valid leasehold interests in all real
property used in its business, except for such defects in title as could not,
individually or in the aggregate, have a Material Adverse Effect. Such real
property is free and clear of all Liens or rights of others, except Permitted
Liens.
SECTION 4.09. Taxes. Each of the Parent Guarantor and its Principal
Subsidiaries and the Borrower and its Subsidiaries have filed all Federal and
other material tax returns and reports required to be filed and have paid all
Federal and other material taxes, assessments, fees and other governmental
charges levied or imposed upon them or their properties, income or assets
otherwise due and payable except those which are being contested in good faith
by appropriate proceedings and for which adequate reserves have been provided in
accordance with GAAP and no Notice of Lien has been filed or recorded. There is
no proposed tax assessment against the Parent Guarantor or any of its
Subsidiaries which would, if the assessment were made, have a Material Adverse
Effect.
SECTION 4.10. Financial Condition.
(a) The audited consolidated statements of financial position of the Parent
Guarantor and its Subsidiaries dated December 31, 1996, and the related
consolidated statements of loss, stockholders' equity and cash flows for the
fiscal year ended on that date: (i) were prepared in accordance with GAAP
consistently applied throughout the periods covered thereby, except as otherwise
expressly noted therein, (ii) fairly present, in all material respects, the
financial condition of the Parent Guarantor and its Subsidiaries as of the date
thereof and results of operations for the period covered thereby and (iii) show
all material Indebtedness and other liabilities, direct or contingent, of the
Parent Guarantor and its consolidated Subsidiaries as of the date thereof
(including liabilities for taxes and material commitments).
37
(b) The unaudited pro forma summary consolidated condensed balance sheet of
the Parent Guarantor and its Subsidiaries as of September 30, 1997 together with
the related pro forma summary condensed statement of operations data for the
nine months then ended fairly present, in conformity with GAAP applied on a
basis consistent with the financial statements referred to in subsection (a)
above, the consolidated financial position of the Parent Guarantor and its
Subsidiaries as of such date, based on the assumptions set forth therein. As of
such date and the Closing Date, the Parent Guarantor and its Subsidiaries had
and have no material liabilities, contingent or otherwise, which are not
properly reflected on such balance sheet (including liabilities for taxes and
material commitments).
(c) Since September 30, 1997, there has been no Material Adverse Effect.
SECTION 4.11. Environmental Matters. The operations of the Parent Guarantor
and each of its Subsidiaries comply in all material respects with all
Environmental Laws. The Parent Guarantor and each of its Subsidiaries have
obtained all licenses, permits, authorizations and registrations required under
any Environmental Law ("Environmental Permits") necessary for its operations to
comply in all material respects with Environmental Laws, and all such
Environmental Permits are in full force and effect, and the Parent Guarantor and
each of its Subsidiaries are in material compliance with all terms and
conditions of such Environmental Permits. None of the Parent Guarantor, any of
its Subsidiaries or any of their present or, to the knowledge of the Parent
Guarantor and the Borrower, past property or operations is subject to any
outstanding written order from or agreement with any Governmental Authority or
other Person, nor subject to any judicial or administrative proceeding,
respecting any Environmental Law, Environmental Claim or Hazardous Material.
There are no conditions or circumstances which may give rise to any
Environmental Claim arising from the operations of the Parent Guarantor or its
Subsidiaries, including Environmental Claims associated with any operations of
the Parent Guarantor or its Subsidiaries, with a potential liability in excess
of $5,000,000 in the aggregate. Without limiting the generality of the
foregoing, the Parent Guarantor and its Subsidiaries have met all notification
requirements under Title III of the Superfund Amendments and Reauthorization Act
of 1986 or any other Environmental Law.
SECTION 4.12. Regulated Entities. None of the Parent Guarantor, any Person
controlling the Parent Guarantor, or any Subsidiary thereof, is (a) an
"Investment Company" within the meaning of the Investment Company Act of 1940;
38
or (b) subject to regulation under the Public Utility Holding Company Act of
1935, the Federal Power Act, the Interstate Commerce Act, any state public
utilities code or any other Federal or state statute or regulation limiting its
ability to incur Indebtedness.
SECTION 4.13. Subsidiaries. As of the Closing Date, the Borrower does not
have any Subsidiaries and has no equity investments in any other corporation or
entity.
SECTION 4.14. Insurance. The properties of the Borrower and its
Subsidiaries are insured with financially sound and reputable insurance
companies, in such amounts, with such deductibles and covering such risks as is
customarily carried on by companies engaged in similar businesses and owning
similar properties in localities where the Borrower or such Subsidiary operates.
SECTION 4.15. Business. The Borrower and its Subsidiaries have not
conducted any business other than as described in the Offering Memorandum.
Neither the business nor the properties of the Borrower and its Subsidiaries are
or have been affected by any fire, explosion, accident, strike, lockout or other
labor dispute, drought, storm, hail, earthquake, embargo, act of God or of the
public enemy or other casualty (whether or not covered by insurance) which has
had a Material Adverse Effect.
SECTION 4.16. Disclosure. The information (including, without limitation,
the information in the Offering Memorandum) furnished in writing at or prior to
the Closing Date by the Parent Guarantor or the Borrower to any Agent or Bank in
connection with this Agreement and the transactions contemplated hereby is true,
complete and accurate in every material respect or based on reasonable estimates
on the date as of which such information is stated or certified and is not
incomplete by omitting to state any material fact necessary to make such
information (taken as a whole) not misleading in light of the circumstances
under which such information was made. The pro forma financial projections
contained in the Offering Memorandum were made in good faith and the assumptions
on the basis of which such projections were made were (when made) and are (as of
the date of this Agreement) reasonable. There is no fact known to the Parent
Guarantor or the Borrower on the date as of which this representation and
warranty is made that has not been disclosed in writing to the Agent which could
reasonably be expected to have a Material Adverse Effect.
39
ARTICLE 5
COVENANTS
Each of the Borrower and the Parent Guarantor agrees that, so long as any
Bank has any Commitment hereunder or any amount payable hereunder or under any
Note remains unpaid:
SECTION 5.01. Information. The Borrower will deliver to each of the Banks:
(a) as soon as available, but not later than 90 days after the end of each
fiscal year of the Borrower and the Parent Guarantor, respectively, commencing
with the fiscal year ending December 31, 1997, a copy of the audited
consolidated balance sheets of the Borrower and the Parent Guarantor as at the
end of such year and the related audited consolidated statements of income,
stockholders' equity and cash flows for such fiscal year, setting forth in each
case in comparative form the figures for the previous year, and accompanied by
the opinion of Xxxxxx Xxxxxxxx LLP or another nationally-recognized independent
public accounting firm which report shall state that such consolidated financial
statements present fairly, in all material respects, the financial position,
results of operations and cash flows for the periods indicated in conformity
with GAAP applied on a basis consistent with prior years;
(b) as soon as available, but not later than 45 days after the end of each
of the first three fiscal quarters of each year, commencing with the first such
fiscal quarter to end after the Effective Date, a copy of the unaudited
consolidated balance sheets of the Borrower and Parent Guarantor as of the end
of such quarter and the related consolidated statements of income, stockholders'
equity and cash flows for the period commencing on the first day and ending on
the last day of such quarter, and certified by an appropriate Responsible
Officer as fairly presenting, in all material respects, in accordance with GAAP
(except for the absence of footnote disclosure), the financial position and the
results of operations of the Borrower and the Parent Guarantor; and
(c) as soon as available, any other interim financial statements of the
Borrower and its Subsidiaries reasonably requested by the Administrative Agent
at the direction of the Required Banks.
SECTION 5.02. Certificates; Other Information. The Borrower will deliver to
each of the Banks:
(a) concurrently with the delivery of the financial statements referred to
in Section 5.01(a) above, a certificate of the independent certified public
40
accountants reporting on such financial statements stating that in making the
examination necessary therefor no knowledge was obtained of any Default or Event
of Default, except as specified in such certificate;
(b) concurrently with the delivery of the financial statements referred to
in Section 5.01(a) above, a certificate of a Responsible Officer of the Borrower
(i) stating that, to the best of such officer's knowledge, the Borrower, during
such period, has observed or performed all of its covenants and other
agreements, and satisfied every condition contained in this Agreement to be
observed, performed or satisfied by it, and that such officer has obtained no
knowledge of any Default or Event of Default except as specified in such
certificate, (ii) when applicable, showing in detail the calculations supporting
such statement in respect of Article 5 and (iii) setting forth the Excess Cash
Flow for such period, together with the calculation thereof in reasonable
detail;
(c) promptly after the same are filed, copies of (if, in the case of
reports to the FCC, such reports are material) all financial statements and
regular, periodical or special reports which the Borrower, the Parent Guarantor
or any Subsidiary of the Parent Guarantor may make to, or file with, the
Securities and Exchange Commission, the FCC or any successor or similar
Governmental Authorities; and
(d) promptly, such additional financial and other information as the
Administrative Agent, at the request of any Bank, may from time to time
reasonably request.
SECTION 5.03. Notices. The Borrower shall promptly notify the Agents and
each Bank of:
(a) the occurrence of any Default or Event of Default, and of the
occurrence or existence of any event or circumstance that could reasonably be
expected to become a Default or Event of Default;
(b) any (i) breach or non-performance of, or any default under any
Contractual Obligation which could reasonably be expected to result in a
Material Adverse Effect; or (ii) dispute, litigation, investigation, proceeding
or suspension which may exist at any time between the Parent Guarantor or any of
its Subsidiaries and any Governmental Authority and which, if determined
adversely to the Parent Guarantor or any of its Subsidiaries, could reasonably
be expected to result in a Material Adverse Effect;
(c) the commencement of, or any material development in, any litigation or
proceeding affecting the Parent Guarantor or any Subsidiary (i) in which the
amount of damages claimed is $5,000,000 (or its equivalent in another currency
41
or currencies) or more, (ii) in which injunctive or similar relief is sought and
which, if adversely determined, could have a Material Adverse Effect, or (iii)
in which the relief sought is an injunction or other stay of the performance of
any Loan Document or the operations of the Parent Guarantor or any of its
Subsidiaries;
(d) upon, but in no event later than ten days after, becoming aware of (i)
any and all enforcement, cleanup, removal or other governmental or regulatory
actions instituted, completed or threatened against the Parent Guarantor or any
Subsidiary or any of their properties pursuant to any applicable Environmental
Laws, (ii) all other Environmental Claims or (iii) any environmental or similar
condition on any real property adjoining or in the vicinity of the property of
the Parent Guarantor or any of its Subsidiaries that could reasonably be
anticipated to cause such property or any part thereof to be subject to any
restrictions on the ownership, occupancy, transferability or use of such
property under any Environmental Laws;
(e) any other litigation or proceeding affecting the Parent Guarantor or
any of its Subsidiaries which the Parent Guarantor would be required to report
to the Securities and Exchange Commission pursuant to the Securities Exchange
Act of 1934, within four days after reporting the same to the Securities and
Exchange Commission;
(f) any ERISA Event affecting the Borrower or any member of its Controlled
Group (but in no event more than ten days after such ERISA Event) together with
(i) a copy of any notice with respect to such ERISA Event filed with the PBGC
and (ii) any notice delivered by the PBGC to the Borrower or any member or its
Controlled Group with respect to such ERISA Event;
(g) any Material Adverse Effect subsequent to the date of the most recent
audited financial statements of the Borrower delivered to the Banks pursuant to
Section 5.01(a);
(h) any material change in accounting policies or financial reporting
practices;
(i) any labor controversy resulting in or threatening to result in any
strike, work stoppage, boycott, shutdown or other labor disruption against or
involving the Borrower or any Subsidiary;
(j) any material revision of the Borrower's business plan;
(k) the adoption of each capital expenditures budget by the Borrower;
42
(l) any event that could reasonably be expected to result in Net Cash
Proceeds requiring a mandatory prepayment pursuant to Section 2.09; and
(m) the delivery of, or receipt of, any notice of (i) a reduction in
coverage of any insurance required to be maintained by Section 5.06 or otherwise
procured by the Borrower covering loss or damage to any material property of the
Borrower (other than a reduction in coverage or amount resulting from a payment
thereunder) or (ii) the cancellation or non-renewal of any such insurance
policy.
Each notice pursuant to this Section shall be delivered promptly after a
Responsible Officer becomes aware of the subject matter of such notice and shall
be accompanied by a written statement by a Responsible Officer of the Borrower
setting forth details and effective date of the occurrence referred to therein
and stating what action the Borrower proposes to take with respect thereto.
SECTION 5.04. Conduct of Business; Preservation of Corporate Existence.
Each of the Parent Guarantor and the Borrower shall, and shall cause each of its
Principal Subsidiaries and Subsidiaries, respectively: (a) to engage in business
of the same general type as now conducted by the Parent Guarantor and its
Subsidiaries (including XXXXX and AMRC Holdings and Subsidiaries of AMRC
Holdings); (b) to preserve and maintain in full force and effect its corporate
existence and good standing under the laws of its State or jurisdiction of
incorporation; (c) to preserve and maintain in full force and effect all rights,
privileges, qualifications, permits, licenses and franchises necessary or
desirable in the normal conduct of its business; (d) to use its reasonable
efforts, in the ordinary course and consistent with past practice, to preserve
its business organization and preserve the goodwill and business of the
customers, suppliers and others having business relations with it; and (e) to
preserve or renew all of its registered trademarks, trade names and service
marks, the non-preservation of which could have a Material Adverse Effect.
SECTION 5.05. Maintenance of Property. Each of the Borrower and the Parent
Guarantor shall maintain, and shall cause each of its Principal Subsidiaries and
Subsidiaries, respectively, to maintain, and preserve all its property which is
used or useful in its business in good working order and condition, ordinary
wear and tear excepted.
SECTION 5.06. Maintenance of Insurance. (a) The Borrower shall procure at
its own expense and maintain in full force and effect at all times on and after
the Effective Date with responsible insurance carriers with a Best's rating of
43
A/VII or better (except for policies underwritten by Lloyds of London and
companies acceptable to the Agents and the Required Banks), the following
insurance:
(i) Workers' Compensation Insurance: Except as to exposures
in those jurisdictions in which the state government is the
sole source of such insurance, as required by applicable
state laws including, without limitation, employer's
liability insurance with the following limits: bodily injury
by accident: $100,000 each accident; bodily injury by
disease: $100,000 each employee; and bodily injury by
disease: $500,000 policy limit (the policies with respect to
which shall include an all states' endorsement).
(ii) Commercial General Liability: Against claims for
personal injury (including bodily injury and death) and
property damage in such amounts as are customarily carried
by companies of established repute engaged in the same or a
similar business but not to exceed $5,000,000 in the
aggregate. Such insurance shall provide coverage for
products/completed operations, blanket contractual,
explosion, collapse and underground coverage, broad form
property damage and personal injury insurance with
$1,000,000 each occurrence, $1,000,000 general aggregate
(other than products/completed operations), $1,000,000
personal and advertising limit, and $1,000,000
products/completed operations aggregate limit.
(iii) Business Automobile Liability: Against claims for
personal injury (including bodily injury and death) and
property damage covering all owned, leased, non-owned and
hired motor vehicles (to the extent there are any thereof),
with a $2,000,000 minimum limit per occurrence for combined
bodily injury and property damage and in the aggregate where
applicable.
(iv) Business Interruption Insurance: To the extent
reasonably obtainable on customary terms and conditions and
with customary exclusions, with respect to any risk of loss
in respect of which the Borrower in its judgment does not
then have adequate redundant or replacement property or
assets available which would prevent any loss or
interruption of any cash flow if such loss occurred,
business interruption insurance with a $2,000,000 minimum
limit per occurrence.
(v) Property Damage Insurance: (x) Property damage insurance
on an "all risk" basis (with customary conditions and
exclusions) including coverage against damage or loss caused
by earth movement and flood and providing coverage for its
44
satellites and communications ground segment (the "Covered
Property"), in a minimum aggregate amount equal to the
lesser of (1) the "full insurable value" of the Covered
Property and (2) 110% of all Obligations and (y) unless both
of the Agents shall otherwise agree, In-Orbit Insurance. For
purposes of this clause (v) and Section 5.06(b), "full
insurable value" shall mean the full replacement value of
the Covered Property, including any improvements and
equipment and supplies, without deduction for physical
depreciation and/or obsolescence; all such policies may have
deductibles of not greater than $250,000, except for earth
movement insurance which will have the lowest deductible as
shall (in the opinion of the Agents) be available on
commercially reasonable terms in the insurance market place.
Such insurance shall include an "agreed amount" clause. For
purposes of this clause (v), "In-Orbit Insurance" shall mean
in-orbit insurance, with insurance carriers acceptable to
the Agents, in a minimum aggregate amount equal to
$184,000,000 and when the ACTEL Lease Agreement and the TMI
Purchase Agreement become effective an additional amount of
in-orbit insurance of $50,000,000 shall be obtained to cover
MSAT-1 and up to $50,000,000 of such $184,000,000 of
insurance on MSAT-2 may be for the account and benefit of
ACTEL or other lessee under a Satellite Lease Arrangement
(or if coverage in such amounts is unavailable to the
Borrower using its reasonable best efforts, such lesser
amounts as the Borrower is able to obtain) and having
deductibles and other terms and conditions as are reasonably
available in the market at reasonable cost and are
acceptable to the Agents.
(b) All policies of insurance required to be maintained pursuant to
Sections 5.06(a)(iv) and 5.06(a)(v) or otherwise procured by the Borrower
covering loss or damage to any of the Borrower's property shall provide that (i)
there shall be no recourse against the Agents or the Banks for payment of
premiums or other amounts with respect thereto, (ii) to the extent available,
the insurer is required to provide the Administrative Agent with at least 30
days (or ten days, in the case of nonpayment of premiums) prior written notice
of reduction in coverage or amount (other than a reduction in coverage or amount
resulting from a payment thereunder), cancellation or non-renewal of any policy
and (iii) the proceeds of all policies (other than in respect of comprehensive
general liability, workers' compensation and comprehensive automobile liability
insurance) shall be payable to the Administrative Agent pursuant to standard
first mortgagee endorsement, without contribution, substantially equivalent to
the New York standard mortgagee endorsement. If the Borrower fails or may fail
to timely file any proof of loss, the Administrative Agent shall have the right
to join the Borrower in submitting a proof of any loss in excess of $250,000.
All such policies (other than in respect of workers' compensation insurance)
shall insure the interests of the Insured Parties, as their interest may appear,
45
and shall further provide, to the extent such insurance is available at a
commercially reasonable rate, that payments shall be made thereunder regardless
of any breach or violation by the Borrower of warranties, declarations or
conditions not contained in such policies, any action or inaction of the
Borrower (other than nonpayment of premiums) or others, or any foreclosure
relating to its satellite or communications ground segment or any other business
of the Borrower or any change in ownership of all or any portion of thereof or
any other business of the Borrower. Each such policy shall (i) except in the
case of insurance required to be maintained pursuant to Sections 5.06(a)(iv) and
5.06(a)(v), waive any right of subrogation against the Banks (and their
respective officers, employees and agents), (ii) except in the case of insurance
required to be maintained pursuant to Sections 5.06(a)(iv) and 5.06(a)(v),
include a severability of interest or cross liability clause, (iii) provide that
the insurance be primary and not excess of or contributory to any insurance or
self-insurance maintained by the Borrower, the Agents or the Banks, (iv) contain
a breach of warranty clause in favor of the Agents and the Banks and (v) except
in the case of workers' compensation insurance, name the Insured Parties as
their interests may appear, as additional insureds or loss payees.
(c) The Borrower shall deliver to the Administrative Agent, within 30 days
after the close of each fiscal year, commencing with the fiscal year ending
December 31, 1998, a certificate of International Space Brokers, Inc.,
Metro/Risk, Inc. or other recognized independent insurance brokers, reasonably
acceptable to the Required Banks, (i) confirming that all insurance policies
required pursuant to this Section 5.06 are in force on the date thereof, (ii)
confirming the names of the companies issuing such policies, (iii) confirming
the amounts and expiration date or dates of such policies, (iv) including
certificates evidencing such policies marked "premium paid" for the prior year
and (v) stating that in such broker's opinion after due investigation, such
policies substantially comply with the requirements of this Section 5.06.
(d) In the event the Borrower fails to take out or maintain, or fails to
cause to be taken out or maintained, the full insurance coverage required by
this Section 5.06, the Administrative Agent (upon the direction of the Required
Banks), upon 30 days' prior notice (unless the aforementioned insurance would
lapse within such period, in which event notice should be given as soon as
reasonably possible) to the Borrower of any such failure, may (but shall not be
obligated to) take out the required policies of insurance and pay the premiums
on the same. All amounts so advanced therefor by the Administrative Agent shall
be immediately reimbursed by the Borrower to the Administrative Agent, and the
Borrower shall forthwith pay such amounts to the Administrative Agent, together
with interest thereon at the sum of 2% plus the rate otherwise applicable to
Base Rate Loans for each day until paid.
46
(e) The Administrative Agent shall promptly notify each Bank of each
written notice received by it with respect to the cancellation of or material
adverse change in any insurance policy required to be maintained by the Borrower
pursuant to this Section 5.06.
SECTION 5.07. Payment of Obligations. Each of the Parent Guarantor and the
Borrower shall, and shall cause each of its Principal Subsidiaries and
Subsidiaries, respectively, to, pay and discharge as the same shall become due
and payable, all its obligations and liabilities, including: (a) all tax
liabilities, assessments and governmental charges or levies upon it or its
properties or assets, unless the same are being contested in good faith by
appropriate proceedings and adequate reserves in accordance with GAAP are being
maintained by such Person; (b) all lawful claims which, if unpaid, might by law
become a Lien upon its property (excluding claims being contested in good faith
by the Borrower, and for which adequate reserves have been made or as to which
the corresponding liens have been bonded); and (c) all Indebtedness as and when
due and payable but subject to any subordination provisions contained in any
instrument or agreement evidencing such Indebtedness.
SECTION 5.08. Compliance with Laws. Each of the Parent Guarantor and the
Borrower shall comply, and shall cause each of its Principal Subsidiaries and
Subsidiaries, respectively, to comply, in all material respects with all
Requirements of Law of any Governmental Authority having jurisdiction over it or
its business (including the Federal Fair Labor Standards Act and ERISA), except
such as may be contested in good faith or as to which a bona fide dispute may
exist.
SECTION 5.09. Inspection of Property and Books and Records. Each of the
Parent Guarantor and the Borrower shall maintain, and shall cause each of its
Principal Subsidiaries and Subsidiaries, respectively, to maintain, proper books
of record and account, in which full, true and correct entries in conformity
with GAAP consistently applied shall be made of all financial transactions and
matters involving the assets and business of the Parent Guarantor and the
Borrower and such Principal Subsidiaries. Each of the Parent Guarantor and the
Borrower will permit, and will cause each of its Principal Subsidiaries and
Subsidiaries, respectively, to permit, representatives of any Agent or Bank to
visit and inspect any of its properties, to examine its corporate, financial and
operating records and make copies thereof or abstracts therefrom, and to discuss
its affairs, finances and accounts with its directors, officers, employees and
independent public accountants at such reasonable times during normal business
hours and as often as may be reasonably desired, upon reasonable advance notice
to the Parent Guarantor or the Borrower, as the case may be; provided that when
47
an Event of Default exists representatives from the United States offices of any
Agent or Bank may visit and inspect at the expense of the Borrower such
properties at any time during business hours and without advance notice. The
Borrower shall reimburse the Agents and the Banks for their reasonable expenses
incurred in conducting such visits and examinations when an Event of Default
exists.
SECTION 5.10. Environmental Laws. (a) Each of the Parent Guarantor and the
Borrower shall, and shall cause each of its respective Subsidiaries to, conduct
its operations and keep and maintain its property in compliance with all
Environmental Laws.
(b) Upon written request of any Agent or Bank, the Borrower shall submit
and cause each of its Subsidiaries to submit, to such Agent or Bank, at the
Borrower's sole cost and expense at reasonable intervals, a report providing an
update of the status of and any environmental, health or safety compliance
obligation, remedial obligation or liability, that could, individually or in the
aggregate, result in liability in excess of $5,000,000.
SECTION 5.11. Use of Proceeds. The Borrower shall use the proceeds of the
Loans only for general corporate purposes, including capital expenditures and
the refinancing of obligations under the Xxxxxx Bridge Loan Agreement and the
Existing Credit Facilities. No portion of the Loans will be used, directly or
indirectly, for the purpose, whether immediate, incidental or ultimate, of
buying or carrying any "margin stock" within the meaning of Regulation U. No
proceeds of any Loans will be used to acquire any security in any transaction
which is subject to Section 13 or 14 of the Securities Exchange Act of 1934, as
amended.
SECTION 5.12. No Subsidiaries. The Borrower shall not have any Subsidiaries
or equity investments in any other corporation or entity except as set forth on
Schedule 4.13.
SECTION 5.13. Government Approvals. The Borrower shall, and shall cause
each of its Subsidiaries to, comply with the terms of and maintain in full force
and effect the FCC Licenses, and all amendments thereto, and shall, and shall
cause each of its Subsidiaries to, obtain, maintain and comply with the terms of
all other Government Approvals which are necessary under applicable laws and
regulations in connection with the Borrower's or such Subsidiary's business. No
such Government Approval shall be subject to any restriction, condition,
limitation or other provision that would have a Material Adverse Effect.
SECTION 5.14. Further Assurances. Each of the Borrower and the Parent
Guarantor shall ensure that all written information, exhibits and reports
48
furnished to the Banks do not and will not contain any untrue statement of a
material fact and do not and will not omit to state any material fact or any
fact necessary to make the statements contained therein not misleading in light
of the circumstances in which made, and will promptly disclose to the Agents and
the Banks and correct any defect or error that may be discovered therein or in
any Loan Document or in the execution, acknowledgment or recordation thereof.
SECTION 5.15. Limitation on Liens. Neither the Parent Guarantor nor the
Borrower shall, nor shall either permit any member of the Parent Guarantor Group
to, directly or indirectly, make, create, incur, assume or suffer to exist any
Lien upon or with respect to any part of its property or assets, whether now
owned or hereafter acquired, or offer or agree to do so, other than the
following ("Permitted Liens"):
(a) any Lien existing on the Effective Date securing Indebtedness existing
on the Effective Date and identified on Schedule 5.15;
(b) any Lien in favor of the Administrative Agent created under the
Security and Pledge Agreement (as defined in the Term Credit Agreement) and any
Lien in favor of the Shareholder Guarantors pursuant to the Shareholder
Guarantor Security Agreement;
(c) Liens for taxes, fees, assessments or other governmental charges which
are not delinquent or remain payable without penalty, or to the extent that
non-payment thereof is permitted by Section 5.07, provided that no Notice of
Lien has been filed or recorded;
(d) carriers', warehousemen's, mechanics', landlords', materialmen's,
repairmen's or other similar Liens arising in the ordinary course of business
which do not secure Indebtedness and are not delinquent or remain payable
without penalty;
(e) Liens (other than any Lien imposed by ERISA) on the property of any
member of the Parent Guarantor Group incurred, or pledges or deposits required,
in connection with workmen's compensation, unemployment insurance and other
social security legislation;
(f) Liens on the property of any member of the Parent Guarantor Group
securing (i) the performance of bids, trade contracts (other than for borrowed
money), leases, statutory obligations, and (ii) obligations on surety and appeal
bonds, and (iii) other obligations of a like nature incurred in the ordinary
course of business which do not secure Indebtedness, provided that all such
Liens in the aggregate could not cause a Material Adverse Effect;
49
(g) easements, rights-of-way, restrictions and other similar encumbrances
incurred in the ordinary course of business which, in the aggregate, are not
substantial in amount, and which do not in any case materially detract from the
value of the property subject thereto or interfere with the ordinary conduct of
the businesses of the Parent Guarantor Group;
(h) Liens on any asset which is the subject of a capital lease securing
Indebtedness incurred or assumed for the purpose of financing all or any part of
the cost of acquiring such asset, provided that (x) such Lien attaches
concurrently with or within 30 days after the acquisition thereof, and (y) the
sum of the aggregate principal amount of such Indebtedness secured by such Liens
shall not exceed $15,000,000;
(i) Liens on contract rights under subscriber equipment leases sold,
pledged or otherwise transferred pursuant to any bona fide financing of such
leases;
(j) Liens on property and assets of AMRC Holdings and its Subsidiaries; and
(k) Liens to secure Vendor Financing Indebtedness permitted by Section
5.23(k); provided that such Liens cover only the assets acquired with such
Vendor Financing Indebtedness.
SECTION 5.16. Disposition of Assets, Consolidations and Mergers. Neither
the Parent Guarantor nor the Borrower shall, nor shall it permit any member of
the Parent Guarantor Group to, directly or indirectly, (i) sell, assign, lease,
convey, transfer or otherwise dispose of (whether in one or a series of
transactions) any of its assets, business or property (including accounts and
notes receivable (with or without recourse) and equipment sale-leaseback
transactions) or (ii) merge or consolidate with any other Person, or enter into
any agreement to do any of the foregoing described in clauses (i) or (ii) except
for the following; provided that immediately after giving effect to any of the
following, no Default or Event of Default would exist:
(a) sales, transfers, or other dispositions of inventory, or used, worn-out
or surplus property, or property of no further use to the Parent Guarantor and
its Subsidiaries, all in the ordinary course of business;
(b) sales, transfers, or other dispositions of equipment in the ordinary
course of business to the extent that such equipment is exchanged for credit
50
against the purchase price of similar replacement equipment or the proceeds of
such sale are reasonably promptly applied to the purchase price of such
replacement equipment;
(c) sales, transfers, or other dispositions of communications services,
capacity or equipment pursuant to the customer contracts providing for the sale
of communications services, capacity or equipment in the ordinary course of
business;
(d) sales, transfers or other dispositions pursuant to bona fide
sale-leaseback financings in which the lease gives rise solely to Capital Lease
Obligations; provided, however, that any such sales, transfers or other
dispositions are not permitted with any assets of the communications network;
(e) sales, transfers, or other dispositions of assets in the ordinary
course of business having a fair market value not exceeding $500,000 per item or
$1,000,000 in the aggregate in any fiscal year (excluding sales, transfers and
dispositions theretofore approved in accordance with the terms hereof in such
fiscal year);
(f) sales, transfers or other dispositions of assets to Sales Corporation
to be used in connection with the sales and marketing of services of the
Borrower and having a fair market value not exceeding $5,000,000 in the
aggregate during the term of this Agreement;
(g) sales, transfers or other dispositions of contract rights under
subscriber equipment leases pursuant to any bona fide financing of such leases;
(h) non-exclusive licenses of technology and other intangible assets;
(i) sales of mobile earth terminals and related equipment, and other
inventory;
(j) any Subsidiary of the Borrower may merge, consolidate or combine with
or into, or transfer assets to the Borrower or one or more Subsidiaries of the
Borrower; provided that with respect to any such transaction involving the
Borrower, the Borrower shall be the continuing or surviving corporation and if
any such transaction shall be between a Subsidiary and a wholly-owned
Subsidiary, the wholly-owned Subsidiary shall be the continuing or surviving
corporation;
(k) any Subsidiary of the Borrower may sell, lease, transfer or otherwise
dispose of any or all of its assets (upon voluntary liquidation or otherwise),
to the Borrower or another wholly-owned Subsidiary of the Borrower;
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(l) the Borrower or any Subsidiary may merge, consolidate or combine with
another entity if the Borrower or the Subsidiary, respectively, is the
corporation surviving the merger; and
(m) the Satellite Lease Arrangements.
SECTION 5.17. Employee Contracts and Arrangements. Neither the Parent
Guarantor nor the Borrower shall, nor shall either permit any of its
Subsidiaries to, enter into any employment contracts or arrangements whose
terms, including salaries, benefits and other compensation, are not normal and
customary and commercially reasonable for companies of like size and
circumstances.
SECTION 5.18. Investments. Neither of the Parent Guarantor nor any other
member of the Parent Guarantor Group will make or acquire any Investment in any
Person other than:
(a) Investments in Persons which are Subsidiaries on the date hereof;
(b) Cash Equivalents; and
(c) any Investment not otherwise permitted by the foregoing clauses of this
Section if, immediately after such Investment is made or acquired, the aggregate
net book value of all Investments permitted by this clause (c) does not exceed
$10,000,000.
SECTION 5.19. Transactions with Affiliates. Except where such Affiliate is
a member of the Parent Guarantor Group, the Parent Guarantor will not, and will
not permit any Subsidiary to, directly or indirectly, (i) pay any funds to or
for the account of any Affiliate, (ii) make any investment in any Affiliate
(whether by acquisition of stock or indebtedness, by loan, advance, transfer of
property, guarantee or other agreement to pay, purchase or service, directly or
indirectly, any Indebtedness, or otherwise), (iii) lease, sell, transfer or
otherwise dispose of any assets, tangible or intangible, to any Affiliate, or
(iv) participate in, or effect, any transaction with any Affiliate, except in
each case on an arm's-length basis on terms at least as favorable to the Parent
Guarantor or such Subsidiary as could have been obtained from a third party that
was not an Affiliate or as otherwise expressly approved in writing by the
Required Banks.
SECTION 5.20. Compliance with ERISA. Neither the Parent Guarantor nor the
Borrower shall directly or indirectly, and neither the Parent Guarantor nor the
Borrower shall permit any member of the Controlled Group directly or indirectly
(i) to terminate, any Qualified Plan subject to Title IV of ERISA, so as to
52
result in any material (in the opinion of the Required Banks) liability to the
Borrower or any member of the Controlled Group, (ii) to permit to exist any
ERISA Event, which presents the risk of a material (in the opinion of the
Required Banks) liability of any member of the Controlled Group, or (iii) to
make a complete or partial withdrawal (within the meaning of ERISA Section 4201)
from any Multiemployer Plan so as to result in any material (in the opinion of
the Required Banks) liability to any member of the Controlled Group or (iv)
permit the present value of all nonforfeitable accrued benefits under each
Qualified Plan (using the actuarial assumptions utilized by the PBGC upon
termination of a Qualified Plan) materially (in the opinion of the Required
Banks) to exceed the fair market value of Qualified Plan assets allocable to
such benefits, all determined as of the most recent valuation date for each such
Qualified Plan.
SECTION 5.21. Restricted Payments. The Parent Guarantor will not declare or
make any dividend payment or other distribution of assets, properties, cash,
rights, obligations or securities on account of any shares of any class of its
capital stock or purchase, redeem or otherwise acquire for value (or permit any
member of the Parent Guarantor Group to do so) any shares of its capital stock
or any warrants, rights or options to acquire such shares, now or hereafter
outstanding.
SECTION 5.22. Accounting Changes. Neither the Borrower nor the Parent
Guarantor will, nor will permit any member of the Parent Guarantor Group to,
make any significant change in accounting treatment and reporting practices,
except as required by GAAP, or change the fiscal year of the Parent Guarantor or
any of its Subsidiaries.
SECTION 5.23. Limitation on Indebtedness. Neither the Parent Guarantor nor
the Borrower shall, nor shall either permit any member of the Parent Guarantor
Group (other than AMRC Holdings and Subsidiaries of AMRC Holdings) to, create,
incur, assume, guaranty, suffer to exist, or otherwise become or remain directly
or indirectly liable with respect to, any Indebtedness, except for:
(a) accounts payable to trade creditors for goods and services and current
operating liabilities (not the result of the borrowing of money) incurred in the
ordinary course of the Parent Guarantor's, the Borrower's or the Subsidiary's
business, as the case may be, in accordance with customary terms and paid within
the specified time, unless contested in good faith by appropriate proceedings
and reserved for in accordance with GAAP;
(b) Indebtedness represented by Rate Contracts;
53
(c) income taxes payable and deferred taxes;
(d) accrued expenses and deferred income;
(e) Indebtedness under the Senior Notes in an aggregate principal amount
not to exceed $335,000,000 and Contingent Obligations of the Borrower's
Subsidiaries and of the Parent Guarantor in respect thereof (such Contingent
Obligations of the Parent Guarantor to be subordinated as described in the
Offering Memorandum);
(f) Indebtedness under the Term Credit Agreement;
(g) Contingent Obligations incurred in connection with any lease financing
of mobile communications terminals, not exceeding $5,000,000 in the aggregate in
principal amount;
(h) Indebtedness outstanding on the Effective Date and identified on
Schedule 5.23;
(i) Indebtedness under the Financial Management Account Line of Credit of
the Borrower payable to the order of Wachovia Bank of North Carolina, N.A., in
an aggregate principal amount at any time not exceeding $2,500,000;
(j) Indebtedness incurred to finance In-Orbit Insurance in an aggregate
amount outstanding at any time not to exceed $6,000,000;
(k) Vendor Financing Indebtedness in an aggregate amount outstanding at any
time not to exceed $10,000,000; and
(l) any other Indebtedness incurred after the Effective Date; provided that
the aggregate outstanding principal amount of all such Indebtedness shall not at
any time exceed $15,000,000.
ARTICLE 6
DEFAULTS
SECTION 6.01. Events of Default. If one or more of the following events
("Events of Default") shall have occurred and be continuing:
(a) the Borrower shall fail to pay any principal of any Loan when due or
any interest, any fees or any other amount payable hereunder within two Business
54
Days of the date when due, or one or more Shareholder Guarantors shall have made
more than two capital contributions or Investments in the Parent Guarantor or
any Subsidiary thereof (or more than one during any twelve-month period) for the
principal purpose of permitting the Borrower to pay any principal, interest,
fees or other amounts payable hereunder;
(b) the Borrower or the Parent Guarantor shall fail to observe or perform
any covenant contained in Article 5, other than those contained in Sections 5.01
through 5.05, 5.07 through 5.10, and 5.14;
(c) the Borrower or the Parent Guarantor shall fail to observe or perform
any covenant or agreement contained in this Agreement (other than those covered
by clause (a) or (b) above) for 20 days after notice thereof has been given to
the Borrower by the Administrative Agent at the request of any Bank;
(d) any representation, warranty, certification or statement made by the
Borrower, a Subsidiary of the Borrower or the Parent Guarantor in this Agreement
or any other Loan Document or in any certificate, financial statement or other
document delivered pursuant to this Agreement shall prove to have been incorrect
in any material respect when made (or deemed made);
(e) the Parent Guarantor or any Subsidiary of the Parent Guarantor shall
fail to make any payment in respect of (x) any obligation under the Term Credit
Agreement or (y) any other Indebtedness or Contingent Obligation having an
aggregate principal and face amount of more than $5,000,000, in each case when
due (whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise) and such failure continues after the applicable grace period or
notice period, if any, specified in the document relating thereto;
(f) any event or condition shall occur which results in the acceleration of
the maturity of (x) any Indebtedness or Contingent Obligation under the Term
Credit Agreement or (y) any other Indebtedness or Contingent Obligation of the
Parent Guarantor or any Subsidiary of the Parent Guarantor having an aggregate
principal or face amount of more than $5,000,000 or enables (or, with the giving
of notice or lapse of time or both, would enable) the holder of any such
Indebtedness or Contingent Obligation or any Person acting on such holder's
behalf to accelerate the maturity thereof;
(g) the Parent Guarantor or any Principal Subsidiary shall commence a
voluntary case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any
55
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall fail generally to pay its debts as they
become due, or shall take any corporate action to authorize any of the
foregoing;
(h) an involuntary case or other proceeding shall be commenced against the
Parent Guarantor or any Principal Subsidiary seeking liquidation, reorganization
or other relief with respect to it or its debts under any bankruptcy, insolvency
or other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 60 days; or an order for
relief shall be entered against the Parent Guarantor or any Principal Subsidiary
under the federal bankruptcy laws as now or hereafter in effect;
(i) (1) any member of the Controlled Group shall fail to pay when due,
after the expiration of any applicable grace period, any installment payment
with respect to its withdrawal liability under a Multiemployer Plan; (2) any
member of the Controlled Group shall fail to satisfy its contribution
requirements under Section 412(c)(11) of the Code, whether or not it has sought
a waiver under Section 412(d) of the Code; (3) in the case of an ERISA Event
involving the withdrawal from a Plan of a "substantial employer" (as defined in
Section 4001(a)(2) or Section 4062(e) of ERISA), the withdrawing employer's
proportionate share of that Plan's Unfunded Pension Liabilities is more than
$5,000,000 or 10% of its net worth, if greater; (4) in the case of an ERISA
Event involving the complete or partial withdrawal from a Multiemployer Plan,
the withdrawing employer has incurred a withdrawal liability in an aggregate
amount exceeding $5,000,000 or 10% of its net worth, if greater; (5) in the case
of an ERISA Event not described in clause (3) or (4), the Unfunded Pension
Liabilities of the relevant Plan or Plans exceed $5,000,000 or 10% of its net
worth, if greater; (6) a Plan that is intended to be qualified under Section
401(a) of the Code shall lose its qualification, and the loss can reasonably be
expected to impose on any member of the Controlled Group liability (for
additional taxes, to Plan participants, or otherwise) in the aggregate amount of
$5,000,000 or 10% of its net worth, if greater or more; (7) the commencement or
increase of contributions to, the adoption of, or the amendment of a Plan by,
any member of the Controlled Group shall result in a net increase in unfunded
liabilities to the Borrower or an ERISA Affiliate in excess of $5,000,000 or 10%
of net worth, if greater; or (8) the occurrence of any combination of events
listed in clauses (3) through (7) that involves a net increase in aggregate
Unfunded Pension Liabilities and unfunded liabilities in excess of $5,000,000 or
10% of its net worth, if greater;
56
(j) one or more final judgments, orders or decrees shall be entered against
the Parent Guarantor or any member of the Parent Guarantor Group involving in
the aggregate a liability (not fully covered by insurance and as to which the
insurer has not acknowledged liability) more than an amount equal to the greater
of (i) $5,000,000 and (ii) 10% of the Parent Guarantor's net worth, and the same
shall remain unvacated, undischarged, unstayed or unbonded pending appeal for a
period of 60 days after the entry thereof; or
(k) any non-monetary judgment, order or decree shall be rendered against
the Parent Guarantor or any of its Subsidiaries which could reasonably be
expected to have a Material Adverse Effect, and enforcement proceedings shall
have been commenced by any Person upon such judgment or order which shall remain
unstayed for any period of 10 consecutive days or more; or
(l) the FCC or any other Governmental Authority shall revoke or fail to
renew any FCC License or any other material license, permit or franchise of the
Parent Guarantor or any of its Subsidiaries; the Borrower shall for any reason
lose any FCC License or any other material license, permit or franchise; or the
Borrower shall suffer the imposition of any restraining order, escrow,
suspension or impound of funds in connection with any proceeding (judicial or
administrative) with respect to any FCC License or any other material license,
permit or franchise;
(m) there shall occur and be continuing a Material Adverse Effect;
(n) the Borrower shall breach or default under any Rate Contract to which
any Bank is a party, if the effect of such breach or default is to allow the
Bank to proceed against the Borrower to satisfy any claim of the Bank against
the Borrower in respect of such Rate Contract;
(o) any provision of Article 9 of this Agreement shall for any reason be
revoked or invalidated, or otherwise cease to be in full force and effect;
(p) there shall occur a Change in Control;
(q) any Shareholder Guarantor (other than Baron Capital, so long as, with
respect to any failure to make a payment described in clause (ii) below, an
amount equal to such payment is paid under the Baron Capital Letter of Credit)
shall fail to make any payment (i) in respect of any Indebtedness or Contingent
Obligation having an aggregate principal or face amount of more than $75,000,000
or (ii) under its Shareholder Guaranty when due (whether by scheduled maturity,
57
required prepayment, acceleration, demand or otherwise) and such failure
continues after the applicable grace period or notice period, if any, specified
in the document relating thereto;
(r) any event or condition shall occur which results in the acceleration of
the maturity of any Indebtedness or Contingent Obligation of any Shareholder
Guarantor (other than Baron Capital) having an aggregate principal or face
amount of more than $75,000,000 or enables the holder of such Indebtedness or
Contingent Obligation or any Person acting on such holder's behalf to accelerate
the maturity thereof;
(s) any Shareholder Guaranty or the Baron Capital Letter of Credit shall
for any reason be revoked or invalidated or otherwise cease to be in full force
and effect (other than in accordance with its terms as the result of performance
in full of the relevant Shareholder Guarantor's obligations thereunder) or any
Shareholder Guarantor (other than Baron Capital) shall so assert in writing or
any Shareholder Guarantor shall bring an action to limit its liabilities
thereunder;
(t) Xxxxxx' senior unsecured long-term securities (without third-party
credit enhancement) shall not be rated Baa3 or above by Xxxxx'x and BBB- or
above by S&P; or
(u) Xxxxxx and either other Shareholder Guarantor shall have notified any
of the Agents and the banks of the existence of a Guaranty Issuance Agreement
Event of Default;
then, and in every such event, the Administrative Agent shall (i) if requested
by Banks having more than 50% in aggregate amount of the Commitments, by notice
to the Borrower terminate the Commitments and they shall thereupon terminate,
and (ii) if requested by Banks holding more than 50% of the aggregate principal
amount of the Loans, by notice to the Borrower declare the Loans (together with
accrued interest thereon) to be, and the Loans shall thereupon become,
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Borrower; provided that in
the case of any of the Events of Default specified in clause (g) or (h) above
with respect to the Borrower, without any notice to the Borrower or any other
act by the Administrative Agent or the Banks, the Commitments shall thereupon
terminate and the Loans (together with accrued interest thereon) shall become
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Borrower. If any amount
payable under this Agreement shall not be paid when due, then the Administrative
Agent shall, if requested by Banks holding more than 50% of the aggregate
principal amount (excluding any Loans held by the Borrower or any Shareholder
58
Guarantor or any Affiliate of the foregoing) of the Tranche A Loans, Tranche B
Loans or Tranche C Loans, as the case may be, demand payment thereof under the
relevant Shareholder Guaranty.
SECTION 6.02. Notice of Default. The Administrative Agent shall give notice
to the Borrower under Section 6.01(c) promptly upon being requested to do so by
any Bank and shall thereupon notify all the Banks thereof.
ARTICLE 7
THE AGENTS
SECTION 7.01. Appointment and Authorization. Each Bank irrevocably appoints
and authorizes each Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement, the Notes and each other Loan
Document as are delegated to such Agent by the terms hereof or thereof, together
with all such powers as are reasonably incidental thereto.
SECTION 7.02. Agents and Affiliates. Xxxxxx Guaranty Trust Company of New
York shall have the same rights and powers under this Agreement as any other
Bank and may exercise or refrain from exercising the same as though it were not
an Agent, and each of Toronto Dominion (Texas), Inc. and Xxxxxx Guaranty Trust
Company of New York and its affiliates may accept deposits from, lend money to,
and generally engage in any kind of business with the Parent Guarantor or any
Subsidiary or affiliate of the Parent Guarantor as if it were not an Agent.
SECTION 7.03. Action by Agents. The obligations of the Agents hereunder are
only those expressly set forth herein. Without limiting the generality of the
foregoing, the Agents shall not be required to take any action with respect to
any Default, except as expressly provided in Article 6.
SECTION 7.04. Consultation with Experts. Either Agent may consult with
legal counsel (who may be counsel for the Borrower or the Parent Guarantor),
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel, accountants or experts.
SECTION 7.05. Liability of Agents. No Agent or any of its affiliates or any
of their respective directors, officers, agents or employees shall be liable for
any action taken or not taken by it in connection herewith (i) with the consent
or at the request of the Required Banks or (ii) in the absence of its own gross
negligence or willful misconduct. No Agent or any of its affiliates or any of
their respective directors, officers, agents or employees shall be responsible
59
for or have any duty to ascertain, inquire into or verify (i) any statement,
warranty or representation made in connection with this Agreement or any
borrowing hereunder; (ii) the performance or observance of any of the covenants
or agreements of the Borrower or the Parent Guarantor; (iii) the satisfaction of
any condition specified in Article 3, except receipt of items required to be
delivered to the Documentation Agent; or (iv) the validity, effectiveness or
genuineness of this Agreement, the Notes or any other instrument or writing
furnished in connection herewith. No Agent shall incur any liability by acting
in reliance upon any notice, consent, certificate, statement, or other writing
(which may be a bank wire, telex, facsimile transmission or similar writing)
believed by it to be genuine or to be signed by the proper party or parties.
SECTION 7.06. Indemnification. Each Bank shall, ratably in accordance with
its Commitment, indemnify each Agent, its affiliates and their respective
directors, officers, agents and employees (to the extent not reimbursed by the
Borrower or the Parent Guarantor) against any cost, expense (including counsel
fees and disbursements), claim, demand, action, loss or liability (except such
as result from such indemnitee's gross negligence or willful misconduct) that
such indemnitee may suffer or incur in connection with this Agreement or any
action taken or omitted by such indemnitee hereunder.
SECTION 7.07. Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon either Agent or any other Bank, and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon either Agent
or any other Bank, 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 any action under this Agreement.
SECTION 7.08. Successor Agent. Either Agent may resign at any time by
giving notice thereof to the Banks and the Borrower. Upon any such resignation,
the Required Banks shall have the right to appoint a successor Agent. If no
successor Agent shall have been so appointed by the Required Banks, and shall
have accepted such appointment, within 30 days after the retiring Agent gives
notice of resignation, then the retiring Agent may, on behalf of the Banks,
appoint a successor Agent, which shall be a commercial bank organized or
licensed under the laws of the United States of America or of any State thereof
and having a combined capital and surplus of at least $50,000,000. Upon the
acceptance of its appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the rights
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations hereunder. After any retiring Agent's
60
resignation hereunder as Agent, the provisions of this Article shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Agent.
SECTION 7.09. Agents' Fees. The Borrower shall pay to each Agent for its
own account fees in the amounts and at the times previously agreed upon between
the Borrower and such Agent.
ARTICLE 8
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair. If
on or prior to the first day of any Interest Period for any Euro-Dollar Loan:
(a) the Administrative Agent is advised by the Reference Banks that
deposits in dollars (in the applicable amounts) are not being offered to the
Reference Banks in the London interbank market for such Interest Period, or
(b) Banks having 50% or more of the aggregate principal amount of the
affected Loans advise the Administrative Agent that the Adjusted London
Interbank Offered Rate as determined by the Administrative Agent will not
adequately and fairly reflect the cost to such Banks of funding their
Euro-Dollar Loans for such Interest Period, the Administrative Agent shall
forthwith give notice thereof to the Borrower and the Banks, whereupon until the
Administrative Agent notifies the Borrower that the circumstances giving rise to
such suspension no longer exist, (i) the obligations of the Banks to make
Euro-Dollar Loans or to continue or convert outstanding Loans as or into
Euro-Dollar Loans shall be suspended and (ii) each outstanding Euro-Dollar Loan
shall be converted into a Base Rate Loan on the last day of the then current
Interest Period applicable thereto. Unless the Borrower notifies the
Administrative Agent at least two Domestic Business Days before the date of any
Euro-Dollar Borrowing for which a Notice of Borrowing has previously been given
that it elects not to borrow on such date, such Borrowing shall instead be made
as a Base Rate Borrowing. The Administrative Agent shall notify the Borrower as
soon as reasonably possible upon learning that the circumstances giving rise to
such suspension no longer exist.
SECTION 8.02. Illegality. If, on or after the date of this Agreement, the
adoption of any applicable law, rule or regulation, or any change in any
applicable law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
61
agency charged with the interpretation or administration thereof, or compliance
by any Bank (or its Euro-Dollar Lending Office) with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency shall make it unlawful or impossible for any Bank (or its
Euro-Dollar Lending Office) to make, maintain or fund its Euro-Dollar Loans and
such Bank shall so notify the Administrative Agent, the Administrative Agent
shall forthwith give notice thereof to the other Banks and the Borrower,
whereupon until such Bank notifies the Borrower and the Administrative Agent
that the circumstances giving rise to such suspension no longer exist, the
obligation of such Bank to make Euro-Dollar Loans, or to convert outstanding
Loans into Euro-Dollar Loans, shall be suspended. Before giving any notice to
the Administrative Agent pursuant to this Section, such Bank shall designate a
different Euro-Dollar Lending Office if such designation will avoid the need for
giving such notice and will not, in the judgment of such Bank, be otherwise
disadvantageous to such Bank. If such notice is given, each Euro-Dollar Loan of
such Bank then outstanding shall be converted to a Base Rate Loan either (a) on
the last day of the then current Interest Period applicable to such Euro-Dollar
Loan if such Bank may lawfully continue to maintain and fund such Loan to such
day or (b) immediately if such Bank shall determine that it may not lawfully
continue to maintain and fund such Loan to such day. Each Bank shall notify the
Administrative Agent and the Borrower as soon as reasonably possible after the
circumstances giving rise to any suspension by such Bank described in this
Section 8.02 no longer exist.
SECTION 8.03. Increased Cost and Reduced Return. (a) If on or after the
date hereof, the adoption of any applicable law, rule or regulation, or any
change in any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Bank (or its Applicable Lending Office) with any
request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency shall impose, modify or deem
applicable any reserve (including, without limitation, any such requirement
imposed by the Board of Governors of the Federal Reserve System, but excluding
any such requirement included in an applicable Euro-Dollar Reserve Percentage),
special deposit, insurance assessment or similar requirement against assets of,
deposits with or for the account of, or credit extended by, any Bank (or its
Applicable Lending Office) or shall impose on any Bank (or its Applicable
Lending Office) or the London interbank market any other condition affecting its
Euro-Dollar Loans, its Note or its obligation to make Euro-Dollar Loans and the
result of any of the foregoing is to increase the cost to such Bank (or its
Applicable Lending Office) of making or maintaining any Euro-Dollar Loan, or to
reduce the amount of any sum received or receivable by such Bank (or its
Applicable Lending Office) under this Agreement or under its Note with respect
62
thereto, by an amount deemed by such Bank to be material, then, within 15 days
after demand by such Bank (with a copy to the Administrative Agent), the
Borrower shall pay to such Bank such additional amount or amounts as will
compensate such Bank for such increased cost or reduction; provided, however,
that in the case of an increase referred to above resulting from the published
interpretation by a governmental authority, such Bank shall be entitled to make
demand on the Borrower in respect thereof only within 180 days of the
publication of such interpretation.
(b) If any Bank shall have determined that, after the date hereof, the
adoption of any applicable law, rule or regulation regarding capital adequacy,
or any change in any such law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or any request or directive regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on capital
of such Bank (or its Parent) as a consequence of such Bank's obligations
hereunder to a level below that which such Bank (or its Parent) could have
achieved but for such adoption, change, request or directive (taking into
consideration its policies with respect to capital adequacy) by an amount deemed
by such Bank to be material, then from time to time, within 15 days after demand
by such Bank (with a copy to the Administrative Agent), the Borrower shall pay
to such Bank such additional amount or amounts as will compensate such Bank (or
its Parent) for such reduction; provided, however, that in the case of an
increase referred to above resulting from the published interpretation by a
governmental authority, such Bank shall be entitled to make demand on the
Borrower in respect thereof only within 180 days of the publication of such
interpretation.
(c) Each Bank will promptly notify the Borrower and the Administrative
Agent of any event of which it has knowledge, occurring after the date hereof,
which will entitle such Bank to compensation pursuant to this Section and will
designate a different Lending Office if such designation will avoid the need
for, or reduce the amount of, such compensation and will not, in the judgment of
such Bank, be otherwise disadvantageous to such Bank. A certificate of any Bank
claiming compensation under this Section and setting forth the additional amount
or amounts to be paid to it hereunder shall be conclusive in the absence of
manifest error. In determining such amount, such Bank may use any reasonable
averaging and attribution methods. Each Bank will notify the Administrative
Agent and the Borrower as soon as reasonably possible after any circumstance
entitling such Bank to compensation pursuant to this Section 8.03(c) no longer
exists.
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SECTION 8.04. Taxes. (a) For the purposes of this Section 8.04 , the
following terms have the following meanings:
"Taxes" means any and all present or future taxes, duties, levies, imposts,
deductions, charges or withholdings with respect to any payment by the Borrower
or the Parent Guarantor, as the case may be, pursuant to this Agreement or under
any Note, and all liabilities with respect thereto, excluding (i) in the case of
each Bank and Agent, taxes imposed on its income, and franchise or similar taxes
imposed on it, by a jurisdiction under the laws of which such Bank or Agent (as
the case may be) is organized or in which its principal executive office is
located or, in the case of each Bank, in which its Applicable Lending Office is
located and (ii) in the case of each Bank, any United States withholding tax
imposed on such payments but only to the extent that such Bank is subject to
United States withholding tax at the time such Bank first becomes a party to
this Agreement.
"Other Taxes" means any present or future stamp or documentary taxes and
any other excise or property taxes, or similar charges or levies, which arise
from any payment made pursuant to this Agreement or under any Note or from the
execution or delivery of, or otherwise with respect to, this Agreement or any
Note.
(b) Any and all payments by the Borrower or the Parent Guarantor to or for
the account of any Bank or Agent hereunder or under any Note shall be made
without deduction for any Taxes or Other Taxes; provided that, if the Borrower
or the Parent Guarantor shall be required by law to deduct any Taxes or Other
Taxes from any such payments, (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section) such Bank or Agent (as
the case may be) receives an amount equal to the sum it would have received had
no such deductions been made, (ii) the Borrower or the Parent Guarantor, as the
case may be, shall make such deductions, (iii) the Borrower shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with applicable law and (iv) the Borrower or the Parent Guarantor, as
the case may be, shall furnish to the Administrative Agent, at its address
referred to in Section 10.01 , the original or a certified copy of a receipt
evidencing payment thereof.
(c) The Borrower agrees to indemnify each Bank and Agent for the full
amount of Taxes or Other Taxes (including, without limitation, any Taxes or
Other Taxes imposed or asserted by any jurisdiction on amounts payable under
this Section) paid by such Bank or Agent (as the case may be) and any liability
(including penalties, interest and expenses, other than those resulting from any
act or failure to act by such Bank) arising therefrom or with respect thereto.
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This indemnification shall be paid within 15 days after such Bank or Agent (as
the case may be) makes demand therefor.
(d) Each Bank organized under the laws of a jurisdiction outside the United
States, on or prior to the date of its execution and delivery of this Agreement
in the case of each Bank listed on the signature pages hereof and on or prior to
the date on which it becomes a Bank in the case of each other Bank, and from
time to time thereafter if requested in writing by the Borrower (but only so
long as such Bank remains lawfully able to do so), shall provide the Borrower
and the Administrative Agent with Internal Revenue Service form 1001 or 4224, as
appropriate, or any successor form prescribed by the Internal Revenue Service,
certifying that such Bank is entitled to benefits under an income tax treaty to
which the United States is a party which exempts the Bank from United States
withholding tax or reduces the rate of withholding tax on payments of interest
for the account of such Bank or certifying that the income receivable pursuant
to this Agreement is effectively connected with the conduct of a trade or
business in the United States.
(e) For any period with respect to which a Bank has failed to provide the
Borrower or the Administrative Agent with the appropriate form pursuant to
Section 8.04(d) (unless such failure is due to a change in treaty, law or
regulation occurring subsequent to the date on which such form originally was
required to be provided), such Bank shall not be entitled to indemnification
under Section 8.04(b) or 8.04(c) with respect to Taxes imposed by the United
States; provided that if a Bank, which is otherwise exempt from or subject to a
reduced rate of withholding tax, becomes subject to Taxes because of its failure
to deliver a form required hereunder, the Borrower shall take such steps as such
Bank shall reasonably request to assist such Bank to recover such Taxes.
(f) If the Borrower or the Parent Guarantor is required to pay additional
amounts to or for the account of any Bank pursuant to this Section, then such
Bank will change the jurisdiction of its Applicable Lending Office if, in the
judgment of such Bank, such change (i) will eliminate or reduce any such
additional payment which may thereafter accrue and (ii) is not otherwise
disadvantageous to such Bank.
SECTION 8.05. Base Rate Loans Substituted for Affected Euro-Dollar Loans.
If (i) the obligation of any Bank to make, or convert outstanding Loans to,
Euro-Dollar Loans has been suspended pursuant to Section 8.02 or (ii) any Bank
has demanded compensation under Section 8.03 or 8.04 with respect to its
Euro-Dollar Loans and the Borrower shall, by at least five Euro-Dollar Business
Days' prior notice to such Bank through the Administrative Agent, have elected
that the provisions of this Section shall apply to such Bank, then, unless and
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until such Bank notifies the Borrower that the circumstances giving rise to such
suspension or demand for compensation no longer exist:
(a) all Loans which would otherwise be made by such Bank as (or continued
as or converted into) Euro-Dollar Loans shall instead be Base Rate Loans (on
which interest and principal shall be payable contemporaneously with the related
Euro-Dollar Loans of the other Banks); and
(b) after each of its Euro-Dollar Loans has been repaid (or converted to a
Base Rate Loan), all payments of principal which would otherwise be applied to
repay such Euro-Dollar Loans shall be applied to repay its Base Rate Loans
instead.
If such Bank notifies the Borrower that the circumstances giving rise to such
notice no longer apply, the principal amount of each such Base Rate Loan shall
be converted into a Euro-Dollar Loan on the first day of the next succeeding
Interest Period applicable to the related Euro-Dollar Loans of the other Banks.
ARTICLE 9
PARENT GUARANTY
SECTION 9.01. The Parent Guaranty. The Parent Guarantor hereby
unconditionally guarantees the full and punctual payment (whether at stated
maturity, upon acceleration or otherwise) of the principal of and interest on
each Note issued by the Borrower pursuant to this Agreement, and the full and
punctual payment of all other amounts payable by the Borrower under this
Agreement. Upon failure by the Borrower to pay punctually any such amount, the
Parent Guarantor shall forthwith on demand pay the amount not so paid at the
place and in the manner specified in this Agreement.
SECTION 9.02. Guaranty Unconditional. The obligations of the Parent
Guarantor hereunder shall be unconditional and absolute and, without limiting
the generality of the foregoing, shall not be released, discharged or otherwise
affected by:
(a) any extension, renewal, settlement, compromise, waiver or release in
respect of any obligation of the Borrower under this Agreement or any Note, by
operation of law or otherwise;
(b) any modification or amendment of or supplement to this Agreement or any
Note;
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(c) any release, impairment, non-perfection or invalidity of any direct or
indirect security for any obligation of the Borrower under this Agreement or any
Note;
(d) any change in the corporate existence, structure or ownership of the
Borrower, or any insolvency, bankruptcy, reorganization or other similar
proceeding affecting the Borrower or its assets or any resulting release or
discharge of any obligation of the Borrower contained in this Agreement or any
Note;
(e) the existence of any claim, set-off or other rights which the Parent
Guarantor may have at any time against the Borrower, either Agent, any Bank or
any other Person, whether in connection herewith or any unrelated transactions,
provided that nothing herein shall prevent the assertion of any such claim by
separate suit or compulsory counterclaim;
(f) any invalidity or unenforceability relating to or against the Borrower
for any reason of this Agreement or any Note, or any provision of applicable law
or regulation purporting to prohibit the payment by the Borrower of the
principal of or interest on any Note or any other amount payable by the Borrower
under this Agreement; or
(g) any other act or omission to act or delay of any kind by the Borrower,
either Agent, any Bank or any other Person or any other circumstance whatsoever
which might, but for the provisions of this paragraph, constitute a legal or
equitable discharge of the Parent Guarantor's obligations hereunder.
SECTION 9.03. Discharge Only Upon Payment in Full; Restatement in Certain
Circumstances. The Parent Guarantor's obligations hereunder shall remain in full
force and effect until the Commitments shall have terminated and the principal
of and interest on the Notes and all other amounts payable by the Borrower under
this Agreement shall have been paid in full. If at any time any payment of the
principal of or interest on any Note or any other amount payable by the Borrower
under this Agreement is rescinded or must be otherwise restored or returned upon
the insolvency, bankruptcy or reorganization of the Borrower or otherwise, the
Parent Guarantor's obligations hereunder with respect to such payment shall be
reinstated at such time as though such payment had been due but not made at such
time.
SECTION 9.04. Waiver by the Parent Guarantor. The Parent Guarantor
irrevocably waives acceptance hereof, presentment, demand, protest and any
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notice not provided for herein, as well as any requirement that at any time any
action be taken by any Person against the Borrower or any other Person.
SECTION 9.05. Subrogation. Until such time as all principal of and interest
on each Note issued by the Borrower pursuant to this Agreement and all other
amounts payable by the Borrower under this Agreement have indefeasibly been paid
in full, the Parent Guarantor shall not assert any rights to which it may be
entitled, by operation of law or otherwise, upon making any payment hereunder to
be subrogated to the rights of the payee against the Borrower with respect to
such payment or against any direct or indirect security therefor, or otherwise
to be reimbursed, indemnified or exonerated by or for the account of the
Borrower in respect thereof.
SECTION 9.06. Stay of Acceleration. If acceleration of the time for payment
of any amount payable by the Borrower under this Agreement or any Note is stayed
upon insolvency, bankruptcy or reorganization of the Borrower, all such amounts
otherwise subject to acceleration under the terms of this Agreement shall
nonetheless be payable by the Parent Guarantor hereunder forthwith on demand by
the Administrative Agent made at the request of the requisite proportion of the
Banks specified in Article 6 of the Agreement.
SECTION 9.07. Subordination. (a) The obligations of the Parent Guarantor
under this Article 9 will be subordinated in right of payment to the prior
payment in full of all Senior Indebtedness.
(b) Upon any distribution to creditors of the Parent Guarantor in a
liquidation or dissolution of the Parent Guarantor or in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding relating to the
Parent Guarantor or its property, an assignment for the benefit of creditors or
any marshalling of the Parent Guarantor's assets and liabilities, the holders of
Senior Indebtedness will be entitled to receive payment in full of all
Obligations with respect to Senior Indebtedness (including interest after the
commencement of any such proceeding at the rate specified in the Term Credit
Agreement or otherwise applicable thereto) before the Banks will be entitled to
receive any payment under this Article 9, and until all Obligations with respect
to Senior Indebtedness are paid in full, any distribution to which the Banks
would be entitled shall be made to the holders of Senior Indebtedness (except
that the Banks may receive and retain Permitted Junior Securities).
(c) The Parent Guarantor may not make any payment upon or in respect of its
obligations under this Article 9 (except in Permitted Junior Securities) if (i)
a default in the payment of the principal of, premium, if any, or interest on
Designated Senior Indebtedness occurs and is continuing beyond any applicable
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period of grace or (ii) any other default occurs with respect to Designated
Senior Indebtedness that permits holders of the Designated Senior Indebtedness
as to which such default relates to accelerate its maturity and the
Administrative Agent receives notice of such default (a "Payment Blockage
Notice") from the Parent Guarantor or the holders of any Designated Senior
Indebtedness. Payments under this Article 9 may and shall be resumed (i) in the
case of a payment default, upon the date on which such default is cured or
waived and (ii) in the case of a nonpayment default, the earlier of the date on
which such nonpayment default is cured or waived or 179 days after the date on
which the applicable Payment Blockage Notice is received, unless the maturity of
any Designated Senior Indebtedness has been accelerated. No new period of
payment blockage may be commenced unless and until (i) 360 days have elapsed
since the effectiveness of the immediately prior Payment Blockage Notice and
(ii) all scheduled payments of principal, premium, if any, and interest on the
Notes that have come due have been paid in full with cash. No nonpayment default
that existed or was continuing on the date of delivery of any Payment Blockage
Notice to the Administrative Agent shall be, or be made, the basis for a
subsequent Payment Blockage Notice.
(d) The Parent Guarantor shall promptly notify holders of Senior
Indebtedness if payment of the Loans is accelerated because of an Event of
Default.
(e) As used in this Section 9.07, the following capitalized terms have the
meanings set forth below:
"Capital Stock" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership or limited liability
company, partnership or membership interests (whether general or limited) and
(iv) any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of assets of, the
issuing Person.
"Designated Senior Indebtedness" means (i) any Indebtedness outstanding
under the Loan Documents (as defined in the Term Credit Agreement) or (ii) any
other Senior Indebtedness the principal amount of which is $25,000,000 or more
and that has been designated by the Parent Guarantor in writing to the
Administrative Agent as "Designated Senior Indebtedness".
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
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"Permitted Junior Securities" means Equity Interests in the Parent
Guarantor or debt securities that are subordinated to all Senior Indebtedness
(and any debt securities issued in exchange for Senior Indebtedness) to
substantially the same extent as, or to a greater extent than, the obligations
of the Parent Guarantor under this Article 9 are subordinated to Senor
Indebtedness.
"Senior Indebtedness" means Obligations in respect of the Loan Documents
(as defined in the Term Credit Agreement) and any other Indebtedness of the
Parent Guarantor now or hereafter incurred except such Indebtedness specifically
designated by the Parent Guarantor in writing to the Administrative Agent as
subordinated indebtedness at the time of its incurrence. Notwithstanding
anything to the contrary in the foregoing, Senior Indebtedness will not include
(i) any liability for federal, state, local or other taxes owed or owing by the
Parent Guarantor, (ii) any Indebtedness of the Parent Guarantor to any of its
Subsidiaries or other Affiliates, (iii) any trade payables or (iv) any
Indebtedness that is incurred in violation of this Agreement.
ARTICLE 10
MISCELLANEOUS
SECTION 10.01. Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including bank wire, facsimile
transmission or similar writing) and shall be given to such party: (a) in the
case of the Borrower, the Parent Guarantor or either Agent, at its address or
facsimile number set forth on the signature pages hereof, (b) in the case of any
Bank, at its address or facsimile number set forth in its Administrative
Questionnaire or (c) in the case of any party, such other address or facsimile
number as such party may hereafter specify for the purpose by notice to the
Agents and the Borrower. Each such notice, request or other communication shall
be effective (i) if given by facsimile transmission, when transmitted to the
facsimile number specified in this Section and confirmation of receipt is
received, (ii) if given by mail, 72 hours after such communication is deposited
in the mails with first class postage prepaid, addressed as aforesaid or (iii)
if given by any other means, when delivered at the address specified in this
Section; provided that notices to the Administrative Agent under Article 2 or
Article 8 shall not be effective until received.
SECTION 10.02. No Waivers. No failure or delay by either Agent or any Bank
in exercising any right, power or privilege hereunder or under any Note shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
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right, power or privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by law.
SECTION 10.03. Expenses; Indemnification. (a) The Borrower shall pay (i)
all out-of-pocket expenses of the Agents, including reasonable fees and
disbursements of special counsel for the Agents, in connection with the
preparation and administration of this Agreement, any waiver or consent
hereunder or any amendment hereof or any Default or alleged Default hereunder
and (ii) if an Event of Default occurs, all out-of-pocket expenses incurred by
each Agent and Bank, including (without duplication) the fees and disbursements
of outside counsel and the allocated cost of inside counsel, in connection with
such Event of Default and collection, bankruptcy, insolvency and other
enforcement proceedings resulting therefrom.
(b) The Borrower agrees to indemnify each Agent and Bank, their respective
affiliates and the respective directors, officers, agents and employees of the
foregoing (each an "Indemnitee") and hold each Indemnitee harmless from and
against any and all liabilities, losses, damages, costs and expenses of any
kind, including, without limitation, the reasonable fees and disbursements of
counsel, which may be incurred by such Indemnitee in connection with any
investigative, administrative or judicial proceeding (whether or not such
Indemnitee shall be designated a party thereto) brought or threatened relating
to or arising out of this Agreement or any actual or proposed use of proceeds of
Loans hereunder; provided that no Indemnitee shall have the right to be
indemnified hereunder for such Indemnitee's own gross negligence or willful
misconduct as determined by a court of competent jurisdiction.
SECTION 10.04. Sharing of Set-offs. Each Bank agrees that if it shall, by
exercising any right of set-off or counterclaim or otherwise (other than any
such right against a Shareholder Guarantor), receive payment of a proportion of
the aggregate amount of principal and interest due with respect to any Note held
by it which is greater than the proportion received by any other Bank in respect
of the aggregate amount of principal and interest due with respect to any Note
held by such other Bank, the Bank receiving such proportionately greater payment
shall purchase such participations in the Notes held by the other Banks, and
such other adjustments shall be made, as may be required so that all such
payments of principal and interest with respect to the Notes held by the Banks
shall be shared by the Banks pro rata; provided that nothing in this Section
shall impair the right of any Bank to exercise any right of set-off or
counterclaim it may have and to apply the amount subject to such exercise to the
payment of indebtedness of the Borrower or the Parent Guarantor other than its
indebtedness hereunder. Each of the Borrower and the Parent Guarantor agrees, to
the fullest extent it may effectively do so under applicable law, that any
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holder of a participation in a Note, whether or not acquired pursuant to the
foregoing arrangements, may exercise rights of set-off or counterclaim and other
rights with respect to such participation as fully as if such holder of a
participation were a direct creditor of the Borrower or the Parent Guarantor in
the amount of such participation.
SECTION 10.05. Amendments and Waivers. Any provision of this Agreement or
the Notes may be amended or waived if, but only if, such amendment or waiver is
in writing and is signed by the Borrower and the Required Banks (and, if the
rights or duties of an Agent are affected thereby, by such Agent); provided that
no such amendment or waiver shall, unless signed by all the Banks, (a) increase
or decrease the Commitment of any Bank (except for a ratable decrease in the
Commitments of all Banks) or subject any Bank to any additional obligation, (b)
reduce the principal of or rate of interest on any Loan, or any fees hereunder,
(c) postpone the date fixed for any payment of principal of or interest on any
Loan, or any fees hereunder or for any scheduled reduction or termination of any
Commitment, (d) release the Parent Guarantor from its obligations hereunder or
the Shareholder Guarantors from their obligations under the Shareholders
Guaranties, or (e) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Notes, or the number of Banks, which shall be
required for the Banks or any of them to take any action under this Section or
any other provision of this Agreement.
SECTION 10.06. Successors and Assigns. (a) The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that the Borrower may not assign or
otherwise transfer any of its rights under this Agreement without the prior
written consent of all Banks.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its Commitment or
any or all of its Loans. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon notice to the
Borrower and the Agents, such Bank shall remain responsible for the performance
of its obligations hereunder, and the Borrower and the Agents shall continue to
deal solely and directly with such Bank in connection with such Bank's rights
and obligations under this Agreement. Any agreement pursuant to which any Bank
may grant such a participating interest shall provide that such Bank shall
retain the sole right and responsibility to enforce the obligations of the
Borrower hereunder including, without limitation, the right to approve any
amendment, modification or waiver of any provision of this Agreement; provided
that such participation agreement may provide that such Bank will not agree to
any modification, amendment or waiver of this Agreement described in clause (a),
(b), (c), (d) or (e) of the proviso to Section 10.05 without the consent of the
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Participant. The Borrower agrees that each Participant shall, to the extent
provided in its participation agreement, be entitled to the benefits of Article
8 with respect to its participating interest. An assignment or other transfer
which is not permitted by subsection (c) or (d) below shall be given effect for
purposes of this Agreement only to the extent of a participating interest
granted in accordance with this subsection (b).
(c) Any Bank may at any time, upon five Business Days' written notice to
each of the Agents, assign to one or more banks or other institutions (each an
"Assignee") all, or a proportionate part (equivalent to an initial Commitment of
not less than $2,500,000) of all, of its rights and obligations under this
Agreement and the Notes, and such Assignee shall assume such rights and
obligations, pursuant to an Assignment and Assumption Agreement in substantially
the form of Exhibit D hereto executed by such Assignee and such transferor Bank,
with (and subject to) the subscribed consent of the Borrower and the
Administrative Agent, which consent shall in each case not be unreasonably
withheld; provided that (x) if an Assignee is an affiliate of such transferor
Bank or was a Bank immediately prior to such assignment or if the Assignee is a
Shareholder Guarantor purchasing Notes pursuant to Section 1(e) of a Shareholder
Guaranty, no such consent shall be required and (y) such Bank shall
contemporaneously assign to such Assignee an equivalent percentage of loans
under the Term Credit Agreement. Upon execution and delivery of such instrument
and payment by such Assignee to such transferor Bank of an amount equal to the
purchase price agreed between such transferor Bank and such Assignee, such
Assignee shall be a Bank party to this Agreement and shall have all the rights
and obligations of a Bank with a Commitment as set forth in such instrument of
assumption, and the transferor Bank shall be released from its obligations
hereunder to a corresponding extent, and no further consent or action by any
party shall be required. Upon the consummation of any assignment pursuant to
this subsection (c), the transferor Bank, the Administrative Agent and the
Borrower shall make appropriate arrangements so that, if required, a new Note is
issued to the Assignee, and the transferor Bank shall provide prompt written
notice of such assignment to the Documentation Agent. In connection with any
such assignment, the transferor Bank shall pay to the Administrative Agent an
administrative fee for processing such assignment in the amount of $2,500. If
the Assignee is not incorporated under the laws of the United States of America
or a state thereof, it shall deliver to the Borrower and the Administrative
Agent certification as to exemption from deduction or withholding of any United
States federal income taxes in accordance with Section 8.04.
(d) Any Bank may at any time assign all or any portion of its rights under
this Agreement and its Note to a Federal Reserve Bank. No such assignment shall
release the transferor Bank from its obligations hereunder.
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(e) No Assignee, Participant or other transferee of any Bank's rights shall
be entitled to receive any greater payment under Section 8.03 or 8.04 than such
Bank would have been entitled to receive with respect to the rights transferred,
unless such transfer is made with the Borrower's prior written consent or by
reason of the provisions of Section 8.02, 8.03 or 8.04 requiring such Bank to
designate a different Applicable Lending Office under certain circumstances or
at a time when the circumstances giving rise to such greater payment did not
exist.
(f) Each Bank shall, upon receipt from a Shareholder Guarantor of an amount
equal to all of such Bank's Guaranteed Obligations (as defined in the relevant
Shareholder Guaranty) (the "Transfer Payment"), assign to such Shareholder
Guarantor the corresponding portion of its rights and obligations under this
Agreement and the Notes in accordance with paragraph (c) of this Section 10.06;
provided that (i) the consent of the Borrower and the Administrative Agent shall
not be required for such assignment and (ii) no such assignment shall be
effective until each Bank has received its Transfer Payment from the applicable
Shareholder Guarantor.
SECTION 10.07. Collateral. Each of the Banks represents to the Agents and
each of the other Banks that it in good faith is not relying upon any "margin
stock" (as defined in Regulation U) as collateral in the extension or
maintenance of the credit provided for in this Agreement.
SECTION 10.08. Governing Law; Submission to Jurisdiction. This Agreement
and each Note shall be governed by and construed in accordance with the laws of
the State of New York. Each of the Borrower and the Parent Guarantor hereby
submits to the nonexclusive jurisdiction of the United States District Court for
the Southern District of New York and of any New York State court sitting in New
York City for purposes of all legal proceedings arising out of or relating to
this Agreement or the transactions contemplated hereby. Each of the Borrower and
the Parent Guarantor irrevocably waives, to the fullest extent permitted by law,
any objection which it may now or hereafter have to the laying of the venue of
any such proceeding brought in such a court and any claim that any such
proceeding brought in such a court has been brought in an inconvenient forum.
SECTION 10.09. Counterparts; Integration; Effectiveness. This Agreement may
be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement constitutes the entire agreement and understanding
among the parties hereto and supersedes any and all prior agreements and
understandings, oral or written, relating to the subject matter hereof. This
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Agreement shall become effective upon receipt by the Documentation Agent of
counterparts hereof signed by each of the parties hereto (or, in the case of any
party as to which an executed counterpart shall not have been received, receipt
by the Documentation Agent in form satisfactory to it of telegraphic, telex,
facsimile or other written confirmation from such party of execution of a
counterpart hereof by such party).
SECTION 10.10. Waiver of Jury Trial. EACH OF THE BORROWER, THE PARENT
GUARANTOR, THE AGENTS AND THE BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT
TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 10.11. Confidentiality. Each Bank agrees to take normal and
reasonable precautions and exercise due care to maintain the confidentiality of
all non-public information provided to it by the Parent Guarantor or any of its
Subsidiaries by the Agents on the Parent Guarantor's or such Subsidiary's behalf
in connection with this Agreement or any other Loan Document and neither it nor
any of its Affiliates shall use any such information for any purpose or in any
manner other than pursuant to the terms contemplated by this Agreement, except
to the extent such information (a) was or becomes generally available to the
public other than as a result of a disclosure by the Bank, or (b) was or becomes
available on a non-confidential basis from a source other than the Parent
Guarantor or the Borrower, provided that such source is not bound by a
confidentiality agreement with the Parent Guarantor or the Borrower known to the
Bank; provided, further, that any Bank may disclose such information (A) to any
other Bank or to the Agents, (B) at the request of any regulatory authority or
in connection with an examination of such Bank by any such authority; (C)
pursuant to subpoena or other court process; (D) when required to do so in
accordance with the provisions of any applicable law; (E) at the express
direction of any other agency of any State of the United States of America or of
any other jurisdiction in which such Bank conducts its business; and (F) to such
Bank's independent auditors and legal counsel. Notwithstanding the foregoing,
the Company authorizes each Bank to disclose to any Participant or Assignee
(each, a "Transferee") and any prospective Transferee such financial and other
information in such Bank's possession concerning the Parent Guarantor or any of
its Subsidiaries which has been delivered to the Banks pursuant to this
Agreement or which has been delivered to the Banks by the Parent Guarantor or
any of its Subsidiaries in connection with the Banks' credit evaluation of the
Parent Guarantor and its Subsidiaries prior to entering into this Agreement;
provided that such Transferee agrees in writing to such Bank to keep such
information confidential to the same extent required of the Banks hereunder.
75
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
AMSC ACQUISITION COMPANY, INC.
By /s/Xxxx X. Xxxxxxx
------------------
Name: Xxxx X. Xxxxxxx
Title: Chief Executive Officer,
President and Treasurer
Address: 00000 Xxxxxxxxx Xxxxxxxxx
Xxxxxx, XX 00000
Attention: General Counsel
Facsimile: 000-000-0000
AMERICAN MOBILE SATELLITE CORPORATION
By /s/Xxxx X. Xxxxxxx
------------------
Name: Xxxx X. Xxxxxxx
Title: President and Chief
Executive Officer
Address: 00000 Xxxxxxxxx Xxxxxxxxx
Xxxxxx, XX 00000
Attention: General Counsel
Facsimile: 000-000-0000
00
XXXXXXX XXXXXXXX (XXXXX), INC.
By /s/Xxxx Xxxx
------------
Name: Xxxx Xxxx
Title: Vice President
XXXXXX GUARANTY TRUST
COMPANY OF NEW YORK
By /s/Xxxx X. Xxxxxxx
------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS
ASSOCIATION
By /s/Xxxxxx X. Xxxxxxxx
---------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Managing Director
77
XXXXXX GUARANTY TRUST
COMPANY OF NEW YORK, as
Documentation Agent
By /s/Xxxx X. Xxxxxxx
------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
Address: 000 Xxxxxxx Xxxxxxxxxx Xxxx
Xxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxxx
Facsimile: 000-000-0000
TORONTO DOMINION (TEXAS),
INC., as Administrative Agent
By /s/Xxxx Xxxx
------------
Name: Xxxx Xxxx
Title: Vice President
Address: 000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxx Xxxx
Facsimile: 000-000-0000
78
COMMITMENT SCHEDULE
Bank Tranche A Tranche B Tranche C
Commitment Commitment Commitment
Toronto Dominion (Texas), $37,500,000 $0 $6,250,000
Inc.
Xxxxxx Guaranty Trust $37,500,000 $0 $6,250,000
Company of New York
Bank of America National $0 $12,500,000 $0
Trust and Savings
Association
1
PRICING SCHEDULE
"Euro-Dollar Margin" and "Commitment Fee Percentage" mean for any date the
rates set forth below in the column corresponding to the "Pricing Level" that
applies at such date:
Level I Level II Level III
Euro-Dollar Margin 0.500% 0.750% 1.000%
Commitment Fee 0.125% 0.150% 0.175%
Percentage
------------------ --------- ----------- ------------
For purposes of this Schedule, the following terms have the following
meanings:
"Level I Pricing" applies at any date if, as of such date, Xxxxxx'
long-term debt is rated A3 or higher by Moody's and A- or higher by S&P
"Level II Pricing" applies at any date if, as of such date, (i) Xxxxxx'
long-term debt is rated Baa2 or higher by Moody's and BBB or higher by S&P and
(ii) Level I Pricing does not apply.
"Level III Pricing" applies at any date if neither Level I nor Level II
Pricing applies.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Pricing Level" refers to the determination of which of Level I, Level II
or Level III applies at any date.
"S&P" means Standard & Poor's Rating Service.
The credit ratings to be utilized for purposes of this Schedule are those
assigned to the senior unsecured long-term debt securities of Xxxxxx without
third-party credit enhancement, and any rating assigned to any other debt
security of Xxxxxx shall be disregarded. The ratings in effect for any day are
those in effect at the close of business on such day.
1
DISCLOSURE SCHEDULE
Section 1.01 -- FCC Licenses.
Section 4.03 -- Government Approvals.
Section 4.05 -- Litigation.
Section 4.07 -- Plans.
Section 4.10(c) -- Material Adverse Effect.
Section 4.13 -- Subsidiaries and Equity Investments.
Section 5.15 -- Existing Liens.
Section 5.23 -- Existing Indebtedness.
1
EXHIBIT A -- Note
REVOLVING NOTE
New York, New York
[DATE]
For value received, AMSC Acquisition Company, Inc., a Delaware corporation
(the "Borrower"), promises to pay to the order of ______________________ (the
"Bank"), for the account of its Applicable Lending Office, the unpaid principal
amount of each Loan made by the Bank to the Borrower pursuant to the Revolving
Credit Agreement referred to below on the maturity date provided for in the
Revolving Credit Agreement. The Borrower promises to pay interest on the unpaid
principal amount of each such Loan on the dates and at the rate or rates
provided for in the Revolving Credit Agreement. All such payments of principal
and interest shall be made in lawful money of the United States in Federal or
other immediately available funds at the office of The Toronto-Dominion Bank, 00
Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx.
All Loans made by the Bank, the respective Types thereof and all repayments
of the principal thereof shall be recorded by the Bank and, if the Bank so
elects in connection with any transfer or enforcement hereof, appropriate
notations to evidence the foregoing information with respect to each such Loan
then outstanding may be endorsed by the Bank on the schedule attached hereto, or
on a continuation of such schedule attached to and made a part hereof; provided
that the failure of the Bank to make any such recordation or endorsement shall
not affect the obligations of the Borrower hereunder or under the Revolving
Credit Agreement.
This note is one of the Notes referred to in the Revolving Credit Agreement
dated as of March 31, 1998 among AMSC Acquisition Company, Inc., American Mobile
Satellite Corporation, the banks party thereto, Xxxxxx Guaranty Trust Company of
New York, as Documentation Agent and Toronto Dominion (Texas), Inc. as
Administrative Agent (as the same may be amended from time to time, the
"Revolving Credit Agreement"). Terms defined in the Revolving Credit Agreement
are used herein with the same meanings. Reference is made to the Revolving
Credit Agreement for provisions for the prepayment hereof and the acceleration
of the maturity hereof.
1
The payment in full of the principal and interest on this note has,
pursuant to the provisions of the Revolving Credit Agreement, been
unconditionally guaranteed by American Mobile Satellite Corporation.
AMSC ACQUISITION COMPANY, INC.
By --------------------------------------------
Name:
Title:
2
LOANS AND PAYMENTS OF PRINCIPAL
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Amount Type Amount of
of of Principal Notation
Date Loan Loan Repaid Made By
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3
EXHIBIT B -- Opinion of Counsel for the Borrower
and the Parent Guarantor
OPINION OF
COUNSEL FOR THE BORROWER
AND THE PARENT GUARANTOR
March __, 1998
To the Banks, Shareholder Guarantors and the Agents
Referred to Below
c/x Xxxxxx Guaranty Trust Company
of New York, as Documentation Agent
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
I am Vice President, Secretary and General Counsel of AMSC Acquisition
Company, Inc., a Delaware corporation (the "Acquisition"), and American Mobile
Satellite corporation, a Delaware Corporation (the "AMSC"). In such capacity I
have become familiar with the $100,000,000 Revolving Credit Agreement (the
"Revolving Credit Agreement") among Acquisition, AMSC, the banks listed on the
signature pages thereof, Xxxxxx Guaranty Trust Company of New York, as
Documentation Agent and Toronto Dominion (Texas), Inc. as Administrative Agent.
Capitalized terms not otherwise defined herein shall have the meanings set forth
in the Revolving Credit Agreement. This opinion is being rendered to you
pursuant to Section 3.01 of the Revolving Credit Agreement.
In rendering this opinion, I have examined originals or copies of:
1. the Revolving Credit Agreement, the Notes and each Subsidiary
Guaranty (collectively, the "Loan Documents");
2. the certificates of incorporation, as amended, of AMSC, Acquisition and
each Subsidiary of Acquisition (collectively, the "Loan Parties");
3. the bylaws, as amended, of each Loan Party;
1
4. the Certificates of Good Standing with respect to each Loan Party
issued by the Secretary of State of the State of Delaware not earlier
than March 20, 1998;
5. the Certificate of Good Standing as a Foreign Corporation with respect
to AMSC issued by the State Corporation Commission of the Commonwealth
of Virginia dated March __, 1998;
6. certain resolutions adopted by the Board of Directors of AMSC at a
meeting of the Board held on March 19, 1998;
7. certain resolutions adopted by unanimous written consent of the Board
of Directors of Acquisition dated March 19, 1998; and
8. certain resolutions adopted by the Board of Directors of each
Subsidiary of Acquisition at meetings of such Boards held on March 19,
1998;
upon all of which I have relied. I have not independently verified any factual
matters in connection with or apart from my review of the documents referred to
above and, accordingly, I do not express any opinion as to matters that might
have been disclosed by independent verification.
In arriving at the opinions expressed below, I have assumed, and not
verified, the authenticity of all documents submitted to me as originals and the
conformity to original documents of all documents submitted to me as copies, as
well as the due and valid authorization, execution and delivery of all such
documents by the appropriate party or parties (other than the Loan Parties), and
that each such party (other than the applicable Loan Parties) has adequate
power, authority and legal right to enter into such documents to which it is a
party and to perform its obligations under such documents to which it is a
party.
Based solely upon the foregoing and in reliance thereon, and subject to
the qualifications, limitations and assumptions set forth herein, it is my
opinion that:
1. Each Loan Party is a corporation duly incorporated, validly existing
and in good standing under the laws of Delaware and, in the case of AMSC
Subsidiary Corporation, under the laws of Virginia, has all corporate powers and
all material governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted, and is duly qualified as a
foreign corporation, licensed and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of property or the conduct
of its business require such qualification except where the failure to be so
2
qualified would not reasonably be expected to result in a Material Adverse
Effect.
2. The execution, delivery and performance by AMSC of the Revolving
Credit Agreement, by Acquisition of the Revolving Credit Agreement and the Notes
and by each Subsidiary of Acquisition of the Subsidiary Guaranties are within
the corporate powers of AMSC, Acquisition or such Subsidiary, as relevant, have
been duly authorized by all necessary corporate action and do not and will not:
(a) contravene the terms of such Person's certificate of incorporation, bylaws
or other organization documents; (b) conflict with or result in any breach or
contravention of, or the creation of any Lien under, any indenture, agreement,
lease, instrument, Contractual Obligation, injunction, order, decree or
undertaking to which such Person is a party; or (c) violate any Requirement of
Law.
3. Each Loan Document constitutes the legal, valid and binding
obligations or agreements of each Loan Party party thereto, enforceable against
such Loan Party in accordance with its terms.
4. Except as set forth in Section 4.05 of the Disclosure Schedule and
for matters arising after the Effective Date which could not reasonably be
expected to have a Material Adverse Effect, there are no actions, suits,
proceedings, claims or disputes pending, or to the best of our knowledge,
threatened or contemplated at law, in equity, in arbitration or before any
Governmental Authority, against AMSC or any of its Subsidiaries or any of their
respective properties which: (a) purport to affect or pertain to any Loan
Document, or any of the transactions contemplated thereby; or (b) if determined
adversely to AMSC or any of its Subsidiaries, could have a Material Adverse
Effect. No injunction, writ, temporary restraining order or any order of any
nature has been issued by any court or other Governmental Authority purporting
to enjoin or restrain the execution, delivery and performance of any Loan
Document, or directing that the transactions provided for therein not be
consummated as therein provided.
5. None of AMSC, any Person controlling AMSC, or any Subsidiary
thereof, is (a) an "Investment Company" within the meaning of the Investment
Company Act of 1940; or (b) subject to regulation under the Public Utility
Holding Company Act of 1935, or, to the best of our knowledge, the Federal Power
Act, the Interstate Commerce Act, any state public utilities code or any other
Federal or state statute or regulation limiting its ability to incur
Indebtedness.
3
The foregoing opinions are subject to the following assumptions and
qualifications:
(a) The opinions set forth in paragraph 3 are subject to the effect of
any applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting creditors' rights generally and to the possible judicial
application of foreign laws or governmental action affecting the enforcement of
creditors' rights.
(b) The opinions set forth in paragraph 3 are subject to the further
qualification that the enforceability of the obligations of the Loan Parties
under Loan Documents are subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
Such principles of equity are of general application and, in applying such
principles, a court, among other things, might not allow a creditor to
accelerate the maturity of a debt upon the occurrence of a default deemed
immaterial or might decline to order that a covenant be performed. Such
principles applied by a court might include, among other things, a requirement
that creditors act with reasonableness and good faith. Such a requirement might
be applied, among other situations, to the provisions of any Loan Document
requiring the payment of an indemnity or compensation to any party thereto or
purporting to authorize conclusive determinations by any party thereto.
(c) Without limiting the foregoing, I call to your attention certain
exceptions noted below.
(i) With respect to my opinion in paragraph 3 hereof, I
express no opinion as to whether the courts of a jurisdiction other
than the State of New York would give effect to the choice of New York
law as governing the agreements as to which I express an opinion in
paragraph 3.
(ii) I express no opinion as to the possible applicability to
transactions contemplated by the Loan Documents of Section 548 of the
United States Bankruptcy Code or comparable provisions of other
applicable law.
(iii) With respect to my opinion in paragraph 3 hereof,
(A) No opinion is expressed with respect to the
enforceability of any provision in Article 9 of the
Revolving Credit Agreement or Section 5 of each Subsidiary
Guaranty purporting to guarantee a liability of Acquisition
4
despite the fact that the obligations being guaranteed are
unenforceable due to illegality or the fact that any one of
the Agents or any one of the Banks had voluntarily released
Acquisition's liability with respect to such guaranteed
obligations.
(B) Section 9.02(a) and (b) of the Revolving Credit
Agreement and Section 5(a) of each Subsidiary Guaranty,
which provide that the liability of AMSC or a Subsidiary of
Acquisition shall not be affected by certain changes,
modifications, amendments or waivers referred to therein,
might be enforceable only to the extent that such changes,
modifications, amendments or waivers were not so material as
to constitute a new contract among the parties.
(C) I express no opinion as to the enforceability of
Section 9.04 of the Revolving Credit Agreement or Section 6
of each Subsidiary Guaranty insofar as either of them relate
to any waiver or extension of or agreement not to assert any
defense based upon an applicable statue of limitations.
(d) The foregoing opinions are limited to the laws of the State of New
York, the General Corporation Law of the State of Delaware, the laws of the
Commonwealth of Virginia and the Federal law of the United States (except as
noted below), and I do not express any opinion herein concerning any other law
(including, without limitation, any such other law of any jurisdiction wherein
any party to any of Loan Document may be located or deemed located or wherein
enforcement of any such documents may be sought). I do not express any opinion
as to any matters arising under the Communications Act of 1934, as amended, or
any rules or regulations of the Federal Communications Commission. I do not
express any opinion as to any matters (including Governmental Approvals)
relating to international law, including compliance by any Loan Party with
treaties involving the International Maritime Satellite Organization, the
International Telecommunications Satellite Organization and the International
Telecommunication Union. I am not a member of the Bar of the State of Delaware
and insofar as the opinions expressed herein relate to matters of the General
Corporation Law of the State of Delaware, I have relied on the latest standard
compilations of statutes available to me.
The opinions herein are rendered as of the date of this opinion, and I
assume no obligation to revise or supplement this opinion at any date subsequent
hereto.
5
The opinions set forth above relate solely to the matters as to which my
opinion has been requested by you, and you must judge whether the matters
addressed herein are sufficient for your purposes. I do not express any opinion
as to any other matters.
This opinion is rendered to the Documentation Agent and is solely for its
benefit, for the benefit of the Shareholder Guarantors, and for the benefit of
any Bank party to the Revolving Credit Agreement in connection with the above
transaction. This opinion may not be relied upon by the Documentation Agent for
any other purpose, or furnished to, quoted to or relied upon by any other Person
other than any Bank or Shareholder Guarantor referred to in the immediately
preceding sentence, for any purpose without my prior written consent. It is not
to be filed with or furnished to any Governmental Authority or other Person in
either case without my prior written consent.
Very truly yours,
/s/Xxxxx X. Xxxxx
Xxxxx X. Xxxxx
General Counsel
6
EXHIBIT C -- Opinion of Special Counsel for the Agents
OPINION OF
XXXXX XXXX & XXXXXXXX,
SPECIAL COUNSEL FOR THE AGENTS
March __, 1998
To the Banks and the Agents
Referred to Below
c/x Xxxxxx Guaranty Trust Company
of New York, as Documentation Agent
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
We have participated in the preparation of the $100,000,000 Revolving
Credit Agreement (the "Revolving Credit Agreement") dated as of March 31, 1998
among AMSC Acquisition Company, Inc., a Delaware corporation ("Acquisition"),
American Mobile Satellite Corporation, a Delaware corporation ("AMSC"), the
banks listed on the signature pages thereof (the "Banks"), Xxxxxx Guaranty Trust
Company of New York, as Documentation Agent, and Toronto Dominion (Texas), Inc.,
as Administrative Agent (collectively, the "Agents"), and have acted as special
counsel for the Agents for the purpose of rendering this opinion pursuant to
Section 3.01 of the Revolving Credit Agreement. Terms defined in the Revolving
Credit Agreement are used herein as therein defined.
We have examined originals or copies, certified or otherwise identified
to our satisfaction, of such documents, corporate records, certificates of
public officials and other instruments and have conducted such other
investigations of fact and law as we have deemed necessary or advisable for
purposes of this opinion.
Upon the basis of the foregoing, we are of the opinion that assuming
that the execution, delivery and performance by Acquisition of the Revolving
Credit Agreement and the Notes and by AMSC of the Revolving Credit Agreement are
within such Person's corporate powers and have been duly authorized by all
necessary corporate action, the Revolving Credit Agreement constitutes a valid
1
and binding agreement of Acquisition and AMSC and each Note constitutes a valid
and binding obligation of Acquisition, in each case enforceable in accordance
with its terms except as may be limited by bankruptcy, insolvency or similar
laws affecting creditors' rights generally and by general principles of equity.
We are members of the Bar of the State of New York and the foregoing
opinion is limited to the laws of the State of New York. In giving the foregoing
opinion, we express no opinion as to the effect (if any) of any law of any
jurisdiction (except the State of New York) in which any Bank is located which
limits the rate of interest that such Bank may charge or collect.
This opinion is rendered solely to you in connection with the above
matter. This opinion may not be relied upon by you for any other purpose or
relied upon by any other person without our prior written consent.
Very truly yours,
2
EXHIBIT D -- Assignment and Assumption Agreement
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of _________, 19__ among [NAME OF ASSIGNOR] (the
"Assignor"), [NAME OF ASSIGNEE] (the "Assignee"), AMSC ACQUISITION COMPANY, INC.
(the "Borrower") and TORONTO DOMINION (TEXAS), INC., as Administrative Agent
(the "Agent").
WHEREAS, this Assignment and Assumption Agreement (the "Agreement")
relates to the $100,000,000 Revolving Credit Agreement dated as of March 31,
1998 among the Borrower, American Mobile Satellite Corporation, as Parent
Guarantor, the Assignor and the other Banks party thereto, as Banks, Morgan
Guaranty Trust Company of New York, as Documentation Agent, and the Agent (the
"Credit Agreement");
WHEREAS, as provided under the Credit Agreement, the Assignor has a
Commitment to make Loans to the Borrower in an aggregate principal amount at any
time outstanding not to exceed $__________;*
WHEREAS, Loans made to the Borrower by the Assignor under the Credit
Agreement in the aggregate principal amount of $__________ are outstanding at
the date hereof; and
WHEREAS, the Assignor proposes to assign to the Assignee all of the
rights of the Assignor under the Credit Agreement in respect of a portion of its
Commitment thereunder in an amount equal to $__________ (the "Assigned Amount"),
together with a corresponding portion of its outstanding Loans, and the Assignee
proposes to accept assignment of such rights and assume the corresponding
obligations from the Assignor on such terms;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
1. Definitions. All capitalized terms not otherwise defined herein
shall have the respective meanings set forth in the Credit Agreement.
--------
1 To be modified if assignment occurs after Commitments have terminated.
1
2. Assignment. The Assignor hereby assigns and sells to the Assignee
all of the rights of the Assignor under the Credit Agreement to the extent of
the Assigned Amount, and the Assignee hereby accepts such assignment from the
Assignor and assumes all of the obligations of the Assignor under the Credit
Agreement to the extent of the Assigned Amount, including the purchase from the
Assignor of the corresponding portion of the principal amount of the Loans made
by the Assignor outstanding at the date hereof. Upon the execution and delivery
hereof by the Assignor, the Assignee, [the Borrower and the Agent] and the
payment of the amounts specified in Section 3 required to be paid on the date
hereof (i) the Assignee shall, as of the date hereof, succeed to the rights and
be obligated to perform the obligations of a Bank under the Credit Agreement
with a Commitment in an amount equal to the Assigned Amount, and (ii) the
Commitment of the Assignor shall, as of the date hereof, be reduced by a like
amount and the Assignor released from its obligations under the Credit Agreement
to the extent such obligations have been assumed by the Assignee. The assignment
provided for herein shall be without recourse to the Assignor.
3. Payments. As consideration for the assignment and sale contemplated
in Section 2 hereof, the Assignee shall pay to the Assignor on the date hereof
in Federal funds the amount heretofore agreed between them.* It is understood
that commitment and/or facility fees accrued to the date hereof are for the
account of the Assignor and such fees accruing from and including the date
hereof are for the account of the Assignee. Each of the Assignor and the
Assignee hereby agrees that if it receives any amount under the Credit Agreement
which is for the account of the other party hereto, it shall receive the same
for the account of such other party to the extent of such other party's interest
therein and shall promptly pay the same to such other party.
[4. Consent of the Borrower and the Agent. This Agreement is
conditioned upon the consent of the Borrower and the Agents pursuant to Section
10.06 of the Credit Agreement. The execution of this Agreement by the Borrower
and the Agents is evidence of this consent. Pursuant to Section 2.03, the
Borrower agrees to execute and deliver a Note payable to the order of the
Assignee to evidence the assignment and assumption provided for herein.]
5. Non-Reliance on Assignor. The Assignor makes no representation or
warranty in connection with, and shall have no responsibility with respect to,
the solvency, financial condition, or statements of the Borrower or the Parent
--------
1 Amount should combine principal together with accrued interest and
breakage compensation, if any, to be paid by the Assignee, net of any portion of
any upfront fee to be paid by the Assignor to the Assignee. It may be preferable
in an appropriate case to specify these amounts generically or by formula rather
than as a fixed sum.
2
Guarantor, or the validity and enforceability of the obligations of the Borrower
or the Parent Guarantor in respect of the Credit Agreement or any Note. The
Assignee acknowledges that it has, independently and without reliance on the
Assignor, and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement and will continue to be responsible for making its own independent
appraisal of the business, affairs and financial condition of the Borrower.
6. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
7. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.
[NAME OF ASSIGNOR]
By -------------------------------------------
Name:
Title:
[NAME OF ASSIGNEE]
By -------------------------------------------
Name:
Title:
AMSC ACQUISITION COMPANY, INC.
By -------------------------------------------
Name:
Title:
3
TORONTO DOMINION (TEXAS), INC.,
as Administrative Agent
By ------------------------------------------
Name:
Title:
4
EXHIBIT E - Subsidiary Guaranty
SUBSIDIARY GUARANTY
TO: Toronto Dominion (Texas), Inc.,
as Administrative Agent
PRELIMINARY STATEMENTS:
A. AMSC Acquisition Company, Inc., a Delaware corporation (the
"Borrower"), the Banks named therein (the "Banks"), Xxxxxx Guaranty Trust
Company of New York, as Documentation Agent and Toronto Dominion (Texas), Inc.,
as Administrative Agent (the "Agent"), are parties to a $100,000,000 Revolving
Credit Agreement dated as of March 31, 1998 (said agreement, as it may hereafter
be amended, supplemented, restated or otherwise modified from time to time, is
referred to herein as the "Revolving Credit Agreement").
B. The undersigned Guarantor ("Guarantor") is a Subsidiary of the
Borrower and it is a requirement of the Revolving Credit Agreement that the
Guarantor enter into this Guaranty guaranteeing all obligations of every nature
of the Borrower from time to time owed under or in respect of the Revolving
Credit Agreement and the other Loan Documents (the "Guarantied Obligations").
NOW, THEREFORE, the Guarantor agrees as follows:
1. For valuable consideration, the undersigned Guarantor
unconditionally, absolutely and irrevocably guarantees and promises to pay to
the Agent, or order, on demand, when due (whether by scheduled maturity,
required prepayment, acceleration, demand, or otherwise) in lawful money of the
United States and in immediately available funds, any and all present or future
Guarantied Obligations owing to the Agents and the Banks (collectively, the
"Guarantied Parties"). The term Guarantied Obligations is used herein in its
most comprehensive sense and include any and all advances, debts, obligations,
and liabilities of the Borrower, now, or hereafter made, incurred, or created,
whether voluntary or involuntarily, and however arising, including, without
limitation, any and all attorneys' fees, costs, premiums, charges, or interest
owed by the Borrower to the Guarantied Parties, whether due or not due, absolute
or contingent, liquidated or unliquidated, determined or undetermined, whether
the Borrower may be liable individually or jointly with others, whether recovery
1
upon such indebtedness may be or hereafter becomes barred by any statute of
limitations or whether such indebtedness may be or hereafter become otherwise
unenforceable.
2. Notwithstanding the foregoing, the liability of Guarantor under this
guaranty shall be limited to an aggregate amount equal to the largest amount
that would not render its obligations hereunder subject to avoidance under
Section 548 of the United States Bankruptcy Code or any comparable provisions of
any applicable state law.
3. This Guaranty is a continuing guaranty which relates to any
Guarantied Obligation, including those which arise under successive transactions
which shall either cause the Borrower to incur new Guarantied Obligations,
continue the Guarantied Obligations from time to time, or renew them after they
have been satisfied. The Guarantor agrees that nothing shall discharge or
satisfy its obligations created hereunder except for the full payment in cash of
the Guarantied Obligations with interest as applicable.
4. The Guarantor agrees that it is directly liable to the Agent for the
benefit of the Guarantied Parties for payment of the Guarantied Obligations if
the Borrower has failed to make payment thereof when due (whether by scheduled
maturity, required prepayment, acceleration, demand, or otherwise), that its
obligations hereunder are independent of the Guarantied Obligations of the
Borrower, or of any other guarantor, and that a separate action or actions may
be brought and prosecuted against the Guarantor, whether action is brought
against the Borrower or whether the Borrower is joined in any such action or
actions. The Guarantor agrees that any releases which may be given by the
Guarantied Parties to the Borrower or any other guarantor shall not release it
from this Guaranty.
5. The obligations of the Guarantor under this Guaranty shall not be
affected, modified or impaired upon the occurrence from time to time of any of
the following, whether or not with notice to or the consent of the Guarantor:
(a) the compromise, settlement, change, modification, amendment
(whether material or otherwise) or partial termination of any or all of the
Guarantied Obligations;
(b) the failure to give notice to the Guarantor of the occurrence of
any Event of Default under the terms and provisions of the Agreement;
(c) the waiver of the payment, performance or observance of any of
the Guarantied Obligations;
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(d) the taking or omitting to take any actions referred to in any of
the Loan Documents or of any action under this Guaranty;
(e) any failure, omission or delay on the part of the Guarantied
Parties to enforce, assert or exercise any right, power or remedy conferred in
this Guaranty, the Revolving Credit Agreement, any other Loan Document or any
other indulgence or similar act on the part of the Guarantied Parties in good
faith and in compliance with applicable law;
(f) the voluntary or involuntary liquidation, dissolution, sale or
other disposition of all or substantially all of the assets, marshalling of
assets, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors or readjustment of, or other similar proceedings which affect the
Guarantor, any other guarantor of any of the Guarantied Obligations of the
Borrower or any of the assets of any of them, or any allegation of invalidity or
contest of the validity of this Guaranty in any such proceeding;
(g) to the extent permitted by law, the release or discharge of any
other guarantors of the Guarantied Obligations from the performance or
observance of any obligation, covenant or agreement contained in any guaranties
of the Guarantied Obligations by operation of law; or
(h) the default or failure of any other guarantors of the Guarantied
Obligations fully to perform any of their respective obligations set forth in
any such guaranties of the Guarantied Obligations.
To the extent any of the foregoing refers to any actions which the
Guarantied Parties may take, the Guarantor hereby agrees that the Guarantied
Parties may take such actions in such manner, upon such terms, and at such times
as the Guarantied Parties, in their discretion, deem advisable, without, in any
way or respect, impairing, affecting, reducing or releasing the Guarantor from
its undertakings hereunder and the Guarantor hereby consents to each and all of
the foregoing actions, events and occurrences.
6. The Guarantor hereby waives:
(a) any and all rights to require the Guarantied Parties to prosecute
or seek to enforce any remedies against the Borrower or any other party liable
to the Guarantied Parties on account of the Guarantied Obligations;
(b) any right to assert against the Guarantied Parties any legal or
equitable defense (other than indefeasible payment in full of the Guarantied
Obligations or as expressly provided in this Guaranty), set-off, counterclaim,
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or claim which the Guarantor may now or at any time hereafter have against the
Borrower or any other party liable to the Guarantied Parties in any way or
manner under the Revolving Credit Agreement;
(c) all defenses, counterclaims and off-sets of any kind or nature,
arising directly or indirectly from the present or future lack of perfection,
sufficiency, validity or enforceability of any Loan Document and the security
interest granted pursuant thereto;
(d) any defense arising by reason of any claim or defense based upon an
election of remedies by the Guarantied Parties including, without limitation,
any direction to proceed by judicial or nonjudicial foreclosure or by deed in
lieu thereof, which, in any manner impairs, affects, reduces, releases, destroys
or extinguishes the Guarantor's subrogation rights, rights to proceed against
the Borrower for reimbursement, or any other rights of the Guarantor to proceed
against the Borrower, against any other guarantor, or against any other
security, with the Guarantor understanding that the exercise by the Guarantied
Parties of certain rights and remedies may offset or eliminate the Guarantor's
right of subrogation against the Borrower, and that the Guarantor may therefore
incur partially or totally non-reimbursable liability hereunder; and
(e) all presentments, demands for performance, notices of
non-performance, protests, notices of protest, notices of dishonor, notices of
default, notice of acceptance of this Guaranty, and notices of the existence,
creation, or incurring of new or additional indebtedness, and all other notices
or formalities to which the Guarantor may be entitled.
7. The Guarantor hereby agrees that unless and until all Guarantied
Obligations have been paid to the Guarantied Parties in full, it shall not have
any rights of subrogation, reimbursement or contribution as against the Borrower
or any other guarantor, if any, and shall not seek to assert or enforce the
same. The Guarantor understands that the exercise by the Guarantied Parties of
certain rights and remedies contained in the Loan Documents may affect or
eliminate the Guarantor's right of subrogation if any, against the Borrower and
that the Guarantor may therefore incur a partially or totally non-reimbursable
liability hereunder; nevertheless, the Guarantor hereby authorizes and empowers
the Guarantied Parties to exercise, in their sole discretion, any right and
remedy, or any combination thereof, which may then be available, since it is the
intent and purpose of the Guarantor that the obligations hereunder shall be
absolute, independent and unconditional under any and all circumstances.
8. The Guarantor is presently informed of the financial condition of
the Borrower and of all other circumstances which a diligent inquiry would
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reveal and which bear upon the risk of nonpayment of the Guarantied Obligations.
The Guarantor hereby covenants that it will continue to keep itself informed of
the financial condition of the Borrower, the status of other guarantors, if any,
and of all other circumstances which bear upon the risk of nonpayment. The
Guarantor hereby waives its right, if any, to require the Guarantied Parties to
disclose to it any information which they may now or hereafter acquire
concerning such condition or circumstances including, but not limited to, the
release of any other guarantor.
9. The Guarantied Parties' books and records evidencing the Guarantied
Obligations shall be admissible in any action or proceeding and shall be binding
upon the Guarantor for the purpose of establishing the terms set forth therein
and shall constitute prima facie proof thereof.
10. The Guarantor represents and warrants for and with respect to
itself that:
(a) The Guarantor is a corporation duly organized and existing under
the laws of the state of , and is properly licensed and in good standing in, and
where necessary to maintain its rights and privileges have complied with the
fictitious name statute of, every jurisdiction in which it is doing business,
except where the failure to be licensed or be in good standing or comply with
any such statute will not have a material adverse effect on the ability of the
Guarantor to perform its obligations hereunder or under any instrument or
agreement required hereunder;
(b) The execution, delivery and performance of this Guaranty and any
instrument or agreement required hereunder are within the power of the
Guarantor, have been duly authorized by, and are not in conflict with the terms
of any charter, by-law or other organization papers of, the Guarantor;
(c) No approval, consent, exemption or other action by, or notice to or
filing with, any governmental authority is necessary in connection with the
execution, delivery, performance or enforcement of this Guaranty or any
instrument or agreement required hereunder, except as may have been obtained and
certified copies of which have been delivered to Agent and the Guarantied
Parties;
(d) There is no law, rule or regulation, nor is there any judgment,
decree or order of any court or governmental authority binding on the Guarantor,
which would be contravened by the execution, delivery, performance or
enforcement of this Guaranty or any instrument or agreement required hereunder;
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(e) This Guaranty is a legal, valid and binding agreement of the
Guarantor, enforceable against the Guarantor in accordance with its terms, and
any instrument or agreement required hereunder, when executed and delivered,
will be similarly legal, valid, binding and enforceable, except where
enforceability thereof may be limited by applicable law relating to bankruptcy,
insolvency, moratorium or other similar laws affecting creditors' rights
generally or by the application of general principles of equity;
(f) There is no action, suit or proceeding pending against, or to the
knowledge of the Guarantor, threatened against or affecting the Guarantor,
before any court or arbitrator or any governmental body, agency or official
which in any manner draws into question that validity or enforceability of this
Guaranty; and
(g) The execution, delivery and performance by the Guarantor of this
Guaranty does not constitute, to the best knowledge of the Guarantor, a
"fraudulent conveyance," "fraudulent obligation" or "fraudulent transfer" within
the meanings of the Uniform Fraudulent Conveyances Act or Uniform Fraudulent
Transfer Act, as enacted in any jurisdiction.
11. Any one of the following events shall constitute a "Guarantor Event
of Default:"
(a) The Guarantor is generally not paying or admits in writing its
inability to pay its debts as such debts become due, or files any petition or
action for relief under any bankruptcy, reorganization, insolvency, or
moratorium law or any other law for the relief of, or relating to, debtors, now
or hereafter in effect, or makes any assignment for the benefit of creditors, or
takes any corporate action in furtherance of any of the foregoing;
(b) An involuntary petition is filed against the Guarantor under any
bankruptcy statute now or hereafter in effect, or a custodian, receiver,
trustee, assignee for the benefit of creditors (or other similar official) is
appointed to take possession, custody or control of any property of the
Guarantor, unless such petition or appointment is set aside or withdrawn or
ceases to be in effect within sixty (60) days from the date of said filing or
appointment.
THEN, any and all of the Guarantor's obligations under this Guaranty shall
become due, payable and enforceable against the Guarantor whether or not the
Guarantied Obligations are then due and payable without presentment, demand,
protest or other requirements of any kind, all of which are hereby expressly
waived by the Guarantor, and the obligation of each Bank to make any Loan under
the Revolving Credit Agreement shall thereupon terminate.
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12. This Guaranty shall be binding upon the successors and assigns of
the Guarantor and shall inure to the benefit of the Guarantied Parties'
successors and assigns. This Guaranty cannot be assigned by the Guarantor
without the prior written consents of the Guarantied Parties which shall be in
the Guarantied Parties' sole and absolute discretion.
13. No failure or delay by the Guarantied Parties in exercising any
right, power or privilege hereunder shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
14. The Guarantor shall pay all out-of-pocket expenses incurred by the
Agent and the Guarantied Parties, including fees and disbursements of counsel
(including the allocated cost of inhouse counsel and staff), in connection with
the enforcement of this Guaranty (whether or not suit is brought).
15. No modification of this Guaranty shall be effective for any purpose
unless it is in writing and executed by an officer of the Agent and the
Guarantor authorized to do so. This Guaranty merges all negotiations,
stipulations and provisions relating to the subject matter of this Guaranty
which preceded or may accompany the execution of this Guaranty.
16. This Guaranty and the rights and obligations of the parties
hereunder shall be construed in accordance with and be governed by the laws of
the State of New York without reference to the principles of conflicts of laws
thereof.
17. This Guaranty may be executed in any number of counterparts and by
the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.
18. Any indebtedness of the Borrower now or hereafter held by the
Guarantor is hereby subordinated to the indebtedness of the Borrower to the
Agent and the Guarantied Parties; and such indebtedness of the Borrower to the
Guarantor if the Agent so requests shall be collected, enforced and received by
the Guarantor as trustee for the Agent and the Guarantied Parties and be paid
over to the Agent on account of the indebtedness of the Borrower to the Agent
and the Guarantied Parties but without reducing or affecting in any manner the
liability of the Guarantor under the other provisions of this Guaranty.
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19. This Guaranty shall become effective upon execution hereof by the
Guarantor. The Guarantor shall deliver to the Agent all of the following, in
form and substance satisfactory to the Agent and the Banks and in sufficient
copies for each Bank:
(a) Resolutions; Incumbency Certificate.
(i) Copies of the resolutions of the board of
directors of the Guarantor approving and authorizing the
execution, delivery and performance of this Guaranty by the
Guarantor, certified as of the date hereof by the Secretary or
an Assistant Secretary of the Guarantor; and
(ii) A certificate of the Secretary or Assistant
Secretary of the Guarantor certifying the names and true
signatures of the officers of the Guarantor authorized to
execute and deliver this Guaranty.
(b) Articles of Incorporation; By-laws and Good Standing of the
Guarantor. Each of the following documents:
(i) the articles or certificate of incorporation of
the Guarantor as in effect on the date hereof, certified by
the Secretary of State of the State of incorporation of the
Guarantor as of a recent date and by the Secretary or
Assistant Secretary of the Guarantor as of the date hereof and
the bylaws of the Guarantor as in effect on the date hereof,
certified by the Secretary or Assistant Secretary of the
Guarantor as of the date hereof; and
(ii) a good standing certificate for the Guarantor
from the Secretary of State of its state of incorporation and
each state where the Guarantor is qualified to do business as
a foreign corporation as of a recent date.
20. Unless otherwise specified herein or therein, all terms defined in
this Guaranty shall have meanings assigned to them in the Revolving Credit
Agreement.
21. All notices and other communications hereunder shall be delivered,
in the manner and with the effect provided in the Revolving Credit Agreement
and, in the case of the Guarantor, care of the Borrower.
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22. It is not necessary for the Guarantied Parties to inquire into the
powers of any Guaranteed Party or of the officers, directors or agents acting or
purporting to act on its behalf, and any indebtedness made or created in
reliance upon the professed exercise of such powers shall be guaranteed
hereunder.
Executed as of the day of , .
[Guarantor]
By: --------------------------------------------
Title: --------------------------------------------
TORONTO DOMINION (TEXAS), INC.,
as Administrative Agent
By: -------------------------------------
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