LOAN AGREEMENT
between
FINOVA CAPITAL CORPORATION,
as Agent and Lender,
and
AQUIS COMMUNICATIONS, INC.
as Borrower
Dated as of December 31, 1998
TABLE OF CONTENTS
Page
Number
------
PRELIMINARY STATEMENT........................................................1
ARTICLE IDEFINITIONS AND DETERMINATIONS......................................1
1.1 Definitions......................................................1
1.2 Time Periods....................................................27
1.3 Accounting Terms and Determinations.............................27
1.4 References......................................................27
1.5 Lender's or Agent's Discretion..................................27
1.6 Borrower's Knowledge............................................28
ARTICLE IILOAN AND TERMS OF PAYMENT.........................................28
2.1 Loan............................................................28
2.1.1 Aggregate Loan Amount....................................28
2.1.2 Initial Portion..........................................28
2.1.3 Merger Portion...........................................28
2.1.4 Subsequent Portion.......................................28
2.1.5 Acquisition Portion......................................28
2.1.6 Use of Proceeds..........................................28
2.1.7 Note.....................................................29
2.1.8 Reborrowing..............................................29
2.2 Interest........................................................29
2.2.1 Interest Rate............................................29
2.2.2 Interest Computation.....................................30
2.2.3 Maximum Interest.........................................30
2.3 LIBOR Loans.....................................................31
2.3.1 Election by Borrower.....................................31
2.3.2 LIBOR Limitations........................................31
2.3.3 Eurodollar Deposits Unavailable or Interest Rate
Unascertainable .........................................31
2.3.4 Tax and Other Laws.......................................32
2.3.5 Changes in Law Rendering LIBOR Loans Unlawful............32
2.3.6 Indemnity................................................33
2.4 Principal and Interest Payments.................................33
2.4.1 Interest.................................................33
2.4.2 Principal................................................33
2.5 Default Rate....................................................34
2.6 Late Charges....................................................34
2.7 Loan Fees.......................................................34
2.7.1 Closing Loan Fee.........................................34
2.7.2 Subsequent Portion Loan Fee..............................34
2.7.3 Acquisition Portion Loan Fees............................34
2.8 Prepayments.....................................................34
2.8.1 Voluntary Prepayments....................................34
2.8.2 Mandatory Prepayments....................................35
2.8.3 Prepayment Premium.......................................36
2.8.4 Involuntary Prepayment...................................37
2.9 Payments after Event of Default.................................37
2.10 Method of Payment; Good Funds...................................37
ARTICLE III SECURITY; LETTERS OF CREDIT.....................................37
3.1 Security........................................................37
3.2 Letters of Credit...............................................37
3.2.1 Draws on Letters of Credit...............................37
3.2.2 Application of Draw Proceeds.............................38
3.2.3 Release of Letters of Credit.............................38
ARTICLE IV CONDITIONS OF CLOSING............................................38
4.1 Closing Conditions for Each Disbursement........................38
4.1.1 Representations and Warranties...........................38
4.1.2 Performance; No Default..................................38
4.1.3 Licenses.................................................39
4.1.4 Financial Statements and Projections.....................39
4.1.5 Insurance................................................39
4.1.6 Environmental Audit......................................39
4.1.7 Indebtedness to be Refinanced............................40
4.1.8 Approval of Instruments and Security Interests; Consents.40
4.1.9 Security Interests.......................................40
4.1.10 Use of Assets............................................40
4.1.11 Proceedings and Documents................................40
4.1.12 Material Adverse Change..................................40
4.1.13 Broker Fees..............................................41
4.1.14 Fees and Expenses........................................41
4.2 Closing Conditions for Initial Portion..........................41
4.2.1 Equity Capitalization....................................41
4.2.2 Maximum Leverage.........................................41
4.2.3 Consummation of Xxxx Atlantic Acquisition................41
4.2.4 Delivery of Documents....................................41
4.2.5 Opinions of Counsel; Direction for Delivery..............43
4.2.6 Appraisal................................................43
4.3 Conditions to Disbursement of the Merger Portion................43
4.3.1 Disbursement of Initial Portion..........................43
4.3.2 Maximum Leverage.........................................43
4.3.3 Consummation of Paging Partners Merger...................43
4.3.4 Delivery of Documents....................................43
4.3.5 Opinions of Counsel; Direction for Delivery..............45
4.4 Conditions to Disbursement of the Subsequent Portion............45
4.4.1 Disbursement of Initial Portion..........................45
4.4.2 Maximum Leverage.........................................45
4.4.3 Xxxx Atlantic Seller Note Payment........................45
4.4.4 Delivery of Documents....................................45
4.5 Conditions to Disbursement of Acquisition Portion...............46
4.5.1 Disbursement of Initial Portion..........................46
4.5.2 Maximum Leverage.........................................46
4.5.3 Amount and Frequency of Advances.........................46
4.5.4 Purpose of Advance.......................................46
4.5.5 Information Regarding Subsequent Acquisitions............46
4.5.6 Consent to Subsequent Acquisition........................47
4.5.7 Consummation of Subsequent Acquisition...................47
4.5.8 Delivery of Documents....................................47
4.5.9 Opinions of Counsel; Direction for Delivery..............49
ARTICLE V REPRESENTATIONS AND WARRANTIES....................................49
5.1 Existence and Power.............................................49
5.2 Authority.......................................................49
5.3 Borrower Capital Stock and Related Matters......................49
5.3.1 Borrower Capital Stock...................................50
5.3.2 Restrictions.............................................50
5.4 Binding Agreements..............................................50
5.5 Business and Property of Borrower...............................50
5.5.1 Business and Property....................................50
5.5.2 Licenses.................................................50
5.5.3 Operating Agreements.....................................51
5.5.4 Facility Sites...........................................51
5.5.5 Leases...................................................51
5.5.6 Real Estate..............................................51
5.5.7 Operation and Maintenance of Equipment...................51
5.6 Title to Property; Liens........................................51
5.7 Projections and Financial Statements............................52
5.7.1 Financial Statements.....................................52
5.7.2 Projections..............................................52
5.8 Litigation......................................................52
5.9 Defaults in Other Agreements; Consents; Conflicting Agreements..52
5.10 Taxes...........................................................53
5.11 Compliance with Applicable Laws.................................53
5.12 Patents, Trademarks, Franchises, Agreements.....................53
5.13 FCC Matters.....................................................53
5.14 Environmental Matters...........................................54
5.15 Application of Certain Laws and Regulations.....................54
5.15.1 Investment Company Act...................................54
5.15.2 Holding Company Act......................................54
5.15.3 Foreign or Enemy Status..................................54
5.15.4 Regulations as to Borrowing..............................54
5.16 Margin Regulations..............................................55
5.17 Other Indebtedness..............................................55
5.18 No Misrepresentation............................................55
5.19 Employee Benefit Plans..........................................55
5.19.1 No Other Plans...........................................55
5.19.2 ERISA and Code Compliance and Liability..................55
5.19.3 Funding..................................................55
5.19.4 Prohibited Transactions and Payments.....................56
5.19.5 No Termination Event.....................................56
5.19.6 ERISA Litigation.........................................56
5.20 Employee Matters................................................56
5.20.1 Collective Bargaining Agreements; Grievances.............56
5.20.2 Claims Relating to Employment............................56
5.21 Burdensome Obligations..........................................57
5.22 Broker Fees.....................................................57
5.23 Pagers in Service...............................................57
5.24 Insurance.......................................................57
5.25 Representations and Warranties in Certain Documents.............57
5.26 Year 2000 Problem...............................................57
ARTICLE VI AFFIRMATIVE COVENAN..............................................58
6.1 Legal Existence; Good Standing..................................58
6.2 Inspection......................................................58
6.3 Financial Statements and Other Information......................58
6.3.1 Monthly Statements.......................................58
6.3.2 Quarterly Statements and Agings..........................58
6.3.3 Annual Statements........................................59
6.3.4 Officer's Certificates...................................59
6.3.5 Accountants' Certificate.................................59
6.3.6 Audit Reports............................................60
6.3.7 Business Plans...........................................60
6.3.8 Notice of Defaults; Loss.................................60
6.3.9 Notice of Suits; Adverse Events..........................60
6.3.10 Reports to Shareholders, Creditors and Governmental
Bodies...................................................60
6.3.11 ERISA Notices and Requests...............................61
6.3.12 Other Information........................................62
6.4 Reports to Governmental Bodies and Other Persons................62
6.5 Maintenance of Licenses and Other Agreements....................62
6.6 Insurance.......................................................62
6.6.1 Maintenance of Insurance.................................62
6.6.2 Claims and Proceeds......................................63
6.7 Future Leases...................................................63
6.8 Future Acquisitions of Real Property............................63
6.9 Environmental Matters...........................................64
6.9.1 Compliance...............................................64
6.9.2 Certification............................................64
6.10 Compliance with Laws............................................64
6.11 Taxes and Claims................................................64
6.12 Maintenance of Properties.......................................64
6.13 Governmental Approvals..........................................65
6.14 Payment of Indebtedness.........................................65
6.15 Year 2000 Problem...............................................65
6.16 Xxxx Atlantic Interest Account..................................65
ARTICLE VII NEGATIVE COVENANTS..............................................65
7.1 Borrowing.......................................................65
7.2 Liens...........................................................65
7.3 Merger and Acquisition..........................................66
7.4 Contingent Liabilities..........................................66
7.5 Distributions...................................................66
7.6 Capital Expenditures............................................66
7.7 Payments of Indebtedness for Borrowed Money.....................66
7.7.1 Permitted Senior Indebtedness............................67
7.7.2 Motorola Indebtedness....................................67
7.7.3 Xxxx Atlantic Seller Indebtedness........................67
7.7.4 Letters of Credit Indebtedness...........................67
7.7.5 Deferred Payment Indebtedness............................68
7.8 Obligations as Lessee Under Operating Leases....................68
7.9 Investments, Loans..............................................68
7.10 Fundamental Business Changes....................................69
7.11 Facility Sites..................................................69
7.12 Sale or Transfer of Assets......................................69
7.13 Amendment of Certain Agreements.................................69
7.14 Acquisition of Additional Properties............................69
7.15 Equity Sales....................................................69
7.16 Transactions with Affiliates....................................70
7.17 Compliance with ERISA...........................................70
7.18 Senior Leverage Ratio...........................................71
7.19 Total Leverage Ratio............................................71
7.20 Senior Debt Service Coverage Ratio..............................72
7.21 Certain Agreements..............................................72
ARTICLE VIII DEFAULT AND REMEDIES...........................................73
8.1 Events of Default...............................................73
8.1.1 Default in Payment.......................................73
8.1.2 Breach of Covenants......................................73
8.1.3 Breach of Warranty.......................................73
8.1.4 Default Under Other Indebtedness for Borrowed Money......73
8.1.5 Bankruptcy...............................................73
8.1.6 Judgments................................................74
8.1.7 Impairment of Licenses; Other Agreements.................74
8.1.8 Collateral...............................................74
8.1.9 Interruption of Operations...............................75
8.1.10 Plans....................................................75
8.1.11 Change in Control........................................75
8.2 Acceleration of Borrower's Obligations..........................76
8.3 Remedies on Default.............................................76
8.3.1 Enforcement of Security Interests........................76
8.3.2 Other Remedies...........................................76
8.4 Application of Funds............................................76
8.4.1 Expenses.................................................76
8.4.2 Borrower's Obligations...................................76
8.4.3 Surplus..................................................77
8.5 Performance of Borrower's Obligations...........................77
ARTICLE IX ADDITIONAL LENDERS AND PARTICIPANTS; THE AGENT...................77
9.1 Assignment to Other Lenders.....................................77
9.1.1 Assignment...............................................77
9.1.2 Effect of Loan Assignment................................77
9.1.3 Register.................................................78
9.1.4 Substitution of Notes....................................78
9.1.5 Inspections...............................................78
9.2 Participations..................................................78
9.3 Set Off and Sharing of Payments.................................78
9.4 Lenders' Decisions..............................................79
9.5 Appointment of Agent............................................79
9.6 Delegation of Duties............................................79
9.7 Nature of Duties; Independent Credit Investigation..............79
9.8 Instructions from Lenders.......................................80
9.9 Exculpatory Provisions..........................................80
9.10 Reimbursement and Indemnification by Lenders of Agent...........80
9.11 Reliance by Agent...............................................81
9.12 Notice of Default...............................................81
9.13 Release of Collateral...........................................81
9.14 Lenders in Their Individual Capacities..........................81
9.15 Holders of Notes................................................81
9.16 Successor Agent.................................................81
9.17 Delivery of Information.........................................82
9.18 Beneficiaries...................................................82
ARTICLE X CLOSING...........................................................82
ARTICLE XI EXPENSES AND INDEMNITY...........................................82
11.1 Attorney's Fees and Other Fees and Expenses.....................82
11.1.1 Fees and Expenses for Preparation of Loan Instruments....83
11.1.2 Fees and Expenses in Enforcement of Rights or Defense
of Loan Instrument ......................................83
11.2 Indemnity.......................................................83
11.2.1 Brokerage Fees...........................................83
11.2.2 General..................................................83
11.2.3 Operation of Collateral; Joint Venturers.................84
11.2.4 Environmental Indemnity..................................84
ARTICLE XII MISCELLANEOUS...................................................84
12.1 Notices.........................................................84
12.2 Survival of Loan Agreement; Indemnities.........................85
12.3 Further Assurance...............................................86
12.4 Taxes and Fees..................................................86
12.5 Severability....................................................86
12.6 Waiver..........................................................86
12.7 Modification of Loan Instruments................................86
12.8 Captions........................................................86
12.9 Successors and Assigns..........................................86
12.10 Remedies Cumulative.............................................87
12.11 Entire Agreement; Conflict......................................87
12.12 APPLICABLE LAW..................................................87
12.13 JURISDICTION AND VENUE..........................................87
12.14 WAIVER OF RIGHT TO JURY TRIAL...................................88
12.15 TIME OF ESSENCE.................................................88
12.16 Estoppel Certificate............................................88
12.17 Consequential Damages...........................................89
12.18 Counterparts....................................................89
12.19 No Fiduciary Relationship.......................................89
12.20 Confidentiality.................................................89
12.21 Governmental Approval...........................................89
List of Exhibits to Loan Agreement
Schedule I - Commitments
Exhibit 1.1(A) - Compliance Certificate
Exhibit 1.1(B) - Environmental Compliance Certificate
Exhibit 1.1(C) - LIBOR Election Notice
Exhibit 1.1(D) - Pager Certificate
Exhibit 1.1(E) - Notice of Borrowing
Exhibit 1.1(F) - Other Permitted Liens
Exhibit 5.3.1 - Borrower Capital Stock
Exhibit 5.3.2 - Restrictions
Exhibit 5.5.2 - Licenses
Exhibit 5.5.3 - Operating Agreements
Exhibit 5.5.4 - Facility Sites
Exhibit 5.5.5 - Leases
Exhibit 5.5.5 - Leases
Exhibit 5.5.6 - Real Estate
Exhibit 5.7.2 - Projections
Exhibit 5.8 - Litigation
Exhibit 5.19.1 - Employee Benefit Plans
Exhibit 5.20.1 - Collective Bargaining Agreements; Grievances
Exhibit 6.6.1 - Insurance Letter Agreement
XIV
LOAN AGREEMENT
This LOAN AGREEMENT, dated as of December 31, 1998, is between AQUIS
COMMUNICATIONS, INC., a Delaware corporation ("Borrower"), and FINOVA CAPITAL
CORPORATION, a Delaware corporation ("FINOVA"), in its individual capacity and
as agent for all Lenders (this and all other capitalized terms used herein are
defined in Section 1.1 below).
PRELIMINARY STATEMENT:
Borrower desires to borrow up to $30,000,000 from Lenders, which funds
shall be used (i) to consummate the Xxxx Atlantic Acquisition, (ii) to make the
Paging Partners Escrow Deposit, (iii) to make payments permitted hereunder on
the Xxxx Atlantic Seller Indebtedness, the Motorola Indebtedness, the Letters of
Credit Indebtedness and the Deferred Payment Indebtedness, (iv) for Subsequent
Acquisitions, (v) to pay transaction costs and (vi) for working capital. Lenders
have agreed to make the Loan upon the terms and subject to the conditions herein
set forth.
NOW, THEREFORE, it is hereby agreed as follows:
ARTICLE I
DEFINITIONS AND DETERMINATIONS
1.1 Definitions. As used in this Loan Agreement and in the other Loan
Instruments, unless otherwise expressly indicated herein or therein, the
following terms shall have the following meanings (such meanings to be
applicable equally to both the singular and plural forms of the terms defined):
Accountants: PriceWaterhouseCoopers or any other independent
certified public accounting firm selected by Borrower and reasonably
satisfactory to Lenders.
Accounting Changes: as defined in Section 1.3.
Accounts Decrease: for any period, the excess of the Eligible
Accounts at the beginning of such period over the Eligible Accounts at the
end of such period.
Accounts Increase: for any period, the excess of Eligible Accounts
at the end of such period over the Eligible Accounts at the beginning of
such period.
Acquisition Portion: a portion of the Loan in an amount not to
exceed the sum of (i) $8,000,000 plus (ii) if the Xxxx Atlantic Seller
Note Payment Date occurs on or before June 30, 2000, the amount of the
Subsequent Portion as of the Xxxx Atlantic Seller Note Payment
Date in excess of the proceeds of the Subsequent Portion actually used to
make the Xxxx Atlantic Seller Note Payment and to pay the Subsequent
Portion Loan Fee.
Acquisition Portion Availability Period: the period (i) commencing
on the date which is 10 days after Agent receives the financial statements
required under subsection 6.3.1 for the period ending June 30, 1999 and
(ii) ending on June 30, 2000.
Acquisition Portion Loan Fees: the fees payable by Borrower to
Lenders pursuant to subsection 2.7.3.
ADA: the Americans with Disabilities Act of 1990, as amended, any
successor statute thereto, and the rules and regulations issued
thereunder, as in effect from time to time.
Additional Principal Payment: the product of (i) 0.25 multiplied by
(ii) the portion of the Base Principal Payment financed with the proceeds
of Indebtedness for Borrowed Money.
Additional Sums: as defined in subsection 2.2.3.
Xxxxxxxx Loan: the loan in the original principal amount of $240,000
made by Borrower to Xxxx Xxxxxxxx.
Xxxxxxxx Note: the promissory note dated December, 1998 in the
original principal amount of $240,000 made by Xxxx Xxxxxxxx in favor of
Borrower.
Advance: an advance of the Acquisition Portion.
Affiliate: any Person that directly or indirectly, through one or
more intermediaries, controls or is controlled by or is under common
control with another Person. The term "control" means possession, direct
or indirect, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of
voting securities or equity interests, by contract or otherwise. For the
purposes hereof any Person which owns or controls, directly or indirectly,
30% or more of the securities or equity interests, as applicable, whether
voting or non-voting, of any other Person shall be deemed to "control"
such Person.
Agent: FINOVA, as agent for all Lenders.
Applicable Margin: shall have the meaning assigned to that term in
subsection 2.2.1.
Asset Acquisition: an acquisition of the assets of a Paging
Business, including the related FCC Licenses.
Asset Sale: the sale of all or any Property of Borrower not
permitted pursuant to clauses (i) and (ii) of Section 7.12.
Asset Sale Proceeds: the gross proceeds payable to Borrower in
connection with any Asset Sale, less (i) all reasonable, customary and
documented costs and expenses of such Asset Sale and (ii) all taxes
payable by Borrower as a result of the consummation of such Asset Sale .
Assignee: any Person (i) who is a financial institution organized
under the laws of the United States of America or any State thereof or
maintains a domestic lending office in the United States of America and
(ii) to which a Loan Assignment is made in compliance with the provisions
of subsection 9.1.1.
Assignment and Acceptance: an assignment and acceptance agreement to
be executed in connection with each Loan Assignment, in form and substance
reasonably satisfactory to Agent.
Assignment of Xxxx Atlantic Acquisition Instruments: a collateral
assignment of Borrower's rights under the Xxxx Atlantic Acquisition
Instruments executed by Borrower in favor of Agent and consented to by the
Xxxx Atlantic Sellers.
Assignment of Leases: a collateral assignment of leases executed by
Borrower in favor of Agent.
Assignment of Paging Partners Merger Instruments: a collateral
assignment of Borrower's rights under the Paging Partners Merger
Instruments executed by Borrower in favor of Agent and consented to by
Paging Partners.
Assignment of Subsequent Acquisition Instruments: a collateral
assignment of Borrower's rights under the applicable Subsequent
Acquisition Instruments executed by Borrower in favor of Agent and
consented to by the Subsequent Acquisition Seller.
Available Excess Cash Flow: for any year, the lesser of (a) the
Excess Cash Flow for such year and (b) the amount by which the Cash
Equivalents exceed $1,000,000 as of the end of such year.
Bankruptcy Code: the United States Bankruptcy Code and any successor
statute thereto, and the rules and regulations issued thereunder, as in
effect from time to time.
BAPCO: Xxxx Atlantic Paging, Inc., a Delaware corporation.
BAP Investors: collectively, all holders of the Borrower Capital
Stock prior to the consummation of the Paging Partners Merger.
BAP Investors Pledge Agreement: a pledge agreement executed by BAP
Investors in favor of Agent covering the Borrower Capital Stock.
3
Base Principal Payment: the $1,200,000 principal payment due on
March 31, 2000 pursuant to the Xxxx Atlantic Seller Note.
Base Rate: the per annum rate of interest announced or published
publicly from time to time by Citibank, N.A. in New York, New York as its
corporate base (or equivalent) rate of interest, which rate shall change
automatically without notice and simultaneously with each change in such
corporate base rate. The Base Rate is a reference rate and does not
necessarily represent the lowest or best rate actually charged to any
customer by Citibank, N.A. in New York, New York.
Base Rate Portion: the Principal Balance other than the portion
thereof consisting of LIBOR Loans.
Basic Financial Statements: as defined in subsection 6.3.3.
Xxxx Atlantic Acquisition: the acquisition by Borrower from the Xxxx
Atlantic Sellers of the Xxxx Atlantic System and the other Property to be
sold to Borrower pursuant to the terms and conditions of the Xxxx Atlantic
Acquisition Instruments.
Xxxx Atlantic Acquisition Instruments: the Asset Purchase Agreement
dated as of July 2, 1998 among the Xxxx Atlantic Sellers and Borrower, and
all documents, instruments and agreements executed and delivered in
connection therewith.
Xxxx Atlantic Interest Account: a segregated deposit account
maintained by Borrower at a Qualified Depository.
Xxxx Atlantic Reseller Agreement: a reseller agreement between
Borrower and Xxxx Atlantic NYNEX Mobile.
Xxxx Atlantic Seller Note: the promissory note dated the Closing
Date in the original principal amount of $4,150,000 made by Borrower
payable to BAPCO.
Xxxx Atlantic Seller Note Payment: the Required Xxxx Atlantic
Principal Payment, together with all accrued and unpaid interest on the
Xxxx Atlantic Seller Indebtedness through the date the Required Xxxx
Atlantic Principal Payment is made, to the extent such accrued and unpaid
interest is then due and payable.
Xxxx Atlantic Seller Note Payment Date: the date the Xxxx Atlantic
Seller Note Payment has been paid in full.
Xxxx Atlantic Seller Indebtedness: the Indebtedness for Borrowed
Money owed by Borrower to BAPCO pursuant to the Xxxx Atlantic Seller
Indebtedness Instruments, in an original principal amount not to exceed
$4,150,000.
4
Xxxx Atlantic Seller Indebtedness Instruments: the Xxxx Atlantic
Seller Note and all other documents, instruments and agreements
evidencing, governing the terms of repayment of or securing the repayment
of the Xxxx Atlantic Seller Indebtedness executed or delivered in
connection therewith.
Xxxx Atlantic Seller Indebtedness Liens: the Liens granted by
Borrower to BAPCO to secure the Xxxx Atlantic Seller Indebtedness.
Xxxx Atlantic Sellers: collectively, Xxxx Atlantic - Delaware, Inc.,
a Delaware corporation, Xxxx Atlantic - Maryland, Inc., a Maryland
corporation, Xxxx Atlantic - New Jersey, Inc., a New Jersey corporation,
Xxxx Atlantic - Pennsylvania, Inc., a Pennsylvania corporation, Xxxx
Atlantic - Virginia, Inc., a Virginia corporation, Xxxx Atlantic -
Washington, D.C., Inc., a New York corporation, Xxxx Atlantic - West
Virginia, Inc., a West Virginia corporation, and BAPCO.
Xxxx Atlantic Seller Subordination Agreement: a subordination
agreement among BAPCO, Agent and Borrower pertaining to the Xxxx Atlantic
Seller Indebtedness.
Xxxx Atlantic System: the portion of the System acquired by Borrower
as a result of the Xxxx Atlantic Acquisition.
Borrower: has the meaning assigned to that term in the Preamble to
this Loan Agreement.
Borrower Capital Stock: all of the issued and outstanding capital
stock of and other equity interests in Borrower and all warrants, options
and other rights to purchase capital stock of and other equity interests
in Borrower.
Borrower's Obligations: (i) any and all Indebtedness due or to
become due, now existing or hereafter arising, of Borrower to Lenders
and/or Agent pursuant to the terms of this Loan Agreement or any other
Loan Instrument, including, without limitation, the Loan Fees, and (ii)
the performance of the covenants of Borrower contained in the Loan
Instruments.
Business Day: (i) except as provided in clause (ii), any day other
than a Saturday, Sunday or other day on which banks in Phoenix, Arizona or
Parsippany, New Jersey are required to close, and (ii) with respect to all
notices, determinations, fundings and payments in connection with a LIBOR
Loan, any day which is a Business Day described in clause (i) and which is
also a day for trading among banks in Dollar deposits in the London
interbank eurodollar market.
Business Insurance: such property, casualty, liability, business
interruption and other insurance as Agent from time to time requires
Borrower to maintain.
5
Capital Expenditures: payments that are made or liabilities that are
incurred by a Person for the lease, purchase, improvement, construction or
use of any Property, the value or cost of which under GAAP is required to
be capitalized and appears on such Person's balance sheet in the category
of property, plant or equipment, without regard to the manner in which
such payments or the instruments pursuant to which they are made are
characterized, and shall include, without limitation, payments for or
liabilities incurred with respect to the installment purchase of Property
and payments under Capitalized Leases. Except for the purpose of
determining Excess Cash Flow, a Capital Expenditure shall be deemed to be
made as of the time the Property which is the subject thereof is put into
service.
Capitalized Lease: any lease of Property, the obligations for the
rental of which are required to be capitalized in accordance with GAAP.
Cash Equivalents: at any date, the remainder of (i) the aggregate of
Borrower's (A) cash on hand or in any bank or trust company, and checks on
hand and in transit, (B) monies on deposit in any money market account,
and (C) treasury bills, certificates of deposit, commercial paper and
readily marketable securities at current market value having, in each
instance, a maturity of not more than 90 days, minus (ii) the amount
required under Section 6.16 to be maintained by Borrower on deposit in the
Xxxx Atlantic Interest Account as of such date.
Closing: the disbursement of the Initial Portion.
Closing Certificate: a closing certificate executed by Borrower to
Agent.
Closing Date: the date upon which the Closing occurs.
Closing Loan Fee: the fee payable by Borrower to Lenders pursuant to
subsection 2.7.1.
Code: the Internal Revenue Code of 1986, as amended, any successor
statute thereto, and the rules and regulations issued thereunder, as in
effect from time to time.
Collateral: (i) all existing and after-acquired Property of
Borrower, including without limitation all existing and after-acquired
accounts, equipment, inventory and general intangibles, (ii) the Borrower
Capital Stock and (iii) all proceeds of the foregoing.
Commitment: shall mean, as to any Lender at any time, the amount
initially set forth opposite its name in the column labeled "Commitment"
on Schedule I, as adjusted from time to time to reflect any Assignment and
Acceptances.
Communications Act: the Communications Act of 1934 as amended, any
successor statute thereto, and the rules, regulations and legally binding
policies of the FCC promulgated thereunder, as amended and in effect from
time to time.
6
Compliance Certificate: a compliance certificate executed by
Borrower in the form of Exhibit 1.1(A) attached hereto.
Deerfield Partners: Deerfield Partners, LLC, a Delaware limited
liability company.
Deerfield Partners Note: the promissory note dated January 4, 1999
in the original principal amount of $150,000 made by Borrower in favor of
Deerfield Partners providing for interest on the outstanding principal
balance thereof at 15% per annum and a fee payable to Deerfield Partners
in the amount of $15,000.
Default Rate: with respect to (i) the Base Rate Portion and all
other Borrower's Obligations other than LIBOR Loans, a per annum rate
equal to the Base Rate in effect from time to time plus the Applicable
Margin plus 2.0% per annum and (ii) each LIBOR Loan, a per annum rate
equal to the LIBOR Rate applicable thereto plus the Applicable Margin plus
2.0% per annum.
Default Rate Period: a period of time commencing on the date that an
Event of Default has occurred and ending on the date that such Event of
Default is cured or waived.
Deferred Payment Parties: collectively, PCS Management, Deerfield
Partners and Select Capital.
Deferred Payment Indebtedness Instruments: the PCS Management Note,
the Deerfield Partners Note and the Select Capital Note.
Deferred Payment Indebtedness: all Indebtedness for Borrowed Money
owed by Borrower to the Deferred Payment Parties pursuant to the Deferred
Payment Indebtedness Instruments.
Deferred Payment Parties Subordination Agreement: a subordination
agreement among the Deferred Payment Parties, Agent, BAPCO and Borrower
pertaining to the Deferred Payment Indebtedness.
Dollars: lawful currency of the United States.
Eligible Accounts: at any given time, the aggregate of the face
amount of the accounts receivable of Borrower not over 60 days past due,
net of applicable reserves with respect to such accounts and Trade Out
Transactions.
Employee Benefit Plan: any employee benefit plan within the meaning
of Section 3(3) of ERISA which (i) is maintained for employees of Borrower
or any ERISA Affiliate or (ii) has at any time within the preceding six
years been maintained for the employees of Borrower or any current or
former ERISA Affiliate.
7
Engineer: an engineer selected by Borrower and acceptable to Agent.
Environmental Audit: (i) a Phase I audit report with respect to a
parcel of real estate and such other studies and reports as Agent deems
necessary after review of the results of such Phase I audit, including, if
required by Agent, soil and ground water tests, each such report and study
to be in form and content and issued by Persons acceptable to Agent and
(ii) a letter from each Person issuing each such report or study entitling
Lenders to rely thereon.
Environmental Certificate: an environmental certificate executed by
Borrower to Agent.
Environmental Compliance Certificate: an environmental compliance
certificate in the form of Exhibit 1.1(B).
Environmental Laws: any and all federal, state and local laws that
relate to or impose liability or standards of conduct concerning public or
occupational health and safety or protection of the environment, as now or
hereafter in effect and as have been or hereafter may be amended or
reauthorized, including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C ss.9601
et seq.), the Hazardous Materials Transportation Act (42 U.S.C. ss.1802 et
seq.), the Resource Conservation and Recovery Act (42 U.S.C. ss.6901 et
seq.), the Federal Water Pollution Control Act (33 U.S.C. ss.1251 et
seq.), the Toxic Substances Control Act (15 U.S.C. ss.2601 et seq.), the
Clean Air Act (42 U.S.C. ss.7901 et seq.), the National Environmental
Policy Act (42 U.S.C. ss.4231, et seq.), the Refuse Act (33 U.S.C. ss.407,
et seq.), the Safe Drinking Water Act (42 U.S.C. ss.300(f) et seq.), the
Occupational Safety and Health Act (29 U.S.C. ss.651 et seq.), and all
rules, regulations, codes, ordinances and guidance documents promulgated
or published thereunder, and the provisions of any licenses, permits,
orders and decrees issued pursuant to any of the foregoing.
Equity Acquisition: an acquisition of the capital stock or other
equity interest of a Person or Persons which owns a Paging Business and
the related FCC Licenses.
Equity Sale: the issuance or sale by Borrower of any equity
securities in Borrower.
Equity Sale Proceeds: the gross proceeds payable to Borrower in
connection with any Equity Sale, less all reasonable, customary and
documented costs and expenses of such Equity Sale.
ERISA: the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto, and the rules and regulations
issued thereunder, as in effect from time to time.
8
ERISA Affiliate: any Person who is a member of a group which is
under common control with Borrower, who together with Borrower is treated
as a single employer within the meaning of Section 414(b), (c) and (m) of
the Code.
Eurocurrency 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 of the United States or other Governmental Body
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.
Event of Default: any of the Events of Default set forth in Section
8.1.
Excess Cash Flow: for any period, (i) the Operating Cash Flow for
such period, (ii) plus, the Accounts Decrease, if any, for such period and
(iii) minus, the sum of the following for such period: (A) Total Debt
Service actually paid or accrued during such period with respect to
Indebtedness for Borrowed Money of Borrower permitted hereunder, (B)
amounts actually paid by Borrower with respect to Capital Expenditures for
such period permitted pursuant to Section 7.6, whether or not such Capital
Expenditures were incurred during such period, but excluding any such
amounts paid from the proceeds of Indebtedness for Borrowed Money and (C)
the Accounts Increase, if any, for such period.
Excess Interest: as defined in subsection 2.2.3.
FCC: the Federal Communications Commission or any Governmental Body
succeeding to its functions.
FINOVA: has the meaning assigned to that term in the Preamble to
this Loan Agreement.
Funding Date: as the context requires, the date of disbursement of
the Initial Portion, the Merger Portion, the Subsequent Portion or any
Advance, or, for purposes of determining the satisfaction of the
conditions set forth in Sections 4.1 and 4.3, the date the Paging Partners
Merger is consummated.
GAAP: generally accepted accounting principles as in effect from
time to time, which shall include but shall not be limited to the official
interpretations thereof by the Financial Accounting Standards Board or any
successor thereto.
Good Funds: United States Dollars available in federal funds to
FINOVA at or before 12:00 noon, Phoenix time, on a Business Day.
9
Governmental Body: any foreign, federal, state, municipal or other
government, or any department, commission, board, bureau, agency, public
authority or instrumentality thereof or any court or arbitrator.
Hazardous Materials: any hazardous, toxic, dangerous or other waste,
substance or material defined as such in, regulated by or for purposes of
any Environmental Law.
Incipient Default: any event or condition which, with the giving of
notice or the lapse of time, or both, would become an Event of Default.
Indebtedness: all liabilities, obligations and reserves, contingent
or otherwise, which, in accordance with GAAP, would be reflected as a
liability on a balance sheet or would be required to be disclosed in a
financial statement, including, without duplication: (i) Indebtedness for
Borrowed Money, (ii) obligations secured by any Lien upon Property, (iii)
guaranties, letters of credit and other contingent obligations, and (iv)
liabilities in respect of unfunded vested benefits under any Pension Plan
or in respect of withdrawal liabilities incurred under ERISA by Borrower
or any ERISA Affiliate to any Multiemployer Plan.
Indebtedness for Borrowed Money: without duplication, all
Indebtedness (i) in respect of money borrowed, (ii) evidenced by a note,
debenture or other like written obligation to pay money (including,
without limitation, all of Borrower's Obligations and Permitted Senior
Indebtedness), (iii) in respect of rent or hire of Property under
Capitalized Leases or for the deferred purchase price of Property, (iv) in
respect of obligations under conditional sales or other title retention
agreements, and (v) all guaranties of any or all of the foregoing.
Indebtedness to be Refinanced: all Indebtedness for Borrowed Money
not permitted to exist hereunder which would be assumed or owed by
Borrower upon the consummation of the Xxxx Atlantic Acquisition, the
Paging Partners Merger or any Subsequent Acquisition.
Indemnification Proceeds: the gross proceeds payable to Borrower
resulting from the assertion of a claim by Borrower arising from a breach
or default by another party under the Xxxx Atlantic Acquisition
Instruments, the Paging Partners Merger Instruments or any Subsequent
Acquisition Instruments, less all reasonable, customary and documented
costs and expenses of the assertion and prosecution of such claim,
including, without limitation, the expenses and reasonable fees of counsel
retained by Borrower.
Initial Loan Instruments:
(i) Loan Agreement;
(ii) Note;
(iii) Xxxx Atlantic Seller Subordination Agreement;
10
(iv) Letters of Credit Account Parties Subordination
Agreement;
(v) Deferred Payment Parties Subordination Agreement;
(vi) Security Agreement;
(vii) BAP Investors Pledge Agreement;
(viii) Assignment of Leases;
(ix) Assignment of Xxxx Atlantic Acquisition Instruments;
(x) Closing Certificate;
(xi) Solvency Certificate;
(xii) Environmental Certificate;
(xiii) Notice of Borrowing with respect to the Initial
Portion;
(xiv) Uniform Commercial Code financing statements required by
Agent; and
(xv) such other instruments and documents as Agent and
Lenders reasonably may require in connection with the
transactions contemplated by this Loan Agreement.
Initial Portion: a portion of the Loan in an amount up to
$20,000,000.
Instruments: collectively, the Loan Instruments, the Xxxx Atlantic
Acquisition Instruments, the Xxxx Atlantic Seller Indebtedness
Instruments, the Xxxx Atlantic Reseller Agreement, the Letters of Credit
Indebtedness Instruments, the Deferred Payment Indebtedness Instruments,
the Paging Partners Merger Instruments, the Motorola Indebtedness
Instruments and the Subsequent Acquisition Instruments.
Interest Period: a period (i) commencing (A) on the applicable
Funding Date, if Borrower prior thereto has elected pursuant to subsection
2.3.1 to have all or a portion of the portion of the Loan to be disbursed
on such date bear interest from such date at a LIBOR Rate, (B) with
respect to the conversion of all or a portion of the Base Rate Portion to
a LIBOR Loan, on the Business Day specified by Borrower in the applicable
LIBOR Election Notice and (C) with respect to the continuation as a LIBOR
Loan of all or a portion of a then existing LIBOR Loan after the
expiration of the Interest Period applicable to such existing LIBOR Loan,
on the last day of the Interest Period applicable to such existing LIBOR
Loan,
11
and (ii) ending 30, 60 or 90 days thereafter, as selected by Borrower in
its LIBOR Election Notice; provided, however:
(1) if any Interest Period otherwise would end on a day that
is not a Business Day, such Interest Period shall end on the next
succeeding Business Day, unless the result of such extension would
be to carry such Interest Period into another calendar month, in
which event such Interest Period shall end on the immediately
preceding Business Day; and
(2) any Interest Period that otherwise would extend beyond the
Maturity Date shall end on the Maturity Date.
Interest Rate Determination Date: the date for determining a LIBOR
Rate, which date shall be one Business Day prior to the date of
commencement of the applicable Interest Period.
Landlord: a lessor under a Lease.
Landlord Consent and Waiver: a landlord consent and waiver in form
and substance satisfactory to Agent.
Lease: any lease of real estate under which Borrower is the lessee.
Leasehold Property: any real estate which is the subject of a Lease.
Lender Addition Agreement: an agreement executed by a Lender and an
Assignee in connection with a Loan Assignment.
Lenders: FINOVA and each Assignee.
Lenders' Decisions: all determinations to be made by Lenders
pursuant to the terms of the Loan Instruments, including, without
limitation, any amendment or modification of any of the Loan Instruments,
determinations with respect to the declaration of Events of Default and
acceleration of Borrower's Obligations or any other obligation arising
under the Loan Instruments, waivers of affirmative or negative covenants
or other provisions of the Loan Instruments, advancement of funds pursuant
to any of the Loan Instruments or the exercise of any rights or remedies
granted to Lenders or Agent pursuant to the terms of any of the Loan
Instruments.
Lenders' Ratable Share: as of any date of determination, the
proportion that the Principal Balance then outstanding bears to the sum of
(i) the principal balance of the Motorola Indebtedness then outstanding
plus (ii) the Principal Balance then outstanding.
12
Letters of Credit: unconditional, irrevocable stand-by letters of
credit issued by a Qualified Depository for the benefit of Agent having an
expiry date not earlier than June 30, 1999, in an aggregate face amount
equal to the amount of the Initial Portion disbursed on the Closing Date
in excess of $18,000,000 and otherwise in form and substance satisfactory
to Agent.
Letters of Credit Account Parties: collectively, each Person for
whose account any of the Letters of Credit is issued.
Letters of Credit Account Parties Agreement: collectively, the
Letter of Credit Account Party Agreements, each dated the Closing Date,
between Borrower and each Letter of Credit Account Party pertaining to the
Letters of Credit.
Letters of Credit Account Parties Payment: an amount equal to the
sum of (i) 10% of the aggregate face amount of the Letters of Credit as of
the Closing Date, plus (ii) 10% of the aggregate amount drawn on the
Letters of Credit as of the Letters of Credit Account Parties Payment Date
plus (iii) an amount equal to the product of (A) the aggregate face amount
of the Letters of Credit as of the Closing Date multiplied by (B) 15.0%
per annum multiplied by (C) a fraction, the (x) numerator of which is the
number days elapsed from the Closing Date through the Letters of Credit
Account Parties Payment Date and (y) denominator of which is 365.
Letters of Credit Account Parties Payment Date: the date which is
the earlier of (i) the date any Letter of Credit is fully drawn and (ii)
the date the Letters of Credit are released pursuant to subsection 3.2.3.
Letters of Credit Account Parties Subordination Agreement: a
subordination agreement among the Letters of Credit Account Parties,
Agent, BAPCO and Borrower pertaining to the Letters of Credit
Indebtedness.
Letters of Credit Indebtedness: all Indebtedness for Borrowed Money
owed by Borrower to the Letters of Credit Account Parties arising as a
result of any draw on the Letters of Credit.
Letters of Credit Indebtedness Instruments: the Letters of Credit
Account Party Agreement, the Letters of Credit Indebtedness Note and all
other documents, instruments and agreements evidencing, governing the
terms of repayment of or securing the repayment of the Letters of Credit
Indebtedness executed or delivered in connection therewith.
Letters of Credit Indebtedness Note: collectively, the promissory
notes, each dated the Closing Date, made by Borrower in favor of the
Letters of Credit Account Parties to evidence the Letters of Credit
Indebtedness.
13
LIBOR Election Notice: a notice by Borrower to Agent to have a
portion of the Principal Balance bear interest at a LIBOR Rate, in the
form of Exhibit 1.1(C).
LIBOR Loan: each portion of the Principal Balance which bears
interest determined by reference to a LIBOR Rate.
LIBOR Rate: means for each Interest Period a rate of interest equal
to (i) the rate per annum determined by Agent (rounded upwards to the
nearest 1/100th of 1%) at which deposits of Dollars approximately equal in
amount to the amount of the LIBOR Loan specified in the applicable LIBOR
Election Notice are offered to Agent by prime banks in the London
interbank eurodollar market at approximately 11:00 a.m., London time, on
the applicable Interest Rate Determination Date for the relevant Interest
Period, divided by (ii) 1.00 minus the Eurocurrency Reserve Requirements
in effect on the applicable Interest Rate Determination Date. The LIBOR
Rate shall be adjusted with respect to any LIBOR Loan outstanding on the
effective date of any change in the Eurocurrency Reserve Requirements as
of such effective date. Agent shall give prompt notice to Borrower of the
LIBOR Rate as determined or adjusted in accordance herewith, which
determination shall be conclusive absent manifest error.
Licenses: all licenses, permits, consents, approvals and authority
issued by any Governmental Body in connection with the operation of
Borrower's Paging Business, including without limitation, all FCC
Licenses.
Lien: any mortgage, pledge, assignment, lien, charge, encumbrance or
security interest of any kind, or the interest of a vendor or lessor under
any conditional sale agreement, Capitalized Lease or other title retention
agreement.
Loan: the term loan to be made by Lenders to Borrower in the maximum
principal amount of $30,000,000 pursuant to Section 2.1.
Loan Agreement: this Loan Agreement and any amendments or
supplements hereto.
Loan Assignment: the assignment by a Lender of (i) any portion of
such Lender's interest in Borrower's Obligations and (ii) any of such
Lender's other rights under any of the Loan Instruments.
Loan Fees: the Closing Loan Fee, the Subsequent Portion Loan Fee and
the Acquisition Portion Loan Fees.
Loan Instruments: collectively, the Initial Loan Instruments, the
Paging Partners Merger Additional Loan Instruments and the Subsequent
Acquisition Additional Loan Instruments.
14
Loan Year: a period of time from the Closing Date or any anniversary
of the Closing Date to the immediately succeeding anniversary of the
Closing Date.
Management Holders: Xxxx X. Xxxxxxxx, Xxxxxxx X. Xxxx, Xxxx X.
Xxxxxxxx, X. X. Xxxxxxxx or any Person over which any of the foregoing
individuals, directly or indirectly, exercises voting control, including,
without limitation, the right to direct the management and policies of
such Person and the right to elect a majority of the Board of Directors or
similar governing authority for such Person.
Material Adverse Effect: (i) a material adverse effect upon the
business, operations, Property, profits or financial condition of Borrower
or upon the validity, enforceability or priority of the Security Interests
or (ii) a material impairment of the ability of Borrower to perform its
obligations under any Loan Instrument to which it is a party or of Agent
or any Lender to enforce or collect any of Borrower's Obligations.
Maturity Date: the earlier of (i) December 31, 2003 or (ii) or the
date on which Borrower's Obligations are accelerated pursuant to this Loan
Agreement.
Maximum Rate: as defined in subsection 2.2.3.
Merger Portion: a portion of the Loan in an amount equal to
$500,000.
Mortgage: a mortgage or deed of trust executed by Borrower in favor
of Agent encumbering each parcel of Real Estate owned by Borrower, in each
case in form and substance satisfactory to Agent.
Motorola: Motorola Inc.
Motorola Indebtedness: the Indebtedness for Borrowed Money owed by
Borrower to Motorola pursuant to the Motorola Indebtedness Instruments, in
a principal amount not to exceed $1,300,000.
Motorola Indebtedness Instruments: all documents, instruments and
agreement executed and delivered to or by Motorola evidencing, governing
the terms of repayment of or securing the Motorola Indebtedness.
Motorola Intercreditor Agreement: an intercreditor agreement among
Motorola, Agent and Borrower in form and substance satisfactory to Agent.
Motorola Liens: the Liens granted by Paging Partners to Motorola to
secure the Motorola Indebtedness.
Motorola Ratable Share: as of any date of determination, the
proportion that the principal balance of the Motorola Indebtedness then
outstanding bears to the sum of (i) the
15
principal balance of the Motorola Indebtedness then outstanding plus (ii)
the Principal Balance as of such date.
Multiemployer Plan: any multiemployer plan as defined pursuant to
Section 3(37) of ERISA to which Borrower or any ERISA Affiliate makes, or
accrues an obligation to make, contributions, or has made, or been
obligated to make, contributions within the preceding six years.
Net Excess Cash Flow: for any year, the remainder of (i) the
Available Excess Cash Flow for such year minus (ii) the Required Excess
Cash Flow Prepayment for such year.
Net Principal Balance: as of any date of determination, the
Principal Balance as of such date less (i) prior to the Paging Partners
Merger Closing Date, the aggregate undrawn face amount of the Letters of
Credit and (ii) from and after the Paging Partners Merger Closing Date,
zero.
Notice of Borrowing: a notice of borrowing/disbursement request from
Borrower to Agent in the form of Exhibit 1.1(E).
Note: the promissory notes executed by Borrower payable to the order
of each Lender in the amount of such Lender's Commitment, each dated as of
the Closing Date and in form and substance satisfactory to Agent, and any
notes issued in substitution therefor pursuant to subsection 9.1.4.
Obligors: collectively, Borrower and each other Person (other than
Agent) which is a party to any Security Instrument.
Operating Agreement: any material tower or transmitter site lease or
license, office lease, control point lease, equipment lease, reseller
agreement, advertising contract, pager contract, telephone contract, voice
mail contract, maintenance or repair contract, employment agreement,
collective bargaining agreement or other similar agreement or contract
relating to the operation of Borrower's Paging Business.
Operating Cash Flow: for any period, without duplication, the net
income of Borrower for such period:
(i) plus the sum of the following, to the extent deducted in
determining such net income for such period:
(A) losses from sales, exchanges and other dispositions
of Property not in the ordinary course of business;
16
(B) interest paid or accrued on Indebtedness, including,
without limitation, interest on Capitalized Leases that is
imputed in accordance with GAAP;
(C) depreciation and amortization of assets during such
period;
(D) income taxes which are accrued, but not paid, during
such period; and
(E) expenses incurred in connection with Trade Out
Transactions;
(ii) minus the sum of the following, to the extent included in
determining such net income for such period:
(A) gains from sales, exchanges and other dispositions
of Property or other extraordinary gains not in the ordinary
course of business;
(B) proceeds of Business Insurance; and
(C) revenue received in connection with Trade Out
Transactions.
Operating Lease: any lease which, under GAAP, is not required to be
capitalized.
Pager: any pager owned, leased or otherwise used by a Person to
receive radio communication access or other services from Borrower.
Pager Certificate: a certificate in the form of Exhibit 1.1(D) with
respect to the number of Pagers in Service executed by Borrower and
delivered pursuant to subsection 6.3.1.
Pagers in Service: Pagers for which Borrower is receiving a monthly
payment, with respect to which no such payment is delinquent by more than
90 days, unless the monthly payments to Borrower are being paid by Persons
such as Fortune 500 companies, Governmental Bodies or not-for-profit
corporations, in which case no such payment is delinquent by more than 180
days.
Paging Business: the business of owning, operating and managing
mobile common carrier paging systems, mobile communications systems,
control terminals and switches, antenna and transmitter sites, or
telephone systems, including, but not limited to, the ownership and
operation by Borrower of the System.
Paging Partners: Paging Partners Corporation, a Delaware
corporation.
17
Paging Partners Escrow: the escrow established pursuant to the
Paging Partners Escrow Agreement.
Paging Partners Escrow Deposit: the $250,000 escrow deposit into the
Paging Partners Escrow described in the Paging Partners Escrow Agreement
as the "Post-Closing Deposit."
Paging Partners Escrow Agreement: the Escrow Agreement dated as of
November 6, 1998 among Paging Partners, Paging Partners Merger Sub,
Borrower and Xxxxxxx Xxxxx & Xxxxxxx, P.C., as escrow agent.
Paging Partners Merger: the merger of Paging Partners Merger Sub
with and into Borrower with Borrower as the surviving corporation pursuant
to the terms and conditions of the Paging Partners Merger Instruments.
Paging Partners Merger Closing Date: the date the Paging Partners
Merger is consummated as permitted pursuant to Section 7.3.
Paging Partners Merger Sub: Paging Partners Merger Corporation, a
Delaware corporation.
Paging Partners Merger Agreement: the Agreement and Plan of Merger
dated as of November 6, 1998 by and among Borrower, Paging Partners and
Paging Partners Merger Sub.
Paging Partners Merger Instruments: the Paging Partners Merger
Agreement, the Paging Partners Escrow Agreement and all other documents,
instruments and agreements executed or delivered in connection with the
Paging Partners Merger.
Paging Partners Merger Additional Loan Instruments: collectively,
the following documents to be executed and delivered by Borrower in
connection with the Paging Partners Merger:
(i) the Motorola Intercreditor Agreement, the Paging Partners
Pledge Agreement, the Assignment of Paging Partners Merger
Instruments, a Notice of Borrowing with respect to the disbursement
of the Merger Portion, any amendments to the Loan Instruments and
such UCC Financing Statements and any other mortgages, security
agreements and other agreements required by Agent to (A) reflect the
effect of the Paging Partners Merger and (B) grant to Agent a
perfected Lien, subject in priority only to Permitted Prior Liens,
upon all existing and after-acquired Property acquired by Borrower
as a result of the consummation of the Paging Partners Merger and,
to the extent permitted by applicable law, the FCC Licences (and the
proceeds thereof) transferred to Borrower in connection with the
Paging Partners Merger;
18
(ii) an Environmental Certificate covering any real estate
acquired or leased by Borrower in connection with the Paging
Partners Merger;
(iii) a Landlord's Consent executed by the Landlord under such
Leases assumed or executed by Borrower in connection with the Paging
Partners Merger as Agent may require;
(iv) such assignments and third party consents with respect to
any agreements related to the Paging Business acquired by Borrower
as a result of the Paging Partners Merger as Agent reasonably shall
request; and
(v) such other instruments, documents, certificates, consents,
waivers and opinions as Agent reasonably may require in connection
with the Paging Partners Merger.
Paging Partners Pledge Agreement: a pledge agreement executed by
Paging Partners in favor of Agent covering the Borrower Capital Stock
acquired by Paging Partners as a result of the Paging Partners Merger.
Paging Partners System: the portion of the System acquired by
Borrower as a result of the Paging Partners Merger.
Participant: any Person to which a Lender sells or assigns a
Participation.
Participation: a sale or any assignment by a Lender of a
participating interest in (i) any portion of such Lender's interest in
Borrower's Obligations and (ii) any of such Lender's other rights under
any of the Loan Instruments.
Participation Agreement: an agreement executed by a Lender and a
Participant pursuant to Section 9.2.
Pay-Off Letter: a pay-off letter from each holder of the
Indebtedness to be Refinanced addressed to Agent.
PBGC: the Pension Benefit Guaranty Corporation or any Governmental
Body succeeding to the functions thereof.
PCS Management: PCS Management Group, a sole proprietorship of Xxxx
X. Xxxxxxxx.
PCS Management Note: the promissory note dated January 4, 1999 in
the original principal amount of $75,000 made by Borrower in favor of PCS
Management providing for interest on the outstanding principal balance
thereof at 15% per annum and a fee payable to PCS Management in the amount
of $7,500.
19
Pension Plan: any Employee Benefit Plan, other than a Multiemployer
Plan, which is subject to the provisions of Part 3 of Title I of ERISA,
Title IV of ERISA, or Section 412 of the Code and which (i) is maintained
for employees of Borrower or any ERISA Affiliate, or (ii) has at any time
within the preceding six years been maintained for the employees of
Borrower or any of its current or former ERISA Affiliates.
Permitted Liens: any of the following Liens:
(i) the Security Interests;
(ii) the Motorola Liens, provided Motorola and Borrower have
executed and delivered to Agent the Motorola
Intercreditor Agreement;
(iii) the Xxxx Atlantic Seller Indebtedness Liens;
(iv) the Permitted Senior Indebtedness Liens;
(v) Liens for taxes, assessments or other governmental
charges or levies, which either are (A) not delinquent
or (B) being contested diligently and in good faith by
appropriate proceedings, and as to which Borrower has
set aside reserves on its books in accordance with GAAP;
(vi) statutory Liens, such as landlord's, vendor's,
repairman's, mechanic's, materialman's, warehouseman's,
carrier's or other like Liens, arising by operation of
law and incurred in good faith in the ordinary course of
business, provided that the underlying obligations
relating to such Liens are paid in the ordinary course
of business or are not overdue for a period of more than
90 days, or are being contested diligently and in good
faith by appropriate proceedings and as to which
Borrower has set aside reserves on its books in
accordance with GAAP, or the payment of which
obligations are otherwise secured in a manner
satisfactory to Agent;
(vii) zoning ordinances, easements, rights-of-way, licenses,
reservations, provisions, covenants, conditions, waivers
or restrictions on the use of Property and other similar
encumbrances or title exceptions, in each case, that are
acceptable to Agent;
(viii) Liens in respect of judgments or awards with respect to
which no Event of Default would exist pursuant to
subsection 8.1.6;
20
(ix) pledges, deposits or other Liens to secure payment of
insurance premiums (A) to be paid in accordance with
applicable laws in the ordinary course of business
relating to payment of worker's compensation, or (B)
that are required for the participation in any fund in
connection with worker's compensation, unemployment
insurance, old-age pensions or other social security
programs;
(x) deposits to secure the performance of bids, trade
contracts, leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of
like nature in each case incurred in the ordinary course
of business; and
(xi) Liens described on Exhibit 1.1(F) hereto.
Permitted Prior Liens: any of the following Liens:
(i) the Permitted Senior Indebtedness Liens;
(ii) the Permitted Liens described in clauses (v) and (vi) of
the definition of Permitted Liens that are accorded
priority to the Security Interests by law; and
(iii) the Permitted Liens described in clauses (ii), (vii),
(ix), (x) and (xi) of the definition of Permitted Liens,
subject to the limitations or requirements set forth
therein.
Permitted Senior Indebtedness: Indebtedness, other than the Loan,
incurred to purchase tangible personal property or Indebtedness incurred
to lease tangible personal property pursuant to Capitalized Leases,
provided that (i) such Indebtedness (other than the Loan) existing as of
the Closing Date shall not exceed $100,000, (ii) during any Loan Year
after the Closing Date the amount of such Indebtedness (other than the
Loan) at any one time outstanding during such Loan Year shall not exceed
$200,000, unless the Motorola Indebtedness has been paid in full and the
Motorola Liens have been released, in which case the amount of such
Indebtedness shall not exceed $1,500,000, and (iii) no Event of Default
exists at the time or will be caused as a result of the incurrence of any
Indebtedness described in clause (ii).
Permitted Senior Indebtedness Liens: Liens that secure Permitted
Senior Indebtedness, provided that (i) each such Lien attaches only to the
Property purchased or leased with the proceeds of the Permitted Senior
Indebtedness incurred with respect to such Property and (ii) Agent is
granted a Lien upon such Property, subordinate only to the Lien granted to
the holder of the applicable Permitted Senior Indebtedness.
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Person: any individual, firm, corporation, business enterprise,
trust, association, joint venture, partnership, Governmental Body or other
entity, whether acting in an individual, fiduciary or other capacity.
Prepayment Premium: defined in subsection 2.8.1(a).
Principal Balance: the unpaid principal balance of the Loan or any
specified portion thereof outstanding from time to time.
Pro Forma Operating Cash Flow: for any period, Operating Cash Flow
for such period plus, for any portion of such period prior to the (i)
Closing, the Operating Cash Flow of the Xxxx Atlantic Sellers derived from
the operation of the Xxxx Atlantic System, (ii) Funding Date of the Merger
Portion, the Operating Cash Flow of Paging Partners derived from the
operation of the Paging Partners System, or (iii) Funding Date of any
Advance, the Operating Cash Flow derived from the Paging Business which is
the subject of the applicable Subsequent Acquisition, in each case as
adjusted in Agent's sole discretion for expenses intended to be eliminated
following the consummation of the Xxxx Atlantic Acquisition, the Paging
Partners Merger or such Subsequent Acquisition, as applicable.
Property: all types of real, personal or mixed property and all
types of tangible or intangible property.
Pro Rata Share: the proportion that a Lender's Commitment bears to
the total Commitments of all Lenders.
Qualified Depository: a member bank of the Federal Reserve System
having a combined capital and surplus of at least $500,000,000.
Real Estate: each parcel of real estate owned by Borrower.
Register: has the meaning assigned to that term in subsection 9.1.3.
Related Parties means (i) any spouse or immediate family member of a
Management Holder, (ii) any trust set up for the benefit of a Management
Holder or any of the Persons specified in clause (i) or (iii) any
corporation or limited liability company wholly owned by a Management
Holder and/or the Persons specified in clause (i) and (ii).
Required Amount: an amount equal to the lesser of (i) the aggregate
undrawn face amount of the Letters of Credit as of May 31, 1999 and (ii)
the amount which, if applied to reduce the Principal Balance as of the
last day of the most recent month prior to May, 1999 with respect to which
Agent has been in receipt for at least 10 days of the financial statements
required under Section 6.3.1 for such month, would have caused the Target
Leverage Ratio as of such last day to be equal to 4.0.
22
Required Xxxx Atlantic Principal Payment: the scheduled principal
payment due on March 31, 2000 pursuant to the Xxxx Atlantic Seller Note in
an amount equal to the sum of (i) the Base Principal Payment plus (ii) the
Additional Principal Payment.
Required Excess Cash Flow Prepayment: for any year in which a
mandatory prepayment is required to be made pursuant to subsection
2.8.2(a), an amount equal to the lesser of (i) (A) 50% of the Excess Cash
Flow for the preceding year (with respect to the mandatory prepayment due
in 2001) or (B) 25% of the Excess Cash Flow for the preceding year (with
respect to the mandatory prepayment due in 2002 and each year thereafter)
or (ii) the amount by which the Cash Equivalents as of the end of the
preceding year exceeds $1,000,000.
Securities Act: the Securities Act of 1933, as amended, or any
similar Federal statute, and the rules and regulations of the Securities
and Exchange Commission promulgated thereunder, as in effect from time to
time.
Securities Exchange Act: the Securities Exchange Act of 1934, as
amended, any successor statute thereto, and the rules and regulations of
the Securities and Exchange Commission promulgated thereunder, as in
effect from time to time.
Security Agreement: a security agreement executed by Borrower in
favor of Agent.
Security Instruments: collectively, the Security Agreement, the BAP
Investors Pledge Agreement, the Assignment of Leases, the Assignment of
Xxxx Atlantic Acquisition Instruments, the Paging Partners Pledge
Agreement, the Assignment of Paging Partners Merger Instruments and each
Mortgage now or hereafter granted by Borrower to Agent, all as amended
from time to time.
Security Interests: the Liens in the Collateral granted to Agent
pursuant to the Security Instruments and any other document now or
hereafter executed by Borrower or any other Person which purports to
create a Lien on the Property of such Person in favor of Agent.
Select Capital: Select Capital Corp., a Delaware corporation, or any
substitute holder of the Select Capital Note as described in the
definition thereof.
Select Capital Note: collectivley, one or more promissory notes
dated January 4, 1999 in the original principal amount of $295,400 made by
Borrower in favor of Select Capital, or any substitution therefor in a
principal amount not in excess of $295,400, provided that the holder of
any such substituted note executes and delivers to Agent a subordination
agreement in form and substance substantially similar to the Deferred
Payment Parties Subordination Agreement.
23
Select Capital Warrants: warrants to purchase up to 1562 shares of
the Borrower Capital Stock issuable to Select Capital pursuant to the
terms and conditions of the Select Capital Note.
Senior Debt Service: during any period, all payments of principal,
interest, premium and other charges with respect to the Principal Balance
(other than the Loan Fees), which payments are required to be made
pursuant to this Loan Agreement during such period.
Senior Debt Service Coverage Ratio: the ratio of (i) Pro Forma
Operating Cash Flow for the twelve month period ending on the last day of
any quarter to (ii) (A) for the quarter ended March 31, 1999, Senior Debt
Service for such quarter multiplied by 4, (B) for the quarter ended June
30, 1999, Senior Debt Service for the six month period then ended
multiplied by 2, (C) for the quarter ended September 30, 1999, Senior Debt
Service for the nine months then ended multiplied by 1.33 and (D) for any
quarter ending on or after December 31, 1999, Senior Debt Service for the
twelve months then ended.
Senior Leverage Ratio: the ratio of the Net Principal Balance as of
the last day of any month to the Pro Forma Operating Cash Flow for the
twelve month period ending on such last day.
Solvency Certificate: a solvency certificate executed by Borrower to
Agent.
Small Subsequent Acquisition: a Subsequent Acquisition with respect
to which (i) the gross purchase price payable is less than $250,000 and
(ii) Agent has reviewed and approved any liabilities, whether liquidated
or contingent, to be assumed by Borrower in connection with such
Subsequent Acquisition.
Stated Rate: as defined in subsection 2.2.3.
Subsequent Acquisition: an Asset Acquisition or Equity Acquisition
by Borrower subsequent to the Closing Date.
Subsequent Acquisition Additional Loan Instruments: collectively,
the following documents to be executed and delivered by Borrower in
connection with a Subsequent Acquisition:
(i) the Assignment of Subsequent Acquisition Instruments, a
Notice of Borrowing with respect to the applicable Advance, any
amendments to the Loan Instruments and such UCC Financing Statements
and other mortgages, security agreements and agreements required by
Agent to (A) reflect the effect of such Subsequent Acquisition and
(B) grant to Agent a perfected Lien, subject in priority only to
Permitted Prior Liens, upon all existing and after-acquired Property
acquired by Borrower as a result of the consummation of such
Subsequent Acquisition, and to
24
the extent permitted by applicable law, the FCC Licences (and the
proceeds thereof) transferred to Borrower in connection with such
Subsequent Acquisition;
(ii) an Environmental Certificate covering any real estate
acquired or leased by Borrower in connection with such Subsequent
Acquisition;
(iii) a Landlord's Consent executed by each Landlord under
such Leases assumed or executed by Borrower in connection with such
Subsequent Acquisition as Agent may require;
(iv) such assignments and third party consents with respect to
any agreements with respect to the Paging Business which is the
subject of such Subsequent Acquisition as Agent reasonably shall
request; and
(v) such other instruments, documents, certificates, consents,
waivers and opinions as Agent reasonably may require in connection
with such Subsequent Acquisition.
Subsequent Acquisition Instruments: the purchase agreement and all
other documents and instruments executed in connection with a Subsequent
Acquisition.
Subsequent Acquisition Merger: as defined in subsection 4.5.7.
Subsequent Acquisition Seller: the seller or sellers under the
applicable Subsequent Acquisition Instruments.
Subsequent Portion: a portion of the Loan in the amount of
$1,500,000. An amount equal to the portion of the Subsequent Portion in
excess of the amount thereof actually used during the Subsequent Portion
Availability Period to make the Xxxx Atlantic Seller Note Payment and to
pay the Subsequent Portion Loan Fee shall be added to the Acquisition
Portion as of the Xxxx Atlantic Seller Note Payment Date.
Subsequent Portion Availability Period: the period (i) commencing on
the date which is 10 days after Agent receives the Basic Financial
Statements for 1999 and (ii) ending on June 30, 2000.
Subsequent Portion Loan Fee: the fee payable by Borrower to Lenders
pursuant to subsection 2.7.2.
System: the paging system facilities of Borrower, operated at the
locations described on Exhibit 5.5.4, as updated or amended from time to
time in accordance with Section 7.11.
Target Leverage Ratio: the ratio of the Principal Balance as of the
last day of any month to the lesser of (i) the product of (A) Operating
Cash Flow for the period from the
25
Closing Date through such last day multiplied by (B) a fraction, the (x)
numerator of which is 365 and (y) denominator of which is the number of
days elapsed from the Closing Date through such last day and (ii) Pro
Forma Operating Cash Flow for the twelve month period ending on such last
day.
Termination Event: (i) a "Reportable Event" described in Section
4043 of ERISA and the regulations issued thereunder; or (ii) the
withdrawal of Borrower or any ERISA Affiliate from a Pension Plan during a
plan year in which it was a "substantial employer" as defined in Section
4001(a)(2); or (iii) the termination of a Pension Plan, the filing of a
notice of intent to terminate a Pension Plan or the treatment of a Pension
Plan amendment as a termination under Section 4041 of ERISA; or (iv) the
institution of proceedings to terminate, or the appointment of a trustee
with respect to, any Pension Plan by the PBGC; or (v) any other event or
condition which would constitute grounds under Section 4042(a) of ERISA
for the termination of, or the appointment of a trustee to administer, any
Pension Plan; or (vi) the partial or complete withdrawal of Borrower or
any ERISA Affiliate from a Multiemployer Plan; or (vii) the imposition of
a lien pursuant to Section 412 of the Code or Section 302 of ERISA; or
(viii) any event or condition which results in the reorganization or
insolvency of a Multiemployer Plan under Sections 4241 or 4245 of ERISA;
or (ix) any event or condition which results in the termination of a
Multiemployer Plan under Section 4041A of ERISA or the institution by the
PBGC of proceedings to terminate a Multiemployer Plan under Section 4042
of ERISA.
Total Debt Service: during any period, all payments of principal,
interest, premium and other charges with respect to Indebtedness for
Borrowed Money of Borrower (other than the Loan Fees) made or required to
be made during such period.
Total Leverage Ratio: the ratio of (i) the sum of (A) the Net
Principal Balance as of the last day of any month plus (B) the principal
balance of all Indebtedness for Borrowed Money of Borrower other than
Borrower's Obligations as of the last day of such month to (ii) the Pro
Forma Operating Cash Flow for the twelve month period ending on such last
day.
Trade Out Transaction: an exchange of advertising time for non-cash
consideration, such as goods, services or program material.
1.2 Time Periods. In this Loan Agreement and the other Loan Instruments,
in the computation of periods of time from a specified date to a later specified
date, (i) the word "from" means "from and including," (ii) the words "to" and
"until" each mean "to, but excluding" and (iii) the words "through," "end of"
and "expiration" each mean "through and including." Unless otherwise specified,
all references in this Loan Agreement and the other Loan Instruments to (i) a
"month" shall be deemed to refer to a calendar month, (ii) a "quarter" shall be
deemed to refer to a calendar quarter and (iii) a "year" shall be deemed to
refer to a calendar year.
1.3 Accounting Terms and Determinations. All accounting terms not
specifically defined herein shall be construed, all accounting determinations
hereunder shall be made and all
26
financial statements required to be delivered pursuant hereto shall be prepared
in accordance with GAAP as in effect at the time of such interpretation,
determination or preparation, as applicable. In the event that any Accounting
Changes (as hereinafter defined) occur and such changes result in a change in
the method of calculation of financial covenants, standards or terms contained
in this Loan Agreement, then Borrower and Lenders agree to enter into
negotiations to amend such provisions of this Loan Agreement so as to reflect
such Accounting Changes with the desired result that the criteria for evaluating
the financial condition of Borrower shall be the same after such Accounting
Changes as if such Accounting Changes had not been made. For purposes hereof,
"Accounting Changes" shall mean changes in generally accepted accounting
principles required by the promulgation of any rule, regulation, pronouncement
or opinion by the Financial Accounting Standards Board of the American Institute
of Certified Public Accountants (or any successor thereto) or other appropriate
authoritative body.
1.4 References. All references in this Loan Agreement to "Article,"
"Section," "subsection," "subparagraph," "clause" or "Exhibit," unless otherwise
indicated, shall be deemed to refer to an Article, Section, subsection,
subparagraph, clause or Exhibit, as applicable, of this Loan Agreement.
1.5 Lender's or Agent's Discretion. Whenever the terms "satisfactory to
Lenders or Agent," "determined by Lenders or Agent," "acceptable to Lenders or
Agent," "Lenders or Agent shall elect," "Lenders or Agent shall request," "at
the option or election of Lenders or Agent," or similar terms are used in the
Loan Instruments, except as otherwise specifically provided therein, such terms
shall mean satisfactory to, at the election or option of, determined by,
acceptable to or requested by Lenders or Agent, as applicable, in their or its
sole and unlimited discretion.
1.6 Borrower's Knowledge. Any statements, representations or warranties
that are based upon the best knowledge of Borrower or an officer thereof shall
be deemed to have been made after due inquiry by Borrower or an officer, as
applicable, with respect to the matter in question.
ARTICLE II
LOAN AND TERMS OF PAYMENT
2.1 Loan.
2.1.1 Aggregate Loan Amount. The Loan shall consist of a term loan
from Lenders to Borrower in the maximum aggregate amount of $30,000,000,
comprised of the Initial Portion, the Merger Portion, the Subsequent
Portion and the Acquisition Portion.
2.1.2 Initial Portion. Each Lender severally agrees to disburse its
Pro Rata Share of the Initial Portion to or as directed by Borrower when
all of the terms and conditions set forth in Section 4.1 and 4.2 have been
satisfied.
27
2.1.3 Merger Portion. Each Lender severally agrees to disburse its
Pro Rata Share of the Merger Portion at any time prior to July 1, 1999 to
or as directed by Borrower provided all of the terms and conditions set
forth in Section 4.1 and 4.3 have been satisfied.
2.1.4 Subsequent Portion. Each Lender severally agrees to disburse
its Pro Rata Share of the Subsequent Portion at any time during the
Subsequent Portion Availability Period to or as directed by Borrower
provided all of the terms and conditions set forth in Sections 4.1 and 4.4
have been satisfied.
2.1.5 Acquisition Portion. Each Lender severally agrees to disburse
its Pro Rata Share of Advances of the Acquisition Portion to or as
directed by Borrower from time to time during the Acquisition Portion
Availability Period provided all of the terms and conditions set forth in
Sections 4.1 and 4.5 have been satisfied.
2.1.6 Use of Proceeds. The proceeds of the (i) Initial Portion shall
be used to provide funds to consummate the Xxxx Atlantic Acquisition, to
pay the Closing Loan Fee, to make the Paging Partners Escrow Deposit, to
pay transaction costs and for working capital, (ii) Merger Portion shall
be used to provide funds to consummate the Paging Partners Merger, to pay
transaction costs and for working capital, (iii) Subsequent Portion shall
be used to make the Xxxx Atlantic Seller Note Payment and to pay the
Subsequent Portion Loan Fee and (iv) Acquisition Portion shall be used to
provide funds to enable Borrower to repay the Motorola Indebtedness, to
make the Xxxx Atlantic Seller Note Payment and to make other payments on
the Xxxx Atlantic Seller Indebtedness after the Xxxx Atlantic Seller Note
Payment has been paid in full, to pay the Letters of Credit Indebtedness
(other than the Letters of Credit Account Parties Payment), to pay the
Deferred Payment Indebtedness, to make Subsequent Acquisitions permitted
hereunder, to pay the Acquisition Portion Loan Fee payable in connection
with the disbursement of Advances of the Acquistion Portion and to pay
transaction costs in connection therewith.
2.1.7 Note. The Loan shall be evidenced by the Note.
2.1.8 Reborrowing. Borrower shall not be entitled to reborrow any
portion of the Loan which is repaid or prepaid.
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2.2 Interest.
2.2.1 Interest Rate. Except as provided in Section 2.5 and as
otherwise provided in the last sentence of this subsection 2.2.1, the Base
Rate Portion shall bear interest at the Base Rate in effect from time to
time plus the Applicable Margin in effect for the current quarter and each
LIBOR Loan shall bear interest at the applicable LIBOR Rate plus the
Applicable Margin in effect for the current quarter. As used in this Loan
Agreement, the term "Applicable Margin" for any quarter shall be
determined by Agent on the first day of such quarter (the "Determination
Date") and shall mean with respect to the Base Rate Portion and each LIBOR
Loan the per annum percentage rate set forth opposite the applicable
Senior Leverage Ratio as calculated as of the last day of the month most
recently ended with respect to which Agent has been in receipt for at
least 10 days of the financial statements required under Section 6.3.1 for
such month:
Senior Base Rate LIBOR Loan
Leverage Applicable Applicable
Ratio Margin Margin
----- ------ ------
3.5 or greater 1.75% 4.50%
3.0 or greater but
less than 3.5 1.50% 4.25%
less than 3.0 1.25% 4.00%
Notwithstanding the foregoing, until the last day of the sixth quarter
following the quarter in which the Closing Date occurs, the Applicable
Margin shall mean (i) with respect to the Base Rate Portion, 1.75% per
annum and (ii) with respect to each LIBOR Loan, 4.50% per annum.
2.2.2 Interest Computation. Interest shall be payable monthly in
arrears, computed on the basis of a year consisting of 360 days and
charged for the actual number of days during the period for which interest
is being charged. In computing interest, the Funding Date shall be
included and the date of payment shall be excluded.
2.2.3 Maximum Interest. Notwithstanding any provision to the
contrary contained herein or in any other Loan Instrument, Lenders shall
not collect a rate of interest, including the Loan Fees, on any obligation
or liability due and owing by Borrower to Lenders in excess of the maximum
contract rate of interest permitted by applicable law ("Excess Interest").
All fees, charges, goods, things in action or any other sums or things of
value (other than items (a), (b), (c) and (d) below) paid or payable by
Borrower (collectively, the "Additional Sums"), whether pursuant to the
Note, this Loan Agreement, the other Loan Instruments or any other
document or instrument in any way pertaining to the Loan, that, under the
laws of the State of Arizona, may be deemed to be interest with respect to
the Loan, for the purpose of any laws of the State of Arizona that may
limit the maximum amount of interest to be charged with respect to the
Loan shall be payable by Borrower and shall be deemed to be additional
29
interest, and for such purposes only, the agreed upon and "contracted for
rate of interest" with respect to the Loan shall be deemed to be increased
by the rate of interest resulting from the Additional Sums. Lenders and
Borrower agree that the interest laws of the State of Arizona shall govern
the relationship among them and understand and believe that the
transactions contemplated by the Loan Instruments comply with the usury
laws of the State of Arizona, but in the event of a final adjudication to
the contrary, Borrower shall be obligated to pay, nunc pro tunc, to
Lenders only such interest as then shall be permitted by the laws of the
state found to govern the contract relationship among Lenders and
Borrower. For the purpose of any laws of the State of Arizona that may
limit the maximum amount of interest to be charged with respect to a loan,
the "contracted for rate of interest" for the Loan shall consist of the
following: (a) interest calculated in accordance with the provisions of
subsection 2.2.1; (b) interest calculated in accordance with the
provisions of Section 2.5; (c) the late charges, described and payable in
accordance with provisions of Section 2.6; (d) the Loan Fees; and (e) all
Additional Sums, if any. Borrower agrees to pay an effective "contracted
for rate of interest" which is the sum of items (a), (b), (c), (d) and
(e), as applicable, above. If any Excess Interest is provided for or
determined by a court of competent jurisdiction to have been provided for
in this Loan Agreement or any other Loan Instrument, then in such event
(i) Borrower shall not be obligated to pay such Excess Interest, (ii) any
Excess Interest collected by Lenders shall be, at Lenders' option, (A)
applied to the Principal Balance or to accrued and unpaid interest not in
excess of the maximum rate permitted by applicable law or (B) refunded to
the payor thereof, (iii) the interest rates provided for herein
(collectively, including, without limitation, the Loan Fees, the "Stated
Rate") shall be automatically reduced to the maximum rate allowed from
time to time under applicable law (the "Maximum Rate") and this Loan
Agreement and the other Loan Instruments, as applicable, shall be deemed
to have been, and shall be, modified to reflect such reduction, and (iv)
Borrower shall not have any action against Agent or Lenders for any
damages arising out of the payment or collection of such Excess Interest;
provided, however, that if at any time thereafter the Stated Rate is less
than the Maximum Rate, Borrower shall, to the extent permitted by law,
continue to pay interest at the Maximum Rate until such time as the total
interest received by Lenders is equal to the total interest which Lenders
would have received had the Stated Rate been (but for the operation of
this provision) the interest rate payable. Thereafter, the interest rate
payable shall be the Stated Rate unless and until the Stated Rate again
exceeds the Maximum Rate, in which event the provisions contained in this
subsection 2.2.3 again shall apply.
2.3 LIBOR Loans.
2.3.1 Election by Borrower. Subject to the provisions of subsection
2.3.2 and provided no Event of Default then exists, Borrower from time to
time may elect to have all or a portion of the Principal Balance bear or
continue to bear interest at a LIBOR Rate, such election to be exercised
by delivery of a LIBOR Election Notice to Agent x/x Xxxxxx Xxxxx, XXXXXX
Capital Corporation, 000 X. Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000,
Telecopy No. (000) 000-0000, by facsimile transmission not less than three
Business Days prior to the commencement of the applicable Interest Period.
Agent shall determine (which determination shall, absent manifest error,
be presumptively correct) the LIBOR Rate applicable to the
30
relevant LIBOR Loan on the applicable Interest Rate Determination Date and
promptly shall give notice thereof to Borrower. Agent and Lenders shall
have the right without further confirmation to assume that any LIBOR
Election Notice received by Agent and in good faith believed by Agent to
be executed by Xxxx Xxxxxxxx or any other individual designated by him in
a notice to Agent has been given by a person duly authorized to act on
behalf of Borrower. Any LIBOR Election Notice received by Agent shall be
irrevocable. Upon the expiration of an Interest Period the applicable
LIBOR Loan shall be converted to and become part of the Base Rate Portion
unless such LIBOR Loan has been continued as a LIBOR Loan in accordance
with this subsection 2.3.1.
2.3.2 LIBOR Limitations. Each LIBOR Loan shall be in an amount not
less than $1,000,000 or integral multiples of $100,000 in excess thereof.
At no time shall more than three LIBOR Loans be in effect.
2.3.3 Eurodollar Deposits Unavailable or Interest Rate
Unascertainable. If prior to the commencement of any Interest Period Agent
determines that Dollar deposits of the relevant amount for the relevant
Interest Period are not available in the London Interbank Market or the
rate at which such Dollar deposits are being offered will not adequately
and fairly reflect the cost to the Lenders of maintaining a LIBOR Rate for
such Interest Period, or that by reason of circumstances affecting such
market, adequate and reasonable means do not exist for ascertaining the
LIBOR Rate applicable to such Interest Period, Agent promptly shall give
notice of such determination to Borrower and any LIBOR Election Notice
previously given by Borrower which has not yet become effective shall be
deemed to be canceled.
2.3.4 Tax and Other Laws. In the event that by reason of any law,
regulation or requirement or interpretation thereof by any Governmental
Body, or the imposition of any requirement of any such Governmental Body,
whether or not having the force of law, including the imposition of any
reserve and/or special deposit requirement (other than reserves included
in the Eurocurrency Reserve Requirements), any Lender shall be subjected
to any tax, levy, impost, charge, fee, duty, deduction or withholding of
any kind whatsoever (other than any tax imposed upon the total net income
of such Lender or franchise tax imposed on such Lender) and if any such
measures or any other similar measure shall result in an increase in the
cost to any Lender of maintaining its share of any LIBOR Loan or in a
reduction in the amount of principal or interest receivable by any Lender
in respect thereof, then Borrower shall pay to the affected Lender within
10 days after receipt of a notice from such Lender (which notice shall be
accompanied by a statement in reasonable detail setting forth the basis
for the calculation thereof, which calculation, in the absence of
demonstrable error, shall be conclusive and binding), an amount equal to
such increased cost or reduced amount. At any time after receipt of such
notice Borrower may convert all LIBOR Loans to the Base Rate Portion, and
such conversion shall be effective three Business Days after the Lenders
have received notice from Borrower of such conversion. Notwithstanding the
foregoing, no Lender shall (i) be entitled to compensation under this
subsection 2.3.4 for any amounts incurred or accruing more than 180 days
prior to the giving of notice to Borrower
31
of additional costs of the type described in this subsection 2.3.4 or (ii)
exercise any of its rights under this subsection 2.3.4 if it shall not at
the time be the general policy or practice of such Lender to exercise
similar rights against its other borrowers similarly situated. Upon the
occurrence of any event giving rise to the operation of subsections 2.3.4
or 2.3.6 or Section 12.4 with respect to any Lender, such Lender will, if
requested by Borrower, use reasonable efforts (subject to overall policy
considerations of such Lender) to designate another lending office for any
portion of the Loan affected by such event, provided that such designation
is made on such terms that such Lender and its lending office suffer no
material economic, legal or regulatory disadvantage, with the object of
aoviding the consequence of the event giving rise to the operation of such
subsection or Section. The foregoing shall not affect or postpone any of
the obligations of Borrower or the rights of any Lender proviced in
subsection 2.3.4 or 2.3.6 or Section 12.4.
2.3.5 Changes in Law Rendering LIBOR Loans Unlawful. If at any time
any law, treaty or regulation, or any interpretation thereof by any
Governmental Body shall make it unlawful for any Lender to fund or
maintain its share of any LIBOR Loan with monies obtained in the London
Interbank Market, such Lender, upon the occurrence of such event, shall
notify Borrower thereof and thereupon the (i) right of Borrower to make
any LIBOR Election shall be suspended for the duration of such illegality
and (ii) if required by such law, regulation or interpretation, on such
date as shall be specified in such notice all Interest Periods then in
effect shall be terminated, and thereafter all LIBOR Loans shall be deemed
converted to the Base Rate Portion.
2.3.6 Indemnity. In addition to any other payments payable by
Borrower to Lenders pursuant to the Loan Instruments, Borrower shall
indemnify and reimburse each Lender on demand for any loss or expense
which such Lender may sustain as a consequence of any prepayment of any
LIBOR Loan prior to the expiration of the Interest Period applicable
thereto except as required under subsection 2.3.5 and/or any failure by
Borrower to (i) make any payment when due of any amount payable with
respect to any LIBOR Loan or (ii) borrow the amount set forth in any LIBOR
Election Notice on the date specified therefor.
2.4 Principal and Interest Payments.
2.4.1 Interest. Except as otherwise provided in subsection 2.8.1(c)
and 2.8.2(d), interest on the Principal Balance shall be payable monthly
in arrears on the first Business Day of each month beginning with the
month following the month in which the Closing occurs.
2.4.2 Principal. The Principal Balance shall be payable in
consecutive quarterly installments on the first Business Day of each
quarter commencing with the quarter beginning July 1, 2000. Each such
installment shall be in an amount equal to the percentage of the Principal
Balance as of June 30, 2000 set forth below opposite the quarter in which
such payment is due:
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Percentage of Principal
Quarter Beginning Balance as of June 30, 2000
----------------- ---------------------------
July 1, 2000 0.50%
October 1, 2000 0.50%
January 1, 2001 1.94%
April 1, 2001 1.94%
July 1, 2001 1.94%
October 1, 2001 1.94%
January 1, 2002 3.13%
April 1, 2002 3.13%
July 1, 2002 3.13%
October 1, 2002 3.13%
January 1, 2003 3.50%
April 1, 2003 3.50%
July 1, 2003 3.50%
October 1, 2003 3.50%
The remaining Principal Balance, together with all accrued and unpaid
interest thereon and all other sums which then are due and payable
pursuant to the terms of the Loan Instruments, shall be due and payable in
full on the Maturity Date.
2.5 Default Rate. During a Default Rate Period, Borrower's Obligations
shall bear interest at the Default Rate.
2.6 Late Charges. If a payment of principal or interest to be made
pursuant to this Loan Agreement becomes past due for a period in excess of five
Business Days, Borrower shall pay on demand to Lenders a late charge of 2% of
the amount of such overdue payment.
2.7 Loan Fees.
2.7.1 Closing Loan Fee. Borrower shall pay to Lenders a closing fee
in the amount of $430,000 upon the Closing. The Closing Loan Fee shall be
deemed to be fully earned as of the Closing. FINOVA shall credit the
$50,000 deposit (net of expenses) previously paid by Borrower to FINOVA
against the Closing Loan Fee.
2.7.2 Subsequent Portion Loan Fee. Upon the disbursement of the
Subsequent Portion Borrower shall pay to Lenders a loan fee in the amount
of 1.00% of the amount of the Subsequent Portion actually disbursed. The
Subsequent Portion Loan Fee shall be deemed to be fully earned upon the
disbursement of the Subsequent Portion.
2.7.3 Acquisition Portion Loan Fees. Concurrently with the
disbursement of each Advance of the Acquisition Portion, Borrower shall
pay to Lenders a loan fee in the amount
33
of 1.00% of the amount of such Advance. Each Acquisition Portion Loan Fee
shall be deemed to be fully earned upon the disbursement of the applicable
Advance.
2.8 Prepayments.
2.8.1 Voluntary Prepayments. Borrower may not prepay any LIBOR Loan
prior to the expiration of the Interest Period applicable thereto. Except
as provided in the preceding sentence, Borrower may at any time
voluntarily prepay the Principal Balance in whole or in part, subject to
the following conditions:
(a) Prepayment Premium. Concurrently with any voluntary
prepayment of all or any part of the Principal Balance and subject
to the last sentence of this subsection 2.8.1(a), Borrower shall pay
to Lenders a prepayment premium (the "Prepayment Premium") equal to
a percentage of the amount of the Principal Balance prepaid,
determined in accordance with the following schedule:
Percentage of Principal
Period of Prepayment Balance Prepaid
-------------------- ---------------
First Loan Year 4.0%
Second Loan Year 3.0%
Third Loan Year 2.0%
Thereafter 0.0%
Notwithstanding the foregoing, the applicable Prepayment Premium
shall be reduced by 100 basis points in the event that (i) Borrower
requests Lenders to provide financing to enable Borrower to
consummate a Subsequent Acquisition, (ii) Lenders decline to provide
the requested financing on terms (including without limitation,
leverage, interest rates and fees) no less favorable to Borrower
than those herein contained and (iii) the Subsequent Acquisition is
consummated with proceeds of other senior financing and Borrower's
Obligations are prepaid in full concurrently with the disbursement
of such proceeds.
(b) Notice of Prepayment; Number and Amount of Prepayments.
Not less than 10 days prior to the date upon which Borrower desires
to make any voluntary prepayment of the Principal Balance, Borrower
shall deliver to Lenders notice of its intention to prepay, which
notice shall be irrevocable and shall state the prepayment date and
the amount of the Principal Balance to be prepaid. The amount of any
voluntary partial prepayment of the Principal Balance shall be not
less than $100,000 or integral multiples thereof. A voluntary
prepayment of the Principal Balance shall not be made more
frequently than once a month.
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(c) Additional Payments. Concurrently with any voluntary
prepayment of the Principal Balance pursuant to this subsection
2.8.1, Borrower shall (i) prepay the Motorola Indebtedness in an
amount equal to the Motorola Ratable Share of the voluntary
prepayment of the Principal Balance, determined as of the date of
such voluntary prepayment and (ii) pay to Lenders accrued and unpaid
interest on the portion of the Principal Balance which is being
prepaid to the date on which Lenders are in receipt of Good Funds,
and any other sums which then are due and payable pursuant to the
terms of any of the Loan Instruments.
(d) Application of Partial Prepayments. Any voluntary partial
prepayment of the Principal Balance pursuant to this subsection
2.8.1 shall be applied to the installments of the Principal Balance
in the inverse order of maturity.
2.8.2 Mandatory Prepayments.
(a) Required Excess Cash Flow Prepayments. Until Borrower's
Obligations are paid in full, within 120 days after the end of 1999
and the end of each year thereafter, Borrower shall pay to (i)
Lenders the Lenders' Ratable Share, determined as of the date of the
last day of such year, of the Required Excess Cash Flow Prepayment
for such year and (ii) Motorola the Motorola Ratable Share,
determined as of the last day of such year, of the Required Excess
Cash Flow Prepayment for such year.
(b) Prepayments from Insurance Proceeds, Asset Sale Proceeds
or Equity Sale Proceeds. Until Borrower's Obligations are paid in
full, Borrower shall pay to (i) Lenders the Lenders' Ratable Share
of any insurance proceeds, Asset Sale Proceeds or Equity Sale
Proceeds, determined as of the date of any required prepayment
pursuant to Section 6.6.2 with respect to insurance proceeds or as
of the date of receipt by Borrower with respect to Asset Sale
Proceeds or Equity Sale Proceeds and (ii) Motorola the Motorola
Ratable Share of any insurance proceeds, Asset Sale Proceeds or
Equity Sale Proceeds, determined as of the date of any required
prepayment pursuant to Section 6.6.2 with respect to insurance
proceeds or as of the date of receipt by Borrower with respect to
Asset Sale Proceeds or Equity Sale Proceeds. The Lenders' Ratable
Share and the Motorola Ratable Share of any such insurance proceeds,
Asset Sale Proceeds or Equity Sale Proceeds shall be calculated
after deducting from such insurance proceeds, Asset Sale Proceeds or
Equity Sale Proceeds, as applicable, the amount of any accrued and
unpaid interest on the Loan and any applicable Prepayment Premium
payable to Lenders.
(c) Prepayments from Indemnification Proceeds. Until
Borrower's Obligations are paid in full, whether or not an Event of
Default exists, upon notice from Agent to Borrower given within 30
days after receipt by Agent of notice from Borrower of Borrower's
collection of any Indemnification Proceeds, Borrower shall
35
pay to Lenders such portion of such Indemnification Proceeds
designated by Agent in its notice to Borrower except to the extent
(i) such Indemnification Proceeds are utilized to satisfy
Indebtedness of Borrower the existence of which gave rise to, or to
reimburse Borrower for any obligation, claim, judgment, liability or
settlement made by Borrower which gave rise to, the payment of such
Indemnification Proceeds to Borrower and (ii) no Event of Default
then exists and is continuing. In the event Agent fails to give such
notice within such 30 day period, Borrower may use such
Indemnification Proceeds in such manner as Borrower shall determine,
subject to the terms and conditions of this Loan Agreement. Borrower
shall give to Agent prompt notice of the collection of any
Indemnification Proceeds.
(d) Application of Mandatory Prepayments. Prepayments received
by Lenders pursuant to this subsection 2.8.2 shall be applied in the
following order of priority to the payment of: (i) any and all sums
which are due and payable pursuant to the terms of the Loan
Instruments, except the Principal Balance and accrued and unpaid
interest thereon, (ii) accrued and unpaid interest on the portion of
the Principal Balance being prepaid, and (iii) the installments of
the Principal Balance in the inverse order of maturity.
2.8.3 Prepayment Premium. No Prepayment Premium shall be payable
with respect to prepayments (i) pursuant to subsection 2.8.2(a), 2.8.2(c)
or 2.3.5, (ii) from any refinancing of the Loan made by Lenders, which
refinancing shall be at Lenders' discretion, or (iii) from proceeds of
insurance. Any prepayment from Asset Sale Proceeds or Equity Sale Proceeds
shall be accompanied by payment of the applicable Prepayment Premium.
2.8.4 Involuntary Prepayment. Concurrently with any payment of the
Principal Balance received by Lenders resulting from the exercise by Agent
and/or Lenders of any remedy available to Agent and/or Lenders subsequent
to the occurrence of an Event of Default and the acceleration of
Borrower's Obligations, Borrower shall pay to Lenders a Prepayment Premium
in an amount equal to the Prepayment Premium which would be payable if
such payment was made pursuant to subsection 2.8.1.
2.9 Payments after Event of Default. All payments received by Lenders
during the existence of an Event of Default shall be applied in accordance with
Section 8.4.
2.10 Method of Payment; Good Funds. All payments to be made pursuant to
the Loan Instruments by Borrower to Lenders shall be made by wire transfer of
Good Funds to the account of Agent at Citibank, N.A., 000 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx, XXX 000000000, Credit: FINOVA Capital Corporation, Credit Account No.
00000000, or to such other account as Agent shall notify Borrower.
ARTICLE III
36
SECURITY; LETTERS OF CREDIT
3.1 Security. Borrower's Obligations shall be secured by (i) a Lien upon
all of the Collateral, which Lien at all times shall be superior and prior to
all other Liens, except Permitted Prior Liens, and (ii) the Letters of Credit.
3.2 Letters of Credit.
3.2.1 Draws on Letters of Credit. Lenders may direct Agent to draw
on the Letters of Credit (i) in an aggregate amount equal to the amount of
the applicable unmade payment if an Event of Default under subsection
8.1.1 occurs, (ii) in full or in part at any time if any Event of Default
described in clauses (ii), (iii), (iv) or (v) of subsection 8.1.5(a),
subsection 8.1.5(b) or subsection 8.1.7 occurs and (iii) in an aggregate
amount equal to the Required Amount at any time after May 31, 1999 if (A)
the Paging Partners Merger Closing Date has not occurred on or before May
31, 1999 and (B) the Target Leverage Ratio as of the last day of the most
recent month prior to May, 1999 with respect to which Agent has been in
receipt for at least 10 days of the financial statements required under
Section 6.3.1 for such month exceeds 4.0. The amount drawn on each Letter
of Credit in connection with the aggregate amount of any permitted drawing
on all Letters of Credit shall be equal the aggregate amount of such
permitted drawing multiplied by a fraction, the numerator of which is the
undrawn face amount of such Letter of Credit and the denominator of which
is the undrawn face amount of all Letters of Credit. Any partial draw upon
the Letters of Credit shall not prevent Agent from making additional full
or partial draws thereon to the extent permitted hereunder, and Agent and
Lenders shall not be precluded from exercising any other rights and
remedies under the Loan Instruments in the event the Letters of Credit are
drawn upon. Agent shall be entitled to draw upon the Letters of Credit to
the extent permitted hereunder regardless of whether (i) Borrower or any
of its Affiliates has any claim, set-off or defense against Agent or any
Lender or (ii) the Paging Partners Merger is consummated after May 31,
1999. Neither Borrower nor any of its Affiliates shall file any motion,
suit or claim (other than any compulsory counterclaim excluding any
compulsory counterclaim the assertion of which could result in Agent being
enjoined from drawing upon the Letters of Credit), or commence any other
judicial proceeding at law or in equity or institute any non-judicial
action to challenge the right or authority of Agent to make any permitted
drawing upon the Letters of Credit or otherwise attempt to enjoin, impede
or impair any such permitted drawing.
3.2.2 Application of Draw Proceeds. The proceeds of any draw upon
the Letters of Credit shall be applied to reduce the Principal Balance in
the inverse order of maturity of the installments thereof.
3.2.3 Release of Letters of Credit. Agent shall release and deliver
to Borrower the Letters of Credit, subject to any notation thereon or
reduction in the face amount thereof as a result of any permitted draw
upon the Letters of Credit, promptly after the Paging Partners
37
Merger Closing Date if the Paging Partners Merger Closing Date occurs on
or before May 31, 1999.
ARTICLE IV
CONDITIONS OF CLOSING
4.1 Closing Conditions for Each Disbursement. The obligation of Lenders to
disburse any portion of the Loan, and the right of Borrower under Section 7.3 to
consummate the Paging Partners Merger, shall be subject to the satisfaction or
waiver of all of the following conditions on or before the applicable Funding
Date in a manner, form and substance satisfactory to Agent:
4.1.1 Representations and Warranties. On such Funding Date, the
representations and warranties of each Obligor set forth in the Loan
Instruments to which such Person is a party shall be true and correct in
all material respects.
4.1.2 Performance; No Default. Each Person shall have performed and
complied with all agreements and conditions contained in the Instruments
to which such Person is a party to be performed by or complied with by
such Person prior to or at such Funding Date, and no Event of Default or
Incipient Default then shall exist or result from the disbursement of such
portion of the Loan.
4.1.3 Licenses. Agent shall have received (i) copies of all Licenses
issued by the FCC and any other Governmental Body for the operation of the
Paging Business to be acquired by Borrower on the applicable Funding Date
and (ii) evidence that (A) such Licenses constitute all Licenses which are
necessary to enable Borrower to conduct such Paging Business, except for
any Licenses (other than any FCC Licenses), the absence of which could not
reasonably be expected to have a Material Adverse Effect, (B) such
Licenses are in full force and effect as of the applicable Funding Date,
except where the failure of any Licenses (other than any FCC Licenses) to
be in full force and effect could not reasonably be expected to have a
Material Adverse Effect, (C) no event has occurred which could result in
the termination, revocation or non-renewal of any such License, except
where the termination, revocation or non-renewal of any such License
(other than any FCC License) could not reasonably be expected to have a
Material Adverse Effect, (D) upon the applicable Funding Date Borrower
will be the holder of all such Licenses, except where the failure of
Borrower to be the holder of any such License (other than any FCC License)
could not reasonably be expected to have a Material Adverse Effect and (E)
the consent by the FCC or other applicable Governmental Body of the
transfer of such Licenses to Borrower has become final and is no longer
subject to administrative or judicial reconsideration, review or appeal,
except with respect to any such License (other than any FCC License) where
the failure of such consent to have become final could not reasonably be
expected to have a Material Adverse Effect.
38
4.1.4 Financial Statements and Projections. Agent shall have such
received pro-forma balance sheets, financial statements and operating
projections with respect to Borrower and the Paging Business to be
acquired on the applicable Funding Date as Agent reasonably may require,
provided that no pro-forma balance sheets or operating projections shall
be required (i) in connection with the Paging Partners Merger if the
Paging Partners Merger is consummated prior to September 30, 1999 or (ii)
in connection with any Subsequent Acquisition with respect to which
Agent's consent is not required under subsection 4.5.6.
4.1.5 Insurance. At least three Business Days prior to the
applicable Funding Date Borrower shall have delivered to Agent evidence
satisfactory to Agent that all Business Insurance coverage required
pursuant to Section 6.6 is in full force and effect and all premiums then
due thereon have been paid in full.
4.1.6 Environmental Audit. Agent shall have received an
Environmental Audit with respect to each parcel of Real Estate to be
acquired by Borrower on the applicable Funding Date designated by Agent,
and such other alternative assurances of compliance with Environmental
Laws (such as regulatory records checks) with respect to each parcel of
Leasehold Property to be acquired by Borrower on the applicable Funding
Date designated by Agent. All costs incurred in performing such
Environmental Audits and providing such other alternative assurances of
compliance shall be borne by Borrower.
4.1.7 Indebtedness to be Refinanced. Agent shall have received
evidence that the Indebtedness to be Refinanced in connection with the
consummation of the acquisition of the Paging Business to be acquired by
Borrower on the applicable Funding Date has been paid in full or will be
paid in full on the applicable Funding Date.
4.1.8 Approval of Instruments and Security Interests; Consents.
Agent shall have received evidence that all material approvals or consents
shall have been obtained from the FCC and all other Governmental Bodies
and, except to the extent the failure to obtain such approvals or consents
could reasonably be expected to have a Material Adverse Effect, all other
Persons, whose approval or consent is required to enable (i) Borrower and
the other Persons party to the Instruments to enter into and perform their
respective obligations under the Instruments to which each such Person is
a party and (ii) such Person to grant to Agent the Security Interests
contemplated in the Security Instruments to which such Person is a party.
4.1.9 Security Interests. All filings of Uniform Commercial Code
financing statements and all other filings and actions necessary to
perfect and maintain the Security Interests as first, valid and perfected
Liens in the Property covered thereby, subject in priority only to
Permitted Prior Liens, shall have been filed or taken and Agent shall have
received such UCC, state and federal tax Lien, pending suit, judgment and
other Lien searches as it deems necessary to confirm the foregoing.
39
4.1.10 Use of Assets. Agent shall be satisfied that Borrower at all
times shall be entitled to the use and quiet enjoyment of all Property
necessary for the continued ownership and operation of Borrower's Paging
Business, including, without limitation, the use of equipment, fixtures,
Licenses, offices and means of ingress and egress thereto, and any
easements or rights-of-way necessary to reach any equipment or other items
necessary for the operation of such Paging Business, except where the
failure to be entitled to such use and quiet enjoyment could not
reasonably be expected to have a Material Adverse Effect.
4.1.11 Proceedings and Documents. All corporate and other
proceedings in connection with the Instruments and all documents and
instruments incident thereto shall be reasonably satisfactory to Agent,
and Agent shall have received all such counterpart originals or certified
or other copies as Agent may request.
4.1.12 Material Adverse Change. No event shall have occurred since
December 31, 1997, in the case of the Initial Portion, or since the most
recent Funding Date, in the case of the Merger Portion, the Subsequent
Portion or any Advance, and no litigation or governmental proceeding or
investigation shall be pending, which has had or could reasonably be
expected to have a Material Adverse Effect. No judgment, order, injunction
or other restraint prohibiting or imposing materially adverse conditions
on the transactions to be consummated on the applicable Funding Date shall
be in effect.
4.1.13 Broker Fees. If the services of a broker or other agent have
been used in connection with the acquisition of the Paging Business to be
acquired by Borrower on the applicable Funding Date, all fees owed to such
broker or agent shall have been paid and Agent shall have received
evidence of such payment.
4.1.14 Fees and Expenses. Agent shall have received payment of the
Loan Fees payable on the applicable Funding Date and all fees and expenses
described in subsection 11.1.1.
4.2 Closing Conditions for Initial Portion. The obligation of Lenders to
disburse the Initial Portion shall be subject to the satisfaction or waiver of
all of the following conditions on or before the Closing Date in a manner, form
and substance satisfactory to Agent:
4.2.1 Equity Capitalization. Borrower shall demonstrate to the
satisfaction of Agent that Borrower has received not less than $6,000,000
in capital contributions in exchange for the issuance of the Borrower
Capital Stock.
4.2.2 Maximum Leverage. Borrower shall demonstrate to the
satisfaction of Agent that, assuming the Initial Portion had been
disbursed and the Xxxx Atlantic Acquisition had been consummated on the
last day of the second month prior to the month in which the Closing Date
is to occur, (i) the Senior Leverage Ratio as of such last day would not
exceed 3.7 and (ii) the Total Leverage Ratio as of such last day would not
exceed 4.8.
40
4.2.3 Consummation of Xxxx Atlantic Acquisition. Agent shall have
received evidence that (i) Borrower has acquired good title to all
Property necessary for the operation of the Xxxx Atlantic System, free and
clear of all Liens other than Permitted Liens and (ii) the Xxxx Atlantic
Acquisition has been consummated in accordance with the terms of the Xxxx
Atlantic Acquisition Instruments and as contemplated by this Loan
Agreement.
4.2.4 Delivery of Documents. The following shall have been delivered
to Agent, each duly authorized and executed, where applicable, and in form
and substance satisfactory to Agent:
(a) the Initial Loan Instruments;
(b) the Letters of Credit;
(c) a good standing certificate for Borrower from the
Secretaries of State of Delaware, New Jersey, Pennsylvania,
Maryland, Virginia, West Virginia, New York and Washington, DC, each
dated a recent date prior to the Closing Date;
(d) certified copies of (i) the articles of incorporation of
Borrower, together with all amendments thereto, certified by the
Secretary of State of Delaware as of a recent date prior to the
Closing Date; (ii) the by-laws of Borrower, certified as of the
Closing Date by the secretary of Borrower and (iii) resolutions
adopted by the board of directors of Borrower authorizing the
execution and delivery of the Loan Instruments, the Xxxx Atlantic
Acquisition Instruments and the Paging Partners Merger Agreement by
Borrower and the consummation of the transactions contemplated
thereby, certified as of the Closing Date by the secretary of
Borrower;
(e) signature and incumbency certificates of officers of
Borrower;
(f) certified copies or executed originals of each of the
following:
(1) the Xxxx Atlantic Acquisition Instruments;
(2) the Xxxx Atlantic Seller Indebtedness Instruments;
(3) the Xxxx Atlantic Reseller Agreement;
(4) the Letters of Credit Indebtedness Instruments;
(5) the Deferred Payment Indebtedness Instruments;
(6) the Paging Partners Merger Agreement and the Paging
Partners Escrow Agreement;
41
(7) the Operating Agreements;
(8) the Leases; and
(9) all instruments and documents evidencing Permitted
Senior Indebtedness existing as of the Closing Date;
(g) a Landlord Consent and Waiver from each Xxxx Atlantic
Seller with respect to each Lease under which such Xxxx Atlantic
Seller is the lessor;
(h) Pay-Off Letters from the each holder of Indebtedness to be
Refinanced in connection with the consummation of the Xxxx Atlantic
Acquisition; and
(i) such other instruments, documents, certificates, consents,
waivers and opinions as Agent reasonably may request.
4.2.5 Opinions of Counsel; Direction for Delivery. Agent shall have
received (i) opinions dated the Closing Date from (A) Xxxxxxxx Xxxxx
Xxxxxxxx Xxxx & Ballon LLP, counsel to Borrower, and (B) Wiley, Rein &
Fielding, special regulatory counsel for Borrower, in each case addressed
to Agent, as a Lender and as Agent, in such form and covering such matters
as Agent reasonably may require and (ii) copies of letters in form
satisfactory to Agent from Borrower addressed to the counsel described in
clause (i), directing such counsel to deliver to Agent the foregoing
opinions. In addition, Agent shall have received or be entitled to rely
upon opinions dated the Closing Date from counsel to the Xxxx Atlantic
Sellers, covering such matters as Agent reasonably may require.
4.2.6 Appraisal. Agent shall have received an appraisal of the Xxxx
Atlantic System prepared by a firm acceptable to Agent indicating a
current fair market value of the Xxxx Atlantic System of not less than
$28,000,000.
4.3 Conditions to Disbursement of the Merger Portion. The obligation of
Lenders to disburse the Merger Portion, and the right of Borrower under Section
7.3 to consummate the Paging Partners Merger, shall be subject to the
satisfaction of all of the following conditions on or before the applicable
Funding Date:
4.3.1 Disbursement of Initial Portion. The Initial Portion shall
have been disbursed.
4.3.2 Maximum Leverage. Borrower shall demonstrate to the
satisfaction of Agent that, assuming the Merger Portion had been disbursed
and the Paging Partners Merger had been consummated on the last day of the
second month prior to the month in which the Funding Date of the Merger
Portion is to occur, (i) the Senior Leverage Ratio as of such last
42
day would not exceed 4.0 and (ii) the Total Leverage Ratio as of such last
day would not exceed 5.0.
4.3.3 Consummation of Paging Partners Merger. Agent shall have
received evidence that (i) Borrower has acquired good title to all other
Property necessary for the operation of the Paging Partners System, free
and clear of all Liens other than Permitted Liens and (ii) the Paging
Partners Merger shall have been consummated in accordance with the terms
of the Paging Partners Merger Instruments and as contemplated by this Loan
Agreement.
4.3.4 Delivery of Documents. The following shall have been delivered
to Agent, each duly authorized and executed, where applicable, and in form
and substance satisfactory to Agent:
(a) the Paging Partners Merger Additional Loan Instruments;
(b) a good standing certificate for Paging Partners, Paging
Partners Merger Sub and Borrower from the Secretary of State of
Delaware, each dated a recent date prior to the Funding Date of the
Merger Portion;
(c) a certificate of merger from the Delaware Secretary of
State reflecting the consummation of the Paging Partners Merger and
copies of such of the Paging Partners Merger Instruments as are
required to be filed with the Delaware Secretary of State, certified
by the Delaware Secretary of State;
(d) certified copies of (i) the articles of incorporation of
Paging Partners and Paging Partners Merger Sub, together with all
amendments thereto, certified by the Secretary of State of Delaware;
(ii) the by-laws of Paging Partners and Paging Partners Merger Sub,
certified as of the Funding Date of the Merger Portion by the
secretary of Paging Partners and (iii) resolutions adopted by the
board of directors of Paging Partners and Paging Partners Merger Sub
authorizing the execution and delivery of the Paging Partners Merger
Instruments and the consummation of the Paging Partners Merger,
certified as of the Funding Date of the Merger Portion by the
secretary of Paging Partners;
(e) certified copies of (i) the articles of incorporation of
Borrower, together with all amendments thereto as in effect upon the
consummation of the Paging Partners Merger, certified by the
Secretary of State of Delaware; (ii) the by-laws of Borrower,
certified as of the Funding Date of the Merger Portion by the
secretary of Borrower and (iii) resolutions adopted by the board of
directors of Borrower authorizing the execution and delivery of the
Paging Partners Additional Loan Instruments, the Paging Partners
Merger Instruments and the consummation of the Paging Partners
Merger, certified as of the Funding Date of the Merger Portion by
the secretary of Borrower;
43
(f) signature and incumbency certificates of officers of
Paging Partners, Paging Partners Merger Sub and Borrower;
(g) certified copies or executed originals of each of the
following:
(1) the Paging Partners Merger Instruments;
(2) the Motorola Indebtedness Instruments;
(3) the Operating Agreements not previously delivered to
Agent;
(4) the Leases not previously delivered to Agent; and
(5) all instruments and documents evidencing Permitted
Senior Indebtedness existing as of the Funding Date of the
Merger Portion;
(h) Pay-Off Letters from the each holder of Indebtedness to be
Refinanced in connection with the consummation of the Paging
Partners Merger; and
(i) such other instruments, documents, certificates, consents,
waivers and opinions as Agent reasonably may request.
4.3.5 Opinions of Counsel; Direction for Delivery. Agent shall have
received (i) opinions dated the Funding Date of the Merger Portion from
(A) Xxxxxxxx Xxxxx Xxxxxxxx Xxxx & Ballon LLP, counsel to Borrower, and
(B) Wiley, Rein & Fielding, special regulatory counsel for Borrower, in
each case addressed to Agent, as a Lender and as Agent, in such form and
covering such matters as Agent reasonably may require and (ii) copies of
letters in form satisfactory to Agent from Borrower addressed to the
counsel described in clause (i), directing such counsel to deliver to
Agent the foregoing opinions. In addition, Agent shall have received or be
entitled to rely upon opinions dated the Funding Date of the Merger
Portion from counsel to Paging Partners, covering such matters as Agent
reasonably may require.
4.4 Conditions to Disbursement of the Subsequent Portion. The obligation
of Lenders to disburse the Subsequent Portion shall be subject to the
satisfaction of all of the following conditions on or before the Funding Date of
the Subsequent Portion:
4.4.1 Disbursement of Initial Portion. The Initial Portion shall
have been disbursed.
4.4.2 Maximum Leverage. Borrower shall demonstrate to the
satisfaction of Agent that, assuming the Subsequent Portion had been
disbursed and the Xxxx Atlantic Seller Note Payment had been made on the
last day of the second month prior to the month in which
44
the Funding Date of the Subsequent Portion is to occur, (i) the Senior
Leverage Ratio as of such last day would not exceed 4.0 and (ii) the Total
Leverage Ratio as of such last day would not exceed 5.0.
4.4.3 Xxxx Atlantic Seller Note Payment. Agent shall have received
evidence satisfactory to Agent that the Xxxx Atlantic Seller Note Payment
will be paid with the proceeds of the disbursement of the Subsequent
Portion.
4.4.4 Delivery of Documents. A Notice of Borrowing with respect to
the Subsequent Portion shall have been delivered to Agent, duly authorized
and executed and in form and substance satisfactory to Agent.
4.5 Conditions to Disbursement of Acquisition Portion. The obligation of
Lenders to disburse Advances shall be subject to the satisfaction of all of the
following conditions on or before the Funding Date of each such Advance:
4.5.1 Disbursement of Initial Portion. The Initial Portion shall
have been disbursed.
4.5.2 Maximum Leverage. Borrower shall demonstrate to the
satisfaction of Agent that, assuming the requested Advance had been
disbursed and the applicable Subsequent Acquisition, if any, had been
consummated on the last day of the second month prior to the month in
which the Funding Date of the requested Advance is to occur, (i) the
Senior Leverage Ratio as of such last day would not exceed 4.0 and (ii)
the Total Leverage Ratio as of such last day would not exceed 5.0.
4.5.3 Amount and Frequency of Advances. The requested Advance shall
be in a minimum amount of $250,000 and no more than one Advance not
related to a Subsequent Acquisition shall be made in any quarter. The
amount of the requested Advance, when added to the aggregate amount of all
prior Advances, shall not exceed the amount of the Acquisition Portion
then in effect.
4.5.4 Purpose of Advance. If the requested Advance is to be used:
(a) to consummate a Subsequent Acquisition or to pay all or
any portion of the Xxxx Atlantic Seller Indebtedness, Agent shall
have received evidence that the Motorola Indebtedness has been paid
in full and the Motorola Liens have been released;
(b) to consummate a Subsequent Acquisition, to pay all or any
portion of the Letters of Credit Indebtedness or to pay all or any
portion of the Deferred Payment Indebtedness, Agent shall have
received evidence that (i) the Motorola Indebtedness has been paid
in full and the Motorola Liens have been released, (ii) the
45
Xxxx Atlantic Seller Note Payment has been paid in full and (iii)
either (A) the Xxxx Atlantic Seller Indebtedness has been paid in
full and the Xxxx Atlantic Seller Indebtedness Liens have been
released or (B) after giving effect to such requested Advance, Agent
shall be satisfied that the Principal Balance would not exceed any
applicable limits on "Senior Indebtedness" under the Xxxx Atlantic
Seller Subordination Agreement.
4.5.5 Information Regarding Subsequent Acquisitions. If the proceeds
of the requested Advance are to be used to consummate a Subsequent
Acquisition, within a reasonable period of time prior to the proposed
Funding Date of the requested Advance Agent shall have received from
Borrower a description of the proposed Subsequent Acquisition accompanied
by a description of the operations history and relevant market information
with respect to the Paging Business proposed to be acquired, a discussion
of competition and information regarding key personnel with respect to
such Paging Business, and such other financial statements, reports,
projections and information with respect to the operation of such Paging
Business as Agent reasonably may require, together with the most recent
drafts of the applicable Subsequent Acquisition Instruments.
4.5.6 Consent to Subsequent Acquisition. If the proceeds of the
requested Advance are to be used to consummate a Subsequent Acquisition
other than a Small Subsequent Acquisition, or if the aggregate gross
purchase prices payable in connection with all prior Small Subsequent
Acquisitions is $750,000 or greater, Agent shall have consented to such
Subsequent Acquisition, which consent may be given or withheld in Agent's
sole discretion.
4.5.7 Consummation of Subsequent Acquisition. If the proceeds of the
requested Advance are to be used to consummate a Subsequent Acquisition,
Agent shall have received evidence that (i) the Subsequent Acquisition has
been consummated in accordance with the terms of the applicable Subsequent
Acquisition Instruments and as contemplated by this Loan Agreement, (ii)
if such Subsequent Acquisition is an Asset Acquisition, Borrower will
acquire concurrently with the applicable Funding Date of the requested
Advance good title to all of the Property being purchased pursuant to such
Subsequent Acquisition Instruments, free and clear of all Liens and
Indebtedness, except such Liens and Indebtedness permitted hereunder as
Borrower has agreed to assume or take subject to pursuant to the
Subsequent Acquisition Instruments, (iii) if such Subsequent Acquisition
is an Equity Acquisition (A) the equity securities which are the subject
of such Subsequent Acquisition and the Property of the Person being
acquired in such Subsequent Acquisition shall be free and clear of all
Liens and Indebtedness, except such Liens and Indebtedness permitted
hereunder as Borrower has agreed to assume or take subject to pursuant to
such Subsequent Acquisition Instruments, (B) Agent shall be satisfied that
adequate provision has been made to protect Borrower against the
assumption of material undisclosed liabilities and (C) on the Funding Date
of the requested Advance, the Person being acquired in such Subsequent
Acquisition will be merged with and into Borrower with the Borrower being
the surviving entity (a "Subsequent Acquisition Merger").
46
4.5.8 Delivery of Documents. The following shall have been delivered
to Agent, each duly authorized and executed, where applicable, and in form
and substance satisfactory to Agent:
(a) the applicable Subsequent Acquisition Additional Loan
Instruments;
(b) a good standing certificate for Borrower from the
Secretary of State of each new State in which Borrower will be
conducting its Paging Business as a result of the consummation of
such Subsequent Acquisition, each dated a recent date prior to the
Funding Date of the requested Advance;
(c) certified copies of (i) any amendments to the articles of
incorporation of Borrower since the most recent Funding Date,
certified by the Secretary of State of Delaware as of a recent date
prior to the Funding Date of the applicable Advance; (ii) any
amendments to the by-laws of Borrower since the most recent Funding
Date, certified as of the Funding Date of the requested Advance by
the secretary of Borrower and (iii) resolutions adopted by the board
of directors of Borrower authorizing the execution and delivery of
the applicable Subsequent Acquisition Additional Loan Instruments
and the applicable Subsequent Acquisition Instruments and the
consummation of the transactions contemplated thereby, certified as
of the Funding Date of the requested Advance by the secretary of
Borrower;
(d) signature and incumbency certificates of officers of
Borrower;
(e) if the requested Advance is being used in connection with
an Equity Acquisition:
(1) a good standing certificate for the Person being
acquired, dated a recent date prior to the Funding Date of the
requested Advance;
(2) a certificate of merger from the Delaware Secretary
of State and the State in which the Person being acquired is
organized reflecting the consummation of the Subsequent
Acquisition Merger and copies of such of the instruments as
are required to be filed with the respective Secretaries of
State, certified by the respective Secretaries of State;
(f) certified copies of (i) the articles of incorporation or
organization or certificate of limited partnership, as applicable,
of the applicable Subsequent Acquisition Seller, together with all
amendments thereto, certified by the Secretary of State where the
Subsequent Acquisition Seller is organized; (ii) the by-laws,
partnership agreement or limited liability company operating
agreement of the Subsequent Acquisition Seller, as applicable,
certified as of the Funding Date of the requested Advance by the
Subsequent Acquisition Seller and (iii) resolutions adopted by the
board of directors, general partner or manager of the Subsequent
Acquisition
47
Seller authorizing execution and delivery of the applicable
Subsequent Acquisition Instruments and the consummation of the
Subsequent Acquisition, certified as of the Funding Date of the
requested Advance by the Subsequent Acquisition Seller;
(g) certified copies or executed originals of each of the
following:
(1) the applicable Subsequent Acquisition Instruments;
(2) the Operating Agreements not previously delivered to
Agent;
(3) the Leases not previously delivered to Agent; and
(4) all instruments and documents evidencing Permitted
Senior Indebtedness existing as of the Funding Date of the
requested Advance;
(h) Pay-Off Letters from the each holder of Indebtedness to be
Refinanced in connection with the consummation of the applicable
Subsequent Acquisition; and
(i) such other instruments, documents, certificates, consents,
waivers and opinions as Agent reasonably may request.
4.5.9 Opinions of Counsel; Direction for Delivery. Agent shall have
received (i) opinions dated the Funding Date of the requested Advance from
(A) Xxxxxxxx Xxxxx Xxxxxxxx Xxxx & Ballon LLP, counsel to Borrower, and
(B) Wiley, Rein & Fielding, special regulatory counsel for Borrower, in
each case addressed to Agent, as a Lender and as Agent, in such form and
covering such matters as Agent reasonably may require and (ii) copies of
letters in form satisfactory to Agent from Borrower addressed to the
counsel described in clause (i), directing such counsel to deliver to
Agent the foregoing opinions. In addition, Agent shall have received or be
entitled to rely upon opinions dated the Funding Date of the requested
Advance from counsel to any applicable Subsequent Acquisition Seller,
covering such matters as Agent reasonably may require.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Agent and Lenders as follows:
5.1 Existence and Power. Borrower is a corporation duly formed, validly
existing and in good standing under the laws of the State of Delaware. Borrower
is in good standing under the laws of each other jurisdiction in which the
failure to be in good standing could have a Material Adverse Effect. Borrower
has all requisite power and authority to own its Property and to carry on its
business as now conducted and as proposed to be conducted following the Closing
Date.
48
5.2 Authority. Borrower has full power and authority to enter into,
execute, deliver and carry out the terms of the Instruments to which it is a
party and to incur the obligations provided for therein, all of which have been
duly authorized by all proper and necessary action and are not prohibited by its
articles of incorporation or by-laws.
5.3 Borrower Capital Stock and Related Matters.
5.3.1 Borrower Capital Stock. There is set forth in Exhibit 5.3.1 a
complete description of the Borrower Capital Stock. The Borrower Capital
Stock is validly issued, fully paid and non-assessable, and has been
issued and sold in compliance with all applicable federal and state laws,
rules and regulations, including, without limitation, all so-called
"Blue-Sky" laws. The Borrower Capital Stock is owned beneficially and of
record by the Persons in the respective percentages set forth on Exhibit
5.3.1, free and clear of all Liens except the Security Interests.
5.3.2 Restrictions. Except as set forth in Exhibit 5.3.2, Borrower
(i) is not a party to and has no knowledge of any agreements restricting
the transfer of the Borrower Capital Stock, except the Loan Instruments
and the Paging Partners Merger Agreement, (ii) except as provided in the
Paging Partners Merger Agreement, has not issued any rights which can be
convertible into or exchangeable or exercisable for any Borrower Capital
Stock, or any rights to subscribe for or to purchase, or any options for
the purchase of, or any agreements providing for the issuance (contingent
or otherwise) of, or any calls, commitments or claims of any character
relating to, any of the Borrower Capital Stock or any securities
convertible into or exchangeable or exercisable for any Borrower Capital
Stock and (iii) is not subject to any obligation (contingent or otherwise)
to repurchase or otherwise acquire or retire any Borrower Capital Stock.
Borrower is not required to file, and Borrower has not filed, pursuant to
the Securities Act or Section 12 of the Securities Exchange Act, a
registration statement relating to any class of debt or equity securities.
5.4 Binding Agreements. This Loan Agreement and the other Loan
Instruments, when executed and delivered, will constitute the valid and legally
binding obligations of Borrower to the extent Borrower is a party thereto,
enforceable against Borrower in accordance with their respective terms, except
as such enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in effect affecting
the enforcement of creditors' rights generally and (ii) equitable principles
(whether or not any action to enforce such document is brought at law or in
equity).
49
5.5 Business and Property of Borrower.
5.5.1 Business and Property. Borrower (i) holds all FCC Licenses
necessary to the operation of the System and all other Licenses necessary
to the operation of the System, except where the failure to hold such
other Licenses could not reasonably be expected to have a Material Adverse
Effect and (ii) has not engaged in and does not propose to engage in any
business activity other than the operation of the System and the Paging
Business relating thereto.
5.5.2 Licenses. There is set forth in Exhibit 5.5.2 a description of
all material Licenses which have been issued or assigned to Borrower,
including all such Licenses issued by the FCC. All of such Licenses are in
full force and effect and have been duly issued in the name of, or validly
assigned to, Borrower, no default or breach exists thereunder and Borrower
has full power and authority thereunder to operate the System and the
Paging Business relating thereto.
5.5.3 Operating Agreements. There is set forth in Exhibit 5.5.3 a
description of all material Operating Agreements relating to the operation
of the System. Each such Operating Agreement is in full force and effect
and no event has occurred which could result in the cancellation or
termination of any such Operating Agreement or the imposition thereunder
of any liability upon Borrower which could have a Material Adverse Effect.
5.5.4 Facility Sites. There is set forth in Exhibit 5.5.4 the
locations of the chief executive office of Borrower, the locations of all
of Borrower's Property, the places where Borrower's books and records are
kept and the locations of all switches, transmitters, control points,
antennae, equipment and offices presently used in the operation of the
System.
5.5.5 Leases. There is set forth in Exhibit 5.5.5 a list of all
Leases, together with a complete and accurate address of each parcel of
Leasehold Property subject to such Leases and the address of each Landlord
under such Lease. Each Lease is in full force and effect, there has been
no default in the performance of any of its terms or conditions by
Borrower or, to the best knowledge of Borrower, any other party thereto,
and, to the best knowledge of Borrower, no claims of default have been
asserted with respect thereto. The present and contemplated use of the
Leasehold Property is in compliance with all applicable zoning ordinances
and regulations and other laws and regulations, the violation of which
could have a Material Adverse Effect.
5.5.6 Real Estate. There is set forth in Exhibit 5.5.6 a complete
and accurate address and legal description of the Real Estate, together
with the tax identification numbers applicable thereto. The present and
contemplated use of the Real Estate is in compliance with all applicable
zoning ordinances and regulations and other laws and regulations the
failure to comply with which would have a Material Adverse Effect.
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5.5.7 Operation and Maintenance of Equipment. To the best knowledge
of Borrower, no Person owning or operating any equipment necessary for the
operation of the System has used, operated or maintained the same in a
manner which now or hereafter could result in the cancellation or
termination of the right of Borrower to use or make use of the same or
which could result in any material liability of Borrower for damages in
connection therewith. To the best knowledge of Borrower, all of the
equipment and other tangible personal property owned by Borrower is, in
all material respects, in good operating condition and repair (subject to
normal wear and tear) and, to the best knowledge of Borrower, has been
used, operated and maintained in substantial compliance with all
applicable laws, rules and regulations.
5.6 Title to Property; Liens. Borrower has (i) good title to all Property
necessary to conduct its Paging Business, except (A) any License which cannot be
transferred without the consent of a Governmental Body and (B) the portion
thereof consisting of a leasehold estate and (ii) a valid leasehold estate in
each portion of its Property which consists of a leasehold estate. All of such
Property is free and clear of all Liens, except Permitted Liens. Upon the proper
filing with the appropriate Governmental Bodies of appropriate Uniform
Commercial Code financing statements, the applicable Loan Instruments will
create valid and perfected first Liens in the Property described therein,
subject in priority only to Permitted Prior Liens.
5.7 Projections and Financial Statements.
5.7.1 Financial Statements. Borrower has delivered to Agent the
financial statements described in Exhibit 5.7.1 pertaining to the
operations of the System. To the best knowledge of Borrower (i) such
financial statements present fairly in all material respects the results
of operations of the System for the periods covered thereby and the
financial condition of the System as of the dates indicated therein, (ii)
all of such financial statements have been prepared in conformity with
GAAP consistently applied, except for the absence of footnotes and subject
to year-end adjustments and (iii) since December 31, 1997, there has been
no change which has had a Material Adverse Effect. Borrower also has
delivered to Agent a pro-forma balance sheet as of the Closing Date. Such
pro-forma balance sheet, which assumes the consummation of the
transactions contemplated by the Instruments, presents fairly in all
material respects the anticipated financial condition of Borrower as of
the Closing Date.
5.7.2 Projections. Borrower has delivered to Agent the projections
described in Exhibit 5.7.2 of the future operations of Borrower. Such
projections represent the best estimates of future performance of Borrower
believed by Borrower to be reasonable as of the Closing Date.
5.8 Litigation. There is set forth in Exhibit 5.8 a description of all
actions, suits, arbitration proceedings and claims pending or, to the best
knowledge of Borrower, threatened against Borrower, relating to the System or
the business or operations thereof or maintained by Borrower
51
at law or in equity or before any Governmental Body which if adversely
determined could reasonably be expected to have a Material Adverse Effect. None
of the matters set forth in such Exhibit 5.8 could reasonably be expected to be
adversely determined.
5.9 Defaults in Other Agreements; Consents; Conflicting Agreements.
Borrower is not in default under any agreement to which it is a party or by
which it or any of its Property is bound, the effect of which default could have
a Material Adverse Effect. No material authorization, consent, approval or other
action by, and no notice to or filing with, any Governmental Body or any other
Person which has not already been obtained, taken or filed, as applicable, is
required (i) for the due execution, delivery or performance by Borrower of any
of the Instruments to which Borrower is a party or (ii) as a condition to the
validity or enforceability of any of the Instruments to which Borrower is a
party or any of the transactions contemplated thereby or the priority of the
Security Interests, except for (A) certain filings to establish and perfect the
Security Interests and (B) filing of certain of the Loan Instruments with the
FCC. No provision of any mortgage, indenture, material contract, material
agreement, statute, rule, regulation, judgment, decree or order binding on
Borrower or affecting its Property conflicts with, or requires any consent which
has not already been obtained under, or would in any way prevent the execution,
delivery or performance of the terms of any of the Instruments or affect the
validity or priority of the Security Interests. The execution, delivery and
performance of the terms of the Instruments will not constitute a default under,
or result in the creation or imposition of, or obligation to create, any Lien
other than Permitted Liens upon the Property of Borrower pursuant to the terms
of any such mortgage, indenture, contract or agreement.
5.10 Taxes. Borrower has filed all tax returns required to be filed, and
has paid, or made adequate provision for the payment of, all taxes shown to be
due and payable on such returns or in any assessments made against it, except
such taxes or assessments as are being contested in good faith and by
appropriate proceedings diligently conducted and for which adequate reserves
have been set aside in accordance with GAAP, and no tax liens have been filed
and, to the best knowledge of Borrower, no claims are being asserted in respect
of such taxes which are required by GAAP to be reflected in the financial
statements of Borrower and are not so reflected therein. The charges, accruals
and reserves on the books of Borrower with respect to all federal, state, local
and other taxes are considered by the management of Borrower to be adequate, and
Borrower does not know of any unpaid assessment which is or might be due and
payable by Borrower or create a Lien against any of Borrower's Property, except
such assessments as are being contested in good faith and by appropriate
proceedings diligently conducted, and for which adequate reserves have been set
aside in accordance with GAAP. None of the tax returns of Borrower are under
audit and Borrower is not the subject or target of any investigation by the
Internal Revenue Service.
5.11 Compliance with Applicable Laws. Borrower is not in default in
respect of any judgment, order, writ, injunction, decree or decision of any
Governmental Body, which default could have a Material Adverse Effect. Borrower
is in compliance in all material respects with all applicable statutes and
regulations, including, without limitation, the Communications Act, all
Environmental Laws, ERISA, ADA and all laws and regulations relating to unfair
labor practices, equal employment opportunity and employee safety, of all
Governmental Bodies, the non-compliance with which could reasonably be expected
to have a Material Adverse Effect. No material condemnation, eminent
52
domain or expropriation has been commenced or, to the best knowledge of
Borrower, threatened against Borrower's Property.
5.12 Patents, Trademarks, Franchises, Agreements. Borrower owns, possesses
or has the right to use all patents, trademarks, service marks, trade names,
copyrights, franchises and rights with respect thereto (i) which are necessary
for the conduct of the Paging Business proposed to be conducted by Borrower
after the Closing Date and (ii) for which the failure to own, possess or have
the right to use could have a Material Adverse Effect, in each case, without any
known conflict with the rights of others and free of any Liens other than the
Security Interests.
5.13 FCC Matters. Borrower (i) has duly and timely filed all reports and
other filings which are required to be filed by Borrower under the
Communications Act and any other applicable law, rule or regulation of any
Governmental Body, the non-filing of which could have a Material Adverse Effect,
and (ii) is in compliance with the Communications Act and all such laws, rules
and regulations, the noncompliance with which could have a Material Adverse
Effect. All information provided by or on behalf of Borrower in any material
filing with the FCC was at the time of filing true, complete and correct in all
material respects, and the FCC has been notified of any substantial or
significant changes in such information as required in accordance with the
Communications Act and all other applicable laws, rules and regulations.
5.14 Environmental Matters. Borrower is in compliance in all material
respects with all applicable Environmental Laws and no portion of any of Real
Estate or the Leasehold Property has been used as a land fill. To the best
knowledge of Borrower, there currently are not any known Hazardous Materials
generated, manufactured, released, stored, buried or deposited over, beneath, in
or on (or used in the construction and/or renovation of) the Real Estate or
Leasehold Property in violation of applicable Environmental Laws.
5.15 Application of Certain Laws and Regulations. Borrower is not and no
Affiliate of Borrower is:
5.15.1 Investment Company Act. An "investment company," or a company
"controlled" by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended.
5.15.2 Holding Company Act. 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," as such terms are
defined in the Public Utility Holding Company Act of 1935, as amended.
5.15.3 Foreign or Enemy Status. (i) An "enemy" or an "ally of an
enemy" within the meaning of Section 2 of the Trading with the Enemy Act,
(ii) a "national" of a foreign country designated in Executive Order No.
8389, as amended, or of any "designated enemy country" as defined in
Executive Order No. 9095, as amended, of the President of the United
53
States of America, in each case within the meaning of such Executive
Orders, as amended, or of any regulation issued thereunder, (iii) a
"national of any designated foreign country" within the meaning of the
Foreign Assets Control Regulations or the Cuban Assets Control Regulations
of the United States of America (Code of Federal Regulations, Title 31,
Chapter V, Part 515, Subpart B, as amended) or (iv) an alien or a
representative of any alien or foreign government within the meaning of
Section 310 of Title 47 of the United States Code.
5.15.4 Regulations as to Borrowing. Subject to any statute or
regulation which regulates the incurrence of any Indebtedness for Borrowed
Money, including, without limitation, statutes or regulations relative to
common or interstate carriers or to the sale of electricity, gas, steam,
water, telephone, telegraph or other public utility services.
5.16 Margin Regulations. None of the transactions contemplated by this
Loan Agreement or any of the other Loan Instruments, including the use of the
proceeds of the Loan, will violate or result in a violation of Section 7 of the
Securities Exchange Act of 1934, as amended, or any regulations issued pursuant
thereto, including, without limitation, Regulations G, T, U and X, and Borrower
does not own or intend to carry or purchase any "margin security" within the
meaning of such Regulation U or G.
5.17 Other Indebtedness. Upon the Closing, there will be no Indebtedness
for Borrowed Money owed by Borrower to any Person, except (i) Borrower's
Obligations, (ii) the Xxxx Atlantic Seller Indebtedness, (iii) the Letters of
Credit Indebtedness, (iv) the Deferred Payment Indebtedness and (v) Permitted
Senior Indebtedness permitted to exist as of the Closing Date pursuant to this
Loan Agreement.
5.18 No Misrepresentation. Neither this Loan Agreement nor any other Loan
Instrument, certificate, information or report furnished or to be furnished by
or on behalf of Borrower to Agent or any Lender in connection with any of the
transactions contemplated hereby or thereby, contains or will contain a
misstatement of material fact, or omits or will omit to state a material fact
required to be stated in order to make the statements contained herein or
therein, taken as a whole, not misleading in the light of the circumstances
under which such statements were made. There is no fact, other than information
known to the public generally, known to Borrower after diligent inquiry, that
could have a Material Adverse Effect that has not expressly been disclosed to
Agent in writing.
5.19 Employee Benefit Plans.
5.19.1 No Other Plans. Neither Borrower nor any ERISA Affiliate
maintains or contributes to, or has any obligation under, any Employee
Benefit Plan other than those identified on Exhibit 5.19.1. Borrower has
provided Agent accurate and complete copies of all contracts, agreements
and documents described on Exhibit 5.19.1.
5.19.2 ERISA and Code Compliance and Liability. Borrower and each
ERISA Affiliate are in compliance with all applicable provisions of ERISA
and the regulations and
54
published interpretations thereunder with respect to all Employee Benefit
Plans except where failure to comply would not result in a material
liability to Borrower and except for any required amendments for which the
remedial amendment period as defined in Section 401(b) of the Code has not
yet expired. Each Employee Benefit Plan that is intended to be qualified
under Section 401(a) of the Code has been or will be determined by the
Internal Revenue Service to be so qualified, and each trust related to
such plan has been or will be determined to be exempt under Section 401(a)
of the Code. No material liability has been incurred by Borrower or any
ERISA Affiliate which remains unsatisfied for any taxes or penalties with
respect to any Employee Benefit Plan or any Multiemployer Plan.
5.19.3 Funding. No Pension Plan has been terminated, nor has any
accumulated funding deficiency (as defined in Section 412 of the Code)
been insured (without regard to any waiver granted under Section 412 of
the Code), nor has any funding waiver from the Internal Revenue Service
been received or requested with respect to any Pension Plan, nor has
Borrower or any ERISA Affiliate failed to make any contributions or to pay
any amounts due and owing as required by Section 412 of the Code, Section
302 of ERISA or the terms of any Pension Plan prior to the due dates of
such contributions under Section 412 of the Code or Section 302 of ERISA,
nor has there been any event requiring any disclosure under Section
4041(c)(3)(C), 4063(a) or 4068 of ERISA with respect to any Pension Plan.
5.19.4 Prohibited Transactions and Payments. Neither Borrower nor
any ERISA Affiliate has: (i) engaged in a nonexempt "prohibited
transaction" as such term is defined in Section 406 of ERISA or Section
4975 of the Code; (ii) incurred any liability to the PBGC which remains
outstanding other than the payment of premiums and there are no premium
payments which are due and unpaid; (iii) failed to make a required
contribution or payment to a Multiemployer Plan; or (iv) failed to make a
required installment or other required payment under Section 412 of the
Code.
5.19.5 No Termination Event. No Termination Event has occurred or is
reasonably expected to occur.
5.19.6 ERISA Litigation. No material proceeding, claim, lawsuit
and/or investigation is existing or, to the best knowledge of Borrower,
threatened concerning or involving any (i) employee welfare benefit plan
(as defined in Section 3(1) of ERISA) currently maintained or contributed
to by Borrower or any ERISA Affiliate, (ii) Pension Plan or (iii)
Multiemployer Plan.
5.20 Employee Matters.
5.20.1 Collective Bargaining Agreements; Grievances. Except as set
forth in Exhibit 5.20.1, (i) none of the employees of Borrower is subject
to any collective bargaining agreement with Borrower, (ii) no petition for
certification or union election is pending with respect to the employees
of Borrower and no union or collective bargaining unit has sought
55
such certification or recognition with respect to the employees of
Borrower and (iii) there are no strikes, slowdowns, work stoppages, unfair
labor practice complaints, grievances, arbitration proceedings or
controversies pending or, to the best knowledge of Borrower, threatened
against Borrower by any of Borrower's employees, other than employee
grievances or controversies arising in the ordinary course of business
that could not in the aggregate be expected to have a Material Adverse
Effect.
5.20.2 Claims Relating to Employment. Neither Borrower nor, to
Borrower's best knowledge, any employee of Borrower, is subject to any
employment agreement or non-competition agreement with any former employer
or any other Person which agreement would have a Material Adverse Effect
due to (i) any information which Borrower would be prohibited from using
under the terms of such agreement or (ii) any legal considerations
relating to unfair competition, trade secrets or proprietary information.
5.21 Burdensome Obligations. After giving effect to the transactions
contemplated by the Instruments (i) Borrower (A) will not be a party to or be
bound by any franchise, agreement, deed, lease or other instrument, or be
subject to any restriction, which is so unusual or burdensome so as to cause, in
the foreseeable future, a Material Adverse Effect and (B) does not intend to
incur, or believe that it will incur, debts beyond its ability to pay such debts
as they become due, and (ii) Borrower (A) owns and will own Property, the fair
saleable value of which is (I) greater than the total amount of its liabilities
(including contingent liabilities) and (II) greater than the amount that will be
required to pay the probable liabilities of its then existing debts as they
become absolute and matured, and (B) has and will have capital that is not
unreasonably small in relation to its business as presently conducted and as
proposed to be conducted. Borrower does not presently anticipate that future
expenditures needed to meet the provisions of federal or state statutes, orders,
rules or regulations will be so burdensome so as to have a Material Adverse
Effect.
5.22 Broker Fees. The services of a broker or other similar agent have not
been used in connection with the Loan, other than Deerfield Partners and PCS
Management, whose fees, not to exceed $300,000 in the case of Deerfield Partners
or $225,000 in the case of PCS Management, will be paid in full by Borrower upon
the Closing in the manner permitted under Section 7.16.
5.23 Pagers in Service. As of the Closing Date, there are no less than
190,000 Pagers in Service. Upon the consummation of the Paging Partners Merger,
there will be no less than 410,000 Pagers in Service.
5.24 Insurance. No notice of cancellation has been received with respect
to any insurance policies required pursuant to Section 6.6.1 and Borrower is in
material compliance with all conditions contained in such policies.
5.25 Representations and Warranties in Certain Documents. To the best
knowledge of Borrower, the representations and warranties made by the Xxxx
Atlantic Sellers in the Xxxx Atlantic Acquisition Instruments and by Paging
Partners Corporation in the Paging Partners Merger
56
Agreement are true and correct in all material respects as of the Closing Date
and no material default exists thereunder.
5.26 Year 2000 Problem. Borrower has taken all action necessary to assure
that there will be no Material Adverse Effect by reason of the advent of the
year 2000, including without limitation, that all computer-based systems,
embedded microchips and other processing capabilities effectively recognize and
process dates after April 1, 1999.
ARTICLE VI
AFFIRMATIVE COVENANTS
Until all of Borrower's Obligations are paid and performed in full
Borrower agrees that it will:
6.1 Legal Existence; Good Standing. Maintain its existence and its good
standing in Delaware and maintain its qualification in each other jurisdiction
in which the failure so to qualify could have a Material Adverse Effect.
6.2 Inspection. Permit representatives of Agent and Lenders, upon
reasonable prior notice and during normal business hours if no Event of Default
or Incipient Default exists and is continuing, or without notice at any time if
an Event of Default or Incipient Default exists and is continuing, to (i) visit
its offices, (ii) examine its books and records and Accountants' reports
relating thereto, (iii) make copies or extracts therefrom, (iv) discuss its
affairs with its employees, (v) examine and inspect its Property and (vi) meet
and discuss its affairs with the Accountants, and such Accountants, as a
condition to their retention by Borrower, are hereby irrevocably authorized by
Borrower to fully discuss and disclose all such affairs with Agent and Lenders.
6.3 Financial Statements and Other Information. Maintain a standard system
of accounting in accordance with GAAP and furnish to each Lender:
6.3.1 Monthly Statements. As soon as available and in any event
within 30 days after the close of each month:
(a) a copy of the balance sheet of Borrower as of the end of
such month, which shall include a line item showing the amount on
deposit in the Xxxx Atlantic Interest Account as restricted cash,
(b) statements of operations and Operating Cash Flow for such
month and for the period from the beginning of the then current year
to the end of such month, setting forth in each case in comparative
form the corresponding figures for the corresponding period in the
preceding year, and
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(c) a Pager Certificate for each Borrower as of the last day
of such month,
all in reasonable detail, containing such information as Lenders
reasonably may require, and certified as complete and correct, subject to
normal year-end adjustments, by the Chief Financial Officer of Borrower.
6.3.2 Quarterly Statements and Agings. As soon as available and in
any event within 45 days after the close of each quarter:
(a) a copy of the balance sheet of Borrower as of the end of
such quarter,
(b) statements of operations and Operating Cash Flow for such
quarter and for the period from the beginning of the then current
year to the end of such quarter, setting forth in each case in
comparative form the corresponding figures for the corresponding
period in the preceding year, and
(c) an aging of Borrower's outstanding accounts payable and
accounts receivable as of the end of such quarter,
all in reasonable detail, containing such information as Lenders
reasonably may require, and certified by the Chief Financial Officer as
complete and correct, subject to normal year-end adjustments.
6.3.3 Annual Statements. As soon as available and in any event
within 90 days after the close of each year:
(a) the balance sheet of Borrower as of the end of such year
and the statements of operations, cash flows, shareholders' equity
(collectively, the "Basic Financial Statements"), Operating Cash
Flow and Excess Cash Flow for such year setting forth in each case
in comparative form the corresponding figures for the preceding
year,
(b) an opinion of the Accountants which shall accompany the
Basic Financial Statements of Borrower, which opinion shall be
unqualified as to going concern and scope of audit, stating that (i)
the examination by the Accountants in connection with such Basic
Financial Statements has been made in accordance with generally
accepted auditing standards, (ii) such Basic Financial Statements
have been prepared in conformity with GAAP and in a manner
consistent with prior periods, and (iii) such Basic Financial
Statements fairly present in all material respects the financial
position and results of operations of Borrower, and
(c) a letter from the Accountants stating that the statements
of Operating Cash Flow and Excess Cash Flow were computed in
accordance with the requirements of this Loan Agreement.
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6.3.4 Officer's Certificates. The financial statements described in
subsection 6.3.2 and 6.3.3 shall be accompanied by a Compliance
Certificate.
6.3.5 Accountants' Certificate. Simultaneously with the delivery of
the certified Basic Financial Statements required by subsection 6.3.3,
copies of a certificate of the Accountants stating that (i) they have
checked the computations delivered by Borrower in compliance with
subsection 6.3.3, and (ii) in making the examination necessary for their
audit or review of the Basic Financial Statements for such year, nothing
came to their attention of a financial or accounting nature that caused
them to believe that (A) Borrower was not in compliance with the terms,
covenants, provisions or conditions of any of the Loan Instruments, or (B)
there shall have occurred any condition or event which would constitute an
Event of Default, or, if so, specifying in such certificate all such
instances of non-compliance and the nature and status thereof.
6.3.6 Audit Reports. Promptly upon receipt thereof, a copy of each
report, other than the reports referred to in subsection 6.3.3, including
any so-called "Management Letter" or similar report, submitted to Borrower
by the Accountants in connection with any annual, interim or special audit
made by the Accountants of the books of Borrower.
6.3.7 Business Plans. Not less than 30 days prior to the end of each
year, a business plan for the Paging Business of Borrower for the
following year setting forth in reasonable detail the projected Operating
Cash Flow, Capital Expenditures and operations budget of such Paging
Business and of Borrower, and such other information as Lenders reasonably
may request, for such following year.
6.3.8 Notice of Defaults; Loss. Prompt written notice if: (i) any
Indebtedness of Borrower is declared or shall become due and payable prior
to its declared or stated maturity, or called and not paid when due, (ii)
there shall occur and be continuing an Event of Default, accompanied by a
statement of the president of Borrower setting forth what action Borrower
proposes to take in respect thereof, or (iii) any event shall occur which
has a Material Adverse Effect, including the amount or the estimated
amount of any loss or adverse effect.
6.3.9 Notice of Suits; Adverse Events. Prompt written notice of: (i)
any citation, summons, subpoena, order to show cause or other order naming
Borrower a party to any proceeding before any Governmental Body which
might reasonably be expected to have a Material Adverse Effect, including
with such notice a copy of such citation, summons, subpoena, order to show
cause or other order, (ii) any lapse or other termination of any license,
permit, franchise, agreement or other authorization issued to Borrower by
any Governmental Body or any other Person that is material to the
operation of the Paging Business of Borrower, (iii) any refusal by any
Governmental Body or any other Person to renew or extend any such license,
permit, franchise, agreement or other authorization and (iv) any dispute
between Borrower and any Governmental Body or any other Person, which
lapse,
59
termination, refusal or dispute referred to in clauses (ii) and (iii)
above or in this clause (iv) could have a Material Adverse Effect.
6.3.10 Reports to Shareholders, Creditors and Governmental Bodies.
(a) Promptly upon becoming available, copies of all financial
statements, reports, notices and other statements sent or made
available generally by Borrower to its shareholders, of all regular
and periodic reports and all registration statements and
prospectuses filed by Borrower with any securities exchange or with
the Securities and Exchange Commission or any Governmental Body
succeeding to any of its functions, and of all statements generally
made available by Borrower or others concerning material
developments in the business of Borrower.
(b) Promptly upon becoming available, copies of any periodic
or special reports filed by Borrower with any Governmental Body or
Person, if such reports indicate any material change in the
business, operations, affairs or condition of Borrower, or if copies
thereof are requested by any Lender, and copies of any material
notices and other communications from any Governmental Body or
Person which specifically relate to Borrower.
6.3.11 ERISA Notices and Requests.
(a) With reasonable promptness, and in any event within 30
days after occurrence of any of the following, notice and/or copies
of: (i) the establishment of any new Employee Benefit Plan, Pension
Plan or Multiemployer Plan; (ii) the commencement of contributions
to any Employee Benefit Plan, Pension Plan or Multiemployer Plan to
which Borrower or any of its ERISA Affiliates was not previously
contributing or any increase in the benefits of any existing
Employee Benefit Plan, Pension Plan or Multiemployer Plan; (iii)
each funding waiver request filed with respect to any Employee
Benefit Plan and all communications received or sent by Borrower or
any ERISA Affiliate with respect to such request; and (iv) the
failure of Borrower or any of its ERISA Affiliates to make a
required installment or payment under Section 302 of ERISA or
Section 412 of the Code by the due date.
(b) Promptly and in any event within 10 days of becoming aware
of the occurrence of or forthcoming occurrence of any (i)
Termination Event or (ii) "prohibited transaction," as such term is
defined in Section 406 of ERISA or Section 4975 of the Code, in
connection with any Pension Plan or any trust created thereunder, a
notice specifying the nature thereof, what action Borrower has
taken, is taking or proposes to take with respect thereto and, when
known, any action taken or threatened by the Internal Revenue
Service, the Department of Labor or the PBGC with respect thereto.
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(c) With reasonable promptness but in any event within 10 days
after the occurrence of any of the following, copies of: (i) any
favorable or unfavorable determination letter from the Internal
Revenue Service regarding the qualification of an Employee Benefit
Plan under Section 401(a) of the Code; (ii) all notices received by
Borrower or any ERISA Affiliate of the PBGC's intent to terminate
any Pension Plan or to have a trustee appointed to administer any
Pension Plan; (iii) each Schedule B (Actuarial Information) to the
annual report (Form 5500 Series) filed by Borrower or any ERISA
Affiliate with the Internal Revenue Service with respect to each
Pension Plan; and (iv) all notices received by Borrower or any ERISA
Affiliate from a Multiemployer Plan sponsor concerning the
imposition or amount of withdrawal liability pursuant to Section
4202 of ERISA; and written notice within two Business Days of
Borrower's or any ERISA Affiliate's filing of or intention to file a
notice of intent to terminate any Pension Plan under a distress
termination within the meaning of Section 4041(c) of ERISA.
6.3.12 Other Information.
(a) Immediate notice of any material change in, or termination
of, the employment of Xxxx X. Xxxxxxxx, any change in the location
of any Property of Borrower which is material to or necessary for
the continued operation of Borrower's business, any change in the
name of Borrower, any sale or purchase of Property outside the
regular course of business of Borrower, and any change in the
business or financial affairs of Borrower, which change could have a
Material Adverse Effect.
(b) Promptly upon request therefor, such other information and
reports relating to the past, present or future financial condition,
operations, plans and projections of Borrower as Lenders reasonably
may request from time to time.
6.4 Reports to Governmental Bodies and Other Persons. Timely file all
material reports, applications, documents, instruments and information required
to be filed pursuant to all rules, regulations or requests of any Governmental
Body or other Person having jurisdiction over the operation of the business of
Borrower, including, but not limited to, such of the Loan Instruments as are
required to be filed with any such Governmental Body or other Person pursuant to
applicable rules and regulations promulgated by such Governmental Body or other
Person, except where the failure to file could not reasonably be expected to
have a Material Adverse Effect.
6.5 Maintenance of Licenses and Other Agreements. Maintain in full force
and effect at all times (subject to any modification in the ordinary of business
which could not reasonably be expected to have a Material Adverse Effect), and
apply in a timely manner for renewal of, all Licenses, trademarks, trade names
and agreements necessary for the operation of its Paging Business, the loss of
any of which could have a Material Adverse Effect, and deliver to Agent (i)
prompt notice of the proposed amendment or modification of any of such Licenses,
trademarks, tradenames or agreements which could reasonably be expected to have
a Material Adverse Effect and (ii) (A) evidence of the filing of any application
for renewal of any such Licenses not later than the last day
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such application may be filed in accordance with applicable law and (B) copies
of any petition filed to deny any such renewal application promptly after
receipt thereof by Borrower.
6.6 Insurance.
6.6.1 Maintenance of Insurance. Maintain in full force and effect
Business Insurance as required by the insurance letter agreement between
Borrower and Agent attached hereto as Exhibit 6.6.1, all of which shall be
written by insurers and in amounts and forms satisfactory to Agent and
otherwise comply with the terms of such insurance letter agreement, and
deliver to Agent such evidence of compliance with this subsection 6.6.1 as
Agent may require.
6.6.2 Claims and Proceeds. Borrower hereby directs all insurers
under all policies of Business Insurance to pay all proceeds payable
thereunder directly to Agent and Borrower hereby authorizes Agent to
collect all such proceeds. Borrower irrevocably appoints Agent (and all
officers, employees or agents designated by Agent) as Borrower's true and
lawful attorney and agent in fact for the purpose of and with power to
make, settle and adjust claims under such policies of insurance, endorse
the name of Borrower on any check, draft, instrument or other item of
payment for the proceeds of such policies of insurance, and to make all
determinations and decisions with respect to such policies of insurance.
Borrower acknowledges that such appointment as attorney and agent in fact
is a power coupled with an interest, and therefore is irrevocable. The
insurance proceeds received on account of any loss, damage, destruction or
other casualty (i) if any Event of Default exists and is continuing or if
the aggregate amount thereof exceeds $200,000, at the option of Agent may
be applied to the payment of Borrower's Obligations in the following order
of priority: (A) first, to the payment of any and all sums which then are
due and payable pursuant to the terms of the Loan Instruments, other than
the Principal Balance and interest accrued thereon, (B) next, to accrued
and unpaid interest on the Principal Balance and (C) then, to the
Principal Balance of the Loan in the inverse order of the maturity of the
installments thereof, or (ii) at the option of Agent may be (or if no
Event of Default exists and is continuing and the aggregate amount thereof
is $200,000 or less, shall be), held by Agent and applied to pay for the
cost of repair or replacement of the Property which was the subject of
such loss, damage, destruction or other casualty, in which event such
proceeds shall be made available in the manner and under such conditions
as Agent may require. In the event such proceeds are to be applied to the
repair or replacement of Property, the Property shall be repaired or
replaced so as to be of at least equal value and substantially the same
character as prior to such loss, damage, destruction or other casualty
within 90 days after receipt of such proceeds.
6.7 Future Leases. Deliver to Agent, concurrently with the execution by
Borrower, as lessee, of any lease pertaining to real property, (i) an executed
copy thereof, (ii) at the option of Agent, either a leasehold mortgage upon or a
collateral assignment of such lease in favor of Agent, in either case in form
and substance satisfactory to Agent, and (iii) a Landlord Consent and Waiver
from the lessor under such lease.
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6.8 Future Acquisitions of Real Property. Deliver to Agent concurrently
with the (i) execution by Borrower of any contract relating to the purchase by
Borrower of real property, an executed copy of such contract and (ii) closing of
the purchase of such real property, (A) a first mortgage or deed of trust in
favor of Agent on such real property, in form and substance satisfactory to
Agent, (B) a lender's policy of title insurance, in such form and amount and
containing such endorsements as shall be satisfactory to Agent, (C) an ALTA/ACSM
survey of such real property and (D) such other documents and assurances with
respect to such real property as Agent may require.
6.9 Environmental Matters.
6.9.1 Compliance. At all times comply with, and be responsible for,
its material obligations under all Environmental Laws applicable to the
Real Estate, Leasehold Property and any other Property owned by Borrower
or used by Borrower in the operation of Borrower's Paging Business. At its
sole cost and expense, Borrower shall (i) comply in all respects with (A)
any notice of any violation or administrative or judicial complaint or
order having been filed against Borrower, any portion of any Real Estate
or Leasehold Property or any other Property owned by Borrower or used by
Borrower in the operation of its business alleging violations of any law,
ordinance and/or regulation requiring Borrower to take any action in
connection with the release, transportation and/or clean-up of any
Hazardous Materials, and (B) any notice from any Governmental Body or any
other Person alleging that Borrower is or may be liable for costs
associated with a response or clean-up of any Hazardous Materials or any
damages resulting from such release or transportation, or (ii) diligently
contest in good faith by appropriate proceedings any demands set forth in
such notices, provided (A) reserves in an amount reasonably satisfactory
to Agent to pay the costs associated with complying with any such notice
are established by Borrower and (B) no Lien would or will attach to the
Property which is the subject of any such notice as a result of any
compliance by Borrower which is delayed during any such contest. Promptly
upon receipt of any notice described in the foregoing clause (i), Borrower
shall deliver to Agent a copy thereof.
6.9.2 Certification. Deliver to Agent, not later than the first
Business Day of each year, an Environmental Compliance Certificate.
6.10 Compliance with Laws. Comply with the Communications Act and all
other federal, state and local laws, ordinances, requirements and regulations
and all judgments, orders, injunctions and decrees applicable to Borrower and
its operations, the failure to comply with which could have a Material Adverse
Effect.
6.11 Taxes and Claims. Pay and discharge all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits, or
upon any Property belonging to it, prior to the date on which penalties attach
thereto, and all lawful claims which, if unpaid, might become a Lien (other than
a Permitted Lien) upon the Property of Borrower, provided that Borrower
63
shall not be required by this Section 6.11 to pay any such amount if the same is
being contested diligently and in good faith by appropriate proceedings and as
to which Borrower has set aside reserves on its books reasonably satisfactory to
Agent.
6.12 Maintenance of Properties. Maintain all of its Properties necessary
in the operation of its Paging Business in good working order and condition.
6.13 Governmental Approvals. Upon the exercise by Agent and/or Lenders of
any power, right or privilege pursuant to the provisions of any of the Loan
Instruments after the occurrence and during the continuance of any Event of
Default requiring any consent, approval or authorization of any Governmental
Body (including, without limitation, transfers of Licenses), promptly execute
and cause the execution of all applications, certificates, instruments and other
documents that Agent and/or Lenders may be required to obtain for such consent,
approval or authorization.
6.14 Payment of Indebtedness. Except as to matters being contested in good
faith and by appropriate proceedings and except to the extent prohibited by the
terms of this Loan Agreement, the Xxxx Atlantic Seller Subordination Agreement
or the Motorola Intercreditor Agreement, promptly pay when due, or in
conformance with customary trade terms, all of its Indebtedness.
6.15 Year 2000 Problem. Take all action reasonably necessary to assure
that there will be no Material Adverse Effect by reason of the advent of the
year 2000, including without limitation that all computer-based systems,
embedded microchips and other processing capabilities of Borrower effectively
recognize and process dates after April 1, 1999; and, at Agent's request,
provide to Agent assurance reasonably acceptable to Agent that Borrower's
computer-based systems, embedded microchips and other processing capabilities
are year 2000 compatible.
6.16 Xxxx Atlantic Interest Account. On the first Business Day of each
quarter commencing with April 1, 1999 through and including the first quarter of
2000, deposit in the Xxxx Atlantic Interest Account such amount as is necessary
to cause the collected balance of funds on deposit therein to be equal to all
accrued and unpaid interest on the Xxxx Atlantic Seller Indebtedness.
ARTICLE VII
NEGATIVE COVENANTS
Until all of Borrower's Obligations are paid and performed in full,
Borrower shall not:
7.1 Borrowing. Create, incur, assume or suffer to exist any liability for
Indebtedness for Borrowed Money except (i) Borrower's Obligations, (ii)
Permitted Senior Indebtedness, (iii) the Xxxx Atlantic Seller Indebtedness, (iv)
the Letters of Credit Indebtedness, (v) the Deferred Payment
64
Indebtedness and (v) provided Borrower and Motorola have executed and delivered
to Agent the Motorola Intercreditor Agreement, the Motorola Indebtedness.
7.2 Liens. Create, incur, assume or suffer to exist any Lien upon any of
its Property, whether now owned or hereafter acquired, except Permitted Liens.
7.3 Merger and Acquisition. Consolidate with or merge with or into any
Person, acquire directly or indirectly all or substantially all of the capital
stock, equity interests or Property of any Person, or acquire any Paging
Business except for (i) the Paging Partners Merger on the terms and conditions
set forth in the Paging Partners Merger Agreement, provided the conditions set
forth in Sections 4.1 and 4.3 have been satisfied and (ii) Subsequent
Acquisitions, provided the conditions set forth in Sections 4.1 and 4.5 have
been satisfied.
7.4 Contingent Liabilities. Assume, guarantee, endorse, contingently agree
to purchase, become liable in respect of any letter of credit, or otherwise
become liable upon the obligation of any Person, except for liabilities arising
from the endorsement of negotiable instruments for deposit or collection or
similar transactions in the ordinary course of business and for the Letters of
Credit Indebtedness.
7.5 Distributions. Make any dividends, distributions or other shareholder
expenditures with respect to the Borrower Capital Stock or apply any of its
Property to the purchase, redemption or other retirement of, or set apart any
sum for the payment of, or make any other distribution by reduction of capital
or otherwise in respect of, any of the Borrower Capital Stock, except that,
provided that no Event of Default or Incipient Default exists and is continuing,
any Required Excess Cash Flow Prepayment has been made, and any payment required
under the Xxxx Atlantic Seller Indebtedness Instruments has been made, Borrower
may, within 120 days after the end of 2000 and the end of each year thereafter,
pay dividends to its shareholders in an aggregate amount not to exceed the
remainder of (i) the Net Excess Cash Flow for such year minus (ii) the sum of
(A) the amount of any prepayment of the Xxxx Atlantic Seller Indebtedness during
such 120 day period permitted under subsection 7.7.3, (B) the amount of any
payments on account of the Letters of Credit Indebtedness during such 120 day
period permitted under subsection 7.7.4 and (C) the amount of any payments on
account of the Deferred Payment Indebtedness permitted under subsection 7.7.5.
7.6 Capital Expenditures. Make or incur any Capital Expenditures in any
year set forth below in excess of the amount set forth below opposite such year,
except to the extent such Capital Expenditures are made from the proceeds of
additional cash capital contributions to Borrower and no Event of Default exists
and is continuing at the time such cash capital contributions are made:
Year Amount
---- ------
1999 $3,600,000
2000 $3,500,000
2001 $3,300,000
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2002 $3,000,000
2003 $3,000,000
7.7 Payments of Indebtedness for Borrowed Money. Make any payment or
prepayment on account of any Indebtedness for Borrowed Money other than
Borrower's Obligations, except that Borrower may:
7.7.1 Permitted Senior Indebtedness. Make regularly scheduled
payments on account of Permitted Senior Indebtedness.
7.7.2 Motorola Indebtedness. Make (i) regularly scheduled payments
on account of the Motorola Indebtedness (A) if no Event of Default under
subsection 8.1.1, clauses (ii), (iii), (iv) or (v) of subsection 8.1.5(a),
subsection 8.1.5(b), subsection 8.1.7 or 8.1.2(a) with respect to Sections
7.18, 7.19 or 7.20 exists and is continuing or (B) while any such Event of
Default exists and is continuing provided that concurrently with the
making of any such payment, Borrower pays to Lenders on account of
Borrower's Obligations (such payment to be applied in such order as
Lenders may determine) an amount equal to the quotient of (x) the amount
of such payment to Motorola divided by (y) the Motorola Ratable Share
determined immediately prior to the making of such payment to Motorola,
(ii) prepayments on account of the Motorola Indebtedness to the extent
provided for in Sections 2.8 and 2.9 and (iii) prepayments on account of
the Motorola Indebtedness from proceeds of the Acquisition Portion subject
to the satisfaction of the conditions set forth in Section 4.5 provided
that no Event of Default exists and is continuing or would be created by
the making of any such prepayments.
7.7.3 Xxxx Atlantic Seller Indebtedness. Make (i) the Xxxx Atlantic
Seller Note Payment provided that (A) no Event of Default exists and is
continuing or would be created by the making of such payment, (B) the
Senior Leverage Ratio as of the last day of the month most recently ended
with respect to which Agent has been in receipt for at least 10 days of
the financial statements required under Section 6.3.1 for such month and
assuming such payment had been made on such last day is less than or equal
to 4.0 and (C) the Total Leverage Ratio as of such last day and assuming
such payment had been made on such last day is less than or equal to 5.0,
(ii) regularly scheduled payments of accrued and unpaid interest on the
Xxxx Atlantic Seller Indebtedness after the date the Xxxx Atlantic Seller
Note Payment is due and at a rate per annum not in excess of the Base Rate
in effect from time to time plus 1.0% per annum, subject to the terms and
conditions of the Xxxx Atlantic Seller Subordination Agreement, (iii)
prepayments of the Xxxx Atlantic Seller Indebtedness within 120 days after
the end of 1999 and the end of each year thereafter in an amount not to
exceed the Net Excess Cash Flow for such year, subject to the terms and
conditions of the Xxxx Atlantic Seller Subordination Agreement, (iv)
voluntary prepayments of the Xxxx Atlantic Seller Indebtedness to the
extent permitted by the Xxxx Atlantic Seller Subordination Agreement and
(v) prepayments on account of the Xxxx Atlantic Seller Indebtedness from
proceeds of the Acquisition Portion subject to the satisfaction of the
conditions set forth in Section 4.5 provided that no Event of Default
exists and is continuing or would be created by the making of any such
prepayment.
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7.7.4 Letters of Credit Indebtedness. Make (i) the Letters of Credit
Account Parties Payment on or after the Letters of Credit Account Parties
Payment Date provided that (A) no Event of Default exists and is
continuing or would be created by the making of such payment and (B) after
giving effect to the Letters of Credit Account Parties Payment, the Cash
Equivalents would exceed $750,000, (ii) an annual payment within 120 days
after the end of 1999 and each year thereafter on account of accrued and
unpaid interest on and the outstanding principal balance of the Letters of
Credit Indebtedness provided that (A) no Event of Default or Incipient
Default exists and is continuing or would be created by the making of any
such annual payment, (B) any Required Excess Cash Flow Prepayment has been
made, (C) any payment required under the Xxxx Atlantic Seller Indebtedness
Instruments has been made and (D) the amount of any such annual payment
does not exceed the remainder of (x) the Net Excess Cash Flow for such
year minus (y) the amount of any prepayment of the Xxxx Atlantic Seller
Indebtedness during such year permitted under subsection 7.7.3 minus (z)
the aggregate amount of all dividends paid to its shareholders during such
120 day period permitted under Section 7.5 and (iii) prepayments on
account of the Letters of Credit Indebtedness from proceeds of the
Acquisition Portion subject to the satisfaction of the conditions set
forth in Section 4.5, provided no Event of Default or Incipient Default
exists and is continuing or would be created by the making of any such
prepayment.
7.7.5 Deferred Payment Indebtedness. Provided that no Event of
Default or Incipient Default exists and is continuing or would be created
by the making of any such payment, Borrower may make payments on account
of the Deferred Payment Indebtedness (i) on March 31, 1999 provided that
after giving effect to any such payment the Cash Equivalents would exceed
$500,000, (ii) on the Paging Partners Merger Closing Date provided that
after giving effect to any such payment the Cash Equivalents would exceed
$750,000 and (iii) from proceeds of the Acquisition Portion subject to the
satisfaction of the conditions set forth in Section 4.5.
7.8 Obligations as Lessee Under Operating Leases. Enter into or suffer to
exist any arrangement as lessee of Property under any Operating Lease if the
aggregate rentals for all such Operating Leases during any year would exceed
$4,000,000.
7.9 Investments, Loans. At any time purchase or otherwise acquire, hold or
invest in the capital stock of, or any other interest in, any Person, or make
any loan or advance to, or enter into any arrangement for the purpose of
providing funds or credit to, or make any other investment, whether by way of
capital contribution or otherwise, in or with any Person, including, without
limitation, any Affiliate, except (i) investments in direct obligations of, or
instruments unconditionally guaranteed by, the United States of America or in
certificates of deposit issued by a Qualified Depository, (ii) investments in
commercial or finance paper which, at the time of investment, is rated "A" or
better by Xxxxx'x Investors Service, Inc., or Standard & Poor's Corporation,
respectively, or at the equivalent rate by any of their respective successors,
(iii) any interests in any money market account maintained, at the time of
investment, with a Qualified Depository, the investments of which,
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at the time of investment, are restricted to the types specified in clause (i)
above and (iv) the Xxxxxxxx Loan. All investments permitted pursuant to this
Section 7.9 shall have a maturity not exceeding one year.
7.10 Fundamental Business Changes. Materially change the nature of its
business or engage in any business other than the Paging Business.
7.11 Facility Sites. Not change the locations of any tower installations,
transmitters, switches or offices used in the operation of the System unless (i)
Agent shall have received notice of such change not later than 10 Business Days
after such change, (ii) Borrower shall have complied with all applicable laws,
rules and regulations and shall have received all required consents and
approvals from any Governmental Body, including, without limitation, the FCC,
(iii) such change could not reasonably be expected to have a Material Adverse
Effect and (iv) Borrower shall have executed and delivered to Agent any
documents Agent reasonably may require in order to maintain the validity and
priority of the Security Interests.
7.12 Sale or Transfer of Assets. Sell, lease, assign, transfer or
otherwise dispose of any Property except for (i) the sale or disposition of (A)
inventory in the ordinary course of business, (B) Property which is not material
to or necessary for the continued operation of its business and (C) obsolete or
unusable items of equipment which promptly are replaced with new items of
equipment of like function and comparable value to the unusable items of
equipment when the same were new or not obsolete or unusable, provided such
replacement items of equipment shall become subject to the Security Interests,
(ii) Trade Out Transactions consummated in connection with promotional or other
activities, all of which shall be conducted by Borrower in the ordinary course
of business consistent with past practices and (iii) Asset Sales with respect to
which Borrower has obtained Lenders' prior written consent, which consent may be
given or withheld in the sole and absolute discretion of Lenders.
7.13 Amendment of Certain Agreements. Amend, modify or waive any term or
provision of (i) its articles of incorporation or by-laws, except as
contemplated by the Paging Partners Merger Agreement in connection with the
Paging Partners Merger, (ii) the Xxxx Atlantic Acquisition Instruments, (iii)
the Xxxx Atlantic Seller Indebtedness Instruments, (iv) the Xxxx Atlantic
Reseller Agreement, (v) the Letters of Credit Indebtedness Instruments, (vi) the
Deferred Payment Indebtedness Instruments or (vi) the Motorola Indebtedness
Instruments.
7.14 Acquisition of Additional Properties. Acquire any additional Property
except such Property as is necessary to or useful in the operation of its
business and Subsequent Acquisitions, provided that all such acquisitions shall
be subject to the conditions and limitations set forth in this Loan Agreement.
7.15 Equity Sales. Consummate any Equity Sales, including, without
limitation, the issuance or sale of any additional capital stock or any options
or other interests convertible into or exercisable for any such additional
capital stock, without the prior written consent of Lenders, which
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consent may be given or withheld in the sole and absolute discretion of Lenders,
except (i) as contemplated by the Paging Partners Merger Agreement provided that
the Paging Partners Merger has been consummated as permitted pursuant to Section
7.3 and (ii) for the Select Capital Warrants, provided that upon issuance, the
Select Capital Warrants are pledged to Agent pursuant to a pledge agreement in
form and substance substantially similar to the BAP Investors Pledge Agreement.
7.16 Transactions with Affiliates. Sell, lease, assign, transfer or
otherwise dispose of any Property to any Affiliate, lease Property, render or
receive services or purchase assets from any Affiliate, or otherwise enter into
any contractual relationship with any Affiliate on terms which are less
favorable to Borrower than those otherwise reasonably attainable on an arm's
length basis from a Person which is not one of its Affiliates, except that on
the Closing Date Borrower may (i) pay to PCS Management on the Closing Date a
fee of $225,000 by (A) issuing to PCS Management the PCS Management Note and (B)
issuing capital stock of Borrower valued at $150,000 and (ii) pay to Deerfield
Partners a $300,000 fee by (A) making a $36,061 cash payment, (B) issuing to
Deerfield Partners the Deerfield Partners Note and (C) issuing capital stock of
Borrower valued at $113,939.
7.17 Compliance with ERISA.
(i) Permit the occurrence of any Termination Event which would
result in a liability to Borrower or any ERISA Affiliate in excess of
$50,000;
(ii) Permit the present value of all benefit liabilities under all
Pension Plans to exceed the current value of the assets of such Pension
Plans allocable to such benefit liabilities by more than $50,000;
(iii) Permit any accumulated funding deficiency in excess of $50,000
(as defined in Section 302 of ERISA and Section 412 of the Code) with
respect to any Pension Plan, whether or not waived;
(iv) Fail to make any contribution or payment to any Multiemployer
Plan which Borrower or any ERISA Affiliate may be required to make under
any agreement relating to such Multiemployer Plan, or any law pertaining
thereto which results in or is likely to result in a liability in excess
of $50,000;
(v) Engage, or permit Borrower or any ERISA Affiliate to engage, in
any "prohibited transaction" as such term is defined in Section 406 of
ERISA or Section 4975 of the Code for which a civil penalty pursuant to
Section 502(i) of ERISA or a tax pursuant to Section 4975 of the Code in
excess of $50,000 is imposed;
(vi) Permit the establishment of any Employee Benefit Plan providing
post-retirement welfare benefits or establish or amend any Employee
Benefit Plan which establishment or amendment could result in liability to
Borrower or any ERISA Affiliate or increase the obligation of Borrower or
any ERISA Affiliate to a Multiemployer Plan which
69
liability or increase, individually or together with all similar
liabilities and increases, is material to Borrower or any ERISA Affiliate;
or
(vii) Fail, or permit Borrower or any ERISA Affiliate to fail, to
establish, maintain and operate each Employee Benefit Plan in compliance
in all material respects with ERISA, the Code and all other applicable
laws and regulations and interpretations thereof.
7.18 Senior Leverage Ratio. Permit the Senior Leverage Ratio as of any
date set forth below to be greater than the amount set forth opposite such date:
Date Amount
---- ------
March 31, 1999 4.00
June 30, 1999 4.00
September 30, 1999 4.00
December 31, 1999 4.00
March 31, 2000 4.00
June 30, 2000 4.00
September 30, 2000 3.75
December 31, 2000 3.50
March 31, 2001 3.25
June 30, 2001 3.25
September 30, 2001 3.25
December 31, 2001 3.00
March 31, 2002 2.75
June 30, 2002 2.75
September 30, 2002 2.75
December 31, 2002 2.50
March 31, 2003 2.50
June 30, 2003 2.50
September 30, 2003 2.50
December 31, 2003 2.50
7.19 Total Leverage Ratio. Permit the Total Leverage Ratio as of any date
set forth below to be greater than the amount set forth opposite such date:
Date Amount
---- ------
March 31, 1999 5.00
June 30, 1999 5.00
September 30, 1999 5.00
December 31, 1999 5.00
March 31, 2000 5.00
June 30, 2000 5.00
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September 30, 2000 4.75
December 31, 2000 4.50
March 31, 2001 4.25
June 30, 2001 4.00
September 30, 2001 3.75
December 31, 2001 3.75
March 31, 2002 3.75
June 30, 2002 3.50
September 30, 2002 3.50
December 31, 2002 3.50
March 31, 2003 3.50
June 30, 2003 3.50
September 30, 2003 3.50
December 31, 2003 3.50
7.20 Senior Debt Service Coverage Ratio. Permit the Senior Debt Service
Coverage Ratio as of any date set forth below to be less than the amount set
forth below opposite such date:
Date Amount
---- ------
March 31, 1999 2.50
June 30, 1999 2.50
September 30, 1999 2.50
December 31, 1999 2.50
March 31, 2000 2.50
June 30, 2000 2.50
September 30, 2000 2.50
December 31, 2000 2.50
March 31, 2001 2.25
June 30, 2001 2.25
September 30, 2001 2.25
December 31, 2001 2.25
March 31, 2002 2.00
June 30, 2002 2.00
September 30, 2002 2.00
December 31, 2002 2.00
March 31, 2003 1.90
June 30, 2003 1.90
September 30, 2003 1.90
December 31, 2003 1.90
7.21 Certain Agreements. Enter into any joint operating or similar
agreements with respect to the operation of the System or any other paging
system without the prior written consent of Lenders.
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ARTICLE VIII
DEFAULT AND REMEDIES
8.1 Events of Default. The occurrence of any of the following shall
constitute an Event of Default under the Loan Instruments:
8.1.1 Default in Payment. If Borrower shall fail to pay all or any
portion of Borrower's Obligations when the same become due and payable.
8.1.2 Breach of Covenants.
(a) If Borrower shall fail to observe or perform any covenant
or agreement made by Borrower contained in subsection 2.8.1(c) or
2.8.2 with respect to payments required to be made to Motorola,
subsection 3.2.1, Section 6.1, 6.2, 6.5, 6.6, 6.9, 6.10, 6.11, 6.13,
6.14 or 6.16 or in Article VII; or
(b) If any Obligor shall fail to observe or perform any
covenant or agreement (other than those referred to in subparagraph
(a) above or specifically addressed elsewhere in this Section 8.1)
made by such Person in any of the Loan Instruments to which such
Person is a party, and such failure shall continue for a period of
30 days after written notice of such failure is given by Lenders.
8.1.3 Breach of Warranty. If any representation or warranty made by
or on behalf of any Obligor in or pursuant to any of the Loan Instruments
or in any instrument or document furnished in compliance with the Loan
Instruments shall prove to be false or misleading in any material respect.
8.1.4 Default Under Other Indebtedness for Borrowed Money. If (i)
Borrower at any time shall be in default (as principal or guarantor or
other surety) in the payment of any principal of or premium or interest on
any Indebtedness for Borrowed Money (other than Borrower's Obligations,
the Letters of Credit Indebtedness or the Deferred Payment Indebtedness)
beyond the grace period, if any, applicable thereto and the aggregate
amount of such payments then in default beyond such grace period shall
exceed $100,000 or (ii) any default shall occur in respect of any issue of
Indebtedness for Borrowed Money of Borrower (other than Borrower's
Obligations, the Letters of Credit Indebtedness or the Deferred Payment
Indebtedness) outstanding in a principal amount of at least $200,000, or
in respect of any agreement or instrument relating to any such issue of
Indebtedness for Borrow ed Money, and such default shall continue beyond
the grace period, if any, applicable thereto.
8.1.5 Bankruptcy.
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(a) If Borrower shall (i) generally not be paying its debts as
they become due, (ii) file, or consent, by answer or otherwise, to
the filing against it of a petition for relief or reorganization or
arrangement or any other petition in bankruptcy or insolvency under
the laws of any jurisdiction, (iii) make an assignment for the
benefit of creditors, (iv) consent to the appointment of a
custodian, receiver, trustee or other officer with similar powers
for it or for any substantial part of its Property, or (v) be
adjudicated insolvent.
(b) If any Governmental Body of competent jurisdiction shall
enter an order appointing, without consent of Borrower, a custodian,
receiver, trustee or other officer with similar powers with respect
to it or with respect to any substantial part of its Property, or if
an order for relief shall be entered in any case or proceeding for
liquidation or reorganization or otherwise to take advantage of any
bankruptcy or insolvency law of any jurisdiction, or ordering the
dissolution, winding-up or liquidation of Borrower of any petition
for any such relief shall be filed against it and such petition
shall not be dismissed or stayed within 60 days.
8.1.6 Judgments. If there shall be entered against Borrower one or
more judgments, awards or decrees, or orders of attachment, garnishment or
any other writ, which exceed $250,000 in the aggregate at any one time
outstanding, excluding judgments, awards, decrees, orders or writs (i) for
which there is full insurance and with respect to which the insurer has
assumed responsibility in writing, (ii) for which there is full
indemnification (upon terms and by creditworthy indemnitors which are
satisfactory to Lenders) or (iii) which have been in force for less than
the applicable period for filing an appeal so long as execution has not
been levied thereunder (or in respect of which Borrower shall at the time
in good faith be prosecuting an appeal or proceeding for review and in
respect of which a stay of execution or appropriate appeal bond shall have
been obtained pending such appeal or review.
8.1.7 Impairment of Licenses; Other Agreements. If (i) any
Governmental Body shall revoke, terminate, suspend or adversely modify any
License of Borrower, the adverse modification or non-continuation of which
could reasonably be expected to have a Material Adverse Effect, or (ii)
there shall exist any violation or default in the performance of, or a
material failure to comply with any agreement, or condition or term of any
License, which violation, default or failure could reasonably be expected
to have a Material Adverse Effect, or (iii) any agreement which is
necessary to the operation of the Paging Business of Borrower shall be
revoked or terminated and not replaced by a substitute acceptable to
Lenders within 30 days after the date of such revocation or termination,
and such revocation or termination and non-replacement could reasonably be
expected to have a Material Adverse Effect.
8.1.8 Collateral. If any material portion of the Collateral shall be
seized or taken by a Governmental Body or Person, or Borrower shall fail
to maintain or cause to be maintained the Security Interests and priority
of the Loan Instruments as against any Person,
73
or the title and rights of any Person party to any Loan Instrument to any
material portion of the Collateral shall have become the subject matter of
litigation which could reasonably be expected to result in impairment or
loss of the security provided by the Loan Instruments.
8.1.9 Interruption of Operations. If the operations of the System
shall cease completely at any time for more than 72 hours during any
period of 10 consecutive days, unless (i) the operations of all or
substantially all of the paging systems in the relevant market also are
interrupted for a like period of time and (ii) Borrower shall be receiving
during such period proceeds of business interruption insurance sufficient
to assure that its per diem Operating Cash Flow during such period is at
least equal to its average per diem Operating Cash Flow for the
consecutive three month period preceding the initial date of interruption;
provided, however, that, notwithstanding the provisions of clauses (i) and
(ii) to the contrary, an Event of Default shall be deemed to occur
hereunder if the operations of the System shall cease completely at any
time for more than 120 hours during any period of 20 consecutive days.
8.1.10 Plans. If an event or condition specified in subsection
6.3.11 hereof shall occur or exist with respect to any Pension Plan or
Multiemployer Plan and, as a result of such event or condition, together
with all other such events or conditions, Borrower or any ERISA Affiliate
shall incur, or in the opinion of Lenders be reasonably likely to incur, a
liability to a Pension Plan or Multiemployer Plan or the PBGC (or any of
them) which, in the reasonable judgment of Lender, would have a Material
Adverse Effect.
8.1.11 Change in Control. If (i) Xxxx X. Xxxxxxxx shall cease to
devote his full business time and effort to the day to day management of
the business and operations of Borrower, (ii) BAP Investors collectively
shall cease to own and control at least 85% of the Borrower Capital Stock
from the Closing Date to the Paging Partners Merger Closing Date, (iii)
prior to the Paging Partners Merger Closing Date, the Management Holders
and their Related Parties shall cease to own and control at least 50% of
the Borrower Capital Stock or (iv) from and after the Paging Partners
Merger Closing Date, any "person" or "group" (as such terms are used for
purposes of Sections 13(d) and 14(d) of the Securities Exchange Act,
whether or not applicable) is or becomes the "beneficial owner" (as such
term is used in Rules 13d-3 and 13d-5 under the Securities Exchange Act,
whether or not applicable, except that a "person" shall be deemed to have
"beneficial ownership" of all shares that any such person has the right to
acquire, whether such right is exercisable immediately or only after the
passage of time), directly or indirectly (including as a result of a
merger or consolidation), of more than 30% of the total voting power in
the aggregate of all classes of capital stock of Paging Partners then
outstanding normally entitled to vote in elections of directors (but
excluding from the percentage of voting power held by any group the voting
power of shares owned by the Management Holders and their Related Parties
who are deemed to be members of the group, provided that such Management
Holders and Related Parties beneficially own a majority of the total
voting power of capital stock held by such group), if at such time the
Management Holders and their Related
74
Parties together shall fail to beneficially own, directly or indirectly,
securities representing at least the same percentage of the combined
voting power of such capital stock as the percentage "beneficially owned"
by such person or group.
8.2 Acceleration of Borrower's Obligations. Upon the occurrence of:
(a) any Event of Default described in clauses (ii), (iii), (iv) and
(v) of subsection 8.1.5(a) or in 8.1.5(b), all of Borrower's Obligations
at that time outstanding automatically shall mature and become due, and
(b) any other Event of Default, Lenders, at any time, at their
option, without further notice or demand, may declare all of Borrower's
Obligations due and payable, whereupon Borrower's Obligations immediately
shall mature and become due and payable,
all without presentment, demand, protest or notice (other than notice of the
declaration referred to in clause (b) above), all of which hereby are waived.
8.3 Remedies on Default. If Borrower's Obligations have been accelerated
pursuant to Section 8.2, Lenders, at their option, may:
8.3.1 Enforcement of Security Interests. Enforce their rights and
remedies under the Loan Instruments in accordance with their respective
terms.
8.3.2 Other Remedies. Enforce any of the rights or remedies accorded
to Lenders and/or Agent at equity or law, by virtue of statute or
otherwise.
8.4 Application of Funds. Any funds received by Lenders or Agent pursuant
to the exercise of any rights accorded to Lenders and/or Agent pursuant to, or
by the operation of any of the terms of, any of the Loan Instruments, including,
without limitation, insurance proceeds, condemnation proceeds or proceeds from
the sale of Collateral shall be applied to Borrower's Obligations in the
following order of priority:
8.4.1 Expenses. First, to the payment of (i) all fees and expenses
actually incurred, including, without limitation, court costs, fees of
appraisers, title charges, costs of maintaining and preserving the
Collateral, costs of sale, and all other costs incurred by Agent and
Lenders, in exercising any rights accorded to such Persons pursuant to the
Loan Instruments or by applicable law, including, without limitation,
reasonable attorney's fees, and (ii) all Liens superior to the Liens of
Agent and the Motorola Liens except such superior Liens subject to which
any sale of the Collateral may have been made.
8.4.2 Borrower's Obligations. Next, to the payment of Borrower's
Obligations in such order as Lenders may determine and, to the extent
required by the Motorola Intercreditor Agreement, to the payment of the
Motorola Indebtedness.
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8.4.3 Surplus. Any surplus, to the Person or Persons entitled
thereto.
8.5 Performance of Borrower's Obligations. If Borrower fails to (i)
maintain in force and pay for any insurance policy or bond which Borrower is
required to provide pursuant to any of the Loan Instruments, (ii) keep the
Collateral free from all Liens except for Permitted Liens, (iii) pay when due
all taxes, levies and assessments on or in respect of the Collateral, except as
otherwise permitted pursuant to the terms hereof, (iv) make all payments and
perform all acts on the part of Borrower to be paid or performed in the manner
required by the terms hereof and by the terms of the other Loan Instruments with
respect to any of the Collateral, including, without limitation, all expenses of
protecting, storing, warehousing, insuring, handling and maintaining the
Collateral, (v) keep fully and perform promptly any other of the obligations of
Borrower hereunder or under any of the other Loan Instruments, and (vi) keep
fully and perform promptly the obligations of Borrower with respect to any issue
of Indebtedness for Borrowed Money secured by a Permitted Prior Lien, then Agent
or Lenders may (but shall not be required to) procure and pay for such insurance
policy or bond, place such Collateral in good repair and operating condition,
pay, contest or settle such Liens or taxes or any judgments based thereon or
otherwise make good any other aforesaid failure of Borrower. Borrower shall
reimburse Agent and Lenders immediately upon demand for all sums paid or
advanced on behalf of Borrower for any such purpose, together with costs and
expenses (including reasonable attorney's fees) paid or incurred by Agent and
Lenders in connection therewith and interest on all sums advanced from the date
of advancement until repaid to Agent and Lenders at the Default Rate. All such
sums advanced by Agent and Lenders, with interest thereon, immediately upon
advancement thereof, shall be deemed to be part of Borrower's Obligations.
ARTICLE IX
ADDITIONAL LENDERS AND PARTICIPANTS; THE AGENT
9.1 Assignment to Other Lenders.
9.1.1 Assignment. FINOVA may make one or more Loan Assignments to an
Assignee and each Assignee, with the prior written consent of Agent (which
may be given or denied in the sole discretion of Agent), may make a Loan
Assignment of the rights and obligations which were assigned to such
Assignee, provided, however, that (i) each Loan Assignment shall be of a
constant, and not a varying, percentage of all rights and obligations of
such Lender under this Loan Agreement, (ii) each Loan Assignment shall not
be less than $5,000,000 and shall be in integral multiples of $1,000,000
in excess thereof, (iii) the parties to each such Loan Assignment shall
execute and deliver to the Agent an Assignment and Acceptance, together
with any Note or Notes subject to such assignment and (iv) FINOVA at all
times shall maintain not less than a 51% interest in Borrower's
Obligations.
9.1.2 Effect of Loan Assignment. Upon the execution, delivery,
acceptance and recording of an Assignment and Acceptance (i) the Assignee
thereunder shall be a party to this Loan Agreement and, to the extent that
rights and obligations hereunder have been
76
assigned to it pursuant to such Assignment and Acceptance, have the rights
and obligations of a Lender hereunder and (ii) the Lender thereunder
shall, to the extent that rights and obligations hereunder have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its
rights and be released from its obligations under this Loan Agreement.
9.1.3 Register. Agent shall maintain a copy of each Assignment and
Acceptance delivered to and accepted by it and a register for the
recordation of the names, addresses, and interests of the Lenders in
Borrower's Obligations (the "Register"). The entries in the Register shall
be conclusive and binding for all purposes, absent manifest error, and
Borrower, Agent and Lenders may treat each Person whose name is recorded
in the Register as a Lender hereunder for all purposes of this Agreement.
The Register shall be available for inspection by Borrower or any Lender
at any reasonable time and from time to time upon reasonable prior notice.
9.1.4 Substitution of Notes. Simultaneously with the delivery by
Agent to Borrower of any Note which is the subject of a Loan Assignment
which is marked "canceled," Borrower shall execute and deliver to Agent
for delivery to (i) the applicable Assignee, a Note payable to the order
of such Assignee in an amount equal to the amount assigned to such
Assignee, and (ii) the assigning Lender, a Note payable to the order of
such Lender in an amount equal to the amount retained by such Lender, each
such Note to be substantially in the form of the canceled Note.
9.1.5 Inspections. Any action which any Assignee shall desire to
undertake pursuant to Section 6.2 shall be coordinated by such Assignee
through Agent, and Agent shall accompany each such Assignee which desires
to undertake any such action pursuant to Section 6.2.
9.2 Participations. Subject to the restrictions set forth in subsection
9.1.1, each Lender shall have the right to sell Participations. In the event of
the sale of a Participation, the obligations of the Lender selling such a
Participation shall remain unchanged, such Lender shall remain solely
responsible for the performance thereof, such Lender shall remain the holder of
any Note which previously has been delivered to Lender pursuant to the terms of
this Loan Agreement, and Borrower shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations under
this Loan Agreement. Notwithstanding the sale of any Participation, all amounts
payable by Borrower pursuant to the terms of the Loan Instruments shall be
determined as if no such Participation had been sold. No Participant shall be
entitled to require a Lender to take or omit to take any action pursuant to the
Loan Instruments except as provided in the Participation Agreement executed by
and between the Participant and such Lender.
9.3 Set Off and Sharing of Payments. Upon the occurrence of any Event of
Default and the acceleration of Borrower's Obligations, each Lender is
authorized by Borrower, at any time or from time to time thereafter, without
notice to Borrower or to any other Person, to set off and to appropriate and
apply any and all balances held by such Lender for the account of Borrower, and
any
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other Property at any time held or owing by such Lender to or for the credit or
for the account of Borrower, against and on account of any of Borrower's
Obligations which are not paid when due. Borrower agrees that (i) each Lender
may exercise its right to set off with respect to amounts in excess of such
Lender's share of Borrower's Obligations and may sell Participations in such
excess to other Lenders and (ii) any Lender so purchasing a Participation in the
Loan made or other of Borrower's Obligations held by other Lenders may exercise
all rights of set-off, bankers' lien, counterclaim or similar rights with
respect to such Participation as fully as if such Lender were a direct holder of
the Loan and other of Borrower's Obligations in the amount of such
Participation.
9.4 Lenders' Decisions. Until a Loan Assignment is made, all Lenders'
Decisions shall be made solely by FINOVA. After a Loan Assignment is made, any
Lenders' Decisions which may be made pursuant to the Loan Instruments by Lenders
or as to which the Lenders shall have the right to consent shall be made as set
forth in the applicable Lender Addition Agreements; provided, however, that (i)
except as set forth in clause (ii) below, such Lender Addition Agreements shall
provide that any holder or holders of 67% or more of the Principal Balance shall
have the right to make all Lenders' Decisions and to consent to any matter
arising under the Loan Instruments without obtaining the consent of any other
holder or holders of the Principal Balance and (ii) the Lender Addition
Agreements may provide that the consent of all Lenders shall be required for
Lenders' Decisions relating to (A) increasing the amount of the Loan, (B)
extending the Maturity Date, (C) altering the interest rates applicable to or
the repayment terms of the Loan or (D) amending Article VII or Article IX.
9.5 Appointment of Agent. Each Lender hereby irrevocably appoints and
authorizes FINOVA to act as Agent for such Lender under this Loan Agreement and
to execute and deliver or accept the other Loan Instruments on behalf of such
Lender. Each Lender hereby irrevocably authorizes, and each holder of any Note
by the acceptance of a Note shall be deemed irrevocably to authorize, the Agent
to take such action on its behalf under the provisions of this Loan Agreement
and the other Loan Instruments and any other instruments and agreements referred
to herein and therein, and to exercise such powers and to perform such duties
hereunder as are specifically delegated to or required of the Agent by the terms
of this Loan Agreement, together with such powers as are reasonably incidental
thereto. FINOVA agrees to act as the Agent on behalf of the Lenders to the
extent provided in this Loan Agreement.
9.6 Delegation of Duties. The Agent may perform any of its respective
duties hereunder by or through agents or employees and shall be entitled to
engage and pay for the advice or services of any attorneys, accountants or other
experts concerning all matters pertaining to its duties hereunder and to rely
upon any advice so obtained.
9.7 Nature of Duties; Independent Credit Investigation. Agent shall have
no duties or responsibilities except those expressly set forth in this Loan
Agreement and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Loan Agreement or otherwise
exist. The duties of Agent shall be mechanical and administrative in nature.
Agent shall not have by reason of this Loan Agreement a fiduciary or trust
relationship in respect of any Lender, and nothing in this Loan Agreement
express or implied, is intended to or shall be so construed as to
78
impose upon Agent any obligations in respect of this Loan Agreement except as
expressly set forth herein. Each Lender expressly acknowledges that (i) Agent
has not made any representations or warranties to it and that no act by Agent
hereafter taken, including any review of the affairs of any of the Persons party
to any Loan Instrument shall be deemed to constitute any representation or
warranty by Agent to any Lender and (ii) it has made and will continue to make,
without reliance upon Agent, its own independent investigation of the financial
condition and affairs and its own appraisal of the creditworthiness of each of
the Persons party to any Loan Instrument and the condition and value of the
Collateral in connection with this Loan Agreement and the making of the Loan.
9.8 Instructions from Lenders. Agent shall have the right to request
instructions from the Lenders by notice to each of the Lenders. If Agent shall
request instructions from the Lenders with respect to any act or action
(including the failure to act) in connection with this Loan Agreement, Agent
shall be entitled to refrain from such act or taking such action unless and
until Agent shall have received instructions from the Lenders, and Agent shall
not incur liability to any Person by reason of so refraining. No Lender shall
have any right of action against Agent as a result of Agent acting or refraining
from acting in accordance with the instructions of the Lenders.
9.9 Exculpatory Provisions. None of Agent or any of its respective
directors, officers, employees, agents, attorneys or Affiliates shall (i) be
liable to any Lender for any action taken or omitted to be taken by it or them
pursuant to any Loan Instruments unless caused by it or its respective
directors, officers, employees, agents, attorneys or Affiliates own gross
negligence or willful misconduct, (ii) be responsible in any manner to any of
Lenders for the effectiveness, enforceability, genuineness, validity or due
execution of this Loan Agreement or any other Loan Instruments or for any
recital, representation, warranty, document, certificate, report or statement
herein or made or furnished under or in connection with this Loan Agreement or
any other Loan Instruments, or (iii) be under any obligation to any of Lenders
to ascertain or to inquire as to the performance or observance of any of the
terms, covenants or conditions hereof or thereof on the part of the Persons
party to any Loan Instrument, the financial condition of such Persons, or the
existence or possible existence of any Event of Default or Incipient Default.
9.10 Reimbursement and Indemnification by Lenders of Agent. Each Lender
agrees to reimburse and indemnify Agent (to the extent not reimbursed by
Borrower and without limiting the obligation of Borrower to do so) in proportion
to its Ratable Share from and against all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by or
asserted against Agent in its capacity as such, in any way relating to or
arising out of this Loan Agreement or any other Loan Instruments or any action
taken or omitted by Agent hereunder or thereunder, provided that no Lender shall
be liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from Agent's gross negligence or willful misconduct.
9.11 Reliance by Agent. Agent shall be entitled to rely upon any writing,
telegram, telex or teletype message, resolution, notice, consent, certificate,
letter, statement, order or other document or conversation by telephone or
otherwise believed by it to be genuine and correct and to have been
79
signed, sent or made by the proper Person or Persons, and upon the advice and
opinions of counsel and other professional advisers selected by Agent. Agent
shall be fully justified in failing or refusing to take any action hereunder
unless it shall first be indemnified to its satisfaction by Lenders against any
and all liability and expense (other than a liability or expense relating to
gross negligence or willful misconduct) which may be incurred by it by reason of
taking or continuing to take any such action.
9.12 Notice of Default. Agent shall not be deemed to have knowledge or
notice of the occurrence of any Incipient Default or Event of Default unless
Agent has received written notice from a Lender or Borrower referring to this
Loan Agreement, describing such Incipient Default or Event of Default and
stating that such notice is a "notice of default."
9.13 Release of Collateral. Lenders hereby authorize Agent to release any
Lien granted to Agent upon any Collateral upon (i) the payment and satisfaction
of all of Borrower's Obligations or (ii) the request of Borrower if such release
is required pursuant to the terms of any of the Loan Instruments.
9.14 Lenders in Their Individual Capacities. With respect to the portions
of the Loan made by it, Agent shall have the same rights and powers as any other
Lender and may exercise the same as thought it were not Agent, and the term
"Lenders" shall, unless the context otherwise indicates, include Agent in its
individual capacity. Agent and its Affiliates and each of the Lenders and their
respective Affiliates may, without liability to account, except as prohibited
herein, make loans to, accept deposits from, discount drafts for, act as trustee
under indentures of, and generally engage in any kind of banking or trust
business with, Borrower and its Affiliates as though such Lender were not a
Lender hereunder.
9.15 Holders of Notes. Agent may deem and treat any payee of any Note as
the owner hereof for all purposes unless and until Agent receives an Assignment
and Acceptance with respect thereto. Any request, authority or consent of any
Person who at the time of making such request or giving such authority or
consent is the holder of any Note shall be conclusive and binding on any
subsequent holder, transferee or assignee of such Note or of any Note or Notes
issued in exchange therefor.
9.16 Successor Agent. Agent may resign at any time by giving not less than
30 days' prior written notice to Borrower and the other Lenders. The Lenders
shall have the right to appoint a successor Agent. If a successor Agent is not
appointed within 30 days following Agent's notice of its resignation or its
removal, Agent shall appoint a successor agent who shall serve as Agent until
such time as the Lenders appoint a successor Agent. Upon its appointment, such
successor Agent shall succeed to the rights, powers and duties of Agent and the
term "Agent" shall mean such successor effective upon its appointment, and the
former Agent's rights, powers and duties as Agent shall be terminated without
any other or further act or deed on the part of such former Agent or any of the
parties to this Agreement. After the resignation of any Agent, the provisions of
this Article IX shall inure to the benefit of such former Agent and such former
Agent shall not by reason of such
80
resignation be deemed to be released from liability for any actions taken or not
taken by it while it was Agent.
9.17 Delivery of Information. Agent shall not be required to deliver to
any Lender originals or copies of any documents, instruments, reports, notices,
communications or other information received by Agent from Borrower or any other
Person under or in connection with any Loan Instruments except (i) as
specifically provided in the Loan Instruments or (ii) as specifically requested
from time to time in writing by any Lender with respect to a specific document,
instrument, notice or other written communication received by and in the
possession of Agent at the time of receipt of such request and then only in
accordance with such specific request.
9.18 Beneficiaries. Except as expressly provided in this Loan Agreement,
the provisions of this Article IX are solely for the benefit of Agent and
Lenders, and Borrower shall not have any rights to rely on or enforce any of the
provisions hereof. In performing its functions and duties under this Loan
Agreement, Agent shall act solely as agent of Lenders and does not assume and
shall not be deemed to have assumed any obligation toward or relationship of
agency or trust with or for Borrower.
ARTICLE X
CLOSING
The Closing Date shall be such date as the parties shall determine, and
the Closing shall take place on such date, provided all conditions for the
Closing as set forth in this Loan Agreement have been satisfied or otherwise
waived by Agent. The Closing shall take place at the offices of Altheimer &
Xxxx, 00 X. Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000 or such other
place as the parties hereto shall agree. Unless the Closing occurs on or before
January 31, 1999, this Loan Agreement shall terminate and be of no further force
or effect and, except for any obligation of Borrower to Agent pursuant to
Article XI, none of the parties hereto shall have any further obligation to any
other party.
ARTICLE XI
EXPENSES AND INDEMNITY
11.1 Attorney's Fees and Other Fees and Expenses. Whether or not any of
the transactions contemplated by this Loan Agreement shall be consummated,
Borrower agrees to pay to Agent on demand all expenses incurred by Agent and
Lenders, in connection with the transactions contemplated hereby (including,
without limitation, any appraisal fees, environmental audit fees and title and
recording charges) and in connection with any amendments, modifications or
waivers (whether or not the same become effective) under or in respect of any of
the Loan Instruments, including, without limitation:
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11.1.1 Fees and Expenses for Preparation of Loan Instruments. All
expenses, disbursements and reasonable attorney's fees (including, without
limitation, charges for required mortgagee's title insurance, lien
searches, reproduction of documents, long distance telephone calls and
overnight express carriers) of counsel retained by Agent and Lenders in
connection with the preparation and negotiation of the Loan Instruments or
any amendments, modifications or waivers hereto or thereto.
11.1.2 Fees and Expenses in Enforcement of Rights or Defense of Loan
Instruments. Any expenses or other costs, including reasonable attorney's
fees and expert witness fees actually incurred by Agent and Lenders in
connection with the enforcement or collection against Borrower or any
other Person party to any Loan Instrument of any provision of any of the
Loan Instruments, and in connection with or arising out of any litigation,
investigation or proceeding instituted by any Governmental Body or any
other Person with respect to any of the Loan Instruments, whether or not
suit is instituted, including, but not limited to, such costs or expenses
arising from the enforcement or collection against Borrower or any other
Person party to the Loan Instruments of any provision of any of the Loan
Instruments in any state or federal bankruptcy or reorganization
proceeding.
11.2 Indemnity. Borrower agrees to indemnify and save Agent and Lenders
harmless of and from the following:
11.2.1 Brokerage Fees. The fees, if any, of brokers and finders
engaged by Borrower.
11.2.2 General. Any loss, cost, liability, damage or expense
(including reasonable attorney's fees and expenses) incurred by Agent and
Lenders, in investigating, preparing for, defending against, providing
evidence, producing documents or taking other action in respect of any
commenced or threatened litigation, administrative proceeding, suit
instituted by any Person or investigation under any law, including any
federal securities law, the Bankruptcy Code, any relevant state corporate
statute or any other securities law, bankruptcy law or law affecting
creditors generally of any jurisdiction, or any regulation pertaining to
any of the foregoing, or at common law or otherwise, relating, directly or
indirectly, to the transactions contemplated by or referred to in, or any
other matter related to, the Loan Instruments, whether or not Agent or any
Lender is a party to such litigation, proceeding or suit, or is subject to
such investigation, except to the extent of any gross negligence or
willful misconduct of Agent or any Lender.
11.2.3 Operation of Collateral; Joint Venturers. Any loss, cost,
liability, damage or expense (including reasonable attorney's fees and
expenses) incurred in connection with the ownership, operation or
maintenance of the Collateral, the construction of Agent or any
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Lender and Borrower as having the relationship of joint venturers or
partners or the determination that Agent or any Lender has acted as agent
for Borrower.
11.2.4 Environmental Indemnity. Any and all claims, losses, damages,
response costs, clean-up costs and expenses suffered and/or incurred at
any time by Agent and Lenders arising out of or in any way relating to the
existence at any time of any Hazardous Materials in, on, under, at,
transported to or from, or used in the construction and/or renovation of,
any of the Real Estate or Leasehold Property, or otherwise with respect to
any Environmental Law, and/or the failure of Borrower to perform its
obligations and covenants hereunder with respect to environmental matters,
including, but not limited to: (i) claims of any Persons for damages,
penalties, response costs, clean-up costs, injunctive or other relief,
(ii) costs of removal and restoration, including fees of attorneys and
experts, and costs of reporting the existence of Hazardous Materials to
any Governmental Body, and (iii) any expenses or obligations, including
attorney's fees and expert witness fees, incurred at, before and after any
trial or other proceeding before any Governmental Body or appeal therefrom
whether or not taxable as costs, including, without limitation, witness
fees, deposition costs, copying and telephone charges and other expenses,
all of which shall be paid by Borrower to Agent or such Lender when
incurred by Agent or such Lender, except to the extent of any gross
negligence or willful misconduct of Agent or any Lender.
ARTICLE XII
MISCELLANEOUS
12.1 Notices. All notices and communications under this Loan Agreement
shall be in writing and shall be (i) delivered in person, (ii) sent by telecopy,
or (iii) mailed, postage prepaid, either by registered or certified mail, return
receipt requested, or by overnight express carrier, addressed in each case as
follows:
To Borrower: Aquis Communications, Inc.
0000X Xxxxx 00
Xxxxx 000
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxx X. Xxxxxxxx
Telecopy No.: (000) 000-0000
Copy to: Xxxxxxxx Xxxxx Xxxxxxxx Xxxx & Ballon LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx Xxx Xxxxxxxxxxx, Esq.
Telecopy No.: (000) 000-0000
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To Lender: FINOVA Capital Corporation
000 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Portfolio Manager
Communications Finance
Telecopy No.: (000) 000-0000
Copy to: FINOVA Capital Corporation
0000 X. Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Vice President, Law
Telecopy No.: (000) 000-0000
Copy to: Altheimer & Xxxx
00 X. Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxx, Esq.
Telecopy No.: (000) 000-0000
or to any other address or telecopy number, as to any of the parties hereto, as
such party shall designate in a written notice to the other parties hereto. All
notices sent pursuant to the terms of this Section 12.1 shall be deemed received
(i) if personally delivered, then on the Business Day of delivery, (ii) if sent
by telecopy before 2:00 p.m. Phoenix time, on the day sent if a Business Day or
if such day is not a Business Day or if sent after 2:00 p.m. Phoenix time, then
on the next Business Day, (iii) if sent by overnight, express carrier, on the
next Business Day immediately following the day sent, or (iv) if sent by
registered or certified mail, on the earlier of the fifth Business Day following
the day sent or when actually received. Any notice by telecopy shall be followed
by delivery on the next Business Day by overnight, express carrier or by hand.
12.2 Survival of Loan Agreement; Indemnities. All covenants, agreements,
representations and warranties made in this Loan Agreement and in the
certificates delivered pursuant hereto shall survive the making by Lender of the
Loan and the execution and delivery to Lenders of the Note and of all other Loan
Instruments, and shall continue in full force and effect so long as any of
Borrower's Obligations remain outstanding, unperformed or unpaid.
Notwithstanding the repayment of all amounts due under the Loan Instruments, the
cancellation of the Note and the release and/or cancellation of any and all of
the Loan Instruments or the foreclosure of any Liens on the Collateral, the
obligations of Borrower to indemnify Agent and Lenders with respect to the
expenses, damages, losses, costs and liabilities described in Section 11.2 shall
survive until all applicable statute of limitations periods with respect to
actions which may be brought against Agent or any Lender have run.
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12.3 Further Assurance. From time to time, Borrower shall execute and
deliver to Agent and Lenders such additional documents as Lenders reasonably may
require to carry out the purposes of the Loan Instruments and to protect
Lenders' rights thereunder, including, without limitation, using its best
efforts in the event any Collateral is to be sold to secure the approval by any
Governmental Body of any application required by such Governmental Body in
connection with such sale, and not take any action inconsistent with such sale
or the purposes of the Loan Instruments.
12.4 Taxes and Fees. Should any tax (other than taxes based upon the net
income of any Lender), recording or filing fees become payable in respect of any
of the Loan Instruments, or any amendment, modification or supplement thereof,
Borrower agrees to pay the same on demand, together with any interest or
penalties thereon attributable to any delay by Borrower in meeting any Lender's
demand, and agrees to hold Lenders harmless with respect thereto.
12.5 Severability. In the event that any provision of this Loan Agreement
is deemed to be invalid by reason of the operation of any law, including, but
not limited to, any of the rules and regulations and policies of the FCC, or by
reason of the interpretation placed thereon by any court or the FCC or any other
Governmental Body, as applicable, the validity, legality and enforceability of
the remaining terms and provisions of this Loan Agreement shall not in any way
be affected or impaired thereby, all of which shall remain in full force and
effect, and the affected term or provision shall be modified to the minimum
extent permitted by law so as to achieve most fully the intention of this Loan
Agreement.
12.6 Waiver. No delay on the part of Agent or any Lender in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, and no
single or partial exercise of any right, power or privilege hereunder shall
preclude other or further exercise thereof, or be deemed to establish a custom
or course of dealing or performance between the parties hereto, or preclude the
exercise of any other right, power or privilege.
12.7 Modification of Loan Instruments. No modification or waiver of any
provision of any of the Loan Instruments shall be effective unless the same
shall be in writing, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given. No notice to or
demand on Borrower in any case shall entitle Borrower to any other or further
notice or demand in the same, similar or other circumstances.
12.8 Captions. The headings in this Loan Agreement are for purposes of
reference only and shall not limit or otherwise affect the meaning hereof.
12.9 Successors and Assigns. This Loan Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto, subject to the limitations set forth in Article
IX; provided, however, that Borrower shall not be entitled to assign any of its
rights or delegate any of its duties hereunder.
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12.10 Remedies Cumulative. All rights and remedies of Agent and Lenders
pursuant to this Loan Agreement, any other Loan Instruments or otherwise, shall
be cumulative and non-exclusive, and may be exercised singularly or
concurrently. Neither Agent nor any Lender shall be required to prosecute
collection, enforcement or other remedies against Borrower or any other Person
party to the Loan Instruments before proceeding against any such Person or to
enforce or resort to any security, liens, collateral or other rights of Agent or
Lenders. One or more successive actions may be brought against Borrower and/or
any other Person party to the Loan Instruments, either in the same action or in
separate actions, as often as Lenders deem advisable, until all of Borrower's
Obligations are paid and performed in full.
12.11 Entire Agreement; Conflict. This Loan Agreement and the other Loan
Instruments executed prior or pursuant hereto constitute the entire agreement
among the parties hereto with respect to the transactions contemplated hereby or
thereby and supersede any prior agreements, whether written or oral, relating to
the subject matter hereof. In the event of a conflict between the terms and
conditions set forth herein and the terms and conditions set forth in any other
Loan Instrument, the terms and conditions set forth herein shall govern.
12.12 APPLICABLE LAW. THE LOAN INSTRUMENTS SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS AND DECISIONS OF THE STATE OF ARIZONA.
FOR PURPOSES OF THIS SECTION 12.12, THE LOAN INSTRUMENTS SHALL BE DEEMED TO BE
PERFORMED AND MADE IN THE STATE OF ARIZONA.
12.13 JURISDICTION AND VENUE. BORROWER HEREBY AGREES THAT ALL ACTIONS OR
PROCEEDINGS INITIATED BY BORROWER AND ARISING DIRECTLY OR INDIRECTLY OUT OF THE
LOAN INSTRUMENTS SHALL BE LITIGATED IN THE SUPERIOR COURT OF MARICOPA COUNTY, OR
THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA OR, IF AGENT OR ANY
LENDER INITIATES SUCH ACTION, IN ADDITION TO THE FOREGOING COURTS, ANY COURT IN
WHICH AGENT OR SUCH LENDER SHALL INITIATE OR TO WHICH AGENT OR SUCH LENDER SHALL
REMOVE SUCH ACTION, TO THE EXTENT SUCH COURT HAS JURISDICTION. BORROWER HEREBY
EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR
PROCEEDING COMMENCED BY AGENT OR ANY LENDER IN OR REMOVED BY AGENT OR ANY LENDER
TO ANY OF SUCH COURTS, AND HEREBY AGREES THAT PERSONAL SERVICE OF THE SUMMONS
AND COMPLAINT, OR OTHER PROCESS OR PAPERS ISSUED THEREIN MAY BE SERVED IN THE
MANNER PROVIDED FOR NOTICES HEREIN, AND AGREES THAT SERVICE OF SUCH SUMMONS AND
COMPLAINT OR OTHER PROCESS OR PAPERS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL
ADDRESSED TO BORROWER AT THE ADDRESS TO WHICH NOTICES ARE TO BE SENT PURSUANT TO
SECTION 12.1. BORROWER WAIVES ANY CLAIM THAT MARICOPA COUNTY, ARIZONA OR THE
DISTRICT OF ARIZONA IS AN INCONVENIENT FORUM OR AN IMPROPER FORUM BASED ON LACK
OF VENUE. TO THE EXTENT PROVIDED BY LAW, SHOULD BORROWER, AFTER
86
BEING SO SERVED, FAIL TO APPEAR OR ANSWER TO ANY SUMMONS, COMPLAINT, PROCESS OR
PAPERS SO SERVED WITHIN THE NUMBER OF DAYS PRESCRIBED BY LAW AFTER THE MAILING
THEREOF, BORROWER SHALL BE DEEMED IN DEFAULT AND AN ORDER AND/OR JUDGMENT MAY BE
ENTERED BY THE COURT AGAINST BORROWER AS DEMANDED OR PRAYED FOR IN SUCH SUMMONS,
COMPLAINT, PROCESS OR PAPERS. THE EXCLUSIVE CHOICE OF FORUM FOR BORROWER SET
FORTH IN THIS SECTION 12.13 SHALL NOT BE DEEMED TO PRECLUDE THE ENFORCEMENT BY
AGENT OR ANY LENDER OF ANY JUDGMENT OBTAINED IN ANY OTHER FORUM OR THE TAKING BY
AGENT OR ANY LENDER OF ANY ACTION TO ENFORCE THE SAME IN ANY OTHER APPROPRIATE
JURISDICTION, AND BORROWER HEREBY WAIVES THE RIGHT TO COLLATERALLY ATTACK ANY
SUCH JUDGMENT OR ACTION.
12.14 WAIVER OF RIGHT TO JURY TRIAL. AGENT, LENDERS AND BORROWER
ACKNOWLEDGE AND AGREE THAT ANY CONTROVERSY WHICH MAY ARISE UNDER ANY OF THE LOAN
INSTRUMENTS OR WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED THEREBY WOULD BE
BASED UPON DIFFICULT AND COMPLEX ISSUES AND, THEREFORE, THE PARTIES AGREE THAT
ANY LAWSUIT ARISING OUT OF ANY SUCH CONTROVERSY WILL BE TRIED IN A COURT OF
COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.
12.15 TIME OF ESSENCE. TIME IS OF THE ESSENCE FOR THE PERFORMANCE BY
BORROWER OF THE OBLIGATIONS SET FORTH IN THIS LOAN AGREEMENT AND THE OTHER LOAN
INSTRUMENTS.
12.16 Estoppel Certificate. Within 15 days after Agent or any Lender
requests Borrower to do so, Borrower will execute and deliver to Agent or such
Lender a statement certifying (i) that this Loan Agreement is in full force and
effect and has not been modified except as described in such statement, (ii) the
date to which interest on the Note has been paid, (iii) the Principal Balance,
(iv) whether or not to its knowledge an Event of Default has occurred and is
continuing, and, if so, specifying in reasonable detail each such Event of
Default of which it has knowledge, (v) whether to its knowledge it has any
defense, setoff or counterclaim to the payment of the Note in accordance with
its terms, and, if so, specifying each defense, setoff or counterclaim of which
it has knowledge in reasonable detail (including where applicable the amount
thereof), and (vi) as to any other matter reasonably requested by Agent or such
Lender.
12.17 Consequential Damages. Neither Agent nor any Lender nor any agent or
attorney of Agent or such Lender shall be liable to Borrower for consequential
damages arising from any breach of contract, tort or other wrong relating to the
establishment, administration or collection of the Borrower's Obligations.
12.18 Counterparts. This Loan Agreement may be executed by the parties
hereto in several counterparts and each such counterpart shall be deemed to be
an original, but all such counterparts shall together constitute one and the
same agreement.
87
12.19 No Fiduciary Relationship. No provision in this Loan Agreement or in
any other Loan Instrument, and no course of dealing among the parties hereto,
shall be deemed to create any fiduciary duty by Agent or any Lender to Borrower.
12.20 Confidentiality. Except as provided for in the Loan Instruments and
except as necessary to enable Agent or Lenders to realize upon Borrower's
Obligations and except in connection with the administration or enforcement of
Agent's and Lenders' rights under the Loan Instruments, Agent and Lenders each
shall use their commercially reasonable efforts not to disclose any information
relative to the Paging Business of Borrower designated by Borrower as
confidential to any Person without the prior written consent of Borrower, except
that Agent and Lenders may disclose any such information (i) in connection with
any proposed Loan Assignment or Participation, (ii) which otherwise is in the
public domain, (iii) to the extent required by applicable law or any rule,
regulation, decree, order or injunction of any Governmental Body, subject to any
protective order obtained by Borrower or (iv) which is obtained by Agent or any
Lender from a third party not known to Agent or any Lender to be under an
obligation of confidentiality to Borrower.
12.21 Governmental Approval. Notwithstanding anything to the contrary
contained herein or in any other Loan Instrument, no party hereto shall take any
action that would constitute or result in the transfer or assignment of any FCC
license, or other license, permit or authority issued by any Governmental Body,
or a transfer of control over any such license, permit or authorization, if such
assignment or transfer would require the prior approval of and/or notice to any
Governmental Body, without such party first having notified such Governmental
Body of any such assignment or transfer and, if required, obtaining the approval
of such Governmental Body therefor.
[remainder of this page intentionally left blank]
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IN WITNESS WHEREOF, this Loan Agreement has been executed and delivered by
each of the parties hereto by a duly authorized officer of each such party on
the date first set forth above.
AQUIS COMMUNICATIONS, INC., a Delaware
corporation
By:
-----------------------------------------
Xxxx X. Xxxxxxxx
President
FINOVA CAPITAL CORPORATION, a
Delaware corporation
By:
-----------------------------------------
Xxxxx X. Xxxxx
Vice President
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SCHEDULE I
Commitments
Lender Commitment Pro Rata Share
------ ---------- --------------
FINOVA Capital Corporation $30,000,000.00 100%
90
EXHIBIT 1.1(A)
COMPLIANCE CERTIFICATE
AQUIS COMMUNICATIONS, INC.
Reference is made to that certain Loan Agreement dated as of January 4,
1999 (such Loan Agreement, as the same may be amended, modified, supplemented or
restated from time to time, the "Loan Agreement"), between Aquis Communications,
Inc., a Delaware corporation, and FINOVA Capital Corporation, a Delaware
corporation. All capitalized terms used but not elsewhere defined herein shall
have the meanings ascribed to such terms in the Loan Agreement.
Pursuant to the Loan Agreement the undersigned hereby certifies to Agent
and Lenders that:
(1) as of _________________, 199_, ____________________ is the Chief
Financial Officer of Borrower; and
(2) except as set forth below, Borrower is in full compliance with all
terms and conditions of the Loan Agreement; and
(3) with respect to the Sections of the Loan Agreement set forth below and
the covenants contained therein, Borrower is in full compliance unless otherwise
indicated.
Section and Covenant In Full Compliance Not in Compliance
-------------------- ------------------ -----------------
6.1 Legal Existence; Good Standing |_| |_|
6.2 Inspection |_| |_|
6.3 Financial Statements and Other Information
6.3.1 Monthly Statements |_| |_|
6.3.2 Quarterly Statements and Agings |_| |_|
6.3.3 Annual Statements |_| |_|
6.3.4 Officer's Certificates |_| |_|
6.3.5 Accountants' Certificate |_| |_|
6.3.6 Audit Reports |_| |_|
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6.3.7 Business Plans |_| |_|
6.3.8 Notice of Defaults; Loss |_| |_|
6.3.9 Notice of Suits; Adverse Events |_| |_|
6.3.10 Reports to Shareholders, Creditors |_| |_|
and Governmental Bodies
6.3.11 ERISA Notices and Requests |_| |_|
6.3.12 Other Information |_| |_|
6.4 Reports to Governmental Bodies and Other Persons |_| |_|
6.5 Maintenance of Licenses and Other Agreements |_| |_|
6.6 Insurance
6.6.1 Maintenance of Insurance |_| |_|
6.6.2 Claims and Proceeds |_| |_|
6.7 Future Leases |_| |_|
6.8 Future Acquisitions of Real Property |_| |_|
6.9 Environmental Matters
6.9.1 Compliance |_| |_|
6.9.2 Certification |_| |_|
6.10 Compliance with Laws |_| |_|
6.11 Taxes and Claims |_| |_|
6.12 Maintenance of Properties |_| |_|
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6.13 Governmental Approvals |_| |_|
6.14 Payment of Indebtedness |_| |_|
6.15 Year 2000 Problem |_| |_|
6.16 Xxxx Atlantic Interest Account |_| |_|
7.1 Borrowing |_| |_|
7.2 Liens |_| |_|
7.3 Merger and Acquisition |_| |_|
7.4 Contingent Liabilities |_| |_|
7.5 Distributions |_| |_|
7.6 Capital Expenditures |_| |_|
7.7 Payments of Indebtedness for |_| |_|
Borrowed Money
7.7.1 Permitted Senior Indebtedness |_| |_|
7.7.2 Motorola Indebtedness |_| |_|
7.7.3 Xxxx Atlantic Seller Indebtedness |_| |_|
7.7.4 Letters of Credit Indebtedness |_| |_|
7.7.3 Deferred Payment Indebtedness |_| |_|
7.8 Obligations as Lessee Under Operating |_| |_|
Expenses
7.9 Investments, Loans |_| |_|
3
7.10 Fundamental Business Changes |_| |_|
7.11 Facility Sites |_| |_|
7.12 Sale or Transfer of Assets |_| |_|
7.13 Amendment of Certain Agreements |_| |_|
7.14 Acquisition of Additional Properties |_| |_|
7.15 Equity Sales |_| |_|
7.16 Transactions with Affiliates |_| |_|
7.17 Compliance with ERISA |_| |_|
7.18 Senior Leverage Ratio (see |_| |_|
Schedule 1 attached hereto for
supporting calculations)
7.19 Total Leverage Ratio (see |_| |_|
Schedule 2 attached hereto for
supporting calculations)
7.20 Senior Debt Service Coverage Ratio |_| |_|
(see Schedule 3 attached hereto for
supporting calculations)
7.21 Certain Agreements |_| |_|
With respect to any item identified above as not being in compliance, the
undersigned has attached and certifies as to the accuracy of statements
specifying the violation, condition, or events which result in such
non-compliance, the nature and status thereof, and the actions which Borrower
proposes to take with respect thereto to bring Borrower into full compliance
with the Loan Agreement.
The foregoing certifications are made by ____________________, in his
capacity as the acting Chief Financial Officer of Borrower, from his personal
knowledge, after due inquiry and with full knowledge that Agent and Lenders will
rely thereon. This Certificate is given pursuant to and in compliance with
subsection 6.3.3 of the Loan Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Compliance
Certificate on this ____ day of ___________, 199_.
4
AQUIS COMMUNICATIONS, INC.,
a Delaware corporation
By:___________________________________
Name:_________________________________
Title:________________________________
5
Schedule 1
Senior Leverage Ratio
For ________________________ ended on _______________________________________
(Indicate fiscal period) (Indicate date of financial statements)
6
Schedule 2
Total Leverage Ratio
For ________________________ ended on _______________________________________
(Indicate fiscal period) (Indicate date of financial statements)
7
Schedule 3
Senior Debt Service Coverage Ratio
For ________________________ ended on _______________________________________
(Indicate fiscal period) (Indicate date of financial statements)
8
EXHIBIT 1.1(B)
ENVIRONMENTAL COMPLIANCE CERTIFICATE
AQUIS COMMUNICATIONS, INC.
Reference is made to that certain Loan Agreement dated as of December___,
1998 (such Loan Agreement, as the same may be amended, modified, supplemented or
restated from time to time, the "Loan Agreement"), between Aquis Communications,
Inc., a Delaware corporation, and FINOVA Capital Corporation, a Delaware
corporation. All capitalized terms used but not elsewhere defined herein shall
have the meanings ascribed to such terms in the Loan Agreement.
Pursuant to the Loan Agreement the undersigned hereby certify to Agent and
Lenders that:
(1) as of ____________, 199_, __________________ is the duly elected and
acting Chief Executive Officer of Borrower;
(2) all representations and warranties set forth in the Environmental
Certificate and in Section 5.14 of the Loan Agreement are true and correct as of
the date hereof; and
(3) Borrower is in compliance with all of the covenants set forth in the
Environmental Certificate and in subsection 6.9.1 of the Loan Agreement as of
the date hereof.
IN WITNESS WHEREOF, the undersigned has executed this Environmental
Compliance Certificate on this ____ day of ___________, 199_.
AQUIS COMMUNICATIONS, INC.,
a Delaware corporation
By:___________________________________
Name:_________________________________
Title:________________________________
EXHIBIT 1.1(C)
LIBOR ELECTION NOTICE
AQUIS COMMUNICATIONS, INC.
FINOVA Capital Corporation
000 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxx
Telecopy No. (000) 000-0000
Ladies and Gentlemen:
Reference is made to that certain Loan Agreement dated as of January 4,
1999 (such Loan Agreement, as the same may be amended, modified, supplemented or
restated from time to time, the "Loan Agreement"), between Aquis Communications,
Inc., a Delaware corporation, and FINOVA Capital Corporation, a Delaware
corporation. All capitalized terms used but not elsewhere defined herein shall
have the meanings ascribed to such terms in the Loan Agreement.
The undersigned represent and warrant to Lenders that as of the date of
this notice:
1. no Event of Default has occurred and is continuing;
2. no more than three LIBOR Loans will exist after giving effect to the
requests specified below; and
3. to the extent the request specified below relates to a partial
continuation of any Loan as a LIBOR Loan, or to a partial conversion
of any Loan to a LIBOR Loan, such request is in a minimum amount of
$1,000,000 or integral multiples of $100,000 in excess thereof.
Borrower hereby irrevocably requests that Lenders:
o continue as a LIBOR Loan, on _____________, ____, $____________ of
the $____________ portion of the Principal Balance now bearing
interest determined by reference to the LIBOR Rate for an additional
interest period of ____ months;
o convert to a LIBOR Loan, on ____________, ____, $____________ of the
$____________ portion of the Principal Balance now bearing interest
at the Base Rate, such LIBOR Loan to bear interest determined by
reference to the LIBOR Rate for an interest period of ____________
months.
Very truly yours,
AQUIS COMMUNICATIONS, INC.,
a Delaware corporation
By:___________________________________
Name:_________________________________
Title:________________________________
