EXHIBIT 10.1
CREDIT AGREEMENT
AMONG
VOYAGER INFORMATION NETWORKS, INC.
THE SEVERAL LENDERS FROM
TIME TO TIME PARTIES HERETO
AND
FLEET NATIONAL BANK
AS AGENT
DATED AS OF SEPTEMBER 23, 1998
TABLE OF CONTENTS
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Page No.
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I. GENERAL TERMS 1
1.01. REDUCING REVOLVING FACILITIES 1
1.02. INTEREST ON THE NOTES 2
1.03. LOAN REQUESTS; TYPE OF LOAN 5
1.04. LOAN DISBURSEMENTS 6
1.05. PREPAYMENTS AND TERMINATION OR REDUCTION OF THE COMMITMENTS 6
1.06. FEES 9
1.07. REQUIREMENTS OF LAW 10
1.08. LIMITATIONS ON LIBOR LOANS; ILLEGALITY 11
1.09. TAXES 12
1.10. INDEMNIFICATION 13
1.11. PAYMENTS UNDER THE NOTES 14
1.12. SET-OFF, ETC. 15
1.13. PRO RATA TREATMENT; SHARING 15
1.14. NON-RECEIPT OF FUNDS BY THE AGENT 16
1.15. REPLACEMENT OF NOTES 17
II. SECURITY; SUBORDINATION; USE OF PROCEEDS 17
2.01. SECURITY FOR THE OBLIGATIONS; SUBORDINATION; ETC. 17
2.02. USE OF PROCEEDS; SCHEDULE OF SOURCES AND USES 18
III. CONDITIONS OF MAKING THE LOANS 18
3.01. CONDITIONS TO THE FIRST LOANS 18
3.02. ALL LOANS 20
3.03. LENDER APPROVALS 21
IV. REPRESENTATIONS AND WARRANTIES 21
4.01. FINANCIAL STATEMENTS 21
4.02. ORGANIZATION, QUALIFICATION, ETC. 22
4.03. AUTHORIZATION; COMPLIANCE; ETC. 22
4.04. GOVERNMENTAL AND OTHER CONSENTS, ETC. 23
4.05. COMPLIANCE WITH LAWS AND AGREEMENTS 23
4.06. PROPRIETARY RIGHTS; THE PUBLICATIONS 23
4.07. LITIGATION 23
4.08. MATERIAL AGREEMENTS 23
4.09. TITLE TO PROPERTIES; CONDITION OF PROPERTIES 24
4.10. SOLVENCY 24
4.11. FULL DISCLOSURE 25
4.12. MARGIN STOCK 25
4.13. TAX RETURNS 25
4.14. PENSION PLANS, ETC. 25
4.15. PROJECTIONS 25
4.16. BROKERS, ETC. 26
4.17. CAPITALIZATION 26
4.18. ENVIRONMENTAL COMPLIANCE 26
4.19. INVESTMENT COMPANY ACT 27
4.20. LABOR MATTERS 27
4.21. YEAR 2000 27
V. FINANCIAL COVENANTS 27
5.01. LEVERAGE 27
5.02. FIXED CHARGES 28
ii
5.03. TOTAL INTEREST COVERAGE 28
VI. AFFIRMATIVE COVENANTS 28
6.01. PRESERVATION OF ASSETS; COMPLIANCE WITH LAWS, ETC. 28
6.02. INSURANCE 29
6.03. TAXES, ETC. 31
6.04. NOTICE OF PROCEEDINGS, DEFAULTS, ADVERSE CHANGE, ETC. 32
6.05. FINANCIAL STATEMENTS AND REPORTS 32
6.06. INSPECTION 34
6.07. ACCOUNTING SYSTEM 34
6.08. ADDITIONAL ASSURANCES 34
6.09. COMPLIANCE WITH ENVIRONMENTAL LAWS 35
6.10. INTEREST RATE PROTECTION 35
6.11. YEAR 2000 COMPLIANCE 36
VII. NEGATIVE COVENANTS 36
7.01. INDEBTEDNESS 36
7.02. LIENS 37
7.03. DISPOSITION OF ASSETS; ETC. 38
7.04. FUNDAMENTAL CHANGES; ACQUISITIONS; RESTRICTED PAYMENTS 38
7.05. MANAGEMENT 39
7.06. SALE AND LEASEBACK 39
7.07. INVESTMENTS 39
7.08. CHANGE IN BUSINESS 39
7.09. ACCOUNTS RECEIVABLE 39
7.10. TRANSACTIONS WITH AFFILIATES 39
7.11. AMENDMENT OF CERTAIN AGREEMENTS, ETC. 39
7.12. ERISA 40
iii
7.13. MARGIN STOCK 40
7.14. NEGATIVE PLEDGES, ETC. 40
VIII. DEFAULTS 40
IX. REMEDIES ON DEFAULT, ETC. 42
X. THE AGENT 43
10.01. APPOINTMENT, POWERS AND IMMUNITIES 43
10.02. RELIANCE BY AGENT 44
10.03. EVENTS OF DEFAULT 44
10.04. RIGHTS AS A LENDER 45
10.05. INDEMNIFICATION 45
10.06. NON-RELIANCE ON AGENT AND OTHER LENDERS 45
10.07. FAILURE TO ACT 46
10.08. RESIGNATION OF AGENT 46
10.09. COOPERATION OF LENDERS 46
XI. DEFINITIONS 46
XII. ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS; ACTIONS BY THE LENDERS 63
XIII. BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS 65
XIV. MISCELLANEOUS 68
14.01. SURVIVAL 68
14.02. FEES AND EXPENSES; INDEMNITY; ETC. 68
14.03. NOTICE 69
14.04. GOVERNING LAW 70
14.05. CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL 70
14.06. SEVERABILITY 71
iv
14.07. SECTION HEADINGS, ETC. 71
14.08. SEVERAL NATURE OF LENDERS' OBLIGATIONS 71
14.09. COUNTERPARTS 71
14.10. KNOWLEDGE AND DISCOVERY 71
14.11. AMENDMENT OF OTHER AGREEMENTS 71
14.12. DISCLAIMER OF RELIANCE 71
14.13. ENVIRONMENTAL INDEMNIFICATION 72
14.14. INTEGRATION 73
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INDEX OF SCHEDULES
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Schedule 1.01(a) Allocation of Commitments
Schedule 1.01(b) Form of Reducing Revolving Credit Note
Schedule 1.03(a) Form of Loan Request
Schedule 1.03(d) Form of Interest Rate Option Notice
Schedule 2.01 Exceptions to Security Requirements
Schedule 2.02 Sources and Uses of Capital
Schedule 3.01(c) Omnibus Officers' Certificate
Schedule 4.01 Opening Balance Sheet
Schedule 4.02 Organization; Qualification
Schedule 4.04 Consents
Schedule 4.06 Proprietary Rights
Schedule 4.07 Litigation
Schedule 4.08 Material Agreements
Schedule 4.09 Condition of Properties
Schedule 4.14 Pension Plans
Schedule 4.15 Projections
Schedule 4.17 Capitalization
Schedule 6.05 Compliance Report
Schedule 7.01 Permitted Indebtedness
Schedule 7.02 Permitted Liens
Schedule 13(b)(iii) Form of Assignment and Acceptance
Schedule 13(b)(iv) Form of Notice of Assignment and
Acceptance
Schedule A Form of NetLink Acquisition Agreement
CREDIT AGREEMENT
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AGREEMENT dated as of September __, 1998, by and among VOYAGER INFORMATION
NETWORKS, INC. (the "Borrower"), a Michigan corporation that is wholly-owned by
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Voyager Holdings, Inc., a Delaware corporation (the "Parent"); the financial
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institutions which are now, or in accordance with ARTICLE XIII hereafter become,
parties hereto by execution of the signature pages to this Agreement or
otherwise (collectively, the "Lenders" and each individually, a "Lender"); and
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FLEET NATIONAL BANK, as Agent for the Lenders (in such capacity as Agent,
together with its successors and assigns in such capacity, the "Agent").
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RECITALS
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The Borrower is an Internet service provider with primary operations in
Michigan, and Wisconsin. The Borrower desires to obtain funds for Capital
Expenditures, to finance the Borrower's debt service and future acquisitions
made by the Borrower and for the Borrower's general working capital purposes.
The Lenders are willing to provide such funds, all subject to the terms and
conditions of this Agreement.
NOW THEREFORE, the parties hereto, intending to be legally bound, and in
consideration of the foregoing and the mutual covenants contained herein, hereby
agree as follows:
I. GENERAL TERMS
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SECTION 1.01. REDUCING REVOLVING FACILITIES.
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(a) On the Closing Date, subject to the terms and conditions contained in
this Agreement, the Lenders agree to establish in favor of the Borrower reducing
revolving credit facilities in the aggregate principal amount of $40,000,000,
allocated among the Lenders as set forth in Schedule 1.01(a) (collectively, in
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either case, as reduced pursuant to Section 1.01(e), the "Commitments" and, with
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respect to each Lender's allocation thereof, its "Commitment"), which
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Commitments shall expire on September 30, 2004 (such date, or such earlier date
as the Commitments shall expire or be terminated hereunder, being referred to
herein as the "Maturity Date").
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(b) The borrowings under the Commitments (such borrowings being referred to
as "Loans") shall be evidenced by the Borrower's Reducing Revolving Credit
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Notes, each in the form attached hereto as Schedule 1.01(b) (together with any
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additional Reducing Revolving Credit Notes issued to any assignee(s) of the
Commitments under Article XIII or otherwise issued in substitution therefor or
replacement thereof, the "Notes"). The Notes are hereby incorporated by
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reference herein and made a part hereof.
(c) From the Closing Date to and including the Maturity Date and within the
limits of the aggregate Commitments, the Borrower may borrow, repay and reborrow
under this Section 1.01. The Notes shall be paid as required in accordance with
SECTION 1.05 in connection with all mandatory and voluntary reductions of the
Commitments.
(d) The Commitments (i) shall be automatically and permanently reduced on
September 30, 2000 and on the last Business Day of each December, March, June
and September thereafter (each such date being referred to as a "Quarterly
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Date"), on each of which dates the Borrower shall repay such amount of the
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aggregate Notes as shall cause the aggregate outstanding principal balance
thereunder to be less than or equal to the Commitments, as so reduced, and (ii)
shall expire on the Maturity Date, when all outstanding principal and accrued
interest on the Notes shall be due and payable in full. Such quarterly
reductions of the Commitments shall be in the amounts set forth below, without
giving effect to any other mandatory or optional Commitment reductions and,
after giving effect to such quarterly automatic reductions, the maximum
aggregate amount of the Commitments shall not exceed the levels set forth below:
AGGREGATE AMOUNT OF AUTOMATIC PERMANENT
PAYMENT DATE REDUCTION MAXIMUM COMMITMENTS
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Closing Date $ - 0 - $40,000,000
September 30, 2000 $ 500,000 $39,500,000
December 31, 2000 500,000 39,000,000
March 31, 2001 1,000,000 38,000,000
June 30, 2001 1,000,000 37,000,000
September 30, 2001 1,000,000 36,000,000
December 31, 2001 1,000,000 35,000,000
March 31, 2002 2,000,000 33,000,000
June 30,2002 2,000,000 31,000,000
September 30, 2002 2,000,000 29,000,000
December 31, 2002 2,000,000 27,000,000
March 31, 2003 3,000,000 24,000,000
June 30, 2003 3,000,000 21,000,000
September 30, 2003 3,000,000 18,000,000
December 31, 2003 3,000,000 15,000,000
March 31, 2004 5,000,000 10,000,000
June 30, 2004 5,000,000 5,000,000
September 30, 2004 5,000,000 $- 0 -
SECTION 1.02. INTEREST ON THE NOTES.
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(A) INTEREST RATE. Subject to the terms and conditions set forth in this
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SECTION 1.02, the Borrower may elect an interest rate for the outstanding
principal balances from time to time of the Notes, or any portion thereof, based
upon either the Base Rate or the applicable LIBOR Rate and determined as of any
date, as set forth in the table below, as follows:
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(i) the rate for any Base Rate Loan shall be the Base Rate plus the
Applicable Margin for Base Rate Loans then in effect; and
(ii) the rate for any LIBOR Loan shall be the applicable LIBOR Rate
plus the Applicable Margin for LIBOR Loans in effect on the first day of
the applicable Interest Period.
(B) DETERMINATION OF APPLICABLE MARGIN.
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(i) The Applicable Margin for Base Rate Loans and LIBOR Loans shall be
determined based upon the ratio of (A) Total Funded Debt as of the first
day of such Pricing Period to (B) Annualized Operating Cash Flow for the
three months ended on the last day of the month immediately preceding the
first day of such Pricing Period (the "Pricing Ratio"), as indicated in the
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following Table:
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RATIO OF TOTAL FUNDED DEBT
TO ANNUALIZED OPERATING APPLICABLE MARGIN: APPLICABLE MARGIN:
CASH FLOW BASE RATE LOANS LIBOR LOANS
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Greater than or equal to 2.25% 3.50%
5.00:1.00
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Less than 5.00:1.00 but
greater than or equal to
4.50:1.00 2.00% 3.25%
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Less than 4.50:1.00 but
greater than or equal to
4.00:1.00 1.75% 3.00%
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Less than 4.00:1.00 1.50 % 2.75%
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NOTHING IN THIS SECTION 1.02(B) SHALL BE DEEMED TO CONSTITUTE A WAIVER OF THE
REQUIREMENTS OF SECTION 5.01, DEFAULT UNDER WHICH WILL RESULT IN AN EVENT OF
DEFAULT AND THE IMPOSITION OF THE DEFAULT RATE.
(ii) As used in this SECTION 1.02, the term "Pricing Period" shall
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mean each period commencing on (A) the date as of which the Borrower is
required, under SECTION 6.05 (B) and SECTION 6.05(C), to deliver financial
statements and a Compliance Report indicating the applicable Pricing Ratio
(in each case, a "Compliance Report Delivery Date") and ending on (B) the
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next following Compliance Report Delivery Date.
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(iii) The determination of the Applicable Margin for any Pricing
Period shall be based on the quarterly financial statements and Compliance
Report required to be delivered on the first date of such Pricing Period,
as provided above. Notwithstanding the preceding sentence, in the event of
any discrepancy between the computation based on such financial statements
and Compliance Report and the related audited financial statements
furnished pursuant to SECTION 6.05(A) (the "Audited Financial Statements"),
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the computation based upon the Audited Financial Statements shall govern,
retroactive to the first day of the applicable Pricing Period in which such
discrepancy occurred. In the event of a retroactive correction in the
determination of the Applicable Margin in favor of the Borrower, the amount
of interest thereby refundable to the Borrower shall be applied on the date
of such retroactive correction, to prepay interest payable on the Notes. If
the retroactive correction is in favor of the Lenders, the amount of
interest due to the Lenders shall be paid in full to the Agent on the first
Quarterly Date after written notice of such correction is provided to the
Borrower.
(iv) Notwithstanding the foregoing, no reduction of the Applicable
Margin hereunder shall occur (A) until or unless the Compliance Report for
the relevant fiscal period is delivered to the Agent, which Compliance
Report demonstrates the basis for such reduction or (B) during the
existence of any Default.
(v) Notwithstanding the foregoing, if the Borrower shall consummate
an Acquisition during any Pricing Period, the Applicable Margin for the
period commencing on the date of such Acquisition and ending on the last
day of such Pricing Period shall be determined based upon the ratio of (A)
Total Funded Debt as of the date of such Acquisition to Annualized
Operating Cash Flow for the three months ended on the month immediately
preceding the date of such Acquisition, as indicated in the table set forth
in paragraph (i) of this Section 1.02(b).
(C) INTEREST PAYMENT DATES. Interest on the Loans shall be payable in
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arrears, without setoff, deduction or counterclaim, as follows:
(i) Interest on each Base Rate Loan shall be due and payable on the
Quarterly Dates, commencing December 31, 1998, and at maturity, whether by
reason of acceleration, prepayment, payment or otherwise, provided that
interest accrued on any Base Rate Loan that is converted to a LIBOR Loan
shall be paid on the Quarterly Date following the date of such conversion
(or, if accrued on a Base Rate Loan which is so converted on a Quarterly
Date, on such Quarterly Date). The interest rate on Base Rate Loans shall
change on the date of any change in the applicable Base Rate without prior
notice thereof being provided to Borrower.
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(ii) Interest on each LIBOR Loan shall be due and payable on the last
day of the Interest Period applicable to such Loan and, if such Interest
Period exceeds three (3) months, every three (3) months after the beginning
of such interest period, until and at maturity, whether by reason of
acceleration, prepayment, payment or otherwise.
(D) COMPUTATIONS. Interest on Base Rate Loans shall be computed on the
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basis of the actual number of days elapsed over a 365 or 366-day year, as
applicable. Interest on LIBOR Loans shall be computed on the basis of the
actual number of days elapsed over a 360-day year.
(E) EFFECT OF DEFAULTS, ETC.
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(i) At all times during the existence of any Event of Default, the
outstanding principal under the Notes and, to the extent permitted by
applicable law, overdue interest, fees , expenses or other amounts payable
hereunder or under the other Loan Documents shall bear interest at a rate
per annum (the "Default Rate") equal to two (2.00%) above (a), with respect
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to Base Rate Loans and overdue interest, fees, expenses and other amounts
payable hereunder, the highest interest rate then applicable to any Base
Rate Loans and (b), with respect to any LIBOR Loans then in effect (and
only until the end of the Interest Period applicable to such LIBOR Loans),
the highest interest rate then applicable to any LIBOR Loans.
(ii) Nothing in this SECTION 1.02(E) shall affect the rights of the
Agent or the Lenders to exercise any rights or remedies under the Loan
Documents or applicable law arising upon the occurrence of an Event of
Default.
SECTION 1.03. LOAN REQUESTS; TYPE OF LOAN.
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(A) LOAN REQUESTS. Each request by the Borrower for Loans under the
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Commitments (other than the initial Loans made concurrently herewith) shall be
made not later than (i) 11:00 A.M. (Boston time) on the Business Day prior to
the proposed Borrowing Date, if such Loans are Base Rate Loans, or (ii) 11:00
A.M. (Boston time) on the third Business Day prior to the proposed Borrowing
Date, if any of such Loans are LIBOR Loans, by telephonic notice to the Agent,
confirmed no later than 11:00 A.M. (Boston time) on the next following Business
Day by a written Loan Request, in the form of SCHEDULE 1.03(A) (each, a "Loan
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Request"), signed by an Authorized Officer of the Borrower and indicating (i)
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the date of such Loans, (ii) whether such Loans shall be Base Rate Loans or
LIBOR Loans and, if so, the Interest Period therefor, and (iii) the use of
proceeds thereof, to the extent any such proceeds are not being used for working
capital purposes. The Agent shall promptly notify the Lenders of such Loan
Request and the information contained therein. Each Loan Request shall, upon
such notification by the Agent to the Lenders, be irrevocable and binding on the
Borrower.
(B) CONVERSION TO A DIFFERENT TYPE OF LOAN. The Borrower may elect from
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time to time to convert any outstanding Loans to Base Rate Loans or LIBOR Loans,
as the case may be, provided that (i) with respect to any such conversion of
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LIBOR Loans to Base Rate Loans, the
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Borrower shall provide the appropriate Interest Rate Option Notice by 11:00 A.M.
(Boston time) on the date of such proposed conversion; (ii) with respect to any
such conversion of Base Rate Loans to LIBOR Loans, the Borrower shall provide
the appropriate Interest Rate Option Notice by 11:00 A.M. (Boston time) at least
three Business Days prior to the date of such proposed conversion; (iii) with
respect to any such conversion of LIBOR Loans into Base Rate Loans, such
conversion shall only be effected on the last day of the Interest Period for
such LIBOR Loans unless the required indemnification payments are made under
SECTION 1.11; (iv) no Loans may be converted into LIBOR Loans when any Default
has occurred and is continuing; (v) the Borrower may have no more than five (5)
LIBOR Loans outstanding at any time; (vi) any conversion of less than all of the
outstanding Base Rate Loans into LIBOR Loans shall be in a minimum aggregate
principal amount of $500,000 and, if greater, an integral multiple of $100,000;
and (viii) any conversion of less than all of the outstanding LIBOR Loans into
Base Rate Loans shall be in a minimum aggregate principal amount of $100,000
and, if greater, an integral multiple of $100,000. The Agent shall promptly
notify the Lenders of such Interest Rate Option Notice and the information
contained therein.
(C) CONTINUANCE OF AN INTEREST RATE OPTION. The Borrower may continue any
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LIBOR Loans as such upon the expiration of the related Interest Period by
providing to the Agent an Interest Rate Option Notice in compliance with the
notice provisions set forth in SECTION 1.03(B); provided that no LIBOR Loans may
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be continued when any Default has occurred and is continuing, but shall be
automatically converted to Base Rate Loans on the last day of the first
applicable Interest Period that ends during the continuance of such Default.
Base Rate Loans shall be deemed to continue as such until receipt of an Interest
Rate Option Notice requesting conversion thereof to LIBOR Loans.
(D) FORM OF NOTICE. Each Interest Rate Option Notice shall be
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substantially in the form of SCHEDULE 1.03(D) and shall specify: (i) the
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aggregate principal amount of Loans to be continued or converted; (ii) the
proposed date thereof; (iii) the Interest Period for such LIBOR Loans; and (iv)
whether such Loans shall be LIBOR Loans or Base Rate Loans.
SECTION 1.04. LOAN DISBURSEMENTS. The Loans shall be made by the Lenders
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pro rata as provided in SECTION 1.13. Not later than 1:00 P.M. (Boston time),
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in the case of LIBOR Loans, or 3:00 P.M. (Boston time), in the case of Base Rate
Loans, on the date specified for any Loans, each Lender shall make available to
the Agent the portion of the Loans to be made by it on such date, in immediately
available funds, for the account of the Borrower. The amount so received by the
Agent shall, subject to the terms and conditions of this Agreement, be made
available to the Borrower by depositing the same in immediately available funds
in the appropriate account or accounts of the Borrower and by disbursing such
funds as indicated in writing in the related Loan Request furnished prior to or,
if applicable, on the date such Loans are proposed to be made.
SECTION 1.05. PREPAYMENTS AND TERMINATION OR REDUCTION OF THE COMMITMENTS.
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(A) VOLUNTARY REDUCTIONS AND RELATED PREPAYMENTS. At any time prior to the
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Maturity Date, as the case may be, upon at least three (3) Business Days'
written notice to the
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Agent (each, a "Commitment Reduction Notice"), the Borrower may permanently
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terminate or permanently reduce any of the Commitments, without penalty or
premium, provided as follows:
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(i) any such reduction shall be in an aggregate amount of not less
than $250,000 or, if greater, an integral multiple of $250,000;
(ii) any such reduction shall apply to each Lender's Commitment pro
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rata as provided in SECTION 1.13;
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(iii) simultaneously with each such reduction, the Borrower (A) shall
pay to the Agent, for the ratable account of each Lender, any then accrued
unpaid Commitment Fees on the terminated or reduced portion of the
respective Commitments, (B) shall repay such amount, if any, of the
aggregate principal amount of the Notes as shall be required to cause the
outstanding principal balance thereunder to be less than or equal to the
aggregate Commitments after giving effect to such reductions, and (C) shall
pay any indemnification payments due in accordance with SECTION 1.10 in
respect of LIBOR Loans so prepaid.
Each Commitment Reduction Notice shall specify the date fixed for such
termination or reduction, the aggregate principal amount thereof and the
aggregate principal amount of the Notes, if any, required to be repaid hereunder
on such date.
(B) MANDATORY COMMITMENT REDUCTIONS AND PREPAYMENTS; INSURED EVENTS.
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(i) Subject to the provisions of SECTION 6.02, within one hundred
eighty (180) days following the receipt by the Borrower or any of the
Subsidiaries of the proceeds of insurance, condemnation award or other
compensation in respect of any Casualty Event (the "Restoration Period")
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(or upon such earlier date following the receipt of such proceeds, as the
Borrower or any Subsidiary shall have determined not to restore, repair or
replace the asset or property affected by such Casualty Event), which
proceeds, have not been applied to the restoration, repair or replacement
of the assets or properties affected by such Casualty Events, the Borrower
shall prepay the Notes and/or permanently reduce the Commitments in the
aggregate amount of such proceeds, all as provided in SECTION 1.05(F).
Nothing in this SECTION 1.05(B) shall be deemed (i) to limit any obligation
of the Companies pursuant to the Security Agreements to remit to the
Collateral Account the proceeds of insurance, condemnation award or other
compensation received in respect of any Casualty Event, (ii) to obligate
the Agent to release any of such proceeds from the Collateral Account to
the Borrower or any Subsidiary during the existence of any Default or (iii)
to require the Borrower or Lenders to apply Insurance Proceeds in the
Collateral Account to prepayment of the Notes pending completion of
repairs, replacements and restoration initiated within the Restoration
Period.
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(C) MANDATORY COMMITMENT REDUCTIONS AND PREPAYMENTS; EXCESS CASH FLOW. On
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April 30 of each year, commencing April 30, 2001, the Borrower shall prepay the
Notes and reduce the Commitments, all as provided in SECTION 1.05(F), in an
aggregate amount equal to the percentage of Excess Cash Flow for the immediately
preceding calendar year determined as provided in the following table, which
percentage shall be based upon the ratio of Total Funded Debt as of December 31
of the preceding calendar year to Annualized Operating Cash Flow for the three
months ended on December 31 of the preceding calendar year.
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RATIO OF TOTAL FUNDED DEBT TO
OPERATING CASH FLOW AS OF PERCENTAGE OF EXCESS
DECEMBER 31 CASH FLOW REQUIRED TO BE
OF PRECEDING YEAR USED FOR PREPAYMENT
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Greater than 3.00:1.00 50%
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Less than or equal to 3.00:1.00 0%
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(D) MANDATORY COMMITMENT REDUCTIONS AND PREPAYMENTS; DISPOSITIONS OF
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ASSETS. Without limiting the obligation of the Borrower under SECTION 7.03 to
obtain the consent of the Lenders to any Disposition not otherwise permitted
hereunder, the Borrower agrees (i) three (3) Business Days prior to the
occurrence of any disposition of assets or properties by any Company, other than
as permitted under SECTION 7.03, to deliver to the Agent (in sufficient copies
for each Lender) a statement, certified by an Authorized Officer and in
reasonable detail, of the estimated amount of the Net Sale Proceeds of such
Disposition and (ii) that in the event such Disposition is completed, the
Borrower shall prepay the Notes and/or permanently reduce the Commitments in the
amount of such Net Sale Proceeds, as provided in SECTION 1.06(F) and as follows:
(A) on the date of such Disposition, in an aggregate amount equal to
100% of the Net Sale Proceeds of such Disposition received by any Company
on the date of such Disposition; and
(B) thereafter, to the extent any Company shall receive Net Sale
Proceeds under deferred payment arrangements or investments entered into or
received in connection with any Disposition, an amount equal to one hundred
percent (100%) of the aggregate amount of such deferred Net Sale Proceeds,
payable within two (2) Business Days after such Company receives such
funds, in each case reduced until the Commitments and any outstanding Loans
under the Notes are reduced to zero.
(E) MANDATORY COMMITMENT REDUCTIONS AND PREPAYMENTS; EQUITY ISSUANCES.
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Upon any issuance of additional Equity Securities of any Company for cash
consideration (other
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than with respect to the Equity Financing and with respect to issuances of
shares of the Parent's common stock upon the exercise of options granted under
the Plan), the Borrower shall prepay the Notes and permanently reduce the
Commitments in the aggregate amount equal to the net proceeds, all as provided
in SECTION 1.05(F), until the Commitments and any outstanding Loans under the
Notes are reduced to zero.
(F) APPLICATION OF REDUCTIONS OF THE COMMITMENTS AND PREPAYMENTS/
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COMMITMENT REDUCTION.
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(i) The prepayment that is to be made hereunder upon the occurrence
of any of the events described in SECTIONS 1.05(A) through 1.05(E) shall be
applied to permanently reduce the Commitments and pay the Notes until the
Commitments are reduced to $0 and are terminated and the Notes are paid in
full; and
(ii) Simultaneously with the termination or reduction of the
Commitments under any of the foregoing provisions of this SECTION 1.05, the
Borrower (A) shall pay to the Agent, for the ratable account of each
Lender, any then accrued unpaid Commitment Fee on the reduced portion of
such Commitments, and (B) shall repay such amount, if any, of the aggregate
principal amount of the Notes as shall cause the balance outstanding
thereunder to be less than or equal to the aggregate Commitments, after
giving effect to such termination or reduction.
(iii) All voluntary and mandatory prepayments of the Notes under the
foregoing provisions of this SECTION 1.05 (A) shall be made without set-
off, deduction or counterclaim, (B) shall be accompanied by any
indemnification payments due in accordance with SECTION 1.10 in respect of
LIBOR Loans and (C) unless otherwise specified in this SECTION 1.05, shall
be applied first, to overdue interest, fees and expenses hereunder and
-----
second, to pay installments of principal of the Notes, in the inverse order
------
of maturity (if applicable), provided, in each case, that (x) payments of
--------
principal, interest, fees and expenses of the Notes shall be applied to the
Lenders' respective Notes pro rata as provided in SECTION 1.13, unless
--- ----
otherwise agreed to by the Lenders, and (y) applications of prepayments to
principal shall be made first to Base Rate Loans and then to LIBOR Loans.
SECTION 1.06. FEES.
------------ ----
(a) The Borrower shall pay to the Agent, for the ratable account of each
Lender, a non-refundable fee (the "Commitment Fee") on the aggregate daily
--------------
unutilized portion of the Commitments, from the Closing Date to and including
the earlier of the termination thereof or the Maturity Date, at the rate of
0.50% per annum computed on the basis of the actual number of days elapsed over
--- -----
a 360-day year), payable quarterly in arrears on each Quarterly Date, commencing
December 31, 1998, without setoff, deduction or counterclaim, with a final
payment on the termination date thereof or, if earlier, the maturity of the
Notes, whether by payment, prepayment, acceleration or otherwise.
9
(b) The Borrowers shall pay to the Lenders certain fees in the amounts
specified in the respective Fee Letters.
SECTION 1.07. REQUIREMENTS OF LAW.
------------ -------------------
(a) In the event that any Regulatory Change shall:
(i) change the basis of taxation of any amounts payable to any
Lender under this Agreement or the Notes in respect of any Loans, including
without limitation LIBOR Loans (other than taxes imposed on the net income of
such Lender);
(ii) impose or modify any reserve, compulsory loan assessment,
special deposit or similar requirement relating to any extensions of credit or
other assets of, or any deposits with or other liabilities of, any applicable
office of such Lender (including any of such Loans or any deposits referred to
in the definition of "LIBOR Base Rate" in Article XI); or
(iii) impose any other conditions affecting this Agreement in respect
of Loans, including without limitation LIBOR Loans (or any of such extensions of
credit, assets, deposits or liabilities);
and the result of any of the foregoing shall be to increase such Lender's costs
of making or maintaining any Loans, including without limitation LIBOR Loans or
any Commitment, or to reduce any amount receivable by such Lender hereunder in
respect of any of its LIBOR Loans or any Commitment, in each case only to the
extent that such additional amounts are not included in the LIBOR Base Rate or
Base Rate applicable to such Loans, then the Borrower shall pay on demand to
such Lender, through the Agent, and from time to time as specified by such
Lender, such additional amounts as such Lender shall reasonably determine are
sufficient to compensate such Lender for such increased cost or reduced amount
receivable.
(b) If at any time after the date of this Agreement any Lender shall have
determined that the applicability of any law, rule, regulation or guideline
adopted after the Closing Date pursuant to, or arising after the Closing Date
out of, the July 1988 report of the Basle Committee on Lending Regulations and
Supervisory Practices entitled "International Convergence of Capital Measurement
and Capital Standards", or the adoption or implementation after the Closing Date
of any other Regulatory Change regarding capital adequacy or any change after
the Closing Date in the interpretation or administration thereof by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof (whether or not having the force of
law), has or will have the effect of reducing the rate of return on such
Lender's capital or on the capital of such Lender's holding company, if any, as
a consequence of the existence of its obligations hereunder to a level below
that which such Lender or its holding company could have achieved but for such
adoption, change or compliance (taking into consideration such Lender's policies
with respect to capital adequacy) by an amount reasonably deemed by such Lender
to be material, then from time to time following written notice by such
10
Lender to the Borrower as provided in paragraph (c) of this Section, within
fifteen (15) days after demand by such Lender, the Borrower shall pay to such
Lender, through the Agent, such additional amount or amounts as such Lender
shall reasonably determine will compensate such Lender or such corporation, as
the case may be, for such reduction, provided that to the extent that any or all
of the Borrower's liability under this Section arises following the date of the
adoption of any such Regulatory Change (the "Effective Date"), such compensation
--------------
shall be payable only with respect to that portion of such liability arising
after notice of such Regulatory Change is given by such Lender to the Borrower
(unless such notice is given within sixty (60) days after the Effective Date, in
which case such compensation shall be payable in full).
(c) If any Lender becomes entitled to claim any additional amounts pursuant
to this Section, it shall promptly notify the Borrower of the event by reason of
which it has become so entitled. A certificate setting forth in reasonable
detail the computation of any additional amounts payable pursuant to this
Section submitted by such Lender to the Borrower shall be delivered to the
Borrower and the other Lenders promptly after the incurrence of such additional
amounts and shall be presumed correct in the absence of manifest error. The
covenants contained in this Section shall survive the termination of this
Agreement and the payment of the outstanding Notes. No failure on the part of
any Lender to demand compensation under paragraph (a) or (b) above on any one
occasion shall constitute a waiver of its rights to demand compensation on any
other occasion. The protection of this Section shall be available to each
Lender regardless of any possible contention of the invalidity or
inapplicability of any law, regulation or other condition which shall give rise
to any demand by such Lender for compensation thereunder. In the event that any
of the losses or payments for which any Lender or its holding company is
compensated under this SECTION 1.07 are reimbursed or otherwise restored to such
Lender or its holding company for any reason, including the rescission,
nullification or retroactive modification of any such Regulatory Change, such
Lender shall reimburse the Borrower accordingly as soon as reasonably
practicable.
SECTION 1.08. LIMITATIONS ON LIBOR LOANS; ILLEGALITY.
------------ --------------------------------------
(a) Anything herein to the contrary notwithstanding, if, on or prior to the
determination of an interest rate for any LIBOR Loans for any applicable
Interest Period, the Agent shall determine (which determination shall be
conclusive absent manifest error) that:
(i) by reason of any event affecting United States money markets or
the London interbank market, quotations of interest rates for the relevant
deposits are not being provided in the relevant amounts or for the relevant
maturities for purposes of determining the rate of interest for such Loans
under this Agreement; or
(ii) the rates of interest referred to in the definition of "LIBOR Base
----------
Rate" in ARTICLE XI, on the basis of which the rate of interest on any
----
LIBOR Loans for such period is determined, do not accurately reflect the
cost to the Lenders of making or maintaining such LIBOR Loans for such
period;
11
then the Agent shall give the Borrower prompt notice thereof (and shall
thereafter give the Borrower prompt notice of the cessation, if any, of such
condition), and so long as such condition remains in effect, the Lenders shall
be under no obligation to make LIBOR Loans or to convert Base Rate Loans into
LIBOR Loans and the Borrower shall, at its sole discretion, on the last day(s)
of the then current Interest Period(s) for any outstanding LIBOR Loans, either
prepay such LIBOR Loans in accordance with SECTION 1.05 or convert such Loans
into Base Rate Loans in accordance with SECTION 1.03.
(b) Notwithstanding any other provision herein, if for any reason a Lender
shall be unable to make or maintain LIBOR Loans as contemplated by this
Agreement, such Lender shall provide prompt written notice to the Borrower and
(i) such Lender's commitment hereunder to make LIBOR Loans, continue LIBOR Loans
as such and convert Base Rate Loans to LIBOR Loans shall thereupon terminate
(subject to reinstatement by such Lender at any such time as this Section shall
no longer preclude LIBOR lending by such Lender) and (ii) such Lender's Loans
then outstanding as LIBOR 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 LIBOR Loan occurs on a day which is not the last day of
the then current Interest Period with respect thereto, and if the reason for
such Lender's inability to make or maintain LIBOR Loans as contemplated by this
Agreement is a Regulatory Change, then the Borrower shall pay to such Lender
such amounts, if any, as may be required pursuant to SECTION 1.10.
SECTION 1.09. TAXES.
------------ -----
(a) All payments made by the Borrower under this Agreement and the Notes
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 (all such
taxes, levies, imposts, duties, charges, fees, deductions and withholdings being
hereinafter called "Taxes"); provided, however, that the term "Taxes" shall not
----- -------- -------
include net income taxes, franchise taxes (imposed in lieu of net income taxes)
and general intangibles taxes (such as those imposed by the State of Florida)
imposed on the Agent or any Lender, as the case may be, as a result of a present
or former connection or nexus between the jurisdiction of the government or
taxing authority imposing such tax (or any political subdivision or taxing
authority thereof or therein) and the Agent or such Lender other than that
arising solely from the Agent or such Lender having executed, delivered or
performed its obligations or received a payment under, or enforced, this
Agreement, the Notes or any of the Security Documents. If any Taxes are
required to be withheld from any amounts payable to the Agent or any Lender
hereunder or under the Notes, the amounts so payable to the Agent or such Lender
shall be increased to the extent necessary to yield to the Agent or such Lender
(after payment of all Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Agreement and the
Notes. Whenever any Taxes are payable by the Borrower in respect of this
Agreement or the Notes, as promptly as possible thereafter the Borrower shall
send to the Agent for its own account or for the account of such Lender, as the
case may be, a certified copy of an original official receipt received by the
Borrower showing payment thereof.
12
If the Borrower fails to pay any Taxes when due to the appropriate taxing
authority or fails to remit to the Agent the required receipts or other required
documentary evidence, the Borrower shall indemnify the Agent and the Lenders for
any incremental taxes, interest or penalties that may become payable by the
Agent or any Lender as a result of any such failure. If, after any payment of
Taxes by the Borrower under this Section, any part of any Tax paid by the Agent
or any Lender is subsequently recovered by the Agent or such Lender, the Agent
or such Lender shall reimburse the Borrower to the extent of the amount so
recovered. A certificate of an officer of the Agent or such Lender setting forth
the amount of such recovery and the basis therefor shall, in the absence of
manifest error, be conclusive. The Agent and the Lenders shall use reasonable
efforts to notify the Borrower of (i) unpaid Taxes, if any, owed by the Borrower
which are subject to this Section and (ii) the attempts by the Agent and the
Lenders, if any, to obtain abatements of any such Taxes and the receipt by the
Agent or the Lenders of any funds in connection therewith. The agreements in
this subsection shall survive the termination of this Agreement and the payment
of the Notes and all other amounts payable hereunder.
(b) Each Lender, if any, that is not incorporated under the laws of the
United States or a state thereof agrees that, prior to the first date as of
which any payment is required to be made to it hereunder, it will deliver to the
Borrower and the Agent (i) two duly completed copies of United States Internal
Revenue Service Form 1001 or 4224 or successor applicable form, as the case may
be, and (ii) an Internal Revenue Service Form W-8 or W-9 or successor applicable
form. Each such Lender also agrees to deliver to the Borrower and the Agent two
further copies of the said Form 1001 or 4224 and Form W-8 or W-9, or successor
applicable forms or other manner of certification, as the case may be, on or
before the date that any such form expires or becomes obsolete or after the
occurrence of any event requiring a change in the most recent form previously
delivered by it to the Borrower, and such extensions or renewals thereof as may
reasonably be requested by the Borrower or the Agent, unless in any such case an
event (including, without limitation, any change in treaty, law or regulation)
has occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent such
Lender from duly completing and delivering any such form with respect to it and
such Lender so advises the Borrower and the Agent. Such Lender shall certify
(x) in the case of a Form 1001 or 4224, that it is entitled to receive payments
under this Agreement without deduction or withholding of any United States
federal income taxes and (y) in the case of a Form W-8 or W-9, that it is
entitled to an exemption from United States backup withholding tax.
SECTION 1.10. INDEMNIFICATION. The Borrower shall pay to the Agent, for
------------ ---------------
the account of each Lender, upon the request of such Lender delivered to the
Agent and thereafter delivered by the Agent to the Borrower, such amount or
amounts as shall compensate such Lender for any direct loss, cost or expense
actually incurred by such Lender (as such amount is reasonably determined by
such Lender) as a result of:
(a) any payment or prepayment or conversion of any LIBOR Loan held by such
Lender on a date other than the last day of the Interest Period for such LIBOR
Loan (including without limitation any such payment, prepayment or conversion
required under SECTION 1.03 or 1.05); or
13
(b) any failure by the Borrower to borrow, convert into or continue a LIBOR
Loan on the date for such borrowing specified in the relevant Loan Request or
Interest Rate Option Notice under SECTION 1.03 or otherwise.
Such indemnification shall include an amount equal to the excess, if any,
of (i) the amount of interest which 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) which
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. This covenant shall survive the termination of this Agreement and the
payment of the Loans and all other amounts payable hereunder. The determination
by each such Lender of the amount of any such loss or expense, when set forth in
a written notice delivered to the Agent (and thereafter delivered by the Agent
to the Borrower), containing such Lender's calculation thereof in reasonable
detail, shall be presumed correct in the absence of manifest error.
SECTION 1.11. PAYMENTS UNDER THE NOTES. All payments and prepayments made
------------ ------------------------
by the Borrower of principal of, and interest on, the Notes and other sums and
charges payable under this Agreement, including without limitation the
Commitment Fee and any payments under SECTIONS 1.07, 1.09 and 1.10, shall be
made in immediately available funds to the Agent (as specified in SECTION 14.03)
for the accounts of the Lenders as provided in SECTION 1.13 and otherwise herein
or in the Fee Letter, not later than 2:00 P.M. (Boston time), on the date on
which such payment shall become due. The failure by the Borrower to make any
such payment by such hour shall not constitute a default hereunder so long as
payment is received later that day, provided that any such payment made after
2:00 P.M. (Boston time), on such due date shall be deemed to have been made on
the next Business Day for the purpose of calculating interest on amounts
outstanding on the Notes. The Borrower shall, at the time of making each
payment under this Agreement or the Notes, specify to the Agent the Notes or
amounts payable by the Borrower hereunder to which such payment is to be applied
(and in the event that it fails to so specify, or if an Event of Default has
occurred and is continuing, the Agent may distribute such payments in such
manner as the Required Lenders may direct or, absent such direction, as it
determines to be appropriate, subject to the provisions of SECTION 1.13).
Except as otherwise provided in the definition of "Interest Period" with respect
to LIBOR Loans, if any payment hereunder or under the Notes shall be due and
payable on a day that is not a Business Day, such payment shall be deemed due on
the next following Business Day and interest shall be payable at the applicable
rate specified herein through such extension period. The Agent, or any Lender
for whose account any such payment is made, may (but shall not be obligated to)
debit the amount of any such payment which is not made by such time to any
deposit account of the Borrower with the Agent or such Lender, as the case may
be. Each payment received by the Agent under this Agreement or any Note for the
account of a Lender shall be paid promptly to such Lender, in
14
immediately available funds, for the account of such Lender for the Note in
respect to which such payment is made.
SECTION 1.12. SET-OFF, ETC. The Borrower agrees that, in addition to (and
------------ ------------
without limitation of) any right of set-off, bankers' lien or counterclaim a
Lender may otherwise have, each Lender shall be entitled, at its option, to
offset balances held by it (other than accounts as to which the Borrower is
acting solely as a fiduciary) for the account of the Borrower at any of its
offices, in Dollars or in any other currency, against any principal of or
interest on the Notes held by such Lender or other fees or charges owed to such
Lender hereunder that are not paid when due (regardless of whether such balances
are then due to the Borrower), in which case it shall promptly notify the
Borrower and the Agent thereof, provided that such Lender's failure to give such
notice shall not affect the validity thereof and (as security for any
Indebtedness hereunder) the Borrower hereby grants to the Agent and the Lenders
a continuing security interest in any and all balances, credit, deposits,
accounts or moneys of the Borrower maintained with the Agent and any Lender now
or hereafter (other than accounts as to which the Borrower is acting solely as a
fiduciary). If a Lender shall obtain payment of any principal, interest or
other amounts payable under this Agreement through the exercise of any right of
set-off, banker's lien or counterclaim or otherwise, it shall promptly purchase
from the other Lenders participations in (or, if and to the extent specified by
such Lender, direct interests in) the Note(s) held by the other Lenders in such
amounts, and make such other adjustments from time to time as shall be
equitable, to the end that all the Lenders shall share the benefit of such
payment (net of any expenses which may be incurred by such Lender in obtaining
or preserving such benefit) pro rata in accordance with the unpaid principal
--- ----
amounts of and interest on the Note(s) held by each of them. To such end, the
Lenders shall make appropriate adjustments among themselves (by the resale of
participations sold or otherwise) if such payment is rescinded or must otherwise
be restored. The Borrower agrees that any Lender or any other Person that
purchases a participation (or direct interest) in the Note(s) held by any or all
of the Lenders (each being hereinafter referred to as a "Participant") may
-----------
exercise all rights of set-off, bankers' lien, counterclaim or similar rights
with respect to such participation as fully as if such Participant were a direct
holder of Notes in the amount of such participation. Nothing contained herein
shall be deemed to require any Participant to exercise any such right or shall
affect the right of any Participant to exercise, and retain the benefits of
exercising, any such right with respect to any indebtedness or obligation of the
Borrower, other than the Borrower's indebtedness and obligations under this
Agreement.
SECTION 1.13. PRO RATA TREATMENT; SHARING.
------------- ---------------------------
(a) Except to the extent otherwise provided herein: (i) each borrowing
from the Lenders under the Commitments shall be made from the Lenders, each
payment of the Commitment Fee shall be made to the Lenders and each reduction of
the Commitments shall be applied to the Notes held by the Lenders pro rata
--- ----
according to the amounts of their respective unused Commitments; (ii) without
limiting the generality of clause (i) above, the principal amount of LIBOR Loans
made by each Lender shall be determined on a pro rata basis in accordance with
--- ----
its respective Commitment or the outstanding principal amounts of the Loans owed
to such Lender (in the case of conversions to or continuations of Loans as LIBOR
Loans); (iii) each payment and prepayment of principal of the Notes shall be
made to the Lenders pro rata
--- ----
15
in accordance with the respective unpaid principal amounts of the respective
Notes held by the Lenders; (iv) each payment of interest on the Notes shall be
made for the accounts of the Lenders and each payment of the Commitment Fee or
any other sums and charges payable under this Agreement (except for fees payable
in accordance with the Fee Letters, which are payable as provided thereunder)
shall be made to the Lenders pro rata in accordance with the respective unpaid
--- ----
principal amounts of, and interest on, the related Loans made by each of them
(calculated, as applicable, for each day of the relevant payment period); (v)
each payment under SECTION 1.07, 1.09 or 1.10 shall be made to each Lender in
the amount required to be paid to such Lender pursuant to such Section for
losses suffered or costs incurred by such Lender; and (vi) each distribution of
cash, property, securities or other value received by any Lender, directly or
indirectly, in respect of the Borrower's Indebtedness hereunder, whether
pursuant to any attachment, garnishment, execution or other proceedings for the
collection thereof or pursuant to any bankruptcy, reorganization, liquidation or
other similar proceeding, after payment of collection and other expenses as
provided herein and in the Security Documents, shall be apportioned among the
Lenders pro rata in accordance with the respective unpaid principal amounts of
--- ----
of and interest on the Notes held by each of them.
(b) Notwithstanding the foregoing, if any Lender (a "Recovering Party")
----------------
shall receive any distribution of the type referenced in SECTION 1.13(A)(VI) (a
"Recovery") in respect thereof, such Recovering Party shall pay to the Agent for
--------
distribution to the Lenders as set forth herein their respective pro rata shares
--- ----
of such Recovery, as set forth herein, unless the Recovering Party is legally
required to return any Recovery, in which case each party receiving a portion of
such Recovery shall return to the Recovering Party its pro rata share of the sum
--- ----
required to be returned without interest. For purposes of this Agreement,
calculations of the amount of the pro rata share of each Lender shall be rounded
--- ----
to the nearest whole dollar.
(c) The Borrower acknowledges and agrees that, if any Recovering Party
shall be obligated to pay to the other Lenders a portion of any Recovery
pursuant to SECTION 1.13(B) and shall make such recovery payment, the Borrower
shall be deemed to have satisfied its obligations in respect of Indebtedness
held by such Recovering Party only to the extent of the Recovery actually
retained by such Recovering Party after giving effect to the pro rata payments
--- ----
by such Recovering Party to the other Lenders. The obligations of the Borrower
in respect of Indebtedness held by each other Lender shall be deemed to have
been satisfied to the extent of the amount of the Recovery distributed to each
such other Lender by the Recovering Party.
SECTION 1.14. NON-RECEIPT OF FUNDS BY THE AGENT. Unless the Agent shall
------------ ---------------------------------
have been notified in writing by a Lender or the Borrower prior to one (1)
Business Day before the time at which such Lender or the Borrower is scheduled
to make payment to the Agent of (in the case of a Lender) the proceeds of a Loan
to be made by it hereunder or (in the case of the Borrower) a payment to the
Agent for the account of any or all of the Lenders hereunder (such payment being
herein referred to as a "Required Payment"), which notice shall be effective
----------------
upon actual receipt, that it does not intend to make such Required Payment to
the Agent, the Agent may (but shall not be required to) assume that the Required
Payment has been made and may (but shall not be required to), in reliance upon
such assumption, make the amount thereof available to the intended recipient(s)
on such date and, if such Lender or the Borrower (as the case may be) has not in
fact
16
made the Required Payment to the Agent, the recipient(s) of such payment shall,
on demand, or with respect to payment received by the Borrower, within three (3)
Business Days after such receipt repay to the Agent for the Agent's own account
the amount so made available together with interest thereon in respect of each
day during the period commencing on the date such amount was so made available
by the Agent until the date the Agent recovers such amount at a rate per annum
equal to (a) the Federal Funds Rate for such day, with respect to interest paid
by such Lender, or (b) the applicable rate provided under SECTION 1.02, with
respect to interest paid by the Borrower.
SECTION 1.15. REPLACEMENT OF NOTES. Upon receipt of evidence reasonably
------------ --------------------
satisfactory to the Borrower of the loss, theft, destruction or mutilation of
any Note and (a) in the case of any such loss, theft or destruction, upon
delivery of an indemnity agreement reasonably satisfactory to the Borrower
(without need to post bond or any other security with respect thereto), or (b)
in the case of any such mutilation, upon the surrender of such Note for
cancellation, the Borrower will execute and deliver, in lieu of such lost,
stolen, destroyed, or mutilated Note, a new Note of like tenor.
II. SECURITY; SUBORDINATION; USE OF PROCEEDS
-----------------------------------------
SECTION 2.01. SECURITY FOR THE OBLIGATIONS; SUBORDINATION; ETC.
------------ ------------------------------------------------
(a) Except as specified in SCHEDULE 2.01 attached hereto, the Borrower's
-------------
obligations hereunder, under the Notes and in respect of any Rate Hedging
Obligations entered into with any of the Lenders or any Hedging Lenders shall be
secured at all times, by:
(i) the unlimited guaranty of the Parent and each Subsidiary of the
Borrower, if any;
(ii) a first priority perfected security interest in and lien upon all
presently owned and hereafter acquired tangible and intangible personal
property and fixtures of each of the Companies (including, without
limitation, and any intercompany notes), subject only to any prior Liens
expressly permitted under this Agreement;
(iii) to the extent requested by the Agent, first Mortgages on all
hereafter acquired real estate owned by each of the Companies, subject only
to any prior Liens expressly permitted under this Agreement, together with
mortgagee's title insurance policies acceptable to the Agent;
(iv) to the extent requested by the Agent, first priority perfected
collateral assignments of or leasehold mortgages on all real estate leases
in which any of the Companies now has or may in the future have an interest
and such third party consents, lien waivers, non-disturbance agreements and
estoppel certificates as the Agent shall reasonably require, together with
mortgagee's title insurance policies acceptable to the Agent;
17
(v) a first priority perfected collateral assignment and/or pledge of
all of the issued and outstanding Equity Securities of the Parent (except
for up to 6% of the Parent's common stock or options therefor issued to
employees of the Borrower in accordance with the Plan), the Borrower and
each Subsidiary, and all warrants, options and other rights to purchase
such ownership interests or capital stock; and
(vi) subject to the provisions of SECTION 6.01(C), first priority
perfected collateral assignments of all such stock and asset purchase
agreements, and such other management agreements, co-location agreements, line
access agreements and other licenses, permits and authorizations to which any of
the Companies is a party as the Agent shall reasonably deem necessary to protect
the interests of the Lenders, together with such third party consents, lien
waivers and estoppel certificates as the Agent shall reasonably require.
(B) SUBORDINATION. All existing and hereafter arising indebtedness and
-------------
other obligations, including, without limitation, any obligations to pay
dividends or to make any other distributions, of each Company to their
respective Affiliates shall be subordinated to the Obligations of the Companies
pursuant to subordination agreements (the "Affiliate Subordination Agreements")
----------------------------------
or other Security Documents satisfactory in form and substance to the Required
Lenders and to the Agent's counsel, in their sole and absolute discretion.
(C) SECURITY DOCUMENTS. All agreements and instruments described or
------------------
contemplated in this SECTION 2.01, together with any and all other agreements
and instruments heretofore or hereafter securing the Notes and the Borrower's
obligations hereunder or otherwise executed in connection with this Agreement,
are sometimes hereinafter referred to collectively as the "Security Documents"
------------------
and each individually as a "Security Document". The Borrower agrees to take
-----------------
such action as the Lenders may reasonably request from time to time in order to
cause the Agent and the Lenders to be secured at all times as described in this
Section.
SECTION 2.02. USE OF PROCEEDS; SCHEDULE OF SOURCES AND USES.
------------ ---------------------------------------------
The proceeds of the Loans shall be used by the Borrower (a) to make Capital
Expenditures, (b) to fund its Total Debt Service, (c) to make Permitted
Acquisitions and (d) for working capital.
III. CONDITIONS OF MAKING THE LOANS
------------------------------
SECTION 3.01. CONDITIONS TO THE INITIAL LOANS. The obligations of the
------------ -------------------------------
Lenders to enter into this Agreement and to make the initial Loans to the
Borrower on the Closing Date are subject to the following conditions:
(A) REPRESENTATIONS AND WARRANTIES. The representations and warranties of
------------------------------
the Borrower and its Affiliates set forth in this Agreement and in the Loan
Documents shall be true
18
and correct in all material respects on and as of the date hereof and on the
Closing Date and the Borrower shall have performed all obligations that were to
have been performed by it hereunder prior to the Borrowing Date of such Loans.
(B) LOAN DOCUMENTS AND ORGANIZATIONAL DOCUMENTS. On or before the Closing
-------------------------------------------
Date, the Borrower shall have executed and/or delivered to the Agent (or shall
have caused to be executed and delivered to the Agent by the appropriate
Persons), the following:
(i) The Notes;
(ii) All of the Security Documents, including without limitation all
Uniform Commercial Code Financing Statements and Termination Statements and
(except as provided in SCHEDULE 2.01) all lessor consents and waivers, required
-------------
by the Agent or its counsel in connection with the Borrower's compliance with
the provisions of SECTION 2.01;
(iii) Certified copies of the resolutions of the Board of Directors of
each Company, authorizing the execution and delivery of the Loan Documents to
which it is a party;
(iv) A copy of the certificate or articles of incorporation of each
Company, with any amendments thereto, certified by the appropriate Secretary of
State and by the Secretary or an Assistant Secretary of such Company;
(v) For each Company, certificates of legal existence and good
standing issued as of a reasonably recent date by such Company's state of
organization or formation and any other state in which such Company is
authorized or qualified to transact business;
(vi) No later than three (3) Business Days prior to the Closing Date,
to the extent requested by the Agent, copies of all material governmental
licenses, franchises and permits, and all other material leases, contracts,
agreements, instruments and other documents specified in SCHEDULES 4.04, 4.06,
---------------------
4.08, 4.09 and 4.17;
---------- ----
(vii) Such Uniform Commercial Code, Federal tax lien and judgment
searches with respect to the Companies as are requested by the Agent, the
results thereof to be satisfactory to the Agent ("Lien Searches");
-------------
(viii) The Opening Balance Sheet;
(ix) Certificates of insurance evidencing the insurance coverage and
policy provisions required in this Agreement; and
19
(x) Such other supporting documents and certificates as the Agent or
the Lenders may reasonably request from time to time.
(C) OFFICER'S CERTIFICATES AS TO COMPLIANCE, ETC. The Borrower shall have
--------------------------------------------
provided to the Agent an officer's certificate, in substantially the form of
SCHEDULE 3.01(C), executed on behalf of the Borrower by an Authorized Officer,
----------------
with his or her signature certified as provided therein.
(D) COMPANIES' COUNSEL OPINIONS. The Agent shall have received the
---------------------------
favorable written opinion of general counsel to the Parent and the Borrower,
dated as of the Closing Date, addressed to the Agent and the Lenders and
reasonably satisfactory to the Agent in scope and substance.
(E) EQUITY FINANCING. The Lenders shall have received evidence that the
----------------
Borrower has received cash equity contributions prior to the Closing Date from
the Equity Investors, which when combined with the outstanding principal balance
of the Subordinated Debt, equals an amount of not less than $9,333,333 in the
aggregate and evidence of the Equity Investors' obligation to make additional
cash equity contributions to the Borrower of at least $666,666.67 on or before
March 31, 1999 (the financing described in this Section 3.01(e) is referred to
as the "Equity Financing"). Such evidence may include, without limitation,
----------------
evidence of the Parent having entered into the Stock Purchase Agreement and
consummated the initial closing thereunder pursuant to which certain Equity
Investors shall have (i) converted existing promissory notes and (ii)
contributed an additional $533,333.33 in cash to Parent (and the Parent in turn
having contributed such proceeds to the Borrower), in exchange for additional
Equity Securities of the Parent that are pledged to the Lenders in accordance
with Section 2.01, and certain other Equity Investors shall have committed to
contribute to the Parent in cash an additional $666,666.67 (which proceeds shall
be contributed by the Parent to the Borrower) on or before March 31, 1999 in
exchange for additional Equity Securities of the Parent. The Borrower shall
have certified to such effect in the certificate referred to in paragraph (c)
above.
(F) CLOSING LEVERAGE. After giving effect to such Loans, the ratio of (i)
----------------
Total Funded Debt as of the Closing Date to (ii) Operating Cash Flow for the
three months ended July 31, 1998 multiplied by four ("Closing Leverage") shall
----------------
be less than or equal to 6.00:1.00 and the Agent shall have received
satisfactory evidence (including detailed calculations) to such effect.
(G) NO MATERIAL ADVERSE CHANGE. Since December 31, 1997, no event or
--------------------------
circumstance shall have occurred that could reasonably be expected to have a
Material Adverse Effect.
(H) LEGAL AND OTHER FEES. As of the Closing Date, all fees owed to the
--------------------
Agent and the Lenders, including documented legal fees and out-of-pocket
expenses incurred through such date shall have been paid in full.
SECTION 3.02. ALL LOANS. The obligations of the Lenders to make any Loans
------------ ---------
or to permit the Conversion are subject to the following conditions:
20
(a) All warranties and representations set forth in this Agreement shall be
true and correct in all material respects as of the date such Loans are made,
except to the extent they relate specifically to an earlier date or are affected
by transactions occurring after the date hereof and permitted hereunder;
(b) No Default or Event of Default shall have occurred and be continuing;
and
(c) After giving effect to such Loans, no event or circumstances shall have
occurred that has had or could reasonable be expected to have a Material Adverse
Effect.
Each telephonic or written request for such Loans shall constitute a
representation to such effect as of the date of such request and as of the date
of such borrowing.
(d) The Agent shall have received a properly completed Loan Request,
together with all such certified financial calculations as the Agent shall
reasonably require to substantiate the current and pro forma certifications of
--- -----
no Default contained therein.
(e) The Agent shall have received such other supporting documents and
certificates as the Agent and the Required Lenders may reasonably request.
SECTION 3.03. LENDER APPROVALS. For purposes of determining compliance
------------ ----------------
with the conditions precedent referred to in SECTIONS 3.01 and 3.02, as of the
date hereof or, with respect to Loans made hereafter, as of the Borrowing Date
of such Loans, each of the Lenders shall be deemed to have consented to,
approved or accepted or be satisfied with each document or other matter which is
the subject of such Lender's consideration under any of the provisions of such
Sections, unless an officer of the Agent responsible for the transactions
contemplated by the Loan Documents shall have received written notice from such
Lender prior to the date hereof or the applicable Borrowing Date, as the case
may be, specifying its objection thereto and such Lender shall have failed to
execute and deliver this Agreement or to make available to the Agent such
Lender's ratable share of such Loans, as the case may be.
IV. REPRESENTATIONS AND WARRANTIES. The Borrower represents and warrants
------------------------------
to the Lenders as set forth below. Such representations and warranties
are, unless otherwise specified, made as of the date hereof and shall survive
the delivery of the Notes and the making of the Loans.
SECTION 4.01. FINANCIAL STATEMENTS. The Borrower has heretofore furnished
------------ --------------------
to the Lenders:
(a) (i) the Borrower's audited balance sheets dated as of December 31,
1996 and December 31, 1997 and the related statements of operations,
stockholders' equity and cash flow for the fiscal year then ended, and (ii) the
Borrower's unaudited balance sheet dated as of June 30, 1998 and the related
statements of operations, stockholders' equity and cash flow for the six months
then ended (collectively, the "Financial Statements"); and
--------------------
21
(b) the Borrower's balance sheet attached as SCHEDULE 4.01 showing its pro
------------- ---
forma financial condition as of the date hereof, after giving effect to the
-----
first Loans contemplated hereunder (the "Opening Balance Sheet").
---------------------
The Financial Statements have been prepared in accordance with GAAP. Since
the respective dates of the most recent Financial Statements, there has been no
material adverse change in the assets, properties, business or condition
(financial or otherwise) of the Borrower. The Companies have no contingent
liabilities or other obligations other than as set forth in the Opening Balance
Sheet. The Opening Balance Sheet fairly represents in all material respects the
Borrower's pro forma financial condition as of the date thereof. The financial
--- -----
projections submitted to the Lenders by the Borrower (including all projections
set forth in the Budget) are believed by the Borrower to be reasonable as of the
date hereof in light of all information presently known by the Borrower.
SECTION 4.02. ORGANIZATION, QUALIFICATION, ETC. Each of the Companies (a)
------------ --------------------------------
is a corporation, duly organized, validly existing and in good standing under
the laws of its state of incorporation, all as specified in SCHEDULE 4.02, (b)
-------------
has the power and authority to own its properties and to carry on its business
as now being conducted and as presently contemplated, (c) has the power and
authority to execute and deliver, and perform its obligations under, this
Agreement, the Notes and each of the other Loan Documents and (d) is duly
qualified to transact business in the jurisdictions specified in SCHEDULE 4.02
-------------
and in each other jurisdiction where the nature of its activities requires such
qualification, except where the failure to so qualify would not have Material
Adverse Effect. The Parent has no Subsidiaries other than the Borrower; and, as
of the date hereof, the Borrower has no Subsidiaries except for Horizon
Telecommunications, Inc., a Michigan corporation. The Parent's sole asset
(other than de minimus assets having a book value of not more than $1,000 in the
-- -------
aggregate) is the record and beneficial ownership interests in all of the
Borrower's issued and outstanding Equity Securities.
SECTION 4.03. AUTHORIZATION; COMPLIANCE; ETC. The execution and delivery
------------ -------------------------------
of, and performance by the Companies of their respective obligations under, this
Agreement and the other Loan Documents have been duly authorized by all
requisite corporate action and will not violate any provision of law, any order,
judgment or decree of any court or other agency of government, the charter
documents or by-laws of any corporate Company, or any indenture, agreement or
other instrument to which any Company is a party, or by which any Company is
bound or result in a breach of, or constitute (with due notice or lapse of time
or both) a default under, or except as may be permitted under this Agreement,
result in the creation or imposition of any lien, charge or encumbrance of any
nature whatsoever upon any of the property or assets of any Company pursuant to,
any such indenture, agreement or instrument that would have a Material Adverse
Effect. Each of the Loan Documents constitutes the valid and binding obligation
of each of the Companies and any of their Affiliates party thereto, enforceable
against such party in accordance with its terms, subject, however to bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting the rights and
remedies of creditors generally or the application of principles of equity,
whether in any action in law or proceeding in
22
equity, and subject to the availability of the remedy of specific performance or
of any other equitable remedy or relief to enforce any right under any such
agreement.
SECTION 4.04. GOVERNMENTAL AND OTHER CONSENTS, ETC. Except for filings
------------ ------------------------------------
and recording required under SECTION 2.01 and the Security Documents and except
as set forth in SCHEDULE 4.04, none of the Companies is required to obtain any
-------------
material consent, approval or authorization from or to file any declaration or
statement with or to give any notice to, any Governmental Authority or any other
Person (including, without limitation, any notices required under the applicable
bulk sales law) in connection with or as a condition to the execution, delivery
or performance of any of the Loan Documents. Except as set forth in such
SCHEDULE 4.04, all consents, approvals and authorizations described in such
-------------
Schedule have been duly granted and are in full force and effect on the date
hereof and all filings described in such Schedule have been properly and timely
made.
SECTION 4.05. COMPLIANCE WITH LAWS AND AGREEMENTS. None of the Companies
------------ -----------------------------------
is in violation of any provision of its corporate charter or by-laws or any
other organizational documents, as the case may be, or of any indenture,
agreement or instrument to which it is a party or by which it is bound or of any
provision of law, the violation of which could have a Material Adverse Effect,
or any order, judgment or decree of any court or other agency of government to
which it is subject.
SECTION 4.06. PROPRIETARY RIGHTS.
------------ ------------------
The Companies possess or have the rights to all trade names, trademarks,
copyrights and other proprietary rights necessary for the operation of the
Companies' businesses, free and clear of any attachments, liens, encumbrances or
adverse claims (except to the extent the absence thereof has not had, and could
not reasonably be expected to have, a Material Adverse Effect), and neither the
present or contemplated activities or products of any of such entities infringe
any such trade names, trademarks, copyrights or other proprietary rights of
others. Each of such trade names, trademarks, copyrights and other rights is in
full force and effect and no material default has occurred and is continuing
thereunder. All such proprietary rights that have been registered, or as to
which registration applications have been submitted, are described on SCHEDULE
--------
4.06.
----
SECTION 4.07. LITIGATION. Except as specified in SCHEDULE 4.07, there is
------------ ---------- -------------
no action, suit or proceeding at law or in equity or by or before any
governmental instrumentality or other agency pending or, to the knowledge of the
Borrower, threatened (nor is any basis therefor known to the Borrower), as of
the date hereof (a) that questions the validity of any of the Loan Documents, or
any action taken or to be taken pursuant hereto or thereto, in a manner or to an
extent that would have a Material Adverse Effect, or (b) against or affecting
any Company that, if adversely determined, either in any case or in the
aggregate, would have a Material Adverse Effect.
SECTION 4.08. MATERIAL AGREEMENTS. In addition to the proprietary rights
------------ -------------------
described in SECTION 4.06, the Companies possess all other material contract
rights, including co-location agreements, line access agreements, distribution
agreements, subscription agreements,
23
noncompetition agreements and employment agreements that are reasonably
necessary for the operation of the Companies' businesses, each of which, to the
extent material to the Companies' operations, is accurately described on
SCHEDULE 4.08. In addition, SCHEDULE 4.08 also accurately and completely lists
------------- -------------
all agreements, if any, among any Company's members and all material
management, consulting and other agreements, if any, to which any Company is a
party, and that are in effect in connection with the conduct of the businesses
of such Company. Each of the foregoing rights and agreements is in full force
and effect and no material default has occurred and is continuing thereunder.
SECTION 4.09. TITLE TO PROPERTIES; CONDITION OF PROPERTIES.
------------ --------------------------------------------
(a) Except as set forth on SCHEDULE 4.09, the Companies have good title to
-------------
all of their properties and assets free and clear of all mortgages, security
interests, restrictions, liens and encumbrances of any kind, including without
limitation liens or encumbrances in respect of unpaid taxes (collectively,
"Liens"), except liens and encumbrances contemplated by and permitted under this
------
Agreement.
(b) None of the Companies owns any fee interest in any real property as of
the date hereof.
(c) Except as set forth on SCHEDULE 4.09, each of the Companies enjoys
-------------
quiet possession under all leases to which it is a party as lessee, and all of
such leases are valid, subsisting and in full force and effect. None of such
leases contains any provision restricting the incurrence of indebtedness by the
lessee.
SECTION 4.10. SOLVENCY..
------------ --------
(a) The aggregate amount of the full salable value of the assets and
properties of each Company exceeds the amount that will be required to be paid
on or in respect of such Company's existing debts and other liabilities
(including contingent liabilities) as they mature.
(b) No Company's assets and properties constitute unreasonably small
capital for such Company to carry out its business as now conducted and as
proposed to be conducted, including such Company's capital needs, taking into
the account the particular capital requirements of such Company's business and
the projected capital requirements and capital availability thereof.
(c) The Companies do not have debts beyond their ability to pay such debts
as they mature, taking into account the timing and amounts of cash reasonably
anticipated to be received by each Company and the amounts of cash reasonably
anticipated to be payable on or in respect of each Company's obligations.
(d) The Borrower believes that no reasonably anticipated final judgment in
a pending action or, to its knowledge, any threatened actions for money damages
will be rendered at a time when, or in an amount such that, any Company will be
unable to satisfy such judgment promptly
24
in accordance with its terms (taking into account the maximum reasonable amount
thereof and the earliest reasonable time at which such judgment might be
rendered). The cash available to each Company, after taking into account all
other anticipated uses of cash (including the payment of all such Company's
indebtedness) is anticipated to be sufficient to pay any such judgment promptly
in accordance with their terms.
(e) No Company is contemplating either the filing of a petition by it under
any state or federal bankruptcy or insolvency laws or the liquidating of all or
a substantial portion of its property, and the Borrower has no knowledge of any
Person contemplating the filing of any such petition against any Company.
SECTION 4.11. FULL DISCLOSURE. No statement of fact made by or on behalf
------------ ---------------
of any of the Companies in this Agreement, the Security Documents or in any
certificate or schedule furnished to the Lenders pursuant hereto or thereto
contains any untrue statement of a material fact or omits to state any fact
necessary to make statements contained in any such writing not misleading. There
is no fact presently known to the Borrower that has not been disclosed to the
Lenders in writing that has had, or could reasonably be expected to have, a
Material Adverse Effect.
SECTION 4.12. MARGIN STOCK. The Companies do not own or have any present
------------ ------------
intention of acquiring any "margin stock" within the meaning of Regulation U (12
CFR Part 221), of the Board of Governors of the Federal Reserve System (herein
called "Margin Stock").
------------
SECTION 4.13. TAX RETURNS. Each of the Companies has filed when due all
------------ -----------
federal, state and local tax and information returns required to be filed, and
has paid or made adequate provision for the payment of all material federal,
state and local taxes, franchise fees, charges and assessments shown thereon.
SECTION 4.14. PENSION PLANS, ETC.
------------ -------------------
(a) Except as described in SCHEDULE 4.14, neither the Borrower nor any
-------------
member of the Controlled Group has any pension, profit sharing or other similar
plan providing for a program of deferred compensation to any employee.
(b) Neither the Borrower nor any member of the Controlled Group has any
material liability (i) under Section 412 of the Code for failure to satisfy the
minimum funding requirements for pension plans, (ii) as the result of the
termination of a defined benefit plan under Title IV of ERISA, (iii) under
Section 4201 of ERISA for withdrawal or partial withdrawal from a multi-employer
plan, or (iv) for participation in a prohibited transaction with an employee
benefit plan as described in Section 406 of ERISA and Section 4975 of the Code.
SECTION 4.15. PROJECTIONS. Attached as SCHEDULE 4.15 are annual
------------ ----------- -------------
projections as of the date hereof of the operation of the Companies' businesses
through December 31, 2004 (the "Projections"). Such Projections represent the
-----------
Borrower's reasonable estimate of future performance, but should not be
construed as a guarantee of future results.
25
SECTION 4.16. BROKERS, ETC. None of the Companies is under any obligation
------------ ------------
to pay any broker's fee, finder's fee or commission in connection with the Loans
contemplated by this Agreement.
SECTION 4.17. CAPITALIZATION. Attached as SCHEDULE 4.17 is a description
------------ -------------- -------------
of the equity capital structure of the Companies showing, for each Company,
accurate ownership percentages of the equityholders of record and accompanied by
a statement of authorized and issued Equity Securities for each Company as of
the date hereof. Such SCHEDULE 4.17 also includes as of the date hereof a
-------------
narrative indicating (a) which securities, if any, carry preemptive rights; (b)
whether there are any outstanding subscriptions, warrants or options to purchase
any securities; (c) whether any Company is obligated to redeem or repurchase any
of its securities, and the details of any such committed redemption or
repurchase; and (d) any other agreement, arrangement or plan to which any
Company is a party or of which the Borrower has knowledge that could directly or
indirectly affect the capital structure of the Companies. All such Equity
Securities (i) are validly issued and fully paid and non-assessable and (ii) are
owned of record and beneficially (except that the Borrower makes no
representation or warranty as to the beneficial ownership of the issued and
outstanding Equity Securities of the Parent) as set forth on SCHEDULE 4.17, free
-------------
of any assignment, pledge, lien, security interest, charge, option or other
encumbrance, except for liens and security interests granted to the Agent or the
Lenders or permitted under SECTION 7.02.
SECTION 4.18. ENVIRONMENTAL COMPLIANCE.
------------ ------------------------
(a) All real property leased by the Companies (the "Properties") and their
----------
existing and, to the Borrower's knowledge, prior uses and activities thereon,
including, but not limited to, the use, maintenance and operation of each of the
Properties and all activities of the Borrower in conduct of business related
thereto comply and have at all times complied with all Environmental Laws the
violation of which could reasonably be expected to have a Material Adverse
Effect.
(b) None of the Companies, and to the Borrower's knowledge, no previous
owner, tenant, occupant or user of any of the Properties or any other Person,
has engaged in or permitted any operations or activities upon any of the
Properties for the purpose of or in any way involving the handling, manufacture,
treatment, storage, use, generation, release, discharge, refining, dumping or
disposal of a material amount of any Hazardous Materials in violation of any
Environmental Law that could reasonably be expected to have a Material Adverse
Effect.
(c) To the Borrower's knowledge, no Hazardous Material has been or is
currently located in, on, under or about any of the Properties in a manner which
violates any Environmental Law or which requires cleanup or corrective action of
any kind under any Environmental Law that in either case could reasonably be
expected to have a Material Adverse Effect.
(d) No notice of violation, lien, complaint, suit, order or other notice or
communication concerning any alleged violation of any Environmental Law in, on,
under or about any of the
26
Properties has been received by any Company or, to the Borrower's knowledge, any
prior owner or occupant of any of the Properties that could reasonably be
expected to have a Material Adverse Effect.
(e) The Companies have all material permits and licenses required under any
Environmental Law to be issued to them by any Governmental Authority for
activities on any of the Properties, except to the extent that the absence of
any such permit or license could not reasonably be expected to have a Material
Adverse Effect, and are in material compliance with the terms and conditions of
such permits and licenses except to the extent failure to comply therewith could
not reasonably be expected to have a Material Adverse Effect. To the Borrower's
knowledge, such permits or licenses are in full force and effect.
(f) To the Borrower's knowledge, no portion of any of the Properties has
been listed, designated or identified in the National Priorities List (NPL) or
the CERCLA information system (CERCLIS), both as published by the United States
Environmental Protection Agency, or any similar list of sites published by any
Federal, state or local authority proposed for or requiring cleanup, or remedial
or corrective action under any Environmental Law.
SECTION 4.19. INVESTMENT COMPANY ACT. None of the Companies is an
------------ ----------------------
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, or a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company," or of a "subsidiary company"
of a "holding company," within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
SECTION 4.20. LABOR MATTERS. No Company is experiencing any strike, labor
------------ -------------
dispute, slow down or work stoppage due to labor disagreements; to the knowledge
of the Companies, there is no such strike, dispute, slow down or work stoppage
threatened against any Company and none of the Companies is subject to any
collective bargaining or similar arrangements, which, in any case, could
reasonably be expected to have a Material Adverse Effect.
SECTION 4.21. YEAR 2000..
------------ ---------
The Borrower's billing system is Year 2000 Compliant. In addition, each of the
Companies has reviewed the Year 2000 Risk and acknowledges the actions necessary
to ensure that the Year 2000 Risk will not have a Material Adverse Effect.
V. FINANCIAL COVENANTS. The Borrower covenants and agrees that, so long
-------------------
as any Lender has any obligation to extend credit to the Borrower hereunder, and
for so long thereafter as there remains outstanding any portion of the principal
of, or interest on, any Note or any other Obligations, whether now existing or
arising hereafter, the Companies will (on a consolidated basis, as applicable):
SECTION 5.01. LEVERAGE. Maintain a ratio of (a) Total Funded Debt as of
------------ --------
each Quarterly Date during each period indicated below to (b) Annualized
Operating Cash Flow for the fiscal quarter then ended not exceeding the
following:
27
MAXIMUM RATIO OF
TOTAL FUNDED DEBT TO
PERIOD ANNUALIZED OPERATING CASH FLOW
------ ------------------------------
Date through December 31, 1998 6.00:1.00
January 1, 1999 through March 31, 1999 5.50:1.00
April 1, 1999 through June 30, 1999 5.00:1.00
July 1, 1999 through December 31, 1999 4.75:1.00
January 1, 2000 through June 30, 2000 4.00:1.00
July 1, 2000 and thereafter 3.50:1.00
SECTION 5.02. FIXED CHARGES. For each period of four (4) consecutive
------------ -------------
fiscal quarters ending on or after June 30, 1999, maintain a ratio of (a)
Operating Cash Flow for such period minus Capital Expenditures made during such
period to (b) Fixed Charges for such period of at least 1.10:1.00.
SECTION 5.03. TOTAL INTEREST COVERAGE. For each fiscal quarter ending on
------------ -----------------------
the Quarterly Dates indicated below, maintain a ratio of Pro Forma Operating
Cash Flow for such period to Total Interest Expense for such period (the "Total
-----
Interest Coverage Ratio") not less than the following:
-----------------------
FISCAL QUARTER ENDING MINIMUM TOTAL INTEREST COVERAGE
--------------------- -------------------------------
September 30, 1998 through June 30, 1999 1.75:1.00
July 1, 1999 through December 31, 2000 2.25:1.00
January 1, 2001 and thereafter 2.50:1.00
VI. AFFIRMATIVE COVENANTS. The Borrower hereby covenants and agrees to
---------------------
and with each of the Lenders that, so long as any Lender has any obligation to
extend credit to the Borrower hereunder, and for so long thereafter as there
remains outstanding any portion of any Obligation, whether now existing or
hereafter arising, each of the Companies shall:
SECTION 6.01. PRESERVATION OF ASSETS; COMPLIANCE WITH LAWS; THIRD PARTY
------------ ---------------------------------------------------------
CONSENTS, ETC.
-------------
(a) Do or cause to be done all things necessary to preserve, renew and keep
in full force and effect its existence as a corporation, a limited partnership
or limited liability company, as the case may be, all material contract and
other rights, licenses, permits and franchises and comply in every material
respect with all laws and regulations applicable to it and all material
agreements
28
to which it is a party, including, without limitation, management agreements,
co-location agreements, line access agreements, and all agreements with its
equityholders, the violation of which could reasonably be expected to have a
Material Adverse Effect;
(b) at all times maintain, preserve and protect all material trade names
and other proprietary rights; and
(c) use its best efforts to obtain all requisite third party consents to
the collateral assignment to the Lenders as contemplated by SECTION 2.01 of all
management agreements, co-location agreements and line access agreements to
which the Borrower is a party (or that have been assigned to the Borrower) as of
the Closing Date on or before the 60th day following the Closing Date; and
thereafter assure that all new management agreements, co-location agreements and
line access agreements (including, without limitation, renewals of existing
agreements) may be collaterally assigned to the Lenders as contemplated by
SECTION 2.01.
(d) preserve all the remainder of its material property used or useful in
the conduct of its business and keep the same in good repair, working order and
condition (reasonable wear and tear and damage by fire or other casualty
excepted), and from time to time, make or cause to be made all needful and
proper repairs, renewals, replacements, betterments and improvements thereto, so
that the business carried on in connection therewith may be conducted at all
times in the ordinary course in a manner substantially consistent with past
practices.
SECTION 6.02. INSURANCE.
------------ ---------
(a) Keep all of its insurable properties now or hereafter owned adequately
insured at all times against loss or damage by fire or other casualty to the
extent customary with respect to like properties of companies conducting similar
businesses; maintain public liability, business interruption, liability and
workers' compensation insurance and insurance against claims of libel and
defamation and copyright and other proprietary right infringement, maintain
insurance with respect to its printing and other production facilities and
related equipment in an amount equal to the full replacement cost thereof, in
each case insuring such Company to the extent customary (and as permitted under
applicable law) with respect to companies conducting similar businesses, all by
financially sound and reputable insurers and furnish to the Agent satisfactory
evidence of the same (including certification by an Authorized Officer of timely
renewal of, and timely payment of all insurance premiums payable under, all such
policies, which certification shall be included in the next succeeding
Compliance Report delivered pursuant to SECTION 6.05); notify the Agent of any
material change in the insurance maintained on its properties after the date
hereof and furnish each of the Lenders satisfactory evidence of any such change;
provide that each insurance policy pertaining to any of its insurable properties
shall: (i) name the Agent, on behalf of the Lenders, as loss payee pursuant to a
so-called "standard mortgagee clause" or "Lender's loss payable endorsement", or
as additional insured (as appropriate), (ii) provide that no action of any
Company shall void such policy as to the Agent or the Lenders, and (iii) provide
that the insurer(s) shall notify the Agent of any proposed cancellation of such
policy at least thirty (30) days in advance thereof (unless such proposed
cancellation arises by reason of non-payment of insurance premiums in which case
such notice shall be given at least ten (10) days in
29
advance thereof) and that the Agent or the Lenders will have the opportunity to
correct any deficiencies justifying such proposed cancellation.
(b) Promptly following the occurrence of any Casualty Event affecting any
asset or property of any Company (whether or not such property constitutes
Collateral) (the "Damaged Property") resulting in Insurance Proceeds aggregating
----------------
$500,000 or more, give prompt notice thereof to the Agent and cause all of such
Insurance Proceeds to be paid to the Agent for deposit into the Collateral
Account, as additional collateral security for the payment of the Obligations,
pending disbursement thereof as hereinafter provided. If, on or before the last
day of the applicable Restoration Period, the Borrower or any Subsidiary shall
not have restored, repaired or replaced the Damaged Property (or, if earlier, on
the date following the deposit of such Insurance Proceeds such Company shall
have determined not to restore, repair or replace the Damaged Property) the
Insurance Proceeds so deposited in the Collateral Account shall be applied in
accordance with and to the extent required in SECTION 1.05(B).
(c) In the event of a Casualty Event affecting any Damaged Property,
whether or not subject to SECTION 6.02(B), and provided that no Event of Default
shall have occurred and be continuing, the Agent or the Lenders will deliver to
the Borrower (for the benefit of such Company) any Insurance Proceeds therefrom,
if the Borrower so elects following notice thereof provided by the Agent,
provided that (i) such Company shall use such proceeds for the repair
--------
restoration or replacement of the Damaged Property within the applicable
Restoration Period, (ii) the Borrower shall have demonstrated to the reasonable
satisfaction of the Lenders that the Damaged Property will be repaired or
restored to substantially its previous condition or will be replaced by
substantially identical property or assets and (iii) if the Agent, on behalf of
the Lenders, had a security interest in and lien upon the Damaged Property, the
Lenders shall have received, at their request, a favorable opinion from the
Borrower's counsel, in form and substance reasonably satisfactory to the Agent,
as to the perfection of the Agent's security interest in and lien upon such
restored or replaced property or asset and such evidence satisfactory to the
Agent as to the priority of such security interest and liens. If the Borrower
fails to elect the disbursement of such Insurance Proceeds as provided in the
foregoing sentence within thirty (30) days following receipt of the Agent's
notice, the Borrower shall be deemed to have elected that such Insurance
Proceeds be applied to the prepayment of the Loans and, if the related Casualty
Event was subject to SECTION 6.02(B), the permanent reduction of the Commitments
provided in SECTION 1.05.
(d) If the Borrower receives any disbursements of Insurance Proceeds as
contemplated by SECTION 6.02(C), but fails to repair, restore or replace the
Damaged Property within the applicable Restoration Period, as required under
SECTION 6.02(C), then the Borrower shall return all such disbursements to the
Agent for application, together with the balance of any related Insurance
Proceeds not so disbursed, to the prepayment of the Loans and, if the related
Casualty Event was subject to SECTION 6.02(B), the permanent reduction of the
Commitments provided in SECTION 1.06.
(e) The Agent may, if directed by the Required Lenders upon the occurrence
and during the existence of any Default, elect to apply any Insurance Proceeds
paid into the Collateral
30
Account or otherwise received by the Agent pursuant to this SECTION 6.02 to the
replacement, restoration and/or repair of the Damaged Property, in lieu of
effecting the prepayment of the Loans required under SECTION 1.05(B) or 6.02(A)
through (D).
(f) If the Borrower or the Agent elects to replace, restore and/or repair
the Damaged Property as provided in SECTION 6.02(C) OR (E), the related
Insurance Proceeds (and any earnings thereon) held in the Collateral Account
shall be applied to the replacement, restoration and repair of the Damaged
Property and advanced by the Agent in periodic installments upon compliance by
the Borrower with such reasonable conditions to disbursement as may be imposed
by the Agent, including, but not limited to, reasonable retention amounts and
receipt of lien releases and, if a Casualty Event results in the Agent's receipt
of Insurance Proceeds aggregating $100,000 or more, disbursement of such
Insurance Proceeds to the Borrower.
(g) Following the occurrence and the continuance of any Default, the Agent
shall have no obligation to release any proceeds from the Collateral Account to
the Borrower as provided above and all such proceeds shall be subject to the
provisions of the Security Agreements. All Insurance Proceeds remaining in the
Collateral Account after application to the repair, replacement and/or
restoration of Damaged Property pursuant to this Section may, at the option of
the Agent, be applied to the prepayment of the Loans or (if consented to by the
Required Lenders) released to the Borrower.
(h) With respect to any Casualty Event resulting in Insurance Proceeds
aggregating $500,000 or more, the Agent shall be entitled at its option to
participate in any compromise, adjustment or settlement in connection with any
claims for damage or destruction under any policy or policies of insurance, and
the Borrower shall, within five (5) Business Days after request therefor,
reimburse the Agent for all reasonable out-of-pocket expenses (including
reasonable attorneys' fees and disbursements) incurred by the Agent in
connection with such participation. None of the Companies shall make any
compromise, adjustment or settlement in connection with any such claim resulting
in Insurance Proceeds aggregating $500,000 or more without the approval of the
Agent.
(i) To the extent, if any, that any improved real property (whether owned
or leased) of the Companies that is mortgaged as required under SECTION 2.01(A)
is situated in a flood zone designated as type "A", "B" or "V" by the U.S.
Department of Housing and Urban Development, obtain and maintain flood insurance
in coverage and amount satisfactory to the Agent.
SECTION 6.03. TAXES, ETC. Pay and discharge or cause to be paid and
------------ -----------
discharged all taxes, assessments and governmental charges or levies imposed
upon it or upon its income and profits or upon any of its property, real,
personal or mixed, or upon any part thereof, before the same shall become in
default, as well as all lawful claims for labor, materials and supplies or
otherwise, which, if unpaid, would become a lien or charge upon such properties
or any part thereof; provided that no Company shall be required to pay and
--------
discharge or cause to be paid and discharged any such tax, assessment, charge,
levy or claim so long as the validity thereof shall be contested in good faith
by appropriate proceedings and it shall have set aside on its books adequate
reserves with respect to any such tax, assessment, charge, levy or claim, so
contested;
31
and provided, further that, in any event, payment of any such tax, assessment,
charge, levy or claim shall be made before any of its property shall be seized
or sold in satisfaction thereof.
SECTION 6.04. NOTICE OF PROCEEDINGS, DEFAULTS, ADVERSE CHANGE, ETC.
------------ ----------------------------------------------------
Promptly (and in any event within five (5) days after the discovery by the
Borrower thereof) give written notice to each of the Lenders of (a) any
proceedings instituted or threatened in writing against it by or in any federal,
state or local court or before any commission or other regulatory body, whether
federal, state or local which could reasonably be expected to have a Material
Adverse Effect; (b) any notices of default received by any Company (together
with copies thereof, if requested by any Lender) with respect to (i) any alleged
default under or violation of any of its material licenses, permits or
franchises (including any material agreement to which it is a party, or (ii) any
alleged default with respect to, or acceleration or other action under any
evidence of material Indebtedness of any Company or any mortgage, indenture or
other agreement relating thereto; (c) (i) any notice of any violation or
administrative or judicial complaint or order filed or to be filed against any
Company and/or any real property owned or leased by it alleging any material
violations of any law, ordinance and/or regulation or requiring it to take any
action in connection with the release and/or clean-up of any Hazardous
Materials, or (ii) any notice from any governmental body or other Person
alleging that any Company is or may be liable for costs associated with a
release or clean-up of any Hazardous Materials or any damages resulting from
such release; (d) any event of dissolution; (e) any change in the condition,
financial or otherwise, of any Company which is reasonably likely to have a
Material Adverse Effect; or (f) the occurrence of any Default or the occurrence
of any event which, upon notice or lapse of time or both, would constitute such
a Default.
SECTION 6.05. FINANCIAL STATEMENTS AND REPORTS. Furnish to the Agent
------------ --------------------------------
(with multiple copies for each of the Lenders):
(a) Within ninety (90) days after the end of each fiscal year, the
consolidated and consolidating (or, if applicable, combined and combining)
balance sheets and statements of income, stockholders', partners' or members'
equity (as applicable) and cash flows of the Companies, together with supporting
schedules in form and substance reasonably satisfactory to the Lenders, audited
by an independent certified public accountants of national reputation selected
by the Borrower and reasonably satisfactory to the Lenders (the "Accountants"),
-----------
the opinion to be unqualified, (i) showing the financial condition of the
Borrower and all of its Subsidiaries at the close of such fiscal year and the
results of operations during such year, (ii) containing a statement to the
effect that the Accountants have examined the provisions of this Agreement and
that in the course of their examination they did not become aware of any Event
of Default, or any event which upon notice or lapse of time or both would
constitute an Event of Default, under ARTICLE V or otherwise (or, if such an
event has occurred, a statement explaining its nature and extent) and (iii)
without disclaiming the Accountants' obligation to address the Year 2000 Risk as
it relates to liabilities or contingent liabilities of the Borrower or any of
its Subsidiaries or the failure of any Borrower or any of its Subsidiaries to
take all necessary and appropriate steps to address the Year 2000 Risk;
provided, however, that in issuing such statement, the Accountants shall not be
--------
required to exceed the scope of normal auditing procedures conducted in
connection with their opinion referred to above;
32
(b) Within forty-five (45) days after the end of each quarter in each
fiscal year, commencing with the fiscal quarter ending June 30, 1998, the
consolidated (or, if applicable, combined) balance sheets and statements of
income, stockholders', partners' or members' equity (as applicable) and cash
flows of the Companies, together with supporting schedules, setting forth in
each case in comparative form the corresponding figures from the preceding
fiscal period of the same duration, prepared by the Borrower in accordance with
GAAP (except for the absence of notes) and certified by an Authorized Officer,
such balance sheets to be as of the close of such quarter, and such statements
of income, stockholders', equity and cash flow to be for the quarter then ended
and the period from the beginning of the then current fiscal year to the end of
such quarter (in each case subject to normal audit and year-end adjustments) and
to include (i) a comparison of actual results to results for the comparable
period of the preceding fiscal year and projected results set forth in the
Budget for such period and (ii) a profit and loss statement for each product
line and business unit for the quarter then ended and the period from the
beginning of the then current fiscal year to the end of such quarter;
(c) Within thirty (30) days after the end of each month, the consolidated
(or, if applicable, combined) balance sheet and statements of income,
stockholders' equity and cash flow of the Companies, together with supporting
schedules, prepared by the Borrower in accordance with GAAP (except for the
absence of notes) and certified by an Authorized Officer, such balance sheets to
be as of the end of such month and income statements to be for the period from
the beginning of the then current fiscal year to the end of such month (subject
to normal audit and year-end adjustments);
(d) Concurrently with the delivery of any annual financial statements
required by SECTION 6.05(A) and any quarterly financial statements required by
SECTION 6.05(B), a report in the form of SCHEDULE 6.05 attached hereto (or
-------------
otherwise in a form satisfactory to the Agent) signed on behalf of the Borrower
by an Authorized Officer (each a "Compliance Report"), setting forth the
-----------------
calculations contemplated in ARTICLE V of this Agreement and certifying as to
the fact that such Person has examined the provisions of this Agreement and that
no Event of Default nor any event which upon notice or lapse of time, or both,
would constitute such an Event of Default has occurred and is continuing;
(e) (i) On or before January 31 of each fiscal year, commencing January 31,
1999, an updated monthly cost budget of the Borrower, including planned Capital
Expenditures and projected borrowings for such fiscal year, with updated
Projections showing financial covenant compliance (collectively, the "Budget"),
------
for the operation of the Companies' businesses during such fiscal year, setting
forth in detail reasonably satisfactory to the Lenders the projected results of
operations of the Companies and stating underlying assumptions, and (ii) within
five (5) days after the effective date thereof, notice of any material changes
or modifications in the Budget (which shall not include changes resulting from
immaterial adjustments to the timing of any proposed borrowings);
(f) Promptly upon receipt or issuance thereof, and in any event within five
(5) Business Days after such receipt, copies of all audit reports submitted to
any Company by its accountants
33
in connection with each yearly, interim or special audit of the books of any
Company made by such accountants, including any material related correspondence
between such accountants and the Borrower's management; and
(g) As soon as reasonably possible after request therefor, such other
information regarding its operations, assets, business, affairs and financial
condition or regarding any of the Companies as the Agent may reasonably request,
including copies of any and all material agreements to which any Company is a
party from time to time.
SECTION 6.06. INSPECTION. Permit employees, agents and representatives of
------------ ----------
the Lenders to inspect, during normal business hours, its premises, its books
and records (and to make abstracts or reproductions thereof) and such other
facilities and systems of the Borrower, as any Lender may wish to inspect in
connection with the Year 2000 Risk and the Company's efforts to become Year 2000
Compliant in accordance with SECTION 6.12. In connection with any such
inspections, the Lenders will use reasonable efforts to avoid an unreasonable
disruption of the Companies' businesses and will give reasonable advance notice
thereof (provided, however, that during the existence of a Default, such notice
--------
will be provided only if circumstances reasonably warrant).
SECTION 6.07. ACCOUNTING SYSTEM. Prepare its financial statements in
------------ -----------------
accordance with generally accepted accounting principles and maintain a fiscal
year ending December 31 for each of the Companies.
SECTION 6.08. ADDITIONAL ASSURANCES. From time to time hereafter:
------------ ---------------------
(a) execute and deliver or cause to be executed and delivered, such
additional instruments, certificates and documents, and take all such actions,
as the Agent or the Lenders shall reasonably request for the purpose of
implementing or effectuating the provisions of this Agreement and the other Loan
Documents, including without limitation (i) the items set forth in SCHEDULE
2.01, if any, which require action after the date hereof, within the time
periods stated in such Schedule, and (ii) the execution and delivery to the
Agent of a mortgage or deed of trust or collateral assignment of lease or
leasehold mortgage in form and substance satisfactory to the Agent (in a
recordable form and in such number of copies as the Agent shall have requested)
covering any real property interests acquired (by ownership or lease) by any
Company, together with any necessary consents relating thereto; and
(b) upon the exercise by the Agent or the Lenders of any power, right,
privilege or remedy pursuant to this Agreement or any other Loan Document which
requires any consent, approval, registration, qualification or authorization of
any Governmental Authority, execute and deliver all applications,
certifications, instruments and other documents and papers that the Lenders may
be so required to obtain.
34
SECTION 6.09. COMPLIANCE WITH ENVIRONMENTAL LAWS.
------------ ----------------------------------
(a) Comply in all material respects with all Environmental Laws and not
generate, store, handle, process, dispose of or otherwise use and not generate,
store, handle, process, dispose of or otherwise use Hazardous Materials in, on,
under or about the Property in a manner that could lead or result in imposition
on any Company or the Agent or any Lender or any of the Properties of any
material liability or lien of any nature whatsoever under any Environmental Law.
(b) Notify the Agent promptly in the event of any spill or other release of
any Hazardous Material in, on, under or about any of the Properties which is
required to be reported to a Governmental Authority under any Environmental Law,
promptly forward to the Agent copies of any notices received by any Company
relating to any alleged violation of any Environmental Law and pay when due any
fine or assessment against the Lenders, any Company or any of the Properties
relating to any Environmental Law, the Borrower or such other Company, unless
payment of the same is being contested in good faith by appropriate proceedings
and it shall have set aside on its books adequate reserves with respect thereto.
(c) If at any time it is determined that the operation or use of any of the
Properties violates any applicable Environmental Law or that there is any
Hazardous Material located in, on, under or about the Properties which under any
Environmental Law requires special handling in collection, treatment, storage or
disposal or any other form of cleanup or remedial or corrective action, and such
requirement has been violated then, within thirty (30) days after receipt of
written notice thereof from a Governmental Authority (or such other time period
as may be specified in the notice sent by such Governmental Authority) or from
the Lenders, take, at its sole cost and expense, such actions as may be
necessary to comply in all material respects with any applicable Environmental
Laws, provided, however, that if such compliance cannot reasonably be completed
within such thirty (30) day period, the Borrower shall commence such necessary
action within such thirty (30) day period and shall thereafter diligently and
expeditiously proceed to comply in all material respects with any and all
applicable Environmental Laws. Nothing herein shall prohibit the Borrower from
asserting any good faith defenses against the government in any governmental
demands.
(d) If a lien is filed against any of the Properties by any Governmental
Authority resulting from the need to expend or the actual expending of monies
arising from an action or omission, whether intentional or unintentional, of any
Company or for which any Company is responsible, resulting in the releasing,
spilling, leaking, leaching, pumping, emitting, pouring, emptying or dumping of
any Hazardous Material in violation of an Environmental Law, then, within thirty
(30) days from the date that such Company is first given written notice that
such lien has been placed against the Properties, either (i) pay the claim and
remove the lien or (ii) furnish a cash deposit, bond or such other security with
respect thereto as is reasonably satisfactory in all respects to the Lenders and
is sufficient to effect a complete discharge of such lien on the Properties.
SECTION 6.10. INTEREST RATE PROTECTION.
------------ ------------------------
35
(a) Within ninety (90) days after the date of the first Loans, keep in
effect or enter into, and, thereafter, maintain in full force and effect, one or
more Rate Hedging Agreements containing terms and conditions reasonably
satisfactory to the Agent and generally prevailing at such time and sufficient
to ensure that at least fifty percent (50%) of the outstanding principal balance
of the Loans is protected at all times against increases in the all-in interest
rate thereon to a per annum rate in excess of ten percent (10%), in each case
--- -----
for a term extending for at least twenty-four (24) months.
(b) Deliver to the Agent copies of each such Rate Hedging Agreement,
including any and all amendments thereto and substitutions thereof, and such
other documentation relating thereto as the Agent or the Lenders may from time
to time request.
SECTION 6.11. YEAR 2000 COMPLIANCE. Use its best efforts to ensure that
------------ --------------------
each Company is Year 2000 Compliant by June 30, 1999. At the request of the
Agent, Borrower will provide the Agent evidence reasonably acceptable to the
Agent that each Company has complied with its obligations under the preceding
sentence.
VII. NEGATIVE COVENANTS. The Borrower covenants and agrees that, so
------------------
long as any Lender has any obligation to extend credit to the Borrower
hereunder, and for so long thereafter as there remains outstanding any portion
of any Obligation, whether now existing or arising hereafter, unless the
Required Lenders shall otherwise consent in writing in accordance with the terms
of ARTICLE XII, none of the Companies will, directly or indirectly:
SECTION 7.01. INDEBTEDNESS. Incur, create, assume, become or be liable,
------------ ------------
directly, indirectly or contingently, in any manner with respect to, or permit
to exist, any Indebtedness or liability, except:
(a) Indebtedness of the Borrower to the Lenders hereunder and under the
Notes;
(b) the guaranties of the Subsidiaries required under SECTION 2.01;
(c) any Rate Hedging Obligations incurred in accordance with SECTION 6.11;
(d) Indebtedness existing on the date hereof and described in SCHEDULE
--------
7.01; provided however, that the terms of such indebtedness shall not be
---- -------- -------
modified or amended in any material respect, nor shall payment thereof be
extended, except as set forth on such SCHEDULE 7.01, without the prior written
-------------
consent of the Required Lenders;
(e) Indebtedness in respect of endorsements of negotiable instruments for
collection in the ordinary course of business;
(f) Indebtedness of the Companies under Capital Leases and purchase money
Indebtedness relating to the purchase price of real estate and equipment to be
used in the
36
Companies' businesses, in the aggregate principal amount (including any such
amounts set forth on SCHEDULE 7.01 attached hereto) of not more than $2,000,000
-------------
outstanding at any time; and
(g) loans between the Companies.
SECTION 7.02. LIENS. Create, incur, assume, suffer or permit to exist any
------------ -----
mortgage, pledge, lien, charge or other encumbrance of any nature whatsoever on
any of its assets or ownership interests, now or hereafter owned, other than the
following ("Permitted Liens"):
---------------
(a) liens securing the payment of taxes, either not yet due or the validity
of which is being contested in good faith by appropriate proceedings, and as to
which it shall have set aside on its books adequate reserves;
(b) deposits under workers' compensation, unemployment insurance and social
security laws, or to secure the performance of bids, tenders, contracts (other
than for the repayment of borrowed money) or leases, or to secure statutory
obligations or surety or appeal bonds, or to secure indemnity, performance or
other similar bonds arising in the ordinary course of business;
(c) liens existing on the date hereof and described on SCHEDULE 7.02
-------------
attached hereto;
(d) liens against the Companies imposed by law, such as vendors',
carriers', lessors', warehouser's or mechanics' liens, incurred by it in good
faith in the ordinary course of business;
(e) liens arising out of a prejudgment attachment, a judgment or award
against it with respect to which it shall currently be prosecuting an appeal, a
stay of execution pending such appeal having been secured, except any such lien
arising in connection with a judgment, attachment or proceeding which gives rise
to an Event of Default under paragraph (i) or (j) of ARTICLE VIII;
(f) liens in favor of the Agent or the Lenders securing the Notes, any
intercompany notes assigned to the Agent and the Lenders as collateral therefor
and the other obligations of the Companies to the Lenders hereunder or under
Rate Hedging Obligations entered into with any Lender or any Lender's Affiliate;
(g) liens against the Companies arising under or securing Capital Leases
and liens or mortgages securing purchase money Indebtedness described in SECTION
7.01(F), provided that the obligation secured by any such lien shall not exceed
one hundred percent (100%) of the lesser of cost or fair market value as of the
time of the acquisition of the property covered thereby and that each such lien
or mortgage shall at all times be limited solely to the item or items of
property so acquired; and
(h) restrictions, easements and minor irregularities in title which do not
and will not interfere with the occupation, use and enjoyment by any Company of
such properties and assets in the normal course of its business as presently
conducted or materially impair the value of such properties and assets for the
purpose of such business.
37
SECTION 7.03. DISPOSITION OF ASSETS; ETC. Sell, lease, transfer or
------------ --------------------------
otherwise dispose of its properties, assets, rights, licenses and franchises to
any Person (including without limitation dispositions in exchange for similar
assets and properties and commonly referred to as "asset swaps") (all of the
foregoing being referred to herein as a "Disposition"), and except for
-----------
Dispositions made in the ordinary course of business (including the Disposition,
without replacement, of equipment which is obsolete or no longer needed by the
Companies in the conduct of their businesses and the replacement of equipment
with other equipment of at least equal utility and value (provided that the
--------
Agent's or the Lenders' lien upon such newly acquired equipment shall have the
same priority as the Agent's or the Lenders' lien upon the replaced equipment
subject to any prior liens permitted by SECTION 7.02(G)).
SECTION 7.04. FUNDAMENTAL CHANGES; ACQUISITIONS; RESTRICTED PAYMENTS.
------------ ------------------------------------------------------
(A) PROHIBITED CHANGES AND TRANSACTIONS.
-----------------------------------
(i) Form any Subsidiary or otherwise change the equity capital
structure or organization of the Companies from that set forth in
SCHEDULE 4.17;
-------------
(ii) Permit or suffer any amendment of its charter, by-laws or
other organizational documents that could have a Material Adverse
Effect (it being expressly agreed that the inclusion in any such
charter documents of any provision similar to those set forth in
Section 102(b)(2) of Title 8 of the Delaware Code is prohibited under
this Section);
(iii) Dissolve, liquidate, consolidate with or merge with any
other Person or otherwise effect any Change of Control;
(iv) Acquire any Person or all or any substantial portion of the
ownership interests or assets or properties of any corporation,
partnership, limited liability company or other entity or any other
material assets (in each case, an "Acquisition") other than Permitted
Acquisitions;
-----------
(v) Repurchase any shares of capital stock or partnership,
membership or other ownership interests, other than (A) the repurchase
of shares of an employee upon the termination of employment of such
employee in accordance with the Companies' applicable employee stock
plan(s) and (B) in the case of the Parent, for the repurchase of
shares of its capital stock not required to be pledged to the Lenders
in accordance with the Security Documents; or
(vi) Issue any additional Equity Securities, except for (i)
common stock of the Parent or options therefor issued in accordance
with the Plan that do not represent in the aggregate more than 6% of
the Parent's issued
38
and outstanding common stock, (ii) Equity Securities of the Parent
issued in accordance with the Equity Financing Documents that, upon
issuance, are pledged to the Agent as required hereunder and (iii)
Equity Securities of the Parent (including, without limitation, those
issued in exchange for the Subordinated Debt) (A) in respect of which
the Parent has no obligation to redeem or to pay cash distributions or
dividends, (B) the issuance of which does not result in an Event of
Default and (C) which shall have been collaterally assigned or pledged
to the Agent as required hereunder.
(B) RESTRICTED PAYMENTS. Directly or indirectly declare, order, pay or
-------------------
make any Restricted Payment or set aside any sum or property therefor.
SECTION 7.05. MANAGEMENT. Turn over the day-to-day management of its
------------ ----------
properties, assets, rights, licenses and franchises to any Person other than a
full-time employee of the Companies.
SECTION 7.06. SALE AND LEASEBACK. Enter into any arrangements, directly
------------ ------------------
or indirectly, with any Person whereby it shall sell or transfer any property,
real, personal or mixed, used or useful in its business, whether now owned or
hereafter acquired, and thereafter rent or lease such property.
SECTION 7.07. INVESTMENTS. Except for Permitted Investments, purchase,
------------ -----------
invest in or otherwise acquire or hold securities, including, without
limitation, capital stock and evidences of indebtedness of, or make loans or
advances to, or enter into any arrangement for the purpose of providing funds or
credit to, any other Person.
SECTION 7.08. CHANGE IN BUSINESS. Engage, directly or indirectly, in any
------------ ------------------
business other than businesses reasonably related to the businesses in which it
is currently engaged.
SECTION 7.09. ACCOUNTS RECEIVABLE. Sell, assign, discount or dispose in
------------ -------------------
any way of any accounts receivable, promissory notes or trade acceptances held
by any Company, with or without recourse, except for collection (including
endorsements) in the ordinary course of business.
SECTION 7.10. TRANSACTIONS WITH AFFILIATES. Enter into any transaction,
------------ ----------------------------
including, without limitation, the purchase, sale or exchange of property or
assets or the rendering or accepting of any service with or to any Affiliate of
any Company, except in the ordinary course of business and pursuant to the
reasonable requirements of its business and upon terms not less favorable to
such Company than it could obtain in a comparable arm's-length transaction with
a third party other than such Affiliate.
SECTION 7.11. AMENDMENT OF CERTAIN AGREEMENTS, ETC. Amend, modify or
------------ ------------------------------------
terminate any material agreement to which any Company is a party, or enter into
any material agreement, in each case, outside of the ordinary course of business
and if the effect thereof would be to
39
increase materially the obligations of any Company thereunder or to confer
additional rights upon the other parties thereto that could have a Material
Adverse Effect. Notwithstanding the foregoing, none of the Companies shall renew
or enter into any co-location agreement, line access agreement or other material
agreements specified by the Agent without obtaining the written consents of such
third parties necessary to effect the collateral assignment thereof in
accordance with SECTION 2.01.
SECTION 7.12. ERISA. (a) Fail to make contributions to pension plans
------------ -----
required by Section 412 of the Code, (b) fail to make payments required by Title
IV of ERISA as the result of the termination of a single employer pension plan
or withdrawal or partial withdrawal from a multiemployer pension plan, or (c)
fail to correct a prohibited transaction with an employee benefit plan with
respect to which it is liable for the tax imposed by Section 4975 of the Code.
SECTION 7.13. MARGIN STOCK. Use or permit the use of any of the proceeds
------------ ------------
of the Loans, directly or indirectly, for the purpose of purchasing or carrying,
or for the purpose of reducing or retiring any indebtedness which was originally
incurred to purchase or carry, any Margin Stock or for any other purpose which
might constitute the transactions contemplated hereby a "purpose credit" within
the meaning of Regulation U (12 CFR Part 221) of the Board of Governors of the
Federal Reserve System, or cause any Loan, the application of proceeds thereof
or this Agreement to violate Regulation G, Regulation U, Regulation T or
Regulation X of the Board of Governors of the Federal Reserve System or any
other regulation of such Board or the Securities Exchange Act of 1934, as
amended, or any rules or regulations promulgated under such statutes.
SECTION 7.14. NEGATIVE PLEDGES, ETC. Enter into any agreement (excluding
------------ ----------------------
this Agreement or any other Transaction Document) prohibiting (a) any Company
from amending or otherwise modifying this Agreement or any other Transaction
Document, or (b) the creation or assumption of any lien upon the properties,
revenues or assets of any Company, whether now owned or hereafter acquired.
VIII. DEFAULTS. In each case of happening of any of the following events
--------
(each of which is herein sometimes called an "Event of Default"):
----------------
(a) any representation or warranty made by or on behalf of any Company or
any of its Affiliates in this Agreement or the Security Documents, or in any
report, certificate, financial statement or other instrument furnished in
connection with this Agreement, or the borrowing hereunder, shall prove to be
false or misleading in any material respect when made or, except for those
representations and warranties that are by their terms limited to a specific
time, reconfirmed;
(b) default in the payment or mandatory prepayment of any installment of
the principal of any Note or any payment of any installment of the principal of
any other indebtedness of the Borrower to the Agent, any Lender or any Hedging
Lender, or any payment in respect of any Rate Hedging Obligations entered into
with the Agent or any Hedging Lender, when the same shall become due and
payable, whether at the due date thereof or at a date fixed for prepayment or by
acceleration or otherwise;
40
(c) default in the payment of any installment of any interest on any Note,
or any premium or fee or any other indebtedness of any Company to the Agent or
any Lender for more than five (5) Business Days after the date when the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment or by acceleration or otherwise;
(d) default in the due observance or performance by, or compliance with,
any Person other than the Agent or any Lender of any covenant or agreement
contained in ARTICLE V, SECTION 6.02, 6.04, 6.06, 6.07, 6.08, 6.09 or 6.11 or
ARTICLE VII (except SECTION 7.10) of this Agreement;
(e) default in the due observance or performance of, or compliance with,
any other covenant, condition or agreement, on the part of any Person other than
the Agent or any Lender to be observed or performed pursuant to the terms of
this Agreement or pursuant to the terms of any Security Document or any Rate
Hedging Obligation entered into with the Agent, any Lender or any Hedging
Lender, which default is not referred to in paragraphs (a) through (d),
inclusive, of this ARTICLE VIII and which default shall continue unremedied for
ten (10) calendar days after the earlier to occur of (i) the Borrower's actual
discovery of such default, or (ii) written notice thereof from the Agent or any
Lender to the Borrower; provided, however, that if any such default cannot be
-------- -------
remedied, then such default shall be deemed to be an Event of Default as of the
date of the occurrence thereof;
(f) any default with respect to any evidence of Indebtedness of any Company
(other than to the Lenders hereunder) for borrowed money, or default under any
agreement giving rise to monetary remedies, in each case which, when aggregated
with all other such defaults of the Companies, exceeds $500,000, if the effect
of such default is to permit the holder of such Indebtedness to accelerate the
maturity of such Indebtedness;
(g) any Company shall (i) discontinue its business, (ii) permit an event of
dissolution to occur, (iii) apply for or consent to the appointment of a
receiver, trustee, custodian or liquidator of it or any of its property, (iv)
admit in writing its inability to pay its debts as they mature, (v) make a
general assignment for the benefit of creditors, (vi) be adjudicated a bankrupt
or insolvent or be the subject of an order for relief under Title 11 of the
United States Code or (vii) file a voluntary petition in bankruptcy, or a
petition or an answer seeking reorganization or an arrangement with creditors or
to take advantage of any bankruptcy, reorganization, insolvency, readjustment of
debt, dissolution or liquidation law or statute, or an answer admitting the
material allegations of a petition filed against it in any proceeding under any
such law or corporate action shall be taken for the purpose of effecting any of
the foregoing;
(h) there shall be filed against any Company an involuntary petition
seeking reorganization of such company or the appointment of a receiver,
trustee, custodian or liquidator of such company or a substantial part of its
assets, or an involuntary petition under any bankruptcy, reorganization or
insolvency law of any jurisdiction, whether now or hereafter in effect and such
involuntary petition shall not have been dismissed within sixty (60) days
thereof;
41
(i) final judgment for the payment of money which, when aggregated with all
other outstanding judgments against the Companies, exceeds $250,000 (exclusive
of amounts covered by insurance or actually contributed in cash by third party
obligors with respect to such judgments) shall be rendered against any Company,
and the same shall remain undischarged (unless fully bonded upon terms
satisfactory to the Required Lenders) for a period of thirty (30) consecutive
days, during which execution shall not be effectively stayed;
(j) the occurrence of any attachment of any deposits or other property of
any Company in the hands or possession of the Agent or any of the Lenders, or
the occurrence of any attachment of any other property of any Company in an
amount which, when aggregated with all other attachments against the Companies,
exceeds $250,000 and which shall not be discharged within thirty (30) days of
the date of such attachment;
(k) there shall occur for any reason a Change of Control;
(l) for any reason, the transaction contemplated by Section 1.4 of the
Stock Purchase Agreement shall not be consummated on or prior to March 31, 1999;
or
(m) for any reason (other than the gross negligence of the Agent or the
Lenders, it being nonetheless understood and agreed that the Borrower shall have
the primary responsibility for filing continuation statements under the Uniform
Commercial Code and making other conforming amendments to the Security Documents
to reflect changed circumstances and assure continued compliance therewith and
with SECTION 2.01), any material Security Document shall not be in full force
and effect in all material respects or shall not be enforceable in all material
respects in accordance with its terms, or any security interest(s) or lien(s)
granted pursuant thereto which is, or are in the aggregate, material shall fail
to be perfected, or any party thereto other than the Agent or the Lenders shall
contest the validity of any material lien(s) granted under, or shall disaffirm
its obligations under, any material Security Document;
then and upon every such Event of Default and at any time thereafter during the
continuance of such Event of Default, at the election of the Required Lenders as
provided in ARTICLE XII, the Commitments shall terminate and the Notes and any
and all other Indebtedness of the Borrower to the Lenders shall immediately
become due and payable, both as to principal and interest, without presentment,
demand, prior notice, or protest, all of which are hereby expressly waived,
anything contained herein or in the Notes or other evidence of such indebtedness
to the contrary notwithstanding (except in the case of an Event of Default under
paragraph (g) or (h) of this ARTICLE VIII which, under applicable law, would
result in the automatic acceleration of the Borrower's Indebtedness, in which
event the Commitments shall automatically terminate and such Indebtedness shall
automatically become due and payable).
IX. REMEDIES ON DEFAULT, ETC.
------------------------
(a) GENERAL REMEDIES. In case any one or more Events of Default shall
----------------
occur and be continuing, the Agent and the Lenders may proceed to protect and
enforce their rights by an action at law, suit in equity or other appropriate
proceeding, whether for the specific performance
42
of any agreement contained in this Agreement, any Security Document, any other
Loan Document or the Notes, or for an injunction against a violation of any of
the terms hereof or thereof or in and of the exercise of any power granted
hereby or thereby or by law, all subject to the provisions of ARTICLE XII. No
right conferred upon the Agent or the Lenders hereby or by any Security
Document, other Loan Document or the Notes shall be exclusive of any other right
referred to herein or therein or now or hereafter available at law, in equity,
by statute or otherwise.
(b) CONSENT TO RECEIVER. Without limiting the generality of the
-------------------
foregoing or limiting in any way the rights of the Lenders under the Security
Documents or otherwise under applicable law, at any time after the occurrence,
and during the continuance, of an Event of Default arising under paragraph (b)
or (c) of ARTICLE VIII, or anytime after the acceleration of the Loans, the
Agent, at the direction of the Required Lenders, shall be entitled to apply for
and have a receiver or receiver and manager appointed under state or Federal law
of the United States by a court of competent jurisdiction in any action taken by
the Agent or the Lenders to enforce their rights and remedies hereunder and
under the Security Documents in order to manage, protect, preserve, sell and
otherwise dispose of all or any portion of the Collateral and continue the
operation of the businesses of the Companies, and to collect all revenues and
profits thereof and apply the same to the payment of all expenses and other
charges of such receivership, including the compensation of the receiver, and to
the payment of the Obligations as aforesaid until a sale or other disposition of
such Collateral shall be finally made and consummated. The Borrower (for itself
and, with all due authority, each Subsidiary) hereby irrevocably consents to and
waives any right to object to or otherwise contest the appointment of a receiver
as provided above. The Borrower (for itself and with all due authority, each
Subsidiary) grants such waiver and consent knowingly after having discussed the
implications thereof with counsel, acknowledges that the uncontested right to
have a receiver appointed for the foregoing purposes is considered essential by
the Lenders in connection with the enforcement of their rights and remedies
hereunder and under the Security Documents, and the availability of such
appointment as a remedy under the foregoing circumstances was a material factor
in inducing the Lenders to make (and commit to make) the Loans to the Borrower;
and agrees to enter into any and all stipulations in any legal actions, or
agreements or other instruments in connection with the foregoing and to
cooperate fully with the Agent and the Lenders in connection with the assumption
and exercise of control by the receiver over all or any portion of the
Collateral.
X. THE AGENT.
---------
SECTION 10.01. APPOINTMENT, POWERS AND IMMUNITIES. Each Lender hereby
------------- ----------------------------------
irrevocably (subject to SECTION 10.08) designates and appoints Fleet National
Bank, which designation and appointment is coupled with an interest, as the
Agent of such Lender under this Agreement and the other Loan Documents, and each
such Lender irrevocably authorizes Fleet National Bank, as the Agent of such
Lender, 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 Agent by the terms of this Agreement and the
other Loan Documents, together with such other powers as are reasonably
incidental thereto. The Agent (which term as used in this sentence and in
SECTION 10.05 and such first sentence of
43
SECTION 10.06 hereof shall include reference to its affiliates and its own and
such affiliates' officers, directors, employees and agents) shall not: (a) have
any duties or responsibilities to be a trustee or other fiduciary for any
Lender; (b) be responsible to the Lenders for any recitals, statements,
representations or warranties contained in this Agreement, or in any certificate
or other document referred to or provided for in, or received by either of them
under, this Agreement, or for the value, validity, effectiveness, genuineness,
enforceability, perfection or sufficiency of this Agreement, any Note, any
Security Document or any other document referred to or provided for herein or
for any failure by the Borrower or any other Person to perform any of its
obligations hereunder or thereunder; (c) be required to initiate or conduct any
litigation or collection proceedings hereunder, except to the extent requested
by the Required Lenders; and (d) be responsible for any action taken or omitted
to be taken by it hereunder or under any other document or instrument referred
to or provided for herein or in connection herewith, except for its own gross
negligence or willful misconduct. The Agent may employ agents and attorneys-in-
fact and shall not be responsible for the negligence or misconduct of any such
agents or attorneys-in-fact it selects with reasonable care. Subject to the
foregoing, to ARTICLE XII and to the provisions of any intercreditor agreement
among the Lenders in effect from time to time, the Agent shall, on behalf of the
Lenders, (a) hold and apply any and all Collateral, and the proceeds thereof, at
any time received by it, in accordance with the provisions of the Security
Documents and this Agreement; (b) exercise any and all rights, powers and
remedies of the Lenders under this Agreement or any of the Security Documents,
including, without limitation, the giving or withholding of any consent or
waiver or the entering into of any amendment; (c) execute, deliver and file UCC
Financing Statements, mortgages, deeds of trust, lease assignments and other
such agreements, and possess instruments on behalf of any or all of the Lenders;
and (d) in the event of acceleration of the Borrower's Indebtedness hereunder,
sell or otherwise liquidate or dispose of any portion of the Collateral held by
it and otherwise exercise the rights of the Lenders hereunder and under the
Security Documents.
SECTION 10.02. RELIANCE BY AGENT. The Agent shall be entitled to rely
------------- -----------------
upon any certification, notice or other communication (including any
communication by telephone, telex, telegram or cable) believed by it to be
genuine and correct and to have been signed or sent by or on behalf of the
proper Person or Persons, and upon advice and statements of legal counsel,
independent accountants and other experts selected by the Agent. As to any
matters not expressly provided for by this Agreement, the Agent shall in all
cases be fully protected in acting, or in refraining from acting, hereunder in
accordance with instructions signed by the Required Lenders or the Lenders, as
the case may be, and such instructions and any action taken or failure to act
pursuant thereto shall be binding on the Lenders.
SECTION 10.03. EVENTS OF DEFAULT. The Agent shall not be deemed to have
------------- -----------------
knowledge of the occurrence of an Event of Default (other than the non-payment
of principal of or interest on the Notes) unless such Agent has received written
notice from any Lender or the Borrower specifying such Event of Default and
stating that such notice is a "Notice of Default". In the event that the Agent
receives such a notice of the occurrence of an Event of Default, the Agent shall
give prompt notice thereof to the Lenders (and shall give each Lender prompt
notice of each such non-payment). The Agent shall (subject to SECTION 10.07)
take such action with respect to such Event of Default as shall be directed by
the Required Lenders, as provided under
44
ARTICLE XII, provided that, unless and until the Agent shall have received such
directions, the Agent may (but shall not be obligated to) take such action on
behalf of the Lenders, or refrain from taking such action, with respect to such
Event of Default as it shall deem advisable in the best interest of the Lenders.
SECTION 10.04. RIGHTS AS A LENDER. With respect to its Commitments and
------------- ------------------
the Loans made by the Agent hereunder, the Agent shall have the same rights and
powers hereunder as any other Lenders and may exercise the same as though its
Affiliates were not acting as the Agent. The Agent and its Affiliates may,
without having to account therefor to the Lenders and without giving rise to any
fiduciary or other similar duty to any Lender, accept deposits from, lend money
to and generally engage in any kind of banking, trust or other business with the
Borrower and any of its Affiliates as if it were not acting as an Agent and as
if Agent were not a Lender, and the Agent may accept fees and other
consideration from or on behalf any Company for services in connection with this
Agreement or otherwise without having to account for the same to the Lenders.
SECTION 10.05. INDEMNIFICATION. The Lenders agree to indemnify the Agent
------------- ---------------
(to the extent not reimbursed under SECTION L4.02, but without limiting the
obligations of the Borrower under such SECTION L4.02), ratably in accordance
with the aggregate principal amount of the Notes held by the Lenders (or, if no
such principal or interest is at the time outstanding, ratably in accordance
with their respective Commitments), for any and all liabilities, obligations,
losses, damages, penalties, action, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Agent in any way relating to or arising out
of this Agreement or any Security Document or any other document contemplated by
or referred to herein or the transactions contemplated by or referred to herein
or therein (including, without limitation, the costs and expenses which the
Borrower is obligated to pay under SECTION 14.02) or the enforcement of any of
the terms of this Agreement or of any Security Document or of any such other
documents, provided that no Lender shall be liable for any of the foregoing to
the extent they arise from the gross negligence or willful misconduct of the
party to be indemnified.
SECTION 10.06. NON-RELIANCE ON AGENT AND OTHER LENDERS. Each Lender
------------- ---------------------------------------
agrees that it has, independently and without reliance on the Agent or any other
Lenders, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Companies and its own decision
to enter into this Agreement and that it will, independently and without
reliance upon the Agent or any other Lenders, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
analysis and decisions in taking or not taking action under this Agreement. The
Agent shall not be required to keep itself informed as to the performance or
observance by the Companies of this Agreement or any other document referred to
or provided for herein or to inspect the properties or books of the Borrower.
Except for notices, reports and other documents and information expressly
required to be furnished to the Lenders by the Agent hereunder, the Agent shall
have no duty or responsibility to provide any Lender with any credit or other
information concerning the affairs, financial condition or businesses of the
Companies, (or any other Affiliates) of the Borrower which may come into the
possession of the Agent or any of its Affiliates. Notwithstanding the
45
foregoing, the Agent will provide to the Lenders any and all information
reasonably requested by them and reasonably available to the Agent promptly upon
such request.
SECTION 10.07. FAILURE TO ACT. Except for action expressly required of
------------- --------------
the Agent hereunder, the Agent shall in all cases be fully justified in failing
or refusing to act hereunder unless it shall be indemnified to its satisfaction
by the Lenders against any and all liability and expense which may be incurred
by it by reason of taking or continuing to take any such action.
SECTION 10.08. RESIGNATION OF AGENT. Fleet National Bank (or any other
------------- ---------------------
Agent hereunder), may resign as the Agent at any time by giving fifteen (15)
days' prior written notice thereof to the Lenders and the Borrower. Any such
resignation shall take effect at the end of such fifteen (15) day period or upon
the earlier appointment of a successor Agent by the Required Lenders as provided
below. Upon any resignation of Fleet National Bank (or any other Agent
hereunder), the Required Lenders shall appoint a successor agent from among the
Lenders or, if such appointment is deemed inadvisable or impractical by the
Required Lenders, another financial institution with a combined capital and
surplus of at least $500,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Agent. After the effective date of the resignation of an Agent
hereunder, the retiring Agent shall be discharged from its duties and
obligations hereunder, provided that the provisions of this ARTICLE X shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as the Agent. In the event that there shall
not be a duly appointed and acting Agent, the Borrower agrees to make each
payment due to the Agent hereunder and under the Notes, if any, directly to each
Lender entitled thereto, pursuant to written instructions provided by the
retiring Agent, and to provide copies of each certificate or other document
required to be furnished to the Agent hereunder, if any, directly to each
Lender.
SECTION 10.09. COOPERATION OF LENDERS. Each Lender shall (a) promptly
------------- ----------------------
notify the other Lenders and the Agent of any Event of Default known to such
Lender under this Agreement and not reasonably believed to have been previously
disclosed to the other Lenders; (b) provide the other Lenders and the Agent with
such information and documentation as such other Lenders or the Agent shall
reasonably request in the performance of their respective duties hereunder,
including, without limitation, all information relative to the outstanding
balance of principal, interest and other sums owed to such Lender by the
Borrower but excluding internally generated reports and analyses and other
customarily confidential materials; and (c) cooperate with the Agent with
respect to any and all collections and/or foreclosure procedures at any time
commenced against the Borrower or otherwise in respect of the Collateral by the
Agent in the name and on behalf of the Lenders.
XI. DEFINITIONS
-----------
As used herein the following terms have the following respective meanings:
ACCOUNTANTS. See SECTION 6.05.
-----------
46
ACQUISITION. See SECTION 7.04.
-----------
AFFILIATE(S). With respect to any Person, any other Person that would
------------
be considered to be an affiliate of any Company under Rule 144(a) of the
Rules and Regulations of the Securities and Exchange Commission, as in
effect on the date hereof, if such Company were issuing securities.
AFFILIATE SUBORDINATION AGREEMENTS. See SECTION 2.01.
----------------------------------
AGENT. See the PREAMBLE.
-----
ANNUALIZED OPERATING CASH FLOW. For any three month period, Proforma
------------------------------
Operating Cash Flow for such period multiplied by four (4).
ASSIGNMENT AND ACCEPTANCE. See Article XIII.
-------------------------
AUDITED FINANCIAL STATEMENTS. See SECTION 1.02.
----------------------------
AUTHORIZED OFFICER. With respect to any certificate, agreement or other
------------------
document to be executed by or on behalf of any Company, the chairman,
president, chief executive officer, chief operating officer, chief
financial officer, vice president or treasurer of such Company, who shall,
in any event, be an officer duly authorized by all required action of such
Company to execute and deliver such document.
BASE RATE. As of any date, the fluctuating interest rate per annum equal
---------
to the greater of (a) the rate established by Fleet National Bank from time
to time at its office in New York, New York as its "Base Rate" for
commercial loans in United States Dollars, and (b) the Federal Funds Rate
plus .50%; in each case, including any applicable adjustments for reserves
----
or Federal Deposit Insurance Corporation requirements. The Base Rate is not
necessarily intended to be the lowest rate of interest determined by Fleet
National Bank in connection with extensions of credit.
BASE RATE LOANS. Loans bearing interest at a rate determined on the basis
---------------
of the Base Rate.
BORROWER. See the PREAMBLE.
--------
BORROWING DATE. With respect to any Loans requested hereunder, the date
--------------
such Loans are to be made.
BUDGET. See SECTION 6.05.
------
BUSINESS DAY. (a) For all purposes other than as provided in clause (b)
------------
below, any day other than a Saturday, Sunday or legal holiday on which
banks in Boston, Massachusetts, and Chicago, Illinois, are open for the
transaction of a substantial part of their commercial
47
banking business; and (b) with respect to all notices and determinations in
connection with, and payments of principal and interest on, LIBOR Loans,
any day that is a Business Day described in clause (a) and that is also a
day for trading by and between banks in U.S. Dollar deposits in the London
interbank market.
CAPITAL EXPENDITURES. For any period, the aggregate amount of payments
--------------------
made by the Companies during such period (including the aggregate amount of
Capital Lease Obligations incurred during such period) for the rental,
lease, purchase, construction or use of any property, the value or cost of
which would, under GAAP, appear on the Borrower's consolidated (or, if
applicable, combined) balance sheet in the category of property, plant and
equipment during such period.
CAPITAL LEASE. Any lease of property (real, personal or mixed) which, in
-------------
accordance with GAAP would be capitalized on the lessee's balance sheet or
for which the amount of the asset and liability thereunder if not so
capitalized should be disclosed in a note to such balance sheet.
CAPITAL LEASE OBLIGATIONS. All obligations of the Companies' to pay rent
-------------------------
or other amounts under a lease of (or other agreement conveying the right
to use) property (real, personal or mixed) to the extent such obligations
are required to be classified and accounted for as a Capital Lease on the
Borrower's balance sheet under GAAP, and, for purposes of this Agreement,
the amount of such obligations shall be the capitalized amount thereof,
determined in accordance with GAAP.
CASUALTY EVENT. Any loss of, or damages to, or any condemnation or other
--------------
taking of any assets or property of the Companies for which any Company
receives insurance proceeds, proceeds of a condemnation award or other
compensation.
CERCLA. The Comprehensive Environmental Response, Compensation and
------
Liability Act of 1989 (42 USC 9601, et. seq.).
-- ---
CHANGE OF CONTROL. For any reason, (i) Media/Communications Partners II
-----------------
Limited Partnership and its affiliates shall cease to own of record at
least 51% of the issued and outstanding Equity Securities of the Parent,
(ii) the Equity Investors shall cease to own of record collectively at
least 75% of the issued and outstanding Equity Securities of the Parent,
(iii) the Parent shall cease to own of record and beneficially 100% of the
issued and outstanding Equity Securities of the Borrower, (iv) the Borrower
shall cease to own of record and beneficially, directly or indirectly
through one or more other Subsidiaries, all of the issued and outstanding
Equity Securities of each of the Subsidiaries or, (v) if at any time, Xxxxx
--
Xxxxxxx or Xxxxxxxxxxx Xxxxx (or, in their absence, persons acceptable to
the Agent in its sole discretion) shall cease to serve in the management
capacities in which they serve as of the date hereof (or on the date the
Agent accepts such successors).
CLOSING DATE. The date as of which all of the conditions to the first
------------
Loans have been satisfied.
48
CLOSING LEVERAGE. See SECTION 3.01.
----------------
CODE. The Internal Revenue Code of 1986, as amended, and the rules and
----
regulations promulgated thereunder.
COLLATERAL. Collectively, any and all collateral referred to herein and in
----------
the Security Documents.
COLLATERAL ACCOUNT. See SECTION 1(D) of each of the Security Agreements.
------------------
COMMITMENT and COMMITMENTS. See SECTION 1.05.
---------- -----------
COMMITMENT FEE. See SECTION 1.06.
--------------
COMMITMENT REDUCTION NOTICE. See SECTION 1.05.
---------------------------
COMPANIES. Collectively, the Parent, Borrower and its Subsidiaries, from
---------
time to time.
COMPLIANCE REPORT. See SECTION 6.05.
-----------------
COMPLIANCE REPORT DELIVERY DATE. See SECTION 1.02.
-------------------------------
CONSOLIDATED NET INCOME. For any period, the net income of the Borrower
-----------------------
and its Subsidiaries (or, with respect to Acquisitions, the net income of
the entity being acquired or generated by the assets being acquired in such
Acquisitions) from operations for such period, after deduction of all
expenses, taxes and other proper charges for such period, determined on a
consolidated basis in accordance with GAAP, after eliminating therefrom all
extraordinary nonrecurring gains or losses, including without limitation
any gains (or losses) from any Disposition of any assets.
CONTROLLED GROUP. All trades or businesses (whether or not incorporated)
----------------
under common control that, together with the Borrower, are treated as a
single employer under Section 414(b) or 414(c) of the Code or Section 40001
of ERISA.
COPYRIGHT OFFICE. The United States Copyright and Trademark Office or any
----------------
other federal government agency which may hereafter perform its functions.
DAMAGED PROPERTY. See SECTION 6.02.
----------------
DEFAULT. An Event of Default or event or condition that, but for the
-------
requirement that time elapse or notice be given, or both, would constitute
an Event of Default.
DEFAULT RATE. See SECTION 1.03(E).
------------
49
DISPOSITION. See SECTION 7.03.
-----------
DOLLARS AND $. Lawful money of the United States of America.
-------------
EFFECTIVE DATE. See SECTION 1.07.
--------------
ENVIRONMENTAL LAWS. Any and all Federal, state, local and foreign laws,
------------------
rules or regulations, and any judicial or administrative orders or decrees,
relating to the regulation or protection of human health, safety or the
environment or to emissions, discharges, releases or threatened releases of
pollutants, contaminants, chemicals or toxic or hazardous substances or
wastes into the indoor or outdoor environment, including, without
limitation, ambient air, soil, surface water, ground water, wetlands, land
or subsurface strata, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, chemicals or toxic or hazardous substances or
wastes.
ENVIRONMENTAL SITE ASSESSMENT. A "Phase One" or other appropriate site
-----------------------------
assessment performed by an environmental assessment firm of national
reputation satisfactory to the Agent and reflected in a written report
which authorizes the reliance thereon by the Agent and the Lenders.
EQUITY FINANCING. See SECTION 3.01.
----------------
EQUITY FINANCING DOCUMENTS. The Stock Purchase Agreement and the other
--------------------------
instruments, agreements and documents evidencing the Equity Financing, true
and complete copies of which have been provided to the Agent.
EQUITY INVESTORS. Media/Communications Partners II Limited Partnership,
----------------
Media/Communications Investors Limited Partnership, Xxxxx Xxxxxxx, Xxxx
Xxxxx, Xxxxxxx Xxxxxx, Xxxxxxxxxxx Xxxxx and Xxxxxxx Xxxxxxxx.
EQUITY SECURITIES. Means, as to any Person that is a corporation, the
-----------------
authorized shares of such Person's capital stock, including all classes of
common, preferred, voting and nonvoting capital stock, and, as to any
Person that is not a corporation or an individual, the ownership interests
in such Person, including, without limitation, the right to share in
profits and losses, the right to receive distributions of cash and
property, and the right to receive allocations of items of income, gain,
loss, deduction and credit and similar items from such Person, whether or
not such interests include voting or similar rights entitling the holder
thereof to exercise control over such Person
ERISA. The Employee Retirement Security Act of 1974, as amended.
-----
EVENT OF DEFAULT. See ARTICLE VIII.
----------------
50
EXCESS CASH FLOW. For any period, Operating Cash Flow for such period
----------------
less (i) Total Interest Expense for such period and (ii) Capital
Expenditures made during such period.
EXEC-PC ACQUISITION AGREEMENT. Means the Asset Purchase Agreement dated as
-----------------------------
of September 14, 1998 among the Borrower, EXEC-PC, Inc., a Wisconsin
corporation, Xxxxxx X. Xxxxxxx and Xxxxx Xxxxxxx.
FEDERAL FUNDS RATE. For any period, a fluctuating interest rate per
------------------
annum (based on a 365 or 366 day year, as the case may be) equal for each
day during such period to the weighted average of the rates of interest
charged on overnight federal funds transactions with member banks of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published for any day which is a Business Day by the Federal Reserve Bank
of New York (or, in the absence of such publication, as reasonably
determined by the Agent).
FEE LETTERS. The three letter agreements of even date herewith between the
-----------
Borrower, and, respectively, Fleet, FINOVA Capital Corporation and State
Street Bank and Trust Company, with respect to the payment of certain fees.
FIXED CHARGES. For any period of four (4) consecutive fiscal quarters, the
-------------
sum of (a) Total Debt Service for such period, (b) cash income, franchise
or similar taxes paid by any corporate subsidiary of the Borrower or any
Subsidiary and (c) Tax Distributions made by the Borrower during such
period.
FLEET. Fleet National Bank, a national banking association.
-----
FUNDED DEBT. In relation to any Person at any time, all indebtedness for
-----------
borrowed money (including all notes payable and drafts accepted
representing extensions of credit and all obligations evidenced by bonds,
debentures, notes or other similar instruments on which interest charges
are customarily paid) of such Person, all guaranty or other contingent
obligations of such Person in respect of any such Indebtedness of any other
Person, the liquidation value of all preferred stock at such time (other
than any preferred stock that is not redeemable at the option of the
holder), all obligations of such Person under Capital Leases and for the
deferred purchase price of property or services (except, in any event,
trade payables arising in the ordinary course of business and obligations
under leases that do not constitute Capital Leases).
GAAP. Generally accepted accounting principles set forth in the opinions
----
and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements
of the Financial Accounting Standards Board or such other entity as may be
approved by a significant segment of the accounting profession, as in
effect on June 30, 1998, applied on a basis consistent with (a) the
application of the same in prior fiscal periods, except as otherwise
required, and (b) that employed by the Accountants in preparing the
financial statements referred to in SECTION 6.05(A).
51
GOVERNMENTAL AUTHORITY. Any nation or government, any state or other
----------------------
political subdivision thereof and any entity exercising any executive,
legislative, judicial, regulatory or administrative functions of, or
pertaining to, government.
HAZARDOUS MATERIALS. Any petroleum or petroleum products, flammable
-------------------
materials, explosives, radioactive materials, asbestos, urea formaldehyde
foam insulation, and transformers or other equipment that contain
polychlorinated biphenyls, "hazardous substances", "hazardous wastes",
"hazardous materials", "extremely hazardous wastes", "restricted hazardous
wastes", "toxic substances", "toxic pollutants", "contaminants",
"pollutants" or words of similar import under any Environmental Law and any
other chemical or other material or substance, the generation, storage,
transportation, use, disposal, release or location of which is now or
hereafter prohibited, limited or regulated under any Environmental Law.
HEDGING LENDER. Any Lender, or any Affiliate of any Lender, which from
--------------
time to time enters into a Rate Hedging Agreement with the Borrower.
INDEBTEDNESS OR INDEBTEDNESS. As applied to any Person, (a) all items
----------------------------
(except items of capital stock, capital or paid-in surplus or of retained
earnings) which, in accordance with GAAP, would be included in determining
total liabilities as shown on the liability side of a balance sheet of such
Person as at the date as of which Indebtedness is to be determined,
including Capital Lease Obligations, but excluding all deferred
---------
subscription liabilities and Indebtedness with respect to trade obligations
and other normal accruals in the ordinary course of business which are not
more than ninety (90) days in arrears measured from the date of billing,
(b) all indebtedness secured by any mortgage, pledge, lien or conditional
sale or other title retention agreement to which any property or asset
owned or held by such Person is subject, whether or not the indebtedness
secured thereby shall have been assumed; and (c) all indebtedness of others
which such Person has directly or indirectly guaranteed, endorsed
(otherwise than for collection or deposit in the ordinary course of
business), discounted or sold with recourse or agreed (contingently or
otherwise) to purchase or repurchase or otherwise acquire, or in respect of
which such Person has agreed to supply or advance funds (whether by way of
loan, stock or equity purchase, capital contribution, makewell or
otherwise) or otherwise to become directly or indirectly liable.
INSURANCE PROCEEDS. With respect to any Casualty Event, any proceeds of
------------------
insurance, condemnation award or other compensation in respect thereof, net
of reasonable fees and expenses related thereto.
INTEREST EXPENSE. For any period, the aggregate amount (determined on a
----------------
consolidated basis, after eliminating intercompany items, in accordance
with GAAP) of interest, commitment fees and letter of credit fees accrued
(whether or not paid) during such period (including, without limitation,
the interest component of Capital Lease Obligations
52
and the Commitment Fee, but excluding non-recurring fees payable under the
Fee Letters and interest in respect of overdue trade payables) by the
Companies in respect of all Indebtedness for borrowed money; plus the net
amount payable (or minus the net amount receivable) under Rate Hedging
Agreements during such period (whether or not actually paid or received
during such period).
INTEREST PERIOD. With respect to each LIBOR Loan, the period commencing on
---------------
the date such Loan is made or converted from a Base Rate Loan, or the last
day of the immediately preceding Interest Period, as to LIBOR Loans being
continued as such, and ending one (1), three (3) or six (6) months, or, to
the extent available, in the sole discretion of the Agent, nine (9) or
twelve (12) months thereafter, as the Borrower may elect in the applicable
Loan Request or Interest Rate Option Notice, provided that:
(i) any Interest Period (other than an Interest Period determined
pursuant to clause (iv) below) that would otherwise end on a day that is
not a Business Day shall be extended to the next succeeding Business Day
unless such Business Day falls in the next calendar month, in which case
such Interest Period shall end on the immediately preceding Business Day;
(ii) if the Borrower shall fail to give notice as provided in SECTION
1.03, the Borrower shall be deemed to have requested a conversion of the
affected LIBOR Loan to a Base Rate Loan on the last day of the then
current Interest Period with respect thereto;
(iii) any Interest Period relating to a LIBOR Loan 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, subject to clause (iv) below, end on the last
Business Day of a calendar month;
(iv) any Interest Period related to a LIBOR Loan that would otherwise
end after the final maturity date of the Loans shall end on such final
maturity date;
(v) no Interest Period shall include a principal repayment date for the
Loans unless an aggregate principal amount of Loans at least equal to the
principal amount due on such principal repayment date shall be Base Rate
Loans or LIBOR Loans having Interest Periods ending on or before such
date; and
(vi) notwithstanding clauses (iv) and (v) above, no Interest Period
shall have a duration of less than one (1) month.
53
INTEREST RATE OPTION NOTICE. A notice given by the Borrower to the Agent
---------------------------
of the Borrower's election to convert Loans to a different type or continue
Loans as the same type, in accordance with SECTION 1.04.
LENDERS. See the PREAMBLE.
-------
LIBOR BASE RATE. With respect to each day during each Interest Period
---------------
pertaining to any LIBOR Loan, the rate per annum determined by the Agent
to be the arithmetic mean (rounded to the nearest l/100th of 1%) of the
offered rates for deposits in Dollars with a term comparable to such
Interest Period that appears on the Telerate British Bankers Assoc.
Interest Settlement Rates Page (as defined below) at approximately 11:00
A.M., London time, on the second full Business Day preceding the first day
of such Interest Period; provided, however, that if there shall at any time
-------- -------
no longer exist a Telerate British Bankers Assoc. Interest Settlement Rates
Page, the term "LIBOR Base Rate" shall mean, with respect to each day
during each Interest Period pertaining to any LIBOR Loan, the rate per
annum equal to the rate at which the Agent is offered Dollar deposits at or
about 10:00 A.M., Boston time, two Business Days prior to the beginning of
such Interest Period in the London interbank deposit market where the
eurodollar and foreign currency and exchange operations in respect of its
LIBOR Loans are then being conducted for delivery on the first day of such
Interest Period for the number of days comprised therein and in an amount
comparable to the amount of its LIBOR Loan to be outstanding during such
Interest Period. As used herein, the "Telerate British Bankers Assoc.
-------------------------------
Interest Settlement Rates Page" means the display designated as Page 3750
-------- ---------------------
on the Telerate System Incorporated Service (or such other page as may
replace such page on such service for the purpose of displaying the rates
at which Dollar deposits are offered by leading banks in the London
interbank deposit market).
LIBOR LOANS. Loans bearing interest at a rate determined on the basis of
-----------
the LIBOR Rate.
LIBOR RATE. With respect to each day during each Interest Period
----------
pertaining to a LIBOR Loan, a rate per annum determined for such day in
accordance with the following formula (rounded upward, if necessary, to the
nearest 1/16th of 1%):
LIBOR Base Rate
---------------
1.00 - LIBOR Reserve Requirements
LIBOR RESERVE REQUIREMENTS. For any day as applied to a LIBOR Loan, the
--------------------------
aggregate (without duplication) of the 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 of Governors of the Federal Reserve System (or
other Governmental Authority having jurisdiction with respect thereto)
prescribed for eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D of such Board) maintained by a member bank of
the Federal Reserve System; provided, however, that LIBOR Reserve
Requirements
54
shall be calculated without giving effect to any increase of the rate of
reserve applicable to any Lender which is specifically imposed on such
Lender under a memorandum of understanding with a Federal Reserve Bank.
LIENS. See SECTION 4.09.
-----
LIEN SEARCHES. See SECTION 3.01.
-------------
LOAN DOCUMENTS. This Agreement, the Notes, the Security Documents and all
--------------
other agreements, instruments and certificates contemplated hereby and
thereby, including without limitation any Rate Hedging Agreements entered
into with any of the Lenders or any Hedging Lenders.
LOAN REQUEST. See SECTION 1.03.
------------
LOANS. See SECTION 1.01.
-----
MARGIN STOCK. See SECTION 4.12.
------------
MATERIAL ADVERSE EFFECT. (a) An adverse effect on the validity or
-----------------------
enforceability of this Agreement or any of the other Loan Documents in any
material respect, (b) an adverse effect on the condition (financial or
other), business, results of operations, prospects or properties of the
Companies, taken as a whole, in any material respect, other than any event
or circumstances that are generally applicable to the Internet service
provider industry or to general economic conditions, or (c) an impairment
of the ability of the Companies to fulfill their respective obligations
under this Agreement, the Notes or any other Loan Document to which it is a
party in any material respect.
MATURITY DATE. September 30, 2004.
-------------
MORTGAGES. Collectively, one or more mortgages, deeds of trust, deeds to
---------
secure debt or collateral assignments of leasehold interest, in form and
substance satisfactory to the Agent, to effect a Lien on real property or
leasehold interests in the state where the respective real property to be
covered by such instrument is located, executed by the party that is the
owner or lessee of such real property in favor of the Agent (or, in the
case of a deed of trust, in favor of a trustee for the benefit of the Agent
and the Lender), covering the respective fee or leasehold interest owned by
the such party, as said mortgages, deeds of trust, deeds to secure debt,
leasehold deeds of trust and collateral assignments of leasehold interests
shall be modified and supplemented and in effect from time to time.
NETLINK ACQUISITION AGREEMENT. Means an Asset Purchase Agreement in
-----------------------------
substantially the form of SCHEDULE A to be entered into among the Borrower,
----------
NetLink Systems, L.L.C., a Michigan limited liability company, Xxxxx
Xxxxxx, Xxxxxxxxxxx Xxxxxxxx and Xxxxxx Xxxxxxxx.
55
NET SALE PROCEEDS. With respect to any Disposition, the aggregate amount
-----------------
of all cash payments received by any Company, directly or indirectly, in
connection with such Disposition, whether at the time thereof or after such
Disposition under deferred payment arrangements or investments entered into
or received in connection with such Disposition, minus the aggregate amount
of any reasonable and customary legal, accounting, regulatory, title and
recording tax expenses, transfer taxes, commissions and other fees and
expenses paid at any time by any Company in connection with such
disposition, and minus any cash income taxes payable by any Company in
connection with such Disposition.
NOTES. See SECTION 1.01.
-----
OBLIGATIONS. The Loans and the other obligations of each of the Companies
-----------
under this Agreement and the other Loan Documents, including without
limitation any and all future loans, advances, debts, liabilities,
obligations, covenants and duties owing by any of the Companies to the
Agent, the Lenders and the Hedging Lenders, or any of them, of any kind or
nature, whether or not evidenced by any note, mortgage or other instrument,
whether arising by reason of an extension of credit, loan, guarantee,
indemnification or in any other manner, whether direct or indirect
(including those acquired by assignment), absolute or contingent, due or to
become due, now existing or hereafter arising and however acquired. The
term "Obligations" also includes, without limitation, all interest,
charges, expenses, fees (including attorneys', accountants', appraisers',
consultants' and other fees) and any other sums chargeable to the Companies
under this Agreement or any other Loan Documents.
OPENING BALANCE SHEET. See SECTION 4.01.
---------------------
OPERATING CASH FLOW. For any fiscal period, Consolidated Net Income for
-------------------
such period, plus, to the extent deducted in the determination of
----
Consolidated Net Income for such period; (a) Total Interest Expense, (b)
depreciation, (c) authorization, (d) taxes in respect of income and profits
expensed during such period and determined on a consolidated basis, (d)
other non-cash expenses, minus (e) extraordinary gains; in each case, for
-----
such period and determined on a consolidated basis, after eliminating
intercompany items, in accordance with GAAP.
PARENT. See the PREAMBLE.
------
PARTICIPANT. See SECTION 1.12.
-----------
PERMITTED ACQUISITIONS.
----------------------
(a) (i) The Acquisitions contemplated by the EXEC-PC Acquisition
Agreement and the NetLink Acquisition Agreement (providing that the
purchase price paid on account of the Acquisition contemplated by the
NetLink Acquisition Agreement does not
56
exceed $4,000,000), in case of such Acquisition, subject to the
satisfaction of the terms and conditions set forth in paragraphs (b)(i)
through (xi) below in this definition;
(b) Any Acquisition by the Borrower that does not result in a
Change of Control, whether such Acquisition is effected by way of the
purchase of assets or Equity Securities, by merger or consolidation of
one or more Subsidiaries or otherwise, of substantially all of the
assets of or Equity Securities issued by Internet service providers or
related businesses located in Michigan, Illinois, Ohio, Indiana,
Wisconsin, Minnesota, Iowa, Missouri and Kentucky, the purchase price
of which does not exceed $10,000,000, in the case of each such
Acquisition, subject to the satisfaction of the terms and conditions
set forth in (i) through (xi) below:
(i) If such Acquisition involves the purchase of equity
interests, the same shall be effected in such a manner as to assure
that the acquired entity becomes a wholly owned Subsidiary of the
Borrower;
(ii) No later than (1) thirty (30) days prior to the
consummation of any such Acquisition or, if earlier, ten (10) business
days after the execution and delivery of the related acquisition
agreement, the Borrower shall have delivered to the Agent (in
sufficient copies for all Lenders) a copy of executed counterparts of
such acquisition agreement, together with all schedules thereto, and
all applicable financial information, including new Projections,
updated to reflect such Acquisition and any related transactions, (2)
promptly following a request therefor, copies of such other
information or documents relating to such Acquisition as the Agent or
any Lender shall have reasonably requested, and (3) promptly following
the consummation of such Acquisition, copies of the material
agreements, instruments and documents executed and delivered at the
closing under such acquisition agreement;
(iii) Neither the Borrower nor any Subsidiary shall, in
connection with any such Acquisition, assume or remain liable with
respect to any indebtedness (including any material tax or ERISA
liability) of the related seller, except (i) to the extent permitted
under this Agreement and (ii) obligations of the seller incurred in
the ordinary course of business and necessary or desirable to the
continued operation of the underlying properties;
(iv) All assets and properties acquired in connection with
any such Acquisition shall be free and clear of any Liens other than
Permitted Liens;
(v) The applicable Sellers shall have consented to the
collateral assignment to the Agent of the Borrower's rights under the
Acquisition Agreement and any other agreements executed thereunder, as
required under SECTION 2.01.
57
(vi) The applicable third parties shall have consented to
the collateral assignment to the Agent of the Borrower's rights under
the leases, co-location agreements, line access agreements and other
material agreements specified by the Agent as is necessary to effect
the collateral assignment thereof in accordance with SECTION 2.01.
(vii) Immediately prior to any such Acquisition and after
giving effect thereto, no Default shall have occurred or be
continuing;
(viii) The Agent shall have received copies of the legal
opinions delivered by Seller(s) pursuant to such Acquisition Agreement
in connection with such Acquisition, and a letter from each Person
delivering an opinion (or authorization within in the opinion)
authorizing reliance thereon by the Agent and the Lenders;
(ix) Without limiting the generality of the foregoing,
after giving effect to such Acquisition (including any Loan therefor)
the Borrower shall be in compliance with the provisions of SECTION 5,
(i) calculated on a pro forma basis as of the end of and for the
--- -----
fiscal period most recently ended prior to the date of such
Acquisition, and (ii) under the Borrower's updated Projections
referred to above. The Borrower shall provide to the Agent a
certificate signed on behalf of the Borrower by its chief financial
officer demonstrating such compliance in reasonable detail;
(x) The Borrower shall have executed and/or delivered to
the Agent (or shall have caused to be executed and delivered to the
Agent by the appropriate Person), the following:
(A) With respect to the assets to be acquired
pursuant to such Acquisition, and the applicable Seller(s), all
Uniform Commercial Code financing statements, termination statements
and all security and pledge agreements, securities pledge agreements,
mortgages, deeds of trusts and related title insurance policies and
all other Security Documents necessary and required by the Agent or
its counsel in connection with the Borrower's compliance with SECTION
2.01;
(B) certified copies of the resolutions of the
Borrower authorizing such Acquisition;
(C) Uniform Commercial Code, tax lien and judgment
searches with respect to the assets to be acquired pursuant to such
Acquisition and the applicable Seller(s) (and their predecessors as
owners of such assets);
(D) updated certificates of insurance evidencing the
additional insurance coverage and policy provisions required in this
Agreement; or
58
(E) such other supporting documents and certificates
as the Agent or Lenders may request; and
(xi) In connection with an Acquisition involving the purchase or
formation of a new Subsidiary and/or the execution of additional
Security Documents or any other Loan Document, the Agent shall have
received the favorable written opinions, addressed to the Agent and
the Lenders, of the Companies' general counsel and local counsel in
the jurisdictions where the assets subject to such Acquisition are
located (in the case of local counsel opinions, relating to matters
concerning the perfection of security interests in real property owned
or leased by the Borrower or any Subsidiary (and, in the case of
leased real property, with respect to which the Agent requests a
collateral assignment or leasehold mortgage in accordance with SECTION
2.01(A)(IV)), such opinions to be in form and substance satisfactory
to the Agent.
(c) Any other Acquisition approved by the Required Lenders in their
sole and absolute discretion prior to the Borrower making a binding
commitment with respect thereto.
PERMITTED INVESTMENTS. (a) Investments in property to be used by any
---------------------
Company in the ordinary course of business; (b) current assets arising from
the sale of goods and services in the ordinary course of business; (c)
investments (of one year or less) in direct or guaranteed obligations of
the United States, or any agency thereof; (d) investments (of 90 days or
less) in certificates of deposit of the Lenders or any other domestic
commercial bank of recognized standing having capital, surplus and
undivided profits in excess of $100,000,000, membership in the Federal
Deposit Insurance Corporation ("FDIC") and senior debt rated carrying one
----
of the two highest ratings of Standard & Poor's Ratings Service, A Division
of McGraw Hill, Inc., or Xxxxx'x Investors Service, Inc. (an "Approved
--------
Institution"); (e) investments (of 90 days or less) in commercial paper
-----------
given one of the two highest ratings by Standard and Poor's Ratings
Service, A Division of McGraw Hill, Inc., or by Xxxxx'x Investors Service,
Inc.; (f) investments redeemable at any time without penalty in money
market instruments placed through the Lenders or Approved Institutions; (g)
repurchase agreements fully collateralized by United States government
securities; (h) deposits fully insured by the FDIC; (i) investments made
prior to and after the date hereof in Subsidiaries, including the
formation and capitalization of new Subsidiaries in connection with and as
permitted under SECTION 7.04; (j) intercompany loans and advances and
otherwise permitted under SECTION 7.01 and (k) short-term relocation and
other personal loans to employees and advances to employees in the ordinary
course of business for the payment of bona fide, properly documented,
---- ----
business expenses to be incurred on behalf of the Companies, provided that
--------
the aggregate outstanding amount of all such loans and advances shall not
exceed $50,000 in the aggregate at any time.
PERMITTED LIENS. See SECTION 7.02.
---------------
59
PERSON OR PERSON. Any individual, corporation, partnership, joint venture,
----------------
trust, business unit, unincorporated organization, or other organization,
whether or not a legal entity, or any government or any agency or political
subdivision thereof.
PLAN. The Voyager Holdings, Inc. 1998 Stock Option and Incentive Plan.
----
PRICING PERIOD. See SECTION 1.02.
--------------
PRICING RATIO. See SECTION 1.02.
-------------
PROFORMA OPERATING CASH FLOW. For any three-month period, Operating Cash
-----------------------------
Flow for such period plus pro forma Operating Cash Flow of any Subsidiaries
--- -----
acquired, or generated by any assets acquired, during such period in
Permitted Acquisitions, assuming such Permitted Acquisitions occurred on
the first day of such period. The determination of "Operating Cash Flow"
of any Subsidiary or assets acquired pursuant to a Permitted Acquisition,
(1) shall be calculated in a manner consistent in all relevant respects
with the method used to determine Operating Cash Flow hereunder and (2)
shall account for only those items included in the definition of Operating
Cash Flow hereunder that are directly attributable to such Subsidiary or
assets and the operation thereof.
PROJECTIONS. See SECTION 4.15.
-----------
PROPERTIES. See SECTION 4.18.
----------
QUARTERLY DATES. See SECTION 1.01.
---------------
RATE HEDGING AGREEMENTS. Any written agreements evidencing Rate Hedging
-----------------------
Obligations, including without limitation the LIBOR provisions of this
Agreement.
RATE HEDGING OBLIGATIONS. Any and all obligations of the Borrower, whether
------------------------
direct or indirect and whether absolute or contingent, at any time created,
arising, evidenced or acquired (including all renewals, extensions,
modifications and amendments thereof and all substitutions therefor), in
respect of: (a) any and all agreements, arrangements, devices and
instruments designed or intended to protect at least one of the parties
thereto from the fluctuations of interest rates, exchange rates or forward
rates applicable to such party's assets, liabilities or exchange
transactions, including without limitation dollar-denominated or cross
currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collar protection agreements, forward rate
currency or interest rate options, puts and warrants and so-called "rate
swap" agreements; and (b) any and all cancellations, buy-backs, reversals,
terminations or assignments of any of the foregoing.
RECOVERY. See SECTION 1.13.
--------
RECOVERING PARTY. See SECTION 1.13.
----------------
60
REGULATION D. Regulation D of the Board of Governors of the Federal
------------
Reserve System, as the same may be amended or supplemented from time to
time.
REGULATORY CHANGE. With respect to any Lender, any change after the
-----------------
Closing Date in any law, rule or regulation (including without limitation
Regulation D) of the United States, any state or any other nation or
political subdivision thereof, including without limitation the issuance of
any final regulations or guidelines, or the adoption or making after the
Closing Date (or, if later, the date as of which such Person became a
Lender) of any interpretation, directive or request, applying to a class of
banks in which such Lender is included under any such law, rule or
regulation (whether or not having the force of law and whether or not
failure to comply therewith would be unlawful) by any court or governmental
or monetary authority charged with the interpretation thereof.
RELATED LENDER PARTY. With respect to any Lender, such Lender's parent
--------------------
company and/or any affiliate of such Lender which is at least fifty percent
(50%) owned by such Lender or its parent company or, in the case of any
Lender which is a fund investing in bank loans, any other fund that invests
in bank loans and is managed by the same investment advisor of such Lender
or by a controlled affiliate of such investment advisor.
REMEDIAL WORK. All activities required under any Environmental Law,
-------------
including, without limitation, cleanup design and implementation, removal
activities, investigation, field and laboratory testing and analysis,
monitoring and other remedial and response actions, taken or to be taken,
arising out of or in connection with Hazardous Materials, including without
limitation all activities included within the meaning of the terms
"removal," "remedial action" or "response," as defined in 42 U.S.C. Section
9601(23), (24) and (25).
REQUIRED LENDERS. (a) Lenders holding at least 60% of the aggregate
----------------
amount of the unused Commitments; and thereafter, (b) Lenders holding at
least 60% of the sum of (i) the aggregate outstanding principal amount of
the Loans and (ii) the aggregate amount of the unused Commitments.
REQUIRED PAYMENT. See SECTION 1.14.
----------------
RESTORATION PERIOD. See SECTION 1.05(B).
------------------
RESTRICTED PAYMENT. Any distribution or payment of cash or property, or
------------------
both, directly or indirectly (a) to any Affiliate of any Company or (b) any
equityholder of any Company or any of their Affiliates, in each case for
any reason whatsoever, including without limitation, salaries, loans, debt
repayment, consulting fees, management fees, operating fees, expense
reimbursements and dividends, distributions, put, call or redemption
payments and any other payments in respect of equity interests; provided,
--------
however, that Restricted Payments shall not include any of the following:
------- ----- --- -------
61
(i) reasonable Transaction Costs, and
(ii) transactions in the ordinary course of the business of the
Companies, provided they comply with the provisions of SECTION 7.10.
SECURITY AGREEMENTS. The Security and Pledge Agreements dated as of
-------------------
the Closing Date or thereafter between (a) the Borrower and the Agent and
(b) each other Company and the Agent, as amended from time to time in
accordance with their respective terms.
SECURITY DOCUMENT(S). See SECTION 2.01.
--------------------
SOLVENT and SOLVENCY. With respect to any Person on a particular date, the
-------- --------
condition that on such date, (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person, (b) the present fair
salable value of the assets of such Person is not less than the amount that
will be required to pay the probable liability of such Person of its debts
as they become absolute and matured, (c) such Person does not intend to,
and does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature, and (d) such
Person is not engaged in business or a transaction, and is not about to
engage in business or a transaction, for which such Person's property would
constitute an unreasonably small amount of capital.
STOCK PURCHASE AGREEMENT. The Stock Purchase Agreement of even date
------------------------
herewith among the Parent and the Equity Investors.
SUBORDINATED DEBT. The Indebtedness evidenced by the (i) Borrower's
-----------------
Amended and Restated Subordinated Promissory Note dated September 23, 1998
in the principal amount of $2,101,197 made payable to the order of Horizon
Cablevision I Limited Partnership and (ii) Horizon Telecommunications
Inc.'s Amended and Restated Promissory Note dated September 23, 1998 in the
principal amount of $100,000 made payable to the order of Horizon
Cablevision I Limited Partnership.
SUBSIDIARY. (a) Any corporation, association, joint stock company,
----------
business trust or other similar organization of which more than 50% of the
ordinary voting power for the election of a majority of the members of the
board of directors or other governing body of such entity is held or
controlled by the Borrower; (b) any other such organization the management
of which is directly or indirectly controlled by a Borrower or a Subsidiary
of the Borrower through the exercise of voting power or otherwise; or (c)
any joint venture, association, partnership or other entity in which the
Borrower has a 50% equity interest.
TAXES. See SECTION 1.09.
-----
THIRD PARTIES. See SECTION 14.02.
-------------
62
TOTAL DEBT SERVICE. For any period, the aggregate amount (determined on a
------------------
combined or consolidated basis, as appropriate after eliminating
intercompany items, in accordance with GAAP) of principal and premium, if
any, and cash interest required to be paid during such period in respect of
Total Funded Debt. For purposes of this definition, the aggregate amount
of all principal required to be paid in respect of the Loans shall be
limited to Scheduled Principal Payments.
TOTAL FUNDED DEBT. As of any date, Funded Debt of the Companies
-----------------
(excluding the Subordinated Debt) as of such date, determined on a
consolidated basis in accordance with GAAP.
TOTAL INTEREST EXPENSE. For any period, Interest Expense for such period
----------------------
which is payable, or currently paid, in cash.
TOTAL INTEREST COVERAGE RATIO. See SECTION 5.03.
-----------------------------
TRANSACTION COSTS. For any period, nonrecurring out-of-pocket expenses
-----------------
(including attorneys' fees, investment banking fees, broker's fees and
facility fees) accrued by any Company and owing to Persons who are not
Affiliates of the Borrower during such period in connection with the
closing of the transactions under this Agreement, and any other
transactions occurring after the Closing Date which are consented to by the
Required Lenders.
YEAR 2000 COMPLIANT. When used with regard to any Company or any of the
-------------------
Companies' suppliers, vendors and customers, all software, embedded
microchips, and other processing capabilities utilized by, and material to
the business operations or financial condition of, such entity are able to
interpret and manipulate data on and involving all calendar dates
correctly, including in relation to dates on or after January 1, 2000, and
without causing a Material Adverse Effect.
YEAR 2000 RISK. The risk that the computer applications used by any
--------------
Company and its suppliers, vendors and customers may be unable to recognize
and perform without error date-sensitive functions involving certain dates
prior to any date after December 31, 1999.
XII. ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS; ACTIONS BY THE LENDERS.
----------------------------------------------------------------
(a) This Agreement (including the Schedules hereto) and the other Loan
Documents constitute the entire agreement of the parties herein and supersede
any and all prior agreements, written or oral, as to the matters contained
herein, and no modification or waiver of any provision hereof or of the Notes or
any other Loan Document, nor consent to the departure by the Borrower or any
other Person therefrom, shall be effective unless the same is in writing, and
then such waiver or consent shall be effective only in the specific instance,
and for the purpose, for which given. Except as hereafter provided, the consent
of the Required Lenders shall be required and
63
sufficient (i) to amend, with the consent of the Borrower, any term of this
Agreement, the Notes or any other Loan Document or to waive the observance of
any such term (either generally or in a particular instance or either
retroactively or prospectively); (ii) to take or refrain from taking any action
under this Agreement, the Notes, any other Loan Document or applicable law,
including, without limitation, (A) the acceleration of the payment of the Notes,
(B) the termination of the Commitments, (C) the exercise of the Agent's and the
Lenders' remedies hereunder and under the Security Documents and (D) the giving
of any approvals, consents, directions or instructions required under this
Agreement or the Security Documents; provided that no such amendment, waiver
--------
or consent shall, without the prior written consent of all of the Lenders or the
holders of all of the Notes at the time outstanding,
(1) extend the fixed maturity or reduce the principal amount of, or reduce
the amount or extend the time of payment of any principal of, or interest
or fees on, any Note (including the Applicable Margin but excluding
mandatory unscheduled prepayments of the Notes under SECTIONS 1.05(B)),
(2) increase or extend any Commitment of any Lender or extend the Maturity
Date (it being understood that waivers or modifications of conditions
precedent, covenants, Defaults or Events of Default shall not constitute
any such increase or extension),
(3) release any guaranties or all or substantially all of the Collateral,
unless (x) such release of Collateral is in connection with a Disposition
permitted under SECTION 7.03 or to which any required consent of the
Required Lenders has been given and (y) substantially all of the Net Sale
Proceeds of such sale are used to repay the Borrower's indebtedness to the
Lenders hereunder or otherwise used in a manner permitted hereunder it
being understood that no amendment or modification to the financial
definitions in this Agreement and no waiver or modification of any
condition precedent, covenant or Default shall constitute a reduction of
interest or fees for purposes of this clause (1),
(4) change the percentage referred to in the definition of "Required
Lenders" contained in ARTICLE XI or materially alter the provisions of
SECTION 1.13,
(5) change any other provisions requiring the consent of all of the Lenders
or the Required Lenders
(6) amend the provisions of this ARTICLE XII, or
(7) consent to the assignment or transfer by the Borrower or any of its
rights and obligations under this Agreement, provided, further that no such
amendment, waiver, consent or other action shall, without the consent of
the Agent, amend, modify or waive any provision of ARTICLE X as the same
applies to the Agent or any other provision of any Loan Documents as same
relates to the rights or obligations of the Agent;
64
and provided, further, that neither notice to, nor the consent of the Borrower
-------- -------
shall be required for any modification, amendment or waiver of the provisions of
this ARTICLE XII governing the number of Lenders required to consent to any act
or omission under the Loan Documents or of the definition of "Required Lenders".
(b) Any amendment or waiver effected in accordance with this ARTICLE XII
shall be binding upon each holder of any Note at the time outstanding, each
future holder of any Note and the Borrower. The Lenders' failure to insist
(directly or through the Agent) upon the strict performance of any term,
condition or other provision of this Agreement, any Note, or any of the Security
Documents, or to exercise any right or remedy hereunder or thereunder, shall not
constitute a waiver by the Lenders of any such term, condition or other
provision or default or Event of Default in connection therewith, nor shall a
single or partial exercise of any such right or remedy preclude any other or
future exercise, or the exercise of any other right or remedy; and any waiver of
any such term condition or other provision or of any such default or Event of
Default shall not affect or alter this Agreement, any Note or any of the
Security Documents, and each and every term, condition and other provision of
this Agreement, the Notes and the Security Documents shall, in such event,
continue in full force and effect and shall be operative with respect to any
other then existing or subsequent default or Event of Default in connection
therewith. An Event of Default hereunder and a default under any Note or under
any of the Security Documents shall be deemed to be continuing unless and until
waived in writing by the Required Lenders or all of the Lenders, as provided in
paragraph (a) above.
XIII. BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS
----------------------------------------------------
(a) This Agreement shall be binding upon and inure to the benefit of the
Borrower, the Lenders and the Agent and their respective successors and assigns,
and all subsequent holders of any of the Notes or any portion hereof.
(b) Each Lender may assign its rights and interests under this Agreement,
the Notes and the Security Documents and/or delegate its obligations hereunder
and thereunder, in whole or in part, and sell participations in the Notes and
the Security Documents as security therefor, provided as follows:
--------
(i) Any such assignment (other than of all of a Lender's Notes and
Commitments) made other than to another Lender or a Related Lender
Party shall reflect an assignment of such assigning Lender's Notes and
Commitments which is in an aggregate principal amount of at least
$5,000,000, and if greater, shall be an integral multiple of
$1,000,000.
(ii) Notwithstanding any provision of this Agreement to the contrary,
each Lender may at any time assign all or any portion of its rights
under this Agreement and each of the other Loan Documents, including,
without limitation, the Notes held by such Lender, to a Federal
Reserve Bank (or equivalent thereof in the case of Lenders chartered
outside of the United
65
States); provided that no such assignment shall release a Lender from
any of its obligations and liabilities under the Loan Documents. Any
Federal Reserve Bank (or equivalent thereof) which receives such an
assignment from any Lender may make further assignments of such rights
in accordance with the provisions of this Section.
(iii) Any assignments and/or delegations made hereunder shall be
pursuant to an instrument of assignment and acceptance (the
"Assignment and Acceptance") substantially in the form of SCHEDULE
------------------------- --------
13(B)(III) and the parties to each such assignment shall execute and
---------
deliver to the Agent for its acceptance the Assignment and Acceptance
together with any Note or Notes subject thereto. Upon such execution
and delivery, from and after the effective date specified in each
Assignment and Acceptance, which effective date shall be at least five
(5) Business Days after the execution thereof, (A) the assignee
thereunder shall become a party hereto and, to the extent provided in
such Assignment and Acceptance, have the rights and obligations of a
Lender hereunder with Commitments and outstanding Loans as set forth
therein and (B) the assigning Lender thereunder shall, to the extent
provided in such assignment, be released from its obligations under
this Agreement as to that portion of its obligation being so assigned
and delegated. The Assignment and Acceptance shall be deemed to amend
this Agreement to the extent, and only to the extent, necessary to
reflect the addition of the assignee as a Lender and the resulting
adjustment of Commitments and outstanding Loans arising from the
purchase by and delegation to such assignee of all or a portion of the
rights and obligations of such assigning Lender under this Agreement.
(iv) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and the assignee together with the Note(s)
subject to such assignment and payment by the assignee to the Agent of
a registration and processing fee of $3,000, the Agent shall accept
such Assignment and Acceptance. Promptly upon delivering such
Assignment and Acceptance to the Agent, the assigning Lender shall
give notice thereof to the Borrower and the other Lenders pursuant to
a Notice of Assignment and Acceptance substantially in the form of
SCHEDULE 13(B)(IV). Within five (5) Business Days after receipt of
------------------
such notice, the Borrower shall execute and deliver to the Agent in
exchange for such surrendered Note(s) one or more new Notes payable to
the order of such assignee in an amount equal to the portion of the
Commitments assumed, and the Loans purchased, by such assignee
pursuant to such Assignment and Acceptance and one or more new Notes
payable to the order of the assigning Lender in an amount equal to the
portion of the Commitments and outstanding Loans retained by it
hereunder. Each new Note shall be dated the effective date of such
Assignment and Acceptance and shall
66
otherwise be in substantially the form provided in SECTION 1.01. The
canceled Note(s) surrendered by the assigning Lender shall be returned
to the Borrower upon the execution and delivery of such new Note(s).
(v) Each Lender may sell participations in all or a portion of
its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitments and the Notes held by
it); provided, however, that, (A) the selling Lender shall remain
obligated under this Agreement to the extent as it would if it had not
sold such participation, (B) the selling Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, (C) at no time shall the selling Lender agree with such
participant to take or refrain from taking any action hereunder or
under any other Loan Document, except that the selling Lender may
agree not to consent, without such participant's consent, to any of
the actions referred to in ARTICLE XII, to the extent that the same
require the consent of each Lender hereunder, (D) all amounts payable
by the Borrower hereunder shall be determined as if such Lender had
not sold such participation and no participant shall be entitled to
receive any greater amount pursuant to this Agreement than the selling
Lender would have been entitled to receive in respect of the amount of
the participation transferred by such Lender to such participant had
no such transfer occurred, and (E) the Borrower, the Agent and the
other Lenders shall continue to deal solely and directly with the
selling Lender in connection with such Lender's rights and obligations
under this Agreement.
(vi) Except for an assignment made to a separately organized
branch or an Affiliate of a Lender, no assignment or participation
referred to above shall be permitted without the prior written consent
of the Agent, which consent shall not be unreasonably withheld or
delayed.
(vii) Except during the existence of an Event of Default, no
assignment by a Lender referred to above, other than to a Related
Lender Party and other than under paragraph (b)(ii) of this Section,
shall be permitted without the prior written consent of the Borrower,
which consent shall not be unreasonably withheld or delayed.
(viii) The Borrower may not assign any of its rights or delegate
any of its duties or obligations hereunder.
(ix) Any Lender may, in connection with any assignment or
participation pursuant to this Section, disclose to the assignee or
participant any information relating to any of the Companies furnished
to such Lender by or on behalf of the Borrower and such assignee or
participant shall treat such information as confidential.
67
XIV. MISCELLANEOUS
-------------
SECTION 14.01. SURVIVAL. This Agreement and all covenants, agreements,
------------- --------
representations and warranties made herein and in the certificates delivered
pursuant hereto, shall survive the making by the Lenders of the Loans and shall
continue in full force and effect so long as any Obligation is outstanding and
unpaid or any Lender has any obligation to advance funds to the Borrower
hereunder.
SECTION 14.02. FEES AND EXPENSES; INDEMNITY; ETC. The Borrower agrees (a)
------------- ---------------------------------
to pay or reimburse the Agent for all its reasonable out-of-pocket costs and
expenses incurred in connection with the development, preparation, negotiation,
interpretation and execution of, and any amendment, supplement or modification
to, this Agreement, the Notes and any other Loan Documents and the consummation
and administration of the transactions contemplated hereby, including, without
limitation, the reasonable fees and disbursements of (i) counsel to the Agent
and (ii) such agents of the Agent not regularly in its employ, accountants,
other auditing services, consultants and appraisers engaged by or on behalf of
the Agent or by the Borrower at the request of the Agent (collectively, "Third
-----
Parties"); (b) to pay or reimburse the Agent for all its reasonable costs and
-------
expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the Notes and any other Loan Documents, including,
without limitation, the reasonable fees and disbursements of (i) counsel to the
Agent and (ii) Third Parties; (c) following the occurrence of an Event of
Default hereunder, to pay or reimburse the Lenders for the reasonable fees and
disbursements of counsel for the respective Lenders engaged for the preservation
or enforcement of such Lender's rights under this Agreement or any other Loan
Documents relating to such Event of Default; (d) to pay, indemnify, and hold
each Lender and the 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 Notes and any other Loan Documents; and (e)
to pay, indemnify, and hold each Lender and the Agent (and their respective
directors, officers, employees and agents) 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 the execution, delivery, enforcement, performance and administration
of, or any transaction contemplated by, any Loan Document or the use or proposed
use of the proceeds of the Loans or the refinancing or restructuring of the
credit arrangement provided under this Agreement in the nature of a "work-out"
or any proceedings with respect to the bankruptcy, reorganization, insolvency,
readjustment of debt, dissolution or liquidation of the Borrower or any other
party other than the Lender or Agent to any Loan Document (all the foregoing in
this clause (e), collectively, the "indemnified liabilities"), provided, that
----------------------- --------
the Borrower shall have no obligation hereunder to the Agent or any Lender with
respect to indemnified liabilities arising from the gross negligence or willful
misconduct of the Agent or any such Lender. The agreements in this Section
shall survive repayment of the Notes and all other amounts payable hereunder.
68
SECTION 14.03. NOTICE.
------------- ------
(a) All notices, requests, demands and other communications provided for
hereunder (including without limitation Loan Requests) shall be in writing
(including telecopied communication) and mailed or telecopied or delivered to
the applicable party at the addresses indicated below.
If to the Agent:
Fleet National Bank
One Federal Street
Mail Stop: MAOFD03D
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx Xxxx and Xxxxxxx Xxxxxx
Telecopy No.: (000) 000-0000
and if to any Lender, at the address set forth on the appropriate signature page
hereto or, with respect to any assignee of the Notes under ARTICLE XIII, at the
address designated by such assignee in a written notice to the other parties
hereto;
in each case (except for routine communications), with a copy to:
Xxxxxxx & Xxxxxx, LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxx X. Slap, Esquire
If to the Borrower:
Voyager Information Networks, Inc.
0000 Xxxxx Xxxxxxxx, Xxxxx 000
Xxxx Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxxxxx Xxxxx
Telecopy No.: (000) 000-0000
with copies (except for routine communications) to:
Xxxxxxx Procter & Xxxx XXX
Xxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxx, P.C.
Telecopy No.: (000) 000-0000
69
or, as to each party, at such other address as shall be designated by such
parties in a written notice to the other party complying as to delivery with the
terms of this Section. All such notices, requests, demands and other
communication shall be deemed given upon receipt by the party to whom such
notice is directed.
(b) The address of the Agent for payment hereunder is as follows:
Fleet National Bank, as Agent
One Federal Street
Mail Stop: MAOFD03D
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx Xxxx and Xxxxxxx Xxxxxx
Telecopy No.: (000) 000-0000
SECTION 14.04. GOVERNING LAW. THIS AGREEMENT AND THE NOTES SHALL BE
------------- -------------
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS (WITHOUT GIVING EFFECT TO ANY CONFLICTS OR CHOICE
OF LAWS PROVISIONS THAT WOULD CAUSE THE APPLICATION OF THE DOMESTIC SUBSTANTIVE
LAWS OF ANY OTHER JURISDICTION).
SECTION 14.05. CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.
------------- ---------------------------------------------
(A) THE BORROWER TO THE EXTENT THAT IT MAY LAWFULLY DO SO, HEREBY
CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE COMMONWEALTH OF
MASSACHUSETTS AND THE UNITED STATES DISTRICT COURT FOR THE OF MASSACHUSETTS, AS
WELL AS TO THE JURISDICTION OF ALL COURTS TO WHICH AN APPEAL MAY BE TAKEN FROM
SUCH COURTS, FOR THE PURPOSE OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT
OF ANY OF ITS OBLIGATIONS ARISING HEREUNDER OR UNDER THE NOTES OR THE SECURITY
DOCUMENTS OR WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED HEREBY, AND EXPRESSLY
WAIVES ANY AND ALL OBJECTIONS IT MAY HAVE AS TO VENUE, INCLUDING, WITHOUT
LIMITATION, THE INCONVENIENCE OF SUCH FORUM, IN ANY OF SUCH COURTS. IN ADDITION,
TO THE EXTENT THAT IT MAY LAWFULLY DO SO, THE BORROWER CONSENTS TO THE SERVICE
OF PROCESS BY PERSONAL SERVICE OR U.S. CERTIFIED OR REGISTERED MAIL, RETURN
RECEIPT REQUESTED, ADDRESSED TO SUCH PARTY AT THE ADDRESS PROVIDED HEREIN. TO
THE EXTENT THAT THE BORROWER HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM
JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR
NOTICE, ATTACHMENT PRIOR TO JUDGMENT ATTACHMENT IN AID OF EXECUTION OR
OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, IT HEREBY IRREVOCABLY WAIVES
SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS.
70
(B) WAIVER OF JURY TRIAL. THE BORROWER HEREBY VOLUNTARILY AND IRREVOCABLY
--------------------
WAIVES TRIAL BY JURY IN ANY ACTION BROUGHT ON OR WITH RESPECT TO THIS AGREEMENT,
THE NOTES, THE SECURITY DOCUMENTS OR ANY OTHER AGREEMENTS EXECUTED IN CONNECTION
HEREWITH.
SECTION 14.06. SEVERABILITY. Any provision of this Agreement, the Notes
------------- ------------
or any of the Security Documents which 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 or affecting the validity or enforceability of such provision
in any other jurisdiction.
SECTION 14.07. SECTION HEADINGS, ETC. Any Article and Section headings in
------------- ----------------------
this Agreement are included herein for convenience of reference only and shall
not constitute a part of this Agreement for any other purpose.
SECTION 14.08. SEVERAL NATURE OF LENDERS' OBLIGATIONS. Notwithstanding
------------- --------------------------------------
anything in this Agreement, the Notes or any of the Security Documents to the
contrary, all obligations of the Lenders hereunder shall be several and not
joint in nature, and in the event any Lender fails to perform any of its
obligations hereunder, the Borrower shall have no recourse against any other
Lender(s) who has (have) performed its (their) obligations hereunder. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out of this Agreement, subject to the provisions of ARTICLE XII,
and it shall not be necessary for any other Lender to be joined as an additional
party in any proceeding for such purpose.
SECTION 14.09. COUNTERPARTS. This Agreement may be executed in several
------------- ------------
counterparts, each of which shall be an original and all of which shall
constitute one and the same Agreement.
SECTION L4.10. KNOWLEDGE AND DISCOVERY. All references in this Agreement
------------- -----------------------
to "knowledge" of, or "discovery" by, the Borrower shall be deemed to include,
without limitation, any such actual knowledge of, or discovery by any executive
officer or the chief financial officer, if any, of the Borrower.
SECTION 14.11. AMENDMENT OF OTHER AGREEMENTS. All references in this
------------- -----------------------------
Agreement to other documents and agreements to which the Lenders are not parties
(including without limitation the Acquisition Agreements) shall be deemed to
refer to such documents and agreements as presently constituted and, except for
any amendments and modifications not prohibited under SECTION 7.11, not as
hereafter amended or modified unless the Required Lenders shall have expressly
consented in writing to such amendment(s) or modification(s).
SECTION 14.12. DISCLAIMER OF RELIANCE. THE BORROWER HAS NOT RELIED ON ANY
------------- ----------------------
ORAL REPRESENTATIONS CONCERNING ANY OF THE TERMS OR CONDITIONS OF THE LOANS, THE
NOTES, THIS AGREEMENT OR ANY OF THE SECURITY DOCUMENTS IN ENTERING INTO THE
SAME. THE BORROWER ACKNOWLEDGES AND AGREES THAT NONE OF THE OFFICERS OF THE
AGENT OR ANY LENDER HAS MADE ANY REPRESENTATIONS THAT ARE INCONSISTENT WITH THE
TERMS AND PROVISIONS OF THIS AGREEMENT, THE
71
NOTES AND THE SECURITY DOCUMENTS, AND NEITHER THE BORROWER NOR ANY OF ITS
AFFILIATES HAS RELIED ON ANY ORAL PROMISES OR REPRESENTATIONS IN CONNECTION
THEREWITH.
SECTION 14.13. ENVIRONMENTAL INDEMNIFICATION. Without limiting the
------------- -----------------------------
generality of SECTION 14.02, in consideration of the execution and delivery of
this Agreement by the Lenders and the making of the Loans, the Borrower hereby
indemnifies, exonerates and holds the Lenders and each of their respective
officers, directors, employees and agents (collectively, the "Indemnified
-----------
Parties") free and harmless from and against any and all actions, causes of
-------
action, suits, losses, costs, liabilities and damages, and expenses incurred in
connection therewith (irrespective of whether any such Indemnified Party is a
party to the action for which indemnification hereunder is sought), including
reasonable attorneys' fees and disbursements (collectively, the "Indemnified
-----------
Liabilities"), incurred by the Indemnified Parties or any of them as a result
-----------
of, or arising out of:
(a) any investigation, litigation or proceeding, including, without
limitation, the assertion of any lien, related to any environmental cleanup,
compliance action or release by any Company of any Hazardous Material or any
other matter affecting any of the Properties and relating to the protection of
the environment; or
(b) the presence on or under, or the actual or threatened discharge or
release from, any Property of any Hazardous Material whether or not such
Hazardous Material originates or emanates from such Property or is present or
threatening to affect such Property
(c) personal injury, death or property damage arising under any statutory
or common law tort theory of liability, including without limitation the
maintenance of a nuisance; or
(d) any other environmental condition arising at or affecting any of the
Properties which is limited, prohibited or otherwise regulated by a federal,
state or local agency charged with the enforcement of Environmental Laws.
The foregoing indemnification shall not apply to any such Indemnified
Liabilities arising for the account of a particular Indemnified Party by reason
of the relevant Indemnified Party's negligence or misconduct, and if and to the
extent that the foregoing undertaking may be unenforceable for any reason, the
Borrower agrees to make the maximum contribution to the payment and satisfaction
of each of the Indemnified Liabilities which is permissible under applicable
law. Notwithstanding anything to the contrary herein contained, the obligations
and liabilities under this Section shall survive and continue in full force and
effect and shall not be terminated, discharged or released in whole or in part
irrespective of whether all the Obligations have been paid in full or the
Commitments have been terminated and irrespective of any foreclosure of any
mortgage, deed of trust or collateral assignment on any real property or
acceptance by any Lender of a deed or assignment in lieu of foreclosure.
72
SECTION 14.14. INTEGRATION.
------------- -----------
This Agreement and the other Loan Documents represent the agreement of the
Borrower, the Agent and the Lenders' with respect to the subject matter hereof,
and there are no promises, undertakings, representations or warranties by Agent
or any Lender relative to the subject matter hereof not expressly set forth or
referred to herein or in the other Loan Documents.
[THE NEXT PAGES ARE THE SIGNATURE PAGES]
73
IN WITNESS WHEREOF, the Agent, the Lenders and the Borrower have caused
this Agreement to be duly executed by their duly authorized representatives, as
a sealed instrument, all as of the day and year first above written.
BORROWER:
--------
VOYAGER INFORMATION NETWORKS, INC.
By: /s/ Xxxxxxxxxxx X. Xxxxx
-------------------------------------
Title: CEO
AGENT:
-----
FLEET NATIONAL BANK
By: /s/ Xxxxxxx Xxxxxx
--------------------------------------
Title: A V.P.
LENDER:
------
FLEET NATIONAL BANK
By: /s/ Xxxxxxx Xxxxxx
--------------------------------------
Title: A V.P.
[Signature Page to Credit Agreement]
Lending Office for all Loans:
Fleet National Bank
One Federal Street
Mail Stop: MAOFD03D
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx Xxxx/Xxxxxxx Xxxxxx
Telecopy No.: (000) 000-0000
Address for Notices:
Fleet National Bank
One Federal Street
Mail Stop: MAOFD03D
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx Xxxx/Xxxxxxx Xxxxxx
Telecopier No.: (000) 000-0000
FINOVA CAPITAL CORPORATION
By: /s/ Xxxxxx X. Xxxxx
----------------------------------
Title: Xxxxxx X. Xxxxx
Address for Notices:
FINOVA Capital Corporation
000 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Portfolio Manager
Telecopy No.: (000) 000-0000
and
FINOVA Capital Corporation
0000 X. Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Vice President, Law
Telecopy No.: (000) 000-0000
0
XXXXX XXXXXX BANK AND TRUST COMPANY
By: /s/ Xxxxxxxx X. Xxxx
----------------------------
Title: Vice President
Address for Notices:
State Street Bank and Trust Company
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxx
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxx Xxxxxxxxx, Esquire
Xxxxxx, Xxxx & Xxxxxxx
Exchange Place
Boston, MA 02109
3
JOINDER
-------
The undersigned joins in the execution of the foregoing Agreement for the
purpose of agreeing to be bound by the provisions thereof applicable to it.
VOYAGER HOLDINGS, INC.
By: /s/ Xxxxxxxxxxx X. Xxxxx
--------------------------------
Title: CEO
4
