EXHIBIT 10.1
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$328,333,333
CREDIT AGREEMENT
AMONG
TSI TELECOMMUNICATION HOLDINGS, INC.,
TSI TELECOMMUNICATION HOLDINGS, LLC,
TSI MERGER SUB, INC.,
AS BORROWER,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO,
XXXXXX BROTHERS INC.,
AS LEAD ARRANGER AND BOOK MANAGER
AND
XXXXXX COMMERCIAL PAPER INC.,
AS ADMINISTRATIVE AGENT
DATED AS OF FEBRUARY 14, 2002
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS......................................................................................1
1.1 Defined Terms...................................................................................1
1.2 Other Definitional Provisions..................................................................30
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS.................................................................30
2.1 Tranche B Term Loan Commitments................................................................30
2.2 Procedure for Term Loan Borrowing..............................................................30
2.3 Repayment of Tranche B Term Loans..............................................................31
2.4 Revolving Credit Commitments...................................................................31
2.5 Procedure for Revolving Credit Borrowing.......................................................32
2.6 Swing Line Commitment..........................................................................32
2.7 Procedure for Swing Line Borrowing; Refunding of Swing Line Loans..............................33
2.8 Repayment of Loans; Evidence of Indebtedness...................................................34
2.9 Commitment Fees, etc...........................................................................35
2.10 Termination or Reduction of Revolving Credit Commitments.......................................36
2.11 Optional Prepayments...........................................................................36
2.12 Mandatory Prepayments and Commitment Reductions................................................36
2.13 Conversion and Continuation Options............................................................38
2.14 Minimum Amounts and Maximum Number of Eurodollar Tranches......................................39
2.15 Interest Rates and Payment Dates...............................................................39
2.16 Computation of Interest and Fees...............................................................39
2.17 Inability to Determine Interest Rate...........................................................40
2.18 Pro Rata Treatment and Payments................................................................40
2.19 Requirements of Law............................................................................42
2.20 Taxes..........................................................................................43
2.21 Indemnity......................................................................................46
2.22 Illegality.....................................................................................46
2.23 Change of Lending Office.......................................................................46
2.24 Replacement of Lenders under Certain Circumstances.............................................47
2.25 Limitation on Additional Amounts, etc..........................................................47
SECTION 3. LETTERS OF CREDIT...............................................................................47
3.1 L/C Commitment.................................................................................47
3.2 Procedure for Issuance of Letter of Credit.....................................................48
3.3 Fees and Other Charges.........................................................................48
3.4 L/C Participations.............................................................................48
3.5 Reimbursement Obligation of the Borrower.......................................................49
3.6 Obligations Absolute...........................................................................50
3.7 Letter of Credit Payments......................................................................50
3.8 Applications...................................................................................51
SECTION 4. REPRESENTATIONS AND WARRANTIES..................................................................51
4.1 Financial Condition............................................................................51
4.2 No Change......................................................................................52
4.3 Corporate Existence; Compliance with Law.......................................................52
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4.4 Corporate Power; Authorization; Enforceable Obligations........................................52
4.5 No Legal Bar...................................................................................53
4.6 No Material Litigation.........................................................................53
4.7 No Default.....................................................................................53
4.8 Ownership of Property; Liens...................................................................53
4.9 Intellectual Property..........................................................................53
4.10 Taxes..........................................................................................54
4.11 Federal Regulations............................................................................55
4.12 Labor Matters..................................................................................55
4.13 ERISA..........................................................................................55
4.14 Investment Company Act; Other Regulations......................................................56
4.15 Subsidiaries...................................................................................56
4.16 Use of Proceeds................................................................................56
4.17 Environmental Matters..........................................................................56
4.18 Accuracy of Information, etc...................................................................57
4.19 Security Documents.............................................................................58
4.20 Solvency.......................................................................................59
4.21 Senior Indebtedness............................................................................59
4.22 Insurance......................................................................................59
4.23 Acquisition Documents..........................................................................59
4.24 Real Property..................................................................................60
4.25 Permits........................................................................................60
SECTION 5. CONDITIONS PRECEDENT............................................................................60
5.1 Conditions to Initial Extension of Credit......................................................60
5.2 Conditions to Each Extension of Credit.........................................................65
SECTION 6. AFFIRMATIVE COVENANTS...........................................................................66
6.1 Financial Statements...........................................................................66
6.2 Certificates; Other Information................................................................67
6.3 Payment of Obligations.........................................................................69
6.4 Conduct of Business and Maintenance of Existence, etc..........................................69
6.5 Maintenance of Property; Insurance.............................................................69
6.6 Inspection of Property; Books and Records; Discussions.........................................70
6.7 Notices........................................................................................71
6.8 Environmental Laws.............................................................................71
6.9 Interest Rate Protection.......................................................................71
6.10 Additional Collateral, etc.....................................................................72
6.11 Use of Proceeds................................................................................74
6.12 ERISA Documents................................................................................74
6.13 Further Assurances.............................................................................74
6.14 Post Closing Covenants.........................................................................75
SECTION 7. NEGATIVE COVENANTS..............................................................................75
7.1 Financial Condition Covenants..................................................................75
7.2 Limitation on Indebtedness.....................................................................77
7.3 Limitation on Liens............................................................................79
7.4 Limitation on Fundamental Changes..............................................................81
7.5 Limitation on Disposition of Property..........................................................81
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7.6 Limitation on Restricted Payments..............................................................83
7.7 Limitation on Capital Expenditures.............................................................84
7.8 Limitation on Investments......................................................................84
7.9 Limitation on Optional Payments and Modifications of Indebtedness..............................86
7.10 Limitation on Transactions with Affiliates.....................................................87
7.11 Limitation on Sales and Leasebacks.............................................................87
7.12 Limitation on Changes in Fiscal Periods........................................................88
7.13 Limitation on Negative Pledge Clauses..........................................................88
7.14 Limitation on Restrictions on Subsidiary Distributions, etc....................................88
7.15 Limitation on Lines of Business................................................................88
7.16 Limitation on Amendments to Acquisition Documents..............................................88
7.17 Limitation on Hedge Agreements.................................................................89
7.18 Partnerships and Joint Ventures................................................................89
7.19 Limitations on Activities of the Parents.......................................................89
SECTION 8. EVENTS OF DEFAULT...............................................................................89
SECTION 9. THE Administrative AGENT; THE ARRANGER..........................................................93
9.1 Appointment....................................................................................93
9.2 Delegation of Duties...........................................................................94
9.3 Exculpatory Provisions.........................................................................94
9.4 Reliance by Administrative Agent...............................................................94
9.5 Notice of Default..............................................................................95
9.6 Non-Reliance on Administrative Agent and Other Lenders.........................................95
9.7 Indemnification................................................................................95
9.8 Arranger and Administrative Agent in Their Individual Capacities...............................96
9.9 Successor Administrative Agents................................................................96
9.10 Authorization to Release Liens.................................................................97
9.11 The Arranger...................................................................................97
9.12 Withholding Tax................................................................................97
SECTION 10. MISCELLANEOUS..................................................................................97
10.1 Amendments and Waivers.........................................................................97
10.2 Notices........................................................................................98
10.3 No Waiver; Cumulative Remedies................................................................100
10.4 Survival of Representations and Warranties....................................................100
10.5 Payment of Expenses; Indemnification..........................................................100
10.6 Successors and Assigns; Participations and Assignments........................................102
10.7 Adjustments; Set-off..........................................................................104
10.8 Counterparts..................................................................................105
10.9 Severability..................................................................................105
10.10 Integration...................................................................................105
10.11 GOVERNING LAW.................................................................................105
10.12 Submission To Jurisdiction; Waivers...........................................................106
10.13 Acknowledgments...............................................................................106
10.14 Confidentiality...............................................................................107
10.15 Release of Collateral and Guarantee Obligations...............................................107
10.16 Accounting Changes............................................................................108
10.17 Delivery of Lender Addenda....................................................................108
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10.18 Construction..................................................................................108
10.19 Confirmation..................................................................................108
10.20 WAIVERS OF JURY TRIAL.........................................................................108
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ANNEXES:
A Pricing Grid
SCHEDULES:
4.1(b) Material Obligations not disclosed on Financial Statements
4.6 Litigation
4.9(b) Trademarks, Service Marks and Trade Names
4.9(c) Patents
4.9(d) Copyrights
4.9(e) Intellectual Property Licenses
4.15(a) Corporate Structure on the Closing Date
4.15(b) Outstanding Subscriptions, Etc.
4.19(a)-1 UCC Filing Jurisdictions - Collateral
4.19(a)-2 UCC Financing Statements to Remain on File
4.19(a)-3 UCC Financing Statements to be Terminated
4.19(b) UCC Filing Jurisdictions - Intellectual Property Collateral
4.23 Acquisition Documents
4.24 Leased Real Property
7.2(d) Existing Indebtedness
7.3(f) Existing Liens
7.10 Affiliate Transactions
EXHIBITS:
A Form of Guarantee and Collateral Agreement
B Form of Compliance Certificate
C Form of Closing Certificate
D Form of Assignment and Acceptance
E-1 Form of Legal Opinion of Xxxxxxxx & Xxxxx
E-2 Form of Legal Opinion of Morris, Nichols, Arsht & Xxxxxxx
F-1 Form of Term Note
F-2 Form of Revolving Credit Note
F-3 Form of Swing Line Note
G Form of Exemption Certificate
H Form of Lender Addendum
I Form of Solvency Certificate
J Form of Subordinated Intercompany Note
K Form of Notice of Borrowing
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CREDIT AGREEMENT, dated as of February __, 2002, among TSI
Telecommunication Holdings, LLC, a Delaware limited liability company (the
"ULTIMATE PARENT"), TSI Telecommunication Holdings, Inc., a Delaware corporation
(the "Parent" and, together with the Ultimate Parent, the "PARENTS"), TSI Merger
Sub, Inc., a Delaware corporation (the "BORROWER"), the several banks and other
financial institutions or entities from time to time parties to this Agreement
(the "LENDERS"), XXXXXX BROTHERS INC., as advisor, lead arranger and book
manager (in such capacity, the "ARRANGER") and XXXXXX COMMERCIAL PAPER INC., as
administrative agent (in such capacity, the "ADMINISTRATIVE AGENT").
W I T N E S S E T H:
WHEREAS, pursuant to the Acquisition Agreement (as defined below), the
Parent will acquire all of the issued and outstanding stock of TSI
Telecommunication Services Inc., a Delaware corporation ("TSI"), through a
merger (the "MERGER") of the Borrower with and into TSI, with TSI as the
surviving corporation (the "ACQUISITION");
WHEREAS, as a result of the Merger, TSI will assume all the
obligations of the Borrower hereunder;
WHEREAS, the Borrower is a wholly owned subsidiary of the Parent, an
entity which is a wholly owned subsidiary of the Ultimate Parent, an entity
formed by certain Control Investment Affiliates of the Principal, the Other
Equity Investors and Management Investors;
WHEREAS, the Borrower has requested that the Lenders make credit
facilities available to the Borrower in order to finance the foregoing
transactions and for the other purposes set forth herein;
WHEREAS, the Lenders are willing to make such credit facilities
available upon and subject to the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the agreements
hereinafter set forth, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement, the terms listed in
this Section 1.1 shall have the respective meanings set forth in this
Section 1.1.
"ACKNOWLEDGEMENT AND CONSENT": the Acknowledgement and Consent of each
Issuer (as defined in the Guarantee and Collateral Agreement) that is not also a
Grantor (as defined in the Guarantee and Collateral Agreement), substantially in
the form of Exhibit A to the Guarantee and Collateral Agreement.
"ACQUISITION": as defined in the recitals hereto.
"ACQUISITION AGREEMENT": The Amended and Restated Agreement of Merger,
dated as of January 14, 2002, by and among the Parent, the Borrower, TSI and
Verizon
Information Services Inc., as the same may be amended, supplemented, replaced or
otherwise modified from time to time in accordance with this Agreement.
"ACQUISITION DOCUMENTS": collectively, the Acquisition Agreement, the
Related Agreements and all schedules, exhibits, annexes and amendments thereto,
and all side letters and agreements affecting the terms thereof or entered into
in connection therewith (other than the Loan Documents and the Senior
Subordinated Note Documents), in each case, as amended, supplemented, replaced
or otherwise modified from time to time in accordance with this Agreement.
"ADJUSTMENT DATE": as defined in the Pricing Grid.
"ADMINISTRATIVE AGENT": as defined in the preamble hereto.
"AFFILIATE": 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. For purposes of this definition, "control" of a Person means the
power, directly or indirectly, either to (a) vote 10% or more of the securities
having ordinary voting power for the election of directors (or persons
performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.
"AFFILIATED FUND": means, with respect to any Lender that is a fund
that invests (in whole or in part) in commercial loans, any other fund that
invests (in whole or in part) in commercial loans and is managed by the same
investment advisor as such Lender or by an Affiliate of such investment advisor:
"AGGREGATE EXPOSURE": with respect to any Lender at any time, an
amount equal to (a) until the Closing Date, the aggregate amount of such
Lender's Commitments at such time and (b) thereafter, the sum of (i) the
aggregate then unpaid principal amount of such Lender's Tranche B Term Loans and
(ii) the amount of such Lender's Revolving Credit Commitment then in effect or,
if the Revolving Credit Commitments have been terminated, the amount of such
Lender's Revolving Extensions of Credit then outstanding.
"AGGREGATE EXPOSURE PERCENTAGE" with respect to any Lender at any
time, the ratio (expressed as a percentage) of such Lender's Aggregate Exposure
at such time to the Aggregate Exposure of all Lenders at such time.
"AGGREGATE QUARTERLY SHORTFALL" as defined in Section 3(a)(iv) of the
Guaranty of Wireless Revenue.
"AGREEMENT": this
Credit Agreement, as amended, supplemented, replaced
or otherwise modified from time to time in accordance with this Agreement.
"ANNUAL SHORTFALL": as defined in Section 4(a)(iii) of the Guaranty of
Wireless Revenue.
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"APPLICABLE MARGIN": for each Type of Loan, the rate per annum set
forth under the relevant column heading below:
Base Rate Eurodollar
Loans Loans
----- -----
Revolving Credit Loans and
Swing Line Loans 3.50% 4.50%
Tranche B Term Loans 3.50% 4.50%
PROVIDED, that on and after the first Adjustment Date occurring after the
completion of two full fiscal quarters of the Borrower after the Closing Date,
the Applicable Margin with respect to Revolving Credit Loans and Swing Line
Loans will be determined pursuant to the Pricing Grid.
"APPLICATION": an application, in such form as the Issuing Lender may
specify from time to time, requesting the Issuing Lender to open a Letter of
Credit.
"ARRANGER": as defined in the preamble hereto.
"ASSET SALE": (i) any Disposition of Property or series of related
Dispositions of Property (excluding any such Disposition permitted by clause
(a), (b), (c), (d), (g), (h), (i) or (j) of Section 7.5) which yields gross
proceeds to any Loan Party (valued at the initial principal amount thereof in
the case of non-cash proceeds consisting of notes or other debt securities and
valued at fair market value (as determined by the Administrative Agent in its
reasonable business judgment) in the case of other non-cash proceeds) in excess
of $1,000,000 and (ii) notwithstanding the exclusions from clause (i) above, any
transaction or series of related transactions which results in the Disposition
of any or all of the SS7 Assets (except to the extent Dispositions of individual
SS7 Assets are permitted pursuant to Sections 7.5(a), (f), (g), (h), (i) and (j)
in separate, unrelated transactions).
"ASSIGNEE": as defined in Section 10.6(c).
"ASSIGNMENT AND ACCEPTANCE": as defined in Section 10.6(c)
"ASSIGNOR": as defined in Section 10.6(c).
"AVAILABLE REVOLVING CREDIT COMMITMENT": as to any Revolving Credit
Lender at any time, an amount equal to the excess, if any, of (a) such Revolving
Credit Lender's Revolving Credit Commitment then in effect OVER (b) such
Revolving Credit Lender's Revolving Extensions of Credit then outstanding;
PROVIDED, that in calculating any Lender's Revolving Extensions of Credit for
the purpose of determining such Lender's (other than the Swingline Lender)
Available Revolving Credit Commitment pursuant to Section 2.9(a), the aggregate
principal amount of Swing Line Loans then outstanding shall be deemed to be
zero.
"BASE RATE": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/100 of 1%) equal to the greatest of (a) the Prime Rate
in effect on such day and (b) the Federal Funds Effective Rate in effect on such
day plus 1/2 of 1%. For purposes hereof: "PRIME RATE" shall mean the prime
lending rate as set forth on the British Banking Association Telerate
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Page 5 (or such other comparable page as may, in the opinion of the
Administrative Agent, replace such page for purpose of displaying such rate), as
in effect from time to time. The Prime Rate is a reference rate and does not
necessarily represent the lowest or best rate actually available. Any change in
the Base Rate due to a change in the Prime Rate or the Federal Funds Effective
Rate shall be effective as of the opening of business on the effective day of
such change in the Prime Rate or the Federal Funds Effective Rate, respectively.
"BASE RATE LOANS": Loans for which the applicable rate of interest is
based upon the Base Rate.
"BENEFICIAL OWNER": has the meaning assigned to such term in Rule
13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the
beneficial ownership of any particular "person" (as that term is used in Section
13(d)(3) of the Exchange Act), such "person" will be deemed to have beneficial
ownership of all securities that such "person" has the right to acquire by
conversion or exercise of other securities, whether such right is currently
exercisable or is exercisable only upon the occurrence of a subsequent
condition. The terms "Beneficially Owns" and "Beneficially Owned" have a
corresponding meaning.
"BENEFITED LENDER": as defined in Section 10.7.
"BOARD": the Board of Governors of the Federal Reserve System of the
United States (or any successor).
"BORROWER": as defined in the preamble hereto. For purposes of Section
4 hereof, "Borrower" shall include the Borrower both before and after giving
effect to the Merger.
"BORROWING DATE": any Business Day specified by the Borrower as a date
on which the Borrower requests the relevant Lender(s) to make Loans hereunder.
"BUSINESS DAY": (i) for all purposes other than as covered by clause
(ii) below, a day other than a Saturday, Sunday or other day on which commercial
banks in
New York City are authorized or required by law to close and (ii) with
respect to all notices and determinations in connection with, and payments of
principal and interest on, Eurodollar Loans, any day which is a Business Day
described in clause (i) and which is also a day for trading by and between banks
in Dollar deposits in the interbank eurodollar market.
"CAPITAL EXPENDITURES": for any period, with respect to any Person,
the aggregate of all expenditures by such Person and its Subsidiaries for the
acquisition or leasing (pursuant to a capital lease) of fixed or capital assets
or additions to equipment (including replacements, capitalized repairs and
improvements during such period) which should be capitalized under GAAP on a
consolidated balance sheet of such Person and its Subsidiaries; PROVIDED that,
for purposes of calculating compliance with the Consolidated Fixed Charge
Coverage Ratio and Section 7.7, the following expenditures shall be excluded,
without duplication: (i) expenditures made to restore or replace Property to the
condition of such Property immediately prior to any damage, loss, or destruction
or condemnation of such Property, to the extent such expenditure is made with,
or subsequently reimbursed out of the proceeds received from any Recovery Event
and (ii) expenditures made by the Borrower or any of its Subsidiaries
constituting an Investment
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permitted by Sections 7.8(h), (o) or (p), (iii) expenditures made by the
Borrower of any of its Subsidiaries as a tenant in leasehold improvements, to
the extent reimbursed by the landlord, (iv) expenditures made with the proceeds
of any Reinvestment Deferred Amount or proceeds of Dispositions of Assets
permitted by clause (a), (b), (c), (d), (g), (h), (i) or (j) of Section 7.5 and
(v) expenditures made with any Excluded Proceeds to the extent such Excluded
Proceeds have not been used to make Investments pursuant to Sections 7.8(h), (o)
or (p).
"CAPITAL LEASE OBLIGATIONS": as to any Person, the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and, for the purposes of
this Agreement, the amount of such obligations at any time shall be the
capitalized amount thereof at such time determined in accordance with GAAP.
"CAPITAL STOCK": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, rights or options to purchase any of the foregoing.
"CASH EQUIVALENTS": (a) United States dollars; (b) securities issued
or directly and fully guaranteed or insured by the United States government or
any agency or instrumentality of the United States government (PROVIDED that the
full faith and credit of the United States is pledged in support of those
securities), having maturities of not more than 12 months from the date of
acquisition; (c) certificates of deposit and eurodollar time deposits with
maturities of six months or less from the date of acquisition, bankers'
acceptances (or in the case of foreign Subsidiaries, the foreign equivalent)
with maturities not exceeding six months and overnight bank deposits, in each
case, with any lender party to the
Credit Agreement or with any domestic
commercial bank having capital and surplus in excess of $500,000,000 and a
Thomson Bank Watch Rating of "B" or better or in the case of foreign
Subsidiaries, any local office of any commercial bank organized under the laws
of the relevant jurisdiction or any political subdivision thereof which has a
combined capital and surplus and undivided profits in excess of $500,000,000;
(d) marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from either Standard & Poor's Rating Services or Xxxxx'x Investors
Services, Inc.; (e) repurchase obligations with a term of not more than seven
days for underlying securities of the types described in clauses (b), (c) and
(d) above entered into with any financial institution meeting the qualifications
specified in clause (c) or (d) above or with any Lender; (f) commercial paper
having the highest rating obtainable from Xxxxx'x Investors Service, Inc. or
Standard & Poor's Rating Services and in each case maturing within 12 months
after the date of acquisition; or (g) shares of money market mutual or similar
funds which invest exclusively in assets satisfying the requirements of clauses
(a) through (f) of this definition.
"CLOSING DATE": the date on which the conditions precedent set forth
in Section 5.1 shall have been satisfied or waived, which date shall be not
later than February 15, 2002.
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"CODE": the Internal Revenue Code of 1986, as amended from time to
time.
"COLLATERAL": all Property of the Loan Parties, now owned or hereafter
acquired, upon which a Lien is purported to be created by any Security Document,
including, without limitation, the Intellectual Property Collateral.
"COMMITMENT": as to any Lender, the sum of the Tranche B Term Loan
Commitment and the Revolving Credit Commitment of such Lender.
"COMMITMENT FEE RATE": 1/2 of 1% per annum.
"COMMONLY CONTROLLED ENTITY": an entity, whether or not incorporated,
which is under common control with the Borrower within the meaning of Section
4001 of ERISA or is part of a group that includes the Borrower and that is
treated as a single employer under Section 414 of the Code or of which the
Borrower is a general partner.
"COMPLIANCE CERTIFICATE": a certificate duly executed by a Responsible
Officer substantially in the form of Exhibit B.
"CONFIDENTIAL INFORMATION MEMORANDUM": the Confidential Information
Memorandum dated January 2002 and furnished to the initial Lenders.
"CONSOLIDATED CURRENT ASSETS": at any date, all amounts (other than
cash and Cash Equivalents) which would, in conformity with GAAP, be set forth
opposite the caption "total current assets" (or any like caption) on a
consolidated balance sheet of the Ultimate Parent and its Subsidiaries at such
date.
"CONSOLIDATED CURRENT LIABILITIES": at any date, all amounts that
would, in conformity with GAAP, be set forth opposite the caption "total current
liabilities" (or any like caption) on a consolidated balance sheet of the
Ultimate Parent and its Subsidiaries at such date, but excluding (a) the current
portion of any Funded Debt of the Ultimate Parent and its Subsidiaries, (b)
without duplication of clause (a) above, all Indebtedness consisting of
Revolving Credit Loans or Swing Line Loans to the extent otherwise included
therein and (c) deferred revenues.
"CONSOLIDATED EBITDA": of any Person for any period, Consolidated Net
Income of such Person and its Subsidiaries for such period PLUS, without
duplication and to the extent reflected as a charge in the statement of such
Consolidated Net Income for such period, the sum of (a) income tax expense
(including, without duplication, franchise and foreign withholding taxes and any
state single business unitary or similar tax), (b) Consolidated Interest Expense
of such Person and its Subsidiaries, amortization or write-off of debt discount
and debt issuance costs and commissions, discounts and other fees and charges
associated with Indebtedness (including, in the case of the Borrower, the Loans,
Letters of Credit and the Senior Subordinated Notes (including the exchange
thereof pursuant to the Registration Rights Agreement)), (c) depreciation and
amortization expense, (d) amortization of intangibles (including, but not
limited to, goodwill) and organization costs, (e) any extraordinary, unusual or
non-recurring expenses or losses (including, whether or not otherwise includable
as a separate item in the
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statement of such Consolidated Net Income for such period, losses on sales of
assets outside of the ordinary course of business, indemnification expenditures
to the extent reimburseable by third parties, expenses incurred pursuant to the
Acquisition Documents, any Permitted Acquisition, any Investment permitted
pursuant to Sections 7.8(o) or (p), or severance or relocation costs) (f) any
other non-cash charges (including unrealized losses on Hedge Agreements
permitted hereunder and losses recognized in respect of post-retirement benefits
as a result of the application of FASB 106 and non-cash foreign currency
translation adjustments as a result of the application of FASB 52 and losses on
ownership of minority interests in any Person), (g) proceeds received from
business interruption insurance, (h) Synthetic Lease Obligations, to the extent
deducted as an expense in such period and MINUS, to the extent included in the
statement of such Consolidated Net Income for such period, the sum of (a)
interest income, (b) any extraordinary, unusual or non-recurring income or gains
(including, whether or not otherwise includable as a separate item in the
statement of such Consolidated Net Income for such period, gains on the sales of
assets or Investments outside of the ordinary course of business and
indemnification payments received from third parties to the extent amounts paid
with respect to such claims were added to Consolidated Net Income; PROVIDED
however that in no case shall any income included in Consolidated Net Income
from the Guaranty of Wireless Revenue be excluded pursuant to this clause (b))
and (c) any other non-cash income (including unrealized gains on Hedge
Agreements, gains recognized in respect of post-retirement benefits as a result
of the application of FASB 106, gains with respect to foreign currency
translation as a result of the application of FASB 52 and gains on ownership of
minority interests in any Person), all as determined on a consolidated basis;
PROVIDED that for purposes of calculating Consolidated EBITDA of the Borrower
and its Subsidiaries for any period, (i) the Consolidated EBITDA of any Person
or business acquired by the Borrower or its Subsidiaries during such period
shall be included on a pro forma basis for such period (assuming the
consummation of such acquisition and the incurrence or assumption of any
Indebtedness in connection therewith occurred on the first day of such period)
if the consolidated balance sheet of such acquired Person or business and its
consolidated Subsidiaries as at the end of the period preceding the acquisition
of such Person and the related consolidated statements of income and of cash
flows for the period in respect of which Consolidated EBITDA is to be calculated
(x) have been previously provided to the Administrative Agent and (y) either (1)
have been reported on without a qualification arising out of the scope of the
audit by independent certified public accountants of nationally recognized
standing or (2) have been found reasonably acceptable by the Administrative
Agent and (ii) the Consolidated EBITDA of any Person or business Disposed of by
the Borrower or its Subsidiaries during such period shall be excluded for such
period (assuming the consummation of such Disposition and the repayment of any
Indebtedness in connection therewith occurred on the first day of such period).
Consolidated EBITDA may be determined to give pro forma effect to expense and
cost reductions, PROVIDED that such calculations are done on a basis that is
permitted by Regulation S-X under the Securities Act of 1933, as amended.
"CONSOLIDATED FIXED CHARGE COVERAGE RATIO": for any period, the ratio
of (a) Consolidated EBITDA of the Ultimate Parent and its Subsidiaries for such
period MINUS the aggregate amount actually paid by the Ultimate Parent and its
Subsidiaries in cash during such period on account of Capital Expenditures
(other than those financed by Indebtedness (other than Revolving Credit Loans))
to (b) Consolidated Fixed Charges for such period.
7
"CONSOLIDATED FIXED CHARGES": for any period, the sum (without
duplication) of (a) Consolidated Cash Interest Expense of the Ultimate Parent
and its Subsidiaries payable in cash for such period, (b) provision for cash
income taxes made by the Ultimate Parent and its Subsidiaries on a consolidated
basis in respect of such period (net of any cash refund in respect of income
taxes actually received in such period) and (c) scheduled payments made during
such period on account of principal of Indebtedness of the Ultimate Parent and
its Subsidiaries (including scheduled principal payments in respect of the
Tranche B Term Loans (as adjusted to give effect to any prior prepayments));
PROVIDED that, for the first three fiscal quarters subsequent to the Closing
Date, for purposes of this definition, (i) Consolidated Cash Interest Expense
shall be deemed to equal Consolidated Cash Interest Expense for such fiscal
quarter (and, in the case of the latter two such determinations, each previous
fiscal quarter commencing after the Closing Date) multiplied by 4, 2 and 4/3,
respectively, (ii) provisions for cash income taxes made shall be deemed to
equal the provisions made for such fiscal quarter (and, in the case of the
latter two such determinations, each previous fiscal quarter commencing after
the Closing Date) multiplied by 4, 2 and 4/3, respectively, and (iii) scheduled
payments made of principal of Indebtedness shall be deemed to equal the
scheduled payments of principal of Indebtedness payable by the Borrower or any
of its Subsidiaries during the full fiscal year ending December 31, 2002;
PROVIDED, further, that, for the first three fiscal quarters of fiscal year
2003, for purposes of calculating the amount of scheduled payments of principal
of Indebtedness under clause (c) above, the scheduled payment amount of
Indebtedness hereunder for any fiscal quarter in fiscal year 2002 shall be
deemed to be an amount equal to (X) the sum of the scheduled payments of
principal for such fiscal year pursuant to Section 2.3, divided by (Y) four.
"CONSOLIDATED INTEREST COVERAGE RATIO": for any period, the ratio of
(a) Consolidated EBITDA of the Ultimate Parent and its Subsidiaries for such
period to (b) Consolidated Cash Interest Expense of the Ultimate Parent and its
Subsidiaries payable in cash for such period; PROVIDED that, for first three
fiscal quarters subsequent to the Closing Date, for purposes of this definition,
Consolidated Cash Interest Expense shall be deemed to equal Consolidated Cash
Interest Expense for such fiscal quarter (and, in the case of the latter two
such determinations, each previous fiscal quarter commencing after the Closing
Date) multiplied by 4, 2 and 4/3, respectively.
"CONSOLIDATED CASH INTEREST EXPENSE": for any period, Consolidated
Interest Expense for such period, excluding any amounts not payable in cash.
"CONSOLIDATED INTEREST EXPENSE": of any Person for any period, total
interest expense (including that attributable to Capital Lease Obligations) of
such Person and its Subsidiaries for such period with respect to all outstanding
Indebtedness of such Person and its Subsidiaries (including, without limitation,
all commissions, discounts and other fees and charges owed by such Person with
respect to letters of credit and bankers' acceptance financing and net costs of
such Person under Hedge Agreements in respect of interest rates to the extent
such net costs are allocable to such period in accordance with GAAP, but
excluding (i) any fees and expenses payable within 60 days of the Closing Date
in connection with the Acquisition and the financing thereof and (ii) fees and
expenses related to the exchange of the Senior Subordinated Notes pursuant to
the Registration Rights Agreement).
8
"CONSOLIDATED LEVERAGE RATIO": as at the last day of any period of
four consecutive fiscal quarters, the ratio of (a) Consolidated Total Debt on
such day to (b) Consolidated EBITDA of the Ultimate Parent and its Subsidiaries
for such period.
"CONSOLIDATED NET INCOME": of any Person for any period, the
consolidated net income (or loss) of such Person and its Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP; PROVIDED,
that in calculating Consolidated Net Income of the Ultimate Parent and its
Subsidiaries for any period, there shall be included, without duplication, (a)
with respect to the Borrower, if such period ends on one of the first three
fiscal quarters of the fiscal year of the Borrower, an amount equal to the
product of (i) the Aggregate Quarterly Shortfall occurring during such period,
multiplied by (ii) 0.61875 and (b) with respect to any Loan Party, if such
period is the fourth fiscal quarter of a fiscal year of the Borrower, an amount
equal to the product of (i) the Annual Shortfall occurring during such period,
multiplied by (ii) 0.825 (each of clause (a) or (b) above, the "GUARANTEED
AMOUNT"); PROVIDED that if the actual amount paid to the Borrower with respect
to such period pursuant to the Guaranty of Wireless Revenue is less than the
applicable Guaranteed Amount with respect to such period, the Consolidated Net
Income for such period shall be promptly restated to effect the actual amount
paid to the Borrower in such period and there shall be excluded (a) the income
(or deficit) of any Person accrued prior to the date it becomes a Subsidiary of
the Borrower or is merged into or consolidated with the Borrower or any of its
Subsidiaries, (b) the income (or deficit) of any Person (other than a Subsidiary
of the Borrower) in which the Borrower or any of its Subsidiaries has an
ownership interest, except to the extent that any such income is actually
received by the Borrower or such Subsidiary in the form of dividends or similar
distributions, and (c) the undistributed earnings of any Subsidiary of the
Borrower to the extent that the declaration or payment of dividends or similar
distributions by such Subsidiary is not at the time permitted by the terms of
any Contractual Obligation (other than under any Loan Document) or Requirement
of Law applicable to such Subsidiary.
"CONSOLIDATED SENIOR DEBT": all Consolidated Total Debt other than
Subordinated Debt.
"CONSOLIDATED SENIOR DEBT RATIO": as of the last day of any period of
four consecutive fiscal quarters, the ratio of (a) Consolidated Senior Debt on
such day to (b) Consolidated EBITDA of the Ultimate Parent and its Subsidiaries
for such period.
"CONSOLIDATED TOTAL DEBT": at any date, the accreted value of all
Funded Debt of the Ultimate Parent and its Subsidiaries at such date, determined
on a consolidated basis in accordance with GAAP.
"CONSOLIDATED WORKING CAPITAL": at any date, the excess of
Consolidated Current Assets on such date over Consolidated Current Liabilities
on such date.
"CONTINUING DIRECTORS": as to any Person, the directors of such Person
on the Closing Date, after giving effect to the Acquisition and the other
transactions contemplated hereby, and each other director, if, in each case,
such other director's nomination for election to the board of directors of such
Person is recommended by at least a majority of the then Continuing Directors or
such other director receives the vote of each of the shareholders of such
9
Person (other than, in the case of the Parent, any shareholders who are
Management Investors) on the Closing Date in his or her election by the
shareholders of such Person.
"CONTRACTUAL OBLIGATION": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
Property is bound.
"CONTROL AGREEMENT": each Control Agreement to be executed and
delivered by each Loan Party party thereto pursuant to the Guarantee and
Collateral Agreement, as the same may be amended, supplemented, replaced or
otherwise modified from time to time in accordance with this Agreement.
"CONTROL INVESTMENT AFFILIATE": as to any Person, any other Person
that (a) directly or indirectly, is in control of, is controlled by, or is under
common control with, such Person and (b) is organized by such Person primarily
for the purpose of making equity or debt investments in one or more companies.
For purposes of this definition, "control" of a Person means the power, directly
or indirectly, to direct or cause the direction of the management and policies
of such Person whether by contract or otherwise.
"DEFAULT": any of the events specified in Section 8, whether or not
any requirement for the giving of notice, the lapse of time, or both, has been
satisfied.
"DERIVATIVES COUNTERPARTY": as defined in Section 7.6.
"DISPOSITION": with respect to any Property, any sale, lease, sale and
leaseback, assignment, conveyance, transfer or other disposition thereof; and
the terms "DISPOSE" and "DISPOSED OF" shall have correlative meanings.
"DISQUALIFIED STOCK": any Capital Stock or other ownership or profit
interest of any Loan Party that by its terms any Loan Party is or, upon the
passage of time or the occurrence of any event, may at any time prior to six
months after the final scheduled maturity of the Tranche B Term Loans become
obligated to redeem, purchase, retire, defease or otherwise make any payment in
respect of in consideration other than Capital Stock (other than Disqualified
Stock); PROVIDED that Capital Stock that would constitute Disqualified Stock
solely because the holders of such Capital Stock have the right to require the
issuer thereof to repurchase such Capital Stock upon the occurrence of a "change
of control" shall not constitute Disqualified Stock if the terms of such Capital
Stock provide that the repurchase obligation is subject to the agreements of the
Loan Parties herein and that the issuer of such Capital Stock shall have no
obligation to repurchase such Capital Stock until all the Obligations have been
paid in full.
"DOLLARS" and "$": dollars in lawful currency of the United States of
America.
"DOMESTIC SUBSIDIARY": any Subsidiary of the Ultimate Parent organized
under the laws of any jurisdiction within the United States of America.
"EMBRATEL ACQUISITION": the acquisition of Empresa Brasileira de
Telecomunicacoes S.A.
10
"ENVIRONMENTAL LAWS": any and all laws, rules, orders, regulations,
statutes, ordinances, codes, decrees, or other legally enforceable requirements
(including, without limitation, common law) of any international authority,
foreign government, the United States, or any state, local, municipal or other
Governmental Authority, regulating, relating to or imposing liability or
standards of conduct concerning protection of the environment or of human
health, or employee health and safety, as has been, is now, or may at any time
hereafter be, in effect.
"ENVIRONMENTAL PERMITS": any and all permits, licenses, approvals,
registrations, notifications, exemptions and any other authorization required
under any Environmental Law.
"EQUITY CONTRIBUTION AGREEMENT": the Equity Contribution Agreement,
dated February __, 2002, made by the Ultimate Parent in favor of the Parent, the
Borrower and TSI Networks Inc., as the same may be amended, supplemented,
replaced or otherwise modified from time to time in accordance with this
Agreement.
"EQUITY INVESTMENT AMOUNT": as defined in Section 5.1(b)(ii).
"EQUITY INVESTORS": The Control Investment Affiliates of the
Principal, the Other Equity Investors and the Management Investors.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"EUROCURRENCY RESERVE REQUIREMENTS": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal fraction) of reserve requirements in effect on such day
(including, without limitation, basic, supplemental, marginal and emergency
reserves under any regulations of the Board or other Governmental Authority
having jurisdiction with respect thereto) dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D of the Board) maintained by a member bank of the
Federal Reserve System. Eurodollar Loans shall be deemed to constitute
Eurocurrency Liabilities and to be subject to such reserve requirements without
benefit or credit for proration, exceptions or offsets which may be available
from time to time to any Lender under Regulation D.
"EURODOLLAR BASE RATE": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum determined on the
basis of the rate for deposits in Dollars for a period equal to such Interest
Period commencing on the first day of such Interest Period appearing on Page
3750 of the Dow Xxxxx Telerate screen as of 11:00 A.M., London time, two
Business Days prior to the beginning of such Interest Period. In the event that
such rate does not appear on Page 3750 of the Dow Xxxxx Telerate screen (or
otherwise on such screen), the "EURODOLLAR BASE RATE" for purposes of this
definition shall be determined by the Administrative Agent as the average of the
rate of interest at which deposits in Dollars for delivery on the first day of
such Interest Period in same day funds in the approximate amount of the
Eurodollar Loan and with an equivalent period that would be offered by Toronto
Dominion (
New York), Inc., UBS AG, Stamford Branch and Barclays Bank PLC to
first-tier major banks in the offshore Dollar market at their request at
approximately 11:00 A.M., London time, two Business Days prior to the beginning
of such Interest Period.
11
"EURODOLLAR LOANS": Loans the rate of interest applicable to which is
based upon the Eurodollar Rate.
"EURODOLLAR RATE": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, a rate per annum determined for such day
in accordance with the following formula (rounded upward to the nearest 1/100th
of 1%):
Eurodollar Base Rate
----------------------------------
1.00 - Eurocurrency Reserve Requirements
"EURODOLLAR TRANCHE": the collective reference to Eurodollar Loans
with current Interest Periods which begin on the same date and end on the same
later date (whether or not such Loans shall originally have been made on the
same day).
"EVENT OF DEFAULT": any of the events specified in Section 8, PROVIDED
that any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.
"EXCESS CASH FLOW": for any fiscal year of the Borrower, the excess,
if any, of (a) the sum, without duplication, of (i) Consolidated Net Income of
the Loan Parties for such fiscal year, (ii) an amount equal to the amount of all
non-cash charges (including depreciation and amortization) deducted in arriving
at such Consolidated Net Income, (iii) decreases in Consolidated Working Capital
of the Loan Parties for such fiscal year, (iv) an amount equal to the aggregate
net non-cash loss on the Disposition of Property by the Loan Parties during such
fiscal year (other than sales of inventory in the ordinary course of business),
to the extent deducted in arriving at such Consolidated Net Income and (v) the
net increase during such fiscal year (if any) in long-term deferred tax accounts
of the Borrower OVER (b) the sum, without duplication, of (i) an amount equal to
the amount of all non-cash credits included in arriving at such Consolidated Net
Income, (ii) the aggregate amount actually paid by any Loan Party in cash during
such fiscal year on account of Capital Expenditures, PLUS any amount permitted
pursuant to Section 7.7 to be carried forward to the next succeeding fiscal year
(excluding (1) Capital Expenditures constituting Permitted Acquisitions, (2) the
principal amount of Indebtedness incurred (other than Indebtedness incurred
hereunder) in connection with such expenditures, (3) any such expenditures
financed with the proceeds of any Reinvestment Deferred Amount and (4) any such
expenditures financed with any amount carried over from the previous fiscal year
pursuant to Section 7.7), (iii) the aggregate amount of all prepayments of
Revolving Credit Loans and Swing Line Loans during such fiscal year to the
extent accompanying permanent optional reductions of the Revolving Credit
Commitments and all optional prepayments of Indebtedness, including the Tranche
B Term Loans during such fiscal year, (iv) the aggregate amount of all regularly
scheduled principal payments of Indebtedness (including, without limitation, the
Tranche B Term Loans) of any Loan Party made during such fiscal year (other than
in respect of any revolving credit facility to the extent there is not an
equivalent permanent reduction in commitments thereunder such that after giving
effect to such commitment reduction the applicable Loan Party would not be able
to reborrow all or any of the amount so prepaid), (v) increases in Consolidated
Working Capital of the Loan Parties for such fiscal year, (vi) an amount equal
to the aggregate net non-cash gain on the Disposition of Property (including
Dispositions consisting of Asset Sales or Recovery Events) by any Loan Party
during such fiscal
12
year (other than sales of inventory in the ordinary course of business), to the
extent included in arriving at such Consolidated Net Income, (vii) the net
decrease during such fiscal year (if any) in long-term deferred tax accounts of
the Borrower, (viii) cash payments made during such period in satisfaction of
non-current liabilities of the Borrower and its Subsidiaries to the extent such
amounts were included as non-cash charges and added back in a previous period
pursuant to clause (a)(ii) above and (ix) cash payments made by the Borrower
during such period permitted under Section 7.6. Notwithstanding the foregoing,
any effects of the Guaranty of Wireless Revenue on the income statement or the
balance sheet of the Loan Parties shall not be double-counted for the purpose of
calculating Excess Cash Flow.
"EXCESS CASH FLOW APPLICATION DATE": as defined in Section 2.12(c).
"EXCHANGE ACT": the Securities Exchange Act of 1934, as amended.
"EXCLUDED FOREIGN SUBSIDIARY": any Foreign Subsidiary in respect of
which either (i) the pledge of all of the Capital Stock of such Subsidiary as
Collateral or (ii) the guaranteeing by such Subsidiary of the Obligations,
would, in the good faith judgment of the Borrower, result in adverse tax
consequences to the Loan Parties, taken as a whole; PROVIDED, HOWEVER, that a
Foreign Subsidiary that (1) is not directly or indirectly owned in whole or in
part by a Foreign Subsidiary (unless each such Foreign Subsidiary is a
pass-through entity for United States federal income tax purposes) and (2) is
treated as a pass-through entity for United States federal income tax purposes
shall not be an Excluded Foreign Subsidiary while so treated.
"EXCLUDED PROCEEDS": the sum of (i) up to $25.0 million of Net Cash
Proceeds received in connection with the issuance and sale of the Capital Stock
of the Ultimate Parent to the extent such Net Cash Proceeds are invested in a
Permitted Acquisition, as permitted under Sections 7.8(o) or (p) or used for
Capital Expenditures, (ii) the Net Cash Proceeds received from the issuance of
director's qualifying shares, (iii) Net Cash Proceeds not to exceed $10,000,000
over the term of this Agreement (PROVIDED that no more than $5,000,000 in the
aggregate of such Net Cash Proceeds may be Excluded Proceeds per fiscal year)
received in connection with the issuance and sale of the Capital Stock of the
Ultimate Parent and the Parent to employees, officers and directors, (iv) Net
Cash Proceeds received by a Subsidiary from its parent in connection with an
Investment by such Subsidiary to be promptly made pursuant to Section 7.8, (v)
Net Cash Proceeds received from the issuance of Capital Stock in the Ultimate
Parent or the Parent to the extent such proceeds are used to finance the
substantially concurrent repurchase of Capital Stock of the Parent from
employees, officers and directors or Capital Stock of the Ultimate Parent, (vi)
Net Cash Proceeds received pursuant to the issuance and sale of Capital Stock of
the Ultimate Parent in connection with Section 4.20 of the Senior Subordinated
Note Indenture and (vii) Net Cash Proceeds received in connection with the
issuance and sale of common stock of the Ultimate Parent which are used to
repurchase the Senior Subordinated Notes held by GTCR Capital Partners, L.P. on
the Closing Date pursuant to Section 7.9(a) within two Business Days of receipt
thereof.
"FACILITY": each of (a) the Tranche B Term Loan Commitments and the
Tranche B Term Loans made thereunder (the "TRANCHE B TERM LOAN FACILITY") and
(b) the Revolving
13
Credit Commitments and the extensions of credit made thereunder (the "REVOLVING
CREDIT FACILITY").
"FEDERAL FUNDS EFFECTIVE RATE": for any day, the weighted average of
the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of
New York, or, if such
rate is not so published for any day which is a Business Day, the average of the
quotations for the day of such transactions received by the Administrative Agent
from three federal funds brokers of recognized standing selected by it.
"FEE LETTER": the Fee Letter, dated December 7, 2001, as amended and
restated on January 14, 2002, among the Parents, the Borrower, the
Administrative Agent and the Arranger, as the same may be amended, supplemented,
replaced or otherwise modified from time to time in accordance with this
Agreement.
"FOREIGN SUBSIDIARY": any Subsidiary of the Ultimate Parent that is
not a Domestic Subsidiary.
"FQ1", "FQ2", "FQ3", and "FQ4": when used with a numerical year
designation, means the first, second, third or fourth fiscal quarters,
respectively, of such fiscal year of the Borrower (e.g., FQ1 2002 means the
first fiscal quarter of the Borrower's 2002 fiscal year, which ends December 31,
2002).
"FUNDED DEBT": as to any Person, all Indebtedness of such Person of
the types described in clauses (a) through (e) of the definition of
"Indebtedness" in this Section; PROVIDED that Indebtedness incurred pursuant to
Section 7.2(g) shall be excluded from the definition of Funded Debt.
"FUNDING OFFICE": the office specified from time to time by the
Administrative Agent as its funding office by notice to the Borrower and the
Lenders.
"GAAP": generally accepted accounting principles in the United States
of America as in effect from time to time, except that for purposes of Section
7.1, GAAP shall be determined on the basis of such principles in effect on the
date hereof and consistent with those used in the preparation of the most recent
audited financial statements delivered pursuant to Section 4.1(b).
"GOVERNING DOCUMENTS": collectively, as to any Person, the articles or
certificate of incorporation and bylaws, any shareholders agreement, certificate
of formation, limited liability company agreement, partnership agreement or
other formation or constituent documents of such Person.
"GOVERNMENTAL AUTHORITY": any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
14
"GUARANTEE AND COLLATERAL AGREEMENT": the Guarantee and Collateral
Agreement to be executed and delivered by the Parents, the Borrower and each
Subsidiary Guarantor, substantially in the form of Exhibit A, as the same may be
amended, supplemented, replaced or otherwise modified from time to time in
accordance with this Agreement.
"GUARANTEE OBLIGATION": as to any Person (the "GUARANTEEING PERSON"),
any obligation of (a) the guaranteeing person or (b) another Person (including,
without limitation, any bank under any letter of credit) to induce the creation
of which the guaranteeing person has issued a reimbursement, counterindemnity or
similar obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "PRIMARY OBLIGATIONS")
of any other third Person (the "PRIMARY OBLIGOR") in any manner, whether
directly or indirectly, including, without limitation, any obligation of the
guaranteeing person, whether or not contingent, (i) to purchase any such primary
obligation or any Property constituting direct or indirect security therefor,
(ii) to advance or supply funds (1) for the purchase or payment of any such
primary obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) 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
(iv) otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; PROVIDED, HOWEVER, that the term
Guarantee Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. The amount of any Guarantee
Obligation of any guaranteeing person shall be deemed to be the lower of (a) an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Guarantee Obligation is made and (b) the maximum amount
for which such guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary obligation
and the maximum amount for which such guaranteeing person may be liable are not
stated or determinable, in which case the amount of such Guarantee Obligation
shall be such guaranteeing person's maximum reasonably anticipated liability in
respect thereof as determined by the Borrower in good faith.
"GUARANTORS": the collective reference to the Ultimate Parent and the
Subsidiary Guarantors.
"GUARANTY OF WIRELESS REVENUE": the Guaranty of Wireless Revenue dated
February [__], 2002 by and between Verizon Information Services Inc. and the
Borrower, and all exhibits and annexes thereto, as the same may be amended,
supplemented, replaced or otherwise modified from time to time in accordance
with this Agreement.
"HEDGE AGREEMENTS": all interest rate swaps, caps or collar agreements
or similar arrangements entered into by the Ultimate Parent or any of its
Subsidiaries providing for protection against fluctuations in interest rates or
currency exchange rates or the exchange of nominal interest obligations, either
generally or under specific contingencies.
"INDEBTEDNESS": of any Person at any date, without duplication, (a)
all indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of Property or services (other than trade
payables and accrued expenses
15
incurred in the ordinary course of such Person's business), (c) all obligations
of such Person evidenced by notes, bonds, debentures or other similar
instruments and, with respect to the Borrower, all obligations arising under the
Guaranty of Wireless Revenue regardless of whether evidenced by a note or
similar instrument, (d) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to Property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such Property), (e) all Capital Lease Obligations or Synthetic Lease
Obligations of such Person, (f) all obligations of such Person, contingent or
otherwise, as an account party under acceptance, letter of credit or similar
facilities, (g) all obligations of such Person, contingent or otherwise, to
purchase, redeem, retire or otherwise acquire for value any Capital Stock of
such Person, (h) all Guarantee Obligations of such Person in respect of
obligations of the kind referred to in clauses (a) through (g) above; (i) all
obligations of the kind referred to in clauses (a) through (h) above secured by
(or for which the holder of such obligation has an existing right, contingent or
otherwise, to be secured by) any Lien on Property (including, without
limitation, accounts and contract rights) owned by such Person, whether or not
such Person has assumed or become liable for the payment of such obligation, (j)
for the purposes of Section 8(e) only, all obligations of such Person in respect
of Hedge Agreements and (k) the liquidation value of any Disqualified Stock of
such Person or its Subsidiaries held by any Person other than such Person and
its Wholly Owned Subsidiaries; PROVIDED that (i) Indebtedness shall not include
any earn-out obligations and (ii) the amount of any Indebtedness (or portion
thereof) which is Non-Recourse Indebtedness or limited to the obligor thereunder
and for which recourse is limited to an identified asset, shall be equal to the
lesser of (A) the limited amount of such obligor's obligation and (B) the fair
market value of such asset. The amount of any Indebtedness under clause (j)
shall be the net amount, including any net termination payments, that would be
required to be paid to a counterparty on such date if a termination of the
applicable Hedge Agreement were to occur on such date, rather than the
notational amount of the applicable Hedge Agreement.
"INDEMNIFIED LIABILITIES": as defined in Section 10.5.
"INDEMNITEE": as defined in Section 10.5.
"INSOLVENCY": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"INSOLVENT": pertaining to a condition of Insolvency.
"INSURANCE REQUIREMENTS": all material terms of any insurance policy
required pursuant to this Agreement or any Security Document and all material
regulations and then current standards applicable to or affecting any Mortgaged
Property or any part thereof or any use or condition thereof, which may, at any
time, be recommended by the Board of Fire Underwriters, if any, having
jurisdiction over any Mortgaged Property, or any other body exercising similar
functions.
"INTELLECTUAL PROPERTY": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether arising
under United States, state, multinational or foreign laws or otherwise,
including, without limitation, copyrights, patents,
16
trademarks (and related goodwill), service-marks (and related goodwill), trade
names, technology, know-how and processes, recipes, formulas, trade secrets, or
licenses (under which the applicable Person is licensor or licensee) relating to
any of the foregoing and all rights to xxx at law or in equity for any
infringement or other impairment thereof, including the right to receive all
proceeds and damages therefrom.
"INTELLECTUAL PROPERTY AGREEMENT": the Intellectual Property Agreement
dated February __, 2002 by and among Verizon Information Services Inc., Verizon
Communications Inc. and the Borrower, and all schedules thereto, as the same may
be amended, supplemented replaced or otherwise modified from time to time in
accordance with this Agreement.
"INTELLECTUAL PROPERTY COLLATERAL": all Intellectual Property of the
Loan Parties, now owned or hereafter acquired, upon which a Lien is purported to
be created by the Intellectual Property Security Agreement or the Guarantee and
Collateral Agreement.
"INTELLECTUAL PROPERTY SECURITY AGREEMENT": Each Intellectual Property
Security Agreement to be executed and delivered by a Loan Party and any After
Acquired Intellectual Property Security Agreement executed by a Loan Party,
substantially in the form of Exhibit B-1 or B-2, respectively, to the Guarantee
and Collateral Agreement, as the same may be amended, supplemented, replaced or
otherwise modified from time to time in accordance with this Agreement.
"INTEREST PAYMENT DATE" (a) as to any Base Rate Loan, the last day of
each March, June, September and December to occur while such Loan is outstanding
and the final maturity date of such Loan, (b) as to any Eurodollar Loan having
an Interest Period of three months or less, the last day of such Interest
Period, (c) as to any Eurodollar Loan having an Interest Period longer than
three months, each day which is three months, or a whole multiple thereof, after
the first day of such Interest Period and the last day of such Interest Period
and (d) as to any Loan (other than any Loan that is a Base Rate Loan (unless all
Revolving Credit Loans are being repaid in full in immediately available funds
and the Revolving Credit Commitments terminated) and any Swing Line Loan), the
date of any repayment or prepayment made in respect thereof.
"INTEREST PERIOD": as to any Eurodollar Loan, (a) initially, the
period commencing on the borrowing or conversion date, as the case may be, with
respect to such Eurodollar Loan and ending one, two, three or six or (if
available to all Lenders under the relevant Facility) nine or twelve months
thereafter, as selected by the Borrower in its Notice of Borrowing or notice of
conversion, as the case may be, given with respect thereto; and (b) thereafter,
each period commencing on the last day of the next preceding Interest Period
applicable to such Eurodollar Loan and ending one, two, three or six or (if
available to all Lenders under the relevant Facility) nine or twelve months
thereafter, as selected by the Borrower by irrevocable notice to the
Administrative Agent not less than three Business Days prior to the last day of
the then current Interest Period with respect thereto; PROVIDED that, all of the
foregoing provisions relating to Interest Periods are subject to the following:
(i) if any Interest Period would otherwise end on a day that
is not a Business Day, such Interest Period shall be extended to the
next succeeding
17
Business Day unless the result of such extension would be to carry
such Interest Period into another calendar month in which event such
Interest Period shall end on the immediately preceding Business Day;
(ii) any Interest Period that would otherwise extend beyond
the Scheduled Revolving Credit Termination Date or beyond the date
final payment is due on the Tranche B Term Loans, as the case may be,
shall end on the Revolving Credit Termination Date or such due date,
as applicable; and
(iii) any Interest Period that begins on the last 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 end on the last Business Day of a calendar month.
"INVESTMENTS": as defined in Section 7.8.
"ISSUING LENDER": a bank to be chosen by the Borrower and the
Administrative Agent, in its capacity as issuer of any Letter of Credit.
"L/C COMMITMENT": $5,000,000.
"L/C FEE PAYMENT DATE": the last day of each March, June, September
and December and the last day of the Revolving Credit Commitment Period.
"L/C OBLIGATIONS": at any time, an amount equal to the sum of, without
duplication, (a) the aggregate then undrawn and unexpired amount of the then
outstanding Letters of Credit and (b) the aggregate amount of drawings under
Letters of Credit that have not then been reimbursed pursuant to Section 3.5.
"L/C PARTICIPANTS": the collective reference to all the Revolving
Credit Lenders other than the Issuing Lender.
"XXXXXX ENTITY": any of Xxxxxx Commercial Paper Inc. or any of its
affiliates (including, without limitation, Syndicated Loan Funding Trust).
"LENDER ADDENDUM": with respect to any initial Lender, a Lender
Addendum, substantially in the form of Exhibit H, to be executed and delivered
by such Lender on the Closing Date as provided in Section 10.17.
"LENDERS": as defined in the preamble hereto and includes the Issuing
Lender.
"LETTERS OF CREDIT": as defined in Section 3.1(a).
"LIEN": any mortgage, pledge, hypothecation, assignment, security
deposit arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature
18
whatsoever (including, without limitation, any conditional sale or other title
retention agreement and any capital lease having substantially the same economic
effect as any of the foregoing).
"LOAN": any loan made by any Lender pursuant to this Agreement.
"LOAN DOCUMENTS": this Agreement, the Security Documents, the
Applications and the Notes.
"LOAN PARTIES": the Parents, the Borrower and each Subsidiary of the
Ultimate Parent which is a party to a Loan Document (including pursuant to
Section 6.10). For purposes of Section 4 hereof, "Loan Parties" shall include
TSI both before and after giving effect to the Merger.
"MAJORITY FACILITY LENDERS": with respect to any Facility, the holders
of more than 50% of the aggregate unpaid principal amount of the Tranche B Term
Loans or the Total Revolving Extensions of Credit, as the case may be,
outstanding under such Facility (or, in the case of the Revolving Credit
Facility, prior to any termination of the Revolving Credit Commitments, the
holders of more than 50% of the Total Revolving Credit Commitments).
"MAJORITY REVOLVING CREDIT FACILITY LENDERS": the Majority Facility
Lenders in respect of the Revolving Credit Facility.
"MANAGEMENT INVESTORS": Xxxxxx Xxxxx, Xxxxxxx Xxxxxxx, Xxxx X'Xxxxx,
Xxxxxx Xxxxxx, and all other individuals who hold Capital Stock on the Closing
Date.
"MATERIAL ADVERSE EFFECT": a material adverse condition or a material
adverse change in or affecting (a) the condition (financial or otherwise),
results of operations, assets, liabilities or prospects of the Loan Parties
taken as a whole, (b) the validity or enforceability of this Agreement or any of
the other Loan Documents, (c) the validity, enforceability or priority of the
Liens purported to be created by the Security Documents, (d) the rights or
remedies of any Secured Party hereunder or under any of the other Loan Documents
or, solely for the purpose of determining whether the conditions in Section 5.2
are satisfied on the Closing Date, (e) the Acquisition.
"MATERIAL SOFTWARE": the "Business Software" as defined in the
Intellectual Property Agreement.
"MATERIALS OF ENVIRONMENTAL CONCERN": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products,
polychlorinated biphenyls, urea-formaldehyde insulation, asbestos, pollutants,
contaminants, radioactivity, and any other toxic or hazardous substances of any
kind, that is regulated pursuant to or could give rise to liability under any
Environmental Law.
"MERGER": as defined in the recitals hereto.
"MORTGAGES": any and all mortgages and/or deeds of trust made by any
Loan Party in favor of, or for the benefit of, the Administrative Agent for the
benefit of the Secured
19
Parties, in a form as may be reasonably agreed to by the Administrative Agent
and the Loan Parties party thereto, as the same may be amended, supplemented,
replaced or otherwise modified from time to time in accordance with this
Agreement.
"MULTIEMPLOYER PLAN": a Plan that is a multiemployer plan as defined
in Section 3(37) or 4001(a)(3) of ERISA.
"NET CASH PROCEEDS": (a) in connection with any Asset Sale or any
Recovery Event, the proceeds thereof in the form of cash and Cash Equivalents
(including any such proceeds received by way of deferred payment of principal
pursuant to a note or installment receivable or purchase price adjustment
receivable or otherwise, but only as and when received) of such Asset Sale or
Recovery Event, net of reasonable and customary attorneys' fees, accountants'
fees, investment banking fees, amounts required to be applied to the repayment
of Indebtedness (together with any accrued and unpaid interest thereon, premium
or penalty or other amount payable with respect thereto) secured by a Lien
expressly permitted hereunder on any asset which is the subject of such Asset
Sale or Recovery Event (other than any Lien pursuant to a Security Document) and
other reasonable and customary fees and expenses, in each case, to the extent
actually incurred in connection therewith and net of (i) taxes paid or
reasonably estimated to be payable as a result thereof (after taking into
account any available tax credits or deductions and any tax sharing
arrangements, and with respect to any Asset Sale involving SS7, taxes payable by
the members of the Ultimate Parent resulting from the Ultimate Parent's
Disposition of its direct interest in SS7) and (ii) solely in connection with
any such Asset Sale, any reserve established in accordance with GAAP or amounts
deposited in escrow for adjustment in respect of the sale price of such asset or
assets or for indemnities with respect to any Asset Sale, PROVIDED that any such
reserved or escrowed amounts shall be Net Cash Proceeds to the extent and at the
time released to a Loan Party or not required to be so used and (b) in
connection with any issuance or sale of equity securities or debt securities or
instruments or the incurrence of loans, the cash proceeds received from such
issuance or incurrence, net of reasonable and customary attorneys' fees,
investment banking fees, accountants' fees, underwriting discounts and
commissions and other reasonable and customary fees and expenses, in each case,
to the extent actually incurred in connection therewith.
"NON-EXCLUDED TAXES": as defined in Section 2.20(a).
"NON-RECOURSE INDEBTEDNESS": Indebtedness as to which neither the
Ultimate Parent nor any of its Subsidiaries: (1)(a) provides credit support of
any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness or the pledge of any collateral), (b) is directly or
indirectly liable as a guarantor or otherwise, or (c) constitutes the lender;
(2) no default with respect to which (including any rights that the holders
thereof may have to take enforcement action against a Subsidiary) would permit
upon notice, lapse of time or both any holder of any other Indebtedness (other
than the Indebtedness incurred hereunder) of the Ultimate Parent or any of its
Subsidiaries to declare a default on such other Indebtedness or cause the
payment thereof to be accelerated or payable prior to its stated maturity; and
(3) as to which the lenders thereof have been notified in writing that they will
not have any recourse to the stock or assets of the Ultimate Parent or any of
its Subsidiaries.
20
"NON-U.S. LENDER": as defined in Section 2.20(f).
"NOTES": the collective reference to the Revolving Credit Notes, the
Term Notes and the Swing Line Notes, if any, evidencing Loans.
"NOTICE OF BORROWING": a certificate duly executed by a Responsible
Officer of the Borrower substantially in the form of Exhibit K.
"OBLIGATIONS": the unpaid principal of and interest on (including,
without limitation, interest accruing after the maturity of the Loans and
Reimbursement Obligations and interest accruing after the filing of any petition
in bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to any Loan Party, whether or not a claim for post-filing
or post-petition interest is allowed in such proceeding) the Loans and all other
obligations and liabilities of the Loan Parties to the Arranger, to the
Administrative Agent or to any Lender (or, in the case of Specified Hedge
Agreements, any affiliate of any Lender), whether direct or indirect, absolute
or contingent, due or to become due, or now existing or hereafter incurred,
which may arise under, out of, or in connection with, this Agreement, any other
Loan Document, the Letters of Credit, any Specified Hedge Agreement or any other
document made, delivered or given in connection herewith or therewith, whether
on account of principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses (including, without limitation, all fees, charges and
disbursements of counsel to the Arranger, to the Administrative Agent or to any
Lender that are required to be paid by any Loan Party pursuant hereto or to any
other Loan Document) or otherwise; PROVIDED, that (i) Obligations of any Loan
Party under any Specified Hedge Agreement shall be secured and guaranteed
pursuant to the Security Documents only to the extent that, and for so long as,
the other Obligations are so secured and guaranteed and (ii) any release of
Collateral or Guarantors effected in the manner permitted by this Agreement
shall not require the consent of holders of obligations under Specified Hedge
Agreements.
"OTHER EQUITY INVESTORS": investors in the Ultimate Parent, other than
certain Control Investment Affiliates of the Principal and the Management
Investors, selected by the Principal and reasonably acceptable to the
Administrative Agent, including Snowlake Investment Pte Ltd.
"OTHER TAXES": any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement or any other Loan Document.
"PARENT": as defined in the preamble hereto.
"PARENTS": as defined in the preamble hereto.
"PARTICIPANT": as defined in Section 10.6(b).
"PAYMENT AMOUNT": as defined in Section 3.5.
21
"PAYMENT OFFICE": the office of the Administrative Agent specified in
Section 10.2 or as otherwise specified from time to time by the Administrative
Agent as its payment office by notice to the Borrower and the Lenders.
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA (or any successor).
"PERMITS": the collective reference to any and all franchises,
licenses, leases, permits, approvals, notifications, certifications,
registrations, authorizations, exemptions, qualifications, easements, rights of
way, Liens and other rights, privileges and approvals required under any
Requirement of Law other than Environmental Permits.
"PERMITTED ACQUISITION": as defined in Section 7.8(h).
"PERMITTED LIENS": the collective reference to (i) in the case of
Collateral other than Pledged Stock, Liens permitted by Section 7.3 and (ii) in
the case of Collateral consisting of Pledged Stock, non-consensual Liens
permitted by Section 7.3 to the extent arising by operation of law.
"PERSON": an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, Governmental Authority or other entity of whatever nature.
"PLAN": at a particular time, any employee benefit plan that is
covered by ERISA and which the Borrower (or, with respect to any Single Employer
Plan or Multiemployer Plan, any Commonly Controlled Entity) maintains,
administers, contributes to or is required to contribute to or under which the
Borrower (or, with respect to any Single Employer Plan or Multiemployer Plan,
any Commonly Controlled Entity) could incur any liability.
"PLEDGED STOCK": as defined in the Guarantee and Collateral Agreement.
"PRICING GRID": the pricing grid attached hereto as Annex A.
"PRINCIPAL": GTCR Xxxxxx Xxxxxx, L.L.C.
"PROFESSIONAL SERVICES AGREEMENT": the Professional Services Agreement
between the Principal and the Borrower dated as of February __, 2002, as the
same may be amended, replaced or otherwise modified from time to time in
accordance with this Agreement.
"PRO FORMA BALANCE SHEET": as defined in Section 4.1(a).
"PROJECTIONS": as defined in Section 6.2(c).
"PROPERTY": any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible,
including, without limitation, Capital Stock.
22
"PURCHASE AGREEMENT": the Purchase Agreement, dated February 5, 2002,
between the Ultimate Parent and its subsidiaries and Xxxxxx Brothers Inc.
"RECOVERY EVENT": any settlement of or payment in respect of any
property or casualty insurance claim or any condemnation proceeding relating to
any asset of any Loan Party.
"REFUNDED SWING LINE LOANS": as defined in Section 2.7(b).
"REFUNDING DATE": as defined in Section 2.7(c).
"REGISTER": as defined in Section 10.6(d).
"REGISTRATION RIGHTS AGREEMENT": the Registration Rights Agreement,
dated February __, 2002, between the Borrower and Xxxxxx Brothers Inc.
"REGULATION D": Regulation D of the Board as in effect from time to
time (and any successor to all or a portion thereof).
"REGULATION H": Regulation H of the Board as in effect from time to
time (and any successor to all or a portion thereof).
"REGULATION T": Regulation T of the Board as in effect from time to
time (and any successor to all or a portion thereof).
"REGULATION U": Regulation U of the Board as in effect from time to
time (and any successor to all or a portion thereof).
"REGULATION X": Regulation X of the Board as in effect from time to
time (and any successor to all or a portion thereof).
"REIMBURSEMENT OBLIGATION": the obligation of the Borrower to
reimburse the Issuing Lender pursuant to Section 3.5 for amounts drawn under
Letters of Credit.
"REINVESTMENT DEFERRED AMOUNT": with respect to any Reinvestment
Event, the aggregate Net Cash Proceeds received by any Loan Party in connection
therewith that are not applied to prepay the Tranche B Term Loans or reduce the
Revolving Credit Commitments pursuant to Section 2.12(b) as a result of the
delivery of a Reinvestment Notice.
"REINVESTMENT EVENT": any Asset Sale or Recovery Event in respect of
which the Borrower has delivered a Reinvestment Notice.
"REINVESTMENT NOTICE": a written notice executed by a Responsible
Officer of the Borrower stating that no Default or Event of Default has occurred
and is continuing and that the Borrower (directly or indirectly through a Wholly
Owned Subsidiary to the extent otherwise permitted hereunder) intends and
expects to use all or a specified portion of the Net Cash Proceeds of an Asset
Sale (other than an Asset Sale involving any SS7 Assets) or Recovery Event to
acquire assets useful in its or such Subsidiary's business; PROVIDED that
notwithstanding
23
the foregoing, the Borrower may submit a Reinvestment Notice with respect to the
Net Cash Proceeds of a Recovery Event if a Default or Event of Default exists,
if all such Proceeds (or a specified portion thereof) are held in a cash
collateral account, established with the Administrative Agent pending the
acquisition of such assets.
"REINVESTMENT PREPAYMENT AMOUNT": with respect to any Reinvestment
Event, the Reinvestment Deferred Amount relating thereto less any amount
expended prior to the relevant Reinvestment Prepayment Date to acquire assets
useful in the Borrower's business.
"REINVESTMENT PREPAYMENT DATE": with respect to any Reinvestment
Event, the earlier of (a) the date occurring one year after receipt of the
proceeds giving rise to such Reinvestment Event and (b) the date on which the
Borrower shall have determined not to, or shall have otherwise ceased to,
acquire assets useful in the Borrower's or the applicable Subsidiary's business
with all or any portion of the relevant Reinvestment Deferred Amount.
"RELATED AGREEMENTS": the Guaranty of Wireless Revenue, the
Intellectual Property Agreement, the Equity Contribution Agreement, the Services
Agreements and the Transition Services Agreement.
"REORGANIZATION": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.
"REPORTABLE EVENT": any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which the thirty day notice period is
waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC Reg.
Section 4043.
"REQUIRED LENDERS": at any time, the holders of more than 50% of (a)
until the Closing Date, the Commitments and (b) thereafter, the sum of (i) the
aggregate unpaid principal amount of the Tranche B Term Loans then outstanding
and (ii) the Total Revolving Credit Commitments then in effect or, if the
Revolving Credit Commitments have been terminated, the Total Revolving
Extensions of Credit then outstanding.
"REQUIRED PREPAYMENT LENDERS": the Majority Facility Lenders in
respect of each Facility.
"REQUIREMENT OF LAW": as to any Person, the Governing Documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its Property or to which such Person or
any of its Property is subject.
"RESPONSIBLE OFFICER": as to any Person, the chief executive officer,
president or chief financial officer of such Person, but in any event, with
respect to financial matters, the chief financial officer or any other executive
officer of such Person having responsibility for the administration of the
obligations in respect of this Agreement of such Person. Unless otherwise
qualified, all references to a "Responsible Officer" shall refer to a
Responsible Officer of the Borrower.
24
"RESTRICTED PAYMENTS": as defined in Section 7.6.
"REVOLVING CREDIT COMMITMENT": as to any Lender, the obligation of
such Lender, if any, to make Revolving Credit Loans and/or participate in Swing
Line Loans and Letters of Credit, in an aggregate principal and/or face amount
not to exceed the amount set forth under the heading "Revolving Credit
Commitment" opposite such Lender's name on Schedule 1 to the Lender Addendum
delivered by such Lender, or, as the case may be, in the Assignment and
Acceptance pursuant to which such Lender became a party hereto, as the same may
be changed from time to time pursuant to the terms hereof.
"REVOLVING CREDIT COMMITMENT PERIOD": the period from the Closing Date
to the Revolving Credit Termination Date.
"REVOLVING CREDIT LENDER": each Lender that has a Revolving Credit
Commitment or that is the holder of Revolving Credit Loans.
"REVOLVING CREDIT LOANS": as defined in Section 2.4.
"REVOLVING CREDIT NOTES": as defined in Section 2.8(e).
"REVOLVING CREDIT PERCENTAGE": as to any Revolving Credit Lender at
any time, the percentage which such Lender's Revolving Credit Commitment then
constitutes of the Total Revolving Credit Commitments (or, at any time after the
Revolving Credit Commitments shall have expired or terminated, the percentage
which the aggregate principal and/or face amount of such Lender's Revolving
Credit Extensions of Credit then outstanding constitutes of the aggregate
principal and/or face amount of the Total Revolving Extensions of Credit then
outstanding).
"REVOLVING CREDIT TERMINATION DATE": the Scheduled Revolving Credit
Termination Date.
"REVOLVING EXTENSIONS OF CREDIT": as to any Revolving Credit Lender at
any time, an amount equal to the sum of (a) the aggregate principal amount of
all Revolving Credit Loans made by such Lender then outstanding, (b) such
Lender's Revolving Credit Percentage of the L/C Obligations then outstanding and
(c) such Lender's Revolving Credit Percentage of the aggregate principal amount
of Swing Line Loans then outstanding.
"SCHEDULED REVOLVING CREDIT TERMINATION DATE": December 31, 2006.
"SEC": the Securities and Exchange Commission (or successors thereto
or an analogous Governmental Authority).
"SECURED PARTIES": collectively, the Arranger, the Administrative
Agent, the Lenders and, with respect to any Specified Hedge Agreement, any
affiliate of any Lender (or any Person that was a Lender or affiliate thereof
when such Hedge Agreement was entered into) party thereto that has agreed to be
bound by the provisions of Section 7.2 of the Guarantee and
25
Collateral Agreement as if it were a party thereto and by the provisions of
Section 9 hereof as if it were a Lender party hereto.
"SECURITY DOCUMENTS": the collective reference to the Guarantee and
Collateral Agreement, the Intellectual Property Security Agreements, the Control
Agreements, the Mortgages and all other pledge and security documents hereafter
delivered to the Administrative Agent granting a Lien on any Property of any
Person to secure the obligations and liabilities of any Loan Party under any
Loan Document.
"SENIOR SUBORDINATED NOTE DOCUMENTATION": the Senior Subordinated Note
Indenture, the Purchase Agreement, the Registration Rights Agreement, together
with any other instruments and agreements entered into by any Loan Party in
connection therewith (other than the Acquisition Documents and the Loan
Documents), as the same may be amended, supplemented, replaced or otherwise
modified from time to time in accordance with this Agreement.
"SENIOR SUBORDINATED NOTE INDENTURE": the Indenture, dated as of
February __, 2002, entered into by the Parents, the Borrower and its
Subsidiaries in connection with the issuance of the Senior Subordinated Notes,
as the same may be amended, supplemented, replaced or otherwise modified from
time to time in accordance with this Agreement.
"SENIOR SUBORDINATED NOTES": the subordinated notes of the Borrower
due 2012, issued from time to time pursuant to the Senior Subordinated Note
Indenture.
"SERVICES AGREEMENT": the collective reference to (i) the Distributed
Processing Services Agreement and the Mainframe Computing Services Agreement,
each as between TSI and Verizon Information Technologies Inc. and dated as of
February __, 2002 and (ii) the Information Technologies Services Agreement
between TSI and Lockheed Xxxxxx Global Telecommunications, dated as of December
19, 2001 as each of the same may be amended from time to time in accordance with
this Agreement.
"SINGLE EMPLOYER PLAN": any Plan that is covered by Title IV of ERISA,
but which is not a Multiemployer Plan.
"SOLVENCY CERTIFICATE": the Solvency Certificate to be executed and
delivered by the chief financial officer of each Loan Party, substantially in
the form of Exhibit I, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with this Agreement.
"SOLVENT": when used with respect to any Person, as of any date of
determination, (a) the amount of the "present fair saleable value" of the assets
of such Person will, as of such date, exceed the amount of all "liabilities of
such Person, contingent or otherwise", as of such date, as such quoted terms are
determined in accordance with applicable federal and state laws governing
determinations of the insolvency of debtors, (b) "the present fair saleable
value" (as such term is defined in clause (a)) of the assets of such Person
will, as of such date, be greater than the amount that will be required to pay
the liability of such Person on its debts as such debts become absolute and
matured, (c) such Person will not have, as of such date, an unreasonably
26
small amount of capital with which to conduct its business, (d) such Person will
be able to pay its debts as they mature, and (e) such Person is not insolvent
within the meaning of any applicable Requirements of Law. For purposes of this
definition, (i) "debt" means liability on a "claim", and (ii) "claim" means any
(x) right to payment, whether or not such a right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured or unsecured or (y) right to an equitable
remedy for breach of performance if such breach gives rise to a right to
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured
or unsecured; PROVIDED that, for purposes of this definition, in computing the
amount of any contingent, unliquidated, unmatured or disputed claim at any time,
it is intended that such claims will be computed at the amount which, in light
of all the facts and circumstances existing at such time, represents the amount
that can reasonably be expected to become an actual, liquidated or matured
claim.
"SPECIFIED CHANGE OF CONTROL": a "change of control" or similar event
(howsoever defined) as defined in the Senior Subordinated Note Indenture.
"SPECIFIED HEDGE AGREEMENT": any Hedge Agreement (a) entered into by
(i) any Loan Party and (ii) any Lender or any affiliate thereof, or any Person
that was a Lender or an affiliate thereof when such Hedge Agreement was entered
into, as counterparty and (b) which has been designated by such Lender and the
Borrower, by notice to the Administrative Agent not later than 90 days after the
execution and delivery thereof by any such Loan Party as a Specified Hedge
Agreement; PROVIDED that the designation of any Hedge Agreement as a Specified
Hedge Agreement shall not create in favor of any Lender or affiliate thereof
that is a party thereto any rights in connection with the management or release
of any Collateral or of the obligations of any Guarantor under the Guarantee and
Collateral Agreement.
"SS7": TSI Networks Inc., a Delaware corporation.
"SS7 ASSETS": (i) all assets comprising the industry standard
signaling network used to enable the setup and delivery of wireless and wireline
telephone calls and (ii) the Capital Stock of SS7.
"SS7 REORGANIZATION": (i) the formation of SS7, (ii) the contribution
of the SS7 Assets by the Borrower to SS7 in exchange for 100% of the voting
participating preferred stock of SS7, accruing dividends at 10% per annum and a
liquidation preference equal to the fair market value of the transferred assets,
net of the allocated Indebtedness, together with the benefits which the Borrower
would be entitled if it owned 5% of the non-voting common stock of SS7, and
(iii) the contribution by the Ultimate Parent of certain assets to SS7 in
exchange for 100% of the non-voting common stock of SS7.
"SUBORDINATED INTERCOMPANY NOTE": collectively, the Subordinated
Intercompany Note No. 1 and the Subordinated Intercompany Note No. 2, to be
executed and delivered by each Loan Party, substantially in the form of Exhibit
J, as the same may be amended, supplemented, replaced or otherwise modified from
time to time in accordance with this Agreement.
27
"SUBSIDIARY": as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock or other ownership
interests having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Borrower. In addition, for the avoidance
of doubt, upon consummation of the SS7 Reorganization, SS7 will be a Subsidiary
of the Borrower.
"SUBSIDIARY GUARANTOR": each Subsidiary of the Ultimate Parent other
than any Excluded Foreign Subsidiary and the Borrower.
"SWING LINE COMMITMENT": the obligation of the Swing Line Lender to
make Swing Line Loans pursuant to Section 2.6 in an aggregate principal amount
at any one time outstanding not to exceed $5,000,000.
"SWING LINE LENDER": Xxxxxx Commercial Paper Inc., in its capacity as
the lender of Swing Line Loans.
"SWING LINE LOANS": as defined in Section 2.6.
"SWING LINE NOTES": as defined in Section 2.8(e).
"SWING LINE PARTICIPATION AMOUNT": as defined in Section 2.7(c).
"SYNDICATION DATE": the date which is 90 days after the Closing Date
or such earlier date that the Administrative Agent determines the syndication is
complete.
"SYNDICATION LETTER AGREEMENT": the letter agreement, dated as of
February [_], 2002 between the Borrower, the Administrative Agent and the
Arranger related to the syndication of the Facilities.
"SYNTHETIC LEASE OBLIGATIONS": all monetary obligations of a Person
under (a) a so-called synthetic, off-balance sheet or tax retention lease, or
(b) an agreement for the use or possession of property creating obligations
which do not appear on the balance sheet of such Person but which, upon the
insolvency or bankruptcy of such Person, would be characterized as the
Indebtedness of such Person (without regard to accounting treatment).
"TAKING": a taking or voluntary conveyance during the term of this
Agreement of all or part of any real property subject to a Mortgage, or any
interest therein or right accruing thereto or use thereof, as the result of, or
in settlement of, any condemnation or other eminent domain proceeding by any
Governmental Authority affecting any such real property or any portion thereof
whether or not the same shall have actually been commenced.
"TERM NOTES": as defined in Section 2.8(e).
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"TOTAL REVOLVING CREDIT COMMITMENTS": at any time, the aggregate
amount of the Revolving Credit Commitments then in effect; PROVIDED that the
amount of the Total Revolving Credit Commitments on the Closing Date shall be
$35,000,000.
"TOTAL REVOLVING EXTENSIONS OF CREDIT": at any time, the aggregate
amount of the Revolving Extensions of Credit of the Revolving Credit Lenders
outstanding at such time.
"TRANCHE B TERM LOAN": as defined in Section 2.1.
"TRANCHE B TERM LOAN COMMITMENT": as to any Tranche B Term Loan
Lender, the obligation of such Lender, if any, to make a Tranche B Term Loan to
the Borrower hereunder in a principal amount not to exceed the amount set forth
under the heading "Tranche B Term Loan Commitment" opposite such Lender's name
on Schedule 1 to the Lender Addendum delivered by such Lender, or, as the case
may be, in the Assignment and Acceptance pursuant to which such Lender became a
party hereto, as the same may be changed from time to time pursuant to the terms
hereof; PROVIDED that the original aggregate amount of the Tranche B Term Loan
Commitments is $293,333,333.
"TRANCHE B TERM LOAN LENDER": each Lender that has a Tranche B Term
Loan Commitment or which is the holder of a Tranche B Term Loan.
"TRANCHE B TERM LOAN PERCENTAGE": as to any Tranche B Term Loan Lender
at any time, the percentage which such Lender's Tranche B Term Loan Commitment
then constitutes of the aggregate Tranche B Term Loan Commitments (or, at any
time after the Closing Date, the percentage which the aggregate principal amount
of such Lender's Tranche B Term Loans then outstanding constitutes of the
aggregate principal amount of the Tranche B Term Loans then outstanding);
PROVIDED that, solely for purposes of calculating the amount of each installment
of Tranche B Term Loans (other than the last installment) payable to a Tranche B
Term Loan Lender pursuant to Section 2.3, such Tranche B Term Loan Lender's
Tranche B Term Loan Percentage shall be calculated without giving effect to any
portion of any prior mandatory or optional prepayment attributable to such
Tranche B Term Loan Lender's Tranche B Term Loans which shall have been declined
by such Tranche B Term Loan Lender (or, in the case of any Tranche B Term Loan
Lender which shall have acquired its Tranche B Term Loans by assignment from
another Person, by such other Person).
"TRANSFEREE": as defined in Section 10.15.
"TRANSITION SERVICES AGREEMENT": the Transition Services Agreement,
dated as of February __, 2002 by and between Verizon Information Services Inc.
and the Borrower, and all schedules, exhibits and annexes thereto, as the same
may be amended, supplemented, replaced or otherwise modified from time to time
in accordance with this Agreement.
"TYPE": as to any Loan, its nature as a Base Rate Loan or a Eurodollar
Loan.
"UCC": the Uniform Commercial Code as in effect in any jurisdiction
from time to time.
29
"ULTIMATE PARENT": as defined in the preamble hereto.
"WHOLLY OWNED SUBSIDIARY": as to any Person, any other Person all of
the Capital Stock of which (other than directors' qualifying shares required by
law) is owned by such Person directly and/or through other Wholly Owned
Subsidiaries.
1.2 OTHER DEFINITIONAL PROVISIONS.
(a) Unless otherwise specified therein, all terms defined in this
Agreement shall have the defined meanings when used in the other Loan Documents
or any certificate or other document made or delivered pursuant hereto or
thereto.
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms relating to any Loan Party not defined in Section 1.1 and
accounting terms partly defined in Section 1.1, to the extent not defined, shall
have the respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(e) The expressions "payment in full," "paid in full" and any other
similar terms or phrases when used herein with respect to the Borrower
Obligations or the Guarantor Obligations shall mean the unconditional, final and
irrevocable payment in full, in immediately available funds, of all of the
Borrower Obligations or the Guarantor Obligations, as the case may be (other
than Obligations in respect of any Specified Hedge Agreement and unmatured
contingent reimbursement and indemnification Obligations).
(f) The words "including" and "includes" and words of similar
import when used in this Agreement shall not be limiting and shall mean
"including without limitation" or "includes without limitation", as the case may
be.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 TRANCHE B TERM LOAN COMMITMENTS. Subject to the terms and
conditions hereof, each Tranche B Term Loan Lender severally agrees to make a
term loan (a "TRANCHE B TERM LOAN") to the Borrower on the Closing Date in an
amount not to exceed the amount of the Tranche B Term Loan Commitment of such
Lender. The Tranche B Term Loans may from time to time be Eurodollar Loans or
Base Rate Loans, as determined by the Borrower and notified to the
Administrative Agent in accordance with Sections 2.2 and 2.13.
2.2 PROCEDURE FOR TERM LOAN BORROWING. The Borrower shall give the
Administrative Agent irrevocable notice (which notice must be received by the
Administrative
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Agent prior to 12:00 Noon,
New York City time, one Business Day prior to the
anticipated Closing Date) requesting that the Tranche B Term Loan Lenders make
the Tranche B Term Loans on the Closing Date and specifying the amount to be
borrowed. The Tranche B Term Loans made on the Closing Date shall initially be
Base Rate Loans, and no Tranche B Term Loan may be converted into or continued
as a Eurodollar Loan having an Interest Period in excess of one month prior to
the Syndication Date. Upon receipt of such notice the Administrative Agent shall
promptly notify each Tranche B Term Loan Lender thereof. Not later than 12:00
Noon,
New York City time, on the Closing Date each Tranche B Term Loan Lender
shall make available to the Administrative Agent at the Funding Office an amount
in immediately available funds equal to the Tranche B Term Loan or Tranche B
Term Loans to be made by such Lender. The Administrative Agent shall make
available to the Borrower the aggregate of the amounts made available to the
Administrative Agent by the Tranche B Term Loan Lenders in like funds.
2.3 REPAYMENT OF TRANCHE B TERM LOANS. The Tranche B Term Loan of
each Tranche B Term Loan Lender shall mature in 18 consecutive quarterly
installments, commencing on September 30, 2002, each of which shall be in an
amount equal to such Lender's Tranche B Term Loan Percentage multiplied by the
amount set forth below opposite such installment; PROVIDED that to the extent
that a portion of such Tranche B Term Loans are prepaid pursuant to Section 2.11
or 2.12, the amounts set forth below shall be reduced to reflect the actual
application of such prepayments:
Installment Principal Amount
----------- ----------------
September 30, 2002 $ 7,500,000
December 31, 2002 $ 7,500,000
March 31, 2003 $ 5,000,000
June 30, 2003 $ 5,000,000
September 30, 2003 $ 5,000,000
December 31, 2003 $ 5,000,000
March 31, 2004 $ 8,750,000
June 30, 2004 $ 8,750,000
September 30, 2004 $ 8,750,000
December 31, 2004 $ 8,750,000
March 31, 2005 $ 11,250,000
June 30, 2005 $ 11,250,000
September 30, 2005 $ 11,250,000
December 31, 2005 $ 11,250,000
March 31, 2006 $ 44,583,333
June 30, 2006 $ 44,583,333
September 30, 2006 $ 44,583,333
December 31, 2006 $ 44,583,334
2.4 REVOLVING CREDIT COMMITMENTS. (a) Subject to the terms and
conditions hereof, each Revolving Credit Lender severally agrees to make
revolving credit loans ("REVOLVING CREDIT LOANS") to the Borrower from time to
time during the Revolving Credit Commitment Period in an aggregate principal
amount at any one time outstanding which, when
31
added to such Lender's Revolving Credit Percentage of the sum of (i) the L/C
Obligations then outstanding and (ii) the aggregate principal amount of the
Swing Line Loans then outstanding, does not exceed the amount of such Lender's
Revolving Credit Commitment. During the Revolving Credit Commitment Period the
Borrower may use the Revolving Credit Commitments by borrowing, prepaying the
Revolving Credit Loans in whole or in part, and reborrowing, all in accordance
with the terms and conditions hereof. The Revolving Credit Loans may from time
to time be Eurodollar Loans or Base Rate Loans, as determined by the Borrower
and notified to the Administrative Agent in accordance with Sections 2.5 and
2.13, PROVIDED that no Revolving Credit Loan shall be made as a Eurodollar Loan
after the day that is one month prior to the Scheduled Revolving Credit
Termination Date.
(b) The Borrower shall repay all outstanding Revolving Credit Loans
on the Revolving Credit Termination Date.
2.5 PROCEDURE FOR REVOLVING CREDIT BORROWING. The Borrower may
borrow under the Revolving Credit Commitments during the Revolving Credit
Commitment Period on any Business Day, PROVIDED that the Borrower shall give the
Administrative Agent irrevocable notice in a Notice of Borrowing (which Notice
of Borrowing must be received by the Administrative Agent prior to 12:00 Noon,
New York City time, (a) three Business Days prior to the requested Borrowing
Date, in the case of Eurodollar Loans, or (b) one Business Day prior to the
requested Borrowing Date, in the case of Base Rate Loans), specifying (i) the
amount and Type of Revolving Credit Loans to be borrowed, (ii) the requested
Borrowing Date and (iii) in the case of Eurodollar Loans, the length of the
initial Interest Period therefor. Any Revolving Credit Loans made on the first
day of the Revolving Credit Commitment Period shall initially be Base Rate
Loans, and no Revolving Credit Loan may be made as, converted into or continued
as a Eurodollar Loan having an Interest Period in excess of one month prior to
the Syndication Date. Each borrowing under the Revolving Credit Commitments
shall be in an amount equal to (x) in the case of Base Rate Loans, $1,000,000 or
a $250,000 multiple in excess thereof (or, if the then aggregate Available
Revolving Credit Commitments are less than $1,000,000, such lesser amount) and
(y) in the case of Eurodollar Loans, $3,000,000 or a $500,000 multiple in excess
thereof; PROVIDED that the Swing Line Lender may request, on behalf of the
Borrower, borrowings under the Revolving Credit Commitments which are Base Rate
Loans in other amounts pursuant to Section 2.7. Upon receipt of any such Notice
of Borrowing from the Borrower, the Administrative Agent shall promptly notify
each Revolving Credit Lender thereof. Each Revolving Credit Lender will make the
amount of its PRO RATA share of each borrowing available to the Administrative
Agent for the account of the Borrower at the Funding Office prior to 12:00 Noon,
New York City time, on the Borrowing Date requested by the Borrower in funds
immediately available to the Administrative Agent. Such borrowing will then be
made available to the Borrower by the Administrative Agent in like funds as
received by the Administrative Agent.
2.6 SWING LINE COMMITMENT. (a) Subject to the terms and conditions
hereof, the Swing Line Lender agrees to make a portion of the credit otherwise
available to the Borrower under the Revolving Credit Commitments from time to
time during the Revolving Credit Commitment Period by making swing line loans
("SWING LINE LOANS") to the Borrower; PROVIDED that (i) the aggregate principal
amount of Swing Line Loans outstanding at any time
32
shall not exceed the Swing Line Commitment then in effect (notwithstanding that
the Swing Line Loans outstanding at any time, when aggregated with the Swing
Line Lender's other outstanding Revolving Credit Loans hereunder, may exceed the
Swing Line Commitment then in effect) and (ii) the Borrower shall not request,
and the Swing Line Lender shall not make, any Swing Line Loan if, after giving
effect to the making of such Swing Line Loan, the aggregate amount of the
Available Revolving Credit Commitments would be less than zero. During the
Revolving Credit Commitment Period, the Borrower may use the Swing Line
Commitment by borrowing, repaying and reborrowing, all in accordance with the
terms and conditions hereof. Swing Line Loans shall be Base Rate Loans only.
(b) The Borrower shall repay all outstanding Swing Line Loans on
the Revolving Credit Termination Date.
2.7 PROCEDURE FOR SWING LINE BORROWING; REFUNDING OF SWING LINE
LOANS. (a) Whenever the Borrower desires that the Swing Line Lender make Swing
Line Loans it shall give the Swing Line Lender irrevocable telephonic notice
confirmed promptly in writing (which telephonic notice must be received by the
Swing Line Lender not later than 1:00 P.M.,
New York City time, on the proposed
Borrowing Date), specifying (i) the amount to be borrowed and (ii) the requested
Borrowing Date (which shall be a Business Day during the Revolving Credit
Commitment Period). Each borrowing under the Swing Line Commitment shall be in
an amount equal to $250,000 or a $100,000 multiple of in excess thereof. Not
later than 3:00 P.M.,
New York City time, on the Borrowing Date specified in a
notice in respect of Swing Line Loans, the Swing Line Lender shall make
available to the Administrative Agent at the Funding Office an amount in
immediately available funds equal to the amount of the Swing Line Loan to be
made by the Swing Line Lender. The Administrative Agent shall make the proceeds
of such Swing Line Loan available to the Borrower on such Borrowing Date in
immediately available funds.
(b) The Swing Line Lender, at any time and from time to time in its
sole and absolute discretion may, on behalf of the Borrower (which hereby
irrevocably directs the Swing Line Lender to act on its behalf), on one Business
Day's notice given by the Swing Line Lender no later than 1:00 P.M.,
New York
City time to the Revolving Credit Lenders and the Borrower, request each
Revolving Credit Lender to make, and each Revolving Credit Lender hereby agrees
to make, a Revolving Credit Loan, in an amount equal to such Revolving Credit
Lender's Revolving Credit Percentage of the aggregate amount of the Swing Line
Loans (the "REFUNDED SWING LINE LOANS") outstanding on the date of such notice,
to repay the Swing Line Lender. Each Revolving Credit Lender shall make the
amount of such Revolving Credit Loan available to the Administrative Agent at
the Funding Office in immediately available funds, not later than 10:00 A.M.,
New York City time, one Business Day after the date of such notice. The proceeds
of such Revolving Credit Loans shall be immediately made available by the
Administrative Agent to the Swing Line Lender for application by the Swing Line
Lender to the repayment of the Refunded Swing Line Loans. The Borrower
irrevocably authorizes the Swing Line Lender to charge the Borrower's accounts
with the Administrative Agent (up to the amount available in each such account)
in order to immediately pay the amount of such Refunded Swing Line Loans to the
extent amounts received from the Revolving Credit Lenders are not sufficient to
repay in full such Refunded Swing Line Loans and the Administrative Agent agrees
to promptly notify
33
the Borrower after any such charge, PROVIDED that the failure to give such
notice shall not affect the validity of such charge and payment.
(c) If prior to the time a Revolving Credit Loan would have
otherwise been made pursuant to Section 2.7(b), one of the events described in
Section 8(f) shall have occurred and be continuing with respect to the Borrower
or if for any other reason, as determined by the Swing Line Lender in its sole
discretion, Revolving Credit Loans may not be made as contemplated by Section
2.7(b), each Revolving Credit Lender shall, on the date such Revolving Credit
Loan was to have been made pursuant to the notice referred to in Section 2.7(b)
(the "REFUNDING DATE"), purchase for cash an undivided participating interest in
the then outstanding Swing Line Loans by paying to the Swing Line Lender an
amount (the "SWING LINE PARTICIPATION AMOUNT") equal to (i) such Revolving
Credit Lender's Revolving Credit Percentage TIMES (ii) the sum of the aggregate
principal amount of Swing Line Loans then outstanding which were to have been
repaid with such Revolving Credit Loans.
(d) Whenever, at any time after the Swing Line Lender has received
from any Revolving Credit Lender such Lender's Swing Line Participation Amount,
the Swing Line Lender receives any payment on account of the Swing Line Loans,
the Swing Line Lender will distribute to such Revolving Credit Lender its Swing
Line Participation Amount (appropriately adjusted, in the case of interest
payments, to reflect the period of time during which such Revolving Credit
Lender's participating interest was outstanding and funded and, in the case of
principal and interest payments, to reflect such Revolving Credit Lender's PRO
RATA portion of such payment if such payment is not sufficient to pay the
principal of and interest on all Swing Line Loans then due); PROVIDED, HOWEVER,
that in the event that such payment received by the Swing Line Lender is
required to be returned, such Revolving Credit Lender will return to the Swing
Line Lender any portion thereof previously distributed to it by the Swing Line
Lender.
(e) Each Revolving Credit Lender's obligation to make the Loans
referred to in Section 2.7(b) and to purchase participating interests pursuant
to Section 2.7(c) shall be absolute and unconditional and shall not be affected
by any circumstance, including, without limitation, (i) any setoff,
counterclaim, recoupment, defense or other right which such Revolving Credit
Lender or the Borrower may have against the Swing Line Lender, the Borrower or
any other Person for any reason whatsoever; (ii) the occurrence or continuance
of a Default or an Event of Default or the failure to satisfy any of the other
conditions specified in Section 5; (iii) any adverse change in the condition
(financial or otherwise) of the Borrower; (iv) any breach of this Agreement or
any other Loan Document by the Borrower, any other Loan Party or any other
Revolving Credit Lender; or (v) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.
(f) If the Issuing Lender notifies the Borrower of a draft
presented under any Letter of Credit (and paid by the Issuing Lender) after 1:00
PM on any given day, the Swing Line Lender will use commercially reasonable
efforts to fund a Swing Line Loan on such day.
2.8 REPAYMENT OF LOANS; EVIDENCE OF INDEBTEDNESS. (a) The Borrower
hereby unconditionally promises to pay to the Administrative Agent for the
account of the appropriate Revolving Credit Lender or Tranche B Term Loan
Lender, as the case may be, (i) the then
34
unpaid principal amount of each Revolving Credit Loan of such Revolving Credit
Lender on the Revolving Credit Termination Date (or such earlier date on which
the Loans become due and payable pursuant to Section 8), (ii) the then unpaid
principal amount of each Swing Line Loan of such Swing Line Lender on the
Revolving Credit Termination Date (or such earlier date on which the Loans
become due and payable pursuant to Section 8) and (iii) the principal amount of
each Tranche B Term Loan of such Tranche B Term Loan Lender in installments
according to the amortization schedule set forth in Section 2.3 (or on such
earlier date on which the Loans become due and payable pursuant to Section 8).
The Borrower hereby further agrees to pay interest on the unpaid principal
amount of the Loans from time to time outstanding from the date hereof until
payment in full thereof at the rates per annum, and on the dates, set forth in
Section 2.15.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of the Borrower to such
Lender resulting from each Loan of such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Agreement.
(c) The Administrative Agent, on behalf of the Borrower, shall
maintain the Register pursuant to Section 10.6(d), and a subaccount therein for
each Lender, in which shall be recorded (i) the amount of each Loan made
hereunder and any Note evidencing such Loan, the Type thereof and each Interest
Period, if any, applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iii) both the amount of any sum received by the Administrative
Agent hereunder from the Borrower and each Lender's share thereof.
(d) The entries made in the Register and the accounts of each
Lender maintained pursuant to Section 2.8(b) shall, to the extent permitted by
applicable law, be PRIMA FACIE evidence of the existence and amounts of the
obligations of the Borrower therein recorded; PROVIDED, HOWEVER, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Loans made to
such Borrower by such Lender in accordance with the terms of this Agreement.
(e) The Borrower agrees that, upon the request to the
Administrative Agent by any Lender, the Borrower will execute and deliver to
such Lender a promissory note of the Borrower evidencing any Tranche B Term
Loans, Revolving Credit Loans or Swing Line Loans, as the case may be, of such
Lender, substantially in the forms of Exhibit F-1, F-2 or F-3, respectively,
with appropriate insertions as to date and principal amount (such notes,
respectively, "TERM NOTES", REVOLVING CREDIT NOTES" and "SWING LINE NOTES").
2.9 COMMITMENT FEES, ETC. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Revolving Credit Lender a
commitment fee for the period from and including the Closing Date to but
excluding the last day of the Revolving Credit Commitment Period, computed at
the Commitment Fee Rate on the average daily amount of the Available Revolving
Credit Commitment of such Lender during the period for which payment is made,
payable quarterly in arrears on the last day of each March, June, September and
December
35
and on the Revolving Credit Termination Date, commencing on the first of such
dates to occur after the date hereof.
(b) The Borrower agrees to pay to the Administrative Agent the fees
in the amounts and on the dates from time to time agreed to in writing by the
Borrower and the Administrative Agent including, without limitation, pursuant to
the Fee Letter.
2.10 TERMINATION OR REDUCTION OF REVOLVING CREDIT COMMITMENTS. The
Borrower shall have the right, upon not less than three Business Days' notice to
the Administrative Agent, to terminate the Revolving Credit Commitments or, from
time to time, to reduce the amount of the Revolving Credit Commitments; PROVIDED
that no such termination or reduction of Revolving Credit Commitments shall be
permitted if, after giving effect thereto and to any prepayments of the
Revolving Credit Loans and Swing Line Loans made on the effective date thereof,
the Total Revolving Extensions of Credit would exceed the Total Revolving Credit
Commitments. Any such reduction shall be in an amount equal to $1,000,000, or a
$250,000 multiple in excess thereof, and shall reduce permanently the Revolving
Credit Commitments then in effect.
2.11 OPTIONAL PREPAYMENTS. The Borrower may at any time and from
time to time prepay the Loans, in whole or in part, without premium or penalty,
upon irrevocable notice delivered to the Administrative Agent at least three
Business Days prior thereto in the case of Eurodollar Loans and at least one
Business Day prior thereto in the case of Base Rate Loans, which notice shall
(i) designate whether the Borrower is prepaying Swing Line Loans, Revolving
Credit Loans and/or Tranche B Term Loans and (ii) specify the date and amount of
prepayment and whether the prepayment is of Eurodollar Loans or Base Rate Loans;
PROVIDED, that if a Eurodollar Loan is prepaid on any day other than the last
day of the Interest Period applicable thereto, the Borrower shall also pay any
amounts owing pursuant to Section 2.21. Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender thereof. If any
such notice is given, the amount specified in such notice shall be due and
payable on the date specified therein, together with (except in the case of
Loans (unless all Revolving Credit Loans are being repaid and the Revolving
Credit Commitments terminated) that are Base Rate Loans and Swing Line Loans)
accrued interest to such date on the amount prepaid. Partial prepayments of
Tranche B Term Loans and Revolving Credit Loans shall be in an aggregate
principal amount of $1,000,000 or a $250,000 multiple in excess thereof. Partial
prepayments of Swing Line Loans shall be in an aggregate principal amount of
$100,000 or a whole multiple thereof.
2.12 MANDATORY PREPAYMENTS AND COMMITMENT REDUCTIONS. (a) Unless the
Required Lenders shall otherwise agree, if after the Closing Date any Capital
Stock shall be issued, or Funded Debt incurred, by any Loan Party (excluding any
Funded Debt incurred in accordance with Section 7.2 as in effect on the date of
this Agreement), an amount equal to 100% of the Net Cash Proceeds thereof (other
than Excluded Proceeds) shall be applied on the date of such issuance or
incurrence toward the prepayment of the Tranche B Term Loans and the reduction
of the Revolving Credit Commitments as set forth in Section 2.12(d).
36
(b) Unless the Required Lenders shall otherwise agree, if, on any
date, any Loan Party shall receive Net Cash Proceeds from any Asset Sale or
Recovery Event then, unless a Reinvestment Notice shall be delivered in respect
thereof, such Net Cash Proceeds shall be applied on such date toward the
prepayment of the Tranche B Term Loans and the reduction of the Revolving Credit
Commitments as set forth in Section 2.12(d); PROVIDED that, notwithstanding the
foregoing, (i) the aggregate Net Cash Proceeds of Asset Sales and Recovery
Events that may be excluded from the foregoing requirement pursuant to a
Reinvestment Notice shall not exceed $5,000,000 in any fiscal year of the
Borrower, (ii) on each Reinvestment Prepayment Date, an amount equal to the
Reinvestment Prepayment Amount with respect to the relevant Reinvestment Event
shall be applied toward the prepayment of the Tranche B Term Loans and the
reduction of the Revolving Credit Commitments as set forth in Section 2.12(d)
and (iii) no Reinvestment Notice may be delivered with respect to the Net Cash
Proceeds of any Disposition of SS7 Assets.
(c) Unless the Required Lenders shall otherwise agree, if, for any
fiscal year of the Borrower commencing with the fiscal year ending December 31,
2002, there shall be Excess Cash Flow, the Borrower shall or shall cause the
applicable Subsidiary to, on the relevant Excess Cash Flow Application Date,
apply 100% of such Excess Cash Flow toward the prepayment of the Tranche B Term
Loans and the reduction of the Revolving Credit Commitments as set forth in
Section 2.12(d). Each such prepayment and commitment reduction shall be made on
a date (an "EXCESS CASH FLOW APPLICATION DATE") no later than ten Business Days
after the earlier of (i) the date on which the financial statements of the
Borrower referred to in Section 6.1(a), for the fiscal year with respect to
which such prepayment is made, are required to be delivered to the Lenders and
(ii) the date such financial statements are actually delivered.
(d) Subject to Section 2.18, amounts to be applied in connection
with prepayments and Commitment reductions made pursuant to this Section 2.12
shall be applied, FIRST, to the prepayment of the Tranche B Term Loans, SECOND,
to reduce permanently the Revolving Credit Commitments and, THIRD, to the
Borrower or such other Person as shall be lawfully entitled thereto. Any such
reduction of the Revolving Credit Commitments shall be accompanied by prepayment
of the Revolving Credit Loans and/or Swing Line Loans to the extent, if any,
that the Total Revolving Extensions of Credit exceed the amount of the Total
Revolving Credit Commitments as so reduced, PROVIDED that if the aggregate
principal amount of Revolving Credit Loans and Swing Line Loans then outstanding
is less than the amount of the Total Revolving Credit Commitments as so reduced
(because L/C Obligations constitute a portion thereof), the Borrower shall, to
the extent of the balance of such excess, replace outstanding Letters of Credit
and/or deposit an amount in immediately available funds in a cash collateral
account (which shall permit overnight investments in certain Cash Equivalents
selected by the Administrative Agent until such funds are applied to the
Obligations) established with the Administrative Agent for the benefit of the
Secured Parties on terms and conditions satisfactory to the Administrative Agent
(and each of the Parents and the Borrower hereby grants to the Administrative
Agent, for the ratable benefit of the Secured Parties, a continuing security
interest in all amounts at any time on deposit in such cash collateral account
to secure all L/C Obligations from time to time outstanding and all other
Obligations). If at any time the Administrative Agent determines that any funds
held in such cash collateral account are subject to any right or claim of any
Person other than the Administrative Agent and the Secured Parties
37
or that the total amount of such funds is less than the amount of such excess,
the Borrower shall, forthwith upon demand by the Administrative Agent, pay to
the Administrative Agent, as additional funds to be deposited and held in such
cash collateral account, an amount equal to the excess of (a) the amount of such
excess over (b) the total amount of funds, if any, then held in such cash
collateral account that the Administrative Agent determines to be free and clear
of any such right and claim. The application of any prepayment pursuant to
Section 2.11 and this Section 2.12 shall be made, FIRST, to Base Rate Loans and,
SECOND, to Eurodollar Loans, in each case in a manner which, in the
Administrative Agent's reasonable judgment (which shall be conclusive) minimizes
the amount of any payments required to be made by the Borrower pursuant to
Section 2.21. Each prepayment of the Loans under Section 2.11 and this Section
2.12 (except in the case of Revolving Credit Loans (unless the Revolving Credit
Loans are being repaid in full and the Revolving Credit Commitments terminated)
that are Base Rate Loans and Swing Line Loans) shall be accompanied by accrued
interest to the date of such prepayment to the applicable Lender on the amount
prepaid.
2.13 CONVERSION AND CONTINUATION OPTIONS. The Borrower may elect
from time to time to convert Eurodollar Loans to Base Rate Loans by giving the
Administrative Agent at least two Business Days' prior irrevocable notice of
such election, PROVIDED that any such conversion of Eurodollar Loans may only be
made on the last day of an Interest Period with respect thereto. The Borrower
may elect from time to time to convert Base Rate Loans to Eurodollar Loans by
giving the Administrative Agent at least three Business Days' prior irrevocable
notice of such election (which notice shall specify the length of the initial
Interest Period therefor), PROVIDED that no Base Rate Loan under a particular
Facility (i) may be converted into a Eurodollar Loan with an Interest Period in
excess of one month when any Event of Default has occurred and is continuing and
the Administrative Agent or the Majority Facility Lenders in respect of such
Facility have determined in its or their sole discretion not to permit such
conversions or (ii) may be converted into a Eurodollar Loan after the date that
is one month prior to the final scheduled termination or maturity date of such
Facility. Upon receipt of any such notice the Administrative Agent shall
promptly notify each relevant Lender thereof.
(b) Any Eurodollar Loan may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Borrower giving irrevocable notice to the Administrative Agent, in accordance
with the applicable provisions of the term "Interest Period" set forth in
Section 1.1, of the length of the next Interest Period to be applicable to such
Loans, PROVIDED that no Eurodollar Loan under a particular Facility (i) may be
continued as such with an Interest Period in excess of one month when any Event
of Default has occurred and is continuing and the Administrative Agent or the
Majority Facility Lenders in respect of such Facility have determined in its or
their sole discretion not to permit such continuation or (ii) may be continued
as such after the date that is one month prior to the final scheduled
termination or maturity date of such Facility, and PROVIDED, FURTHER, that if
the Borrower shall fail to give any required notice as described above in this
paragraph or if such continuation is not permitted pursuant to the preceding
proviso such Loans shall be automatically converted to Base Rate Loans on the
last day of such then expiring Interest Period. Upon receipt of any such notice
the Administrative Agent shall promptly notify each relevant Lender thereof.
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2.14 MINIMUM AMOUNTS AND MAXIMUM NUMBER OF EURODOLLAR TRANCHES.
Notwithstanding anything to the contrary in this Agreement, all borrowings,
conversions, continuations and optional prepayments of Eurodollar Loans
hereunder and all selections of Interest Periods hereunder shall be in such
amounts and be made pursuant to such elections so that, (a) after giving effect
thereto, the aggregate principal amount of the Eurodollar Loans comprising each
Eurodollar Tranche shall be equal to $3,000,000 or a $500,000 multiple in excess
thereof and (b) no more than ten Eurodollar Tranches shall be outstanding at any
one time.
2.15 INTEREST RATES AND PAYMENT DATES. (a) Each Eurodollar Loan
shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such day
plus the Applicable Margin.
(b) Each Base Rate Loan shall bear interest at a rate per annum
equal to the Base Rate plus the Applicable Margin.
(c) (i) If all or a portion of the principal amount of any Loan or
Reimbursement Obligation shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), such overdue amount shall bear interest
at a rate per annum that is equal to (x) in the case of the Loans, the rate that
would otherwise be applicable thereto pursuant to the foregoing provisions of
this Section PLUS 2.0% or (y) in the case of Reimbursement Obligations, the rate
applicable to Base Rate Loans under the Revolving Credit Facility PLUS 2.0%, and
(ii) if all or a portion of any interest payable on any Loan or Reimbursement
Obligation or any commitment fee or other amount payable hereunder shall not be
paid when due (whether at the stated maturity, by acceleration or otherwise),
such overdue amount shall bear interest at a rate per annum equal to the rate
then applicable to Base Rate Loans under the relevant Facility PLUS 2.0% (or, in
the case of any such other amounts that do not relate to a particular Facility,
the rate then applicable to Base Rate Loans under the Revolving Credit Facility
PLUS 2.0%), in each case, with respect to clauses (i) and (ii) above, from the
date of such non-payment until but excluding the date such overdue amount is
paid in full (after as well as before judgment).
(d) Interest shall be payable in arrears on each Interest Payment
Date, PROVIDED that interest accruing pursuant to paragraph (c) of this Section
shall be payable from time to time on demand.
2.16 COMPUTATION OF INTEREST AND FEES. (a) Interest, fees and
commissions payable pursuant hereto shall be calculated on the basis of a
360-day year for the actual days elapsed, except that, with respect to Base Rate
Loans the rate of interest on which is calculated on the basis of the Prime
Rate, the interest thereon shall be calculated on the basis of a 365-day year
for the actual days elapsed. The Administrative Agent shall as soon as
practicable notify the Borrower and the relevant Lenders of each determination
of a Eurodollar Rate. Any change in the interest rate on a Loan resulting from a
change in the Base Rate or the Eurocurrency Reserve Requirements shall become
effective as of the opening of business on the day on which such change becomes
effective. The Administrative Agent shall as soon as practicable notify the
39
Borrower and the relevant Lenders of the effective date and the amount of each
such change in interest rate.
(b) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to Section 2.15(a).
2.17 INABILITY TO DETERMINE INTEREST RATE. If prior to the first day
of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that, by
reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for such
Interest Period, or
(b) the Administrative Agent shall have received notice from the
Majority Facility Lenders in respect of the relevant Facility that the
Eurodollar Rate determined or to be determined for such Interest Period
will not adequately and fairly reflect the cost to such Lenders (as
conclusively certified by such Lenders) of making or maintaining their
affected Loans during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the relevant Lenders as soon as practicable thereafter. If such
notice is given (x) any Eurodollar Loans under the relevant Facility requested
to be made on the first day of such Interest Period shall be made as Base Rate
Loans, (y) any Loans under the relevant Facility that were to have been
converted on the first day of such Interest Period to Eurodollar Loans shall be
continued as Base Rate Loans and (z) any outstanding Eurodollar Loans under the
relevant Facility shall be converted, on the last day of the then current
Interest Period with respect thereto, to Base Rate Loans. Until such notice has
been withdrawn by the Administrative Agent, no further Eurodollar Loans under
the relevant Facility shall be made or continued as such, nor shall the Borrower
have the right to convert Loans under the relevant Facility to Eurodollar Loans.
2.18 PRO RATA TREATMENT AND PAYMENTS. (a) Each borrowing by the
Borrower from the Lenders hereunder, each payment by the Borrower on account of
any commitment fee and any reduction of the Commitments of the Lenders shall be
made PRO RATA according to the respective Tranche B Term Loan Percentages or
Revolving Credit Percentages, as the case may be, of the relevant Lenders.
Subject to Section 2.18(c), each payment (other than prepayments as set forth in
Sections 2.18 (b), (c)) in respect of principal or interest in respect of the
Loans, and each payment in respect of fees or expenses payable hereunder shall
be applied to the amounts of such obligations owing to the Lenders PRO RATA
according to the respective amounts then due and owing to the Lenders. The
application of any prepayment pursuant to this Section 2.18 shall be made,
FIRST, to Base Rate Loans and, SECOND, to Eurodollar Loans.
(b) Each optional prepayment made pursuant to Section 2.11 and each
mandatory prepayment required by Section 2.12 (other than prepayments required
by Section
40
2.12(c)) shall be allocated among the Tranche B Term Loan Lenders holding such
Tranche B Term Loans PRO RATA based on the principal amount of such Tranche B
Term Loans held by such Tranche B Term Loan Lenders, and shall be applied to the
installments of such Tranche B Term Loans PRO RATA based on the remaining
outstanding principal amount of such installments. Each mandatory prepayment
required by Section 2.12(c) shall be allocated among the Tranche B Term Loan
Lenders holding such Tranche B Term Loans based upon the principal amount of
such Tranche B Term Loans held by such Tranche B Term Loan Lenders, and shall be
applied to the installments of such Tranche B Term Loans in inverse order of
maturity. Amounts prepaid on account of the Tranche B Term Loans may not be
reborrowed.
(c) Each payment (including each prepayment) by the Borrower on
account of principal of and interest on the Revolving Credit Loans shall be made
PRO RATA according to the respective outstanding principal amounts of the
Revolving Credit Loans then held by the Revolving Credit Lenders. Each payment
in respect of Reimbursement Obligations in connection with any Letter of Credit
shall be made to the Issuing Lender.
(d) All payments (including prepayments) to be made by the Borrower
hereunder, whether on account of principal, interest, fees or otherwise, shall
be made without setoff or counterclaim and shall be made prior to 1:00 P.M., New
York City time, on the due date thereof to the Administrative Agent, for the
account of the Lenders, at the Payment Office, in Dollars and in immediately
available funds. The Administrative Agent shall distribute such payments to the
Lenders promptly upon receipt in like funds as received. If any payment
hereunder (other than payments on the Eurodollar Loans) becomes due and payable
on a day other than a Business Day, such payment shall be extended to the next
succeeding Business Day. If any payment on a Eurodollar Loan becomes due and
payable on a day other than a Business Day, the maturity thereof shall be
extended to the next succeeding Business Day unless the result of such extension
would be to extend such payment into another calendar month, in which event such
payment shall be made on the immediately preceding Business Day. In the case of
any extension of any payment of principal pursuant to the preceding two
sentences, interest thereon shall be payable at the then applicable rate during
such extension.
(e) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is not made available to the Administrative
Agent by the required time on the Borrowing Date therefor, such Lender shall pay
to the Administrative Agent, on demand, such amount with interest thereon at a
rate equal to the daily average Federal Funds Effective Rate for the period
until such Lender makes such amount immediately available to the Administrative
Agent. A certificate of the Administrative Agent submitted to any Lender with
respect to any amounts owing under this paragraph shall be conclusive in the
absence of manifest error. If such Lender's share of such borrowing is not made
available to the Administrative Agent by such Lender within three Business Days
of such Borrowing Date, the Administrative Agent shall also be entitled to
recover such amount with interest thereon at the
41
rate per annum applicable to Base Rate Loans under the relevant Facility, on
demand, from the Borrower.
(f) Unless the Administrative Agent shall have been notified in
writing by the Borrower prior to the date of any payment being made hereunder
that the Borrower will not make such payment to the Administrative Agent, the
Administrative Agent may assume that the Borrower is making such payment, and
the Administrative Agent may, but shall not be required to, in reliance upon
such assumption, make available to the Lenders their respective PRO RATA shares
of a corresponding amount. If such payment is not made to the Administrative
Agent by the Borrower within three Business Days of such required date, the
Administrative Agent shall be entitled to recover, on demand, from each Lender
to which any amount which was made available pursuant to the preceding sentence,
such amount with interest thereon at the rate per annum equal to the daily
average Federal Funds Effective Rate. Nothing herein shall be deemed to limit
the rights of the Administrative Agent or any Lender against the Borrower.
(g) Each prepayment of Tranche B Term Loans (other than (A) an
optional prepayment pursuant to Section 2.11 made with proceeds not required to
be used to prepay the Loans pursuant to Section 2.12(a) and (b) and (B) a
mandatory prepayment pursuant to Section 2.12(c)) shall be accompanied by a
prepayment premium equal to (i) if such prepayment is made on or prior to the
first anniversary of the Closing Date, 2.00% of the principal amount of such
prepayment and (ii) if such prepayment is made after the first anniversary of
the Closing Date and through the second anniversary of the Closing Date, 1.00%
of the principal amount of such prepayment.
2.19 REQUIREMENTS OF LAW. (a) If the adoption of or any change in
any Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind
whatsoever with respect to this Agreement, any Letter of Credit, any
Application or any Eurodollar Loan made by it, or change the basis of
taxation of payments to such Lender in respect thereof (except for
Non-Excluded Taxes covered by Section 2.20 and changes in the rate of tax
or taxes on the overall net income of such Lender by the jurisdiction under
the laws of which such Lender is organized or in which such Lender has its
principal office or the applicable lending office);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets held
by, deposits or other liabilities in or for the account of, advances, loans
or other extensions of credit by, or any other acquisition of funds by, any
office of such Lender that is not otherwise included in the determination
of the Eurodollar Rate hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining
42
Eurodollar Loans or issuing or participating in Letters of Credit, or to reduce
any amount receivable by such Lender hereunder in respect thereof, then, in any
such case, the Borrower shall promptly pay such Lender, upon its written demand
(which shall include the certificate described in Section 2.19(c)), any
additional amounts necessary to compensate such Lender on an after-tax basis for
such increased cost or reduced amount receivable. If any Lender becomes entitled
to claim any additional amounts pursuant to this Section, it shall promptly
notify the Borrower (with a copy to the Administrative Agent) of the event by
reason of which it has become so entitled.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under or in respect of any Letter of
Credit to a level below that which such Lender or such corporation could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender's or such corporation's policies with respect to capital adequacy)
by an amount deemed by such Lender to be material, then from time to time, after
submission by such Lender to the Borrower (with a copy to the Administrative
Agent) of a written request therefor (which shall include the certificate
described in Section 2.19(c)), the Borrower shall pay to such Lender within 15
days of receipt of such notice such additional amount or amounts as will
compensate such Lender on an after-tax basis for such reduction.
(c) A certificate as to any additional amounts payable pursuant to
this Section submitted by any Lender to the Borrower (with a copy to the
Administrative Agent) with reasonable detail demonstrating how such amounts were
derived shall be conclusive in the absence of manifest error. The obligations of
the Borrower pursuant to this Section shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable hereunder.
2.20 TAXES. (a) All payments made by the Borrower under this
Agreement or any other Loan Document shall be made free and clear of, and
without deduction or withholding for or on account of, any present or future
income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions
or withholdings, now or hereafter imposed, levied, collected, withheld or
assessed by any Governmental Authority, excluding net income taxes and franchise
taxes (imposed in lieu of net income taxes) imposed on the Administrative Agent
or any Lender as a result of a present or former connection between the
Administrative Agent or such Lender and the jurisdiction of the Governmental
Authority imposing such tax or any political subdivision or taxing authority
thereof or therein (other than any such connection arising solely from the
Administrative Agent's or such Lender's having executed, delivered or performed
its obligations or received a payment under, or enforced, this Agreement or any
other Loan Document). If any such non-excluded taxes, levies, imposts, duties,
charges, fees, deductions or withholdings ("NON-EXCLUDED TAXES") are required to
be withheld from any amounts payable to the Administrative Agent or any Lender
hereunder, the amounts so payable to the Administrative Agent or such Lender
shall be increased to the extent necessary to yield to the Administrative
43
Agent or such Lender (after payment of all Non-Excluded Taxes) interest or any
such other amounts that would have been received hereunder had such withholding
not been required; PROVIDED, HOWEVER, that the Borrower or a Guarantor shall not
be required to increase any such amounts payable to the Administrative Agent or
any Lender with respect to any Non-Excluded Taxes (i) that are attributable to
the Administrative Agent's or such Lender's failure to comply with the
requirements of paragraph (f) of this Section, or (ii) that are United States
withholding taxes imposed on amounts payable to the Administrative Agent or such
Lender at the time the Administrative Agent or such Lender becomes a party to
this Agreement, except to the extent that the Administrative Agent's or such
Lender's assignor (if any) was entitled, at the time of assignment, to receive
additional amounts from the Borrower or a Guarantor with respect to such
Non-Excluded Taxes pursuant to this Section 2.20(a). The Borrower or the
applicable Guarantor shall make any required withholding and pay the full amount
withheld to the relevant tax authority or other Governmental Authority in
accordance with applicable Requirements of Law.
(b) The Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable Requirements of Law.
(c) The Borrower shall indemnify the Administrative Agent and any
Lender for the full amount of Non-Excluded Taxes or Other Taxes arising in
connection with payments made under this Agreement (including, without
limitation, any Non-Excluded Taxes or Other Taxes imposed by any jurisdiction on
amounts payable under this Section 2.20) paid by the Administrative Agent or
Lender or any of their respective Affiliates and any liability (including
penalties, additions to tax interest) arising therefrom or with respect thereto,
PROVIDED that if the Borrower reasonably believes that such Non-Excluded Taxes
or Other Taxes, as the case may be, were not correctly or legally asserted, the
Administrative Agent or Lender, as the case may be, will use reasonable efforts
to cooperate with the Borrower to obtain a refund of such Non-Excluded Taxes or
Other Taxes so long as such efforts would not result in any additional costs,
expenses or risks or be otherwise disadvantageous to the Administrative Agent or
Lender, as the case may be. Payment under this indemnification shall be made
within ten days from the date the Administrative Agent or any Lender or any of
their respective Affiliates makes written demand therefor (which demand shall
identify the nature and amount of Non-Excluded Taxes and Other Taxes for which
indemnification is being sought and shall include a copy of the written
assessment from the relevant Governmental Authority demanding payment for such
Non-Excluded Taxes and Other Taxes).
(d) Whenever any Non-Excluded Taxes or Other Taxes are payable by
the Borrower, as promptly as possible thereafter the Borrower shall send to the
Administrative Agent for the account of the Administrative Agent or Lender, as
the case may be, a certified copy of an original official receipt, if any,
received by the Borrower of evidence showing payment thereof or, if such copy is
not available, any other evidence of payment thereof reasonably satisfactory to
the Administrative Agent.
(e) The agreements in this Section 2.20 shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
44
(f) Each Lender (or Transferee) that is not a citizen or resident
of the United States of America, a corporation, partnership or other entity
created or organized in or under the laws of the United States of America (or
any jurisdiction thereof), or any estate or trust that is subject to federal
income taxation regardless of the source of its income (a "NON-U.S. LENDER")
shall deliver to the Borrower and the Administrative Agent (and, in the case of
a Participant, to the Lender from which the related participation shall have
been purchased) (i) a copy of either U.S. Internal Revenue Service Form W-8BEN
(claiming benefits under an applicable treaty) or Form W-8ECI, or, (ii) in the
case of a Non-U.S. Lender claiming exemption from U.S. federal withholding tax
under Section 871(h) or 881(c) of the Code with respect to payments of
"portfolio interest," a statement substantially in the form of Exhibit G to the
effect that such Lender is eligible for a complete exemption from withholding of
U.S. taxes under Section 871(h) or 881(c) of the Code and a Form W-8BEN, in each
case, or any subsequent versions of such forms or successors thereto properly
completed and duly executed by such Non-U.S. Lender claiming complete exemption
from, or a reduced rate of, U.S. federal withholding tax on all payments by the
Borrower under this Agreement and the other Loan Documents. Such forms shall be
delivered by each Non-U.S. Lender on or before the date it becomes a party to
this Agreement (or, in the case of any Participant, on or before the date such
Participant purchases the related participation). In addition, each Non-U.S.
Lender shall deliver new forms on or before the obsolescence, expiration or
invalidity of any form previously delivered by such Non-U.S. Lender in each case
certifying that such Non-U.S. Lender is entitled to an exemption from or a
reduction of withholding or deduction for or on account of United States federal
income taxes in connection with payments under this Agreement and any other Loan
Document. Each Non-U.S. Lender shall promptly notify the Borrower at any time it
determines that it is no longer in a position to provide any previously
delivered certificate to the Borrower (or any other form of certification
adopted by the U.S. taxing authorities for such purpose). Notwithstanding any
other provision of this paragraph, a Non-U.S. Lender shall not be required to
deliver any form pursuant to this paragraph that such Non-U.S. Lender is not
legally able to deliver.
(g) The Administrative Agent and Lender agrees that if it
subsequently recovers, or receives a permanent net tax benefit with respect to,
any amount of Non-Excluded Taxes or Other Taxes (i) previously paid by it and as
to which it has been indemnified by or on behalf of the Borrower or (ii)
previously deducted by the Borrower (including, without limitation, any Taxes
deducted from any additional sums payable under subsection (a) above) and as to
which the Borrower has paid an additional amount under Section 2.20(a) above,
the Administrative Agent or Lender, as the case may be, shall reimburse the
Borrower such portion of any such recovery or permanent net tax benefit as the
Administrative Agent or Lender, as the case may be, in its sole opinion has
determined to be attributable to indemnity payments made, or additional amounts
paid, by or on behalf of the Borrower under this Section 2.20 with respect to
the Non-Excluded Taxes or Other Taxes giving rise to such recovery or tax
benefit and as will leave the Administrative Agent or Lender in no worse
position than it would be in if no such Taxes or Other Taxes had been imposed;
PROVIDED, HOWEVER, that the Borrower, upon the request of the Administrative
Agent or Lender, agrees to repay to the Administrative Agent or Lender, as the
case may be, the amount paid over to the Borrower (together with any penalties,
interest or other charges), in the event the Administrative Agent or Lender is
required to repay such amount to the relevant taxing authority or other
Government Authority. Nothing in this Section 2.20(g) shall oblige the
Administrative Agent and Lender to disclose to the Borrower or any other person
45
any information regarding its tax affairs or computation and the Administrative
Agent and the Lender shall have absolute discretion to arrange their tax affairs
in whatever manner the Administrative Agent or Lender thinks fits.
2.21 INDEMNITY. The Borrower agrees to indemnify each Lender and to
hold each Lender harmless from any loss or expense that such Lender may sustain
or incur as a consequence of (a) default by the Borrower in making a borrowing
of, conversion into or continuation of Eurodollar Loans after the Borrower has
given a notice requesting the same in accordance with the provisions of this
Agreement, (b) default by the Borrower in making any prepayment after the
Borrower has given a notice thereof in accordance with the provisions of this
Agreement or (c) the making of a prepayment or conversion of Eurodollar Loans on
a day that is not the last day of an Interest Period with respect thereto. Such
indemnification may include an amount equal to the excess, if any, of (i) the
amount of interest that would have accrued on the amount so prepaid, or not so
borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
such Interest Period (or, in the case of a failure to borrow, convert or
continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Loans provided
for herein (excluding, however, the Applicable Margin included therein, if any)
OVER (ii) the amount of interest (as reasonably determined by such Lender) that
would have accrued to such Lender on such amount by placing such amount on
deposit for a comparable period with leading banks in the interbank eurodollar
market. A certificate as to any amounts payable pursuant to this Section with
reasonable detail demonstrating how such amounts were derived submitted to the
Borrower by any Lender shall be conclusive in the absence of manifest error.
This covenant shall survive the termination of this Agreement and the payment of
the Loans and Letters of Credit and all other amounts payable hereunder.
2.22 ILLEGALITY. Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such
Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert Base Rate Loans to Eurodollar Loans shall forthwith be canceled and (b)
such Lender's Loans then outstanding as Eurodollar Loans, if any, shall be
converted automatically to Base Rate Loans on the respective last days of the
then current Interest Periods with respect to such Loans or within such earlier
period as required by law. If any such conversion of a Eurodollar Loan occurs on
a day which is not the last day of the then current Interest Period with respect
thereto, the Borrower shall pay to such Lender such amounts, if any, as may be
required pursuant to Section 2.21.
2.23 CHANGE OF LENDING OFFICE. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Section 2.19, 2.20(a) or
2.22 with respect to such Lender, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
file any certificate or document reasonably requested by the Borrower or to
designate another lending office for any Loans affected by such event, in each
case, with the object of avoiding the consequences of such event; PROVIDED that
such designation is made on terms that, in the sole judgment of such Lender,
cause such Lender and its lending
46
office(s) to suffer no economic, legal or regulatory disadvantage, and PROVIDED,
FURTHER, that nothing in this Section shall affect or postpone any of the
obligations of any Borrower or the rights of any Lender pursuant to Section
2.19, 2.20(a) or 2.22.
2.24 REPLACEMENT OF LENDERS UNDER CERTAIN CIRCUMSTANCES. The
Borrower shall be permitted to replace any Lender that (a) requests
reimbursement for amounts owing pursuant to Section 2.19 or 2.20(a) or (b)
defaults in its obligation to make Loans hereunder, with a replacement financial
institution; PROVIDED that (i) such replacement does not conflict with any
Requirement of Law, (ii) no Event of Default shall have occurred and be
continuing at the time of such replacement, (iii) prior to any such replacement,
such Lender shall have taken no action under Section 2.23 so as to eliminate the
continued need for payment of amounts owing pursuant to Section 2.19 or 2.20(a),
(iv) the replacement financial institution shall purchase, at par, all Loans and
other amounts owing to such replaced Lender on or prior to the date of
replacement, (v) the Borrower shall be liable to such replaced Lender under
Section 2.21 (as though Section 2.21 were applicable) if any Eurodollar Loan
owing to such replaced Lender shall be purchased other than on the last day of
the Interest Period relating thereto, (vi) the replacement financial
institution, if not already a Lender, shall be reasonably satisfactory to the
Administrative Agent, (vii) the replaced Lender shall be obligated to make such
replacement in accordance with the provisions of Section 10.6 (PROVIDED that the
Borrower shall be obligated to pay the registration and processing fee referred
to therein), (viii) until such time as such replacement shall be consummated,
the Borrower shall pay all additional amounts (if any) required pursuant to
Section 2.19 or 2.20(a), as the case may be, and (ix) any such replacement shall
not be deemed to be a waiver of any rights that the Borrower, the Administrative
Agent or any other Lender shall have against the replaced Lender.
2.25 LIMITATION ON ADDITIONAL AMOUNTS, ETC. Notwithstanding anything
to the contrary contained in Sections 2.19, 2.20 or 2.22 of this Agreement,
unless the Administrative Agent or a Lender gives notice to the Borrower that it
is obligated to pay an amount under any such Section within 90 days after the
later of (x) the date the Lender incurs the respective increased costs,
Non-Excluded Taxes, Other Taxes, loss, expense or liability, reduction in
amounts received or receivable or reduction in return on capital or (y) the date
such Lender has actual knowledge of its incurrence of the respective increased
costs, Non-Excluded Taxes, Other Taxes, loss, expense or liability, reductions
in amounts received or receivable or reduction in return on capital, such Lender
shall not be entitled to be compensated for interest and penalties by the
Borrower pursuant to Sections 2.19, 2.20, or 2.22, as the case may be, to the
extent such interest or penalties are incurred or suffered on or after such
date. This Section 2.25 shall have no applicability to any Section of this
Agreement other than Sections 2.19, 2.20 or 2.22.
SECTION 3. LETTERS OF CREDIT
3.1 L/C COMMITMENT. (a) Subject to the terms and conditions hereof,
the Issuing Lender, in reliance on the agreements of the other Revolving Credit
Lenders set forth in Section 3.4(a), agrees to issue letters of credit ("LETTERS
OF CREDIT") for the account of the Borrower on any Business Day during the
Revolving Credit Commitment Period in such form as may be approved from time to
time by the Issuing Lender; PROVIDED that the Issuing Lender shall have no
obligation to issue any Letter of Credit if, after giving effect to such
issuance, (i) the L/C
47
Obligations would exceed the L/C Commitment or (ii) the aggregate amount of the
Available Revolving Credit Commitments would be less than zero. Each Letter of
Credit shall (i) be denominated in Dollars and (ii) expire no later than the
earlier of (x) the first anniversary of its date of issuance and (y) the date
which is five Business Days prior to the Scheduled Revolving Credit Termination
Date, PROVIDED that any Letter of Credit with a one-year term may provide for
the renewal thereof for additional one-year periods (which shall in no event
extend beyond the date referred to in clause (y) above).
(b) The Issuing Lender shall not at any time be obligated to issue
any Letter of Credit hereunder if such issuance would conflict with, or cause
the Issuing Lender or any L/C Participant to exceed any limits imposed by, any
applicable Requirement of Law.
3.2 PROCEDURE FOR ISSUANCE OF LETTER OF CREDIT. The Borrower may
from time to time request that the Issuing Lender issue a Letter of Credit by
delivering to the Issuing Lender at its address for notices specified herein an
Application therefor, completed to the satisfaction of the Issuing Lender, and
such other certificates, documents and other papers and information as the
Issuing Lender may request. Upon receipt of any Application, the Issuing Lender
will process such Application and the certificates, documents and other papers
and information delivered to it in connection therewith in accordance with its
customary procedures and shall promptly issue the Letter of Credit requested
thereby (but in no event shall the Issuing Lender be required to issue any
Letter of Credit earlier than three Business Days after its receipt of the
Application therefor and all such other certificates, documents and other papers
and information relating thereto) by issuing the original of such Letter of
Credit to the beneficiary thereof or as otherwise may be agreed to by the
Issuing Lender and the Borrower. The Issuing Lender shall furnish a copy of such
Letter of Credit to the Borrower promptly following the issuance thereof. The
Issuing Lender shall promptly furnish to the Administrative Agent, which shall
in turn promptly furnish to the Lenders, notice of the issuance of each Letter
of Credit (including the amount thereof).
3.3 FEES AND OTHER CHARGES. (a) The Borrower will pay a fee on the
aggregate drawable amount of each outstanding Letter of Credit at a per annum
rate equal to the Applicable Margin then in effect with respect to Eurodollar
Loans under the Revolving Credit Facility, shared ratably among the Revolving
Credit Lenders and payable quarterly in arrears on each L/C Fee Payment Date
after the issuance date of such Letter of Credit. In addition, the Borrower
shall pay to the Issuing Lender for its own account a fronting fee on the
aggregate drawable amount of each outstanding Letter of Credit not to exceed 1/4
of 1% per annum, payable quarterly in arrears on each L/C Fee Payment Date after
the issuance date of such Letter of Credit.
(b) In addition to the foregoing fees, the Borrower shall pay or
reimburse the Issuing Lender for such normal and customary costs and expenses as
are incurred or charged by the Issuing Lender in issuing, negotiating, effecting
payment under, amending or otherwise administering any Letter of Credit.
3.4 L/C PARTICIPATIONS. (a) The Issuing Lender irrevocably agrees
to grant and hereby grants to each L/C Participant, and, to induce the Issuing
Lender to issue Letters of Credit
48
hereunder, each L/C Participant irrevocably agrees to accept and purchase and
hereby accepts and purchases from the Issuing Lender, on the terms and
conditions hereinafter stated, for such L/C Participant's own account and risk
an undivided interest equal to such L/C Participant's Revolving Credit
Percentage in the Issuing Lender's obligations and rights under each Letter of
Credit issued hereunder and the amount of each draft paid by the Issuing Lender
thereunder. Each L/C Participant unconditionally and irrevocably agrees with the
Issuing Lender that, if a draft is paid under any Letter of Credit for which the
Issuing Lender is not reimbursed in full by the Borrower in accordance with the
terms of this Agreement, such L/C Participant shall pay to the Issuing Lender,
regardless of the occurrence or continuance of a Default or an Event of Default
or the failure to satisfy any of the other conditions specified in Section 5,
upon demand, at the Issuing Lender's address for notices specified herein an
amount equal to such L/C Participant's Revolving Credit Percentage of the amount
of such draft, or any part thereof, that is not so reimbursed.
(b) If any amount required to be paid by any L/C Participant to the
Issuing Lender pursuant to Section 3.4(a) in respect of any unreimbursed portion
of any payment made by the Issuing Lender under any Letter of Credit is paid to
the Issuing Lender within three Business Days after the date such payment is
due, such L/C Participant shall pay to the Issuing Lender on demand an amount
equal to the product of (i) such amount, times (ii) the daily average Federal
Funds Effective Rate during the period from and including the date such payment
is required to the date on which such payment is immediately available to the
Issuing Lender, times (iii) a fraction the numerator of which is the number of
days that elapse during such period and the denominator of which is 360. If any
such amount required to be paid by any L/C Participant pursuant to Section
3.4(a) is not made available to the Issuing Lender by such L/C Participant
within three Business Days after the date such payment is due, the Issuing
Lender shall be entitled to recover from such L/C Participant, on demand, such
amount with interest thereon calculated from such due date at the rate per annum
applicable to Base Rate Loans under the Revolving Credit Facility. A certificate
of the Issuing Lender submitted to any L/C Participant with respect to any
amounts owing under this Section shall be conclusive in the absence of manifest
error.
(c) Whenever, at any time after the Issuing Lender has made payment
under any Letter of Credit and has received from any L/C Participant its PRO
RATA share of such payment in accordance with Section 3.4(a), the Issuing Lender
receives any payment related to such Letter of Credit (whether directly from the
Borrower or otherwise, including proceeds of collateral applied thereto by the
Issuing Lender), or any payment of interest on account thereof, the Issuing
Lender will distribute to such L/C Participant its PRO RATA share thereof;
PROVIDED, HOWEVER, that in the event that any such payment received by the
Issuing Lender shall be required to be returned by the Issuing Lender, such L/C
Participant shall return to the Issuing Lender the portion thereof previously
distributed by the Issuing Lender to it.
3.5 REIMBURSEMENT OBLIGATION OF THE BORROWER. The Borrower agrees
to reimburse the Issuing Lender on each date on which the Issuing Lender
notifies the Borrower of the date and amount of a draft presented under any
Letter of Credit and paid by the Issuing Lender for the amount of (a) such draft
so paid and (b) any taxes, fees, charges or other costs or expenses incurred by
the Issuing Lender in connection with such payment (the amounts
49
described in the foregoing clauses (a) and (b) in respect of any drawing,
collectively, the "PAYMENT AMOUNT"). Each such payment shall be made to the
Issuing Lender at its address for notices specified herein in lawful money of
the United States of America and in immediately available funds. Interest shall
be payable on each Payment Amount from the date of the applicable drawing until
payment in full at the rate set forth in (i) until the second Business Day
following the date of the applicable drawing, Section 2.15(b) and (ii)
thereafter, Section 2.15(c). Each drawing under any Letter of Credit shall
(unless an event of the type described in clause (i) or (ii) of Section 8(f)
shall have occurred and be continuing with respect to the Borrower, in which
case the procedures specified in Section 3.4 for funding by L/C Participants
shall apply) constitute a request by the Borrower to the Administrative Agent
for a borrowing pursuant to Section 2.5 of Base Rate Loans (or, at the option of
the Administrative Agent and the Swing Line Lender in their sole discretion, a
borrowing pursuant to Section 2.7 of Swing Line Loans) in the amount of such
drawing. The Borrowing Date with respect to such borrowing shall be the first
date on which a borrowing of Revolving Credit Loans (or, if applicable, Swing
Line Loans) could be made, pursuant to Section 2.5 (or, if applicable, Section
2.7), if the Administrative Agent had received a notice of such borrowing at the
time of such drawing under such Letter of Credit.
3.6 OBLIGATIONS ABSOLUTE. The Borrower's obligations under this
Section 3 shall be absolute and unconditional under any and all circumstances
and irrespective of any setoff, counterclaim or defense to payment that the
Borrower may have or have had against the Issuing Lender, any beneficiary of a
Letter of Credit or any other Person. The Borrower also agrees with the Issuing
Lender that the Issuing Lender shall not be responsible for, and the Borrower's
Reimbursement Obligations under Section 3.5 shall not be affected by, among
other things, the validity or genuineness of documents or of any endorsements
thereon, even though such documents shall in fact prove to be invalid,
fraudulent or forged, or any dispute between or among the Borrower and any
beneficiary of any Letter of Credit or any other party to which such Letter of
Credit may be transferred or any claims whatsoever of the Borrower against any
beneficiary of such Letter of Credit or any such transferee. The Issuing Lender
shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit. The Borrower agrees that
any action taken or omitted by the Issuing Lender under or in connection with
any Letter of Credit or the related drafts or documents, if done in accordance
with the standards of care specified in the UCC of the State of New York, shall
be binding on the Borrower and shall not result in any liability of the Issuing
Lender to the Borrower.
3.7 LETTER OF CREDIT PAYMENTS. If any draft shall be presented for
payment under any Letter of Credit, the Issuing Lender shall promptly notify the
Borrower of the date and amount thereof. The responsibility of the Issuing
Lender to the Borrower in connection with any draft presented for payment under
any Letter of Credit shall, in addition to any payment obligation expressly
provided for in such Letter of Credit, be limited to determining that the
documents (including each draft) delivered under such Letter of Credit in
connection with such presentment are substantially in conformity with such
Letter of Credit.
50
3.8 APPLICATIONS. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Agreement or the other Loan Documents, the provisions of this Agreement
or the other Loan Documents shall apply.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Arranger, the Administrative Agent and the Lenders to
enter into this Agreement and to make the Loans and issue or participate in the
Letters of Credit, the Parents and the Borrower hereby jointly and severally
represent and warrant to the Arranger, the Administrative Agent and each Lender
that:
4.1 FINANCIAL CONDITION.
(a) The unaudited PRO FORMA consolidated and consolidating balance
sheet of the Borrower and its consolidated Subsidiaries as at September 30, 2001
(including the notes thereto) (the "PRO FORMA BALANCE SHEET"), copies of which
have heretofore been furnished to each Lender, has been prepared giving effect
(as if such events had occurred on such date) to (i) the consummation of the
Acquisition, (ii) the Loans to be made and the Senior Subordinated Notes to be
issued on the Closing Date and the use of proceeds thereof and (iii) the payment
of fees and expenses in connection with the foregoing. The Pro Forma Balance
Sheet has been prepared based on the best information available to the Borrower
as of the date of delivery thereof and on good faith estimates and assumptions
reasonably believed by it to be reasonable as of the date of delivery thereof,
and presents fairly on a PRO FORMA basis the estimated financial position of
Borrower and its consolidated Subsidiaries as at September 30, 2001, assuming
that the events specified in the preceding sentence had actually occurred at
such date.
(b) The audited consolidated balance sheets of the Borrower and its
consolidated Subsidiaries as at December 31, 1999 and December 31, 2000, and the
related consolidated statements of income and of cash flows for the fiscal years
ended on such dates, reported on by and accompanied by an unqualified report
from Ernst & Young, present fairly in all material respects the consolidated
financial condition of the Borrower and its consolidated Subsidiaries as at such
date, and the consolidated results of its operations and its consolidated cash
flows for the respective fiscal years then ended. The unaudited consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as at September
30, 2001, and the related unaudited consolidated statements of income and cash
flows for the nine-month period ended on such date, present fairly all material
respects the consolidated financial condition of the Borrower and its
consolidated Subsidiaries as at such date, and the consolidated results of its
operations and its consolidated cash flows for the nine-month period then ended
(subject to normal year-end audit adjustments and the absence of footnotes). All
such financial statements, including the related schedules and notes thereto,
have been prepared in accordance with GAAP applied consistently throughout the
periods involved (except as approved by the aforementioned firm of accountants
and disclosed therein). Except as set forth in SCHEDULE 4.1(b), as of the
Closing Date the Parents, the Borrower and its Subsidiaries do not have any
material Guarantee Obligations, material contingent liabilities and material
liabilities for taxes, or any material long-term leases or unusual forward or
long-term commitments, including, without limitation, any interest rate or
foreign currency swap or exchange transaction or other obligation in respect of
derivatives, that
51
existed as of the date of but are not reflected in the most recent financial
statements referred to in this paragraph. During the period from September 30,
2001 to and including the date hereof there has been no Disposition by any Loan
Party of any material part of its business or Property other than those
Dispositions by TSI prior to the Merger permitted by the Acquisition Agreement.
4.2 NO CHANGE. Since September 30, 2001, there has been no
development or event that has had or could reasonably be expected to have a
Material Adverse Effect.
4.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Each Loan Party (a)
is (or, in the case of TSI, at the time it becomes a party hereto, will be) duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has (or, in the case of TSI, at the time
it becomes a party hereto, will have) the requisite power and authority, and the
legal right, to own and operate its material Property, to lease the Property it
operates as lessee and to conduct the business in which it is currently engaged,
(c) is (or, in the case of TSI, at the time it becomes a party hereto, will be)
duly qualified as a foreign corporation (or other entity) 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, except to
the extent that the failure to so qualify could not reasonably be expected to
have a Material Adverse Effect, and (d) is (or, in the case of TSI, at the time
it becomes a party hereto, will be) in compliance with all Requirements of Law
except to the extent that the failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
4.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. Each
of the Borrower and the Guarantors and, at the time it becomes a party hereto
and in its capacity as a Loan Party hereunder, TSI has the requisite power and
authority, and the legal right, to make, deliver and perform the Loan Documents
and Acquisition Documents to which it is a party and, in the case of the
Borrower, to borrow hereunder. Each of the Borrower and the Guarantors and, at
the time it becomes a party hereto and in its capacity as a Loan Party
hereunder, TSI has taken all necessary action to authorize the execution,
delivery and performance of the Loan Documents and Acquisition Documents to
which it is a party and, in the case of the Borrower, to authorize the
borrowings on the terms and conditions of this Agreement. No material consent or
authorization of, filing with, notice to, Permit from or other act by or in
respect of, any Governmental Authority and no consent or authorization of,
filing with, notice to or other act by or in respect of any other Person is
required in connection with the Acquisition and the borrowings hereunder or with
the execution, delivery, performance, validity or enforceability of this
Agreement, any of the Loan Documents or any Acquisition Documents, except (i)
consents, authorizations, filings and notices which have been obtained or made
and are in full force and effect and (ii) the filings referred to in Section
4.19. Each Loan Document and Acquisition Documents has been duly executed and
delivered on behalf of each of the Borrower and the Guarantors and, at the time
it becomes a party hereto and in its capacity as a Loan Party hereunder, TSI.
This Agreement constitutes, and each other Loan Document and Acquisition
Documents upon execution will constitute, a legal, valid and binding obligation
of each of the Borrower and the Guarantors and, at the time it becomes a party
hereto and in its capacity as a Loan Party hereunder, TSI, enforceable against
each such Loan Party in accordance with its terms, except as enforceability may
be limited by applicable bankruptcy, insolvency,
52
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
4.5 NO LEGAL BAR. The execution, delivery and performance of this
Agreement, the other Loan Documents, the Senior Subordinated Note Documentation
and the Acquisition Documents, the issuance of Letters of Credit, the borrowings
hereunder and the use of the proceeds thereof will not violate any Requirement
of Law or any Contractual Obligation of any of the Borrower or the Guarantors
or, at the time it becomes a party hereto and in its capacity as a Loan Party
hereunder, TSI and will not result in, or require, the creation or imposition of
any Lien on any of their respective properties or revenues pursuant to any
Requirement of Law or any such Contractual Obligation (other than the Liens
created by the Security Documents). No Requirement of Law or Contractual
Obligation applicable to any Loan Party could reasonably be expected to have a
Material Adverse Effect.
4.6 NO MATERIAL LITIGATION. Except as set forth on SCHEDULE 4.6, no
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the Borrower,
threatened by or against any Loan Party against any of their respective
properties or revenues (a) with respect to any of the Loan Documents or the
Acquisition Documents or any of the transactions contemplated hereby or thereby,
or (b) that, if reasonably likely to be adversely determined, could reasonably
be expected to have a Material Adverse Effect.
4.7 NO DEFAULT. No Loan Party is in default under or with respect
to any of its Contractual Obligations in any respect that could reasonably be
expected to have a Material Adverse Effect. No Default or Event of Default has
occurred and is continuing.
4.8 OWNERSHIP OF PROPERTY; LIENS. Each Loan Party has good,
marketable and insurable title in fee simple to, or a valid leasehold interest
in, all its material real property, and good title to, or a valid leasehold
interest in, all its other material Property used in its business as currently
conducted, and none of such Property is subject to any Lien except for any
Permitted Lien. None of the Pledged Stock is subject to any Lien except for
Permitted Liens.
4.9 INTELLECTUAL PROPERTY. (a) Each Loan Party owns, or is licensed
to use, all material Intellectual Property necessary for the conduct of its
business as currently conducted. No material claim has been asserted or is
pending by any Person challenging or questioning the use or validity of
Intellectual Property owned by a Loan Party that is necessary for the conduct of
such Loan Party's business as currently conducted, nor does the Borrower, the
Parent, or the Ultimate Parent know of any valid basis for any such claim. A
Loan Party's use of Intellectual Property owned by such Loan Party that is
necessary for the conduct of such Loan Party's business as currently conducted
does not knowingly and materially infringe the patent rights of any Person, and
does not materially infringe the trade secret, copyright or other Intellectual
Property rights of any Person.
(b) As of the Closing Date and after giving effect to the
Acquisition SCHEDULE 4.9(b) (i) identifies registrations and applications for
each of the trademarks, service marks and trade names owned by any Loan Party
and any material unregistered trademarks or service marks
53
owned by any Loan Party and identifies which such Person registered, made or
otherwise holds such Intellectual Property, and (ii) specifies as to each, the
jurisdiction in which such Intellectual Property has been used, issued or
registered (or, if applicable, in which an application for such issuance or
registration has been filed), including the respective registration or
application numbers.
(c) As of the Closing Date and after giving effect to the
Acquisition, SCHEDULE 4.9(c) (i) identifies each of the patents and patent
applications owned by any Loan Party and identifies which such Person owns such
Intellectual Property, and (ii) specifies as to each, the jurisdiction in which
such Intellectual Property has been issued or registered (or, if applicable, in
which an application for such issuance or registration has been filed),
including the respective patent or application numbers.
(d) As of the Closing Date and after giving effect to the
Acquisition, SCHEDULE 4.9(d) (i) identifies each of the copyright registrations
and copyright applications owned by any Loan Party and any material Copyrights
that have not been registered or for which applications for registration have
not been filed owned by any Loan Party and identifies which such Person
registered, made or otherwise holds such Intellectual Property, and (ii)
specifies as to each, the jurisdiction in which such Intellectual Property has
been issued or registered (or, if applicable, in which an application for such
issuance or registration has been filed), including the respective registration
or application numbers.
(e) As of the Closing Date and after giving effect to the
Acquisition, SCHEDULE 4.9(e) identifies all material licenses, sublicenses and
other agreements pursuant to which (i) Borrower licenses or sublicenses
Intellectual Property owned by it to a third party (other than routine licenses
of software to its customers made in the normal course of providing services to
such customers and licenses granted pursuant to the Intellectual Property
Agreement) or (ii) Borrower licenses or sublicenses Intellectual Property
required for its business as currently conducted from any other Person.
(f) As of the Closing Date and after giving effect to the
Acquisition, each of the trademark applications and registrations, and each of
the patents and applications for patents, and each of the copyright applications
and registrations listed on Schedules 4.9(b), (c), (d) and (e), respectively,
are valid and subsisting and each, according to the records of the United States
Patent and Trademark Office regarding patents and trademarks and the United
States Copyright Office regarding Copyrights, is owned by the entity listed as
owner on such Schedules, and each is free from any recorded liens, licenses or
other encumbrances, other than Permitted Liens.
4.10 TAXES. Each of Loan Party has filed or caused to be filed all
federal, material state and other material tax returns that are required to be
filed and has paid (prior to the date penalties attach thereto) all taxes shown
to be due and payable on said returns or on any assessments made against it or
any of its Property and all other taxes, fees or other charges imposed on it or
any of its Property by any Governmental Authority (other than any the amount or
validity of which are currently being contested in good faith by appropriate
proceedings and with respect to which reserves in conformity with GAAP have been
provided on the books of such Loan Party); the contents of all such material tax
returns are correct and complete in all
54
material respects, no tax Lien has been filed that would not be a Permitted
Lien, and, to the knowledge of the Borrower, no claim is being asserted, with
respect to any such tax, fee or other charge.
4.11 FEDERAL REGULATIONS. No part of the proceeds of the Loans or
Letters of Credit will be used for purchasing or carrying any "margin stock"
(within the meaning of Regulation U) or for the purpose of purchasing, carrying
or trading in any securities under such circumstances as to involve the Borrower
in a violation of Regulation X or to involve any broker or dealer in a violation
of Regulation T. No indebtedness being reduced or retired out of the proceeds of
the Loans or Letters of Credit was or will be incurred for the purpose of
purchasing or carrying any "margin stock" (within the meaning of Regulation U)
in violation of Regulation U. Following application of the proceeds of the Loans
and Letters of Credit, "margin stock" (within the meaning of Regulation U) does
not constitute more than 25% of the value of the assets of the Loan Parties.
None of the transactions contemplated by this Agreement (including, without
limitation, the direct and indirect use of proceeds of the Loans and Letters of
Credit) will violate or result in a violation of Regulation T, Regulation U or
Regulation X. If requested by any Lender or the Administrative Agent, the
Borrower will furnish to the Administrative Agent and each Lender a statement to
the foregoing effect in conformity with the requirements of FR Form G-3 or FR
Form U-1 referred to in Regulation U.
4.12 LABOR MATTERS. There are no strikes, stoppages, slowdowns or
other labor disputes against any of the Loan Parties pending or, to the
knowledge of the Borrower, threatened that (individually or in the aggregate)
could reasonably be expected to have a Material Adverse Effect. Hours worked by
and payment made to employees of the Loan Parties have not been in violation of
the Fair Labor Standards Act or any other applicable Requirement of Law dealing
with such matters that (individually or in the aggregate) could reasonably be
expected to have a Material Adverse Effect. All payments due from any Loan Party
on account of employee health and welfare insurance that (individually or in the
aggregate) could reasonably be expected to have a Material Adverse Effect if not
paid have been paid or accrued as a liability on the books of the relevant Loan
Party.
4.13 ERISA. Neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied in all respects with all applicable provisions of ERISA and the
Code, except to the extent any non-compliance could not reasonably be expected
to have a Material Adverse Effect. No termination of a Single Employer Plan has
occurred, and no Lien in favor of the PBGC or a Plan has arisen, during such
five-year period. The present value of all accrued benefits under each Single
Employer Plan (based on those assumptions used to fund such Plans) did not, as
of the last annual valuation date prior to the date on which this representation
is made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits by a material amount. Neither the Borrower nor any
Commonly Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan that has resulted or could reasonably be expected to result
in a material liability under ERISA, and neither the Borrower nor any Commonly
Controlled Entity would become subject to any material liability under ERISA if
the Borrower or any such Commonly Controlled Entity
55
were to withdraw completely from all Multiemployer Plans as of the valuation
date most closely preceding the date on which this representation is made or
deemed made. No such Multiemployer Plan is in Reorganization or Insolvent.
4.14 INVESTMENT COMPANY ACT; OTHER REGULATIONS. No Loan Party is an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. No Loan
Party is subject to regulation under any Requirement of Law (other than
Regulation X) which limits or conditions its ability to incur Indebtedness.
4.15 SUBSIDIARIES. (a) SCHEDULE 4.15(a) sets forth the ownership
structure of each Loan Party, other than the type, number or holder of the
equity interests of the Ultimate Parent, after giving effect to the Acquisition.
SCHEDULE 4.15(a) sets forth after giving effect to the Acquisition, the name and
jurisdiction of incorporation of each Loan Party and, as to each such Loan Party
(other than the Ultimate Parent), the percentage and number of each class of
Capital Stock owned by any other Loan Party. SCHEDULE 4.15(a) will be updated by
the Borrower to reflect the SS7 Reorganization and any other permitted
restructuring, Permitted Acquisition, or other corporate changes otherwise
permitted hereunder.
(b) Except as set forth on SCHEDULE 4.15(b), there are no
outstanding subscriptions, options, warrants, calls, rights or other agreements
or commitments (other than stock options or other similar rights granted to
employees or directors and directors' qualifying shares) of any nature relating
to any Capital Stock of the Parent, the Borrower or any Subsidiary. No Loan
Party has issued, or authorized the issuance of, any Disqualified Stock, other
than the issuances of Disqualified Stock of the Ultimate Parent and the Parent
expressly permitted hereunder.
4.16 USE OF PROCEEDS. The proceeds of the Tranche B Term Loans shall
be used to finance a portion of the Acquisition and to pay related fees and
expenses. The proceeds of the Revolving Credit Loans and the Swing Line Loans,
and the Letters of Credit, shall be used to finance a portion of the
Acquisition, for general corporate and working capital purposes and up to $15.0
million of such proceeds will be available for Permitted Acquisitions.
4.17 ENVIRONMENTAL MATTERS.
(a) There are no environmental audits conforming to the standards
of the ASTM "Standard Practice for Environmental Assessments: Phase I
Environmental Site Assessment Process" or other written environmental
assessments that have been prepared as to any of the Collateral (or any sites at
which Collateral is located) and that are in the possession of the Loan Parties
which have not been provided to the Administrative Agent.
(b) Other than exceptions to any of the following that would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect:
(i) Each Loan Party: (A) is, and within the period of all
applicable statutes of limitation has been, in compliance with all
applicable Environmental Laws and Environmental Permits; and (B) reasonably
believes that compliance with all applicable
56
Environmental Law that is or is expected to become applicable to any of
them will be timely attained and maintained, without material expense.
(ii) Materials of Environmental Concern are not present at, on,
under, in, or about any real property now or formerly owned, leased or
operated by any Loan Party, or at any other location (including, without
limitation, any location to which Materials of Environmental Concern have
been sent for re-use or recycling or for treatment, storage, or disposal)
which could reasonably be expected to (A) give rise to liability of any
Loan Party under any applicable Environmental Law or otherwise result in
costs to any Loan Party, or (B) materially interfere with any Loan Party's
continued operations, or (C) materially impair the fair saleable value of
any real property owned or leased by any Loan Party.
(iii) There is no pending or, to the knowledge of the Borrower,
threatened judicial, administrative, or arbitral proceeding (including any
notice of violation or alleged violation) under or relating to any
Environmental Law to which any Loan Party is, or to the knowledge of the
Borrower will be, named as a party.
(iv) No Loan Party has received any written request for information,
or been notified that it is a potentially responsible party under or
relating to the federal Comprehensive Environmental Response, Compensation,
and Liability Act or any similar Environmental Law, or with respect to any
Materials of Environmental Concern.
(v) No Loan Party has entered into or agreed to any consent decree,
order, or settlement or other agreement, or is subject to any judgment,
decree, or order or other agreement, in any judicial, administrative,
arbitral, or other forum for dispute resolution, relating to compliance
with or liability under any Environmental Law.
(vi) No Loan Party has assumed or retained, by contract or operation
of law, any liabilities of any other Person of any kind, fixed or
contingent, known or unknown, under any Environmental Law or with respect
to any Material of Environmental Concern.
4.18 ACCURACY OF INFORMATION, ETC. No statement or information
contained in this Agreement, any other Loan Document, the Confidential
Information Memorandum or any other document, certificate or statement
(excluding any projections, pro formas or estimates included in any such
statement, document or certificate) relating to any Loan Party furnished to the
Arranger, the Administrative Agent or the Lenders or any of them, by or on
behalf of any Loan Party for use in connection with the transactions
contemplated by this Agreement or the other Loan Documents, contained as of the
date such statement, information, document or certificate was so furnished (or,
in the case of the Confidential Information Memorandum (after giving effect to
any changes in the term sheet contained therein, to the extent disclosed to the
Lenders), as of the date of this Agreement), any untrue statement of a material
fact or omitted to state a material fact necessary in order to make the
statements contained herein or therein not misleading. The projections and PRO
FORMA financial information contained in the materials referenced above are
based upon good faith estimates and assumptions believed by management of the
Borrower to be reasonable at the time made, it being recognized by the Arranger,
the Administrative Agent and the Lenders that such financial information as it
relates to future
57
events is not to be viewed as fact and that actual results during the period or
periods covered by such financial information may differ from the projected
results set forth therein by a material amount. As of the Closing Date, the
representations and warranties made by the Borrower or any Guarantor (and, at
the time it becomes a party hereto and in its capacity as a Loan Party
hereunder, TSI) in the Acquisition Documents are true and correct in all
material respects. Other than industry-wide, general economic, political or
civil developments widely reported in the financial press, there is no fact
known to the Borrower or any of the Guarantors (or, at the time it becomes a
party hereto, TSI) that could reasonably be expected to have a Material Adverse
Effect that has not been expressly disclosed herein, in the other Loan
Documents, in the Confidential Information Memorandum or in any other documents,
certificates and written statements furnished to the Arranger, the
Administrative Agent and the Lenders for use in connection with the transactions
contemplated hereby and by the other Loan Documents.
4.19 SECURITY DOCUMENTS.
(a) The Guarantee and Collateral Agreement is effective to create
in favor of the Administrative Agent, for the benefit of the Secured Parties, a
legal, valid and enforceable security interest in the Collateral described
therein (except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditor's rights generally and by general equitable principals (whether
enforcement is sought in proceedings in equity or at law)) and proceeds and
products thereof. In the case of the Pledged Stock, when any stock certificates
representing such Pledged Stock are delivered to the Administrative Agent
together with any necessary endorsements, and in the case of the other
Collateral described in the Guarantee and Collateral Agreement with respect to
which a security interest may be perfected by filing, when financing statements
in appropriate form are properly filed in the offices specified on SCHEDULE
4.19(a)-1 (which financing statements may be filed by the Administrative Agent
at any time) and such other filings as are specified on Schedule 3 to the
Guarantee and Collateral Agreement are made (all of which filings have been duly
completed and may be filed by the Administrative Agent at any time), in each
case together with provision for payment of all requisite fees, the Guarantee
and Collateral Agreement shall constitute a fully perfected Lien on, and
security interest in, all right, title and interest of the Loan Parties in such
Collateral and the proceeds and products thereof, as security for the
Obligations (as defined in the Guarantee and Collateral Agreement), in each case
prior and superior in right to any other Person (except Permitted Liens).
SCHEDULE 4.19(a)-2 lists as of the Closing Date each UCC financing statement
that (i) names any Loan Party as debtor and (ii) will remain on file after the
Closing Date. SCHEDULE 4.19(a)-3 lists each UCC financing statement that (i)
names any Loan Party as debtor and (ii) will be terminated on or prior to the
Closing Date; and on or prior to the Closing Date, the Borrower will have
delivered to the Administrative Agent, or caused to be filed, duly completed UCC
termination statements, authorized by the relevant secured party, in respect of
each such UCC financing statement.
(b) Each Intellectual Property Security Agreement is effective to
create in favor of the Administrative Agent, for the benefit of the Secured
Parties, a legal, valid, binding and enforceable security interest (except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditor's rights generally and by general equitable principals (whether
enforcement is sought in
58
proceedings in equity or at law)) in the United States Intellectual Property
Collateral described therein and proceeds and products thereof. Upon the filing
of (i) such Intellectual Property Security Agreement in the appropriate indexes
of the United States Patent and Trademark Office relative to patents and
trademarks (within three (3) months after the execution of such Intellectual
Property Security Agreement), and the United States Copyright Office relative to
copyrights (within thirty (30) days after the execution of such Intellectual
Property Security Agreement), together with provision for payment of all
requisite fees, and (ii) financing statements in appropriate form for filing in
the offices specified on SCHEDULE 4.19(b) (which financing statements may be
executed and filed by the Administrative Agent at any time), together with
provision for payment of all requisite fees, such Intellectual Property Security
Agreement shall constitute a fully perfected Lien on, and security interest in,
all right, title and interest of the Loan Parties in the United States
Intellectual Property Collateral described therein and the proceeds and products
thereof, as security for the Obligations (as defined in the Guarantee and
Collateral Agreement), in each case prior and superior in right to any other
Person (except Permitted Liens).
4.20 SOLVENCY. Each Loan Party is, and after giving effect to the
Acquisition and the incurrence of all Indebtedness and obligations being
incurred in connection with the Loan Documents and the Acquisition will be and
will continue to be, Solvent.
4.21 SENIOR INDEBTEDNESS. The Obligations (including, without
limitation, the guarantee obligations of each Guarantor under the Guarantee and
Collateral Agreement) constitute "Senior Debt," "Designated Senior Debt" and
"Permitted Debt" under and as defined in the Senior Subordinated Note Indenture.
4.22 INSURANCE. Each Loan Party is insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as
are prudent and customary in the businesses in which it is engaged; and No Loan
Party (i) has received written notice from any insurer or agent of such insurer
that substantial capital improvements or other material expenditures will have
to be made in order to continue such insurance or (ii) has any reason to believe
that it will not be able to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar insurers at a
cost that could not reasonably be expected to have a Material Adverse Effect.
4.23 ACQUISITION DOCUMENTS. The Acquisition Documents listed on
SCHEDULE 4.23 constitute all of the material agreements and instruments to which
any Loan Party is bound or by which such Person or any of its property or assets
is bound or affected relating to, or arising out of, the Acquisition. None of
such material agreements or instruments have been amended, supplemented or
otherwise modified, except as permitted hereunder, and all such material
agreements and instruments are in full force and effect. No default under the
Acquisition Agreement as of the Closing Date, and no default under the Guaranty
of Wireless Revenue has occurred which has had a Material Adverse Effect and no
party thereto, or any other Person, has the right to terminate (other than on
the originally scheduled termination date thereof) either of the Acquisition
Agreement or the Guaranty of Wireless Revenue.
59
4.24 REAL PROPERTY. No Loan Party owns any real property except as
set forth on SCHEDULE 4.24(i). Any real property leased by any Loan Party with a
monthly rent in excess of $20,000.00 is listed on SCHEDULE 4.24(ii) (including
location, lease term and monthly rent). To the extent that the Borrower or any
Loan Party acquires or leases any real property in a transaction not prohibited
hereunder, the Borrower shall submit a revised SCHEDULE 4.24(i) or 4.24(ii), as
applicable, to the Administrative Agent to reflect such acquisition or lease.
4.25 PERMITS. Other than exceptions to any of the following that
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect, both before and after consummation of the Acquisition:
(i) each Loan Party has obtained and holds all Permits required for any property
owned, leased or otherwise operated by or on behalf of, or for the benefit of,
such Person and for the operation of each of its businesses as presently
conducted and as proposed to be conducted, (ii) all such Permits are in full
force and effect, and each Loan Party has performed and observed all
requirements of such Permits, (iii) no event has occurred which allows or
results in, or after notice or lapse of time would allow or result in,
revocation or termination by the issuer thereof or in any other impairment of
the rights of the holder of any such Permit, (iv) no such Permits contain any
restrictions, either individually or in the aggregate, that are materially
burdensome to any Loan Party, or to the operation of any of its businesses or
any property owned, leased or otherwise operated by such Person, (v) no Loan
Party has received any written notice that any of its Permits will not be timely
renewed and complied with, without material expense, or that any additional
Permits that may be required of such Person will not be timely obtained and
complied with, without material expense and such renewal or compliance, in the
aggregate, could reasonably be expected to have a Material Adverse Effect and
(vi) neither of the Parents nor the Borrower has any knowledge or reason to
believe that any Governmental Authority is considering limiting, suspending,
revoking or renewing on materially burdensome terms any material Permit and such
limitation, suspension, revocation or burdensome terms could reasonably be
expected to have a Material Adverse Effect.
SECTION 5. CONDITIONS PRECEDENT
5.1 CONDITIONS TO INITIAL EXTENSION OF CREDIT. The agreement of
each Lender to make the initial extension of credit requested to be made by it
is subject to the satisfaction, prior to or concurrently with the making of such
extension of credit on the Closing Date, of the following conditions precedent:
(a) LOAN DOCUMENTS. The Administrative Agent shall have received
(i) this Agreement, executed and delivered by a duly authorized officer of
each of the Parents and the Borrower, (ii) the Guarantee and Collateral
Agreement, executed and delivered by a duly authorized officer of the
Ultimate Parent, the Parent, the Borrower and each Subsidiary Guarantor,
(iii) the Intellectual Property Security Agreement of any Loan Party which
owns Collateral consisting of Intellectual Property, executed and delivered
by a duly authorized officer of each Loan Party party thereto, (iv) each
Acknowledgment and Consent, executed and delivered by a duly authorized
officer of the Issuer (as defined in the Guarantee and Collateral
Agreement) party thereto, (v) the Subordinated Intercompany Note, executed
and delivered by a duly authorized officer of each Loan Party and (vi) if
requested by any Lender, for the account of such Lender, Notes
60
conforming to the requirements hereof and executed and delivered by a duly
authorized officer of the Borrower.
(b) ACQUISITION, ETC. The following transactions shall have been
consummated, in each case on terms and conditions reasonably satisfactory
to the Lenders:
(i) all conditions precedent to the Acquisition shall have
been satisfied, and, the Administrative Agent shall reasonably believe that
upon the funding of the Tranche B Term Loans, the Acquisition shall be
consummated for an aggregate purchase price of approximately $800.0 million
(subject to working capital and other adjustments as provided in the
Acquisition Agreement and including fees and expenses of approximately
$30.0 million in the aggregate (less any savings realized if actual fees
and expenses are less than $30.0 million)) pursuant to the Acquisition
Documents in the form previously approved by the Administration Agent and
any other documentation reasonably satisfactory to the Administrative
Agent, and no material provision thereof shall have been waived, amended,
supplemented or otherwise modified;
(ii) the Ultimate Parent shall have received at least $255.0
million (or such lesser amount as may be agreed by the Administrative
Agent, including in connection with any savings realized if actual fees and
expenses are less than $30.0 million) (the "EQUITY INVESTMENT AMOUNT") in
cash from the issuance of its common and/or preferred stock to the Equity
Investors (at least 70% of which shall be contributed by the Principal and
its Control Investment Affiliates) on terms satisfactory to the Lenders;
the Parent shall have received the Equity Investment Amount in cash from
the issuance of its common and/or preferred stock to the Ultimate Parent on
terms reasonably satisfactory to the Lenders; and the Borrower shall have
received the Equity Investment Amount in cash from the issuance of its
common stock to the Parent on terms reasonably satisfactory to the Lenders
(which shall represent at least 30% of the Borrower's pro forma
capitalization);
(iii) the capital structure of each Loan Party after the
Acquisition shall be as described in SCHEDULE 4.15(i); and
(iv) each of the conditions precedent to the issuance of the
Senior Subordinated Notes pursuant to the Senior Subordinated Note
Documentation shall have been satisfied in strict compliance with the terms
thereof, and no provision thereof shall have been waived, amended,
supplemented or otherwise modified in a manner that could be materially
adverse to the Administrative Agent or any Lender and the Borrower shall
have received at least $245,000,000 in gross cash proceeds from the
issuance of the Senior Subordinated Notes.
(c) PRO FORMA BALANCE SHEET; FINANCIAL STATEMENTS. The Lenders
shall have received (i) the Pro Forma Balance Sheet, (ii) audited
consolidated and consolidating financial statements of the Borrower for the
1999 and 2000 fiscal years and (iii) unaudited interim consolidated and
consolidating financial statements of the Borrower for each fiscal month
and quarterly period ended subsequent to the date of the
61
latest applicable financial statements delivered pursuant to clause (ii) of
this paragraph as to which such financial statements are available, and
such financial statements shall be consistent with the consolidated
financial condition of the Borrower, as reflected in the financial
statements or projections contained in the Confidential Information
Memorandum and shall show a PRO FORMA Consolidated Leverage Ratio of not
greater than 4.50:1.00, based on the most recent twelve-month operating
period for which financials are available.
(d) APPROVALS. (i) All material governmental approvals including
regulatory approvals necessary or advisable in connection with the
Acquisition and (ii) all third party approvals (including landlords' and
other consents) and consents necessary or, in the reasonable discretion of
the Administrative Agent, advisable in connection with the Financing
contemplated hereby shall have been obtained and be in full force and
effect, and all applicable waiting periods shall have expired without any
action being taken or threatened by any Governmental Authority which would
restrain, prevent or otherwise impose adverse conditions on the Acquisition
or the financing contemplated hereby or by the Senior Subordinated Note
Documentation.
(e) DELIVERY OF AGREEMENTS. The Administrative Agent shall have
received (in form and substance reasonably satisfactory to the
Administrative Agent) true and correct executed copies, certified as to
authenticity by the Borrower, of the Acquisition Documents and the Senior
Subordinated Note Documentation and such documents or instruments as may be
reasonably requested by the Administrative Agent, including, without
limitation, any other debt instrument, security agreement or other material
contract to which any Loan Party (including, without limitation, the
Borrower after giving effect to the Merger) may be a party or to which it
may be subject (including, without limitation, the limited liability
company agreement of the Ultimate Parent).
(f) FEES AND OTHER OBLIGATIONS. The Lenders, the Arranger and the
Administrative Agent shall have received all fees required to be paid, and
all expenses for which invoices have been presented (including, without
limitation, the reasonable fees, disbursements and other charges of counsel
to the Administrative Agent), on or before the Closing Date. All such
amounts will be paid with proceeds of Loans made on the Closing Date and
will be reflected in the funding instructions given by the Borrower to the
Administrative Agent on or before the Closing Date.
(g) SOLVENCY. The Lenders shall have received a Solvency
Certificate executed by the chief financial officer of each Loan Party
which shall document the solvency of each Loan Party after giving effect to
the transactions contemplated hereby.
(h) BUDGET. The Lenders shall have received a budget for the Loan
Parties for the 2002 fiscal year.
(i) LIEN SEARCHES. The Administrative Agent shall have received the
results of a recent lien, tax lien, judgment and litigation search in each
of the jurisdictions or offices (including, without limitation, in the
United States Patent and Trademark Office and the United States Copyright
Office) in which UCC financing statements or other
62
filings or recordations should be made to evidence or perfect (with the
priority required under the Loan Documents) security interests in all
Property of the Loan Parties or any jurisdiction or office in which an
existing filing may exist with respect to any Property of any Loan Party,
and such search shall reveal no Liens on any of the assets of the Loan
Parties except for Permitted Liens or Liens set forth in SCHEDULE 4.19(a)-3
or Liens to be released on or prior to the Closing Date.
(j) EXPENSES. The Administrative Agent shall have received
satisfactory evidence that the fees and expenses to be incurred in
connection with the Acquisition and the financing thereof shall not exceed
$30,000,000.
(k) CLOSING CERTIFICATE. The Administrative Agent shall have
received a certificate of each Loan Party, dated as of the Closing Date,
substantially in the form of Exhibit C, with appropriate insertions and
attachments; and the Administrative Agent shall reasonably believe that a
Closing Certificate of TSI will be delivered on the Closing Date subsequent
to the Merger.
(l) OTHER CERTIFICATIONS.
(i) The Administrative Agent shall have received a copy of
the Governing Documents of each Loan Party and each amendment thereto,
certified (as of a date reasonably near the date of the initial extension
of credit) as being a true and correct copy thereof by the Secretary of
State or other applicable Governmental Authority of the jurisdiction in
which each such Loan Party is organized or, in the case of the Ultimate
Parent, by a Responsible Officer thereof;
(ii) The Administrative Agent shall have received a copy of a
certificate of the Secretary of State or other applicable Governmental
Authority of the jurisdiction in which each such Loan Party is organized,
dated reasonably near the date of the initial extension of credit, listing
the charter (or, in the case of the Ultimate Parent, the Certificate of
Formation) of such Loan Party, as applicable, and each amendment thereto on
file in such office and certifying that (A) such amendments are the only
amendments to such Person's charter (or, in the case of the Ultimate
Parent, the Certificate of Formation) on file in such office, (B) such
Person has paid all franchise taxes to the date of such certificate and (C)
such Person is duly organized and in good standing under the laws of such
jurisdiction;
(iii) The Administrative Agent shall have received a
telephonic confirmation from the Secretary of State or other applicable
Governmental Authority of each jurisdiction in which each such Person is
organized certifying that each Loan Party is duly organized and in good
standing under the laws of such jurisdiction on the date of the initial
extension of credit, together with a written confirmatory report in respect
thereof prepared by, or on behalf of, a filing service acceptable to the
Administrative Agent;
(iv) The Administrative Agent shall have received a copy of a
certificate of the Secretary of State or other applicable Governmental
Authority of each
63
jurisdiction in which any Loan Party is required to be qualified as a
foreign corporation or entity (after giving effect to the Merger) dated
reasonably near the date of the initial extension of credit, stating that
each Loan Party is duly qualified and in good standing as a foreign
corporation or entity in each such jurisdiction and has filed all annual
reports required to be filed to the date of such certificate; and
telephonic confirmation from the Secretary of State or other applicable
Governmental Authority of each such jurisdiction on the date of the initial
extension of credit as to the due qualification and continued good standing
of each such Person as a foreign corporation or entity in each such
jurisdiction on or about such date, together with a written confirmatory
report in respect thereof prepared by, or on behalf of, a filing service
acceptable to the Administrative Agent;
(v) The Administrative Agent shall be satisfied that a copy
of a certificate of the Secretary of State of the State of Delaware
certifying the true and lawful merger of TSI with and into the Borrower
with the Borrower as the surviving corporation will be delivered on the
Closing Date; and
(vi) The Administrative Agent shall be satisfied that it will
receive on the Closing Date subsequent to the Merger (1) a copy of the
charter of TSI, (2) Assumption Agreements duly executed by TSI with respect
to the
Credit Agreement and the Guaranty and Collateral Agreement, (3) an
Intellectual Property and Security Agreement duly executed by TSI and (4)
such other Loan Documents duly executed by TSI as the Administrative Agent
shall reasonably request.
(m) LEGAL OPINIONS. The Administrative Agent shall have received
the following executed legal opinions:
(i) the legal opinion of Xxxxxxxx & Xxxxx, counsel to the
Loan Parties, substantially in the form of Exhibit E-1;
(ii) the legal opinion of Morris, Nichols, Arsht & Xxxxxxx,
substantially in the form of Exhibit E-2;
(iii) each legal opinion, if any, delivered in connection with
the Acquisition Agreement, accompanied by a reliance letter in favor of the
Lenders; and
(iv) the legal opinion of such other special and local
counsel as may be required by the Administrative Agent.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent may
reasonably require.
(n) PLEDGED STOCK; STOCK POWER; PLEDGED NOTES. The Administrative
Agent shall have received (i) the certificates representing the shares of
Capital Stock pledged pursuant to the Guarantee and Collateral Agreement,
together with an undated stock power for each such certificate executed in
blank by a duly authorized officer of the pledgor thereof and (ii) each
promissory note (including the Subordinated Intercompany Note) pledged to
the Administrative Agent pursuant to the Guarantee and Collateral
64
Agreement endorsed (without recourse) in blank (or accompanied by an
executed transfer form in blank satisfactory to the Administrative Agent)
by the pledgor thereof.
(o) FILINGS, REGISTRATIONS AND RECORDINGS. Each document
(including, without limitation, any UCC financing statement) required by
the Security Documents or under law or reasonably requested by the
Administrative Agent to be filed, registered or recorded in order to create
in favor of the Administrative Agent, for the benefit of the Secured
Parties, a perfected Lien on, and security interest in, the Collateral
described therein, prior and superior in right to any other Person (other
than Permitted Liens), have been delivered to the Administrative Agent in
proper form for filing, registration or recordation.
(p) INSURANCE. The Administrative Agent shall have received
insurance certificates satisfying the requirements of Section 4.22 hereof
and of Section 5.3 of the Guarantee and Collateral Agreement.
(q) MANAGEMENT. Effective on the Closing Date, Xx Xxxxx will be the
Chief Executive Officer of the Borrower and the other senior management of
the Borrower shall be substantially the same as on December 7, 2001, other
than as a result of changes approved in writing by the Administrative
Agent.
(r) MISCELLANEOUS. The Administrative Agent shall have received
such other documents, agreements, certificates and information as it shall
reasonably request prior to the Closing Date.
5.2 CONDITIONS TO EACH EXTENSION OF CREDIT. The agreement of each
Lender to make any extension of credit requested to be made by it on any date
(including, without limitation, its initial extension of credit) is subject to
the satisfaction of the following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties made by any Loan Party in or pursuant to the Loan Documents
shall be true and correct in all material respects on and as of such date
as if made on and as of such date, except for representations and
warranties expressly stated to relate to a specific earlier date, in which
case such representations and warranties shall be true and correct in all
material respects as of such earlier date.
(b) NO DEFAULT. No Default or Event of Default shall have occurred
and be continuing on such date or after giving effect to the extensions of
credit requested to be made on such date.
(c) SENIOR DEBT. A Responsible Officer of the Borrower shall
certify in writing to the Administrative Agent that the incurrence of such
Indebtedness is permitted under the Senior Subordinated Note Indenture.
65
Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Parents and the
Borrower as of the date of such extension of credit that the conditions
contained in this Section 5.2 have been satisfied.
SECTION 6. AFFIRMATIVE COVENANTS
The Parents and the Borrower hereby jointly and severally agree that,
so long as the Commitments remain in effect, any Letter of Credit remains
outstanding or any Loan or other amount (excluding Obligations in respect of any
Specified Hedge Agreement and unmatured contingent reimbursement and
indemnification Obligations) is owing to any Lender, the Arranger or the
Administrative Agent hereunder, each of the Parents and the Borrower shall and
shall cause each of their respective Subsidiaries to:
6.1 FINANCIAL STATEMENTS. Furnish to the Administrative Agent for
further delivery to each Lender:
(a) as soon as available, but in any event within 105 days after
the end of each fiscal year of the Ultimate Parent, a copy of the audited
consolidated balance sheet and unaudited consolidating balance sheet of the
Ultimate Parent and its consolidated Subsidiaries as at the end of such
year and the related audited consolidated statements of income and of cash
flows for such year, setting forth in each case in comparative form the
figures for the previous year, reported on without a "going concern" or
like qualification or exception, or qualification arising out of the scope
of the audit, by Ernst and Young or other independent certified public
accountants of nationally recognized standing;
(b) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each fiscal
year of the Ultimate Parent, the unaudited consolidated and consolidating
balance sheet of the Ultimate Parent and its consolidated Subsidiaries as
at the end of such quarter and the related unaudited consolidated and
consolidating statements of income and of cash flows for such quarter and
the portion of the fiscal year through the end of such quarter, setting
forth in each case in comparative form the figures for the previous year,
certified by a Responsible Officer as being fairly stated in all material
respects (subject to normal year-end audit adjustments and the absence of
footnotes)
(c) as soon as available, but in any event not later than 45 days
after the end of each month occurring during each fiscal year of the
Ultimate Parent (other than the third, sixth, ninth and twelfth such month)
commencing April, 2002, the summary unaudited consolidated balance sheets
of the Ultimate Parent and its consolidated Subsidiaries as at the end of
such month and the related summary unaudited consolidated statements of
income and of cash flows for such month and the portion of the fiscal year
through the end of such month, setting forth in each case in comparative
form the figures for the previous year (such comparative form statements
shall commence April, 2003), certified by a Responsible Officer as being
fairly stated in all material respects (subject to normal year-end audit
adjustments and the absence of footnotes);
66
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
6.2 CERTIFICATES; OTHER INFORMATION. Furnish to the Administrative
Agent for further delivery to each Lender, or, in the case of clause (k),
to the relevant Lender:
(a) concurrently with the delivery of the financial statements
referred to in Section 6.1(a), a certificate of the independent certified
public accountants reporting on financial statements stating that (i) their
audit examination has included a review of the Loan Documents, (ii) that in
making the examination necessary nothing came to their attention that
caused them to believe that the Loan Parties were not in compliance with
the covenants contained in Section 7 hereof and (iii) that nothing has come
to their attention that causes them to believe that the information
contained in any Compliance Certificate is not correct or that the matters
set forth in such Compliance Certificate are not stated in accordance with
the terms hereof.
(b) concurrently with the delivery of any financial statements
pursuant to Section 6.1, (i) a certificate of a Responsible Officer of the
Borrower and the Ultimate Parent stating that, to the best of each such
Responsible Officer's knowledge, each Loan Party during such period has
observed or performed all of its covenants and other agreements, and
satisfied every condition, contained in this Agreement and the other Loan
Documents to which it is a party to be observed, performed or satisfied by
it, and that such Responsible Officer has obtained no knowledge of any
Default or Event of Default except as specified in such certificate and
(ii) in the case of quarterly or annual financial statements, (x) a
Compliance Certificate containing all information and calculations
necessary for determining compliance by the Loan Parties with the
provisions of this Agreement referred to therein as of the last day of the
fiscal quarter or fiscal year of the Borrower, as the case may be; PROVIDED
that if the Borrower restates Consolidated Net Income to reflect
adjustments related to the Guaranty of Wireless Revenue, the Borrower shall
resubmit such certificate within 25 days of delivery of such financial
statements and (y) to the extent not previously disclosed to the
Administrative Agent in writing, a listing of any county, state, territory,
province, region or any other jurisdiction, or any political subdivision
thereof, whether of the United States or otherwise, where any Loan Party
keeps inventory or equipment (other than mobile goods) and of any
Intellectual Property acquired by any Loan Party since the date of the most
recent list delivered pursuant to this clause (y) (or, in the case of the
first such list so delivered, since the Closing Date);
(c) as soon as available, and in any event no later than 45 days
after the end of each fiscal year of the Borrower, a detailed consolidated
budget for the following fiscal year (including a projected consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as of the
end of the following fiscal year, and the related consolidated statements
of projected cash flow, projected changes in financial position and
projected income), and, as soon as available, significant revisions, if
any, of such
67
budget and projections with respect to such fiscal year presented to the
Board of Directors (collectively, the "PROJECTIONS"), which Projections
shall in each case be accompanied by a certificate of a Responsible Officer
stating that such Projections are based on estimates, information and
assumptions reasonably believed by such Responsible Officer to be
reasonable on the date of delivery thereof, it being recognized that such
projections are not to be viewed as fact and that actual results during the
periods covered by such projections may differ from the projected results
set forth therein by a material amount;
(d) within 45 days after the end of each fiscal quarter of the
Borrower, a narrative discussion and analysis of the financial condition
and results of operations of the Loan Parties for such fiscal quarter and
for the period from the beginning of the then current fiscal year to the
end of such fiscal quarter, as compared to the portion of the Projections
covering such periods and to the comparable periods of the previous year;
(e) no later than five Business Days prior to the effectiveness
thereof, copies of substantially final drafts of any proposed amendment,
supplement, waiver or other modification with respect to the Senior
Subordinated Note Documentation, the Acquisition Agreement, any other
Acquisition Documents or the Governing Documents of any Loan Party;
PROVIDED that, with respect to amendments, supplements, waivers or other
modifications of the Governing Documents such copies will be provided no
later than two Business Days prior to the effectiveness thereof;
(f) within five days after the same are sent, copies of all
financial statements and reports that any Loan Party sends to the holders
of any class of its debt securities or public equity securities and, within
five days after the same are filed, copies of all financial statements and
reports that any Loan Party may make to, or file with, the SEC;
(g) as soon as possible and in any event within three Business Days
of obtaining knowledge thereof: (i) written notice of any development,
event, or condition arising under Environmental Laws that, individually or
in the aggregate with other developments, events or conditions, would
reasonably be expected to have a Material Adverse Effect; and (ii) any
notice that any Governmental Authority may condition approval of, or any
application for, an Environmental Permit or any other material Permit held
by any Loan Party on terms and conditions that would reasonably be expected
to have a Material Adverse Effect on any Loan Party, or to the operation of
any of its businesses (both before and after giving effect to the
Acquisition) or any property owned, leased or otherwise operated by such
Person;
(h) on the date of the occurrence thereof, notice that (i) any or
all of the obligations under the Senior Subordinated Note Indenture have
been accelerated, or (ii) the trustee or the required holders of Senior
Subordinated Notes has given notice that any or all such obligations are to
be accelerated;
(i) to the extent not included in clauses (a) through (h) above, no
later than the date the same are required to be delivered thereunder,
copies of all agreements, documents or other instruments (including,
without limitation, (i) audited and unaudited,
68
pro forma and other financial statements, reports, forecasts, and
projections, together with any required certifications thereon by
independent public auditors or officers of any Loan Party, (ii) press
releases, (iii) statements or reports furnished to any other holder of the
securities of any Loan Party, and (iv) regular, periodic and special
securities reports) that any Loan Party is required to provide pursuant to
the terms of the Senior Subordinated Note Documentation or the Guaranty of
Wireless Revenue; and
(j) promptly, such additional financial and other information
concerning a Loan Party as the Administrative Agent on behalf of any Lender
may from time to time reasonably request.
6.3 PAYMENT OF OBLIGATIONS. To the extent not otherwise prohibited
hereunder or prohibited by the subordination or intercreditor provisions
thereof, pay, discharge or otherwise satisfy at or before maturity or before
they become delinquent, as the case may be, all its material obligations of
whatever nature, except where (i) the amount or validity thereof is currently
being contested in good faith by appropriate proceedings and reserves in
conformity with GAAP with respect thereto have been provided on the books of the
applicable Loan Party or (ii) the non payment of such obligation could not
reasonably be expected to have a Material Adverse Effect.
6.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE, ETC. (a) (i)
Preserve, renew and keep in full force and effect its legal existence (except as
expressly permitted hereunder) and (ii) take all reasonable action to maintain
all rights, privileges, franchises, Permits and licenses necessary or desirable
in the normal conduct of its business, except, in each case, as otherwise
permitted by Section 7.4 and except, in the case of clause (ii) above, to the
extent that failure to do so could not reasonably be expected to have a Material
Adverse Effect; and (b) comply with all Contractual Obligations (not incurred in
violation hereof) and Requirements of Law except to the extent that failure to
comply therewith could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect.
6.5 MAINTENANCE OF PROPERTY; INSURANCE.
(a) Keep all Property and systems useful and necessary, in such
Person's reasonable business judgment, in its business in good working order and
condition, ordinary wear and tear and damage caused by casualty excepted.
(b) Maintain with financially sound and reputable insurance
companies insurance on all its Property (including, without limitation, all
inventory, equipment and vehicles) in at least such amounts and against at least
such risks as are usually insured against in the same general area by companies
engaged in the same or a similar business; and furnish to the Administrative
Agent, upon written request, copies of policies or certificates providing such
insurance coverage; PROVIDED that in any event each Loan Party will maintain (i)
property and casualty insurance on all Property on an all risks basis (including
loss by fire, explosion and theft and such other risks and hazards as are
covered by a standard extended coverage insurance policy), covering the repair
or replacement cost of all such Property and consequential loss coverage for
business interruption and extra expense (which shall include business
interruption expenses as are otherwise generally available to similar
businesses) and (ii) public liability insurance. All such insurance with respect
to each Loan Party shall be provided by insurers
69
which (x) in the case of United States insurers, have an A.M. Best policyholders
rating of not less than A- with respect to primary insurance and B+ with respect
to excess insurance and (y) in the case of non-United States insurers, the
providers of at least 80% of such insurance have either an ISI policyholders
rating of not less than A, an A.M. Best policyholders rating of not less than A-
or a surplus of not less than $500,000,000 with respect to primary insurance,
and an ISI policyholders rating of not less than BBB with respect to excess
insurance, or, if the relevant insurance is not available from such insurers,
such other insurers as the Administrative Agent may approve in writing. All
insurance shall (i) provide that no cancellation, material reduction in amount
or material change in coverage thereof shall be effective until at least 30 days
after receipt by the Administrative Agent of written notice thereof, (ii)
contain a "Replacement Cost Endorsement" with a waiver of depreciation and a
waiver of subrogation against any Secured Party, (iii) if applicable, contain a
standard noncontributory mortgagee clause naming the Administrative Agent
(and/or such other party as may be designated by the Administrative Agent) as
the party to which all payments made by such insurance company shall be paid,
(iv) if requested by the Administrative Agent, contain endorsements providing
that no Loan Party, Secured Party or any other Person shall be a co-insurer
under such insurance policies, and (v) be reasonably satisfactory in all other
respects to the Administrative Agent. Each Secured Party shall be named as an
additional insured on all liability insurance policies of each of the Loan
Parties and the Administrative Agent shall be named as loss payee on all
property and casualty insurance policies of each such Person.
(c) Deliver to the Administrative Agent on behalf of the Secured
Parties, (i) on the Closing Date, a certificate dated such date showing the
amount and types of insurance coverage as of such date, (ii) promptly following
receipt of notice from any insurer, a copy of any notice of cancellation or
material change in coverage from that existing on the Closing Date, (iii)
forthwith, notice of any cancellation or nonrenewal of coverage by any of the
Loan Parties, and (iv) promptly after such information is available to any of
the Loan Parties, full information as to any claim for an amount in excess of
$2,000,000 with respect to any property and casualty insurance policy maintained
by any the Loan Parties.
6.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS.
(a) Keep proper books of records and account in which full, true and correct
entries in conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its business and activities and (b)
permit representatives of any Lender to visit and inspect any of its properties
and examine and, at the Borrower's expense, make abstracts from any of its books
and records (other than materials protected by attorney-client privilege and
materials which such Person may not disclose without violation of a
confidentiality obligation to an unaffiliated third party binding upon it)
during regular business hours and upon reasonable prior notice by the
Administrative Agent at any reasonable time and to discuss the business,
operations, properties and financial and other condition of the Loan Parties
with officers and employees of the Loan Parties and with their respective
independent certified public accountants, so long as the Borrower is afforded an
opportunity to be present. It is understood that, so long as no Default or Event
of Default has occurred and is continuing, such visits, inspections and
examinations shall be coordinated with the Administrative Agent so that (i) in
any fiscal quarter of the Borrower, no Lender other than the Administrative
Agent shall be permitted to visit more than once and (ii) visits by individual
Lenders shall be otherwise minimized to the extent possible.
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6.7 NOTICES. Promptly give notice to the Administrative Agent for
further delivery to each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of any Loan Party or (ii) litigation, investigation or
proceeding which may exist at any time between any Loan Party and any
Governmental Authority, that in either case, if not cured or if reasonably
expected to be adversely determined, as the case may be, could reasonably
be expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting any Loan Party in which
the amount involved is $5,000,000 or more and not covered by insurance or
in which injunctive or similar relief is sought;
(d) the following events, as soon as possible and in any event
within 30 days after any Loan Party knows or has reason to know thereof:
(i) the occurrence of any Reportable Event with respect to any Plan, a
failure to make any required contribution to a Plan, the creation of any
Lien in favor of the PBGC or a Plan or any withdrawal from, or the
termination, Reorganization or Insolvency of, any Multiemployer Plan or
(ii) the institution of proceedings or the taking of any other action by
the PBGC or the Borrower or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the termination,
Reorganization or Insolvency of, any Plan;
(e) any development or event (other than industry-wide, general
economic, political or civil developments widely reported in the financial
press) that has had or could reasonably be expected to have a Material
Adverse Effect; and
(f) any notice of default given to the Borrower or any of its
Subsidiaries from a landlord in connection with any leased property where
inventory of the Borrower or its Subsidiaries is located which could
reasonably be expected to have a Material Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the relevant Loan Party proposes to take with respect
thereto.
6.8 ENVIRONMENTAL LAWS. Comply in all material respects with, and
make reasonable best efforts to ensure compliance in all material respects by
all tenants and subtenants, if any, with, all applicable Environmental Laws and
Environmental Permits, and obtain, maintain and comply in all material respects
with and maintain, and make reasonable best efforts to ensure that all tenants
and subtenants obtain, maintain and comply in all material respects with and
maintain, any and all Environmental Permits.
6.9 INTEREST RATE PROTECTION. In the case of the Borrower, within
60 days after the Closing Date, enter into Hedge Agreements to the extent
necessary to provide that at least 45% of the Funded Debt of the Borrower
effectively bears interest at a fixed rate for a period of
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three years, which Hedge Agreements shall have terms and conditions reasonably
satisfactory to the Administrative Agent.
6.10 ADDITIONAL COLLATERAL, ETC. (a) With respect to any Property
acquired after the Closing Date by any Loan Party (other than (i) any Property
described in paragraphs (b), (c) or (d) of this Section, (ii) any Property
subject to a Lien expressly permitted by Section 7.3(g) (iii) Property acquired
by an Excluded Foreign Subsidiary and (iv) Property which, if owned by such Loan
Party on the Closing Date would not be covered by the grant of security interest
in Section 3 of the Guarantee and Collateral Agreement) as to which the
Administrative Agent, for the benefit of the Secured Parties, does not have a
perfected security interest, promptly (and, in any event, within 15 days
following the date of such acquisition) (i) execute and deliver (or cause such
execution and delivery) to the Administrative Agent such amendments to the
Guarantee and Collateral Agreement or such other documents as the Administrative
Agent deems necessary or advisable to grant to the Administrative Agent, for the
benefit of the Secured Parties, a security interest in such Property and (ii)
take all actions necessary or advisable to grant to the Administrative Agent,
for the benefit of the Secured Parties, a perfected first priority security
interest in such Property (subject only to Permitted Liens), including, without
limitation, the filing of UCC financing statements in such jurisdictions as may
be required by the Guarantee and Collateral Agreement or by law or as may be
requested by the Administrative Agent.
(b) With respect to any fee interest in any real property having a
value (together with improvements thereof) of at least $5,000,000 acquired after
the Closing Date by any Loan Party (other than any such real property owned by
an Excluded Foreign Subsidiary or subject to a Lien expressly permitted by
Sections 7.3(g) or (k)), promptly (and, in any event, within 60 days following
the date of such acquisition) (i) execute and deliver (or cause such execution
and delivery) a first priority Mortgage in favor of the Administrative Agent,
for the benefit of the Secured Parties, covering such real property, (ii) if
requested by the Administrative Agent, provide the Secured Parties with (x)
title and extended coverage insurance covering such real property in an amount
at least equal to the purchase price of such real property (or such other amount
as shall be reasonably specified by the Administrative Agent) as well as a
current ALTA survey thereof, together with a surveyor's certificate and (y) any
consents or estoppels reasonably deemed necessary or advisable by the
Administrative Agent in connection with such Mortgage, each of the foregoing in
form and substance reasonably satisfactory to the Administrative Agent, (iii) if
requested by the Administrative Agent, deliver to the Administrative Agent legal
opinions relating to the matters described above, which opinions shall be in
form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent and (iv) if required by the Administrative Agent, agree to
amendments to the Loan Documents to provide for such additional representations,
warranties and covenants as are customarily associated with loans secured by
real property.
(c) With respect to any new Subsidiary (other than an Excluded
Foreign Subsidiary) created or acquired after the Closing Date (which, for the
purposes of this paragraph, shall include any existing Subsidiary that ceases to
be an Excluded Foreign Subsidiary), by any Loan Party, promptly (and, in any
event, within 30 days following such creation or the date of such acquisition)
(i) execute and deliver (or cause such execution or delivery) to the
Administrative Agent such amendments to the Guarantee and Collateral Agreement
as the
72
Administrative Agent deems necessary or advisable to grant to the Administrative
Agent, for the benefit of the Secured Parties, a perfected first priority
security interest in the Capital Stock of such new Subsidiary that is owned by
any Loan Party (subject only to Permitted Liens), (ii) deliver to the
Administrative Agent the certificates representing such Capital Stock, together
with undated stock powers, in blank, executed and delivered by a duly authorized
officer of such Loan Party, as the case may be, (iii) cause such new Subsidiary
(A) to become a party to the Guarantee and Collateral Agreement and the
Intellectual Property Security Agreement and (B) to take such actions necessary
or advisable to grant to the Administrative Agent for the benefit of the Secured
Parties a perfected first priority security interest (subject only to Permitted
Liens) in the Collateral described in the Guarantee and Collateral Agreement and
the Intellectual Property Security Agreement with respect to such new
Subsidiary, including, without limitation, the recording of instruments in the
United States Patent and Trademark Office and the United States Copyright
Office, the execution and delivery by all necessary Persons of Control
Agreements and the filing of UCC financing statements in such jurisdictions as
may be required by the Guarantee and Collateral Agreement, the Intellectual
Property Security Agreement or by law or as may be requested by the
Administrative Agent, and (iv) if requested by the Administrative Agent, deliver
to the Administrative Agent legal opinions relating to the matters described
above, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Administrative Agent.
(d) With respect to any new Excluded Foreign Subsidiary created or
acquired after the Closing Date by any Loan Party, promptly (and, in any event,
within 60 days following such creation or the date of such acquisition) (i)
execute and deliver (or cause such execution and delivery) to the Administrative
Agent such amendments to the Guarantee and Collateral Agreement as the
Administrative Agent deems necessary or advisable in order to grant to the
Administrative Agent, for the benefit of the Secured Parties, a perfected first
priority security interest in the Capital Stock of such new Subsidiary that is
owned by any Loan Party subject only to Permitted Liens (provided that in no
event shall more than 65% of the total outstanding Capital Stock of any such new
Subsidiary be required to be so pledged), (ii) deliver to the Administrative
Agent the certificates representing such Capital Stock, together with undated
stock powers, in blank, executed and delivered by a duly authorized officer of
such Loan Party, as the case may be, and take such other action as may be
necessary or, in the opinion of the Administrative Agent, desirable to perfect
the security interest of the Administrative Agent thereon, (iii) cause such new
Subsidiary to become a party to the Subordinated Intercompany Note, and (iv) if
requested by the Administrative Agent, deliver to the Administrative Agent legal
opinions relating to the matters described above, which opinions shall be in
form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.
(e) Notwithstanding anything to the contrary in this Section 6.10,
paragraphs (a), (b), (c) and (d) of this Section 6.10 shall not apply to any
Property, new Subsidiary or new Excluded Foreign Subsidiary created or acquired
after the Closing Date, as applicable, as to which the Administrative Agent has
determined in its sole discretion that the collateral value thereof is
insufficient to justify the difficulty, time and/or expense of obtaining a
perfected security interest therein.
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(f) Concurrently with consummation of the SS7 Reorganization, (i)
deliver revised schedules to the Guaranty and Collateral Agreement and the
Intellectual Property Security Agreement, as applicable, (ii) execute and
deliver any additional Intellectual Property Security Agreements as the
Administrative Agent shall request, (iii) deliver any stock or ownership
certificates required to be delivered pursuant to the Guarantee and Collateral
Agreement and (iv) take such other actions reasonably requested by the
Administrative Agent to maintain the perfection of its security interest in the
SS7 Assets and SS7.
6.11 USE OF PROCEEDS. Use the proceeds of the Loans only for the
purposes specified in Section 4.16.
6.12 ERISA DOCUMENTS. The Borrower will cause to be delivered to the
Administrative Agent, promptly upon the Administrative Agent's request, any or
all of the following: (i) a copy of each Plan (or, where any such Plan is not in
writing, a complete description thereof) and, if applicable, related trust
agreements or other funding instruments and all amendments thereto, and all
material written interpretations thereof and written descriptions thereof that
have been distributed to employees or former employees of the Borrower or any of
its Subsidiaries; (ii) the most recent determination letter issued by the
Internal Revenue Service with respect to each Plan; (iii) for the three most
recent plan years preceding the Administrative Agent's request, Annual Reports
on Form 5500 Series required to be filed with any governmental agency for each
Plan; (iv) a listing of all Multiemployer Plans, with the aggregate amount of
the most recent annual contributions required to be made by the Borrower or any
Commonly Controlled Entity to each such Plan and copies of the collective
bargaining agreements requiring such contributions; (v) any information that has
been provided to the Borrower or any Commonly Controlled Entity regarding
withdrawal liability under any Multiemployer Plan; (vi) the aggregate amount of
payments made under any employee welfare benefit plan (as defined in Section
3(1) of ERISA) to any retired employees of the Borrower or any of its
Subsidiaries (or any dependents thereof) during the most recently completed
fiscal year; and (vii) documents reflecting any agreements between the PBGC and
the Borrower or any Commonly Controlled Entity with respect to any Plan.
6.13 FURTHER ASSURANCES. From time to time execute and deliver, or
cause to be executed and delivered, such additional instruments, certificates or
documents, and take all such actions, as the Administrative Agent may reasonably
request, for the purposes of implementing or effectuating the provisions of this
Agreement and the other Loan Documents, or of more fully perfecting or renewing
the rights of the Administrative Agent and the Lenders with respect to the
Collateral (or with respect to any additions thereto or replacements or proceeds
or products thereof or with respect to any other property or assets hereafter
acquired by any Loan Party which may be deemed to be part of the Collateral)
pursuant hereto or thereto. Upon the exercise by the Administrative Agent or any
Lender of any power, right, privilege or remedy pursuant to this Agreement or
the other Loan Documents which requires any consent, approval, recording,
qualification or authorization of any Governmental Authority, the Borrower will
execute and deliver, or will cause the execution and delivery of, all
applications, certifications, instruments and other documents and papers that
such Governmental Authority, the Administrative Agent or such Lender may require
to be obtained from any Loan Party for such governmental consent, approval,
recording, qualification or authorization.
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6.14 POST CLOSING MATTERS. (i) Prior to May 31, 2002, seek
application for copyright registration on all Material Software and (ii) prior
to March 14, 2002, file for recordation the October 20, 2000 name change of GTE
Telecommunication Services Incorporated to TSI Telecommunication Services Inc.
in the records of the United States Patent and Trademark Office and the United
States Copyright Office against all of the United States Intellectual Property
listed on Schedules 4.9(b)-(e) which is currently shown to be in the name of GTE
Telecommunication Services Incorporated..
SECTION 7. NEGATIVE COVENANTS
The Parents and the Borrower hereby jointly and severally agree that,
so long as the Commitments remain in effect, any Letter of Credit remains
outstanding or any Loan or other amount (excluding Obligations in respect of any
Specified Hedge Agreement and unmatured contingent reimbursement and
indemnification Obligations) is owing to any Lender, the Arranger or the
Administrative Agent hereunder, each of the Parents and the Borrower shall not,
and shall not permit any of their respective Subsidiaries to, directly or
indirectly:
7.1 FINANCIAL CONDITION COVENANTS CONSOLIDATED LEVERAGE RATIO.
Permit the Consolidated Leverage Ratio as at the last day of any period of four
consecutive fiscal quarters of the Ultimate Parent ending with the last day of
any fiscal quarter set forth below to exceed the ratio set forth below opposite
such fiscal quarter.
Consolidated
Fiscal Quarter Leverage Ratio
-------------- --------------
FQ1, 2002 4.35:1.00
FQ2, 2002 4.35:1.00
FQ3, 2002 4.35:1.00
FQ4, 2002 4.35:1.00
FQ1, 2003 4.00:1.00
FQ2, 2003 4.00:1.00
FQ3, 2003 4.00:1.00
FQ4, 2003 3.75:1.00
FQ1, 2004 3.50:1.00
FQ2, 2004 3.50:1.00
FQ3, 2004 3.35:1.00
FQ4, 2004 3.35:1.00
FQ1, 2005, and thereafter 3.00:1.00
(b) CONSOLIDATED SENIOR DEBT RATIO. Permit the Consolidated Senior
Debt Ratio as at the last day of any period of four consecutive fiscal quarters
of the Ultimate Parent ending with any fiscal quarter set forth below to exceed
the ratio set forth opposite such fiscal quarter.
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Consolidated
Senior Debt
Fiscal Quarter Ratio
-------------- -----
FQ1, 2002 2.35:1.00
FQ2, 2002 2.35:1.00
FQ3, 2002 2.35:1.00
FQ4, 2002 2.35:1.00
FQ1, 2003 2.00:1.00
FQ2, 2003 2.00:1.00
FQ3, 2003 2.00:1.00
FQ4, 2003 1.75:1.00
FQ1, 2004 1.50:1.00
FQ2, 2004 1.50:1.00
FQ3, 2004 1.35:1.00
FQ4, 2004 1.35:1.00
FQ1, 2005, and thereafter 1.00:1.00
(c) CONSOLIDATED INTEREST COVERAGE RATIO. Permit the Consolidated
Interest Coverage Ratio for any period of four consecutive fiscal quarters of
the Ultimate Parent ending with the last day of any fiscal quarter set forth
below to be less than the ratio set forth below opposite such fiscal quarter.
Consolidated
Interest
Fiscal Quarter Coverage Ratio
-------------- --------------
FQ1, 2002 2.25:1.00
FQ2, 2002 2.25:1.00
FQ3, 2002 2.25:1.00
FQ4, 2002 2.25:1.00
FQ1, 2003 2.25:1.00
FQ2, 2003 2.25:1.00
FQ3, 2003 2.25:1.00
FQ4, 2003 2.25:1.00
FQ1, 2004 2.25:1.00
FQ2, 2004 2.25:1.00
FQ3, 2004 2.25:1.00
FQ4, 2004 2.25:1.00
FQ1, 2005, and thereafter 2.50:1.00
76
(d) CONSOLIDATED FIXED CHARGE COVERAGE RATIO. Permit the
Consolidated Fixed Charge Coverage Ratio for any period of four consecutive
fiscal quarters of the Ultimate Parent ending with the last day of any fiscal
quarter set forth below to be less than 1.20:1.00 for all fiscal quarters.
(e) CERTAIN CALCULATIONS. With respect to any period during which a
Permitted Acquisition or Asset Sale occurs, for purposes of determining
compliance with the covenants set forth in Section 7.1, and for purposes of
calculating the financial ratios used in Annex A, Consolidated EBITDA, the
components of Consolidated Fixed Charges shall be calculated with respect to
such period on a PRO FORMA basis including PRO FORMA adjustments arising out of
events which are directly attributable to a specific transaction, are factually
supportable and are expected to have a continuing impact, in each case
determined on a basis consistent with Article 11 of Regulation S-X promulgated
under the Securities Act of 1933, as amended, and as interpreted by the staff of
the SEC, (which PRO FORMA adjustments shall be certified by the Chief Financial
Officer of the Borrower), using the historical financial statements of the
Person or business acquired or sold or to be acquired or sold and the
consolidated financial statements of the Borrower and its Subsidiaries which
shall be reformulated as if such Permitted Acquisition or Asset Sale, and any
Indebtedness or other liabilities incurred in connection with any such
acquisition or sale had been consummated or incurred at the beginning of such
period (and assuming that such Indebtedness bears interest during any portion of
the applicable measurement period prior to the relevant Permitted Acquisition or
Asset Sale, at the weighted average of the interest rates applicable to
outstanding Loans during such period; PROVIDED that if such assumed Indebtedness
is to remain as permanent financing, the actual interest rate will be used in
the calculation), all such calculations to be in form and substance reasonably
satisfactory to the Administrative Agent; PROVIDED, further, that, with the
written consent of the Administrative Agent, the Borrower shall also be
permitted to make certain normalizing adjustments to Capital Expenditures.
7.2 LIMITATION ON INDEBTEDNESS. Create, incur, assume or suffer to
exist any Indebtedness, except:
(a) Indebtedness of any Loan Party created under any Loan Document;
(b) Unsecured Indebtedness of the Borrower to any Solvent
Subsidiary and of any Wholly Owned Subsidiary Guarantor to the Borrower or any
other Solvent Subsidiary; PROVIDED that such Indebtedness is evidenced by, and
subject to the terms and conditions of, the Subordinated Intercompany Note;
(c) Indebtedness of the Borrower and its Subsidiaries (including,
without limitation, Capital Lease Obligations) secured by Liens permitted by
Section 7.3(g) in an aggregate principal amount not to exceed $10,000,000 at any
one time outstanding;
(d) Indebtedness (other than the Indebtedness referred to in
Section 7.2(f)) of the Borrower and its Subsidiaries outstanding on the date
hereof and listed on SCHEDULE 7.2(d) and any refinancings, refundings, renewals
or extensions thereof (without any increase in the principal amount thereof or
any shortening of the maturity of any principal amount thereof);
77
(e) Indebtedness consisting of Unsecured Guarantee Obligations made
in the ordinary course of business by the Borrower or any of the Subsidiary
Guarantors of obligations of the Borrower or any Subsidiary Guarantor;
(f) Unsecured Indebtedness of the Borrower created under the Senior
Subordinated Note Indenture in respect of the Senior Subordinated Notes in an
aggregate principal amount not to exceed $245,000,000 and (ii) Guarantee
Obligations of any Guarantor in respect of such Indebtedness; PROVIDED that such
Guarantee Obligations are subordinated to the obligations of such Guarantor
under the Guarantee and Collateral Agreement to the same extent as the
obligations of the Borrower in respect of the Senior Subordinated Notes are
subordinated to the Obligations;
(g) subordinated Indebtedness incurred pursuant to the Guaranty of
Wireless Revenue;
(h) Indebtedness under performance, surety, statutory or appeal
bonds or with respect to worker's compensation claims or other bonds permitted
under Sections 7.3(c) and (d);
(i) unsecured subordinated Indebtedness consisting of promissory
notes, on market terms, issued by the Parent to current or former officers,
directors and employees of the Loan Parties (or the spouses or estates thereof)
to purchase or redeem Capital Stock of the Parent issued to such officer,
director or employee, provided that the aggregate amount of such Indebtedness
shall not exceed $10,000,000 at any one time outstanding and the documentation
evidencing such Indebtedness shall contain subordination provisions reasonably
satisfactory to the Administrative Agent (including the subordination of any
payment obligations of the Parent thereunder to the obligations of the Loan
Parties hereunder and provisions prohibiting payments on such Indebtedness if
the Borrower could not pay a dividend under Section 7.6 in the amount of such
payment);
(j) Indebtedness of the Ultimate Parent or the Parent consisting of
repurchase obligations with respect to Capital Stock issued to employees,
officers and directors arising upon the death, disability or termination of
employment of such employees, officers or directors; PROVIDED that such
repurchase obligations of the Parent or Ultimate Parent thereunder are expressly
subject to the Obligations of the Loan Parties hereunder, (including the
subordination of any payment or repurchase obligations of the Parent or the
Ultimate Parent thereunder to the obligations of the Loan Parties hereunder and
provisions prohibiting payments on such Indebtedness if the Borrower could not
pay a dividend under Section 7.6 in the amount of such payment);
(k) Indebtedness issued to insurance companies to finance insurance
premiums payable to such insurance companies in connection with insurance
policies purchased by a Loan Party in the ordinary course of business in an
aggregate amount not to exceed $2,500,000;
(l) Indebtedness consisting of customary overdraft and similar
protections in connection with deposit accounts;
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(m) Indebtedness of the Borrower consisting of customary
indemnification, deferred purchase price adjustments or similar obligations, in
each case incurred or assumed in connection with the acquisition of any business
or assets permitted to be acquired hereunder;
(n) Indebtedness of the Borrower or any Subsidiary assumed in
connection with any Permitted Acquisition under Sections 7.8(h) or (p); PROVIDED
that such Indebtedness was not incurred (i) to provide all or a portion of the
funds utilized to consummate the transaction or series of related transactions
constituting such Permitted Acquisition or (ii) otherwise in connection with, or
in contemplation of, such Permitted Acquisition; and PROVIDED, further, that the
aggregate amount of such Indebtedness, together with any Indebtedness permitted
under clause (o) shall not exceed $20,000,000 at any time outstanding;
(o) Indebtedness of Excluded Foreign Subsidiaries consisting of
working capital revolver facilities; PROVIDED that the aggregate amount of such
Indebtedness, together with any Indebtedness permitted pursuant to clause (n)
shall not to exceed $20,000,000 at any time outstanding;
(p) Unsecured Indebtedness of either of the Parents to the Borrower
incurred in lieu of making a Restricted Payment pursuant to Section 7.6(b) or
(c), in an aggregate amount not to exceed the amount of cash dividends that the
Borrower would be permitted to make pursuant to Sections 7.6(b) and (c) if no
such Indebtedness was incurred; PROVIDED that such Indebtedness is evidenced by
an instrument in form and substance reasonably satisfactory to the
Administrative Agent, including subordination terms, if any, and each such
instrument must be pledged to the Administrative Agent as Collateral pursuant to
the Security Documents; and PROVIDED, further, that the amount of any such
Indebtedness shall reduce dollar-for-dollar the amount of any Restricted
Payments that may be made pursuant to Section 7.6(b) or (c);
(q) Indebtedness of Subsidiaries owed to a Loan Party to the extent
that such Loan Party could have made an Investment in such Subsidiary pursuant
to Sections 7.8(o) or (p); and
(r) additional Indebtedness of the Borrower or any of its
Subsidiaries in an aggregate principal amount (for the Borrower and all
Subsidiaries) not to exceed $15,000,000 at any one time outstanding.
7.3 LIMITATION ON LIENS. Create, incur, assume or suffer to exist
any Lien upon any of its Property, whether now owned or hereafter acquired,
except for:
(a) Liens for taxes, assessments, charges or other government
levies not yet delinquent or which are being contested in good faith by
appropriate proceedings, PROVIDED that adequate reserves with respect thereto
are maintained on the books of the Borrower or its Subsidiaries, as the case may
be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's, landlord's or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 60 days or that are
being contested in good faith by appropriate proceedings;
79
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation;
(d) deposits by or on behalf of the Borrower or any of its
Subsidiaries to secure the performance of tenders, bids, trade contracts (other
than for borrowed money), leases, statutory obligations, self insurance or
reinsurance obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of business;
(e) (i) easements, rights-of-way, restrictions, covenants and other
similar encumbrances incurred in the ordinary course of business that, in the
aggregate, do not in any case materially detract from the value of the Property
subject thereto or materially interfere with the ordinary conduct of the
business of the Borrower or any of its Subsidiaries and (ii) any other Lien or
exception to coverage described in a mortgage policy of title insurance or
surveys issued in favor of and accepted by the Administrative Agent with respect
to any real property subject to a Mortgage;
(f) Liens in existence on the date hereof listed on
SCHEDULE 7.3(f), securing Indebtedness permitted by Section 7.2(d), PROVIDED
that no such Lien is spread to cover any additional Property after the Closing
Date and that the amount of Indebtedness secured thereby is not increased;
(g) Liens securing Indebtedness of the Borrower or any of its
Subsidiaries incurred pursuant to Section 7.2(c) to finance the acquisition,
construction or improvement of fixed or capital assets, PROVIDED that (i) such
Liens shall be created within 30 days of the acquisition of such fixed or
capital assets, (ii) such Liens do not at any time encumber any Property other
than the Property financed by such Indebtedness and (iii) the amount of
Indebtedness secured thereby is not increased;
(h) Liens created pursuant to the Security Documents;
(i) any interest or title of a lessor or sublessor or lessee or
sublessee under any lease entered into by the Borrower or any of its
Subsidiaries in the ordinary course of its business and covering only the assets
so leased;
(j) any interest of Verizon Information Services Inc. granted
pursuant to the Intellectual Property Agreement, any interest of a licensee or
sublicensee under any licenses or sublicenses entered into by the Borrower or
any of its Subsidiaries in the ordinary course of business, in each case to the
extent not interfering in any material respect with the business of the Borrower
or any of its subsidiaries;
(k) Liens on the property or assets of a Person which becomes a
Subsidiary of the Borrower after the date hereof, or if acquired by such Person
after the date hereof, securing Indebtedness permitted by Section 7.2(n);
PROVIDED that (i) such Liens existed at the time such Person became a Subsidiary
of the Borrower and (ii) the amount of Indebtedness secured thereby is not
increased and such Liens are not expanded to cover additional Property;
80
(l) Liens consisting of customary rights of set-off of or banker's
liens on amounts on deposit, to the extent arising by operation of law, incurred
in the ordinary course of business;
(m) Liens on the assets of any Excluded Foreign Subsidiary which
secure Indebtedness permitted pursuant to Section 7.2(o); and
(n) Liens (not otherwise permitted hereunder) which secure
obligations permitted hereunder not exceeding $2,000,000 in the aggregate at any
time outstanding and which are not senior in right of priority to the Liens
created in favor of the Administrative Agent pursuant to this Agreement and the
other Loan Documents and with respect to which no foreclosure or other
enforcement actions have been commenced; PROVIDED that Liens permitted under
this clause (n) may be senior to the Liens created pursuant to the Security
Documents to the extent such Liens secure advances made after the date such Lien
attached to the subject property and the extent that the value of the subject
property does not exceed $2,000,000 in the aggregate at any time outstanding.
7.4 LIMITATION ON FUNDAMENTAL CHANGES. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or Dispose of all or substantially all
of its Property or business, except that:
(a) any Solvent Subsidiary of the Borrower may be merged or
consolidated with or into the Borrower (PROVIDED that the Borrower shall be the
continuing or surviving corporation) or with or into any Guarantor which is a
Wholly Owned Subsidiary of the Borrower (PROVIDED that such Guarantor shall be
the continuing or surviving corporation);
(b) any Subsidiary of the Borrower may Dispose of any or all of its
assets (upon voluntary liquidation, dissolution, winding up or otherwise) to the
Borrower or any Guarantor which is a Wholly Owned Subsidiary of the Borrower;
(c) the Borrower or any Subsidiary thereof may merge with any
Person in connection with a Permitted Acquisition; PROVIDED that if such
transaction involves the Borrower, the Borrower shall be the continuing or
surviving corporation and, if such transaction involves any Subsidiary of the
Borrower, the surviving corporation must be or become a Subsidiary Guarantor;
(d) any Excluded Foreign Subsidiary (i) may be merged with or
consolidated with or into any other Excluded Foreign Subsidiary; PROVIDED that
the ownership interest of the Borrower in the surviving Subsidiary is no less
than the Borrower's ownership interest in the merged Subsidiary and (ii) may
transfer assets of reasonably equivalent value to any other Excluded Foreign
Subsidiary; and
(e) the SS7 Reorganization may occur.
7.5 LIMITATION ON DISPOSITION OF PROPERTY. Dispose of any of its
Property (including, without limitation, receivables and leasehold interests),
whether now owned or
81
hereafter acquired, or, in the case of any Subsidiary of the Ultimate Parent,
issue or sell any shares of such Subsidiary's Capital Stock to any Person,
except:
(a) the Disposition of obsolete or worn out property, or property
which is damaged such that it is no longer materially useful, in each case, in
the ordinary course of business;
(b) Dispositions permitted by Section 7.4(b);
(c) the sale or issuance of (i) any Subsidiary's Capital Stock
(other than Disqualified Stock) to the Borrower or any Guarantor which is a
Wholly Owned Subsidiary of the Borrower, (ii) the Borrower's Capital Stock
(other than Disqualified Stock) to the Parent, (iii) the Parent's Capital Stock
to the Ultimate Parent or, (iv) the Parent's common stock (or common stock
options) to employees, officers, directors and consultants of the Loan Parties
(which common stock (and common stock options) shall not exceed 1% of the
Capital Stock of the Parent.
(d) the Disposition by the Borrower or any of its Subsidiaries of
other assets having a fair market value not to exceed $5,000,000 in the
aggregate for any fiscal year of the Borrower;
(e) any Investment permitted pursuant to Section 7.8(g) and the
Disposition of any Investment permitted pursuant to Section 7.8(b);
(f) any Recovery Event, PROVIDED, that the requirements of Section
2.12(b) are complied with in connection therewith;
(g) the discount, write-off or sale of uncollectible receivables in
the ordinary course of business;
(h) the lease or license (or sublease or sublicense) of real or
personal property (including Intellectual Property) in the ordinary course of
business;
(i) the sale or exchange of specific items of equipment, so long as
the purpose of each such sale or exchange is to acquire (and results within 365
days of such sale or exchange in the acquisition of) replacement items of
equipment which are, in the reasonable business judgment of the Borrower, the
functional equivalent of the item of equipment so sold or exchanged;
(j) the sale of non-core assets acquired in connection with a
Permitted Acquisition;
(k) the cancellation of any Indebtedness constituting an Investment
permitted pursuant to Section 7.8 which the Borrower reasonably believes to be
uncollectible; and
(l) the SS7 Reorganization.
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For the avoidance of doubt, any Disposition of any SS7 Assets is
prohibited under this Agreement except to the extent Dispositions of individual
SS7 Assets are permitted pursuant to Sections 7.5(a), (f), (g), (h), (i) and (j)
in separate, unrelated transactions, which Dispositions do not, either
individually or together with all other such Dispositions made of SS7 Assets,
result in the Disposition of a material portion of the SS7 Assets.
7.6 LIMITATION ON RESTRICTED PAYMENTS. Declare or pay any dividend
(other than dividends payable solely in common stock (excluding Disqualified
Stock) of the Person making such dividend) on, or make any payment on account
of, or set apart assets for a sinking or other analogous fund for, the purchase,
redemption, defeasance, retirement or other acquisition of, any Capital Stock of
any Loan Party, whether now or hereafter outstanding, or make any other
distribution in respect thereof, either directly or indirectly, whether in cash
or property or in obligations, or enter into any derivatives or other
transaction with any financial institution, commodities or stock exchange or
clearinghouse (a "DERIVATIVES COUNTERPARTY") obligating any Loan Party to make
payments to such Derivatives Counterparty as a result of any change in market
value of any such Capital Stock (collectively, "RESTRICTED PAYMENTS"), except
that:
(a) (i) SS7 may declare and pay dividends to the Ultimate Parent if
the Borrower would be permitted to make such Restricted Payment to the Parent
and the Parent would be permitted to make such Restricted Payment to the
Ultimate Parent (it being understood that the amount of any such Restricted
Payment made by SS7 to the Ultimate Parent shall be included in calculating any
dollar limitations on the Borrower's ability to make Restricted Payments
hereunder), (ii) any Subsidiary of the Borrower may declare and pay dividends to
the Borrower or any Guarantor which is a Subsidiary of the Borrower and (iii)
any Excluded Foreign Subsidiary may declare and pay dividends to any Subsidiary
of the Borrower;
(b) the Borrower may pay dividends to the Parent and the Parent may
pay dividends to the Ultimate Parent to permit the Parent or the Ultimate
Parent, as applicable, to (i) purchase the Ultimate Parent's or the Parent's (as
applicable) Capital Stock or Capital Stock Options from present or former
employees, officers, directors or consultants of any Loan Party (or the spouses
or estates thereof) upon the death, disability or termination of employment of
such employee, officer, director or consultant, or to make payments with respect
to Indebtedness issued to repurchase such Capital Stock or Capital Stock Options
pursuant to Section 7.2(i), PROVIDED that the aggregate amount of payments by
the Borrower under this clause (i) shall not exceed $2,000,000 PLUS any amount
owing with respect to such Indebtedness in any fiscal year, and in no case shall
the aggregate amount of such payments exceed $3,000,000 per fiscal year, (ii)
purchase the Ultimate Parent's or the Parent's (as applicable) Capital Stock or
Capital Stock Options from present or former employees, officers, directors or
consultants of any Loan Party (or the spouses or estates thereof) upon the death
or disability of such employee, officer, director or consultant with the
proceeds any "key man" life insurance maintained with respect to such deceased
or disabled employee, officer, director or consultant and (iii) pay management
fees to the Principal or Xxxxxxx Xxxxxxx expressly permitted by Section 7.10;
PROVIDED, further, that the aggregate amount of cash dividends payable pursuant
to this clause (b) shall be reduced dollar-for-dollar by the amount of any
Indebtedness incurred pursuant to Section 7.2(p);
83
(c) (i) the Borrower may pay dividends to the Parent, and the
Parent may pay dividends to the Ultimate Parent, so that the Parent and the
Ultimate Parent may pay corporate, operating overhead expenses (including,
without limitation certain taxes) incurred in the ordinary course of business,
including, without limitation, indemnification obligations and directors' fees
and expenses not to exceed $500,000 in any fiscal year and (ii) the Borrower may
pay dividends to the Parent so that the Parent may pay any taxes which are due
and payable by the Loan Parties (other than the Ultimate Parent) as part of a
consolidated group, PROVIDED that the aggregate amount of cash dividends payable
pursuant to this clause (c) shall be reduced dollar-for-dollar by the amount of
any Indebtedness incurred pursuant to Section 7.2(q);
(d) repurchases of Capital Stock of either of the Parents deemed to
occur on the non-cash exercise of permitted stock options and warrants;
(e) the Ultimate Parent may make tax distributions to the holders
of its Capital Stock to pay income taxes attributable to their investment in SS7
in accordance with the terms of the Governing Documents of the Ultimate Parent;
(f) the Loan Parties may make Restricted Payments pursuant to the
Acquisition Agreement and as necessary to consummate the SS7 Reorganization;
(g) the Ultimate Parent and the Parent may repurchase or exchange
Capital Stock of either of the Parents issued to employees, officers and
directors of any Loan Party with or for (i) cash received pursuant to Section
7.6(b), (ii) Capital Stock of the Ultimate Parent and (iii) Indebtedness of the
Parent incurred pursuant to Section 7.2(i);
(h) the Ultimate Parent and the Parent may repurchase or exchange
Capital Stock of either of the Parents to the extent funded with Net Cash
Proceeds which are Excluded Proceeds pursuant to clause (v) of the definition
thereof.
7.7 LIMITATION ON CAPITAL EXPENDITURES. Make or commit to make any
Capital Expenditure, except Capital Expenditures of the Borrower and its
Subsidiaries in the ordinary course of business not exceeding $30,000,000 with
respect to fiscal year 2002, $20,000,000 with respect to each of fiscal years
2003 and 2004 and $22,000,000 with respect to fiscal year 2005; PROVIDED that up
to 50% of the amount specified for a particular fiscal year, if not so expended
in such fiscal year, may be carried over for expenditure in the next succeeding
fiscal year.
7.8 LIMITATION ON INVESTMENTS. Make any advance, loan, extension of
credit (by way of guaranty or otherwise) or capital contribution to, or purchase
any Capital Stock, bonds, notes, debentures or other debt securities of, or any
assets constituting an ongoing business from, or make any other investment in,
any other Person (all of the foregoing, "INVESTMENTS"), except:
(a) extensions of trade credit, including accounts receivable, in
the ordinary course of business;
(b) Investments in Cash Equivalents;
84
(c) Investments arising in connection with the incurrence of
Indebtedness permitted by Sections 7.2(b), (e), (p) or (r);
(d) loans and advances to employees of the Borrower or any
Subsidiaries of the Borrower in the ordinary course of business (including,
without limitation, for travel, entertainment and relocation expenses) in
an aggregate amount for the Borrower and Subsidiaries of the Borrower not
to exceed $1,000,000 at any one time outstanding;
(e) the Acquisition;
(f) Investments in assets useful in the Borrower's or the
applicable Subsidiary's business made by the Borrower or any of its
Subsidiaries with the proceeds of any Reinvestment Deferred Amount;
(g) Investments (other than those relating to the incurrence of
Indebtedness permitted by Section 7.8(c)) by any Loan Party in the Borrower
or any Person that, prior to such Investment, is a Wholly Owned Subsidiary
Guarantor; and
(h) in addition to Investments otherwise expressly permitted by
this Section, Investments by the Borrower or any of its Wholly Owned
Subsidiaries constituting acquisitions of Persons or ongoing businesses
engaged primarily in one or more lines of businesses permitted under
Section 7.15 ("PERMITTED ACQUISITIONS"); PROVIDED that:
(i) immediately prior to and after giving affect to any such
Permitted Acquisition, no Default or Event of Default shall have occurred
and be continuing and the Borrower shall have certified same to the
Administrative Agent in writing;
(ii) if such Permitted Acquisition is structured as a stock
acquisition, then either (A) the Person so acquired becomes a Wholly Owned
Subsidiary of or, in the case of the Embratel Acquisition, a Subsidiary
which is at least 80% owned by the Borrower or (B) such Person is merged
with and into either the Borrower or a Wholly Owned Subsidiary of the
Borrower (with the Borrower or such Wholly Owned Subsidiary being the
surviving corporation in such merger);
(iii) all of the provisions of Section 6.10 have been or will
be complied with in all material respects in respect of such Permitted
Acquisition;
(iv) after giving PRO FORMA effect to the proposed Permitted
Acquisition in accordance with Section 7.1(e), the Borrower shall be in
compliance with the financial covenants set forth in Section 7.1; and
(v) any cash consideration shall be limited to: (1) proceeds
which are Excluded Proceeds pursuant to clause (i) of the definition
thereof (to the extent such Excluded Proceeds have not been used to make
Investments pursuant to clauses (o) or (p)) of this Section or Capital
Expenditures and (2) up to $15.0 million of proceeds from Revolving Credit
Loans.
85
(i) Investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes with,
customers and suppliers;
(j) the Parent and the Ultimate Parent may acquire and hold
Investments consisting of loans to employees, officers and directors of the
Loan Parties;
(k) the Borrower and its Subsidiaries may receive and own
securities or other Investments acquired pursuant to Dispositions, mergers,
consolidations, amalgamations, liquidations, wind-ups or dissolutions
permitted pursuant to Sections 7.4 or 7.5;
(l) Investments consisting of endorsements for collection or
deposit in the ordinary course of business;
(m) Investments in deposit accounts opened in the ordinary course
of business;
(n) Investments by the Ultimate Parent and the Borrower in SS7
pursuant to the SS7 Reorganization;
(o) Investments by the Borrower or any of its Subsidiaries in joint
ventures (i) with any proceeds which are Excluded Proceeds pursuant to
clause (i) of the definition thereof (to the extent such Excluded Proceeds
have not been used to make Investments pursuant to clauses (h) or (p) of
this Section or to make Capital Expenditures) PLUS (ii) additional such
Investments in an aggregate amount not to exceed $5,000,000; and
(p) in addition to Investments otherwise expressly permitted by
this Section, Investments by the Borrower or any of its Subsidiaries (i)
with any proceeds which are Excluded Proceeds pursuant to clause (i) of the
definition thereof (to the extent such Excluded Proceeds have not been used
to make Investments pursuant to clauses (h) or (o) of this Section or to
make Capital Expenditures) PLUS (ii) additional such Investments in an
aggregate amount (valued at cost) not to exceed $10,000,000 during the term
of this Agreement.
The outstanding amount of any Investment on any date of determination shall be
calculated after giving effect to all cash returns of principal or capital
thereon, cash dividends or other cash returns on the Investments thereon,
received by the Loan Party or Subsidiary which made such Investment and applied
in a manner not prohibited by this Agreement.
7.9 LIMITATION ON OPTIONAL PAYMENTS AND MODIFICATIONS OF
INDEBTEDNESS. (a) Make or offer to make any optional or voluntary payment,
prepayment, repurchase or redemption of, or otherwise voluntarily or optionally
defease, any subordinated Indebtedness (other than the exchange of Senior
Subordinated Notes pursuant to the terms of the Registration Rights Agreement),
or segregate funds for any such payment, prepayment, repurchase, redemption or
defeasance, or enter into any derivative or other transaction with any
Derivatives Counterparty obligating any Loan Party to make payments to such
Derivatives Counterparty as a result of any change in market value of such
Indebtedness, other than the prepayment of Indebtedness incurred hereunder;
PROVIDED, however, that, the Borrower may (i) exchange common equity in the
Ultimate Parent for the cancellation of, or (ii) purchase (with the Net Cash
86
Proceeds received in connection with the sale of common equity interests in the
Ultimate Parent to the Principal or its Control Investment Affiliates which
proceeds have been further contributed by the Ultimate Parent to the Parent and
by the Parent to the Borrower), up to $30.0 million in the aggregate under
clauses (i) and (ii) of principal amount of Senior Subordinated Notes owned by
GTCR Capital Partners, L.P. on the Closing Date (which such portion of the
Senior Subordinated Notes may be held after the Closing Date by the Principal or
any of its Control Investment Affiliates); PROVIDED that such $30.0 million
amount shall be reduced by any prior sales or redemptions of such Senior
Subordinated Notes prior to the date of such exchange; PROVIDED, FURTHER, that
any purchase of such Senior Subordinated Notes occurs substantially
simultaneously with the corresponding issuance of common equity by the Ultimate
PARENT, (b) amend, modify or otherwise change, or consent or agree to any
amendment, modification, waiver or other change to, any of the terms (including,
without limitation, the subordination terms) of any subordinated Indebtedness
(other than any such amendment, modification, waiver or other change which (i)
would extend the maturity or reduce the amount of any payment of principal
thereof, reduce the rate or extend the date for payment of interest thereon and
(ii) does not involve the payment of a consent fee), (c) designate any
Indebtedness (other than the Obligations) as "Designated Senior Debt" for the
purposes of the Senior Subordinated Note Indenture or (d) amend or permit the
amendment of its Governing Documents in any manner determined by the
Administrative Agent in good faith to be materially adverse to the Lenders.
7.10 LIMITATION ON TRANSACTIONS WITH AFFILIATES. Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of Property, the rendering of any service or the payment of any
management, advisory or similar fees, with any Affiliate (other than the
Borrower or any Guarantor which is a Wholly Owned Subsidiary of the Borrower)
unless such transaction is (a) otherwise permitted under this Agreement, (b) in
the ordinary course of business of the Ultimate Parent or any of its
Subsidiaries, as the case may be, and (c) upon fair and reasonable terms no less
favorable to the Ultimate Parent or any of its Subsidiaries, as the case may be,
than it would obtain in a comparable arm's length transaction with a Person that
is not an Affiliate. Notwithstanding the foregoing, the Borrower and its
Subsidiaries may (i) pay to the Principal and its Control Investment Affiliates
management fees and expenses pursuant to the Professional Services Agreement,
which management fees shall be in an aggregate amount not to exceed $500,000 in
any fiscal year of the Borrower (PROVIDED that any amount remaining unpaid from
one fiscal year may be carried over into succeeding fiscal years), (ii) issue
Capital Stock in the Parent to employees, officers, directors and consultants to
the extent permitted under Section 7.5(c), (iii) issue Capital Stock in the
Ultimate Parent to Affiliates of the Ultimate Parent, (iv) engage in
transactions with Transaction Network Services Inc. or any of its Subsidiaries
in the ordinary course of business and consistent with past practices and (v)
make payments as set forth on SCHEDULE 7.10.
7.11 LIMITATION ON SALES AND LEASEBACKS. Enter into any arrangement
with any Person providing for the leasing of Property by any Loan Party which
has been or is to be sold or transferred by such Loan Party to such Person or to
any other Person to whom funds have been or are to be advanced by such Person on
the security of such Property or rental obligations of such Loan Party unless
(i) the sale of such property is permitted by Section 7.5 and (ii) any Capital
Lease Obligations or Liens arising in connection therewith are permitted by
Sections 7.2(c) and (n) and 7.3(g), respectively.
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7.12 LIMITATION ON CHANGES IN FISCAL PERIODS. Permit the fiscal year
of any Loan Party to end on a day other than December 31 or change any Loan
Party's method of determining fiscal quarters, in each case, without the prior
written consent of the Administrative Agent.
7.13 LIMITATION ON NEGATIVE PLEDGE CLAUSES. Enter into or suffer to
exist or become effective any agreement that prohibits or limits the ability of
any Loan Party to create, incur, assume or suffer to exist any Lien upon any of
its Property or revenues, whether now owned or hereafter acquired, to secure the
Obligations or, in the case of any guarantor, its obligations under the
Guarantee and Collateral Agreement, other than (a) this Agreement and the other
Loan Documents and (b) any agreements governing any purchase money Liens or
Capital Lease Obligations otherwise permitted hereby or agreements governing
Indebtedness incurred pursuant to Section 7.2(n), or, to the extent permitted to
be secured by a Lien pursuant to Section 7.3(n), Indebtedness incurred pursuant
to Section 7.2(r) (in which case, any prohibition or limitation shall only be
effective against the assets financed thereby), and (c) the Senior Subordinated
Note Indenture.
7.14 LIMITATION ON RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS, ETC.
Enter into or suffer to exist or become effective any consensual encumbrance or
restriction on the ability of any Loan Party (or, in the case of clause (a)
only, any Subsidiary of the Borrower) to (a) make Restricted Payments in respect
of any Capital Stock of such Subsidiary held by, or pay or subordinate any
Indebtedness owed to, any Loan Party (b) make Investments in any Loan Party or
(c) transfer any of its assets to any Loan Party, except for such encumbrances
or restrictions existing under or by reason of (i) any restrictions existing
under the Loan Documents, (ii) any restrictions under the Senior Subordinated
Note Indenture, (iii) any restrictions with respect to a Subsidiary imposed
pursuant to an agreement that has been entered into in connection with the
Disposition of all or substantially all of the Capital Stock or assets of such
Subsidiary and (iv) with respect to clause (c) only, restrictions on transfers
of (1) assets subject to any Lien permitted under Sections 7.3 (c), (g), (k),
(m) or (n) and (2) general intangibles consisting of customary non-assignment
contract rights entered into in the ordinary course of business and which
restrictions could not reasonably be expected to materially interfere with the
operation of the Loan Parties' business or the rights and remedies of the
Secured Parties under the Loan Documents.
7.15 LIMITATION ON LINES OF BUSINESS. Enter into any business,
either directly or through any Subsidiary, except for those businesses in which
the Borrower and its Subsidiaries are engaged on the date of this Agreement
(after giving effect to the Acquisition) or that are reasonably related or
ancillary thereto.
7.16 LIMITATION ON AMENDMENTS TO ACQUISITION DOCUMENTS. Amend,
supplement, replace or otherwise modify (whether pursuant to a waiver granted by
or to such Person or otherwise) or fail to enforce strictly the terms and
conditions of any of the Acquisition Agreement, the Guaranty of Wireless
Revenue, the Equity Contribution Agreement or the Intellectual Property
Agreement, except to the extent that any such amendment, supplement,
modification or failure to enforce could not (i) materially adversely affect the
ability of the Borrower to repay the Loans or (ii) be reasonably expected to
have a Material Adverse Effect.
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7.17 LIMITATION ON HEDGE AGREEMENTS. Enter into any Hedge Agreement
other than Specified Hedge Agreements entered into in the ordinary course of
business, and not for speculative purposes.
7.18 PARTNERSHIPS AND JOINT VENTURES. Become a general or limited
partner in a partnership or a joint venturer in any joint venture, or permit any
Loan Party to do so, other than (i) any joint venture permitted by Section
7.8(o) or (p), PROVIDED that any Indebtedness of such joint venture is
Non-Recourse Indebtedness and (ii) any partnership which is a Wholly Owned
Subsidiary Guarantor.
7.19 LIMITATIONS ON ACTIVITIES OF THE PARENTS.
(a) The Parent and the Ultimate Parent will not engage in any
business activities other than, in the case of the Parent, holding the Capital
Stock of the Borrower, and in the case of the Ultimate Parent, holding the
Capital Stock of the Parent and the Capital Stock of SS7, and, in each case,
activities directly related or necessary in connection with the holding of such
Capital Stock and transactions permitted by Section 7.10. Neither the Parent nor
the Ultimate Parent will acquire or hold any Capital Stock of any other Person.
(b) The Parent and the Ultimate Parent will not own, lease, manage
or otherwise operate any properties or assets (including cash (other than cash
received by it in connection with dividends made by the Borrower in accordance
with Section 7.6 pending application in the manner contemplated by such Section)
and Cash Equivalents) other than the ownership of the shares of Capital Stock as
described in clause (a) of this Section. Further, neither the Parent nor the
Ultimate Parent will directly or indirectly, create, incur, issue, assume,
guarantee or otherwise become directly or indirectly liable, contingently or
otherwise, with respect to any Indebtedness (other than pursuant to the Guaranty
and Collateral Agreement, subordinated Guarantee Obligations under the Senior
Subordinated Note Indenture and Indebtedness permitted by 7.2(i) or (p)).
SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan or
Reimbursement Obligation when due in accordance with the terms hereof; or the
Borrower shall fail to pay any interest on any Loan or Reimbursement Obligation,
or any Loan Party shall fail to pay any other amount payable hereunder or under
any other Loan Document, within five days after any such interest or other
amount becomes due in accordance with the terms hereof; or
(b) Any representation or warranty made or deemed made by any Loan
Party herein or in any other Loan Document or that is contained in any
certificate, document or financial or other statement furnished by it at any
time under or in connection with this Agreement or any such other Loan Document
shall prove to have been inaccurate in any material respect on or as of the date
made or deemed made; or
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(c) Any Loan Party shall default in the observance or performance
of any agreement contained in clause (i) or (ii) of Section 6.4(a), Section
6.7(a), Section 7 or Section 5 of the Guarantee and Collateral Agreement; or
(d) Any Loan Party shall default in the observance or performance
of any other covenant or agreement contained in this Agreement or any other Loan
Document (other than as provided in paragraphs (a) through (c) of this Section),
and such default shall continue unremedied for a period of 30 days from the
earlier of (i) the date on which any Loan Party knew or should have known of
such default or (ii) the date on which the Administrative Agent provided notice
of such default to such Loan Party; or
(e) Any Loan Party shall (i) default in making any payment of any
principal of any Indebtedness (excluding the Loans) or any Guarantee Obligation
on the scheduled or original due date with respect thereto; or (ii) default in
making any payment of any interest on any such Indebtedness beyond the period of
grace, if any, provided in the instrument or agreement under which such
Indebtedness was created; or (iii) default in the observance or performance of
any other agreement or condition relating to any such Indebtedness or contained
in any instrument or agreement evidencing, securing or relating thereto, or any
other event shall occur or condition exist, the effect of which default or other
event or condition is to cause, or to permit the holder or beneficiary of such
Indebtedness (or a trustee or agent on behalf of such holder or beneficiary) to
cause, with the giving of notice if required, such Indebtedness to become due
prior to its stated maturity or in the case of any Guarantee Obligation to
become payable; PROVIDED, that a default, event or condition described in clause
(i), (ii) or (iii) of this paragraph (e) shall not at any time constitute an
Event of Default unless, at such time, one or more defaults, events or
conditions of the type described in clauses (i), (ii) and (iii) of this
paragraph (e) shall have occurred and be continuing with respect to Indebtedness
or Guarantee Obligation the outstanding principal amount of which exceeds in the
aggregate $7,500,000; or
(f) (i) Any Loan Party shall commence any case, proceeding or other
action (A) under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to it, or
seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition or
other relief with respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian, conservator or other similar official for it or
for all or any substantial part of its assets, or any Loan Party shall make a
general assignment for the benefit of its creditors; or (ii) there shall be
commenced against any Loan Party any case, proceeding or other action of a
nature referred to in clause (i) above that (A) results in the entry of an order
for relief or any such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 60 days; or (iii) there shall be
commenced against any Loan Party any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar process
against all or any substantial part of its assets that results in the entry of
an order for any such relief that shall not have been vacated, discharged, or
stayed or bonded pending appeal within 60 days from the entry thereof; or (iv)
any Loan Party shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth in
clause (i),
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(ii), or (iii) above; or (v) any Loan Party shall generally not, or shall be
unable to, or shall admit in writing its inability to, pay its debts as they
become due; or
(g) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan,
(ii) any "accumulated funding deficiency" (as defined in Section 302 of ERISA),
whether or not waived, shall exist with respect to any Plan or any Lien in favor
of the PBGC or a Plan shall arise on the assets of the Borrower or any Commonly
Controlled Entity, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee shall be
appointed, to administer or to terminate, any Single Employer Plan, which
Reportable Event or commencement of proceedings or appointment of a trustee is
reasonably likely to result in the termination of such Plan for purposes of
Title IV of ERISA, (iv) any Single Employer Plan shall terminate for purposes of
Title IV of ERISA, (v) the Borrower or any Commonly Controlled Entity shall, or
is reasonably likely to, incur any liability in connection with a withdrawal
from, or the Insolvency or Reorganization of, a Multiemployer Plan, (vi) the
Borrower or any of its Subsidiaries or any Commonly Controlled Entity shall be
required to make payments pursuant to any employee welfare benefit plan (as
defined in Section 3(1) of ERISA) that provides benefits to retired employees
(or their dependents), (vii) the Borrower or any of its Subsidiaries or any
Commonly Controlled Entity shall be required to make contributions to any
defined benefit pension plan subject to Title IV of ERISA (including any
Multiemployer Plan) or (viii) any other similar event or condition shall occur
or exist with respect to a Plan; and in each case in clauses (i) through (viii)
above, such event or condition, together with all other such events or
conditions, if any, would, reasonably be expected to have a Material Adverse
Effect on the Borrower; or
(h) One or more judgments or decrees shall be entered against any
Loan Party involving a liability for the Loan Parties taken as a whole (to the
extent not paid or fully covered by insurance as to which the relevant insurance
company has not denied coverage) of $5,000,000 or more, and all such judgments
or decrees shall not have been vacated, discharged, stayed or bonded pending
appeal within 45 days from the entry thereof; or
(i) Any of the Security Documents shall cease, for any reason
(other than pursuant to the terms thereof), to be in full force and effect, or
any Loan Party or any Affiliate of any Loan Party shall so assert, or any Lien
created by any of the Security Documents shall cease to be enforceable and of
the same effect and priority purported to be created thereby; or
(j) (i) Any default occurs under the Guaranty of Wireless Revenue
or (ii) the Guaranty of Wireless Revenue shall cease, for any reason (other than
full performance thereof), to be in full force and effect and such default under
clause (i) or cessation under clause (ii) has had a Material Adverse Effect; or
(k) The guarantee contained in Section 2 of the Guarantee and
Collateral Agreement shall cease, for any reason (other than pursuant to the
terms thereof), to be in full force and effect or any Loan Party or any
Affiliate of any Loan Party shall so assert; or
(l) Any Loan Party or any Affiliate of any Loan Party shall assert
that any provision of any Loan Document is not in full force and effect; or
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(m) (i) The Principal and its Control Investment Affiliates shall
cease to have the power to vote or direct the voting of securities having a
majority of the ordinary voting power for the election of directors of the
Ultimate Parent (determined on a fully diluted basis); (ii) the Principal and
its Control Investment Affiliates shall cease to own of record and beneficially
an economic interest in the Ultimate Parent equal to at least 70% of the total
economic interests of the Ultimate Parent owned by the Principal and its Control
Investment Affiliates of record and beneficially as of the Closing Date; (iii)
at any time after an initial public offering with respect to the Ultimate
Parent, any "person" or "group" (as such terms are used in Sections 13(d) and
14(d) of the Exchange Act), excluding the Principal and its Control Investment
Affiliates, shall become, or obtain rights (whether by means of warrants,
options or otherwise) to become, the "Beneficial Owner", directly or indirectly,
of more than 30% of the total economic interests in the Ultimate Parent; (iv)
the board of directors of the Parent shall cease to consist of a majority of
Continuing Directors; (v) the Parent shall cease to own and control, of record
and beneficially, directly, 100% of each class of outstanding Capital Stock of
the Borrower free and clear of all Liens (except Liens created by the Guarantee
and Collateral Agreement); (vi) the Ultimate Parent shall cease to own and
control, of record and beneficially, directly, 100% of each class of outstanding
Capital Stock of the Parent (other than shares of Capital Stock issued to
present or former officers or employees of the Loan Parties, which shall not
exceed 1% of such Capital Stock calculated on a fully diluted basis) free and
clear of all Liens (except Liens created by the Guarantee and Collateral
Agreement); or (vii) a Specified Change of Control shall occur; or
(n) The Indebtedness under the Senior Subordinated Note
Documentation or any guarantees thereof shall cease, for any reason, to be
validly subordinated to the Obligations or the obligations of the Subsidiary
Guarantors under the Guarantee and Collateral Agreement, as the case may be, as
provided in the Senior Subordinated Note Documentation, or any Loan Party, any
Affiliate of any Loan Party shall so assert; or
(o) The Merger is not consummated on or prior to 5:00 PM, New York
City time on February [__], 2002;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to any Loan Party,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents (including, without limitation, all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) shall immediately become due and payable, and (B) if such event is
any other Event of Default, with the consent of the Required Lenders, the
Administrative Agent may, or upon the request of the Required Lenders, shall, by
notice to the Borrower, declare the Loans hereunder (with accrued interest
thereon) and all other amounts owing under this Agreement and the other Loan
Documents (including, without limitation, all amounts of L/C Obligations,
whether or not the beneficiaries of the then outstanding Letters of Credit shall
have presented the documents required thereunder) to be due and payable
forthwith, whereupon the same shall immediately become due and payable. Upon the
occurrence and during the continuation of an Event of Default, the
Administrative Agent and the Lenders shall be entitled to exercise any and all
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remedies available under the Security Documents, including, without limitation,
the Guarantee and Collateral Agreement and any Mortgage, or otherwise available
under applicable law or otherwise. With respect to all Letters of Credit with
respect to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to this paragraph, the Borrower shall at such time deposit
in a cash collateral account opened by the Administrative Agent an amount in
immediately available funds equal to the aggregate then undrawn and unexpired
amount of such Letters of Credit (and the Borrower hereby grants to the
Administrative Agent, for the ratable benefit of the Secured Parties, a
continuing security interest in all amounts at any time on deposit in such cash
collateral account to secure the undrawn and unexpired amount of such Letters of
Credit and all other Obligations). If at any time the Administrative Agent
determines in good faith and in its reasonable business judgment that any funds
held in such cash collateral account are subject to any right or claim of any
Person other than the Administrative Agent and the Secured Parties or that the
total amount of such funds is less than the aggregate undrawn and unexpired
amount of outstanding Letters of Credit, the Borrower shall, forthwith upon
demand by the Administrative Agent (together with notice received of any such
Person's claim or right, if any), pay to the Administrative Agent, as additional
funds to be deposited and held in such cash collateral account, an amount equal
to the excess of (a) such aggregate undrawn and unexpired amount over (b) the
total amount of funds, if any, then held in such cash collateral account (which
shall permit overnight investments in certain Cash Equivalents selected by the
Administrative Agent until such funds are applied to the Obligations) that the
Administrative Agent determines to be free and clear of any such right and
claim. Amounts held in such cash collateral account shall be applied by the
Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay other
Obligations of the Loan Parties hereunder and under the other Loan Documents.
After all such Letters of Credit shall have expired or been fully drawn upon,
all Reimbursement Obligations shall have been satisfied and all other
obligations of the Loan Parties hereunder and under the other Loan Documents
shall have been paid in full (excluding Obligations in respect of any Specified
Hedge Agreement and unmatured contingent reimbursement and indemnification
Obligations), the balance, if any, in such cash collateral account shall be
returned to the Loan Parties (or such other Person as may be lawfully entitled
thereto).
SECTION 9. THE ADMINISTRATIVE AGENT; THE ARRANGER
9.1 APPOINTMENT. Each Lender hereby irrevocably designates and
appoints the Administrative Agent as the agent of such Lender under this
Agreement and the other Loan Documents, and each such Lender irrevocably
authorizes the Administrative Agent, in such capacity, to take such action on
its behalf under the provisions of this Agreement and the other Loan Documents
and to exercise such powers and perform such duties as are expressly delegated
to the Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Administrative Agent.
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9.2 DELEGATION OF DUTIES. The Administrative Agent may execute any
of its duties under this Agreement and the other Loan Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or attorneys
in-fact selected by it with reasonable care.
9.3 EXCULPATORY PROVISIONS. Neither the Arranger, nor the
Administrative Agent nor any of their respective officers, directors, partners,
employees, agents, attorneys and other advisors, attorneys-in-fact or affiliates
shall be (i) liable for any action lawfully taken or omitted to be taken by it
or such Person under or in connection with this Agreement or any other Loan
Document (except to the extent that any of the foregoing are found by a final
and nonappealable decision of a court of competent jurisdiction to have resulted
solely and proximately from its or such Person's own gross negligence or willful
misconduct in breach of a duty owed to the party asserting liability) or (ii)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by any Loan Party or any officer thereof
contained in this Agreement or any other Loan Document or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Arranger or the Administrative Agent under or in connection with, this
Agreement or any other Loan Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document or for any failure of any Loan Party party thereto to perform its
obligations hereunder or thereunder. The Administrative Agent shall not be under
any obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of any Loan Party.
9.4 RELIANCE BY ADMINISTRATIVE AGENT. The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
instrument, writing, resolution, notice, consent, certificate, affidavit,
letter, telecopy, telex or teletype message, statement, order or other document
or conversation believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to any Loan
Parties), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent may deem and treat the payee of
any Note as the owner thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
Required Lenders or the requisite Lenders required under Section 10.1 to
authorize or require such action (or, if so specified by this Agreement, all
Lenders) as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense that may
be incurred by it by reason of taking or continuing to take any such action. The
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement and the other Loan Documents in
accordance with a request of the Required Lenders or the requisite Lenders under
Section 10.1 to authorize or require such action (or, if so specified by this
Agreement, all Lenders), and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders and all future holders of
the Loans and Letters of Credit.
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9.5 NOTICE OF DEFAULT. The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received notice from a Lender,
either of the Parents or the Borrower referring to this Agreement, describing
such Default or Event of Default and stating that such notice is a "notice of
default". In the event that the Administrative Agent receives such a notice, the
Administrative Agent shall give notice thereof to the Lenders. The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the requisite Lenders (or,
if so specified by this Agreement, all Lenders); PROVIDED that unless and until
the Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders.
9.6 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS. Each
Lender expressly acknowledges that neither the Arranger, the Administrative
Agent nor any of their respective officers, directors, employees, agents,
attorneys and other advisors, partners, attorneys-in-fact or affiliates have
made any representations or warranties to it and that no act by the Arranger or
the Administrative Agent hereinafter taken, including any review of the affairs
of a Loan Party or any affiliate of a Loan Party, shall be deemed to constitute
any representation or warranty by the Arranger or the Administrative Agent to
any Lender. Each Lender represents to the Arranger and the Administrative Agent
that it has, independently and without reliance upon the Arranger or the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition, prospects and creditworthiness of the Loan Parties and their
affiliates and made its own decision to make its Loans (and in the case of the
Issuing Lender, its Letters of Credit) hereunder and enter into this Agreement.
Each Lender also represents that it will, independently and without reliance
upon the Arranger or the Administrative Agent or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition, prospects and
creditworthiness of the Loan Parties and their affiliates. Except for notices,
reports and other documents expressly required to be furnished to the Lenders by
the Administrative Agent hereunder, neither the Arranger nor the Administrative
Agent shall have any duty or responsibility to provide any Lender with any
credit or other information concerning the business, operations, property,
condition (financial or otherwise), prospects or creditworthiness of any Loan
Party or any affiliate of a Loan Party that may come into the possession of the
Arranger or the Administrative Agent or any of its officers, directors,
employees, agents, attorneys and other advisors, partners, attorneys-in-fact or
affiliates.
9.7 INDEMNIFICATION. The Lenders agree to indemnify the Arranger
and the Administrative Agent in its capacity as such (to the extent not
reimbursed by the Parents or the Borrower and without limiting the obligation of
the Parents or the Borrower to do so), ratably according to their respective
Aggregate Exposure Percentages in effect on the date on which indemnification is
sought under this Section (or, if indemnification is sought after the date upon
which the Commitments shall have terminated and the Loans shall have been paid
in full, ratably
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in accordance with such Aggregate Exposure Percentages immediately
prior to such date), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever that may at any time (including, without
limitation, at any time following the payment of the Loans) be imposed on,
incurred by or asserted against the Arranger or the Administrative Agent in any
way relating to or arising out of, the Commitments, this Agreement, any of the
other Loan Documents, the Acquisition Documents or any documents contemplated by
or referred to herein or therein or the transactions contemplated hereby or
thereby or any action taken or omitted by the Arranger or the Administrative
Agent under or in connection with any of the foregoing; PROVIDED that no Lender
shall be liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements that are found by a final and nonappealable decision of a court of
competent jurisdiction to have resulted solely and proximately from the
Arranger's or the Administrative Agent's gross negligence or willful misconduct
in breach of a duty owed to such Lender. The agreements in this Section 9.7
shall survive the payment of the Loans and Letters of Credit and all other
amounts payable hereunder.
9.8 ARRANGER AND ADMINISTRATIVE AGENT IN THEIR INDIVIDUAL
CAPACITIES. The Arranger and the Administrative Agent and their respective
affiliates may make loans to, accept deposits from and generally engage in any
kind of business with any Loan Party as though the Arranger was not the Arranger
and the Administrative Agent was not the Administrative Agent. With respect to
its Loans made or renewed by it and with respect to any Letter of Credit issued
or participated in by it, the Arranger and the Administrative Agent shall have
the same rights and powers under this Agreement and the other Loan Documents as
any Lender and may exercise the same as though it were not the Arranger or the
Administrative Agent, as the case may be, and the terms "Lender" and "Lenders"
shall include the Arranger and the Administrative Agent in their respective
individual capacities.
9.9 SUCCESSOR ADMINISTRATIVE AGENTS. The Administrative Agent may
resign as Administrative Agent upon 10 days' notice to the Lenders and the
Borrower. If the Administrative Agent shall resign as Administrative Agent under
this Agreement and the other Loan Documents, then the Required Lenders shall
appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall (unless an Event of Default under Section 8(a) or Section
8(f) with respect to the Borrower shall have occurred and be continuing) be
subject to approval by the Borrower (which approval shall not be unreasonably
withheld or delayed), whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent's rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Loans or Letters of Credit.
If no successor agent has accepted appointment as Administrative Agent by the
date that is 10 days following a retiring Administrative Agent's notice of
resignation, the retiring Administrative Agent's resignation shall nevertheless
thereupon become effective, and the Lenders shall assume and perform all of the
duties of the Administrative Agent hereunder until such time, if any, as the
Required Lenders appoint a successor agent as provided for above. After any
retiring Administrative Agent's resignation as Administrative Agent, the
provisions of this Section 9 shall inure to its benefit as to any actions
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taken or omitted to be taken by it while it was Administrative Agent under this
Agreement and the other Loan Documents.
9.10 AUTHORIZATION TO RELEASE LIENS. The Administrative Agent is
hereby irrevocably authorized by each of the Lenders to release any Lien
covering any Property of the Borrower or any of its Subsidiaries that is the
subject of a Disposition which is permitted by this Agreement or which has been
consented to in accordance with Section 10.1.
9.11 THE ARRANGER. The Arranger shall have no duties or
responsibilities, and shall incur no liability, under this Agreement and the
other Loan Documents.
9.12 WITHHOLDING TAX. (a) To the extent required by any applicable
law, the Administrative Agent may withhold from any interest payment to any
Lender an amount equivalent to any applicable withholding tax. If the forms or
other documentation required by Section 2.20(f) are not delivered to the
Administrative Agent, then the Administrative Agent may withhold from any
interest payment to any Lender not providing such forms or other documentation,
an amount equivalent to the applicable withholding tax.
(b) If the Internal Revenue Service or any authority of the United
States or other jurisdiction asserts a claim that the Administrative Agent did
not properly withhold tax from amounts paid to or for the account of any Lender
(because the appropriate form was not delivered, was not properly executed, or
because such Lender failed to notify the Administrative Agent of a change in
circumstances which rendered the exemption from, or reduction of, withholding
tax ineffective, or for any other reason), such Lender shall indemnify the
Administrative Agent fully for all amounts paid, directly or indirectly, by the
Administrative Agent as tax or otherwise, including penalties and interest,
together with all expenses incurred, including legal expenses, allocated staff
costs and any out of pocket expenses.
(c) If any Lender sells, assigns, grants a participation in, or
otherwise transfers its rights under this Agreement, the purchaser, assignee,
participant or transferee, as applicable, shall comply and be bound by the terms
of Sections 2.20(f) and 9.12.
SECTION 10. MISCELLANEOUS
10.1 AMENDMENTS AND WAIVERS. Neither this Agreement nor any other
Loan Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 10.1. The
Required Lenders and each Loan Party party to the relevant Loan Document may, or
(with the written consent of the Required Lenders) the Administrative Agent and
each Loan Party party to the relevant Loan Document may, from time to time, (a)
enter into written amendments, supplements or modifications hereto and to the
other Loan Documents (including amendments and restatements hereof or thereof)
for the purpose of adding any provisions to this Agreement or the other Loan
Documents or changing in any manner the rights of the Lenders or of the Loan
Parties hereunder or thereunder or (b) waive, on such terms and conditions as
may be specified in the instrument of waiver, any of the requirements of this
Agreement or the other Loan Documents or any Default or Event of Default and its
consequences; PROVIDED, HOWEVER, that no such waiver and no such amendment,
supplement or modification shall (i) forgive the principal amount or extend the
final scheduled
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date of maturity of any Loan or Reimbursement Obligation, extend the scheduled
date of any amortization payment in respect of any Tranche B Term Loan, reduce
the stated rate of any interest or fee payable hereunder or extend the scheduled
date of any payment thereof in each case without the consent of each Lender
directly affected thereby; (ii) increase the amount or extend the expiration
date of any Commitment of any Lender without the consent of such Lender (it
being understood that waivers or modifications of covenants, Defaults or Events
of Default or of mandatory reductions of Commitments shall not constitute an
increase in the Commitment of any Lender), (iii) amend, modify or waive any
provision of this Section or reduce any percentage specified in the definition
of Required Lenders or Required Prepayment Lenders, consent to the assignment or
transfer by any Loan Party of any of its rights and obligations under this
Agreement and the other Loan Documents, release all or substantially all of the
Collateral or release all or substantially all of the Subsidiary Guarantors from
their guarantee obligations under the Guarantee and Collateral Agreement, in
each case without the consent of all Lenders unless otherwise expressly
permitted herein or in any other Loan Document; (iv) amend, modify or waive any
condition precedent to any extension of credit under the Revolving Credit
Facility set forth in Section 5.2 (including, without limitation, the waiver of
an existing Default or Event of Default required to be waived in order for such
extension of credit to be made) without the consent of the Majority Revolving
Credit Facility Lenders; (v) reduce the percentage specified in the definition
of Majority Facility Lenders with respect to any Facility without the written
consent of all Lenders under such Facility; (vi) amend, modify or waive any
provision of Section 9 or any other provision of any Loan Document relating to
the obligations of the Arranger or the Administrative Agent without the consent
of the Arranger or the Administrative Agent directly affected thereby; (vii)
amend, modify or waive any provision of Section 2.6 or 2.7 without the written
consent of the Swing Line Lender; (viii) amend, modify or waive any provision of
Section 2.18 without the consent of each Lender directly affected thereby; or
(ix) amend, modify or waive any provision of Section 3 without the consent of
the Issuing Lender. Any such waiver and any such amendment, supplement or
modification shall apply equally to each of the Lenders and shall be binding
upon the Loan Parties, the Lenders, the Administrative Agent, the Arranger and
all future holders of the Loans and Letters of Credit. In the case of any
waiver, the Loan Parties, the Lenders, the Arranger and the Administrative Agent
shall be restored to their former position and rights hereunder and under the
other Loan Documents, and any Default or Event of Default waived shall be deemed
to be cured and not continuing; but no such waiver shall extend to any
subsequent or other Default or Event of Default, or impair any right consequent
thereon. Any such waiver, amendment, supplement or modification shall be
effected by a written instrument signed by the parties required to sign pursuant
to the foregoing provisions of this Section; PROVIDED, that delivery of an
executed signature page of any such instrument by facsimile transmission shall
be effective as delivery of a manually executed counterpart thereof.
10.2 NOTICES. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed (a) in the case of the Parents, the Borrower and the
Administrative Agent, as follows and (b) in the case of the Lenders, as set
forth in an administrative questionnaire delivered to the Administrative Agent
or (c) in the case of any party, to such other address as such party may
hereafter notify to the other parties hereto:
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The Parents TSI Telecommunication Holdings, LLC
TSI Telecommunication Holdings, Inc.
000 X. Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attention: President and Chief Financial
Officer
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
with a copy to: GTCR Xxxxxx Xxxxxx, L.L.C.
0000 Xxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx and Xxxxx X.
Xxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
and Xxxxxxxx & Xxxxx
Aon Center
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx & Xxxxxxxxxxx
Xxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
The Borrower: TSI Telecommunication Services Inc.
000 X. Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attention: President and Chief Financial
Officer
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
The Administrative Agent: Xxxxxx Commercial Paper Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
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with a copy to: Xxxxxx & Xxxxxxx
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxxxx X. Xxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
Issuing Lender: As notified by the Issuing Lender to the
Administrative Agent and the Borrower
PROVIDED that any notice, request or demand to or upon the Administrative Agent
or any Lender shall not be effective until received.
10.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no
delay in exercising, on the part of the Arranger, the Administrative Agent or
any Lender, any right, remedy, power or privilege hereunder or under the other
Loan Documents shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights, remedies, powers and privileges herein provided
are cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
10.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans and other extensions of credit hereunder.
10.5 PAYMENT OF EXPENSES; INDEMNIFICATION. The Borrower agrees (a)
to pay or reimburse the Arranger and the Administrative Agent for all their
reasonable out-of-pocket costs and expenses incurred in connection with the
syndication of the Facilities (other than fees payable to syndicate members) and
the development, preparation and execution of, and any amendment, supplement or
modification to, this Agreement and the other Loan Documents and any other
documents prepared in connection herewith or therewith, and the consummation and
administration of the transactions contemplated hereby and thereby, including,
without limitation, the reasonable fees and disbursements and other charges of
counsel to each of the Arranger and the Administrative Agent and the charges of
IntraLinks; PROVIDED that, so long as no Default or Event of Default exists and
is continuing, reimbursement of the Administrative Agent's expenses in
connection with visits pursuant to Section 6.6 shall be limited to reimbursement
of one visit per quarter, (b) to pay or reimburse each Lender, the Arranger and
the Administrative Agent for all its reasonable costs and expenses incurred in
connection with the enforcement or preservation of any rights under this
Agreement, the other Loan Documents and any such other documents, including,
without limitation, the fees and disbursements of counsel to each Lender and of
counsel to the Arranger and the Administrative Agent and the charges of
IntraLinks; PROVIDED that if no Default or Event of Default exists, such
reimbursement for legal fees and disbursements shall be limited to the fees and
disbursements of one primary counsel
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plus the fees and disbursements of any local and specialist counsel engaged by
the Administrative Agent, (c) to pay, indemnify, and hold each Lender, the
Arranger and the Administrative Agent harmless from, any and all recording and
filing fees and any and all liabilities with respect to, or resulting from any
delay in paying, stamp, excise and other taxes, if any, which may be payable or
determined to be payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions contemplated by, or
any amendment, supplement or modification of, or any waiver or consent under or
in respect of, this Agreement, the other Loan Documents and any such other
documents, and (d) to pay, indemnify, and hold each Lender, the Arranger, the
Administrative Agent, their respective affiliates, and their respective
officers, directors, partners, trustees, employees, affiliates, shareholders,
attorneys and other advisors, agents, attorneys-in-fact and controlling persons
(each, an "INDEMNITEE") harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to or
arising out of any claim, proceeding, litigation, or other action concerning or
relating to the execution, delivery, enforcement, performance and administration
of this Agreement, the other Loan Documents and any such other documents,
including, without limitation, any of the foregoing relating to the use of
proceeds of the Loans or Letters of Credit, the violation of, noncompliance with
or liability under, any Environmental Law applicable to the operations of any
Loan Party or any of the Properties or the use by unauthorized persons of
information or other materials sent through electronic, telecommunications or
other information transmission systems that are intercepted by such persons and
to reimburse them for all fees and disbursements and other charges of legal
counsel in connection with claims, actions or proceedings by any Indemnitee
against the Borrower hereunder (all the foregoing in this clause (d),
collectively, the "INDEMNIFIED LIABILITIES"), PROVIDED, that the Borrower shall
have no obligation hereunder to any Indemnitee with respect to Indemnified
Liabilities to the extent such Indemnified Liabilities are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
solely and proximately from the gross negligence, bad faith or willful
misconduct of such Indemnitee. Without limiting the foregoing, and to the extent
permitted by applicable law, the Borrower agrees not to assert and to cause its
Subsidiaries not to assert, and hereby waives and agrees to cause its
Subsidiaries so to waive, all rights for contribution or any other rights of
recovery with respect to all claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature, under or
related to Environmental Laws, that any of them might have by statute or
otherwise against any Indemnitee, PROVIDED, that the Borrower shall not waive
(or cause its Subsidiaries to waive) any such rights for contribution or other
rights of recovery to the extent such claims, demands, penalties, fines,
liabilities, or other expenses are found by a final and nonappealable decision
of a court of competent jurisdiction to have resulted solely and proximately
from the gross negligence, bad faith or willful misconduct of such Indemnitee.
All amounts due under this Section shall be payable not later than five days
after written demand therefor. Statements payable by the Borrower pursuant to
this Section shall be submitted to the Borrower in accordance with Section 10.2,
or to such other Person or address as may be hereafter designated by the
Borrower in a written notice to the Administrative Agent. The agreements in this
Section shall survive repayment of the Loans and Letters of Credit and all other
amounts payable hereunder.
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10.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS. (a)
This Agreement shall be binding upon and inure to the benefit of the Parents,
the Borrower, the Lenders, the Arranger, the Administrative Agent, all future
holders of the Loans and Letters of Credit and their respective successors and
assigns, except that neither of the Parents nor the Borrower may assign or
transfer any of their respective rights or obligations under this Agreement
without the prior written consent of the Arranger, the Administrative Agent and
each Lender.
(a) Any Lender may, without the consent of the Borrower or any
other Person, in accordance with applicable law, at any time sell to one or more
banks, financial institutions or other entities (each, a "PARTICIPANT")
participating interests in any Loan owing to such Lender, any Commitment of such
Lender or any other interest of such Lender hereunder and under the other Loan
Documents. In the event of any such sale by a Lender of a participating interest
to a Participant, such Lender's obligations under this Agreement to the other
parties to this Agreement shall remain unchanged, such Lender shall remain
solely responsible for the performance thereof, such Lender shall remain the
holder of any such Loan for all purposes under this Agreement and the other Loan
Documents, and the Borrower, the Arranger and the Administrative Agent shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement and the other Loan
Documents. In no event shall any Participant under any such participation have
any right to approve any amendment or waiver of any provision of any Loan
Document, or any consent to any departure by any Loan Party therefrom, except to
the extent that such amendment, waiver or consent would reduce the principal of,
or interest on, the Loans or any fees payable hereunder, or postpone the date of
the final maturity of the Loans, in each case to the extent subject to such
participation. The Borrower agrees that if amounts outstanding under this
Agreement and the Loans are due or unpaid, or shall have been declared or shall
have become due and payable upon the occurrence of an Event of Default, each
Participant shall, to the maximum extent permitted by applicable law, be deemed
to have the right of setoff in respect of its participating interest in amounts
owing under this Agreement to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement, PROVIDED that, in purchasing such participating interest, such
Participant shall be deemed to have agreed to share with the Lenders the
proceeds thereof as provided in Section 10.7(a) as fully as if it were a Lender
hereunder. The Borrower also agrees that each Participant shall be entitled to
the benefits of Sections 2.19, 2.20 and 2.21 with respect to its participation
in the Commitments and the Loans outstanding from time to time as if it was a
Lender; PROVIDED that, in the case of Section 2.20, such Participant shall have
complied with the requirements of said Section and PROVIDED, FURTHER, that no
Participant shall be entitled to receive any greater amount pursuant to any such
Section than the transferor Lender would have been entitled to receive in
respect of the amount of the participation transferred by such transferor Lender
to such Participant had no such transfer occurred.
(b) Any Lender (an "ASSIGNOR") may, in accordance with applicable
law and upon written notice to the Administrative Agent, at any time and from
time to time assign to any Lender or any affiliate or Affiliated Fund of the
assigning Lender or another Lender thereof or, with the consent of the Borrower
and the Administrative Agent and, in the case of any assignment of Revolving
Credit Commitments, the written consent of the Issuing Lender and the
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Swing Line Lender (which, in each case, shall not be unreasonably withheld or
delayed) (PROVIDED that no such consent need be obtained (x) by a Xxxxxx Entity
or (y) with respect to any assignment of funded Tranche B Term Loans), to an
additional bank, financial institution or other entity (an "ASSIGNEE") all or
any part of its rights and obligations under this Agreement pursuant to an
Assignment and Acceptance, substantially in the form of Exhibit D (an
"ASSIGNMENT AND ACCEPTANCE"), executed by such Assignee and such Assignor (and,
where the consent of the Borrower, the Administrative Agent or the Issuing
Lender or the Swing Line Lender is required pursuant to the foregoing
provisions, by the Borrower and such other Persons) and delivered to the
Administrative Agent for its acceptance and recording in the Register; PROVIDED
that no such assignment to an Assignee (other than any Lender or any affiliate
or Affiliated Fund of any Lender) shall be in an aggregate principal amount of
less than $1.0 million (in the case of Tranche B Term Loans) and $5.0 million
(with respect to all other Loans and Commitments) (other than in the case of an
assignment of all of a Lender's interests under this Agreement), unless
otherwise agreed by the Borrower and the Administrative Agent. Any such
assignment need not be ratable as among the Facilities. Upon such execution,
delivery, acceptance and recording, from and after the effective date determined
pursuant to such Assignment and Acceptance, (x) the Assignee thereunder shall be
a party hereto and, to the extent provided in such Assignment and Acceptance,
have the rights and obligations of a Lender hereunder with a Commitment and/or
Loans as set forth therein, and (y) the Assignor thereunder shall, to the extent
provided in such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all of an Assignor's rights and obligations under this Agreement, such Assignor
shall cease to be a party hereto). Notwithstanding any provision of this
Section, the consent of the Borrower shall not be required for any assignment
that occurs at any time when any Event of Default shall have occurred and be
continuing.
(c) The Administrative Agent shall, on behalf of the Borrower,
maintain at its address referred to in Section 10.2 a copy of each Assignment
and Acceptance delivered to it and a register (the "REGISTER") for the
recordation of the names and addresses of the Lenders and the Commitment of, and
principal amount of the Loans owing to, each Lender from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrower, the Administrative Agent and the Lenders shall treat each
Person whose name is recorded in the Register as the owner of the Loans and any
Notes evidencing such Loans recorded therein for all purposes of this Agreement.
Any assignment of any Loan, whether or not evidenced by a Note, shall be
effective only upon appropriate entries with respect thereto being made in the
Register (and each Note shall expressly so provide). Any assignment or transfer
of all or part of a Loan evidenced by a Note shall be registered on the Register
only upon surrender for registration of assignment or transfer of the Note
evidencing such Loan, accompanied by a duly executed Assignment and Acceptance;
thereupon one or more new Notes in the same aggregate principal amount shall be
issued to the designated Assignee, and the old Notes shall be returned by the
Administrative Agent to the Borrower marked "canceled". The Register shall be
available for inspection by the Borrower or any Lender (with respect to any
entry relating to such Lender's Loans) at any reasonable time and from time to
time upon reasonable prior notice.
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(d) Upon its receipt of an Assignment and Acceptance executed by an
Assignor and an Assignee (and, in any case where the consent of any other Person
is required by Section 10.6(c), by each such other Person) together with any tax
forms required by Section 2.20 and payment to the Administrative Agent of a
registration and processing fee of $3,500 (except that no such registration and
processing fee shall be payable (y) in connection with an assignment by or to a
Xxxxxx Entity or (z) in the case of an Assignee which is already a Lender or is
an affiliate of a Lender or an Affiliated Fund (and in the case of assignments
on the same day from a Lender to more than one fund managed or advised by the
same investment advisor (which funds are not then Lenders hereunder), only a
single $3,500 registration and processing fee shall be payable for all such
assignments by such Lender to such funds)), the Administrative Agent shall (i)
promptly accept such Assignment and Acceptance and (ii) on the effective date
determined pursuant thereto record the information contained therein in the
Register and give notice of such acceptance and recordation to the Borrower. On
or prior to such effective date, the Borrower, at its own expense, upon request,
shall execute and deliver to the Administrative Agent (in exchange for the
Revolving Credit Note and/or applicable Term Notes, as the case may be, of the
assigning Lender) a new Revolving Credit Note and/or applicable Term Notes, as
the case may be, to such Assignee or its registered assigns in an amount equal
to the Revolving Credit Commitment and/or applicable Tranche B Term Loans, as
the case may be, assumed or acquired by it pursuant to such Assignment and
Acceptance and, if the Assignor has retained a Revolving Credit Commitment
and/or Tranche B Term Loans, as the case may be, upon request, a new Revolving
Credit Note and/or Term Notes, as the case may be, to the Assignor or its
registered assigns in an amount equal to the Revolving Credit Commitment and/or
applicable Tranche B Term Loans, as the case may be, retained by it hereunder.
Such new Note or Notes shall be dated the Closing Date and shall otherwise be in
the form of the Note or Notes replaced thereby.
(e) For the avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this Section concerning assignments of Loans
and Notes relate only to absolute assignments and that such provisions do not
prohibit assignments creating security interests, including, without limitation,
any pledge or assignment by a Lender of any Loan or Note to any Federal Reserve
Bank in accordance with applicable law. In the case of any Lender that is a fund
that invests in bank loans, such Lender may, without the consent of the Borrower
or the Administrative Agent, assign or pledge all or any portion of its rights
under this Agreement, including the Loans and Notes or any other instrument
evidencing its rights as a Lender under this Agreement, to any holder of,
trustee for, or any other representative of holders of, obligations owed or
securities issued, by such fund as security for such obligations or securities;
provided that any foreclosure or similar action by such trustee or
representative shall be subject to the provisions of this Section 10.6
concerning assignments.
10.7 ADJUSTMENTS; SET-OFF. (a) Except to the extent that this
Agreement provides for payments to be allocated to a particular Lender or to the
Lenders under a particular Facility, if any Lender (a "BENEFITED LENDER") shall
at any time receive any payment of all or part of the Obligations owing to it,
or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 8(f), or otherwise), in a greater proportion than any
such payment to or collateral received by any other Lender, if any, in respect
of such other Lender's Obligations, such Benefited Lender shall
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purchase for cash from the other Lenders a participating interest in such
portion of each such other Lender's Obligations, or shall provide such other
Lenders with the benefits of any such collateral, as shall be necessary to cause
such Benefited Lender to share the excess payment or benefits of such collateral
ratably with each of the Lenders; PROVIDED, HOWEVER, that if all or any portion
of such excess payment or benefits is thereafter recovered from such Benefited
Lender, such purchase shall be rescinded, and the purchase price and benefits
returned, to the extent of such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders provided
by law, each Lender shall have the right, without prior notice to the Parents or
the Borrower, any such notice being expressly waived by the Parents and the
Borrower to the extent permitted by applicable law, upon any amount to the
extent due and payable by the Parents or the Borrower hereunder (whether at the
stated maturity or by acceleration), to set off and appropriate and apply
against such amount any and all deposits (general or special, time or demand,
provisional or final, other than trust accounts), in any currency, and any other
credits, indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Lender or any branch or agency thereof to or for the credit or the
account of either of the Parents or the Borrower, as the case may be. Each
Lender agrees to notify promptly the Borrower and the Administrative Agent after
any such setoff and application made by such Lender, PROVIDED that the failure
to give such notice shall not affect the validity of such setoff and
application.
10.8 COUNTERPARTS. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of an executed signature page of this Agreement by
facsimile transmission shall be effective as delivery of a manually executed
counterpart hereof. A set of the copies of this Agreement signed by all the
parties shall be lodged with the Borrower and the Administrative Agent.
10.9 SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.10 INTEGRATION. This Agreement and the other Loan Documents
represent the agreement of the Parents, the Borrower, the Administrative Agent,
the Arranger and the Lenders with respect to the subject matter hereof, and
there are no promises, undertakings, representations or warranties by the
Arranger, the Administrative Agent or any Lender relative to the subject matter
hereof not expressly set forth or referred to herein or in the other Loan
Documents.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
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10.12 SUBMISSION TO JURISDICTION; WAIVERS. Each of the Parents and
the Borrower hereby irrevocably and unconditionally:
(a) submits for itself and its Property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the courts of
the State of New York, the courts of the United States of America for the
Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to the
Ultimate Parent, the Parent or the Borrower, as the case may be at its
address set forth in Section 10.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right
it may have to claim or recover in any legal action or proceeding referred
to in this Section any special, exemplary, punitive or consequential
damages.
10.13 ACKNOWLEDGMENTS. Each of the Parents and the Borrower hereby
acknowledges that:
(a) it has been advised by counsel in the negotiation, execution
and delivery of this Agreement and the other Loan Documents;
(b) neither the Arranger, the Administrative Agent nor any Lender
has any fiduciary relationship with or duty to the Parents or the Borrower
arising out of or in connection with this Agreement or any of the other
Loan Documents, and the relationship between the Arranger, the
Administrative Agent and Lenders, on one hand, and the Parents and the
Borrower, on the other hand, in connection herewith or therewith is solely
that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Arranger, the Administrative Agent and the Lenders or
among the Parents, the Borrower and the Lenders.
106
10.14 CONFIDENTIALITY. Each of the Arranger, the Administrative Agent
and the Lenders agrees to keep confidential all non-public information provided
to it by any Loan Party or any of such Loan Party's attorneys, agents or
accountants pursuant to this Agreement; PROVIDED that nothing herein shall
prevent the Arranger, the Administrative Agent or any Lender from disclosing any
such information (a) to (i) the Arranger, the Administrative Agent, any other
Lender or (ii) any affiliate of any thereof that is obligated to hold such
information in confidence, (b) to any Participant or Assignee (each, a
"TRANSFEREE") or prospective Transferee that agrees to comply with the
provisions of this Section, (c) to any of its employees, directors, agents,
attorneys, accountants and other professional advisors who are obligated to hold
such information in confidence, (d) to any financial institution that is a
direct or indirect contractual counterparty in swap agreements or such
contractual counterparty's professional advisor (so long as such contractual
counterparty or professional advisor to such contractual counterparty agrees to
be bound by the provisions of this Section), (e) upon the request or demand of
any Governmental Authority having jurisdiction over it, (f) in response to any
order of any court or other Governmental Authority or as may otherwise be
required pursuant to any Requirement of Law, (g) if requested or required to do
so in connection with any litigation or similar proceeding, (h) that has been
publicly disclosed other than in breach of this Section, (i) to the National
Association of Insurance Commissioners or any similar organization or any
nationally recognized rating agency that requires access to information about a
Lender's investment portfolio in connection with ratings issued with respect to
such Lender or (j) in connection with the exercise of any remedy hereunder or
under any other Loan Document.
10.15 RELEASE OF COLLATERAL AND GUARANTEE OBLIGATIONS
(a) Notwithstanding anything to the contrary contained herein or in
any other Loan Document, upon request of the Borrower in connection with any
Disposition of Property permitted by the Loan Documents, the Administrative
Agent shall (without notice to or vote or consent of any Lender, or any
affiliate of any Lender that is a party to any Specified Hedge Agreement) take
such actions as shall be reasonably determined to be necessary to release its
security interest in any Collateral being Disposed of in such Disposition, and
to release any guarantee obligations of any Person being Disposed of in such
Disposition, to the extent necessary to permit consummation of such Disposition
in accordance with the Loan Documents PROVIDED that the Borrower shall have
delivered to the Administrative Agent, at least five Business Days prior to the
date of the proposed release, a written request for release identifying the
relevant Collateral being Disposed of in such Disposition and the terms of such
Disposition in reasonable detail, including the date thereof, the price thereof
and any expenses in connection therewith, together with a certification by the
Borrower stating that such transaction is in compliance with this Agreement and
the other Loan Documents and that the proceeds of such Disposition will be
applied in accordance with this Agreement and the other Loan Documents.
(b) Notwithstanding anything to the contrary contained herein or
any other Loan Document, when all Obligations (other than Obligations in respect
of any Specified Hedge Agreement and any unmatured contingent reimbursement and
indemnification Obligations) have been paid in full, all Commitments have
terminated or expired and no Letter of Credit shall be outstanding, upon request
of the Borrower, the Administrative Agent shall (without notice to or vote or
consent of any Lender, or any affiliate of any Lender that is a party to any
Specified
107
Hedge Agreement) take such actions as shall be reasonably necessary or required
to release its security interest in all Collateral, and to release all guarantee
obligations provided for in any Loan Document, whether or not on the date of
such release there may be outstanding Obligations in respect of Specified Hedge
Agreements.
10.16 ACCOUNTING CHANGES. In the event that any "Accounting Change"
(as defined below) shall occur and such change results in a change in the method
of calculation of financial covenants, standards or terms in this Agreement,
then the Parents, the Borrower and the Administrative Agent agree to enter into
negotiations in order to amend such provisions of this Agreement so as to
equitably reflect such Accounting Changes with the desired result that the
criteria for evaluating the Parents' and the Borrower's financial condition
shall be the same after such Accounting Changes as if such Accounting Changes
had not been made. Until such time as such an amendment shall have been executed
and delivered by the Parents, the Borrower, the Administrative Agent and the
Required Lenders, all financial covenants, standards and terms in this Agreement
shall continue to be calculated or construed as if such Accounting Changes had
not occurred. "Accounting Changes" refers to changes in accounting principles
required or permitted by the promulgation of any rule, regulation, pronouncement
or opinion by the Financial Accounting Standards Board of the American Institute
of Certified Public Accountants or, if applicable, the SEC.
10.17 DELIVERY OF LENDER ADDENDA. Each initial Lender shall become a
party to this Agreement by delivering to the Administrative Agent a Lender
Addendum duly executed by such Lender, the Parents, the Borrower and each Agent.
10.18 CONSTRUCTION. Each covenant contained herein shall be construed
(absent express provision to the contrary) as being independent of each other
covenant contained herein, so that compliance with any one covenant shall not
(absent such an express contrary provision) be deemed to excuse compliance with
any other covenant. Where any provision herein refers to action to be taken by
any Person, or which such Person is prohibited from taking, such provision shall
be applicable whether such action is taken directly or indirectly by such
Person.
10.19 CONFIRMATION. The Borrower confirms that interest payable
hereunder accrues on the stated principal amount of the Loans and not on the
accreted value thereof.
10.20 WAIVERS OF JURY TRIAL. EACH OF THE PARENTS, THE BORROWER, THE
ARRANGER, THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
108
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
TSI MERGER SUB, INC.
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx Xxxxxxx
Title: President and Secretary
TSI TELECOMMUNICATION HOLDINGS, INC.,
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx Xxxxxxx
Title: President and Secretary
TSI TELECOMMUNICATION HOLDINGS, LLC,
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx Xxxxxxx
Title: President and Secretary
XXXXXX BROTHERS INC.,
as Arranger
By: /s/ G. Xxxxxx Xxxxx
Name: G. Xxxxxx Xxxxx
Title: Senior Vice President
XXXXXX COMMERCIAL PAPER INC., as
Administrative Agent
By: /s/ G. Xxxxxx Xxxxx
Name: G. Xxxxxx Xxxxx
Title: Authorized Signatory
2
ANNEX A
PRICING GRID FOR REVOLVING CREDIT LOANS AND SWING LINE LOANS
=====================================================================
Consolidated Leverage Applicable Margin Applicable
Ratio for Eurodollar Loans Margin for Base
Rate Loans
---------------------------------------------------------------------
GREATER THAN OR 4.50% 3.50%
EQUAL TO 4.00x
---------------------------------------------------------------------
LESS THAN 4.00x and 4.25% 3.25%
GREATER THAN OR
EQUAL TO 3.50x
---------------------------------------------------------------------
LESS THAN 3.50x and 4.00% 3.00%
GREATER THAN OR
EQUAL TO 3.00x
---------------------------------------------------------------------
LESS THAN 3.00x 3.75% 2.75%
=====================================================================
Changes in the Applicable Margin with respect to Revolving Credit Loans and
Swing Line Loans resulting from changes in the Consolidated Leverage Ratio shall
become effective on the date (the "ADJUSTMENT DATE") on which financial
statements are delivered to the Lenders pursuant to Section 6.1 (a) and (b) and
shall remain in effect until the next change to be effected pursuant to this
paragraph. If any financial statements referred to above are not delivered
within 10 days of the time periods specified above, then, until such financial
statements are delivered, the Consolidated Leverage Ratio as at the end of the
fiscal period that would have been covered thereby shall for the purposes of
this definition be deemed to be greater than 4.00 to 1.0. Each determination of
the Consolidated Leverage Ratio pursuant to this definition shall be made with
respect to the period of four consecutive fiscal quarters of the Borrower ending
at the end of the period covered by the relevant financial statements.
A-1
