Exhibit 10.1.16
EXECUTION COPY
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LOAN AND SECURITY AGREEMENT
Dated as of July 16, 1999
among
ATI OPERATING COMPANY,
as Borrower,
ADVANCED TELECOMMUNICATIONS, INC. and
CERTAIN OPERATING SUBSIDIARIES OF ADVANCED TELECOMMUNICATIONS, INC.,
as Guarantors,
NTFC CAPITAL CORPORATION,
as Lender,
THE OTHER LENDERS PARTY HERETO
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as Administrative Agent
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TABLE OF CONTENTS
Page
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Article 1: DEFINITIONS .................................................. 1
1.1 Certain Definitions .......................................... 1
1.2 Accounting Principles; Subsidiaries .......................... 17
1.3 Computation of Time Periods .................................. 17
1.4 UCC Terms .................................................... 17
1.5 General Construction; Captions ............................... 17
1.6 References to Documents and Laws ............................. 18
Article 2: LOANS ........................................................ 18
2.1 Term Loan Commitments ........................................ 18
2.2 Notes ........................................................ 18
2.3 Reliance on Notices .......................................... 18
2.4 Procedures for Borrowing ..................................... 18
2.5 Loan Amortization ............................................ 19
2.6 Maturity ..................................................... 19
2.7 Prepayments; Commitment Reductions ........................... 19
2.8 Interest and Applicable Margin ............................... 20
2.9 Payments ..................................................... 21
2.10 Application and Allocation of Payments ....................... 21
2.11 Loan Account and Accounting .................................. 22
2.12 Taxes ........................................................ 22
2.13 Capital Adequacy; Increased Costs; Illegality ................ 23
2.14 Use of Proceeds .............................................. 24
2.15 Fees ......................................................... 24
Article 3: COLLATERAL AND SECURITY AGREEMENT ............................ 25
3.1 Grant of Security Interest ................................... 25
3.2 Regulatory Authorizations .................................... 26
3.3 Priority of Security Interests ............................... 26
3.4 Pledge Agreement ............................................. 26
3.5 Further Documentation; Pledge of Instruments ................. 26
3.6 Accounts, Etc ................................................ 27
3.7 Further Identification of Collateral ......................... 27
3.8 Remedies ..................................................... 27
3.9 Standard of Care ............................................. 27
3.10 Advances to Protect Collateral ............................... 27
3.11 License to Use ............................................... 28
3.12 Benefit of the Liens ......................................... 28
3.13 Release of Collateral ........................................ 28
Article 4: REPRESENTATIONS AND WARRANTIES .............................. 28
4.1 Organization and Qualification .............................. 28
4.2 Authority and Authorization ................................. 28
4.3 Execution and Binding Effect ................................ 28
4.4 Governmental Authorizations ................................. 29
4.5 Regulatory Authorizations ................................... 29
4.6 Agreements and Other Documents .............................. 29
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4.7 Absence of Conflicts ......................................... 29
4.8 No Restrictions .............................................. 29
4.9 Government Contracts ......................................... 30
4.10 Financial Statements; Business Plan .......................... 30
4.11 Financial Accounting Practices ............................... 30
4.12 Deposit and Disbursement Accounts ............................ 30
4.13 Insurance .................................................... 30
4.14 Accurate and Complete Disclosure ............................. 30
4.15 No Event of Default; Compliance with Material Agreements ..... 31
4.16 Labor Matters ................................................ 31
4.17 Litigation ................................................... 31
4.18 Rights to Property ........................................... 31
4.19 Year 2000 Issue .............................................. 32
4.20 Taxes ........................................................ 32
4.21 No Material Adverse Change ................................... 32
4.22 Solvency ..................................................... 32
4.23 No Regulatory Event .......................................... 32
4.24 Trade Relations .............................................. 32
4.25 No Brokerage Fees ............................................ 32
4.26 Margin Stock; Regulation U ................................... 32
4.27 Investment Company; Public Utility Holding Company ........... 32
4.28 Personal Holding Company; Subchapter S ....................... 33
4.29 Securities Act, Etc .......................................... 33
4.30 ERISA ........................................................ 33
4.31 Intellectual Property ........................................ 33
4.32 Environmental Warranties ..................................... 33
4.33 Security Interests ........................................... 33
4.34 Place of Business ............................................ 33
4.35 Location of Collateral ....................................... 34
4.36 Material Contracts and Accounts .............................. 34
4.37 No Defaults Under Contracts or Accounts ...................... 34
4.38 Corporate Structure .......................................... 34
4.39 Assumed Names ................................................ 34
4.40 Transactions with Affiliates ................................. 34
Article 5: CONDITIONS TO FIRST BORROWING DATE ........................... 34
5.1 Closing Certificates ......................................... 34
5.2 Opinions of Counsel .......................................... 35
5.3 Closing Documents ............................................ 35
5.4 No Material Adverse Change ................................... 36
Article 6: CONDITIONS OF LENDING ........................................ 36
6.1 Conditions to Each Borrowing Date ............................ 36
6.2 Post-Closing Items ........................................... 37
6.3 Affirmation of Representations and Warranties ................ 37
6.4 Deadline for Funding Conditions .............................. 37
Article 7: AFFIRMATIVE COVENANTS ........................................ 38
7.1 Reporting and Information Requirements ....................... 38
7.2 Other Notices ................................................ 39
7.3 Notice of Pension-Related Events ............................. 39
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7.4 Financial Accounting Practices ............................... 40
7.5 Preservation of Corporate Existence and Qualification ........ 40
7.6 Continuation of Business ..................................... 40
7.7 Insurance .................................................... 40
7.8 Indemnity .................................................... 42
7.9 Access ....................................................... 43
7.10 Expenses ..................................................... 43
7.11 Payment of Taxes, Charges, Claims and Current Liabilities .... 44
7.12 Compliance with Laws ......................................... 45
7.13 Use of Proceeds .............................................. 45
7.14 Government Authorizations; Regulatory Authorizations, Etc .... 45
7.15 Contracts and Franchises ..................................... 45
7.16 Site Leases and Consents ..................................... 45
7.17 Financial Covenants .......................................... 45
7.18 Patent, Trademark and Copyright Collateral ................... 45
7.19 Sites ........................................................ 46
7.20 Environmental Site Assessments ............................... 46
7.21 Construction ................................................. 46
7.22 No Encroachments ............................................. 46
7.23 Certain Notices .............................................. 47
7.24 Management Team .............................................. 47
7.25 Contracts .................................................... 47
7.26 Liens on After-Acquired Property ............................. 47
7.27 Year 2000 Compliance ......................................... 47
7.28 Post-Closing Items ........................................... 47
7.29 Further Assurances ........................................... 47
Article 8: NEGATIVE COVENANTS ........................................... 48
8.1 Indebtedness ................................................. 48
8.2 Restrictions on Liens ........................................ 48
8.3 Limitation on Contingent Obligations ......................... 48
8.4 Prohibition of Mergers, Acquisitions, Sales of Assets, Name,
Office or Business Changes, Etc .............................. 49
8.5 Limitation on Equity Payments ................................ 50
8.6 Assumed Names ................................................ 50
8.7 Limitation on Leases ......................................... 50
8.8 Transactions with Affiliates ................................. 50
8.9 Extension of Accounts ........................................ 50
8.10 Unscheduled Payments ......................................... 50
8.11 Business Activities .......................................... 50
8.12 Capital Expenditures ......................................... 50
8.13 Limitation on Investments, Advances and Loans ................ 51
8.14 Subsidiaries ................................................. 51
Article 9: EVENTS OF DEFAULT AND REMEDIES ............................... 51
9.1 Events of Default ............................................ 51
9.2 Remedies ..................................................... 53
9.3 Waivers by Loan Parties ...................................... 54
9.4 Exercise of Rights ........................................... 54
9.5 Rights of Secured Party ...................................... 55
9.6 Additional Remedies .......................................... 55
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9.7 Application of Proceeds ...................................... 56
9.8 Discontinuance of Proceedings ................................ 56
9.9 Power of Attorney and Proxy .................................. 57
9.10 Regulatory Matters ........................................... 58
Article 10: ASSIGNMENT AND PARTICIPATION; APPOINTMENT OF
ADMINISTRATIVE AGENT ......................................... 59
10.1 Assignment and Participation ................................. 59
10.2 Appointment of the Administrative Agent ...................... 60
10.3 The Administrative Agent's Reliance, Etc ..................... 61
10.4 GECC and Affiliates .......................................... 61
10.5 Lender Credit Decision ....................................... 61
10.6 Indemnification .............................................. 62
10.7 Successor Administrative Agent ............................... 62
10.8 Set Off and Sharing of Payments .............................. 63
10.9 Advances; Payments; Non-Funding Lenders; Information;
Actions in Concert ........................................... 63
Article 11: GUARANTY ..................................................... 65
11.1 Guaranty ..................................................... 65
11.2 Waivers by Guarantors ........................................ 66
11.3 Benefit of Guaranty .......................................... 66
11.4 Subrogation; Subordination ................................... 66
11.5 Election of Remedies ......................................... 67
11.6 Limitation ................................................... 67
11.7 Contribution with Respect to Guaranty Obligations ............ 68
11.8 Liability Cumulative ......................................... 68
Article 12: GENERAL CONDITIONS/MISCELLANEOUS ............................. 68
12.1 Amendments, Modifications and Waivers ........................ 68
12.2 Advances Not Implied Waivers ................................. 69
12.3 Business Day ................................................. 69
12.4 Records ...................................................... 69
12.5 Notices ...................................................... 69
12.6 FCC and PUC Approval ......................................... 70
12.7 Lenders Sole Beneficiary ..................................... 70
12.8 Lender's Review of Information ............................... 70
12.9 No Joint Venture ............................................. 71
12.10 Severability ................................................. 71
12.11 Rights Cumulative ............................................ 71
12.12 Duration; Survival ........................................... 71
12.13 Governing Law ................................................ 71
12.14 Counterparts ................................................. 71
12.15 Successors and Assigns ....................................... 71
12.16 Disclosures and Confidentiality .............................. 71
12.17 Jurisdiction and Venue ....................................... 73
12.18 Jury Waiver .................................................. 73
12.19 Limitation on Liability ...................................... 73
12.20 Schedules, Exhibits and Annexes .............................. 74
12.21 Agreement to Govern .......................................... 74
12.22 Entire Agreement ............................................. 74
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ANNEXES TO LOAN AND SECURITY AGREEMENT
Annex I Initial Commitments; Addresses of the Lenders
Annex II Closing Checklist
SCHEDULES TO LOAN AND SECURITY AGREEMENT
Schedule 1 Loan Party Information and Certain Defined Terms
Schedule 2.5 Loan Amortization
Schedule 2.15 Commitment Fees
Schedule 4.4 Required Consents
Schedule 4.5 Regulatory Authorizations
Schedule 4.6 Agreements and Other Documents
Schedule 4.8 Restrictions on Indebtedness
Schedule 4.9 Government Contracts
Schedule 4.10 Financial Statements
Schedule 4.12 Deposit and Disbursement Accounts
Schedule 4.13 Existing Insurance
Schedule 4.16 Labor Matters
Schedule 4.17 Litigation
Schedule 4.18 Site and Site Leases; Real Property; Equipment Location
Schedule 4.31 Intellectual Property
Schedule 4.32 Environmental Assessments
Schedule 4.33 Security Interests--Recordings and Filings
Schedule 4.34 Place of Business
Schedule 4.35 Location of Collateral
Schedule 4.38 Corporate Structure
Schedule 4.39 Assumed Names
Schedule 4.40 Transactions with Affiliates
Schedule 6.2 Post-Closing Items
Schedule 7.7 Required Insurance
Schedule 7.17 Financial Covenants
Schedule 8.2 Liens
Schedule 8.3 Contingent Obligations
Schedule 8.13 Investments
Schedule 10.9 Wire Instructions
EXHIBITS TO LOAN AND SECURITY AGREEMENT
Exhibit A Form of Note
Exhibit B Form of Borrowing Certificate
Exhibit C Form of Notice of Conversion/Continuation
Exhibit D Form of Opinion of Counsel to Loan Parties
Exhibit E Form of Opinion of Regulatory Counsel to Loan Parties
Exhibit F Form of Landlord Consent
Exhibit G Form of Assignment Agreement
Exhibit H Form of Additional Guarantor Assumption
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LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT ("Agreement") is dated as of July 16,
1999, by and among ATI Operating Company, a Minnesota corporation (the
"Borrower"); Advanced Telecommunications, Inc., a Minnesota corporation
("Holdings"); each Subsidiary (as hereinafter defined) of the Borrower listed on
the signature pages hereof as a "Guarantor"; each financial institution listed
on the signature pages hereof as a "Lender" and the other financial institutions
and other entities who may hereafter from time to time become parties hereto as
successors or assigns as provided herein (each a "Lender" and collectively, the
"Lenders"); and GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation
("GECC"), as the administrative agent for the Lenders (in such capacity, the
"Administrative Agent").
BACKGROUND:
1. The Loan Parties are engaged in the provision of telecommunication
services primarily in Tier I and Tier II Markets in the United States.
2. Holdings and the Borrower have requested that the Lenders provide funds
to the Borrower to finance the Telecommunications Costs and other general
corporate and working capital purposes, including payment of interest and
expenses and the repayment of the Non-Continuing Indebtedness.
3. The Lenders are willing to extend such credit to the Borrower upon the
terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained and intending to be legally bound hereby, the parties
hereto agree as follows:
ARTICLE I: DEFINITIONS
1.1 Certain Definitions. Certain terms are defined on Schedule 1. In
addition to other words and terms defined in the preamble hereof or elsewhere in
this Agreement, or on the Schedules, the following words and terms shall have
the following meanings (such meanings to be equally applicable to both the
singular and plural form of such words and terms) unless the context otherwise
clearly requires:
"Accounts": as defined in Section 3.1(a).
"Additional Contributed Capital": cash equity capital received by Holdings
from time to time after the date hereof pursuant to the Additional Capital
Commitment.
"Additional Capital Commitment": the commitment from one or more Persons
reasonably acceptable to the Administrative Agent to provide cash equity capital
to Holdings of at least $30,000,000 (before payment of transaction fees) in form
and substance, including with respect to any conditions thereto, reasonably
acceptable to the Administrative Agent.
"Additional Guarantor Assumption": as defined in Section 8.14.
"Advance": any advance made pursuant to Section 2.1.
"Affected Lender": as defined in Section 2.13(d).
"Affiliate": with respect to any Person, (a) each Person that, directly or
indirectly, owns or controls, whether beneficially, or as a trustee, guardian or
other fiduciary, five percent (5%) or more of the Stock having ordinary voting
power in the election of directors of such Person, (b) each Person that
controls, is controlled by or is under common control with such Person and (c)
in the case of individuals, the immediate family members, spouses and lineal
descendants of individuals who are Affiliates of the Borrower. For the purposes
of this definition, "control" of a Person shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of its management or
policies, whether through the ownership of voting securities, by contract, by
virtue of being an executive officer or a director or otherwise; provided,
however, that the term "Affiliate" shall specifically exclude, in the case of
any Loan Party, the Administrative Agent and each Lender.
"Applicable Base Margin": 3.75%.
"Applicable LIBOR Margin": 4.75%.
"Applicable Margins": the Applicable Base Margin and the Applicable LIBOR
Margin.
"Artesian Note": the Subordinated Promissory Note for the principal amount
of $400,000, dated August 31, 1998, between Holdings and Artesian Capital
Limited Partnership II.
"Asset Disposition": any sale or other disposition (including by way of
merger, consolidation or condemnation and whether by operation of law or
otherwise), or series of sales or other dispositions, made on or after the
Closing Date by any Loan Party or any of its Subsidiaries to any Person (other
than a Loan Party) of (i) all or substantially all of the outstanding Stock of
any of its Subsidiaries, (ii) all or substantially all of its assets or the
assets of any division of the Borrower or any of its Subsidiaries or (iii) any
other asset or assets (other than inventory sold in the ordinary course of
business and obsolete equipment) which, when taken together with all sales or
other dispositions of assets not covered by either of the foregoing clause (i)
or (ii), yield Asset Disposition Net Proceeds in excess of $500,000 in any
twelve-month period.
"Asset Disposition Net Proceeds": the proceeds of any Asset Disposition,
net of (a) brokerage commissions and other commissions, fees and expenses
(including fees and expenses of counsel, accountants and investment bankers)
related to such Asset Disposition and (b) a reserve for taxes payable as a
result of such Asset Disposition.
"Assignment Agreement": as defined in Section 10.1(a).
"Available Credit": the aggregate Commitments of the Lenders less the
Reserve.
"Availability Increase Date": any date on which all of the following is
true: (i) the Borrower has received Additional Contributed Capital, (ii) the
Loan Parties are in compliance with the financial covenants set forth on
Schedule 7.17 and (iii) at least 95% of the Indebtedness under the Note Purchase
Agreements has been converted to equity of Holdings.
"Base Rate": for any day, a floating rate equal to the higher of (a) the
rate publicly quoted from time to time by The Wall Street Journal as the "base
rate on corporate loans at large U.S. money center commercial banks" (or, if The
Wall Street Journal ceases quoting a base rate of the type described, the
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highest per annum rate of interest published by the Board of Governors of the
Federal Reserve System in Federal Reserve statistical release H.15 (519)
entitled "Selected Interest Rates" as the Bank prime loan rate or its
equivalent) and (b) the Federal Funds Rate plus fifty (50) basis points per
annum. Each change in any interest rate provided for in this Agreement based
upon the Base Rate shall take effect at the time of such change in the Base
Rate.
"Base Rate Loan": any portion of the Loan bearing interest by reference to
the Base Rate.
"Borrower": as defined in the first paragraph of this Agreement.
"Borrower Indebtedness": as defined in Section 11.4.
"Borrowing Certificate": a certificate substantially in the form of
Exhibit B.
"Borrowing Date": any Business Day on which an Advance is made.
"Business Day": a day on which commercial banks in New York City are not
authorized or required by law to close and, if the applicable Business Day
relates to the LIBOR Rate or a LIBOR Loan, a day on which banks in the city of
London are also generally open for interbank or foreign exchange transactions.
"Business Plan": The Loan Parties' business plan, including quarterly pro
forma Projections for the period from January, 1999 through December, 2006, as
described in, and attached to, Schedule 4.10.
"Capital Expenditures": for any period, (a) the additions to property,
plant and equipment (including any additions through the acquisition of stock of
a Person that becomes a Subsidiary) and other capital expenditures of the
Borrower or any of its Subsidiaries (including all systems and development
expenditures related to the build-out of the Networks) that are (or would be)
set forth in a consolidated statement of cash flows of the Borrower and its
Subsidiaries for such period prepared in accordance with GAAP and, without
duplication, (b) Capital Lease Obligations incurred by the Borrower or any of
its Subsidiaries during such period; provided, however, that no consideration
paid for or expenditure or obligation related to the acquisition of any
Regulatory Authorization and no capitalized interest shall be treated as a
Capital Expenditure nor shall expenditures of proceeds of insurance settlements,
condemnation awards and other like settlements in respect of lost, destroyed,
damaged or condemned property, plant or equipment to the extent that such
expenditures are made to repair or replace such property or to acquire other
property, plant and equipment useful in the Telecommunications Business within
twelve (12) months of receipt of such proceeds, be deemed Capital Expenditures.
"Capital Lease": with respect to any Person, any lease of (or other
indebtedness arrangement conveying the right to use) any property (whether real,
personal or mixed) by such Person as lessee that, in accordance with GAAP, would
be required to be classified and accounted for as a capital lease or a liability
on a balance sheet of such Person.
"Capital Lease Obligation": with respect to any Capital Lease of any
Person, the amount of the obligation of the lessee thereunder that, in
accordance with GAAP, would appear on a balance sheet of such lessee in respect
of such Capital Lease and that shall have a stated maturity which is the date of
the last payment of rent or any amount due under such Capital Lease prior to the
first date upon which such Capital Lease may be terminated by the lessee without
payment of a penalty.
"Cash Equivalents": (a) securities issued or fully guaranteed or insured
by the United States government or any agency thereof, (b) certificates of
deposit, eurodollar time deposits, overnight bank
3
deposits and bankers' acceptances of any commercial bank organized under the
laws of the United States, any state thereof, the District of Columbia, any
foreign bank, or its branches or agencies (fully protected against currency
fluctuations) which, at the time of acquisition, are rated at least "A-1" by
Standard & Poor's Rating Corp, a division of The XxXxxx-Xxxx Companies ("S&P")
or "P-1" by Xxxxx'x Investors Service ("Moody's"), (c) commercial paper of an
issuer rated at least "A-1" by S&P or "P-1" by Moody's and (d) shares of any
money market fund that (i) has at least 95% of its assets invested continuously
in the types of investments referred to in clauses (a) through (c) above, (ii)
has net assets of not less than $500,000,000 and (iii) is rated at least "A-l"
by S&P or "P-1" by Moody's; provided, however, that the maturities of all
obligations of the type specified in clauses (a) through (c) above shall not
exceed 270 days.
"Cash Interest Coverage Ratio": (a) until the Loan Parties report positive
EBITDA for each of four (4) consecutive Fiscal Quarters considered as a single
accounting period, the product of EBITDA for the two (2) most recent Fiscal
Quarters ending on or prior to such date multiplied by two (2) divided by
Interest Expense (excluding any portion thereof not paid in cash) for the most
recent four (4) consecutive Fiscal Quarters ending on or prior to such date and
(b) thereafter, EBITDA for any period of four (4) consecutive Fiscal Quarters
divided by Interest Expense (excluding any portion thereof not paid in cash) for
such period.
"Cash Interest Expense": Interest Expense, excluding any portion thereof
not paid in cash.
"Change of Control": the failure of (i) Xxxxxxxx Partners, L.P.
("Xxxxxxxx") to own beneficially a percentage of the voting Stock of Holdings
greater than that beneficially owned by any other Person or (ii) of Xxxxxxxx and
the Person or Persons providing the Additional Capital Contribution to own
beneficially a percentage of the voting Stock of Holdings needed to elect
directors and/or approve a business combination.
"Charges": all federal, state, county, city, municipal, local, foreign or
other governmental Taxes (including Taxes owed to the PBGC at the time due and
payable), levies, assessments, charges, liens, claims or encumbrances upon or
relating to (a) the Collateral, (b) the Obligations, (c) the payroll, income or
gross receipts of any Loan Party, (d) any Loan Party's ownership or use of any
properties or other assets or (e) any other aspect of any Loan Party's business.
"Closing Checklist": the schedule, including all appendices, exhibits or
schedules thereto, listing certain documents and information to be delivered in
connection with this Agreement, the other Loan Documents and the financing
contemplated hereunder, substantially in the form attached hereto as Annex II.
"Closing Date": the date of this Agreement first written above.*
"Code": the Internal Revenue Code of 1986, as amended from time to time.
"Collateral": as defined in Section 3.1.
"Commerce Collateral": all equipment purchased with the proceeds of the
Commerce Equipment Loan and any substitutions or replacements of any components
thereof and any other equipment that was owned by Holdings on December 31, 1998
and was reflected in the books, records and financial statements of Holdings at
such date.
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* Note: Not necessarily the First Borrowing Date.
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"Commerce Equipment Loan": the outstanding balance under the Commerce Loan
Agreements.
"Commerce Loan Agreement": the Equipment Loan Agreements, dated March 30,
1998 and December 30, 1998 (in each case as amended to the date hereof), between
Holdings and Commerce Financial Group, Inc., providing loans totaling
$1,500,000, which were used to finance fixed assets and certain Equipment and
are secured by substantially all such Equipment.
"Commissions": as defined in Section 12.16(b).
"Commitment": (a) as to any Lender, the commitment of such Lender to make
its Pro Rata Share of Advances and (b) as to all Lenders, the aggregate
commitment of all Lenders to make Advances, which aggregate commitment shall be
Sixty-Five Million Dollars ($65,000,000) on the date hereof, in each case as
such amounts may be adjusted, if at all, from time to time in accordance with
this Agreement. The initial Commitment of each Lender is set forth on Annex I.
"Commitment Fees": as defined in Section 2.15(a).
"Commitment Termination Date": the earliest of (a) the second anniversary
of the Closing Date, (b) the date of termination of the Lenders' obligation to
make Advances or permit the Loan to remain outstanding pursuant to Section
9.2(b), (c) the date of the permanent reduction of the Commitments to zero
dollars ($0) and (d) a date twelve (12) months from the Closing Date unless the
Additional Capital Commitment has been obtained prior thereto.
"Communications Law": any and all of (a) the Communications Act of 1934,
as amended by the Telecommunications Act of 1996, any successor federal statute
and the rules and regulations of the FCC thereunder and (b) any state law
governing the provision of telecommunications services and the rules and
regulations of any PUC, all as the same may be in effect from time to time.
"Contingent Obligation": as to any Person, any obligation of such Person
guaranteeing, directly or indirectly, any Indebtedness, leases, dividends or
other obligations ("primary obligations") of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including any
obligation of such Person, whether or not contingent, (a) to purchase any such
primary obligation or any property constituting direct or indirect security
therefor, (b) to advance or supply funds (i) for the purchase or payment of any
such primary obligation or (ii) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (c) to purchase property, securities or services primarily for
the purpose of assuring the owner of any such primary obligation of the ability
of the primary obligor to make payment of such primary obligation or (d)
otherwise to assure or hold harmless the owner of such primary obligation
against loss in respect thereof. The amount of any Contingent Obligation shall
be equal to the amount of the obligation so guaranteed or otherwise supported
or, if less, the amount to which such Contingent Obligation is specifically
limited.
"Contracts": as defined in Section 3.1(b).
"Current Assets": with respect to any Person, all current assets of such
Person as of any date of determination calculated in accordance with GAAP.
"Current Liabilities": with respect to any Person, all liabilities which
should, in accordance with GAAP, be classified as current liabilities, and in
any event shall include all Indebtedness payable on demand or within one year
from any date of determination without any option on the part of the obligor to
extend or renew beyond such year, all accruals for federal or other Taxes based
on or measured by
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income and payable within such year, and the current portion of long-term debt
required to be paid within one year, but excluding, in the case of the Borrower,
the aggregate outstanding principal amount of the Loan.
"Default": any of the conditions or occurrences specified in Section 9.1,
whether or not any requirement for the giving of notice, the lapse of time, or
both, or any other condition has been satisfied.
"Default Rate": as defined in Section 2.8(d).
"EBITDA": for any period, the sum of the consolidated net income (or loss)
of Holdings and its Subsidiaries (excluding extraordinary gains and losses and
the amount of any revenues which are in dispute) plus the amount of
depreciation, amortization, Interest Expense and tax expense deducted in the
determination of such consolidated net income (or loss).
"Environmental Laws": all applicable federal, state, local and foreign
laws, statutes, ordinances, codes, rules and regulations and all applicable
judicial or administrative interpretations thereof, including any applicable
judicial or administrative order, consent decree, order or judgment, imposing
liability or standards of conduct for or relating to the regulation and
protection of human health, safety, the environment and natural resources
(including ambient air, surface water, groundwater, wetlands, land surface or
subsurface strata, wildlife, aquatic species and vegetation). Environmental Laws
include the Comprehensive Environmental Response, Compensation, and Liability
Act of 1980 (42 U.S.C.ss.ss.9601 et seq.) ("CERCLA"); the Hazardous Materials
Transportation Authorization Act of 1994 (49 U.S.C.ss.ss.5101 et seq.); the
Resource Conservation Recovery Act (42 U.S.C.ss.ss.6901 et seq.); the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C.ss.ss.136 et seq.); the
Solid Waste Disposal Act (42 U.S.C.ss.ss.6901 et seq.); the Toxic Substance
Control Act (15 U.S.C. ss.ss.2601 et seq.); the Clean Air Act (42
U.S.C.ss.ss.7401 et seq.); the Federal Water Pollution Control Act (33
U.S.C.ss.ss.1251 et seq.); the Occupational Safety and Health Act (29
U.S.C.ss.ss.651 et seq.); and the Safe Drinking Water Act (42 U.S.C.ss.ss.300(f)
et seq.); and any and all regulations promulgated thereunder, and all analogous
state, local and foreign counterparts or equivalents and any transfer of
ownership notification or approval statutes.
"Environmental Liabilities": with respect to any Person, all liabilities,
response, remedial and removal costs, losses, damages, property damages, natural
resource damages, costs and expenses (including all reasonable fees,
disbursements and expenses of counsel, experts and consultants), fines,
penalties, sanctions and interest incurred as a result of or related to any
environmental claim, suit, action, investigation, proceeding or demand by any
Person, whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute or common law, including any arising under
or related to any Environmental Law, Permit required by or pursuant to any
Environmental Law, or in connection with any Release or threatened Release or
presence of a Hazardous Material.
"Equipment": as defined in Section 3.1(c).
"Equity Payment": any distribution of earnings or capital, or any dividend
payment, redemption or other payment in respect of Stock, either directly or
indirectly, whether in cash or property or in obligations of any Loan Party.
"ERISA": the Employee Retirement Income Security Act of 1974, as amended
from time to time, and any successor statute.
6
"ERISA Affiliate": with respect to any Loan Party, any trade or business
(whether or not incorporated) which, together with such Loan Party, are treated
as a single employer within the meaning of Sections 414(b), (c), (m) or (o) or
the Code.
"Event of Default": any of the conditions or occurrences specified in
Section 9.1; provided, however, that any requirement for the giving of notice,
the lapse of time, or both, shall have been satisfied.
"Excess Cash Flow": with respect to any Fiscal Year, the consolidated net
income (or loss) of the Borrower and its Subsidiaries for such Fiscal Year plus
(a) depreciation, amortization and Interest Expense to the extent deducted in
determining such consolidated net income or loss, plus decreases or minus
increases (as the case may be) (b) in Working Capital during such Fiscal Year,
minus (c) Interest Expense paid or accrued (excluding any original issue
discount, interest paid in kind or amortized debt discount, to the extent
included in determining Interest Expense), to the extent deducted in determining
such net income or loss, and scheduled principal payments paid or payable during
such Fiscal Year in respect of Indebtedness permitted hereunder to be incurred,
plus or minus (as the case may be), (d) extraordinary gains or losses which are
cash items not included in the calculation of net income or loss, minus (e)
Capital Expenditures for such Fiscal Year to the extent permitted hereunder,
plus (f) Taxes deducted in determining consolidated net income to the extent not
paid or payable in cash. For purposes of this definition, "Working Capital"
means Current Assets (exclusive of cash and Cash Equivalents) less Current
Liabilities.
"FCC": the Federal Communications Commission of the United States of
America, and any successor, in whole or in part, to its jurisdiction.
"Federal Funds Rate": for any period, a fluctuating interest rate equal
for each day during such period to the weighted average of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published for such day (or, if such day is
not a Business Day, for the next preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the weighted average of the rates on overnight Federal funds
transactions among members of the Federal Reserve System, as reasonably
determined by the Administrative Agent.
"Fees": any and all fees payable to the Administrative Agent or any Lender
pursuant to this Agreement or any of the other Loan Documents.
"Financial Statements": the consolidated and consolidating income
statements, statements of cash flows and balance sheets of Holdings delivered in
accordance with this Agreement.
"First Borrowing Date": the first date on which an Advance is made.
"Fiscal Quarter": any of the quarterly accounting periods of the Loan
Parties ending on March 31, June 30, September 30 and December 31 of each year.
"Fiscal Year": any of the annual accounting periods of the Loan Parties
ending on December 31 of each year.
"Fixed Charges": for any period, the sum of (a) Total Debt Service, (b)
Capital Expenditures and (c) Cash Taxes imposed or measured by consolidated net
income, in the case of each of (a), (b) and (c), for Holdings and its
Subsidiaries for such period.
7
"Fixed Charges Coverage Ratio": (a) until the Loan Parties report positive
EBITDA for each of four (4) consecutive Fiscal Quarters considered as a single
accounting period, the product of EBITDA for the two (2) most recent Fiscal
Quarters ending on or prior to such date multiplied by two (2) divided by Fixed
Charges for the most recent four (4) consecutive Fiscal Quarters ending on or
prior to such date and (b) thereafter, EBITDA for any period of four (4)
consecutive Fiscal Quarters divided by Fixed Charges for such period.
"GAAP": subject to Section 1.2, generally accepted accounting principles
in the United States of America (as such principles may change from time to
time) applied on a consistent basis (except for changes in application in which
the Loan Parties' independent certified public accountants concur), applied both
to classification of items and amounts.
"GECC Fee Letter": as defined in Section 2.15(b).
"General Intangibles": as defined in Section 3.1(d).
"Governmental Authority": the federal government, any state or political
subdivision thereof, any city or municipal entity, and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Grantor": each Loan Party.
"Guarantor": Holdings, each Subsidiary of the Borrower listed on the
signature pages hereof as a "Guarantor" and any future Subsidiary of the
Borrower which executes an Additional Guarantor Assumption.
"Guarantor Payment": as defined in Section 11.7(a).
"Hazardous Material": any substance, material or waste which is regulated
by, or forms the basis of liability under, any Environmental Laws, including any
material or substance which is (a) defined as a "solid waste," "hazardous
waste," "hazardous material," "hazardous substance," "extremely hazardous
waste," "restricted hazardous waste," "pollutant," "contaminant," "hazardous
constituent," "special waste," "toxic substance" or other similar term or phrase
under any Environmental Laws or (b) petroleum or any fraction or by-product
thereof, asbestos, polychlorinated biphenyls ("PCBs") or any radioactive
substance which is not naturally occurring radioactive material.
"Imperial Bridge Loan": the outstanding balance under the term loan
agreement dated April 12, 1999 with Imperial Bank, which provides for $1,500,000
to be used for working capital purposes, and is secured by a guaranty from one
of Holdings' shareholders.
"Imperial Working Capital Loan": the outstanding balance under the Loan
Agreement, dated June 16, 1998 and as amended on September 16, 1998 and April
12, 1999, among certain of the Loan Parties and Imperial Bank, which provides a
revolving credit facility of $6,000,000, secured by all of the assets of the
Loan Parties and a guaranty by Holdings, to finance working capital needs of the
Loan Parties.
"Indebtedness": as to any Person, at a particular time, without
duplication, (a) indebtedness of such Person for borrowed money, (b)
indebtedness of such Person for the deferred purchase price of property or
services, which purchase price is (i) due more than six (6) months from the date
of incurrence of the obligation in respect thereof or (ii) evidenced by a note
or similar written instrument, (c) obligations under leases which shall have
been or should be, in accordance with GAAP, recorded as
8
Capital Leases, (d) obligations of such Person to purchase or repurchase
accounts receivable, chattel paper or other payment rights sold or assigned by
such Person, (e) indebtedness or obligations of such Person evidenced by or
under or with respect to letters of credit, notes, bonds or other debt
instruments (other than letters of credit that are cash collateralized), and (f)
all Indebtedness referred to in clause (a), (b), (c), (d) or (e) above secured
by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien upon or in property
(including Accounts and General Intangibles) owned by such Person, even though
such Person has not assumed or become liable for the payment of such
Indebtedness.
"Indemnified Liabilities": as defined in Section 7.8(a).
"Indemnified Person": as defined in Section 7.8(a).
"Indemnified Proceeding": as defined in Section 7.8(a).
"Interest Expense": for any period, the aggregate amount of interest,
hedging costs and fees (excluding closing fees and reimbursements for expenses)
paid or payable during such period by the Loan Parties in respect of Total Debt.
"Interest Payment Date": (a) as to any Base Rate Loan, the last Business
Day of each Fiscal Quarter and (b) as to any LIBOR Loan, the last day of the
applicable LIBOR Period; provided, however, that in the case of any LIBOR Period
of two (2) months or greater in duration, interest shall be payable at
three-month intervals and on the last day of such LIBOR Period; provided,
further, that, in addition to the foregoing, each of (x) the Termination Date
and (y) the Maturity Date shall be deemed to be an "Interest Payment Date" with
respect to any interest which is then accrued on the Loan.
"Inventory": as defined in Section 3.1(e).
"Investment Property": as defined in Section 3.1(f).
"Landlord Consent": a consent substantially in the form of Exhibit F or in
other form acceptable to the Administrative Agent executed by the
owner/landlord, sublessor and/or licensor (including carriers) of any switch
site, co-location site, operations center, point of presence site or other
location where any Equipment other than Commerce Collateral with a cost of more
than $300,000 is or is to be located.
"Law": any law (including common law), constitution, statute, regulation,
rule, ordinance, order, injunction, writ, decree or award of any Governmental
Authority of competent jurisdiction or of any arbitrator (including ERISA, the
Code, the UCC, any applicable tax law, product safety law, occupational safety
or health law, Communications Law, Environmental Law and/or securities laws).
"Lender": as defined in the first paragraph of this Agreement.
"Lenders' Expenses": as defined in Section 7.10.
"LIBOR Loan": any portion of the Loan bearing interest by reference to the
LIBOR Rate.
"LIBOR Period": with respect to any LIBOR Loan, each period commencing on
a Business Day selected by the Borrower pursuant to this Agreement and ending
one, three or six months thereafter, as selected by the Borrower's irrevocable
notice to the Administrative Agent as set forth in Section 2.8(e) provided,
however, that the foregoing provision relating to LIBOR Periods is subject to
the following:
9
(a) if any LIBOR Period would otherwise end on a day that is not a
Business Day, such LIBOR Period shall be extended to the next succeeding LIBOR
Business Day unless the result of such extension would be to carry such LIBOR
Period into another calendar month in which event such LIBOR Period shall end on
the immediately preceding Business Day;
(b) any LIBOR Period pertaining to a LIBOR Loan that begins on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such LIBOR Period) shall
end on the last Business Day of a calendar month;
(c) the Borrower shall select LIBOR Periods so as not to require a
scheduled payment of any LIBOR Loan during a LIBOR Period for such Loan; and
(d) the Borrower shall select LIBOR Periods so that there shall be no more
than six (6) separate LIBOR Loans in existence at any one time.
"LIBOR Rate": for each LIBOR Period, a rate of interest determined by the
Administrative Agent equal to:
(a) the offered rate for deposits in United States Dollars for the
applicable LIBOR Period which appears on Telerate Page 3750 as of 11:00 a.m.,
London time, on the second full Business Day next preceding the first day of
each LIBOR Period (unless such date is not a Business Day, in which event the
next succeeding Business Day will be used); divided by
(b) a number equal to 1.0 minus the aggregate (but without duplication) of
the rates (expressed as a decimal fraction) of reserve requirements in effect on
the day which is two (2) Business Days prior to the beginning of such LIBOR
Period (including basic, supplemental, marginal and emergency reserves under any
regulations of the Board of Governors of the Federal Reserve System or other
governmental authority having jurisdiction with respect thereto, as now and from
time to time in effect) for Eurocurrency funding (currently referred to as
"Eurocurrency liabilities" in Regulation D of such Board) which are required to
be maintained by a member bank of the Federal Reserve System.
If such interest rates shall cease to be available from Telerate News
Service, the LIBOR Rate shall be determined from such financial reporting
service or other information as shall be mutually acceptable to the
Administrative Agent and the Borrower.
"Lien": any mortgage, pledge, hypothecation, lien (statutory or other),
judgment lien, security interest, security agreement, charge or other
encumbrance, or other security arrangement of any nature whatsoever, including
any installment contract, conditional sale or other title retention arrangement,
any sale of accounts receivable or chattel paper, any assignment, deposit
arrangement or lease intended as, or having the effect of, security and the
filing of any financing statement under the UCC or comparable law of any
jurisdiction (other than UCC financing statements filed for informational
purposes only).
"Loan": at any time, the aggregate amount of Advances outstanding to the
Borrower.
"Loan Account": as defined in Section 2.11.
"Loan Documents": this Agreement, the Notes, the Stockholder Pledge
Agreement, the other Security Documents, any guaranty by a Guarantor not a party
hereto, the GECC Fee Letter and all filings and other agreements, instruments,
documents and certificates identified on the Closing Checklist.
"Loan Parties": the Borrower, Holdings and each other Guarantor.
10
"Markets": as defined in Schedule 1.
"Material Adverse Change": a material adverse change in (a) the business,
assets. financial or other condition or prospects of the Loan Parties taken as a
whole (b) the ability of the Loan Parties to perform their obligations under
this Agreement, the Notes or the other Loan Documents or (c) the Administrative
Agent's or the Lenders' ability to enforce the rights and remedies granted under
this Agreement or the other Loan Documents, in all cases whether attributable to
a single circumstance or event or an aggregation of circumstances or events.
"Material Adverse Effect": an effect that has, results in or causes or has
a reasonable likelihood of resulting in or causing a Material Adverse Change.
"Maturity Date": the earlier of (a) seventh anniversary of the Closing
Date and (b) the date, if any, on which the Loan matures by notice of
prepayment, acceleration or otherwise.
"Maximum Lawful Rate": as defined in Section 2.8(f).
"Network": a telecommunications system operated by a Loan Party, including
all Equipment related thereto.
"Non-Continuing Indebtedness": the Imperial Bridge Loan, the Imperial
Working Capital Loan, the Nortel Bridge Loan and the Artesian Note.
"Non-Funding Lender": as defined in Section l0.9(a)(ii).
"Note": as defined in Section 2.2.
"Note Purchase Agreements": (a) the Note Purchase Agreement dated as of
February 7, 1997, amended as of August 15, 1997, by and among Holdings and each
person listed thereto as an Investor, for up to $6,000,000 of Series A 8%
Convertible Subordinated Promissory Notes due June 30, 2001 and (b) the Note
Purchase Agreement dated as of December 18, 1997, by and among Holdings,
Xxxxxxxx Partners, L.P., Xxxxxxxx, Xxxxxx & Xxxxx II, L.P. and each person
listed thereto as an Investor, for up to $6,000,000 of Series B Convertible
Subordinated Promissory Notes due June 30, 2001.
"Nortel": Nortel Networks, Inc., a Delaware corporation.
"Nortel Bridge Loan": the outstanding balance under the loan agreement,
dated May 15, 1999, which Holdings entered into with Nortel for a loan of up to
$2,000,000 to finance working capital needs on an unsecured basis.
"Nortel Volume Purchase Agreement": The Master Purchase and Services
Agreement, dated as of June 1, 1999, between Holdings and Nortel.
"Notice of Conversion/Continuation": as defined in Section 2.8(e).
"Obligations": all loans, advances, debts, liabilities and obligations for
the performance of covenants or duties or for payment of monetary amounts
(whether or not such performance is then required or contingent, provided that
such performance is provided for in the Loan Documents, or such amounts are
liquidated or determinable) owing by any Loan Party to the Administrative Agent
or any Lender, and all covenants and duties regarding such amounts, of any kind
or nature, present or future, whether or not evidenced by any note, agreement or
other instrument, in each case arising under this
11
Agreement or any of the other Loan Documents. This term includes all principal,
interest (including all interest which accrues after the commencement of any
case or proceeding in bankruptcy after the insolvency of, or for the
reorganization of, any Loan Party, whether or not allowed in such proceeding),
Fees, expenses, attorneys' fees and any other sum chargeable to any Loan Party
under this Agreement or any of the other Loan Documents.
"Organizational Documents": with respect to a corporation, the certificate
or articles of incorporation and by-laws of such corporation; with respect to a
partnership, the certificate of partnership (or limited partnership, as
applicable) and partnership agreement, together with the analogous documents for
any corporate or partnership general partner; with respect to a limited
liability company, the certificate of formation or articles of organization and
operating agreement; and in any case, any other document governing the formation
and conduct of business by such entity.
"Other Lender": as defined in Section 10.9(d).
"PBGC": the Pension Benefit Guaranty Corporation established under Title
IV of ERISA or any other governmental agency, department or instrumentality
succeeding to its functions.
"Permits": all consents, licenses, notices, approvals, authorizations,
filings, orders, registrations, and permits required by any Governmental
Authority for the construction and operation of a Network (excluding Regulatory
Authorizations), issued or obtained as and when required in accordance with all
Requirements of Law.
"Permitted Encumbrances": the Liens permitted under Section 8.2.
"Permitted Indebtedness": (a) the Obligations, (b) purchase money
Indebtedness and Capital Lease Obligations in an amount not greater than
$1,000,000 in the aggregate outstanding at any one time, (c) unsecured
Indebtedness incurred for purposes of the Telecommunications Business in an
amount outstanding at any time not greater in the aggregate than $1,000,000, (d)
Permitted Intercompany Indebtedness, (e) Indebtedness outstanding under the Note
Purchase Agreements and the Commerce Equipment Loan, (f) interest rate
protection agreements in connection with Indebtedness of the Loan Parties
permitted hereunder and (g) Permitted Subordinated Indebtedness.
"Permitted Intercompany Indebtedness": Indebtedness of the Borrower to any
of its Subsidiaries and Indebtedness of Holdings or of any Subsidiary of the
Borrower to the Borrower or any Subsidiary of the Borrower; provided, however,
that such Indebtedness is subordinated to the Obligations on terms satisfactory
to the Administrative Agent and, if any such Indebtedness is evidenced by an
instrument, such instrument is pledged to the Administrative Agent to secure the
Obligations pursuant to Section 3.5.
"Permitted Subordinated Indebtedness": unsecured Indebtedness of Holdings
the payment of which is structurally or contractually subordinated to the
payment of the Obligations on terms satisfactory to the Administrative Agent and
the Requisite Lenders and as to which the payment of principal of (and premium,
if any) and interest and other payment obligations in respect of such
Indebtedness shall be subordinate to the prior payment in full of the
Obligations to at least the following extent: (a) no payments of principal of
(or premium, if any) or interest on or otherwise due in respect of such
Indebtedness may be permitted for so long as any Default or Event of Default
exists; (b) such Indebtedness may not (i) provide for payments of principal
thereof at the stated maturity thereof by way of a sinking fund applicable
thereto or by way of any mandatory redemption, defeasance, retirement or
repurchase thereof by Holdings (including any redemption, retirement or
repurchase which is contingent upon events or circumstances but excluding any
retirement required by virtue of acceleration of such indebtedness upon any
event of default thereunder), in each case prior to 6 months after the Maturity
Date
12
or (ii) permit redemption or other retirement (including pursuant to an offer to
purchase made by Holdings or any of its Subsidiaries) of such other Indebtedness
at the option of the holder thereof prior to 6 months after the Maturity Date at
the option of the holder of such Indebtedness (including pursuant to an offer to
purchase made by Holdings or any of its Subsidiaries) other than a redemption or
retirement which is conditioned upon a change of control of Holdings pursuant to
provisions set forth in the instruments evidencing such Indebtedness and which
constitutes a "Change of Control" or requires payment in full of the
Obligations; and (c) immediately prior to the issuance of such Indebtedness, no
Default or Event of Default exists and, after giving pro forma effect to the
issuance of such Indebtedness as if such issuance occurred on the first day of
each of the most recently completed computation periods referred to in Section
7.17 and Schedule 7.17, no Default or Event of Default would exist.
"Permitted Third Party Expenses": expenses related to the purchase of
goods and services from any Person other than Nortel which are directly related
to the installation and operation of Equipment purchased from Nortel.
"Person": any individual, sole proprietorship, partnership, joint venture,
trust, unincorporated organization, association, corporation, limited liability
company, institution, public benefit corporation, other entity or government
(whether federal, state, county, city, municipal, local, foreign, or otherwise,
including any instrumentality, division, agency, body or department thereof).
"Plan": any employee pension benefit plan to which Section 4021 of ERISA
applies and which any Loan Party or ERISA Affiliate maintains, contributes to or
has an obligation to contribute to or maintain for employees of any Loan Party
or to which any Loan Party or ERISA Affiliate maintained, made or was required
to make, contributions at any time within the preceding five (5) years.
"Proceeds": as defined in Section 3.1(g).
"Projections": the Loan Parties' forecasted consolidated and consolidating
(a) balance sheets; (b) profit and loss statements; and (c) cash flow
statements, all prepared on a Subsidiary by Subsidiary basis, together with
appropriate supporting details and a statement of underlying assumptions.
"Pro Rata Share": (a) with respect to all matters relating to any Lender
other than as provided in clause (b) below, the percentage obtained by dividing
(i) the Commitment of such Lender by (ii) the aggregate Commitments of all
Lenders and (b) with respect to the Loan on and after the Commitment Termination
Date, the percentage obtained by dividing (i) the aggregate outstanding
principal balance of the Loan held by that Lender by (ii) the outstanding
principal balance of the Loan held by all Lenders.
"PUC": the public utilities commission for the state or any other
jurisdiction in which all or any portion of a Network is located, or any
successor agency, and any successor, in whole or in part, to its functions or
jurisdictions, and any other Persons specified on Schedule 1.
"Quarterly Revenues": for any period, revenues of the Borrower and its
Subsidiaries for the previous Fiscal Quarter that are (a) received from any
third party entity which is not an Affiliate of Holdings or any of its principal
equity owners and (b) not in dispute.
"Regulatory Authorizations": all approvals, authorizations, licenses,
filings, notices, registrations, consents, permits, exemptions, registrations,
qualifications, designations, declarations, or other actions or undertakings now
or hereafter made by, to or in respect of any telecommunications Governmental
Authority, including any certificates of public convenience and all grants,
approvals, licenses, filings and registrations from or to the FCC or any PUC or
under any Communications Law
13
necessary in order to enable any Loan Party to provide telecommunications
service of the type provided or proposed to be provided by such Loan Party.
"Regulatory Event": any of the following events: (a) any Lender becomes
subject to regulation as a "carrier," a "telephone company," a "common carrier,"
a "public utility" or otherwise under any applicable law or governmental
regulation, federal, state or local, solely as a result of the transactions
contemplated by this Agreement and the other Loan Documents or (b) any Loan
Party becomes subject to regulation by any Governmental Authority in any way
that is materially different from the regulation existing at the date hereof and
that has a Material Adverse Effect or (c) the FCC or any PUC issues an order
revoking, denying or refusing to renew, or recommending the revocation, denial
or non-renewal of, any Regulatory Authorization that has a Material Adverse
Effect.
"Release": any spill, emission, leaking, pumping, pouring, emptying,
escape, injection, deposit, disposal, discharge, dumping or leaching of
Hazardous Material in the environment.
"Replacement Lender": as defined in Section 2.13(d).
"Reportable Event": (a) a reportable event described in Section 4043 of
ERISA and regulations thereunder, (b) a withdrawal by a substantial employer
from a Plan to which more than one employer contributes, as referred to in
Section 4063(b) of ERISA, or (c) a cessation of operations at a facility causing
more than twenty percent (20%) of Plan participants to be separated from
employment, as referred to in Section 4062(f) of ERISA.
"Required Consents": as defined in Section 4.4.
"Requirement of Law": as to any Person, the Organizational Documents of
such Person, all Laws applicable to or binding upon such Person or any of its
properties or transactions or to which such Person or any of its property or
transactions is subject and all Permits or Regulatory Authorizations issued to
such Person.
"Requirements": as defined in Section 7.11.
"Requisite Lenders": Lenders having more than sixty-six and two-thirds
percent (66-2/3%) of (a) the Commitments of all Lenders or (b) after the
Commitment Termination Date, the outstanding principal amount of the Loan.
"Reserve": Forty Five Million Dollars ($45,000,000) less the product of
$45,000,000 and the percentage of $30,000,000 that the Additional Contributed
Capital then and theretofore received represents.
"Responsible Officer": of a Person, the chief executive officer, the
president, the general counsel, the chief financial officer or the director of
treasury operations of such Person.
"Right-of-Way": any Loan Party's right, title and interest in, to, over or
under property located in any state or territory, acquired or to be acquired by
such Loan Party at any time for Network purposes, and all such real and personal
property interests as shall be necessary to construct, install, operate and
maintain such Loan Party's Network, including satellite rights, underground
rights, access to and from all such property and any such property or property
rights now or hereafter necessary to connect customers and service providers to
the Network.
14
"Right-of-Way Agreements": all easements, use agreements, contracts,
deeds, co-location agreements, licenses, leases, agreements, documents or means
pursuant to which any Loan Party acquires any Right-of-Way, regardless of
whether such Right-of-Way consists of real property, real property interests or
personal property.
"Roll Out": the transition of Holdings' and its Subsidiaries'
telecommunications operations from a resale to a facilities-based operation, as
described in the Business Plan.
"Secured Parties": the Administrative Agent and the Lenders.
"Security Documents": this Agreement, the Stockholder Pledge Agreement,
the Landlord Consents, all financing statements, and any other agreement or
document required by the terms of this Agreement to be entered into by a
Guarantor not party to this Agreement granting a security interest or other Lien
to secure payment of the Obligations.
"Senior Debt": all Indebtedness of the Borrower and its Subsidiaries other
than Indebtedness which is subordinated, to the reasonable satisfaction of the
Requisite Lenders, to the Obligations.
"Senior Debt to Total Capitalization": at any date, Senior Debt at such
date, divided by Total Capitalization at the same date.
"Senior Leverage Ratio": for any period, Senior Debt as of any date
divided by the product of (i) EBITDA for the two (2) most recent Fiscal Quarters
ending on or prior to such date multiplied by (ii) two (2).
"Site": any site where Equipment with a cost of more than $100,000 is
located.
"Site Leases": collectively, all leases, subleases, tower leases,
co-location agreements, license agreements, easements, use agreements,
privileges, access agreements, Right-of-Way Agreements and all other agreements
relating to the use by any Loan Party of any Site.
"Software" and "Software Licenses": any software now or hereafter owned
by, or licensed to, any Loan Party or with respect to which such Loan Party has
or may have license or use rights.
"Solvent": with respect to any Person on a particular date, that on such
date (a) the fair value of the property of such Person is greater than the total
amount of liabilities, including contingent liabilities, of such Person; (b) the
present fair salable value of the assets of such Person is not less than the
amount that will be required to pay the probable liability of such Person on its
debts as they become absolute and matured; (c) such Person does not intend to,
and does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature; and (d) such
Person is not engaged in a business or transaction, and is not about to engage
in a business or transaction, for which such Person's property would constitute
an unreasonably small capital. The amount of contingent liabilities (such as
litigation, guarantees and pension plan liabilities) at any time shall be
computed as the amount which, in light of all the facts and circumstances
existing at the time, represents the amount which can reasonably be expected to
become an actual or matured liability.
"Stage 1": the period of time from the Closing Date until a date when the
Borrower submits Financial Statements and compliance certificates demonstrating
(i) positive EBITDA for each of the previous two (2) consecutive Fiscal Quarters
taken as a single accounting period and (ii) Total Debt to annualized EBITDA not
greater than l0.0x.
15
"Stage 2": the period immediately following the end of Stage 1.
"Stock": all shares, options, warrants, general or limited partnership or
membership interests or other equivalents (regardless of how designated) of or
in a corporation, partnership, limited liability company or equivalent entity,
whether voting or nonvoting, including common stock, preferred stock or any
other "equity security" (as such term is defined in Rule 3a11-1 of the General
Rules and Regulations promulgated by the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as amended).
"Subsidiary": with respect to any Person, (a) any corporation (i) of which
an aggregate of more than fifty percent (50%) of the outstanding Stock having
ordinary voting power to elect a majority of the Board of Directors of such
corporation (irrespective of whether, at the time, Stock of any other class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time, directly or indirectly, owned
legally or beneficially by such Person and/or one or more Subsidiaries of such
Person or (ii) with respect to which any such Person has the right to vote or
designate the vote of fifty percent (50%) or more of such Stock, whether by
proxy, agreement, operation of law or otherwise and (b) any partnership or
limited liability company (i) in which such Person and/or one or more
Subsidiaries of such Person shall have an interest (whether in the form of
voting or participation in profits or capital contribution) of more than fifty
percent (50%) or (ii) of which any such Person is a general partner or manager
or may exercise the powers of a general partner or manager.
"System Agreements": any and all agreements and documents executed by or
delivered by or to any Loan Party at any time in connection with a Network or
its acquisition, construction or operation, including all management and
maintenance agreements, agreements for storage or warehousing of any Equipment,
Site leases, interconnection agreements, Right-of-Way Agreements, capacity and
usage agreements and agreements with carriers, customers or subscribers.
"Taxes": taxes, levies, imposts, deductions, Charges or withholdings, and
all liabilities with respect thereto (including interest, penalties or additions
thereto), excluding taxes imposed on or measured by the net income of the
Administrative Agent or any Lender by or within the United States of America or
any other jurisdiction from or to which a payment is made by or on behalf of the
Borrower or under which the Administrative Agent or any Lender is organized or
from which it makes the Advances or any political subdivision of any thereof.
"Telecommunications Business": the business of (i) transmitting, or
providing services relating to the transmission of, voice fax, video or data
through owned or leased transmission facilities or the provision of Internet
related services, (ii) creating, developing or marketing communications related
network equipment, software and other devices for use in a telecommunications
business or (iii) evaluating, participating or pursuing any other activity or
opportunity that is primarily related to those identified in clause (i) or (ii)
above.
"Telecommunications Costs": shall mean the costs and expenses related to
purchasing Equipment and services from Nortel and, in an amount not to exceed
50% of the amount paid to Nortel for Equipment and services, Permitted Third
Party Expenses and other expenses acceptable to the Requisite Lenders.
"Termination Date": the date on which the Loan has been repaid in full,
all other Obligations then due have been paid in full, and the Borrower shall
not have any further right to borrow any monies under this Agreement.
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"Total Capitalization": at any date, Total Debt at such date plus
paid-in-capital (including preferred stock but excluding additional equity
issued as pay-in-kind dividends on issued and outstanding equity securities) at
such date for the Loan Parties on a consolidated basis, excluding any
accumulated deficits resulting from operations.
"Total Debt": the aggregate Indebtedness of the Loan Parties.
"Total Debt Service": for any period, the sum of (a) scheduled mandatory
principal payments during such period of Total Debt and (b) Cash Interest
Expense.
"Total Debt to Total Capitalization": at any date, Total Debt at such date
divided by Total Capitalization as of the same date.
"Total Leverage Ratio": for any period, Total Debt as of any date divided
by the product of (i) EBITDA for the two (2) most recent Fiscal Quarters ending
on or prior to such date multiplied by (ii) two (2).
"UCC": the Uniform Commercial Code as the same may from time to time be in
effect in the State of New York or, to the extent it may be required to apply to
any item or items of Collateral, the Uniform Commercial Code as in effect in any
other applicable jurisdiction.
1.2 Accounting Principles: Subsidiaries. Except as otherwise provided in
this Agreement, all computations and determinations as to accounting or
financial matters and all financial statements to be delivered pursuant to this
Agreement shall be made and prepared in accordance with GAAP (including
principles of consolidation where appropriate), consistently applied, and all
accounting or financial terms shall have the meanings ascribed to such terms by
GAAP. If at any time a Loan Party has any Subsidiaries, all accounting and
financial terms herein shall be deemed to include references to consolidation
and consolidating principles, and covenants, representations and agreements with
respect to a Loan Party and its properties and activities shall be deemed to
refer to such Loan Party and its consolidated Subsidiaries collectively. For
purposes of Section 7.17 and Schedule 7.17, GAAP shall be determined on the
basis of such principles in effect on the date of the most recent annual audited
Financial Statements provided hereunder (or if prior to delivery of the first
such annual audited Financial Statements hereunder, then on a basis consistent
with the annual audited Financial Statements referenced in Section 4.10);
provided, however, that if due to a change in application of GAAP or the rules
promulgated with respect thereto, (a) the Borrower shall object to determination
of compliance with the financial covenants in Section 7.17 on such basis or (b)
the Administrative Agent or the Requisite Lenders shall object to determination
of compliance therewith on such basis within thirty (30) days after delivery of
such Financial Statements, then such calculations shall be made on a basis
consistent with the most recent Financial Statements delivered as to which no
such objection shall have been made.
1.3 Computation of Time Periods. In this Agreement, in the computation of
periods of time from a specified date to a later specified date, the word "from"
means "from and including" and the words "to" and "until" each mean "to but
excluding" and the word "through" means "to and including".
1.4 UCC Terms. Except as otherwise provided or amplified (but not limited)
herein, terms used in this Agreement that are defined in the UCC shall have the
same meanings herein.
1.5 General Construction: Captions. All definitions and other terms used
in this Agreement shall be equally applicable to the singular and plural forms
thereof, and all references to any gender shall include all other genders. The
words "hereof," "hereto," "herein" and "hereunder" and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular
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Article, Section or clause in this Agreement. References herein to an Exhibit,
Schedule, Article, Section or clause refer to the appropriate Exhibit, Schedule,
Article, Section or clause in this Agreement unless otherwise specified. The
word "including" shall have the meaning represented by the phrase "including,
without limitation." The captions and table of contents in this Agreement and
the other Loan Documents are for convenience only, and in no way limit or
amplify the provisions hereof.
1.6 References to Documents and Laws. All defined terms and references in
this Agreement or any of the other Loan Documents to any agreement, note,
instrument, certificate or other document shall be deemed to refer to all
amendments, modifications, renewals, extensions, replacements, restatements,
substitutions and supplements thereof and to all appendices, exhibits or
schedules thereto, in each case as the same may be in effect at any and all
times such reference becomes operative. All references herein and in any of the
other Loan Documents to any Law shall include all amendments thereof and any
successor statute and regulations under any of the foregoing.
ARTICLE 2: LOANS
2.1 Term Loan Commitments. On the terms and subject to conditions hereof,
each Lender agrees to make available to the Borrower from time to time during
the period from the Closing Date to the Commitment Termination Date its Pro Rata
Share of each Advance requested by the Borrower in accordance with Section 2.4.
The Pro Rata Share of any Lender of the Loan shall not at any time exceed such
Lender's Pro Rata Share of the Available Credit. The obligation of each Lender
hereunder shall be several and not joint. Amounts repaid or prepaid may not be
reborrowed under this Agreement.
2.2 Notes. The Borrower shall execute and deliver to each Lender a note to
evidence the obligation of the Borrower to repay the amount of such Lender's
Advances together with interest thereon as prescribed in Section 2.8. Each note
shall be in the principal amount of the Commitment of the applicable Lender,
dated the First Borrowing Date, and substantially in the form of Exhibit A (each
a "Note" and, collectively, the "Notes").
2.3 Reliance on Notices. The Administrative Agent and each Lender shall be
entitled to rely upon, and shall be fully protected in relying upon, any
Borrowing Certificate, Notice of Conversion/Continuation or similar notice
believed by the Administrative Agent or such Lender to be genuine. The
Administrative Agent and each Lender may assume that each Person executing and
delivering such a notice was duly authorized, unless the responsible individual
acting thereon for the Administrative Agent or such Lender has actual knowledge
to the contrary.
2.4 Procedures for Borrowing.
(a) Borrowing Certificates. To request an Advance, the Borrower
shall send to the Administrative Agent a completed Borrowing Certificate at
least three (3) Business Days prior to the requested Borrowing Date for LIBOR
Loans and one (1) Business Day prior to the requested Borrowing Date for Base
Rate Loans (or such shorter period for the First Borrowing Date as agreed to by
the Lenders). Each Borrowing Certificate shall specify therein (i) the requested
Borrowing Date, (ii) the aggregate amount of such Advance and the purpose
thereof, (iii) the amount thereof, if any, requested to be LIBOR Loans and (iv)
the initial LIBOR Period or Periods for any such LIBOR Loans. The Loan shall be
made as Base Rate Loans unless (subject to Section 2.13) the Borrowing
Certificate specifies that all or a portion thereof shall be LIBOR Loans. All
LIBOR Loans shall comply with Section 2.8(e).
Each Borrowing Certificate shall be irrevocable and binding on the
Borrower. In the case of any requested Advance which the related Borrowing
Certificate specifies is to be comprised of LIBOR
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Loans, the Borrower shall indemnify each Lender against any loss, cost or
expense incurred by such Lender as a result of any failure to fulfill on the
date specified for such requested Advance in such Borrowing Certificate the
applicable conditions set forth in Article 6, including any loss (excluding loss
of margin), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund any
LIBOR Loan to be made by such Lender as part of such requested Advance when such
LIBOR Loan, as a result of such failure, is not made on such date.
(b) Each Lender's Obligation Several. The failure of any Lender to
make the Advance to be made by it as part of the Loan shall not relieve any
other Lender of its obligation, if any, hereunder to make its Advance on such
Borrowing Date, but no Lender shall be responsible for the failure of any other
Lender to make the Advance to be made by such other Lender on the Borrowing
Date.
(c) Advances. Each Advance (other than the last Advance) shall be in
an aggregate principal amount of not less than $500,000 and no more than two
Advances may be required to be made in any calendar month without the
Administrative Agent's consent. No amount may be borrowed hereunder on or after
the Commitment Termination Date.
2.5 Loan Amortization. The Borrower shall repay the Loan in installments
as set forth on Schedule 2.5.
2.6 Maturity. The entire unpaid balance of the Loan and all other
non-contingent Obligations shall be immediately due and payable in full in
immediately available funds on the Maturity Date, if not sooner paid in full
pursuant to Section 2.7.
2.7 Prepayments: Commitment Reductions.
(a) Voluntary Prepayment. The Borrower may, at its option, at any
time and from time to time upon three (3) Business Days' prior notice to the
Administrative Agent, specifying the date and amount of prepayment, in a minimum
amount of $1,000,000, voluntarily prepay part of the Loan or, at any time, upon
three (3) Business Days' prior written notice to the Administrative Agent,
voluntarily prepay all of the Loan plus in, all cases, all accrued but unpaid
interest thereon and any LIBOR funding breakage costs in accordance with Section
7.8(b). Such notice shall be irrevocable, and the principal amount specified in
such notice shall be due and payable on the date specified together with accrued
interest on the amount prepaid. Any such prepayment shall be subject to a
prepayment premium equal to a percentage of the amount prepaid as follows: two
percent (2%) if the prepayment is made prior to the first anniversary of the
Closing Date; one percent (1%) if the prepayment is made on or after the first
anniversary of the Closing Date but prior to the second anniversary of the
Closing Date; and zero percent (0%) if the prepayment is made on or after the
second anniversary of the Closing Date.
(b) Mandatory Prepayment.
(i) Asset Dispositions. In the event of receipt by any Loan Party of
Asset Disposition Net Proceeds that are not used within 180 days of receipt for
the purchase of Equipment from Nortel or, to the extent permitted herein, any
other Person, in which Equipment the Administrative Agent for the benefit of the
Secured Parties has a first priority perfected security interest, the Borrower
shall prepay the Loan on the next Business Day following the end of such 180 day
period in an amount equal to all such proceeds not so used.
(ii) Excess Cash Flow. The Borrower shall prepay the Loan, in an
amount equal to fifty percent (50%) of Excess Cash Flow for each Fiscal Year
commencing with the first Fiscal Year ending after the Commitment Termination
Date, which payment shall be made on the earlier of the date
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which is ten (10) days after (A) the date on which Holdings' annual audited
Financial Statements for the immediately preceding Fiscal Year are delivered
pursuant to Section 7.1 or (B) the date on which such annual audited Financial
Statements were required to be delivered pursuant to Section 7.1.
(c) Nortel Volume Purchase Agreement. In the event of the
termination of or any material breach by Holdings under the Nortel Volume
Purchase Agreement prior to the Commitment Termination Date, the Borrower shall,
upon receipt of a written notice from the Requisite Lenders, forthwith prepay
the amount of the Obligations in full.
(d) Commitment Reductions. Any prepayment made prior to the
Commitment Termination Date shall reduce the Commitment of the Lenders dollar
for dollar, and the Commitment of each Lender shall be reduced by its Pro Rata
Share of such reduction.
2.8 Interest and Applicable Margin.
(a) The Borrower shall pay interest on the Loan to the
Administrative Agent, for the ratable benefit of the Lenders in accordance with
the Advances made by each Lender, in arrears on each applicable Interest Payment
Date, at the following rates: (i) for Base Rate Loans, the Base Rate plus the
Applicable Base Margin per annum or (ii) for LIBOR Loans, the applicable LIBOR
Rate plus the Applicable LIBOR Margin per annum, based on the aggregate amount
outstanding from time to time.
(b) If any payment on the Loan becomes due and payable on a day
other than a Business Day, the maturity thereof will be extended to the next
succeeding Business Day (except as set forth in the definition of LIBOR Period)
and, with respect to payments of principal, interest thereon shall be payable at
the then applicable rate during such extension.
(c) All computations of Fees calculated on a per annum basis and of
interest on LIBOR Rate Loans shall be made by the Administrative Agent on the
basis of a 360 day year and of interest on Base Rate Loans on the basis of a
365/366 day year, in any case, for the actual number of days occurring in the
period for which such Fees and interest are payable. The Base Rate shall be
determined each day based upon the Base Rate as in effect each day. Each
determination by the Administrative Agent of an interest rate and Fees hereunder
shall be conclusive, absent manifest error.
(d) As long as an Event of Default shall have occurred and be
continuing under Section 9.1 (a) or as long as any other Event of Default shall
have occurred and be continuing at the election of the Requisite Lenders
confirmed by written notice to the Borrower, the interest rates applicable to
the Loan shall be increased by three percent (3%) per annum above the rates of
interest otherwise applicable hereunder ("Default Rate"), and all other
outstanding Obligations shall bear interest at the Default Rate applicable to
such Obligations. Interest at the Default Rate shall accrue from the initial
date of such Event of Default until that Event of Default is cured or waived and
shall be payable upon demand.
(e) As long as no Default or Event of Default shall have occurred
and be continuing, the Borrower shall have the option to (i) request that any
Advances be made as a LIBOR Loan, (ii) convert at any time all or any part of
the outstanding Loan from a Base Rate Loan to one or more LIBOR Loans, (iii)
convert any LIBOR Loan to a Base Rate Loan, subject to payment of LIBOR funding
breakage costs in accordance with Section 7.8(b) if such conversion is made
prior to the expiration of the LIBOR Period applicable thereto, or (iv) continue
all or any portion of any LIBOR Loan upon the expiration of the applicable LIBOR
Period with the succeeding LIBOR Period of that continued LIBOR Loan commencing
on the last day of the LIBOR Period of the LIBOR Loan to be continued. Any
portion of the Loan to be made or continued as, or converted into, a LIBOR Loan
must be in a minimum amount
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of $500,000 and integral multiples of $100,000 in excess of such amount. Any
such election must be made by 11:00 a.m. (New York time) on the third (3rd)
Business Day prior to (1) the date of any proposed Advance which is to bear
interest at the LIBOR Rate, (2) the end of each LIBOR Period with respect to any
LIBOR Loan to be continued as such or (3) the date on which the Borrower wishes
to convert a Base Rate Loan to a LIBOR Loan for a LIBOR Period designated by the
Borrower in such election. If no election is received with respect to a LIBOR
Loan by 11:00 a.m. (New York time) on the third (3rd) Business Day prior to the
end of the LIBOR Period with respect thereto (or if an Event of Default shall
have occurred and be continuing), that LIBOR Loan shall be converted to a Base
Rate Loan at the end of its LIBOR Period. The Borrower must make such election
by notice to the Administrative Agent in writing, by telecopy or overnight
courier. In the case of any conversion or continuation, such election must be
made pursuant to a written notice (a "Notice of Conversion/Continuation") in the
form of Exhibit C.
(f) Notwithstanding anything to the contrary set forth in this
Section 2.8, if a court of competent jurisdiction determines in a final order
that the rate of interest payable hereunder exceeds the highest rate of interest
permissible under law (the "Maximum Lawful Rate"), then so long as the Maximum
Lawful Rate would be so exceeded, the rate of interest payable hereunder shall
be equal to the Maximum Lawful Rate; provided, however, that if at any time
thereafter the rate of interest payable hereunder is less than the Maximum
Lawful Rate, the Borrower shall continue to pay interest hereunder at the
Maximum Lawful Rate until such time as the total interest received by the
Administrative Agent, on behalf of the Lenders, is equal to the total interest
which would have been received had the interest rate payable hereunder been (but
for the operation of this paragraph) the interest rate payable since the date
hereof as otherwise provided in this Agreement. Thereafter, interest hereunder
shall be paid at the rate(s) of interest and in the manner provided in Sections
2.8(a) through (e) above unless and until the rate of interest again exceeds the
Maximum Lawful Rate, and at that time this paragraph shall again apply. In no
event shall the total interest received by any Lender pursuant to the terms
hereof exceed the amount which such Lender could lawfully have received had the
interest due hereunder been calculated for the full term hereof at the Maximum
Lawful Rate. If the Maximum Lawful Rate is calculated pursuant to this
paragraph, such interest shall be calculated at a daily rate equal to the
Maximum Lawful Rate divided by the number of days in the year in which such
calculation is made. If, notwithstanding the provisions of this Section 2.8(f),
a court of competent jurisdiction shall finally determine that the Lender has
received interest hereunder in excess of the Maximum Lawful Rate, the
Administrative Agent shall, to the extent permitted by applicable law, promptly
apply such excess in the order specified in Section 2.10 and thereafter shall
refund any excess to the Borrower or as a court of competent jurisdiction may
otherwise order.
2.9 Payments. All payments and prepayments to be made in respect of
principal, interest or other amounts due from the Borrower hereunder or under
any other Loan Document shall be payable on or before 1:00 p.m., New York time,
on the day when due, without presentment, demand, protest or notice of any kind,
all of which are hereby expressly waived, and an action therefor shall
immediately accrue. Such payments shall be made to the Administrative Agent at
the Administrative Agent's office at 00 Xxxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxxxxx
00000 or such other location specified in writing by the Administrative Agent,
in immediately available funds, without set off, recoupment, counterclaims or
any other deduction of any nature. Payments received after 1:00 p.m., New York
time, on any Business Day shall be deemed to have been received on the following
Business Day.
2.10 Application and Allocation of Payments.
(a) As long as no Default or Event of Default shall have occurred
and be continuing, payments matching specific scheduled payments then due shall
be applied to those scheduled payments. All payments and prepayments applied to
the Loan shall be applied ratably to the portion thereof held by
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each Lender as determined by its Pro Rata Share. As to each other payment, and
as to all payments made when an Event of Default shall have occurred and be
continuing, the Borrower hereby irrevocably waives the right to direct the
application of any and all payments received from or on behalf of the Borrower,
and the Borrower hereby irrevocably agrees that the Administrative Agent shall
have the continuing exclusive right to apply any and all such payments against
the Obligations of the Borrower as the Administrative Agent may deem advisable
notwithstanding any previous entry by the Administrative Agent in the Loan
Account or any other books and records. In the absence of a specific
determination by the Requisite Lenders and the Administrative Agent with respect
thereto, payments shall be applied to amounts then due and payable in the
following order: (1) to the Administrative Agent for Fees, reimbursement of
expenses (including costs of collection and amounts expended in connection with
the sale or administration of the Collateral), protective advances made pursuant
to Section 3.10 and Advances on behalf of a Non-Funding Lender made pursuant to
Section 10.9(a)(ii); (2) to interest on the Loan; (3) to principal payments on
the Loan; and (4) to all other Obligations including all expenses of the Lenders
to the extent reimbursable under Section 7.10.
(b) The Administrative Agent is authorized to, and at its sole
election may, charge to the Loan balance on behalf of the Borrower and cause to
be paid all Fees, expenses, Charges, costs (including insurance premiums in
accordance with Section 7.7(a)) and interest and principal, other than principal
of the Loan, owing by the Borrower under this Agreement or any of the other Loan
Documents if and to the extent the Borrower fails to promptly pay any such
amounts as and when due, even if such charges would cause the balance of the
Loan to exceed the Commitment. At the Administrative Agent's option and to the
extent permitted by law, any charges so made shall constitute part of the Loan
hereunder.
2.11 Loan Account and Accounting. The Administrative Agent shall maintain
a loan account (the "Loan Account") on its books to record: all Advances, all
payments made by the Borrower, and all other debits and credits as provided in
this Agreement with respect to the Loan or any of the other Obligations. All
entries in the Loan Account shall be made in accordance with the Administrative
Agent's customary accounting practices as in effect from time to time. The
balance in the Loan Account, as recorded on the Administrative Agent's most
recent printout or other written statement, shall, absent manifest error, be
presumptive evidence of the amounts due and owing to the Administrative Agent
and the Lenders by the Borrower; provided, however, that any failure to so
record or any error in so recording shall not limit or otherwise affect the
Borrower's duty to pay the Obligations. The Administrative Agent shall render to
the Borrower a monthly accounting of transactions with respect to the Loan
setting forth the balance of the Loan Account. Unless the Borrower notifies the
Administrative Agent in writing of any objection to any such accounting
(specifically describing the basis for such objection), within thirty (30) days
after the date thereof, each and every such accounting shall (absent manifest
error) be deemed final, binding and conclusive upon the Borrower in all respects
as to all matters reflected therein. Only those items expressly objected to in
such notice shall be deemed to be disputed by the Borrower. Notwithstanding any
provision herein contained to the contrary, any Lender may elect (which election
may be revoked) to dispense with the issuance of Notes to that Lender and may
rely on the Loan Account as evidence of the amount of Obligations from time to
time owing to it.
2.12 Taxes.
(a) Any and all payments by the Borrower hereunder (including any
payments made pursuant to Sections 7.8 and 7.10 or under any other Loan
Document) shall be made, in accordance with this Section 2.12, free and clear of
and without deduction for any and all present or future Taxes. If the Borrower
shall be required by law to deduct any Taxes from or in respect of any sum
payable hereunder (including any sum payable pursuant to Sections 7.8 and 7.10
or under any other Loan Document), (i) the sum payable shall be increased as
much as shall be necessary so that after making all required deductions
22
(including deductions applicable to additional sums payable under this Section
2.12) the Administrative Agent or the Lenders, as applicable, receive an amount
equal to the sum they would have received had no such deductions been made, (ii)
the Borrower shall make such deductions, and (iii) the Borrower shall pay on
behalf of the relevant Lender the full amount deducted to the relevant taxing or
other authority in accordance with applicable law. Within thirty (30) days after
the date of any payment of such Taxes, the Borrower shall furnish to the
Administrative Agent the original or a certified copy of a receipt evidencing
payment thereof.
(b) Each Loan Party that is a signatory hereto shall jointly and
severally indemnify and, within ten (10) days of demand therefor, pay the
Administrative Agent and each Lender for the full amount of Taxes (including any
Taxes imposed by any jurisdiction on amounts payable under this Section 2.12)
paid by the Administrative Agent or such Lender, as appropriate, and any
liability (including penalties, interest, additions thereto and expenses)
arising therefrom or with respect thereto.
2.13 Capital Adequacy; Increased Costs; Illegality.
(a) If any Lender shall have determined that any law, treaty,
governmental (or quasi-governmental) rule, regulation, guideline or order
regarding capital adequacy, reserve requirements or similar requirements or
compliance by any Lender with any request or directive regarding capital
adequacy, reserve requirements or similar requirements (whether or not having
the force of law), in each case, adopted after the date hereof, from any central
bank or other Governmental Authority increases or would have the effect of
increasing the amount of capital, reserves or other funds required to be
maintained by such Lender and thereby reducing the rate of return on such
Lender's capital as a consequence of its obligations hereunder, then the
Borrower shall from time to time upon demand by such Lender made within ninety
(90) days of the occurrence thereof (with a copy of such demand to
Administrative Agent) pay to the Administrative Agent, for the account of such
Lender, additional amounts sufficient to compensate such Lender for such
reduction. A certificate as to the amount of that reduction and showing the
basis of the computation thereof submitted by such Lender to the Borrower and to
the Administrative Agent shall, absent manifest error, be final, conclusive and
binding for all purposes. The Borrower shall not be liable for any amounts to
compensate such Lender for such reduction if the Borrower is not so notified
within such ninety (90) day period.
(b) If, due to either (i) the introduction of or any change in any
law or regulation (or any change in the interpretation thereof) or (ii) the
compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), in each case
adopted after the date hereof, there shall be any increase in the cost to any
Lender of agreeing to make or making, funding or maintaining any Loan, then the
Borrower shall from time to time, upon demand by such Lender made within ninety
(90) days of the occurrence thereof (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of such
Lender additional amounts sufficient to compensate such Lender for such
increased cost. A certificate as to the amount of such increased cost, submitted
to the Borrower and to the Administrative Agent by such Lender, shall be
conclusive and binding on the Borrower for all purposes, absent manifest error.
Each Lender agrees that, as promptly as practicable after it becomes aware of
any circumstances referred to above which would result in any such increased
cost, but in any event within ninety (90) days thereof, it shall, to the extent
not inconsistent with such Lender's internal policies of general application,
use reasonable commercial efforts to minimize costs and expenses incurred by it
and payable to it by the Borrower pursuant to this Section 2.13(b).
(c) Notwithstanding anything to the contrary contained herein, if
the introduction of or any change in any law or regulation (or any change in the
interpretation thereof) shall make it unlawful, or any central bank or other
Governmental Authority shall assert that it is unlawful, for any
23
Lender to agree to make or to make or to continue to fund or maintain any LIBOR
Loan, then, unless that the Lender is able to make or to continue to fund or to
maintain such LIBOR Loan at another branch or office of that the Lender without,
in that Lender's opinion, adversely affecting it or its Loan or the income
obtained therefrom, on notice thereof and demand therefor by such Lender to the
Borrower through Administrative Agent, (i) the obligation of such Lender to
agree to make or to make or to continue to fund or maintain LIBOR Loans shall
terminate and (ii) the Borrower shall forthwith prepay in full all outstanding
LIBOR Loans owing by the Borrower to such Lender, together with interest accrued
thereon, unless the Borrower, within five (5) Business Days after the delivery
of such notice and demand, converts the Loan into a Base Rate Loan.
(d) Within fifteen (15) days after receipt by the Borrower of
written notice and demand from any Lender (an "Affected Lender") for payment of
additional amounts or increased costs as provided in Section 2.12 or Section
2.13(a) or 2.13(b), the Borrower may, at its option, notify the Administrative
Agent and such Affected Lender of its intention to replace the Affected Lender.
As long as no Default or Event of Default shall have occurred and be continuing,
the Borrower, with the consent of the Administrative Agent, may obtain, at the
Borrower's expense, a replacement Lender ("Replacement Lender") for the Affected
Lender, which Replacement Lender shall be a commercial bank or other financial
institution having combined capital and surplus of at least $300,000,000 or must
otherwise be reasonably satisfactory to the Administrative Agent. If the
Borrower obtains a Replacement Lender within ninety (90) days following notice
of its intention to do so, the Affected Lender must sell and assign its Loan and
Commitment to such Replacement Lender for an amount equal to the principal
balance of the Loan held by the Affected Lender and all accrued interest and
Fees with respect thereto through the date of such sale; provided, however, that
the Borrower shall have reimbursed such Affected Lender for the additional
amounts or increased costs that it is entitled to receive under this Agreement
through the date of such sale and assignment.
Notwithstanding the foregoing, the Borrower shall not have the right
to obtain a Replacement Lender if the Affected Lender rescinds its demand for
increased costs or additional amounts within fifteen (15) days following its
receipt of the Borrower's notice of intention to replace such Affected Lender.
Furthermore, if the Borrower gives a notice of intention to replace and does not
so replace such Affected Lender within ninety (90) days thereafter, the
Borrower's rights under this Section 2.13(d) shall terminate and the Borrower
shall promptly pay all increased costs or additional amounts demanded by such
Affected Lender pursuant to Sections 2.12(a), 2.13(a) and 2.13(b).
2.14 Use of Proceeds.
(a) Prior to the Availability Increase Date, up to $10,000,000 of
the proceeds of the Advances may be used for Telecommunications Costs and up to
$10,000,000 may be used for other general corporate and working capital
purposes, including payment of interest and expenses and repayment of the
Non-Continuing Indebtedness.
(b) On or after the first Availability Increase Date, up to
$50,000,000 of the proceeds of the Advances may be used for Telecommunications
Costs and up to $15,000,000 may be used for other general corporate and working
capital purposes, including payment of interest and expenses and the repayment
of the Non-Continuing Indebtedness.
2.15 Fees.
(a) The Borrower shall pay to the Administrative Agent, for the
ratable benefit of the Lenders, the fees described on Schedule 2.15 (the
"Commitment Fees").
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(b) The Borrower shall pay to GECC, individually for its own
account, additional fees, the amount and dates of payment of which are embodied
in a separate agreement dated the date hereof between Holdings and GECC (the
"GECC Fee Letter").
ARTICLE 3: COLLATERAL AND SECURITY AGREEMENT
3.1 Grant of Security Interest. To secure the prompt and complete payment,
performance and observance of all of the Obligations (specifically including
each Grantor's Obligations arising under the provisions of Article 9), each
Grantor hereby grants, assigns, conveys, mortgages, pledges, hypothecates and
transfers to the Administrative Agent for the benefit of the Secured Parties a
continuing Lien upon all of such Grantor's right, title and interest in and to
the following kinds and types of property, whether now owned or hereafter
acquired or arising, wherever located, together with all substitutions therefor
and all accessions, replacements and renewals thereof, and in all proceeds and
products thereof (collectively, the "Collateral"):
(a) all existing and future accounts, accounts receivable and rights
to payment, including all accounts receivable created by or arising from all
sales or leases of goods or rendition of services by such Grantor to its
customers or subscribers, all unpaid seller's rights (including rescission,
replevin, reclamation and stopping in transit) relating to the foregoing or
arising therefrom, all rights to any goods represented by any of the foregoing,
including returned or repossessed goods, all reserves and credit balances
arising from any of the foregoing, all guarantees or collateral for any of the
foregoing and all insurance policies or rights relating to any of the foregoing
(collectively, "Accounts");
(b) all existing and future instruments, chattel paper, documents of
title, contracts, agreements, licenses, grants and rights, now or hereafter
entered into or acquired by such Grantor, as modified, replaced or supplemented
from time to time, including all System Agreements, purchase and supply
agreements and related warranty rights, operating agreements and insurance
policies (collectively, "Contracts");
(c) all equipment, furniture and fixtures, switches, towers,
electronics, transmitting equipment, Software, fiber-optic cables and other
cabling, hardware, devices and components, now or hereafter owned by such
Grantor, and any and all additions, substitutions and replacements to or of any
of the foregoing, together with all attachments, components, parts,
improvements, upgrades and accessions installed thereon or affixed thereto
(collectively, "Equipment") other than the Commerce Collateral;
(d) all general intangibles and intangible property, including
rights under Contracts, rights to payment of any kind, insurance proceeds and
amounts due under insurance policies, deposit accounts, patent rights,
trademarks, service marks, copyrights, trade names, customer lists, goodwill,
registrations, licenses, license rights, rights in intellectual property,
Software, Software Licenses, computer programming (including source codes,
object codes and all other embodiments of computer programming or information),
tax refunds and benefits, corporate and other business records, refunds and
indemnification rights, all amounts owed at any time to such Grantor, all rights
that such Grantor may have at any time in any Regulatory Authorization,
including any rights to payment upon any transfer of any Regulatory
Authorization (to the extent permitted by applicable law in effect at any time
and subject to Section 3.2), or any other transfer or transaction intended to
result in a transfer of such a Regulatory Authorization, or the obtaining of FCC
or PUC authority for another Person to operate a telecommunications system in
the area instead of such Grantor (to the extent permitted by applicable law in
effect at any time and subject to Section 3.2), all rights to receive payment or
property upon any assignment, transfer, sale or surrender of any other
Collateral and all other intangible personal property of such Grantor of every
kind and nature (collectively, "General Intangibles");
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(e) all merchandise, inventory and goods, now or hereafter owned,
together with all goods and materials used or usable in manufacturing,
processing, packaging or shipping such merchandise, inventory and goods in all
states of production, from raw materials through work-in-progress to finished
goods (collectively, "Inventory");
(f) all securities, whether certificated or uncertificated,
including the stock of each Guarantor as set forth on Schedule 4.38, security
entitlements, securities accounts, commodity contracts and commodity accounts
(collectively, "Investment Property") and
(g) all proceeds and products, including (i) any and all proceeds of
any insurance, indemnity, warranty or guaranty payable to such Grantor from time
to time with respect to any of the Collateral, (ii) any and all payments (in any
form whatsoever) made or due and payable to such Grantor from time to time in
connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of any other Collateral by any Governmental
Authority (or any Person acting under color of Governmental Authority), (iii)
any and all other amounts from time to time paid or payable under or in
connection with any other Collateral and (iv) any and all cash proceeds and
non-cash proceeds in the form of Equipment, Inventory, Contracts, Accounts,
General Intangibles, documents or securities (collectively, "Proceeds").
3.2 Regulatory Authorizations. The Administrative Agent and each Lender
acknowledge and recognize that each Grantor's assignment of or grant of a
security interest in its Regulatory Authorizations may be subject to
restrictions imposed by the FCC or any PUC on such Grantor's ability to assign
its interest in or transfer control of any Regulatory Authorizations. Likewise,
the Administrative Agent and each Lender acknowledge and recognize that each
Grantor's assignment of or grant of a security interest in any state or local
franchises or licenses may be subject to similar government restrictions. Each
Grantor acknowledges, however, that the value of the Regulatory Authorizations
is a critical part of the Collateral package, and agrees to use its best efforts
to effect the transfer of such Regulatory Authorizations to the Administrative
Agent on behalf of the Secured Parties, or its designee, upon the occurrence and
during the continuance of an Event of Default, upon written notice from the
Administrative Agent.
3.3 Priority of Security Interests. The security interests granted in
Section 3.1 by each Grantor to the Administrative Agent on behalf of the Secured
Parties are and shall be continuing and first-priority security interests in the
Collateral to the extent such Collateral is Stock of a Loan Party or such
security interests may be perfected by filing under the UCC, subject to no Liens
except Permitted Encumbrances.
3.4 Pledge Agreement. Each Loan Party hereby represents and warrants that
valid, first-priority security interests have been granted by the Borrower and
Holdings to the Administrative Agent, on behalf of the Secured Parties, pursuant
to this Agreement, in 100% of the Stock of the Borrower and each Subsidiary of
the Borrower, together with an irrevocable proxy to vote such Stock if an Event
of Default should occur, and that all existing stock certificates, warrants and
other instruments evidencing ownership, together with executed blank stock
powers, have been delivered to the Administrative Agent on behalf of the Secured
Parties.
3.5 Further Documentation; Pledge of Instruments. At any time and from
time to time, upon the written request of the Administrative Agent, and at the
sole expense of the Loan Parties, each Loan Party shall promptly execute,
deliver and record any documents, instruments, agreements and amendments, and
take all such further action, as the Administrative Agent may reasonably deem
desirable in obtaining the full benefits of this Agreement and of the rights and
powers herein granted, including the filing of any financing statements or
amendments under the UCC. Each Loan Party also hereby
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authorizes the Administrative Agent to file any such financing statement or
amendment thereto, without the signature of such Loan Party or with a copy or
telecopy of such Loan Party's signature, to the extent permitted by applicable
law. If any amount payable under or in connection with any of the Collateral or
any Stock of the Borrower or any of its Subsidiaries shall be or become
evidenced by any promissory note or other instrument or any certificated
securities, such note, instrument or certificate shall be immediately pledged
and delivered to the Administrative Agent on behalf of the Secured Parties
hereunder, duly endorsed in a manner satisfactory to the Administrative Agent.
The Administrative Agent shall have the right at any time to exchange
certificates or instruments representing or evidencing any of the Collateral or
Stock of the Borrower or any of its Subsidiaries for certificates or instruments
of smaller or larger denominations. Each Loan Party shall keep and maintain, at
its own cost and expense, satisfactory and complete records of the Collateral,
including a record of any and all payments received and any and all credits
granted with respect to the Collateral and all other dealings with the
Collateral. Each Loan Party shall xxxx its books and records pertaining to the
Collateral to evidence this Agreement and the Liens granted hereby. Each Loan
Party shall duly register on its books and records pertaining to the Stock the
security interests of the Administrative Agent on behalf of the Secured Parties
in such Stock.
3.6 Accounts, Etc. Each Grantor shall be entitled to collect any Accounts
and General Intangibles until the occurrence of an Event of Default, during the
continuance of which the Administrative Agent or the Requisite Lenders may
restrict or terminate such authority. Each Grantor agrees that, upon the
occurrence and during the continuance of an Event of Default, the Administrative
Agent on behalf of the Secured Parties shall be entitled to assume any or all of
the Contracts, Accounts or General Intangibles in the place of such Grantor
(without releasing such Grantor from liability thereunder).
3.7 Further Identification of Collateral. Each Grantor shall furnish to
the Administrative Agent on behalf of the Secured Parties from time to time
statements and schedules further identifying and describing the Collateral and
each location thereof and such other reports in connection with the Collateral
as the Administrative Agent may reasonably request, all in reasonable detail.
3.8 Remedies. The Administrative Agent on behalf of the Secured Parties
shall have all the rights and remedies of a secured party under the UCC, and
shall be entitled to exercise any and all remedies available under this Article
3 or Article 9 or otherwise available at law or in equity upon the occurrence
and during the continuance of an Event of Default. Except as otherwise
specifically provided herein, each Grantor hereby waives presentment, demand,
protest or any notice (to the maximum extent permitted by applicable Law) of any
kind in connection with this Agreement or any Collateral.
3.9 Standard of Care. The Administrative Agent shall be deemed to have
exercised reasonable care in the custody and preservation of any of the
Collateral in its possession if it takes such action for that purpose as the
Borrower requests in writing, but the Administrative Agent's failure to comply
with any such request shall not of itself be deemed a failure to exercise
reasonable care, and no failure of the Administrative Agent to preserve or
protect any rights with respect to such Collateral against prior parties, or to
do any act with respect to the preservation of such Collateral not so requested
by the Borrower, shall be deemed a failure to exercise reasonable care in the
custody or preservation of such Collateral.
3.10 Advances to Protect Collateral. All insurance expense and all
expenses of protecting, storing, warehousing, insuring, handling, maintaining
and shipping the Collateral (including all rent payable by any Grantor to any
landlord of any premises where any of the Collateral may be located) and any and
all Taxes shall be borne and paid by such Loan Party. The Administrative Agent
on behalf of the Secured Parties may (but shall not be obligated to) make
advances to preserve, protect or obtain any of the Collateral, including
advances to cure defaults under any of the Contracts or advances to pay Taxes,
27
insurance and the like upon failure of the Borrower to do so promptly after
request by the Administrative Agent, and all such advances shall become part of
the Obligations owing to the Lenders hereunder and shall be payable to the
Administrative Agent on demand, with interest thereon from the date of such
advance until paid at the Default Rate applicable to Base Rate Loans in effect
on the date of such advance.
3.11 License to Use. The Administrative Agent on behalf of the Secured
Parties is hereby granted a non-exclusive license or other right to use without
charge during the continuance of an Event of Default any Grantor's labels,
patents, copyrights, rights of use of any name, trade secrets, trade names,
trademarks and advertising matter, or any tangible or intangible property or
rights of a similar nature of any Grantor as they pertain to the Collateral, in
advertising for sale and selling any Collateral, and during the continuance of
an Event of Default the rights of each Grantor under all licenses and all
franchise agreements shall inure to the benefit of the Administrative Agent on
behalf of the Secured Parties.
3.12 Benefit of the Liens. All Liens granted or contemplated hereby shall
be for the benefit of the Administrative Agent on behalf of the Secured Parties,
and all Proceeds or payments realized from the Collateral in accordance herewith
shall be applied to the Obligations in accordance with the terms provided
herein.
3.13 Release of Collateral. Upon any sale of assets permitted herein and
payment of the proceeds as required by Section 2.7, the Liens on such assets
granted by the Grantor to the Administrative Agent for the benefit of the
Secured Parties shall be released and the Administrative Agent shall, upon
request of the Borrower, execute and deliver to the Borrower appropriate
executed UCC-3s and other instruments of release as may be appropriate under the
circumstances, confirming such release.
ARTICLE 4: REPRESENTATIONS AND WARRANTIES
Each Loan Party hereby represents and warrants, jointly and severally, to
the Administrative Agent and each Lender, with respect to all Loan Parties, as
follows:
4.1 Organization and Qualification. Each Loan Party is duly organized,
validly existing and in good standing under the laws of its state of
organization. Each Loan Party is duly qualified to do business and in good
standing in each jurisdiction in which the failure to receive or retain such
qualification would have a Material Adverse Effect.
4.2 Authority and Authorization. Each Loan Party has all requisite
corporate right, power, authority and legal right to carry on its business, to
own or lease its properties and to execute and deliver and perform its
obligations under this Agreement, to make the borrowings provided for herein,
and to execute and deliver and to perform its obligations under the Loan
Documents. Each Loan Party's execution, delivery and performance of the Loan
Documents have been duly and validly authorized by all necessary corporate
proceedings on the part of each Loan Party.
4.3 Execution and Binding Effect. This Agreement, the Notes and all other
Loan Documents have been or will be duly and validly executed and delivered by
each Loan Party, and constitute or, when executed and delivered, will
constitute, the legal, valid and binding obligations of such Loan Party
enforceable in accordance with their respective terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
receivership, moratorium or other laws affecting creditors' rights generally and
by general principles of equity.
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4.4 Governmental Authorizations. Except for the consents identified on
Schedule 4.4 (the "Required Consents"), no authorization, consent, approval,
license, exemption or other action by, and no registration, qualification,
designation, declaration or filing with, any Governmental Authority (other than
the filing of financing statements and continuation statements) is or will be
necessary in connection with the execution and delivery of this Agreement, the
Notes or any other Loan Documents by each Loan Party, consummation by each Loan
Party of the transactions herein or therein contemplated, including the
Borrower's obtaining the Loan, the Guarantors' guaranty of the Obligations and
the Loan Parties' granting security for the Obligations, performance of or
compliance by each Loan Party with the terms and conditions hereof or thereof or
the legality, validity and enforceability hereof or thereof.
4.5 Regulatory Authorizations. Each Loan Party holds all authorizations,
permits and licenses required by the FCC, any PUC or any Communications Law for
the conduct of its business and all such Regulatory Authorizations are in full
force and effect and subject to no pending contest, challenge or appeal, subject
only to exceptions that in the aggregate would have no Material Adverse Effect.
No Lender, solely by reason of the execution, delivery and performance of any of
the Loan Documents, will be subject to the regulation or control of either the
FCC or any PUG, except in connection with the enforcement of remedies. The
Regulatory Authorizations are described on Schedule 4.5. The Loan Parties are in
compliance with all applicable Requirements of Law, except for noncompliances
that in the aggregate would not have a Material Adverse Effect.
4.6 Agreements and Other Documents. As of the date hereof, each Loan Party
has provided to the Lenders, accurate and complete copies (or summaries) of all
of the following agreements or documents to which such Loan Party is subject and
each of which is listed on Schedule 4.6: (a) supply agreements and purchase
agreements not terminable by such Loan Party within sixty (60) days following
written notice issued by such Loan Party and involving transactions in excess of
$1,000,000 per annum; (b) any lease of Equipment having a remaining term of one
year or longer and requiring aggregate rental and other payments in excess of
$500,000 per annum; (c) Permits held by such Loan Party, except those the
absence of which in the aggregate would not have a Material Adverse Effect; (d)
instruments or documents evidencing Indebtedness of such Loan Party and any
security interest granted by such Loan Party with respect thereto; (e)
instruments and agreements evidencing the issuance of any equity securities,
warrants, rights or options to purchase equity securities of the Borrower or any
of its Subsidiaries; and (f) all material System Agreements required for the
build-out of the Networks contemplated by the Business Plan. All such agreements
are in full force and effect and are not subject to termination because of
default by a Loan Party or otherwise. Except as set forth on Schedule 4.6, no
material System Agreement or material Contract to which any Loan Party is a
party contains any provision which provides that a change of control of any Loan
Party constitutes an unauthorized assignment thereof or gives the other party a
right of termination, and all material System Agreements are either assignable
or readily replaceable on substantially comparable terms.
4.7 Absence of Conflicts. The execution and delivery of this Agreement,
the Notes and the other Loan Documents, the consummation of the transactions
herein or therein contemplated and the performance of or compliance with the
terms and conditions hereof or thereof by each Loan Party will not (a) violate
any applicable Law; (b) conflict with or result in a breach of or a default
under the Organizational Documents of such Loan Party or any material agreement
or instrument to which such Loan Party is a party or by which such Loan Party or
its properties are bound; or (c) result in the creation or imposition of any
Lien upon any property (now owned or hereafter acquired) of such Loan Party
except as otherwise contemplated by this Agreement.
4.8 No Restrictions. No Loan Party is a party or subject to any contract,
agreement or restriction in its Organizational Documents that materially and
adversely affects its business or the use or ownership of any of its properties
or operation of its business as contemplated in the Business Plan. No
29
Loan Party is a party or subject to any contract or agreement which restricts
its right or ability to incur Indebtedness, other than as set forth on Schedule
4.8, none of which prohibits any Loan Party's execution or performance of its
obligations under this Agreement, the Borrower's obtaining the Loan, the
Guarantors' guaranty of the Obligations and the Loan Parties' providing security
for the Obligations as provided herein. No Loan Party has agreed or consented to
cause or permit in the future (upon the happening of a contingency or otherwise)
any of the Collateral, whether now owned or hereafter acquired, to be subject to
a Lien that is not a Permitted Encumbrance.
4.9 Government Contracts. Except as set forth in Schedule 4.9, as of the
date hereof, no Loan Party's Accounts are subject to the Federal Assignment of
Claims Act, as amended (31 U.S.C.ss.3727) or any similar state or local law.
4.10 Financial Statements; Business Plan. The Borrower has furnished to
the Lenders the most recent annual and quarterly Financial Statements of
Holdings, certified by a Responsible Officer of Holdings, as described on
Schedule 4.10. Such Financial Statements (including the notes thereto) present
fairly the financial condition of the Loan Parties on a consolidated and
consolidating basis as of the end of such fiscal period and the results of its
operations and the changes in its financial position for the fiscal period then
ended, all in conformity with GAAP applied on a basis consistent with that of
the preceding fiscal period. As of the date hereof, no Loan Party has any
obligation or liability (absolute, contingent, liquidated or unliquidated)
material to the Loan Parties taken as a whole, except for those reflected in the
Financial Statements described on Schedule 4.10. Since the date hereof, no Loan
Party has incurred any such obligation or liability except to the extent not
prohibited by this Agreement. The Projections delivered by the Borrower to the
Administrative Agent, on behalf of the Lenders, as part of the Business Plan, as
described on Schedule 4.10, a copy of which has been delivered prior to the date
hereof, were prepared in good faith, based on reasonable assumptions, it being
recognized by the Administrative Agent and the Lenders that such Projections as
to future events are not to be viewed as facts and that actual results during
the period covered by such Projections may differ from the projected results.
4.11 Financial Accounting Practices. Each Loan Party has made and kept
books, records and accounts which, in reasonable detail, accurately and fairly
reflect its respective transactions and dispositions of its assets and maintains
a system of internal accounting controls sufficient to provide reasonable
assurances that (a) transactions are executed in accordance with management's
general or specific authorization, (b) transactions are recorded as necessary to
permit preparation of Financial Statements in conformity with GAAP and to
maintain accountability for assets, (c) access to assets is permitted only in
accordance with management's general or specific authorization and (d) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
4.12 Deposit and Disbursement Accounts. Schedule 4.12 lists all banks and
other financial institutions at which any Loan Party maintains deposits and/or
other accounts as of the date hereof, including any disbursement accounts, and
such Schedule correctly identifies the name, address and telephone number of
each such depository, the name in which the account is held, a description of
the purpose of the account and the complete account number.
4.13 Insurance. Schedule 4.13 lists all insurance policies of any nature
maintained, as of the date hereof, for current occurrences by any Loan Party, as
well as a summary of the terms of each such policy.
4.14 Accurate and Complete Disclosure. No representation or warranty made
by or on behalf of any Loan Party in this Agreement or any other Loan Document
and no statement made by or on behalf of any Loan Party in any Financial
Statement, certificate, report, exhibit or document furnished by such
30
Loan Party to the Administrative Agent pursuant to or in connection with this
Agreement (including any filings with the Securities and Exchange Commission,
the FCC or any PUC), taken as a whole, is or was false or misleading as of the
date made in any material respect (including by omission of material information
necessary to make such representation, warranty or statement not misleading).
There are no facts known (or which should upon the exercise of reasonable
diligence be known) to any Loan Party that, individually or in the aggregate,
would have any reasonable likelihood of resulting in or causing a Material
Adverse Change which have not been set forth in the Financial Statements
referred to in Section 4.10 or otherwise disclosed in writing to the
Administrative Agent and the Lenders prior to the date hereof.
4.15 No Event of Default; Compliance with Material Agreements. No event
has occurred and is continuing and no condition exists which constitutes a
Default or an Event of Default. No Loan Party is in violation of any term of any
material agreement or instrument to which it is a party or by which it or its
properties are bound, except for such violations that in the aggregate would not
have a Material Adverse Effect.
4.16 Labor Matters. (a) No strikes or other material labor disputes
against any Loan Party are pending or, to any Loan Party's knowledge,
threatened; (b) hours worked by and payment made to employees of each Loan Party
comply in all material respects with the Fair Labor Standards Act and each other
federal, state, local or foreign law applicable to such matter; (c) all material
payments due from any Loan Party for employee health and welfare insurance have
been paid or accrued as a liability on the books of such Loan Party; (d) except
as set forth in Schedule 4.16, no Loan Party is a party to or bound by any
collective bargaining agreement, management agreement, consulting agreement or
any employment agreement (and true and complete copies of any agreements
described on Schedule 4.16 have been delivered to the Administrative Agent and
each Lender); (e) as of the date hereof there is no organizing activity
involving any Loan Party pending or, to any Loan Party's knowledge, threatened
by any labor union or group of employees; (f) there are no representation
proceedings pending or, to any Loan Party's knowledge, threatened with the
National Labor Relations Board, and no labor organization or group of employees
of any Loan Party has made a pending demand for recognition which would have a
Material Adverse Effect; and (g) except as set forth in Schedule 4.16, there are
no complaints or charges against any Loan Party pending or, to the knowledge of
the Responsible Officers of Holdings, threatened to be filed with any
Governmental Authority or arbitrator based on, arising out of, in connection
with, or otherwise relating to the employment or termination of employment by
any Loan Party of any individual which, if adversely determined, could
reasonably be expected to have a Material Adverse Effect.
4.17 Litigation. Except as set forth in Schedule 4.17, there is no pending
action, suit or proceeding by or before any Governmental Authority that is
pending or to the knowledge of any Loan Party is threatened against or affecting
any Loan Party or any of its properties, rights or licenses which if adversely
decided would have a Material Adverse Effect.
4.18 Rights to Property. The Loan Parties have good and legal title,
subject only to the Permitted Encumbrances, to the Collateral, all other
personal and real property purported to be owned by them and all property
reflected in the most recent balance sheet referred to in Section 4.10 (except
as sold or otherwise disposed of in the ordinary course of business or as no
longer used or useful in the conduct of the business). Schedule 4.18 lists or
describes (i) all Sites and Site Leases as of the date hereof, (ii) all other
real property owned by each Loan Party as of the date hereof, and (iii) all
material Equipment of each Loan Party as of June 30, 1999 and its location or
proposed location. Each Loan Party has, or by the Borrowing Date shall have,
entered into the Site Leases described on Schedule 4.18. Such Site Leases are in
full force and effect and are not subject to termination because of default or
otherwise.
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4.19 Year 2000 Issue. Each Loan Party has a plan and organization in place
to minimize any Material Adverse Effect caused by the failure of any system or
Equipment which is material to such Loan Party's operations to be Year 2000
Compliant. "Year 2000 Compliant" means that such system or Equipment will
process date data from, into and between the calendar year 1999 and the calendar
year 2000, including leap year calculations, with substantially the same
functionality as such system or Equipment processes date data falling on or
before December 31, 1999 and that, when used in accordance with such system's or
Equipment's normal operation specifications, and provided all systems and
equipment of others used in combination with such system or Equipment properly
exchange data with such system or Equipment, such system or Equipment will
accept, store, retrieve, calculate, compare and otherwise process date data
before and after January 1, 2000. Each Loan Party is conscientiously
implementing such plan. Each Loan Party will, upon request from the
Administrative Agent, on behalf of the Lenders, or from the Requisite Lenders,
provide the Administrative Agent or, if so requested, the Lenders with periodic
updates on its implementation of such plan.
4.20 Taxes. Each Loan Party's federal tax identification number is set
forth on Schedule 1. All federal and state income tax returns and all other
material Tax returns required to be filed by each Loan Party have been properly
prepared, executed and filed, and all Taxes upon such Loan Party or upon any of
its respective properties, incomes, sales or franchises which are shown to be
due and payable thereon have been paid, other than Taxes or assessments the
validity or amount of which such Loan Party is contesting in good faith. The
reserves and provisions for Taxes on the books of each Loan Party are adequate
for all open years and for its current fiscal period.
4.21 No Material Adverse Change. Since the date of the Financial
Statements referenced in Section 4.10 there has been no Material Adverse Change.
4.22 Solvency. Both immediately before and after giving effect to (a) the
Advances to be made or extended on the date hereof or such other date as the
Advances requested hereunder are made or extended, (b) the disbursement of the
proceeds of such Advances and (c) the payment and accrual of all transaction
costs in connection with the foregoing, the Loan Parties, taken as a whole, are
Solvent.
4.23 No Regulatory Event. To the knowledge of any Loan Party, no
Regulatory Event has occurred and is continuing.
4.24 Trade Relations. There exists no actual or, to the knowledge of any
Loan Party, threatened termination, cancellation or limitation of, or any
modification or change in, the business relationship between any Loan Party and
any customer or supplier that would have a Material Adverse Effect or prevent
the Loan Parties from conducting their business after the consummation of the
financing contemplated by this Agreement in substantially the same manner as is
contemplated in the Business Plan.
4.25 No Brokerage Fees. No Loan Party has agreed to pay any brokerage or
other fee, commission or compensation to any Person in connection with the Loan
to be made hereunder except the Fees as contemplated herein.
4.26 Margin Stock; Regulation U. No Loan Party is engaged principally, or
as one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying margin stock. The making of the Advances and
the use of the proceeds thereof will not violate Regulation U or X of the Board
of Governors of the Federal Reserve System.
4.27 Investment Company; Public Utility Holding Company. No Loan Party is
an "investment company" or a "company controlled by an investment company" or an
"affiliated person" or
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"promoter" or "principal underwriter" for, an "investment company," within the
meaning of the Investment Company Act of 1940, as amended, or a "holding
company," or a "subsidiary company" of a "holding company," or an "affiliate" of
a "holding company" or of a "subsidiary company" of a "holding company," within
the meaning of the Public Utility Holding Company Act of 1935. as amended.
4.28 Personal Holding Company; Subchapter S. No Loan Party is a "personal
holding company" as defined in Section 542 of the Code, or a "Subchapter S"
corporation within the meaning of the Code.
4.29 Securities Act. Etc. The issuance of the Notes to the Lenders under
the circumstances contemplated by this Agreement is not required to be
registered under the Securities Act of 1933, as amended, or under the securities
laws of any state.
4.30 ERISA. (i) With respect to any Plan, no Reportable Event has occurred
which may reasonably result in any material liability to the PBGC with respect
to any Plan, (ii) no Plan has been terminated, (iii) no trustee has been
appointed by any United States District Court to administer any Plan, (iv) the
PBGC has not instituted proceedings to terminate any Plan or to appoint a
trustee to administer any such Plan, (v) no Loan Party or Affiliate of a Loan
Party has withdrawn, completely or partially, from any Plan, (vi) no Loan Party
or Affiliate of a Loan Party has incurred secondary liability for withdrawal
liability payments under any Plan and (vii) no Loan Party is subject to any
liability (contingent or otherwise) with respect to any Plan that would have a
Material Adverse Effect.
4.31 Intellectual Property. Each Loan Party owns or possesses the right to
use all patents, trademarks, service marks, trade names, copyrights, know-how,
franchises, Software and Software Licenses necessary for the operation of its
business, without any known conflict with the valid rights of others which would
have a Material Adverse Effect. All such material rights are described
on Schedule 4.31.
4.32 Environmental Warranties. To the best of the Holdings' knowledge,
each Loan Party is in compliance with all Environmental Laws applicable to such
Loan Party or its business or to the real or personal property owned, leased or
operated by such Loan Party, except for such non-compliances which would not
result in any Loan Party incurring Environmental Liabilities that in the
aggregate would have a Material Adverse Effect. No Loan Party has received
notice from a Governmental Authority of, or is aware of, any violation or
alleged violation, or any liability or asserted liability, under any
Environmental Law, with respect to such Loan Party or its business or its
premises. The only premises occupied by any Loan Party are Sites where Equipment
is located and office spaces in commercial office buildings. Schedule 4.32 lists
all environmental or health and safety assessments, investigations, analyses,
testing or sampling results with respect to the operations of any Loan Party or
any real property owned, operated or leased by any Loan Party that is in such
Loan Party's possession, custody or control.
4.33 Security Interests. The provisions of Article 3 are effective to
create in favor of the Administrative Agent, on behalf of the Secured Parties, a
legal, valid and enforceable Lien on or security interest in all of the
Collateral, and, when the recordings and filings described on Schedule 4.33 have
been effected in the public offices listed on said Schedule 4.33, this Agreement
will create a perfected first priority security interest in all right, title,
estate and interest of each Loan Party in the Collateral which may be perfected
by filing, subject to no Liens except Permitted Encumbrances. The recordings and
filings shown on said Schedule 4.33 are all the actions necessary in order to
establish, protect and perfect the interest of the Administrative Agent, on
behalf of the Secured Parties, in the Collateral.
4.34 Place of Business. The chief executive office of each Loan Party is
identified on Schedule 4.34. Each Loan Party's principal place of business in
the state(s) where a Site is located is
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identified on Schedule 4.34. Each Loan Party's records concerning the Collateral
are kept at one or all of these addresses.
4.35 Location of Collateral. The Collateral is and will be kept at the
locations identified by Loan Party and type of Collateral on Schedule 4.35 or
such other locations as may be permitted under Section 8.4.
4.36 Material Contracts and Accounts. Each Contract, General Intangible
and Account is, or will be when it is created, a bona fide, valid and legally
enforceable property or right of a Loan Party and, so far as any Loan Party
knows, of any other party thereto, except for those that do not, in the
aggregate, materially and adversely affect the value of the Collateral. No
amount payable in excess of $10,000 individually or $100,000 in the aggregate
under or in connection with any of such Contracts, General Intangibles or
Accounts are evidenced by any chattel paper or any promissory notes or other
instruments that have not been delivered to the Administrative Agent on behalf
of the Secured Parties.
4.37 No Defaults Under Contracts or Accounts. With respect to each
Contract, Account and General Intangible, no default by any Loan Party or event
which with the giving of notice or the passage of time would be a default has
occurred and, to the knowledge of the Responsible Officers of Holdings, the
other party or parties thereto are not in default thereunder, except for
defaults that in the aggregate would not have a Material Adverse Effect, and
each Loan Party has fully and timely performed all its material obligations
thereunder. The right, title and interest of such Loan Party thereunder is not
subject to any defense, set off, counterclaim or claim, and none of the
foregoing been asserted or alleged against such Loan Party except in respect of
such defaults, defenses, set offs, counterclaims and claims that in the
aggregate do not materially adversely affect the value of the Collateral. The
amount represented by each Loan Party to the Administrative Agent, on behalf of
the Lenders, from time to time as owing on any or all Accounts, Contracts or
General Intangibles, will at such time be the correct amount actually owing by
such account debtors thereunder.
4.38 Corporate Structure. The Borrower is wholly-owned by Holdings. The
Guarantors other than Holdings are wholly-owned, directly or indirectly, by the
Borrower. The authorized and outstanding Stock of each Guarantor and the
ownership thereof is set forth on Schedule 4.38.
4.39 Assumed Names. Except as set forth on Schedule 4.39, no Loan Party
conducts business under any assumed names or trade names, or has conducted
business under any other names, or any assumed names or trade names, at any time
prior to the date hereof.
4.40 Transactions with Affiliates. No Affiliate and no officer or director
of any Loan Party or any individual related by blood, marriage, adoption or
otherwise to any such Affiliate, officer or director, or any Person in which any
such Affiliate, officer, director or individual related thereto owns any
material beneficial interest, is a party to any material agreement, contract,
commitment or transaction with such Loan Party or has any material interest in
any material property used by such Loan Party, except as set forth on Schedule
4.40.
ARTICLE 5: CONDITIONS TO FIRST BORROWING DATE
On the First Borrowing Date, the following conditions shall have been
satisfied:
5.1 Closing Certificates. The Administrative Agent and each Lender shall
have received the following certificates, all in form and substance reasonably
satisfactory to the Administrative Agent and all dated the First Borrowing Date
upon which the Administrative Agent may conclusively rely unless
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and until later certificates have been furnished to the Administrative Agent and
each Lender: (a) a certificate of each Loan Party signed by a duly authorized
Responsible Officer, certifying as to (i) true copies of Organizational
Documents of such Loan Party in effect on such date; (ii) true copies of all
corporate action taken by such Loan Party relative to this Agreement, the Notes
and the other Loan Documents (including a resolution of its Board of Directors
authorizing the execution and delivery of the Loan Documents, the incurrence of
the Obligations and the granting of the Liens contemplated hereby to the extent
required pursuant to the Organizational Documents applicable thereto) which have
been properly adopted and have not been modified or amended; and (iii) the
names, true signatures and incumbency of the Responsible Officers of such Loan
Party authorized to execute and deliver this Agreement, the Notes and the other
Loan Documents; (b) a Certificate of Good Standing (or equivalent certificate)
for such Loan Party, duly issued by the Secretary of State of the State of
organization of such Loan Party and of each other state in which such Loan Party
does business; and (c) a certificate as to such other matters as the
Administrative Agent or any Lender shall reasonably request.
5.2 Opinions of Counsel. The Administrative Agent and each Lender shall
have received the following opinions, all dated the First Borrowing Date and all
in form and substance satisfactory to the Administrative Agent and each Lender:
(a) a written opinion of counsel to each Loan Party, substantially
in the form of Exhibit D, as to such matters as shall be required by the
Administrative Agent, any Lender or their respective counsel, including the
corporate good standing of such Loan Party, the proper adoption of any corporate
resolution required hereby, the authority of the Person signing for such Loan
Party, the validity, binding nature and enforceability of this Agreement and the
other Loan Documents and the validity and perfection of all Liens granted by the
Loan Documents to the Administrative Agent on behalf of the Secured Parties by
such Loan Party in the Collateral; and
(b) a written opinion of regulatory counsel for Loan Parties,
substantially in the form of Exhibit E, as to such matters as shall be required
by the Administrative Agent and its counsel, including the validity of each Loan
Party's Regulatory Authorizations and Permits.
5.3 Closing Documents. The Administrative Agent and the Lenders shall have
received the following documents, all in form and substance reasonably
satisfactory to the Administrative Agent, the Lenders and their respective
counsel:
(a) Agreement. This Agreement, duly executed by all Loan Parties;
(b) Notes. The Notes, duly executed by the Borrower, payable to the
order of each Lender;
(c) Financing Statements. Evidence that all UCC-l financing
statements necessary to perfect the Liens granted hereby, each duly executed by
each Loan Party, have been duly recorded in all the offices identified on
Schedule 4.33;
(d) Commerce Loan Agreement. Amendments to the Commerce Loan
Agreements and related UCC-l financing statements;
(e) Nortel Volume Purchase Agreement. A copy of the duly executed
Nortel Volume Purchase Agreement, in form and substance reasonably satisfactory
to the Lenders;
(f) Insurance. Policies and certificates of insurance required by
Section 7.7. accompanied by evidence of the payment of the premiums therefor;
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(g) Financial Statements. The Financial Statements described on
Schedule 4.10;
(h) Balance Sheet. An unaudited consolidated balance sheet of
Holdings and its Subsidiaries as of a date no earlier than sixty (60) days prior
to the Closing Date, certified by a Responsible Officer as fairly presenting the
financial condition of Holdings, evidencing liabilities not materially in excess
of liabilities projected as of the Closing Date in the Projections;
(i) Asset Locations. A detailed description of all material assets
of each Loan Party by location;
(j) Required Consents. Evidence satisfactory to the Administrative
Agent of each Loan Party's having obtained the Required Consents;
(k) Fee Letter. The executed GECC Fee Letter;
(l) Pre-Closing Lien Searches. Lien searches from all jurisdictions
reasonably determined by the Administrative Agent or any Lender to be
appropriate, as of a date reasonably close to the First Borrowing Date, with
respect to each Loan Party (under their present names and any previous names),
reflecting no other Liens (other than Permitted Encumbrances) on any of the
Collateral; and
(m) Landlord Consents. Such Landlord Consents as the Administrative
Agent shall have requested.
5.4 No Material Adverse Change. As of the First Borrowing Date, after
giving effect to any Advances, there shall not have been (i) since December 31,
1998, any Material Adverse Change; (ii) any litigation commenced which, if
successful, would have a Material Adverse Effect or which would challenge the
financing contemplated by this Agreement, except the litigation listed on
Schedule 4.17 and (iii) since December 31, 1998, any material increase in the
liabilities, liquidated or contingent, of Holdings and its Subsidiaries or a
material decrease in the assets of Holdings and its Subsidiaries, taken as a
whole.
5.5 Fees. The fees required to be paid on or prior to the First Borrowing
Date as specified in the GECC Fee Letter shall have been paid.
ARTICLE 6: CONDITIONS OF LENDING
6.1 Conditions to Each Borrowing Date. The obligation of any Lender to
fund any Advance is subject to each Loan Party's performance of its obligations
hereunder and satisfaction of the following further conditions on the Borrowing
Date for any such Advance (including the First Borrowing Date) or the date of
such conversion or continuation:
(a) Borrowing Certificate; Notice of Conversion/Continuation. The
Administrative Agent shall have received a duly executed Borrowing Certificate
in the form of Exhibit B.
(b) No Default or Event of Default. No Default or Event of Default
shall have occurred and be continuing or would exist upon the consummation of
the transactions to occur on such Borrowing Date.
(c) Representations and Warranties. The representations and
warranties contained in Article 4 shall be true and correct on and as of such
date to the same extent as though made on and as of
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the date, except to the extent such representations and warranties relate to an
earlier date, in which case such representations and warranties shall have been
true and correct in all material respects on and as of such earlier date, both
before and after giving effect thereto.
(d) No Regulatory Event. No Regulatory Event (in the Requisite
Lenders' reasonable determination) shall have occurred and be continuing or
would exist upon the consummation of transactions to occur on such Borrowing
Date.
(e) Expenses. All closing costs and Administrative Agent's and
Lenders' other expenses payable by the Borrower under the terms of any Loan
Document shall have been paid in full (or shall be paid first from such Advance
as provided in Section 2.10).
(f) Details, Proceedings and Documents. All legal details and
proceedings in connection with the transactions contemplated by this Agreement
shall be reasonably satisfactory to the Administrative Agent, and the
Administrative Agent shall have received all such counterpart originals or
certified or other copies of such documents and proceedings in connection with
such transactions, in form and substance reasonably satisfactory to the
Administrative Agent, as the Administrative Agent may from time to time request.
(g) Business Plan. The Business Plan shall continue to reflect that
the Loan Parties have sufficient funding, including the Loan, to completely
finance all costs to build-out the Networks contemplated by the Business Plan
and to fund anticipated operating losses, debt service and ongoing capital
requirements.
6.2 Post-Closing Items. The post-closing items described on Schedule 6.2
shall have been completed in the time permitted, and each Loan Party shall have
provided the Administrative Agent and the Requisite Lenders with satisfactory
evidence thereof pursuant to Section 7.29.
6.3 Affirmation of Representations and Warranties. The Borrowing
Certificate, other request for any Advance hereunder or any Notice of
Conversion/Continuation shall constitute a representation and warranty that (a)
the representations and warranties contained in Article 4 are true and correct
on and as of the date of such request with the same effect as though made on and
as of the date of such request, except to the extent such representations and
warranties relate to an earlier date, in which case that such representations
and warranties were true and correct on and as of such earlier date, and (b) on
the date of such request no Default or Event of Default has occurred and is
continuing or exists or will occur or exist after giving effect to such Advance,
conversion or continuation (for this purpose such Advance being deemed to have
been made and the conversion or continuation having occurred, as the case may
be, on the date of such request). Failure of the Administrative Agent to receive
notice from each Loan Party to the contrary before the applicable Borrowing Date
shall constitute a further representation and warranty by such Loan Party that
(x) the representations and warranties of such Loan Party contained in the first
sentence of this Section 6.3 are true and correct on and as of such Borrowing
Date with the same effect as though made on and as of such Borrowing Date,
except to the extent such representations and warranties relate to an earlier
date, in which case that such representations and warranties were true and
correct on and as of such earlier date, (y) on such Borrowing Date, no Default
or Event of Default has occurred and is continuing or exists or will occur or
exist after giving effect to such Advance and (z) on such Borrowing Date, all
conditions set forth in this Article 6 have been satisfied.
6.4 Deadline for Funding Conditions. No Lender shall have any obligation
to make any Advances hereunder if all of the conditions set forth in Article 5
and in Article 6 have not been fully satisfied or waived by the Requisite
Lenders.
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ARTICLE 7: AFFIRMATIVE COVENANTS
The Loan Parties hereby jointly and severally agree that from and after
the date hereof until the Termination Date, the Loan Parties will keep and
perform fully each and all of the following covenants:
7.1 Reporting and Information Requirements.
(a) Annual Audit Reports. As soon as practicable, and in any event
within ninety (90) days after the close of each Fiscal Year of Holdings, the
Borrower shall furnish or cause to be furnished to the Administrative Agent and
the Lenders audited consolidated and unaudited consolidating statements of
income, statements of cash flow and retained earnings of the Loan Parties for
such Fiscal Year and consolidated and consolidating balance sheet as of the
close of such Fiscal Year, and notes to each, all in reasonable detail, and
setting forth in comparative form (i) the corresponding figures for the
preceding Fiscal Year and (ii) the actual and projected figures from the most
recently ended Fiscal Year, with such consolidated statements and balance sheet
(exclusive of the Projections) to be certified without qualification by
independent certified public accountants of recognized regional or national
standing selected by the Borrower and reasonably satisfactory to the
Administrative Agent.
(b) Quarterly Reports. Within forty-five (45) days after the end of
each of the first three Fiscal Quarters of each Fiscal Year, the Borrower shall
furnish to the Administrative Agent and the Lenders (i) unaudited consolidated
and consolidating statements of income, statements of cash flow and retained
earnings for the Loan Parties for such quarter and for the period from the
beginning of Holdings' then current Fiscal Year to the end of such quarter, and
an unaudited consolidated and consolidating balance sheet of the Loan Parties as
of the end of such quarter, all in reasonable detail and certified by a
Responsible Officer of the Borrower as presenting fairly the financial position
of the Loan Parties as of the end of such quarter and the results of their
operations and the changes in their financial position for such quarter, in
conformity with GAAP (except for accompanying notes thereto), subject to
year-end audit adjustments, (ii) setting forth in comparative form the
corresponding figures for the corresponding quarter of the preceding Fiscal Year
and the projected figures for the corresponding quarter, (iii) updates of
revenues, gross margin and EBITDA of Holdings on a consolidating basis for the
Fiscal Year to date and (iv) upon request of the Administrative Agent, an aging
of accounts payable and accounts receivable.
(c) Compliance Certificates. Within forty-five (45) days after the
end of each of the first three Fiscal Quarters of each Fiscal Year, the Borrower
shall deliver to the Administrative Agent and the Lenders a certificate dated as
of the end of such Fiscal Quarter, signed by a Responsible Officer of the
Borrower (i) stating that as of the date thereof no Event of Default has
occurred and is continuing or exists, or if an Event of Default has occurred and
is continuing or exists, specifying in detail the nature and period of existence
thereof and any action with respect thereto taken or contemplated to be taken by
the applicable Loan Party; (ii) stating that the signer has personally reviewed
this Agreement and that such certificate is based on an examination made by or
under the supervision of the signer sufficient to assure that such certificate
is accurate; and (iii) calculating and certifying the Loan Parties' compliance
with the financial covenants set forth on Schedule 7.17.
(d) Accountants' Certificate. Each set of year-end audited
consolidated Financial Statements and balance sheet delivered pursuant to
Section 7.1(a) shall be accompanied by a certificate or report dated the date of
such statement and balance sheet by the accountants who certified such
statements and balance sheet stating in substance that they have reviewed this
Agreement and that in making the examination necessary for their certification
of such statements and balance sheet they did not become aware of any Event of
Default or, if they did become so aware, such certificate or report shall state
the nature and period of existence thereof.
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(e) Projections. If requested by the Administrative Agent, the
Borrower shall deliver to the Administrative Agent and the Lenders (i) within
thirty (30) days after the beginning of each calendar year, quarterly
projections of its anticipated income, expenses, cash flow, assets and
liabilities for the next five (5) calendar years or, if earlier, through the
calendar year in which the Maturity Date occurs and (ii) quarterly updates for
the first four (4) full Fiscal Years following the Closing Date if the Loan
Parties are not meeting or exceeding the Projections, prepared in good faith on
assumptions believed by Holdings to be reasonable and in a manner and format
consistent with other Financial Statements provided by the Borrower to the
Administrative Agent and the Lenders.
(f) Other Reports and Information. Upon the request of the
Administrative Agent, the Borrower shall deliver to the Administrative Agent and
the Lenders copies of (i) all regular or special reports or effective
registration statements which any Loan Party shall file with Governmental
Authorities, the FCC or any PUC (or any successor thereto) or any securities
exchange, (ii) financial statements, material reports, and other information
distributed by any Loan Party to its creditors or the financial community in
general, and (iii) all press releases issued by any Loan Party.
(g) Further Information. Each Loan Party will promptly furnish to
the Administrative Agent or any Lender such other information as the
Administrative Agent or any Lender may reasonably request, including any report
by independent auditors and the information set forth on Schedules 4.12 and 4.16
updated as of the date of such request.
7.2 Other Notices. Promptly upon a Responsible Officer of any Loan Party
becoming aware of any of the following, the Borrower shall give the
Administrative Agent and each Lender notice thereof, together with a written
statement of a Responsible Officer of the Borrower setting forth the details
thereof and any action with respect thereto taken or contemplated to be taken by
such Loan Party:
(a) a Default or Event of Default;
(b) any Material Adverse Change;
(c) any event, circumstance or development that could reasonably be
expected to cause or result in a Material Adverse Change;
(d) any event that has a reasonable likelihood of constituting or
resulting in a Regulatory Event;
(e) the commencement, existence or threat of any proceeding by or
before any Governmental Authority against such Loan Party which, if adversely
decided, would have a Material Adverse Effect;
(f) such Loan Party's discovery of any fact, circumstance or
condition that could result in any Loan Party incurring Environmental
Liabilities or receipt of any notice of or other written communication alleging
the violation of, or liability under, any Environmental Law affecting such Loan
Party or any of its properties, which individually or in the aggregate with all
such other violations and liabilities, would exceed $500,000 in the aggregate;
or
(g) any transaction or proposed transaction that could result in a
Change of Control.
7.3 Notice of Pension-Related Events. Each Loan Party shall promptly
furnish the Administrative Agent with written notice upon the receipt by such
Loan Party or the administrator of any Plan of any notice, correspondence or
other communication from the PBGC, the IRS, the Secretary of
39
Treasury, the Department of Labor, or any other Person, as the case may be,
relating to (i) any Reportable Event, (ii) any funding deficiency with respect
to any Plan, (iii) any liability, either primary or secondary. with respect to
complete or partial withdrawal from any Plan, (iv) proceedings to terminate any
Plan or (v) the appointment of a trustee for any Plan that would have a Material
Adverse Effect. Such notice shall be accompanied by any pertinent documents
including the relevant notice, correspondence or other communication and a
statement of a Responsible Officer of such Loan Party describing the event or
the action taken and the reasons therefor.
7.4 Financial Accounting Practices. Each Loan Party shall make and keep
books, records and accounts which, in reasonable detail, accurately and fairly
reflect its transactions and dispositions of its assets and maintain a system of
internal accounting controls sufficient to provide reasonable assurances that
(a) transactions are executed in accordance with management's general or
specific authorization, (b) transactions are recorded as necessary (i) to permit
preparation of financial statements in conformity with GAAP and (ii) to maintain
accountability for assets, (c) access to assets is permitted only in accordance
with management's general or specific authorization and (d) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
7.5 Preservation of Corporate Existence and Qualification. Each Loan Party
shall maintain its existence, good standing and rights in full force and effect
in its jurisdiction of organization except as otherwise permitted pursuant to
Section 8.4. Each Loan Party shall qualify to do business and remain qualified
and in good standing and shall obtain all necessary authorizations to do
business in each jurisdiction in which failure to receive or retain such would
have a Material Adverse Effect.
7.6 Continuation of Business. The Loan Parties shall continue to engage
solely in the Telecommunications Business and shall acquire and maintain in full
force and effect all material rights, privileges, franchises and licenses
necessary therefor (including any license or authorization required by the FCC
or any PUC). The Loan Parties shall maintain in force and renew, as necessary,
all material Right-of-Way Agreements and shall obtain such consents of other
parties to any Right-of-Way Agreement as the Administrative Agent on behalf of
the Secured Parties shall deem reasonably necessary to protect its Lien on and
access to the Network, the Collateral and the Right-of-Way.
7.7 Insurance.
(a) The Loan Parties shall, at their sole cost and expense, provide
and maintain or cause to be maintained at all times insurance in such forms and
covering such risks and hazards and in such amounts and with an insurance
corporation with a Best rating of "A" or above, licensed to do business in the
states where any Network or Loan Party is located, as shown on Schedule 7.7 and
otherwise as may be required by the Security Documents. If any Loan Party at any
time or times hereafter shall fail to obtain or maintain any of the policies of
insurance required above or to pay all premiums relating thereto, the
Administrative Agent may at any time or times thereafter obtain and maintain
such policies of insurance and pay such premiums and take any other action with
respect thereto which the Administrative Agent deems advisable. The
Administrative Agent shall have no obligation to obtain insurance for any Loan
Party or pay any premiums therefor. By doing so, the Administrative Agent shall
not be deemed to have waived any Default or Event of Default arising from any
Loan Party's failure to maintain such insurance or pay any premiums therefor.
All sums so disbursed, including reasonable attorneys' fees, court costs and
other charges related thereto, shall be payable on demand by the Loan Parties to
the Administrative Agent and shall be additional Obligations hereunder secured
by the Collateral.
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(b) The Administrative Agent reserves the right at any time upon any
material change in any Loan Party's risk profile (including any change in the
business conducted by any Loan Party or any Laws affecting the potential
liability of such Loan Party) to require additional forms and limits of
insurance to, in the Administrative Agent's reasonable opinion, adequately
protect both the Administrative Agent's and the Lenders' interests in all or any
portion of the Collateral and to ensure that each Loan Party is protected by
insurance in amounts and with coverage customary for its industry. If requested
by the Administrative Agent, which request shall not be made more frequently
than once in any calendar year, each Loan Party shall deliver to the
Administrative Agent from time to time a report of a reputable insurance broker,
satisfactory to the Administrative Agent, with respect to its insurance
policies.
(c) Each Loan Party shall cause (i) all general liability and
automobile insurance policies to name the Administrative Agent on behalf of the
Secured Parties as an additional insured, (ii) all physical damage insurance
policies to contain a Lender's or mortgagee's loss payable provision acceptable
to the Administrative Agent which acceptance shall not be unreasonably withheld,
(iii) all insurance policies to provide that no assignment, cancellation,
material modification, reduction in amount or adverse change in coverage thereof
shall be effective until at least thirty (30) days after receipt by the
Administrative Agent of written notice thereof, (iv) all insurance policies to
insure the interests of the Administrative Agent on behalf of the Secured
Parties regardless of any breach of or violation by such Loan Party of any
warranties, declarations or conditions contained therein and (v) all insurance
policies to provide that the Administrative Agent and the Lenders shall have no
obligation or liability for premiums, commissions, assessments or calls in
connection with such insurance. The Administrative Agent shall be under no
obligation to verify the adequacy or existence of any insurance coverage. Each
Loan Party shall furnish the Administrative Agent copies of, or acceptable
certificates with respect to, all such policies prior to the date hereof, and
shall provide to the Administrative Agent, at least thirty (30) days prior to
each policy expiration date, evidence of the insurance being maintained by such
Loan Party in compliance with this Section 7.7(c). Certificates for insurance
required under clause (i) above shall be in XXXXX Form 25S (attached to Schedule
7.7), and all certificates shall be acceptable in form and substance to the
Administrative Agent, which acceptance shall not be unreasonably withheld.
(d) If any of the Collateral is partially or totally damaged or
destroyed, the Borrower shall give prompt notice to the Administrative Agent,
and all insurance proceeds, less the costs of collection thereof, shall be paid
to or retained by the Administrative Agent. Settlements, adjustments or
compromises of any claims for loss, damage or destruction to the Collateral
shall be made jointly by the Borrower and the Administrative Agent so long as no
Event of Default has occurred and is continuing, and otherwise shall be made
solely by the Administrative Agent. Each Loan Party hereby authorizes and
directs any affected insurance company to pay such proceeds directly to the
Administrative Agent, and to rely on the Administrative Agent's statement as to
whether an Event of Default has occurred. The Loan Parties shall pay all
reasonable out-of-pocket costs of collection of insurance proceeds payable on
account of such damage or destruction. If no Event of Default has occurred and
is continuing on the date any Network is partially or totally damaged or
destroyed, the Administrative Agent shall make available to the Borrower the
proceeds of any physical damage insurance actually paid to the Administrative
Agent in respect of such damage or destruction of any of the Collateral (after
deducting therefrom any sums retained by the Administrative Agent in
reimbursement for costs of collection) to pay the cost of restoration, and the
Borrower shall proceed promptly with the work of restoration of the Collateral
and shall pursue the work of restoration diligently to completion. If any Event
of Default has occurred and is continuing either on the date of such damage or
destruction or on the date such insurance proceeds are paid, or if any Event of
Default shall occur prior to completion of such work of restoration, then the
Administrative Agent, at its option, may apply such insurance proceeds in
payment of any of the Obligations, in such order as set forth in Section 2.10.
Any insurance proceeds remaining after completion of work or restoration shall,
at the Administrative Agent's election, be applied in accordance with Section
2.10, or paid over to the Borrower. Upon completion of any restoration, the
Borrower shall
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deliver to the Administrative Agent a certificate stating that the restoration
has been duly completed and accounting for the use of any insurance proceeds in
such restoration.
7.8 Indemnity.
(a) Each Loan Party that is a signatory hereto shall jointly and
severally indemnify and hold harmless each of the Administrative Agent, the
Lenders and their respective Affiliates, and each such Person's respective
officers, directors, employees, attorneys, agents and representatives (each, an
"Indemnified Person"), from and against any and all suits, actions, proceedings,
claims, damages, losses, liabilities and expenses (including reasonable
attorneys' fees and disbursements and other costs of investigation or defense,
including those incurred upon any appeal) which may be instituted or asserted
against or incurred by any such Indemnified Person as the result of the
execution and delivery of the Loan Documents, credit having been extended under
this Agreement and the other Loan Documents and the administration of such
credit, and in connection with or arising out of the transactions contemplated
hereunder and thereunder, including any and all Environmental Liabilities and
legal costs and expenses arising out of or incurred in connection with the
enforcement of any of the Loan Documents (collectively, "Indemnified
Liabilities") provided, however, that no such Loan Party shall be liable for any
indemnification to an Indemnified Person to the extent that any such suit,
action, proceeding, claim, damage, loss, liability or expense results from that
Indemnified Person's gross negligence or willful misconduct or material and
knowing breach of its obligations under this Agreement. NO INDEMNIFIED PERSON
SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER PARTY TO ANY LOAN DOCUMENT, ANY
SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OF SUCH PERSON OR ANY OTHER
PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE,
EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF CREDIT
HAVING BEEN EXTENDED, SUSPENDED OR TERMINATED UNDER ANY LOAN DOCUMENT OR AS A
RESULT OF ANY OTHER TRANSACTION CONTEMPLATED HEREUNDER OR THEREUNDER.
Promptly after receipt by an Indemnified Person of notice of the
commencement of any investigative, administrative or judicial proceeding in
respect of which a claim for indemnification is to be made against a Loan Party
hereunder (any such proceeding being an "Indemnified Proceeding"), such
Indemnified Person will notify the Loan Parties in writing of the commencement
thereof; provided, that (a) the omission to so notify the Loan Parties will not
relieve the Loan Parties from any liability which they may have to any
Indemnified Person except to the extent that the Loan Parties have been
materially prejudiced by such failure to give notice and (b) the omission to so
notify the Loan Parties will not relieve the Loan Parties from any liability
that they may have to any Indemnified Person otherwise than on account of the
indemnity provided for in this Section 7.8.
(b) To induce the Lenders to provide the LIBOR Rate option on the
terms provided in Section 2.8, if (i) any LIBOR Loans are repaid in whole or in
part prior to the last day of any applicable LIBOR Period (whether that
repayment is made pursuant to any provision of this Agreement or any other Loan
Document or is the result of acceleration, by operation of law or otherwise);
(ii) the Borrower shall default in payment when due of the principal amount of
or interest on any LIBOR Loan; (iii) the Borrower shall default in making any
borrowing of, conversion into or continuation of LIBOR Loans after the Borrower
has given notice requesting the same in accordance herewith; or (iv) the
Borrower shall fail to make any prepayment of a LIBOR Loan after the Borrower
has given a notice thereof in accordance herewith, the Borrower shall indemnify
and hold harmless each Lender from and against all losses, costs and expenses
resulting from or arising from any of the foregoing. Such indemnification shall
include any loss (excluding loss of margin) or expense incurred by such Lender
in connection with the reemployment of such funds or the termination of deposits
from which such funds were obtained. For the purpose of calculating amounts
payable to the Lender under this Section, each Lender shall be deemed to
42
have actually funded its relevant LIBOR Loan through the purchase of a deposit
which bears interest at the LIBOR Rate in an amount equal to the amount of that
LIBOR Loan and having a maturity comparable to the relevant LIBOR Period;
provided, however, that each Lender may fund each of its LIBOR Loans in any
manner it sees fit, and the foregoing assumption shall be utilized only for the
calculation of amounts payable under this Section. This covenant shall survive
the termination of this Agreement and the payment of the Notes and all other
amounts payable hereunder. As promptly as practicable under the circumstances,
each Lender shall provide the Borrower with its written calculation of all
amounts payable pursuant to this Section 7.8(b), and such calculation shall be
presumed correct (absent manifest error) and shall be binding on the parties
hereto unless the Borrower shall object in writing within thirty (30) Business
Days of receipt thereof, specifying the basis for such objection in detail.
7.9 Access. Each Loan Party shall upon reasonable notice permit such
persons as the Administrative Agent or any Lender may designate to visit and
inspect the Collateral or any other properties of such Loan Party, to examine
its books and records and take copies and extracts therefrom and discuss its
respective affairs with its officers and employees at such times and as often as
the Administrative Agent may reasonably request (provided that any Responsible
Officer of such Loan Party may, if it so chooses, be present at or participate
in any such discussion). Each Loan Party hereby authorizes such officers and
employees to discuss with the Administrative Agent or such Lenders the affairs
of such Loan Party. Without limiting the foregoing, each Loan Party shall,
during normal business hours, from time to time upon five (5) Business Days'
prior notice as frequently as the Administrative Agent may reasonably request:
(a) provide the Administrative Agent and any of its officers, employees and
agents access during normal business hours to the properties, facilities,
advisors and employees (including officers) of such Loan Party and to the
Collateral, (b) permit the Administrative Agent and any of its officers,
employees and agents, to inspect, audit and make extracts from such Loan Party's
books and records and (c) permit the Administrative Agent and its officers,
employees and agents, to inspect, review, evaluate and make test verifications
and counts of the Accounts, Equipment, Inventory and other Collateral of such
Loan Party. If a Default or Event of Default shall have occurred and be
continuing or if access is necessary to preserve or protect the Collateral as
determined by the Administrative Agent, each such Loan Party shall provide such
access to the Administrative Agent and to each Lender at all times and without
advance notice. Furthermore, as long as any Event of Default shall have occurred
and be continuing, each such Loan Party shall (i) provide the Administrative
Agent and each Lender with access to their suppliers and customers, (ii) make
available to the Administrative Agent and its respective counsel, as quickly as
is possible under the circumstances, originals or copies of all books and
records which the Administrative Agent may request and (iii) deliver any
document or instrument necessary for the Administrative Agent, as it may from
time to time request, to obtain records from any service bureau or other Person
which maintains records for such Loan Party. Each Loan Party shall maintain
duplicate records or supporting documentation on media, including computer tapes
and discs owned by such Loan Party. Any Lender or its representatives (other
than any Person in the Telecommunications Business), upon request by such Lender
to the Administrative Agent, may accompany the Administrative Agent on any such
visit.
7.10 Expenses. The Borrower shall (a) pay or reimburse the Administrative
Agent for all of its reasonable out-of-pocket costs, fees, charges and expenses
incurred or arising in connection with the negotiation, review, preparation and
execution of this Agreement, the other Loan Documents, any commitment or
proposal letter, or any amendment, supplement, waiver, modification to, the
administration of and any restructuring of this Agreement, the Obligations or
the other Loan Documents, including reasonable legal fees and disbursements,
expenses, document charges and other charges and expenses of the Administrative
Agent, (b) following the occurrence and during the continuance of an Event of
Default, pay or reimburse the Administrative Agent and each Lender for the
enforcement, protection or preservation of any rights under or in connection
with this Agreement or any other Loan Document, including reasonable legal fees
and disbursements, audit fees and charges, and all out-of-
43
pocket expenses, and (c) pay, indemnify and hold each Lender harmless from any
and all recording and filing fees and taxes and any and all liabilities with
respect to, or resulting from any delay by any Loan Party in paying, stamp,
excise and other Taxes (excluding income and franchise taxes and Taxes of
similar nature), if any, which may be payable or determined to be payable in
connection with the execution and delivery or recordation or filing of, or
consummation of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement and the other Loan Documents. All of the amounts described in
this Section are referred to collectively as the "Lenders' Expenses," shall be
payable upon demand, and shall accrue interest at the interest rate for Base
Rate Loans five (5) Business Days after the date of demand until paid in full.
All Lenders' Expenses, and interest thereon, shall be part of the Obligations
and shall be secured by the Collateral. The agreements in this Section 7.10
shall survive repayment of the Obligations. All Lenders' Expenses that are
outstanding on any Borrowing Date shall be paid before or with such Advance. If
the Borrower has not paid to the Lenders the amount of all Lenders' Expenses
billed to the Borrower at least five (5) Business Days before such Borrowing
Date, the Lenders shall be authorized to retain from any Advance on such
Borrowing Date the amount of such Lenders' Expenses that remain unpaid. The
Borrower's obligation to pay Lenders' Expenses shall not be limited by any
limitation on the amount of the Commitment that may be designated as available
for such purposes, and any amounts so designated shall be used to pay Lenders'
Expenses accrued at the time of any Advance before any of the Borrower's legal
fees or similar expenses.
7.11 Payment of Taxes, Charges, Claims and Current Liabilities. Each Loan
Party shall pay or discharge:
(a) on or prior to the date on which penalties thereon accrue, all
Taxes, assessments and other government charges or levies imposed upon it or any
of its properties or income (including such as may arise under Section 4062,
Section 4063 or Section 4064 of ERISA, or any similar provision of Law);
(b) on or prior to the date when due, all lawful claims of
materialmen, mechanics, carriers, warehousemen and other like Persons which
result in creation of a Lien upon any such property;
(c) on or prior to the date when due, all other lawful claims which,
if unpaid, might result in the creation of a Lien upon any such property (other
than Permitted Encumbrances) or which, if unpaid, might give rise to a claim
entitled to priority over general creditors of such Loan Party in a case under
Title II (Bankruptcy) of the United States Code, as amended, or in any
insolvency proceeding or dissolution or winding-up involving such Loan Party;
and
(d) all other current liabilities so that none is overdue more than
sixty (60) days.
Notwithstanding the foregoing, each Loan Party shall be entitled to
contest or appeal the requirements of any Law or Governmental Authority or the
payment of any asserted Tax, assessment, charge, levy, claim, liability or any
judgment entered against such Loan Party (collectively, in this Section 7.11,
the "requirements") as long as (i) such requirements are being contested in good
faith by appropriate proceedings diligently conducted; (ii) the Borrower has
given the Administrative Agent written notice of such requirements and its
intent to contest them, with supporting reasons for such contest; (iii) such
Loan Party maintains adequate cash reserves or has adequate availability under
this Agreement and makes all appropriate provisions as may be required by GAAP
to provide for any liability arising from such requirements; (iv) the contesting
of, or failure to comply with, such requirements does not in any material way
jeopardize such Loan Party's ability or authority to operate all or any part of
its business or the value or continuing priority of the security interests of
the Administrative Agent on behalf of the Secured Parties in the Collateral; (v)
all such contests of and failures to comply with such
44
requirements would not, in the aggregate, have a Material Adverse Effect; and
(vi) any foreclosure, attachment, execution, sale or similar proceeding against
such Loan Party or any of its properties in connection with any such
requirements is duly stayed by posting of a bond or security deposit or by other
action sufficient under applicable Law to stay such foreclosure, attachment,
execution, sale or other proceedings.
7.12 Compliance with Laws. Each Loan Party shall comply in all respects
with all Laws applicable to such Loan Party, including all Environmental Laws;
provided, however, that such Loan Party shall not be deemed to be in violation
of this Section 7.12 as a result of any failure to comply which would not result
in (i) any liability or exposure to the Administrative Agent or the Lenders or
(ii) fines, penalties, injunctive relief or other civil or criminal liabilities
which, in the aggregate would have a Material Adverse Effect.
7.13 Use of Proceeds. The proceeds of the Advances will be used only as
set forth in Section 2.14.
7.14 Government Authorizations; Regulatory Authorizations, Etc. Each Loan
Party shall at all times obtain and maintain in force all of its Regulatory
Authorizations and Permits and all registrations, qualifications, designations,
declarations and other filings with, any Governmental Authority necessary in
connection with execution and delivery of this Agreement, the Notes or any other
Loan Document, consummation of the transactions herein or therein contemplated,
performance of or compliance with the terms and conditions hereof or thereof or
to ensure the legality, validity and enforceability hereof or thereof, provided,
however, that such Loan Party shall not be deemed to be in violation of this
Section 7.14 as a result of any failure that (i) would not result in any
liability or exposure to the Administrative Agent or the Lenders or (ii) that,
together with all such failures, would not result in fines, penalties,
injunctive relief or other civil or criminal liabilities that, in the aggregate,
would have a Material Adverse Effect. The Loan Parties shall promptly provide
the Administrative Agent with a copy of each material Regulatory Authorization
or Permit obtained after the date hereof. together with an update of Schedule
4.5 reflecting the addition thereof and, when each switch becomes operational,
an opinion of regulatory counsel to the effect that the relevant Loan Party has
all Regulatory Authorizations and Permits needed for its operation of such
switch as contemplated by the Business Plan.
7.15 Contracts and Franchises. Each Loan Party shall comply with all
agreements or instruments to which it is a party or by which it or any of its
properties (now owned or hereafter acquired) may be subject or bound and shall
maintain any and all franchises material to its business which it may have or
hereafter acquire; provided, however, that such Loan Party shall not be deemed
to be in violation of this Section 7.15 as a result of failures that in the
aggregate would not have a Material Adverse Effect.
7.16 Site Leases and Consents. Each Loan Party shall maintain in force and
renew as necessary all Site Leases and shall obtain such Landlord Consents as
the Administrative Agent shall reasonably request to protect its and their Liens
and access to the Collateral. All Site Leases entered into after the date hereof
shall have a term (including automatic renewals and such Loan Party's unilateral
renewal rights) equal to or greater than the term of this Agreement and shall
require that the Administrative Agent be given notice of default and the right
to elect to cure defaults and/or assume such agreement upon such Loan Party's
default thereunder upon the occurrence and during the continuation of an Event
of Default under this Agreement.
7.17 Financial Covenants. The Loan Parties shall comply with the financial
covenants set forth on Schedule 7.17.
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7.18 Patent, Trademark and Copyright Collateral. (a) The Borrower shall
notify the Administrative Agent immediately if it knows or has reason to know
that any application or registration relating to any patent, trademark or
copyright (now or hereafter existing) may become abandoned or of any adverse
determination or development (including the institution of, or any such
determination or development in, any proceeding in the United States Patent and
Trademark Office, the United States Copyright Office or any court) regarding any
Loan Party's ownership of any patent, trademark or copyright, its right to
register the same, or to keep and maintain the same, except for adverse
determinations or developments that in the aggregate would not have a Material
Adverse Effect.
(b) Each Loan Party shall take all actions necessary or requested by the
Administrative Agent to maintain and pursue each application, to obtain the
relevant registration and to maintain the registration of each of the patents,
trademarks and copyrights (now or hereafter existing), including the filing of
applications for renewal, affidavits of use, affidavits of noncontestability and
opposition and interference and cancellation proceedings, unless the applicable
Loan Party shall determine that such patent, trademark or copyright is not
material to the conduct of its business and except for such intellectual
property that if not maintained would not have a Material Adverse Effect.
7.19 Sites. For all Sites acquired after the date hereof by any Loan Party
at any time (except for leases of sales offices with terms shorter than three
(3) years), such Loan Party shall provide to the Administrative Agent within
twenty (20) days of such Loan Party's acquisition thereof and before placing any
Collateral thereon:
(a) Site Leases and Right-of-Way Agreements. A copy of the duly
executed counterpart of all of the Site Leases and Right-of-Way Agreements; and
(b) Consent. Duly executed Landlord Consent executed by the owner of
such real property.
7.20 Environmental Site Assessments. For each Site other than a leased
Site, the Borrower shall obtain and deliver to the Administrative Agent, at the
Borrower's expense, an environmental transaction screen for each such Site and
any material portion of any related Right-of-Way, which shall be conducted by
environmental engineers or consultants reasonably acceptable to the
Administrative Agent. Such environmental transaction screen shall cover such
matters as the physical state of the property, the past and present uses of the
relevant property and the surrounding property, a search of relevant federal,
state and local environmental agency records, and such similar matters as may be
generally consistent with environmental investigation of commercial properties
in the state where the property is located. If any environmental transaction
screen discloses any potential environmental problems or conditions or the
possibility of any material Environmental Liability for any Loan Party or any
Lender, as determined by the Administrative Agent, then the Administrative Agent
may require additional audits or investigation of the property and, if not
satisfied with the results thereof, may, at its option, decide not to make any
Advances in respect of such property. The Administrative Agent shall notify the
Borrower in writing of such determination and the Administrative Agent's
selected course of proceeding within a reasonable time after the Borrower's
submission of such assessment.
7.21 Construction. The Loan Parties shall construct and equip each Network
in full compliance in all material respects with all Requirements of Law, shall
safeguard and store all Equipment financed with the proceeds of the Loan until
installed in appropriate storage facilities owned or leased by a Loan Party,
and, in the event of any cessation of construction (until completion of
construction) for more than fifteen (15) successive calendar days, the Loan
Parties shall make adequate provision, reasonably acceptable to the
Administrative Agent, for the protection of all materials stored on site against
deterioration, loss or damage.
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7.22 No Encroachments. The Loan Parties shall construct each Network so
that it shall not encroach upon any easement or right-of-way or the land of
others (unless consented to by the affected property owner), other than an
encroachment that does not have a Material Adverse Effect on the Network.
7.23 Certain Notices. The Borrower shall promptly provide the
Administrative Agent and the Lenders with written notice on each occasion that a
switch is installed and becomes operational in one of the Markets.
7.24 Management Team. The Loan Parties shall engage and continue to retain
a professional and experienced management staff.
7.25 Contracts. Each Loan Party shall comply with the terms of each
Contract, General Intangible and/or Account except for noncompliances which in
the aggregate would not have a Material Adverse Effect. The Borrower shall
deliver to the Administrative Agent copies of all material Contracts entered
into after the date hereof, all modifications made after the date hereof in
existing material Contracts and all demands or notices received by any Loan
Party relating in any way to any material Contract, General Intangible and/or
Account other than in the ordinary course of business.
7.26 Liens on After-Acquired Property. Upon the acquisition after the date
hereof by any Loan Party of any asset acquired of the type defined as Collateral
in this Agreement in which the Administrative Agent on behalf of the Secured
Parties does not have a perfected first-priority Lien other than assets that in
the aggregate do not have any material value, such Loan Party shall (a) promptly
grant or cause to be granted, or confirm or evidence the grant herein of, to the
Administrative Agent on behalf of the Secured Parties a Lien, upon the terms
contained herein, on all such property and interests, free of all other Liens
except Permitted Encumbrances and (b) at its own expense, (i) prepare, execute,
acknowledge and deliver, or cause the preparation, execution, acknowledgment and
delivery of, and thereafter register, file or record, or cause to be registered,
filed or recorded, in an appropriate governmental office, any document or
instrument deemed by the Administrative Agent to be necessary or in the exercise
of its reasonable judgment desirable for the creation, perfection, renewal and
continuation of the foregoing Liens, (ii) pay, or cause to be paid, all Taxes,
fees and legal expenses related to such registration, filing or recording and
(iii) deliver to the Administrative Agent resolutions of Board of Directors and
opinions of counsel, in form and substance as may be reasonably requested by the
Administrative Agent.
7.27 Year 2000 Compliance. Each Loan Party shall take all actions
necessary and commit adequate resources to assure that computer-based and other
systems of the Loan Parties are Year 2000 Compliant (as defined in Section 4.19)
and to minimize any Material Adverse Effect caused by the failure of any system
of such Loan Party which is material to such Loan Party's business to be Year
2000 Compliant.
7.28 Post-Closing Items. Each Loan Party shall comply with the
post-closing items set forth on Schedule 6.2 in the time permitted, if any is
indicated, and shall promptly provide the Administrative Agent with evidence
thereof in form and substance as may be reasonably acceptable to the
Administrative Agent.
7.29 Further Assurances. Each Loan Party shall and shall cause each other
Loan Party to, at such Loan Party's expense and upon request of the
Administrative Agent, duly execute and deliver, or cause to be duly executed and
delivered, to the Administrative Agent and the Lenders such further instruments
and do and cause to be done such further acts as may be necessary or proper in
the reasonable
47
opinion of the Administrative Agent to carry out more effectively the provisions
and purposes of this Agreement or any other Loan Document.
ARTICLE 8: NEGATIVE COVENANTS
The Loan Parties hereby jointly and severally agree that, from and after
the date hereof until the Termination Date, the Loan Parties will not:
8.1 Indebtedness. Create, incur, assume or suffer to exist any
Indebtedness, except for (a) the Obligations and (b) Permitted Indebtedness.
8.2 Restrictions on Liens.
(a) Create or suffer to exist any Lien on the Collateral or on any
other property of any Loan Party, or any part thereof, whether superior or
subordinate to the Lien of the Loan Documents, except for the following
permitted encumbrances (the "Permitted Encumbrances"): (i) Liens and
encumbrances in favor of the Administrative Agent on behalf of the Secured
Parties; (ii) government Liens, including Liens for Taxes not yet due or which
are being contested in good faith and by appropriate proceedings provided that
Section 7.11 is complied with; (iii) statutory Liens in connection with workers'
compensation, unemployment insurance and other social security legislation; (iv)
deposits to secure the performance of bids, trade contracts (other than for
borrowed money), leases, statutory obligations and other obligations of a like
nature, in each case incurred in the Loan Parties' ordinary course of business;
(v) deposits to secure surety bonds, performance bonds and customs bonds, in
each case obtained in the Loan Parties' ordinary course of business; (vi)
easements, Rights-of-Way, restrictions and other similar encumbrances that are
not substantial in amount, and which do not in any case materially detract from
the value of any Collateral subject thereto or interfere with the ordinary
conduct of the business of such Loan Party; (vii) judgment liens and deposits to
secure appeal bonds, in each case, with respect to judgments not in excess of
$500,000 in the aggregate and with respect to which lien execution has been
stayed within thirty (30) days by appropriate judicial proceedings or the
posting of adequate security which may not be any of the Collateral; (viii)
specific liens, if any, identified on Schedule 8.2 and any renewal or extension
of any such Lien that does not extend to any other property and does not secure
an increased amount of Indebtedness or other greater obligation; (ix) statutory
Liens of landlords, statutory Liens of banks and rights of set-off, statutory
Liens of carriers, warehousemen, mechanics, repairmen, workmen and materialmen,
statutory Liens in favor of customs and revenue authorities, and other Liens
imposed by Law, in each case incurred in the ordinary course of business (A) for
amounts not yet overdue or (B) for amounts that are being contested in good
faith by appropriate proceedings, as long as the provisions of Section 7.11 are
satisfied; (x) Liens to secure permitted purchase money Indebtedness and
Indebtedness outstanding under the Commerce Equipment Loan; (xi) leases or
subleases granted to third parties in accordance with any applicable terms of
the Loan Documents and not interfering in any material respect with the ordinary
conduct of the business of the Loan Parties or resulting in a material
diminution in the value of or rights of the Administrative Agent and the Lenders
with respect to any Collateral; and (xii) any (A) interest or title of a lessor
or sublessor under any lease permitted by Section 8.7, (B) restriction or
encumbrance that the interest or title of such lessor or sublessor may be
subject to or (C) subordination of the interest of the lessee or sublessee under
such lease to any restriction or encumbrance referred to in the preceding clause
(B) so long as the holder of such restriction or encumbrance agrees to recognize
the rights of such lessee or sublessee under such lease.
(b) Become a party to any agreement, note, indenture or instrument
or take any other action, which would prohibit the creation of a Lien on any of
its properties or other assets in favor of the Administrative Agent on behalf of
the Secured Parties as additional collateral for the Obligations.
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8.3 Limitation on Contingent Obligations. Agree to, or assume, guarantee,
endorse or otherwise in any way be or become responsible or liable for, directly
or indirectly, any Contingent Obligation, except for (i) those created by or
specified in the Loan Documents or with respect to the Obligations of the Loan
Parties, (ii) those described on Schedule 8.3 and (iii) endorsements of
negotiable instruments for collection.
8.4 Prohibition of Mergers, Acquisitions, Sales of Assets, Name, Office or
Business Changes, Etc.
(a) Enter into, or become the subject of, any transaction of merger
or consolidation (other than (i) as permitted by Section 8.4(b) below, (ii) a
merger with Subsidiaries in which the Borrower or, if the merger is among
Subsidiaries a Subsidiary that is a Loan Party, is the surviving entity or (iii)
a reorganization the principal purpose of which is to change the state of
incorporation of any Loan Party), liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, transfer or
otherwise dispose of, in one transaction or a series of transactions, all or
substantially all of such Loan Party's business or assets, whether now owned or
hereafter acquired.
(b) Change its name, chief executive office, principal place of
business, corporate structure, state or form of organization or the location of
any Collateral (other than inventory sold in the ordinary course of business and
the disposition of obsolete equipment) without giving the Administrative Agent
and the Lenders at least thirty (30) days' advance written notice of such
change, and ensuring that any steps that the Administrative Agent may deem
necessary to continue the perfection and priority of security interests of the
Administrative Agent on behalf of the Secured Parties in the Collateral shall
have been taken.
(c) Except for sales and other dispositions of Equipment and
Inventory in the ordinary course of business (including obsolete Equipment),
sell Collateral having a fair value in excess of One Million Dollars
($1,000,000) in the aggregate in any period of twelve (12) consecutive months,
without the prior written consent of the Requisite Lenders, which consent in the
case of Asset Dispositions aggregating not more than Five Million Dollars
($5,000,000) for all sales and dispositions from and after the Closing Date
shall not be unreasonably withheld or delayed by more than ten (10) days and for
sales aggregating in excess of Five Million Dollars ($5,000,000) for all sales
and dispositions from and after the Closing Date may be withheld in the sole
discretion of the Requisite Lenders; provided, however, that the Administrative
Agent for the benefit of the Secured Parties has a perfected first priority
security interest in the proceeds of each such Asset Disposition pending
reinvestment of such proceeds for purchases of Equipment from Nortel or
prepayment of the Loan.
(d) Change the Fiscal Year end of such Loan Party from December 31,
except with the prior written consent of the Requisite Lenders, which consent
shall not be unreasonably withheld.
(e) Amend, restate or otherwise modify, or violate any terms of, its
Organizational Documents in any material respect (except as permitted by Section
8.4(a) or (p)) without the prior written consent of the Requisite Lenders, which
consent will not be unreasonably withheld, except for reorganization into a "C
corporation".
(f) Become or agree to become a general or limited partner in any
general or limited partnership, or a member in a limited liability company or a
joint venturer in any joint venture except as permitted by Section 8.14 or 8.15.
49
(g) Acquire or purchase substantially all of the stock or ownership
interests in, or substantially all of the business, assets, customers or
operations of, any other entity for more than $500,000 in any one transaction or
a series of related transactions.
8.5 Limitation on Equity Payments. In the case of Holdings, make any
Equity Payment and, in the case of any other Loan Party, make any Equity Payment
to a Person other than a Loan Party, provided, however, that to the extent that
Holdings receives Additional Contributed Capital in excess of $30,000,000, plus
the unpaid amounts (principal and interest) of Indebtedness outstanding under
the Note Purchase Agreement. Holdings may make Equity Payments aggregating such
excess as long as with respect to any such Equity Payment no Default or Event of
Default exists immediately prior to or after giving effect to such Equity
Payment.
8.6 Assumed Names. Transact or engage in business under any assumed name,
fictitious name, trade style or "d/b/a" except those identified on Schedule
4.39.
8.7 Limitation on Leases. Enter into any agreement, or be or become liable
under any agreement not in existence as of the date hereof for the lease, hire
or use of any real or personal property for annual rentals in excess of $250,000
in the aggregate, including capital or operating leases, except that the Loan
Parties may, in the ordinary course of business and on terms standard in the
industry, enter into Site Leases and leases or agreements for office space,
vehicles or office equipment, transmission capacity and for the location or
storage of any of the Collateral.
8.8 Transactions with Affiliates. Except as described in Schedule 4.40 or
permitted by Section 8.5, enter into any transaction with any Affiliate of
Holdings (other than the Borrower or any of its Subsidiaries), including any
loan or advance, any repayment of a loan or advance or the purchase, sale or
exchange of property or the rendering of any services, or enter into, assume or
suffer to exist any employment or consulting contract with any Affiliate of
Holdings, except in the ordinary course of business of such Loan Party and upon
fair and reasonable terms no less favorable to such Loan Party than could be
obtained, at the time of such transaction, or, if such transaction is pursuant
to a written agreement, at the time of the execution of the agreement providing
therefor, in a comparable arms-length transaction with a Person that is not such
an Affiliate of Holdings.
8.9 Extension of Accounts. With respect to Accounts, General Intangibles
or Contracts, (i) grant any material extension of the time of payment of any
thereof, (ii) compromise, compound or settle for a material amount less than the
full amount thereof, (iii) release any Person liable for the payment thereof or
(iv) allow any credit or discount whatsoever thereon, other than trade discounts
granted in the normal course of business or discounts, compromises, compounds or
settlements that could not reasonably be expected to have a Material Adverse
Effect.
8.10 Unscheduled Payments. Make any voluntary or optional principal or
unscheduled interest payment on any Indebtedness other than the Obligations,
except as permitted under Section 2.14.
8.11 Business Activities. Engage in any business activity that is not
similar, related, ancillary or complementary to the Telecommunications Business
or make any material change in the business objectives, purposes and operations
of the Loan Parties from those contemplated in the Business Plan, including the
Loan Parties entering into Markets in states other than those listed in Schedule
1.
8.12 Capital Expenditures. Until substantially all the Networks in each of
the Markets contemplated by the Business Plan are operating, directly or
indirectly make or commit to make any material expenditure in respect of the
purchase or other acquisition (including installment purchases or Capital
Leases) of fixed or capital assets, except for expenditures in accordance with
the Business Plan
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and permitted by Section 7.17 and normal replacements and maintenance (including
capacity expansions and enhancements for existing Networks) which are properly
charged to current operations or expenditures of Excess Cash Flow not required
to prepay the Loans pursuant to Section 2.7(b)(ii).
8.13 Limitation on Investments, Advances and Loans. Make or commit to make
any advance, loan, guarantee of any Indebtedness, extension of credit or capital
contribution to, or hold or invest in or purchase or otherwise acquire any
Stock, bonds, notes, debentures or other securities of, or make any other
investment in, any Person, including any officer of a Loan Party, any Affiliate
of a Loan Party or any officer of any Affiliate of a Loan Party, except another
Loan Party or, to the extent not prohibited by Section 8.14, another Subsidiary,
except (i) Cash Equivalents (ii) transactions permitted pursuant to Section
8.4(a), (iii) travel advances in the ordinary course of business, relocation
loans to employees but not in excess of $250,000 individually or $1,000,000 in
the aggregate outstanding at any one time, (iv) other loans to any employees of
any Loan Party but in any case in an amount (including principal and interest
outstanding) not to exceed $250,000 individually or $1,000,000 in the aggregate
at any given time, (v) any investment acquired (A) in exchange for any other
investment or Accounts held by such Loan Party in connection with or as a result
of a bankruptcy, workout, reorganization or recapitalization of the issuer of
such investment or Accounts or an Affiliate of such issuer, (B) as a result of
foreclosure by such Loan Party of any secured Indebtedness or (C) in
satisfaction of a judgment, (vi) investments in prepaid expenses, negotiable
instruments held for collection and lease, utility and workers' compensation,
performance and other similar deposits in the ordinary course of business, (vii)
securities received in connection with Asset Dispositions aggregating not more
than Five Million Dollars ($5,000,000) of Asset Disposition Net Proceeds for all
Asset Dispositions from and after the Closing Date and (viii) investments
existing on the Closing Date as described on Schedule 8.13.
8.14 Subsidiaries. Permit any Loan Party to create, organize or acquire a
Subsidiary owning, or any Subsidiary of the Borrower that is not already a
Guarantor to own, assets of more than $100,000 unless such Subsidiary delivers
to the Administrative Agent and Lenders an Additional Guarantor Assumption (an
"Additional Guarantor Assumption"), substantially in the form of Exhibit H,
pursuant to which such Subsidiary becomes a Guarantor, and the conditions set
forth in the Additional Guarantor Assumption are satisfied, to the satisfaction
of the Administrative Agent which satisfaction shall not be unreasonably
withheld.
8.15 Commerce Loan Agreements. Make any amendment or other modification to
the Commerce Loan Agreements, except with the prior written consent of the
Administrative Agent.
ARTICLE 9: EVENTS OF DEFAULT AND REMEDIES
9.1 Events of Default. An Event of Default shall mean the occurrence or
existence of one or more of the following events or conditions (whatever the
reason for such Event of Default and whether voluntary, involuntary or effected
by operation of Law):
(a) Payment Default. The Borrower (i) fails to make any payment of
principal of or Fees owing in respect of, the Loan or any of the other
Obligations when such amount becomes due and payable, (ii) fails to make any
payment of interest on the Loan or any of the other Obligations within three (3)
Business Days after such amount becomes due and payable or (iii) fails to pay or
reimburse the Administrative Agent or the Lenders for any expense reimbursable
hereunder or under any other Loan Document within five (5) Business Days
following demand for such reimbursement or payment of expenses.
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(b) False Statement. If any statement, representation or warranty
made or deemed made pursuant to Section 6.3 by any Loan Party in any Loan
Document or made in any Financial Statement, certificate, report, exhibit or
document furnished to the Administrative Agent or any Lender pursuant to any
Loan Document, proves to have been untrue, incomplete, false or misleading in
any material respect as of the time when made or deemed made (including by
omission of material information necessary to make such representation, warranty
or statement not misleading in any material respect).
(c) Immediate Default. Any Loan Party shall fail or neglect to
perform, keep or observe any of the provisions of Section 7.13, 7.17, 7.26 or
7.27 or Article 8 or to maintain insurance as listed on Schedule 7.7.
(d) Covenant Defaults. If any Loan Party fails or neglects to
perform, keep or observe any provision of this Agreement, and such default
continues for a period of thirty (30) calendar days after the earlier of such
Loan Party's knowledge thereof or receipt of written notice from the Lender
thereof, except that violation of Section 7.11(d) shall become an Event of
Default at the end of the sixty (60) day period stated therein and except for
specific events listed elsewhere in this Section 9.1, as to which no notice or
cure period shall apply unless specified.
(e) Undischarged Judgments. If one or more judgments for the payment
of money have been entered against the Borrower in an amount in excess of
$500,000 in the aggregate and such judgment or judgments are not covered by
insurance and have remained undischarged and unstayed for a period of thirty
(30) calendar days or, if stayed, all of the conditions in Section 8.2(a)(vii)
have not been satisfied.
(f) Attachments, Etc. If a writ or warrant of attachment,
garnishment, execution, distraint or similar process has been issued against any
Loan Party or any of its properties in an amount in excess of $500,000, which
has remained undischarged and unstayed for a period of thirty (30) consecutive
days or, if stayed, all of the conditions in Section 8.2(a)(vii) have not been
satisfied.
(g) Default Under Third Party Agreements. A default or breach occurs
under any Indebtedness other than the Loan to which any Loan Party is a party
which (A) involves the failure to make any payment in the amount of $500,000 in
the aggregate or (B) causes or permits any holder of such Indebtedness or a
trustee to cause, Indebtedness or a portion thereof in excess of $500,000 in the
aggregate to become due prior to its stated maturity or prior to its regularly
scheduled dates of payment, regardless of whether such right is exercised by
such holder or trustee.
(h) Involuntary Bankruptcy or Receivership Proceedings. A case or
proceeding commences against any Loan Party (i) seeking a decree or order in
respect of any Loan Party under Title 11 of the United States Code, as now
constituted or hereafter amended or any other applicable federal, state or
foreign bankruptcy or other similar law, (ii) seeking the appointment of a
custodian, receiver, liquidator, assignee, trustee or sequestrator (or similar
official) for any Loan Party or of any substantial part of any such Person's
assets or (iii) seeking the winding-up or liquidation of the affairs of any Loan
Party and any such case or proceeding remains undismissed, unstayed, unbonded or
undischarged for a period of sixty (60) days.
(i) Voluntary Bankruptcy. Any Loan Party (i) files a petition
seeking relief under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other applicable federal, State or foreign bankruptcy
or other similar law, (ii) consents to the institution of proceedings thereunder
or to the filing of any such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee or
sequestrator (or similar official) of any Loan Party or
52
of any substantial part of any such Person's assets, (iii) makes a general
assignment for the benefit of creditors, (iv) takes any corporate action to
authorize any of the foregoing or (v) admits in writing its inability to, or
shall be generally unable to, pay its debts as such debts become due.
(j) ERISA Defaults. If, with respect to any Plan, (i) there has
occurred a Reportable Event reported to or which should be reported to the PBGC
which may reasonably result in any material liability to the PBGC with respect
to any Plan, (ii) a Plan has been terminated with insufficient assets to satisfy
the requirements of Section 4041(b) or ERISA, (iii) a trustee has been appointed
by a United States District Court to administer a Plan, (iv) the PBGC or any
other Person has instituted proceedings to terminate a Plan or to appoint a
trustee to administer any such Plan, (v) any Loan Party or any Affiliate has
withdrawn, completely or partially, from any Plan, (vi) any Loan Party or any
Affiliate has incurred secondary liability for withdrawal liability payments
under any Plan or (vii) a Plan has failed to meet the minimum funding standards
established under the Code or ERISA and such event is not being contested by
such Loan Party in compliance with Section 7.11, if the result of any or all
thereof is that one or more Loan Parties incurs a liability or liabilities in
excess of $500,000 in the aggregate or a Material Adverse Effect.
(k) Defaults Under Other Loan Documents. If any default or breach
should occur under any other Loan Document (other than under any provision of
any other Loan Document referred to in any other Section of this Section 9.1)
and is not cured or waived within thirty (30) days after the earlier of (i) a
Responsible Officer of any Loan Party becoming aware of such default or breach
or (ii) receipt by any Loan Party of notice from the Administrative Agent or any
Lender of such default or breach, or any such Loan Documents should cease to be
in full force and effect, other than with the consent of the Requisite Lenders.
(l) Security Interest. Any material provision of Article 3 or 11 or
Section 9.2 of this Agreement shall for any reason cease to be valid, binding
and enforceable in accordance with its terms (or any Loan Party shall challenge
in writing the enforceability of any such provision or shall assert in writing,
or engage in any action or inaction based on any such assertion, that any such
provision has ceased to be or otherwise is not valid, binding and enforceable in
accordance with its terms) or any security interest created under any Loan
Document shall cease to be a valid and perfected first priority security
interest or Lien (except as otherwise permitted herein or therein) in any of the
Collateral having a value in excess of $1,000,000 purported to be covered
thereby for any reason except the failure of the Administrative Agent or any
Lender to take any action within its control.
(m) Change of Control. If any Change of Control occurs.
9.2 Remedies.
(a) If any Default of Event of Default shall have occurred and be
continuing and the Requisite Lenders shall not have determined to continue to
make Advances so long as that specific Default or Event of Default is
continuing, the Administrative Agent shall (at the written request of the
Requisite Lenders), by written notice to the Borrower, suspend the Commitments
with respect to further Advances, whereupon no further Advances shall be made or
extended (in the sole discretion of the Requisite Lenders) so long as such
Default or Event of Default is continuing. If any Event of Default shall have
occurred and be continuing, the Administrative Agent shall (at the written
request of the Requisite Lenders), without notice except as otherwise expressly
provided herein, increase the rate of interest applicable to the Loans to the
Default Rate.
(b) If any Event of Default shall have occurred and be continuing,
the Administrative Agent may and at the direction of the Requisite Lenders
shall, upon notice to the Borrower from the
53
Administrative Agent, (i) terminate the Commitments with respect to further
Advances; (ii) declare all or any portion of the Obligations, including all or
any portion of any Loan to be forthwith due and payable, all without
presentment, demand, protest or further notice of any kind, all of which are
expressly waived by the Borrower and each other Loan Party; and (iii) exercise
any rights and remedies provided to the Administrative Agent on behalf of the
Secured Parties under the Loan Documents and/or at law or in equity, including
all remedies provided under the UCC; provided, however, that upon the occurrence
of an Event of Default specified in Section 9.1(h), or (i), the Commitment shall
be immediately terminated and all of the Obligations, including the Loan, shall
become immediately due and payable without declaration, notice or demand by any
Person.
(c) Voting Rights; Dividends; Etc. If any Event of Default shall
have occurred and be continuing:
(i) Upon notice by the Administrative Agent to Holdings on behalf of
the Loan Parties, all rights of any Grantor to exercise the voting and other
consensual rights which it would otherwise be entitled to exercise shall cease,
and all such rights shall thereupon become vested in the Administrative Agent
who shall thereupon have the sole right to exercise such voting and other
consensual rights, subject to compliance with all applicable Communications Law.
(ii) All rights of any Grantor to receive dividends and
distributions in respect of the Collateral shall cease, and all such rights
shall thereupon become vested in the Administrative Agent who shall thereupon
have the sole right to receive and hold as Collateral such dividends and
distributions.
(iii) All amounts received by any Loan Party contrary to the
provisions of Section 9.2(c)(ii) shall be received in trust for the benefit of
the Administrative Agent, shall be segregated from other funds of such Loan
Party and shall be forthwith paid over to the Administrative Agent as Collateral
in the same form as so received (with any necessary indorsement).
(iv) Each Loan Party shall, if necessary to permit the
Administrative Agent to exercise the voting and other rights which it may be
entitled to exercise pursuant to Section 9.2(c)(i) and to receive all dividends
and distributions which it may be entitled to receive under Section 9.2(c)(ii),
execute and deliver to the Administrative Agent, from time to time and upon
written notice of the Administrative Agent, appropriate proxies, dividend
payment orders and other instruments as the Administrative Agent may reasonably
request. The foregoing shall not in any way limit the Administrative Agent's
power and authority granted pursuant to Section 9.9 hereof.
9.3 Waivers by Loan Parties. Except as otherwise provided for in this
Agreement or by applicable Law, each Loan Party waives (including for purposes
of Article 11): (a) presentment, demand and protest and notice of presentment,
dishonor, notice of intent to accelerate, notice of acceleration, protest,
default, nonpayment, maturity, release, compromise, settlement, extension or
renewal of any or all commercial paper, accounts, contract rights, documents,
instruments, chattel paper and guaranties at any time held by the Administrative
Agent on behalf of the Secured Parties on which any Loan Party may in any way be
liable, and hereby ratifies and confirms whatever the Administrative Agent on
behalf of the Secured Parties may do in this regard, (b) all rights to notice
and a hearing prior to the Administrative Agent's taking possession or control
of, or to the Administrative Agent's replevy, attachment or levy upon, the
Collateral or any bond or security which might be required by any court prior to
allowing the Administrative Agent on behalf of the Secured Parties to exercise
any of its remedies, and (c) the benefit of all valuation, appraisal, marshaling
and exemption laws. If any notification of intended disposition of any of the
Collateral is required by applicable Law, such notification shall be deemed
reasonably and properly given if given in accordance with Section 12.5 at least
ten (10) days before such disposition.
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9.4 Exercise of Rights. Subject to any requirements for FCC, PUC or other
governmental approval upon the occurrence and during the continuance of any
Event of Default, the rights, powers and privileges provided in this Section 9.4
and all other remedies available to the Administrative Agent and the Lenders
under this Agreement or by statute or by rule of law may be exercised by the
Administrative Agent or any Lender at any time from time to time whether or not
the Obligations shall be due and payable, and whether or not the Administrative
Agent or any Lender shall have instituted any foreclosure or other action for
the enforcement of this Agreement or any other Loan Document. No failure to
exercise, nor any delay in exercising on the part of the Administrative Agent or
any Lender, any right, remedy, power or privilege hereunder or under any of the
other Loan Documents shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege hereunder or thereunder
preclude any other or future exercise thereof or the exercise of any other
right, remedy, power or privilege.
9.5 Rights of Secured Party. In addition to all other rights and remedies
granted to it under this Agreement, the other Loan Documents and under any other
instrument or agreement securing, evidencing or relating to any of the
Obligations, if any Event of Default shall have occurred and be continuing, the
Administrative Agent may exercise all rights and remedies of a secured party
under the UCC.
9.6 Additional Remedies. Remedies of the Administrative Agent and the
Lenders upon the occurrence and during the continuance of an Event of Default
shall include, in addition to, and not in lieu of, such remedies as are
available at law or in equity or provided for in any of the Loan Documents, the
following:
(a) Foreclosure; Receivership. The Administrative Agent shall be
entitled to file one or more suits at law or in equity to collect the
Obligations and/or to foreclose on the Liens on and security interests created
by this Agreement or any other Loan Document. The Administrative Agent may apply
or require any Loan Party to apply for any necessary transfers, assignments,
orders, consents or licenses in connection with the operation or abandonment of
any Network or any part thereof, and shall also be entitled as a matter of right
and without notice and without requiring bond (notice and bond being hereby
waived), without regard to the solvency or insolvency of any Loan Party at the
time of application and without regard to the value of the Collateral at that
time, to have a receiver appointed by a court of competent jurisdiction in order
to manage, protect and preserve the Collateral or any part thereof and to
continue the operation of the business of any Loan Party, and to collect all
revenues and profits thereof and apply the same to the payment of all expenses
and other charges of such receivership until the sale or other final disposition
of the Collateral. Each Loan Party hereby consents to the appointment of such
receiver.
(b) Collection of Accounts, Etc. At any time after the occurrence
and during the continuance of an Event of Default, notify account debtors that
the Accounts have been assigned to the Administrative Agent on behalf of the
Secured Parties and that payments shall be made directly to the Administrative
Agent on behalf of the Secured Parties. Upon the request of Requisite Lenders at
any time after the occurrence and during the continuance of an Event of Default,
the Borrower shall so notify such account debtors. Upon the occurrence and
during the continuance of an Event of Default, the Administrative Agent on
behalf of the Secured Parties shall be entitled, but not obligated, to collect,
compromise, settle and otherwise act with respect to any Accounts, Contracts or
General Intangibles, and shall be authorized to (i) endorse checks and other
instruments, (ii) communicate directly with any Loan Party's customers or other
obligors to collect payments and/or (iii) bring actions to enforce such
collection, and otherwise take any actions necessary to collect and recover any
amounts owing to such Loan Party. Any amounts so received by the Administrative
Agent on behalf of the Secured Parties shall be held for the account of the
Borrower and may be applied to the Obligations at the Administrative
55
Agent's option, at the direction of the Requisite Lenders, but shall not be
deemed to be payment of the Obligations until so applied. The Borrower shall, at
the Requisite Lenders' request, deliver to the Administrative Agent copies of
all original and other documents evidencing or relating to the Accounts,
Contracts or General Intangibles, including all original orders, sublease
contracts, invoices, shipping receipts, computer records and databases.
(c) Segregation of Payments. Upon the Administrative Agent's
request, at the direction of the Requisite Lenders, following and during the
continuance of an Event of Default, the Borrower shall immediately deliver to
the Administrative Agent on behalf of the Lenders all Proceeds received by any
Loan Party, in the form received except for the Borrower' endorsement if
required. Alternatively, the Administrative Agent may, at the direction of the
Requisite Lenders, require the Borrower, to immediately deliver, or may require
the delivery of, such Proceeds to a special bank account or post office box from
which only the Administrative Agent on behalf of the Secured Parties can
withdraw them. In either case, all such Proceeds and any payments received by
any Loan Party under or in connection with any of the Collateral received by
such Loan Party following and during the continuance of an Event of Default
shall be held by the Borrower in trust for the Administrative Agent on behalf of
the Secured Parties and shall be segregated from other funds of the Borrower.
Any and all such payments so received by the Administrative Agent on behalf of
the Secured Parties (whether from the Borrower or otherwise) may, in the sole
discretion of the Administrative Agent, be held by the Administrative Agent on
behalf of the Secured Parties as collateral security for, and/or then or at any
time thereafter applied in whole or in part by the Administrative Agent, against
all or any part of the Obligations of the Loan Parties in such order as the
Administrative Agent may determine in its sole discretion. Any balance of such
payments held by the Administrative Agent and remaining after payment in full of
all the Obligations shall be paid over to the Borrower or to any Person lawfully
entitled to receive the same.
(d) Right to Cure. If any Loan Party fails in any material respect
to perform or comply with any of its agreements contained herein or in any of
the other Loan Documents, the Administrative Agent may take whatever actions it
may deem appropriate to perform or comply or otherwise cause performance or
compliance with such agreement, all at the risk, cost and expense of the
Borrower.
(e) Set Off. If the unpaid principal amount of the Loan, interest
accrued thereon or any other amount owing by the Loan Parties hereunder or under
the Loan shall have become due and payable (by acceleration or otherwise), each
Lender and each Affiliate of each Lender shall have the right, in addition to
all other rights and remedies available to it, without notice to the Loan
Parties, to set off against and to appropriate and apply to such due and payable
amounts any debt owing to, and any other funds held in any manner for the
account of, any of the Loan Parties by such Lender or Affiliate. Such right
shall exist whether or not such Lender or Affiliate shall have given notice or
made any demand hereunder or under the other Loan Documents, whether or not such
debt owing to or funds held for the account of the Loan Parties is or are
matured or unmatured, and regardless of the existence or adequacy of any
Collateral, guaranty or any other security, right or remedy available to the
Administrative Agent and the Lenders. Such Lender or Affiliate shall promptly
notify the Borrower after any such set off and application made by such Lender
or Affiliate, provided, however, that the failure to give such notice shall not
affect the validity of any such set off and application. Each Loan Party hereby
consents to and confirms the foregoing arrangements and confirms such Lender's
and Affiliate's rights of set off.
9.7 Application of Proceeds. Any proceeds of any of the Collateral,
received by the Administrative Agent through sale or disposition of the
Collateral or otherwise, shall be applied by the Administrative Agent toward the
payment of the Obligations, including expenses in connection with the Collateral
(including reasonable fees and legal expenses), as provided in Section 2.10.
56
9.8 Discontinuance of Proceedings. If the Administrative Agent or any
Lender should proceed to enforce any right or remedy under this Agreement or any
other Loan Document, and then discontinue or abandon such proceeding for any
reason, all rights, powers and remedies of the Administrative Agent and the
Lenders hereunder shall continue as if no such proceeding had been taken.
9.9 Power of Attorney and Proxy. For the purpose of carrying out the
provisions and exercising the rights, powers and privileges granted by the Loan
Documents, including Article 3 and this Article 9, each Loan Party hereby
irrevocably constitutes and appoints the Administrative Agent for the benefit of
the Administrative Agent and the Lenders its true and lawful attorney-in-fact
and proxy to execute, acknowledge and deliver any and all documents and
instruments, vote any Stock and do and perform any acts such as are referred to
in the Loan Documents, including Article 3 and this Article 9, with full
irrevocable power and authority in the name and on behalf of such Loan Party,
from time to time in the Administrative Agent's reasonable discretion after the
occurrence and during the continuance of an Event of Default, in accordance with
the Loan Documents and any statute or rule of law. This power of attorney and
proxy is a power coupled with an interest and cannot be revoked until all
Obligations are paid and this Agreement is terminated. Each Loan Party hereby
ratifies all that said attorney-in-fact and proxy shall lawfully do or cause to
be done by virtue and in accordance with the terms hereof.
Without limiting the generality of the foregoing, the Administrative Agent
may, after the occurrence and during the continuance of an Event of Default, do
the following without notice to or assent by any Loan Party to accomplish the
purposes of this Agreement:
(a) upon failure of such Loan Party to do so, timely pay or
discharge Taxes or Liens levied or placed on or threatened against the
Collateral, effect any repairs or any insurance called for by the terms of this
Agreement or any other Loan Document, and pay all or any part of the premiums
there for and the costs thereof;
(b) file any application, petition or other request with the FCC,
any PUC or any other Governmental Authority for the purpose of obtaining any
consent or approval from or satisfying any filing or notice requirement of any
Governmental Authority in order to effect a sale or transfer of any or all the
Collateral, or a change in control of, or to permit the Administrative Agent to
complete or operate, or both, any Network;
(c) vote any membership interest or other Stock; and
(d) (i) direct any party liable for any payment under any of the
Contracts or Accounts to make payment of any and all monies due and to become
due thereunder directly to the Administrative Agent or as the Administrative
Agent shall direct; (ii) in the name of such Loan Party or its own name or
otherwise, take possession of and endorse and collect any checks, drafts, notes,
acceptances, or other instruments for the payment of monies due under, or
otherwise receive payment of and receipt for any and all monies, claims and
other amounts due and to become due at any time in respect of or arising out of
any Collateral; (iii) sign and endorse any invoices, freight or express bills,
bills of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications and notices in connection with Accounts and other
documents relating to the Collateral; (iv) commence and prosecute any suits,
actions or proceedings at law or in equity in any court of competent
jurisdiction or before any arbitrator to collect all or any of the Collateral
and to enforce any other right in respect of any Collateral; (v) defend any
suit, action or proceeding brought against such Loan Party with respect to any
Collateral; (vi) settle, compromise or adjust any suit, action or proceeding
described above upon commercially reasonable terms under the circumstances and,
in connection therewith, give such discharges or releases as the Administrative
Agent may reasonably deem appropriate; (vii) cure any default under any Contract
and/or modify and/or assume any such Contract; and (viii) generally sell, use,
operate, transfer, pledge and make
57
any agreement with respect to or otherwise deal with any of the Collateral as
fully and completely as though the Administrative Agent were the absolute owner
thereof for all purposes, and, at the Administrative Agent's option and the Loan
Parties' expense, at any time or from time to time after the occurrence and
during the continuance of an Event of Default, all other acts and things that
the Administrative Agent reasonably deems necessary to perfect, preserve or
realize upon the Collateral and the Administrative Agent's security interest
therein on behalf of the Secured Parties, in order to effect the intent of this
Agreement and the other Loan Documents all as fully and effectively as such Loan
Party might do.
9.10 Regulatory Matters.
(a) Loan Parties' Cooperation; Consents. Notwithstanding any
provision to the contrary contained herein or in any other Loan Document, the
Administrative Agent and the Lenders will not exercise any right or remedy under
this Agreement that requires prior FCC or PUC approval without first obtaining
such approval. If counsel to the Administrative Agent reasonably determines that
the consent of the FCC or any PUC is required in connection with any of the
actions that may be taken by the Administrative Agent in the exercise of its
rights hereunder or under any of the other Loan Documents, then Loan Parties, at
their sole cost and expense, agree to use their reasonable best efforts to
secure such consent and to cooperate with the Administrative Agent in any action
commenced by the Administrative Agent to secure such consent. Upon the
occurrence and during the continuation of an Event of Default the Borrower shall
promptly execute and/or cause the execution of all applications, certificates,
instruments and other documents and papers that may be required in order to
obtain any necessary governmental consent, approval or authorization, and if the
Borrower fails or refuses to execute such documents, the clerk of the court with
jurisdiction may execute such documents on behalf of the Borrower.
(b) Loan Parties' Cooperation; Transfers. In connection with the
enforcement by the Administrative Agent of any remedies available to it as a
result of any Event of Default and subject to the provisions of Section 9.10(a)
the Loan Parties shall join and cooperate fully with the Administrative Agent,
and with any receiver or trustee referred to herein and with the successful
bidder or bidders at any foreclosure sale when any of these entities files an
application with the FCC or any PUC, or with any necessary federal, state and
local governmental authorities, requesting their prior approval of (i) the
operation or abandonment of all or any portion of the Collateral and (ii) the
assignment or transfer to such entity of all Permits issued to any Loan Party by
the FCC, any PUC or any such other authorities with respect to the Loan Parties'
business and the operation thereof. The Loan Parties' cooperation shall include
without limitation the furnishing of any information that may be required in
connection with such applications.
(c) Conveyance of Regulatory Authorizations. Subject to any
necessary FCC or PUC approval, each Loan Party agrees to assign, transfer and
convey the Regulatory Authorizations to the Administrative Agent (or its
designee) upon the Administrative Agent's request following the occurrence and
during the continuance of an Event of Default, to the extent that any such
assignment or transfer may be deemed necessary to allow the Administrative Agent
to exercise its remedies hereunder or under the Loan Documents.
(d) Specific Performance. Each Loan Party recognizes that its
Regulatory Authorizations are unique assets that may have to be transferred in
order for the Administrative Agent to adequately realize the value of its
security interests. Each Loan Party further recognizes that a violation of this
provision would result in irreparable harm to the Administrative Agent and the
Lenders for which monetary damages may not readily be ascertainable. Therefore,
in addition to any other remedy that may
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be available to the Administrative Agent and the Lenders at law or in equity,
the Administrative Agent shall have the remedy of specific performance to
enforce the provisions of this Section.
ARTICLE 10: ASSIGNMENT AND PARTICIPATION; APPOINTMENT OF
ADMINISTRATIVE AGENT
10.1 Assignment and Participation.
(a) The Loan Parties signatory hereto consent to any Lender's
assignment of, and/or sale of participations in, at any time or times, the Loan
Documents, and any Commitment or of any portion thereof or interest therein,
including any Lender's rights, title, interests, remedies, powers or duties
thereunder, whether evidenced by a writing or not. Any assignment by the Lender
shall (i) require the consent of the Administrative Agent and the Borrower
(which, in the case of the Borrower, shall not be unreasonably withheld or
delayed); provided, however, that no consent of the Borrower shall be required
if an Event of Default shall have occurred and be continuing, (ii) require the
execution of an assignment agreement (an "Assignment Agreement") substantially
in the form attached hereto as Exhibit G and otherwise in form and substance
reasonably satisfactory to, and acknowledged by, the Administrative Agent; (iii)
if a partial assignment, be in an amount at least equal to $5,000,000, be of the
same Pro Rata Share of the Commitment and the Loan and, after giving effect to
any such partial assignment (together with all other partial assignments), the
assigning the Lender shall have retained Commitments and Loans in an amount at
least equal to $5,000,000; and (iv) include a payment to the Administrative
Agent of an assignment fee of $3,500 by the assigning Lender. The failure of the
Borrower to consent to an assignment to a Person that is or is an Affiliate of a
Person that is engaged in the telecommunications industry and is a competitor of
or supplier to any Loan Party shall not be deemed unreasonable. In the case of
an assignment by any Lender under this Section 10.1, the assignee shall have, to
the extent of such assignment, the same rights, benefits and obligations as it
would if it were named as a Lender hereunder. The assigning the Lender shall be
relieved of its obligations hereunder with respect to its Commitments or
assigned portion thereof from and after the date of such assignment. The
Borrower hereby acknowledges and agrees that any such assignment will give rise
to a direct obligation of the Borrower to the assignee and that the assignee
shall be considered to be a "Lender." In all instances, each Lender's liability
to make Loans hereunder shall be several and not joint and shall be limited to
such Lender's Pro Rata Share of the applicable Commitment. In the event any
Lender assigns or otherwise transfers all or any part of the Obligations, any
such Lender shall so notify the Borrower and the Borrower shall, upon the
request of the Administrative Agent or such Lender, execute a new Note in
exchange for each Note, if any, or portion thereof being assigned.
Notwithstanding the foregoing provisions of this Section 10.1(a), any Lender may
at any time pledge the Obligations held by it and such Lender's rights under
this Agreement and the other Loan Documents to a Federal Reserve Bank, and any
Lender that is an investment fund may assign the Obligations held by it and such
Lender's rights under this Agreement and the other Loan Documents to another
investment fund managed by the same investment advisor; provided, however, that
no such pledge to a Federal Reserve Bank shall release such Lender from such
Lender's obligations hereunder or under any other Loan Document.
(b) Any participation by any Lender in all or any part of its
Commitments shall be made with the understanding that all amounts payable by the
Borrower hereunder shall be determined as if that Lender had not sold such
participation, and that the holder of any such participation shall not be
entitled to require such Lender to take or omit to take any action hereunder
except actions directly affecting (i) any reduction in the principal amount of,
or interest rate or Fees payable with respect to, any Loan in which such holder
participates, (ii) any extension of the scheduled amortization of the principal
amount of any Loan in which such holder participates or the final maturity date
thereof, and (iii) any release of all or substantially all of the Collateral
(other than in accordance with the terms of this
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Agreement and the other Loan Documents). Solely for purposes of Sections 2.12,
2.13, 7.8 and 10.8, the Borrower acknowledges and agrees that subject to the
first sentence of Section 10.1(c), a participation shall give rise to a direct
obligation of the Borrower to the participant and the participant shall be
considered to be a "Lender." Except as set forth in the preceding sentence
neither the Borrower nor any other Loan Party shall have any obligation or duty
to any participant. Neither the Administrative Agent nor any Lender (other than
the Lender selling a participation) shall have any duty to any participant and
may continue to deal solely with the Lender selling a participation as if no
such sale had occurred.
(c) Except as expressly provided in this Section 10.1, no Lender
shall, as between any Loan Party and that Lender, or the Administrative Agent
and that Lender, be relieved of any of its obligations hereunder as a result of
any sale, assignment, transfer or negotiation of, or granting of participation
in, all or any part of the Loans, the Notes or other Obligations owed to such
Lender.
(d) Each Loan Party executing this Agreement shall assist any Lender
permitted to sell assignments or participations under this Section 10.1 as
reasonably required to enable the assigning or selling the Lender to effect any
such assignment or participation, including the execution and delivery of any
and all agreements, Notes and other documents and instruments as shall be
requested and, if requested by the Administrative Agent, the preparation of
informational materials for, and the participation of management in meetings
with, potential assignees or participants. Each Loan Party executing this
Agreement shall certify the correctness, completeness and accuracy of all
descriptions of such Loan Parties and its affairs contained in any selling
materials provided by it and all other information provided by it and included
in such materials, except that any Projections delivered by such Loan Party
shall only be certified by such Loan Party as having been prepared by it in
compliance with the representations contained in Section 4.10.
(e) Any Lender may furnish any information concerning the Loan
Parties in the possession of such Lender from time to time to assignees and
participants (including prospective assignees and participants). Each Lender
shall obtain from assignees or participants confidentiality covenants
substantially equivalent to those contained in Section 12.16.
(f) As long as no Event of Default shall have occurred and be
continuing, no Lender shall assign or sell participations in any portion of its
Loans or Commitments to a potential Lender or participant if, as of the date of
the proposed assignment or sale, the assignee Lender or participant would be
subject to capital adequacy or similar requirements under Section 2.13(a),
increased costs under Section 2.13(b), an inability to fund LIBOR Loans under
Section 2.13(c), or withholding Taxes in accordance with Section 2.12(a).
10.2 Appointment of the Administrative Agent. GECC is hereby appointed to
act on behalf of all the Lenders as the Administrative Agent under this
Agreement and the other Loan Documents. The provisions of this Section 10.2 are
solely for the benefit of the Administrative Agent and the Lenders and no Loan
Party nor any other Person shall have any rights as a third party beneficiary of
any of the provisions hereof. In performing its functions and duties under this
Agreement and the other Loan Documents, the Administrative Agent shall act
solely as an agent of the 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 any Loan Party or any other Person. The Administrative Agent shall have no
duties or responsibilities except for those expressly set forth in this
Agreement and the other Loan Documents. The duties of the Administrative Agent
shall be mechanical and administrative in nature and the Administrative Agent
shall not have, or be deemed to have, by reason of this Agreement, any other
Loan Document or otherwise a fiduciary relationship in respect of any Lender.
Neither the Administrative Agent nor any of its Affiliates nor any of their
respective officers, directors, employees, agents or representatives shall be
liable to any Lender for any action taken or omitted to be taken by it as
Administrative Agent hereunder or under any
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other Loan Document, or in connection herewith or therewith, except for damages
caused by its or their own gross negligence or willful misconduct.
If the Administrative Agent shall request instructions from the Requisite
Lenders or all Affected Lenders with respect to any act or action (including
failure to act) in connection with this Agreement or any other Loan Document,
then the Administrative Agent shall be entitled to refrain from such act or
taking such action unless and until the Administrative Agent shall have received
instructions from the Requisite Lenders or all Affected Lenders, as the case may
be, and the Administrative Agent shall not incur liability to any Person by
reason of so refraining. The Administrative Agent shall be fully justified in
failing or refusing to take any action hereunder or under any other Loan
Document (a) if such action would, in the opinion of the Administrative Agent,
be contrary to Law or the terms of this Agreement or any other Loan Document,
(b) if such action would, in the opinion of the Administrative Agent, expose the
Administrative Agent to Environmental Liabilities or (c) if the Administrative
Agent shall not first be indemnified to its satisfaction against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. Without limiting the foregoing, no Lender
shall have any right of action whatsoever against the Administrative Agent as a
result of the Administrative Agent acting or refraining from acting hereunder or
under any other Loan Document in accordance with the instructions of the
Requisite Lenders or all affected Lenders, as applicable.
10.3 The Administrative Agent's Reliance, Etc. Neither the Administrative
Agent nor any of its Affiliates nor any of their respective directors, officers,
agents or employees shall be liable for any action taken or omitted to be taken
by it or them under or in connection with this Agreement or the other Loan
Documents, except for damages caused by its or their own gross negligence or
willful misconduct. Without limitation of the generality of the foregoing, the
Administrative Agent: (a) may treat the payee of any Note as the holder thereof
until the Administrative Agent receives written notice of the assignment or
transfer thereof signed by such payee and in form satisfactory to the
Administrative Agent; (b) may consult with legal counsel, independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (c) makes no warranty or
representation to any Lender and shall not be responsible to any Lender for any
statements, warranties or representations made in or in connection with this
Agreement or the other Loan Documents; (d) shall not have any duty to ascertain
or to inquire as to the performance or observance of any of the terms, covenants
or conditions of this Agreement or the other Loan Documents on the part of any
Loan Party or to inspect the Collateral (including the books and records) of any
Loan Party; (e) shall not be responsible to any Lender for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement or the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto; and (f) shall incur no liability under or
in respect of this Agreement or the other Loan Documents by acting upon any
notice, consent, certificate or other instrument or writing (which may be by
telecopy, telegram, cable or telex) believed by it to be genuine and signed or
sent by the proper party or parties.
10.4 GECC and Affiliates. With respect to its Commitments hereunder, GECC
shall have the same rights and powers under this Agreement and the other Loan
Documents as any other Lender and may exercise the same as though it were not
the Administrative Agent; and the term "Lender" or "Lenders" shall, unless
otherwise expressly indicated, include GECC in its individual capacity. GECC and
its Affiliates may lend money to, invest in, and generally engage in any kind of
business with, any Loan Party, any of their Affiliates and any Person who may do
business with or own securities of any Loan Party or any such Affiliate, all as
if GECC were not the Administrative Agent and without any duty to account
therefor to the Lenders. GECC and its Affiliates may accept fees and other
consideration from any Loan Party for services in connection with this Agreement
or otherwise without having to account for the same to the Lenders. Each Lender
acknowledges the potential conflict of interest between GECC as the Lender
holding disproportionate interests in the Loans and GECC as the Administrative
Agent.
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10.5 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other
Lender and based on the Financial Statements referred to in Section 4.10 and
such other documents and information as it has deemed appropriate, made its own
credit and financial analysis of the Loan Parties and its own decision to enter
into this Agreement. Each Lender also acknowledges that it will, independently
and without reliance upon the Administrative Agent or any other Lender and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement. Each Lender acknowledges the potential conflict of interest of
each other Lender as a result of the Lenders holding disproportionate interests
in the Loans, and expressly consents to, and waives any claim based upon, such
conflict of interest.
10.6 Indemnification. The Lenders agree to indemnify the Administrative
Agent (to the extent the Administrative Agent is not reimbursed by Loan Parties
and without limiting the obligations of Loan Parties hereunder), ratably
according to their respective Pro Rata Shares, from and against any and 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 the Administrative Agent in any way
relating to or arising out of this Agreement or any other Loan Document or any
action taken or omitted by the Administrative Agent in connection therewith;
provided, however, 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 the Administrative Agent's gross
negligence or willful misconduct. Without limiting the foregoing, each Lender
agrees to reimburse the Administrative Agent promptly upon demand for its
ratable share of any out-of-pocket expenses (including counsel fees) incurred by
the Administrative Agent in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement and each other Loan
Document, to the extent that the Administrative Agent is not reimbursed for such
expenses by Loan Parties.
10.7 Successor Administrative Agent. The Administrative Agent may resign
at any time by giving not less than thirty (30) days' prior written notice
thereof to the Lenders and the Borrower. Upon any such resignation, the
Requisite Lenders shall have the right to appoint a successor Administrative
Agent. If no successor Administrative Agent shall have been so appointed by the
Requisite Lenders and shall have accepted such appointment within thirty (30)
days after the resigning Administrative Agent's giving notice of resignation,
then the resigning Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent, which shall be the Lender, if the Lender is
willing to accept such appointment, or otherwise shall be a commercial bank or
financial institution or a subsidiary of a commercial bank or financial
institution if such commercial bank or financial institution is organized under
the laws of the United States of America or of any State thereof and has a
combined capital and surplus of at least $300,000,000. If no successor
Administrative Agent has been appointed pursuant to the foregoing by the 30th
day after the date such notice of resignation was given by the resigning
Administrative Agent, such resignation shall become effective and the Requisite
Lenders shall thereafter perform all the duties of the Administrative Agent
hereunder until such time, if any, as the Requisite Lenders appoint a successor
Administrative Agent as provided above. Any successor Administrative Agent
appointed by the Requisite Lenders hereunder shall be subject to the approval of
the Borrower, such approval not to be unreasonably withheld or delayed;
provided, however, that such approval shall not be required if an Event of
Default shall have occurred and be continuing. Upon the acceptance of any
appointment as the Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall succeed to and become vested
with all the rights, powers, privileges and duties of the resigning
Administrative Agent. Upon the earlier of the acceptance of any appointment as
the Administrative Agent hereunder by a successor Administrative Agent or the
effective date of the resigning Administrative Agent's resignation, the
resigning Administrative Agent shall be discharged
62
from its duties and obligations under this Agreement and the other Loan
Documents, except that any indemnity rights or other rights in favor of such
resigning Administrative Agent shall continue. After any resigning
Administrative Agent's resignation hereunder, the provisions of this Section
10.7 shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was the Administrative Agent under this Agreement and the other
Loan Documents.
10.8 Set Off and Sharing of Payments. In addition to any rights now or
hereafter granted under applicable law and not by way of limitation of any such
rights, upon the occurrence and during the continuance of any Event of Default,
each Lender and each holder of any Note and each of their respective Affiliates
is hereby authorized at any time or from time to time, without notice to any
Loan Party or to any other Person, any such notice being hereby expressly
waived, to set off and to appropriate and to apply any and all balances held by
it at any of its offices for the account of the Borrower or any Guarantor
(regardless of whether such balances are then due to the Borrower or such
Guarantor) and any other properties or assets at any time held or owing by that
Lender, that holder or that Affiliate to or for the credit or for the account of
the Borrower or any Guarantor against and on account of any of the Obligations
which are not paid when due. Any Lender or holder of any Note or any Affiliate
of either exercising a right to set off or otherwise receiving any payment on
account of the Obligations in excess of its Pro Rata Share of the Obligations
shall purchase for cash (and the other Lenders or holders shall sell) such
participations in each such other Lender's or holder's Pro Rata Share of the
Obligations as would be necessary to cause such Lender or holder to share the
amount so set off or otherwise received with each other Lender or holder in
accordance with their respective Pro Rata Shares. Each Loan Party agrees, to the
fullest extent permitted by law, that (a) any Lender or holder may exercise its
right to set off with respect to amounts in excess of its Pro Rata Share of the
Obligations and may sell participations in such amount so set off to other
Lenders and holders and (b) any Lender or holder so purchasing a participation
in the Loans made or other Obligations held by other Lenders or holders may
exercise all rights of set off, bankers, lien, counterclaim or similar rights
with respect to such participation as fully as if such Lender or holder were a
direct holder of the Loans and the other Obligations in the amount of such
participation. Notwithstanding the foregoing, if all or any portion of the set
off amount or payment otherwise received is thereafter recovered from the
Lender, holder or Affiliate that has exercised the right of set off, the.
purchase of participations by that Lender shall be rescinded and the purchase
price restored without interest.
10.9 Advances; Payments; Non-Funding Lenders; Information; Actions in
Concert.
(a) Advances; Payments.
(i) The Administrative Agent shall notify the Lenders, promptly
after receipt of a Borrowing Certificate and in any event prior to 3:00 p.m.
(New York time) on the date such Borrowing Certificate is received, by telecopy,
telephone or other similar form of transmission. Each Lender shall make the
amount of such Lender's Pro Rata Share of such Advance available to the
Administrative Agent in same day funds by wire transfer to the Administrative
Agent's account as set forth in Schedule 10.9 not later than 3:00 p.m. (New York
time) on the requested funding date in the case of a Base Rate Loan and not
later than 11:00 a.m. (New York time) on the requested funding date in the case
of a LIBOR Loan. After receipt of such wire transfers (or, in the Administrative
Agent's sole discretion, before receipt of such wire transfers), subject to the
terms hereof, the Administrative Agent shall make the requested Advance to the
Borrower to the account of the Borrower specified on Schedule 10.9. All payments
by each Lender shall be made without set off, counterclaim or deduction of any
kind.
(ii) All Payments due hereunder and under the Notes shall be made to
the Administrative Agent by wire transfer to the account specified on Schedule
10.9 no later than 1:00 p.m. (New York time) on the date due. Payments received
after such time shall be deemed to have been made
63
on the next Business Day. On each Business Day that the Administrative Agent
receives a payment with respect to the Loans, the Administrative Agent will
advise each Lender by telephone or telecopy of the amount of such Lender's Pro
Rata Share of principal, interest and Fees paid for the benefit of the Lenders
with respect to each applicable Loan. Provided that such Lender has funded all
payments or Advances required to be made by it and has purchased all
participations required to be purchased by it under this Agreement and the other
Loan Documents as of such date, the Administrative Agent will pay to each Lender
such Lender's Pro Rata Share of such payment. To the extent that any Lender (a
"Non-Funding Lender") has failed to fund all such payments and Advances or
failed to fund the purchase of all such participations, the Administrative Agent
shall be entitled to set off the funding short-fall against that Non-funding
Lender's Pro Rata Share of all payment's received from the Borrower. Such
payments shall be made by wire transfer to such Lender's account (as specified
by such Lender in Schedule 10.9 or the applicable Assignment Agreement) not
later than 2:00 p.m. (New York time) on the next Business Day following receipt.
(b) Availability of Lenders' Pro Rata Shares. The Administrative
Agent may assume that each Lender will make its Pro Rata Share of each Advance
available to the Administrative Agent on each funding date. If such Pro Rata
Share is not, in fact, paid to the Administrative Agent by such Lender when due,
the Administrative Agent will be entitled to recover such amount on demand from
such Lender without set off, counterclaim or deduction of any kind. If any
Lender fails to pay the amount of its Pro Rata Share forthwith upon the
Administrative Agent's demand, the Administrative Agent shall promptly notify
the Borrower and the Borrower shall immediately repay such amount to the
Administrative Agent. Nothing in this Section 10.9(b) or elsewhere in this
Agreement or the other Loan Documents shall be deemed to require the
Administrative Agent to advance funds on behalf of any Lender or to relieve any
Lender from its obligation to fulfill its Commitments hereunder or to prejudice
any rights that any Loan Party may have against any Lender as a result of any
default by such Lender hereunder. To the extent that the Administrative Agent
advances funds to the Borrower on behalf of any Lender and is not reimbursed
therefor on the same Business Day as such Advance is made, the Administrative
Agent shall be entitled to retain for its account all interest accrued on such
Advance until reimbursed by the applicable Lender or the Borrower, as the case
may be.
(c) Return of Payments.
(i) If the Administrative Agent pays an amount to a Lender under
this Agreement in the belief or expectation that a related payment has been or
will be received by the Administrative Agent from the Borrower and such related
payment is not received by the Administrative Agent, then the Administrative
Agent will be entitled to recover such amount from such Lender on demand without
set off, counterclaim or deduction of any kind.
(ii) If the Administrative Agent determines at any time that any
amount received by the Administrative Agent under this Agreement must be
returned to the Borrower or paid to any other Person pursuant to any insolvency
law or otherwise, then, notwithstanding any other term or condition of this
Agreement or any other Loan Document, the Administrative Agent will not be
required to distribute any portion thereof to any Lender. In addition, each
Lender will repay to the Administrative Agent on demand any portion of such
amount that the Administrative Agent has distributed to such Lender, together
with interest at such rate, if any, as the Administrative Agent is required to
pay to the Borrower or such other Person, without set off, counterclaim or
deduction of any kind.
(d) Non-Funding Lenders. The failure of any Non-Funding Lender to
make any Advance or any payment required by it hereunder shall not relieve any
other Lender (each such other Lender, an "Other Lender") of its obligations to
make such Advance, but neither any Other Lender nor the Administrative Agent
shall be responsible for the failure of any Non-Funding Lender to make an
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Advance or to purchase a participation required hereunder. Notwithstanding
anything set forth herein to the contrary, a Non-Funding Lender shall not have
any voting or consent rights under or with respect to any Loan Document or
constitute a "Lender" (or be included in the calculation of the "Requisite
Lenders" hereunder) for any voting or consent rights under or with respect to
any Loan Document.
(e) Dissemination of Information. The Administrative Agent will use
reasonable efforts to provide the Lenders with any notice of an Event of Default
received by the Administrative Agent from, or delivered by the Administrative
Agent to, any Loan Party, with notice of any Event of Default of which the
Administrative Agent has actually become aware and with notice of any action
taken by the Administrative Agent following any Event of Default; provided,
however, that the Administrative Agent shall not be liable to any Lender for any
failure to do so, except to the extent that such failure is attributable to the
Administrative Agent's gross negligence or willful misconduct. The Lenders
acknowledge that each Loan Party is required to provide Financial Statements to
the Lenders hereunder and agrees that the Administrative Agent shall have no
duty to provide the same to the Lenders.
(f) Actions in Concert. Anything in this Agreement to the contrary
notwithstanding, each Lender hereby agrees with each other Lender that no Lender
shall take any action to protect or enforce its rights arising out of this
Agreement or the Notes (including exercising any rights of set off) without
first obtaining the prior written consent of the Requisite Lenders, it being the
intent of the Lenders that any such action to protect or enforce rights under
this Agreement and the Notes shall be taken in concert and at the direction or
with the consent of the Administrative Agent.
ARTICLE 11: GUARANTY
11.1 Guaranty. Each of the Guarantors hereby absolutely and
unconditionally guarantees to the Administrative Agent and the Lenders and their
respective successors and assigns the full and prompt payment (whether at stated
maturity, by acceleration or otherwise) and performance of, all Obligations
owing by each of the Guarantors. Each Guarantor agrees that its guaranty
obligation hereunder is a continuing guaranty of payment and performance and not
of collection, that its obligations under this Article 11 shall not be
discharged until payment and performance, in full, of the Obligations has
occurred, and that its obligations under this Article 11 shall be absolute and
unconditional, irrespective of, and unaffected by:
(a) the genuineness, validity, regularity, enforceability or any
future amendment of, or change in, this Agreement, any other Loan Document or
any other agreement, document or instrument to which any Loan Party is or may
become a party;
(b) the absence of any action to enforce this Agreement (including
this Article 11) or any other Loan Document or the waiver or consent by the
Administrative Agent and the Lenders with respect to any of the provisions
thereof;
(c) the existence, value or condition of, or failure to perfect its
Lien against, any security for the Obligations or any action, or the absence of
any action, by the Administrative Agent and the Lenders in respect thereof
(including the release of any such security);
(d) the insolvency of any Loan Party; or
(e) any other action or circumstances which might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor.
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Each Guarantor's liability with respect to the Obligations is primary, not
secondary, and it shall not be a condition to the obligations of the Guarantors
hereunder that the Lenders or the Administrative Agent pursue or preserve
remedies against any party primarily or secondarily liable on the Obligations.
11.2 Waivers by Guarantors. Each Guarantor expressly waives all rights it
may have now or in the future under any statute, or at common law, or at law or
in equity, or otherwise, to compel the Administrative Agent or the Lenders to
xxxxxxxx assets or to proceed in respect of the Obligations guaranteed hereunder
against any other Guarantor, any other party or against any security for the
payment and performance of the Obligations before proceeding against, or as a
condition to proceeding against, such Guarantor. It is agreed among each
Guarantor, the Administrative Agent and the Lenders that the foregoing waivers
are of the essence of the transaction contemplated by this Agreement and the
other Loan Documents and that, but for the provisions of this Article 11 and
such waivers, the Administrative Agent and the Lenders would decline to enter
into this Agreement.
11.3 Benefit of Guaranty. Each Guarantor agrees that the provisions of
this Article 11 are for the benefit of the Administrative Agent and the Lenders
and their respective successors, transferees, endorsees and assigns, and nothing
herein contained shall impair, as between any Guarantor and the Administrative
Agent or the Lenders, the obligations any Guarantor has under the Loan
Documents.
11.4 Subrogation; Subordination. Notwithstanding anything to the contrary
in this Agreement or in any other Loan Document, and except as set forth in
Section 11.7, each Guarantor hereby expressly and irrevocably subordinates to
payment of the Obligations any and all rights at law or in equity to
subrogation, reimbursement, exoneration, contribution, indemnification or set
off and any and all defenses available to a surety, guarantor or accommodation
co-obligor until the Obligations are paid in full in cash. Each Guarantor agrees
that any and all claims against any other Loan Party or any endorser or any
other guarantor of all or any part of the Obligations, or against any of their
respective properties, shall be subordinate and subject in right of payment to
the prior payment, in full and in cash, of all Obligations. Notwithstanding any
right of any Guarantor to ask, demand, xxx for, take or receive any payment from
any other Loan Party, all rights, liens and security interests of such
Guarantor, whether now or hereafter arising and howsoever existing, in any
assets of the other Loan Parties (whether constituting part of the Collateral)
shall be and hereby are subordinated to the rights of the Secured Parties in
those assets. Except as not otherwise prohibited by this Agreement, no Guarantor
shall have any right to possession of any such asset or to foreclose upon any
such asset, whether by judicial action or otherwise, unless and until all of the
Obligations shall have been paid in full in cash and this Agreement has been
terminated. If all or any part of the assets of the Loan Parties, or the
proceeds thereof, are subject to any distribution, division or application to
the creditors of the Loan Parties, whether partial or complete, voluntary or
involuntary, and whether by reason of liquidation, bankruptcy, arrangement,
receivership, assignment for the benefit of creditors or any other action or
proceeding, or if the business of any Loan Party is dissolved or if (except as
permitted by this Agreement) substantially all of the assets of any Loan Party
are sold, then, and in any such event, any payment or distribution of any kind
or character, either in cash, securities or other property, which shall be
payable or deliverable upon or with respect to any indebtedness of any other
Loan Party to any Guarantor ("Borrower Indebtedness"), shall be paid or
delivered to the Administrative Agent for application on any of the Obligations
then due and payable, until such Obligations shall have first been paid in full
in cash. Each Guarantor irrevocably authorizes and empowers the Administrative
Agent to demand, xxx for, collect and receive every such payment or distribution
and give acquittance therefor and to make for and on behalf of such Guarantor
such proofs of claim and take such other action, in the Administrative Agent's
own name or in the name of such Guarantor or otherwise, as the Administrative
Agent may deem necessary or advisable for the enforcement of this Article 11.
The Administrative Agent may vote such proofs of claim in any such proceeding,
receive and collect any and all dividends or other payments or disbursements
made on the Borrower Indebtedness in whatever form the same may be paid or
issued and apply the same on account
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of any of the Obligations then due and payable. If any payment, distribution,
security or instrument or proceeds thereof is received by any Guarantor upon or
with respect to the Borrower Indebtedness prior to the payment in full in cash
of the Obligations and the termination of this Agreement, such Guarantor shall
receive and hold the same in trust, as trustee for the benefit of the
Administrative Agent and the other Secured Parties, and shall forthwith deliver
the same to the Administrative Agent, for the benefit of the Administrative
Agent and the other Secured Parties, in precisely the form received (except for
the endorsement or assignment of such Guarantor where necessary), for
application to any of the Obligations then due and payable, and, until so
delivered, the same shall be held in trust by such Guarantor as the collateral
security of the Administrative Agent, for the benefit of the Administrative
Agent and the other Secured Parties. If any Guarantor fails to make any such
endorsement or assignment to the Administrative Agent, the Administrative Agent
or any of its officers or employees are hereby irrevocably authorized to make
the same. Each Guarantor agrees that until the Obligations have been paid in
full in cash and this Agreement has been terminated, such Guarantor will not
assign or transfer to any Person any claim such Guarantor has or may have
against any other Loan Party. Each Guarantor acknowledges and agrees that this
subordination is intended to benefit the Administrative Agent and the Lenders
and shall not limit or otherwise affect such Guarantor's liability hereunder or
the enforceability of this Article 11 and that the Administrative Agent, the
Lenders and their respective successors and assigns are intended third-party
beneficiaries of the waivers and agreements set forth in this Section 11.4.
11.5 Election of Remedies. If the Administrative Agent or any Lender may,
under applicable Law, proceed to realize its benefits under any of the Loan
Documents giving the Administrative Agent or such Lender a Lien upon any
Collateral, whether owned by any Loan Party or by any other Person, either by
judicial foreclosure or by non-judicial sale or enforcement, the Administrative
Agent or any Lender may, at its sole option, determine which of its remedies or
rights it may pursue without affecting any of its rights and remedies under this
Article 11. If, in the exercise of any of its rights and remedies, the
Administrative Agent or any Lender shall forfeit any of its rights or remedies,
including its right to enter a deficiency judgment against any Loan Party or any
other Person, whether because of any applicable Laws pertaining to "election of
remedies" or the like, each Guarantor hereby consents to such action by the
Administrative Agent or such Lender and waives any claim based upon such action,
even if such action by the Administrative Agent or such Lender shall result in a
full or partial loss of any rights of subrogation which each Guarantor might
otherwise have had but for such action by the Administrative Agent or such
Lender. Any election of remedies which results in the denial or impairment of
the right of the Administrative Agent or any Lender to seek a deficiency
judgment against any Guarantor shall not impair any other Guarantor's obligation
to pay the full amount of the Obligations. In the event the Administrative Agent
or any Lender shall bid at any foreclosure or trustee's sale or at any private
sale permitted by law or the Loan Documents, the Administrative Agent or such
Lender may bid all or less than the amount of the Obligations and the amount of
such bid need not be paid by the Administrative Agent or such Lender but, at the
election of the Administrative Agent or such Lender, shall be credited against
the Obligations. The amount of the successful bid at any such sale, whether the
Administrative Agent, the Lender or any other party is the successful bidder,
shall be conclusively deemed to be the fair market value of the Collateral and
the difference between such bid amount and the remaining balance of the
Obligations shall be conclusively deemed to be the amount of the Obligations
guaranteed under this Article 11, notwithstanding that any present or future Law
or court decision or ruling may have the effect of reducing the amount of any
deficiency claim to which the Administrative Agent or any Lender might otherwise
be entitled but for such bidding at any such sale.
11.6 Limitation. Notwithstanding any provision herein contained to the
contrary, each Guarantor's liability under this Article 11 shall be limited to
an amount not to exceed the amount which could be claimed by the Administrative
Agent and the Lenders from such Guarantor under this Article 11 without
rendering such claim voidable or avoidable under Section 548 of Chapter 11 of
the Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer
Act, Uniform Fraudulent Conveyance
67
Act or similar statute or common law after taking into account, among other
things, such Guarantor's right of contribution and indemnification from each
other Guarantor under Section 11.7.
11.7 Contribution with Respect to Guaranty Obligations.
(a) To the extent that any Guarantor shall make a payment under this
Article 11 of all or any of the Obligations (a "Guarantor Payment") which,
taking into account all other Guarantor Payments then previously or concurrently
made by any other Guarantor, exceeds the amount which such Guarantor would
otherwise have paid if each Guarantor had paid the aggregate Obligations
satisfied by such Guarantor Payment in the same proportion that such Guarantor's
"Allocable Amount" (as defined below) (as determined immediately prior to such
Guarantor Payment) bore to the aggregate Allocable Amounts of each of Guarantors
as determined immediately prior to the making of such Guarantor Payment, then,
following payment in full in cash of the Obligations and termination of the
Commitments, such Guarantor shall be entitled to receive contribution and
indemnification payments from, and be reimbursed by, each other Guarantor for
the amount of such excess, pro rata based upon their respective Allocable
Amounts in effect immediately prior to such Guarantor Payment.
(b) As of any date of determination, the "Allocable Amount" of any
Guarantor shall be equal to the maximum amount of the claim which could then be
recovered from such Guarantor under this Article 11 without rendering such claim
voidable or avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or
under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent
Conveyance Act or similar statute or common law.
(c) This Section 11.7 is intended only to define the relative rights
of the Guarantors and nothing set forth in this Section 11.7 is intended to or
shall impair the obligations of the Guarantors, jointly and severally, to pay
any amounts as and when the same shall become due and payable in accordance with
the terms of this Agreement, including Section 11.1.
(d) The parties hereto acknowledge that the rights of contribution
and indemnification hereunder shall constitute assets of the Guarantors to which
such contribution and indemnification are owing.
(e) The rights of the indemnifying Guarantors against other Loan
Parties under this Section 11.7 shall be exercisable upon the full and payment
of the Obligations and the termination of the Commitments.
11.8 Liability Cumulative. The liability of the Guarantors under this
Article 11 is in addition to and shall be cumulative with all liabilities of
each Guarantor to the Administrative Agent and the Lenders under this Agreement
and the other Loan Documents to which such Guarantor is a party or in respect of
any Obligations or obligation of the other Guarantors without any limitation as
to amount, unless the instrument or agreement evidencing or creating such other
liability specifically provides to the contrary.
ARTICLE 12: GENERAL CONDITIONS/MISCELLANEOUS
The following conditions shall be applicable throughout the term of this
Agreement:
12.1 Amendments, Modifications and Waivers. No amendment, modification or
waiver, of any provision of this Agreement nor consent to any departure by any
Loan Party therefrom shall in any event be effective unless the same shall be in
writing and signed by the Requisite Lenders, and then any
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such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given; provided, however, that no amendment,
modification, waiver or consent shall, unless in writing and signed by each
Lender affected thereby, do any of the following: (i) waive any of the
conditions specified in Article 5, except as otherwise provided therein; (ii)
increase the Commitments or subject any Lender to any additional obligations;
(iii) reduce the principal of, or interest on, the Loan or any fees or other
amounts payable hereunder; (iv) amend any of the provisions in Article 2; (v)
release any material amount of the Collateral except as shall otherwise be
provided herein; (vi) release any Guarantor having a material amount of assets;
(vii) amend the definition of the Requisite Lenders; or (viii) amend this
Section 12.1; and provided, further, that no amendment, modification, waiver or
consent shall, unless in writing and signed by the Administrative Agent in
addition to the Lenders required above to take such action, affect the rights or
duties of the Administrative Agent under this Agreement or the other Loan
Documents. No failure on the part of any Lender or the Administrative Agent to
exercise, and no delay in exercising, any right hereunder or under any Loan
Document shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right preclude any other or further exercise thereof or the
exercise of any other right.
12.2 Advances Not Implied Waivers. No waiver of the requirements contained
in any Loan Document shall be effective unless in writing duly signed by the
required number of the Lenders provided for herein. No Advance hereunder shall
constitute a waiver of any of the conditions of the Lenders' obligation to make
further Advances, except as otherwise provided herein. Any Advance made by any
Lender and any sums expended by any Lender pursuant to the Loan Documents shall
be deemed to have been made pursuant to this Agreement, notwithstanding the
existence of an uncured Default or Event of Default. No Advance at a time when
an Event of Default exists shall constitute a waiver of any right or remedy by
the Administrative Agent or any Lender existing by reason of such Event of
Default, including the right to accelerate the maturity of the Indebtedness
evidenced by the Loan Documents or to foreclose the Lien on the Collateral or to
refuse to make further Advances hereunder.
12.3 Business Day. Except as otherwise provided herein, whenever any
payment or action to be made or taken hereunder or under any other Loan Document
shall be stated to be due on a day which is not a Business Day, such payment or
action shall be made or taken on the next succeeding Business Day (except as set
forth in the definition of LIBOR Period) and such extension of time shall be
included in computing interest or fees, if any, in connection with such payment
or action.
12.4 Records. From time to time the Administrative Agent may send the
Borrower statements of the unpaid principal amount of the Loan, the unpaid
interest accrued thereon, the interest rate or rates applicable to such unpaid
principal amount, the duration of such applicability, and the amount remaining
available on any Commitment, and each statement shall be deemed correct and
conclusively binding on Borrower (absent manifest error) unless the Borrower
notifies the Administrative Agent of an error in the statement in writing within
thirty (30) days of the date on which any such statement is provided to the
Borrower.
12.5 Notices. All notices, requests, demands, directions and other
communications (collectively, "notices") required under the provisions of this
Agreement or any other Loan Document shall be in writing (including
communication by facsimile transmission) unless otherwise expressly permitted
hereunder and shall be sent by hand, by registered or certified mail (return
receipt requested), by overnight courier service (maintaining records of
receipt) or by facsimile transmission with confirmation of receipt, in all cases
with charges prepaid, and any such properly given notice shall be effective upon
the earliest of (i) receipt, (ii) when delivered by hand, (iii) the third
Business Day after being mailed, (iv) the following Business Day if sent by
overnight courier service or (v) upon transmission when sent by facsimile. All
notices shall be addressed as follows:
69
If to any Loan Party, to the Notice Address set forth on Schedule 1, with
copies, if any, as set forth on Schedule 1.
If to Administrative Agent:
General Electric Capital Corporation
Telecom Financial Services
00 Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: Portfolio Manager
Telecopy: (000) 000-0000
With a copy to: NTFC Capital Corporation
000 Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxx 00000
Attention: Legal Department
Telecopy: (000) 000-0000
If to a Lender, to the Notice Address set forth on Annex I or in the
Assignment Agreement by which it became a Lender.
All notices shall be sent to the applicable party at the address stated
above or in accordance with the last unrevoked written direction from such party
to the other party hereto, given in accordance with the terms hereof. The giving
of any notice required hereunder may be waived in writing by the party entitled
to receive such notice.
12.6 FCC and PUC Approval. The exercise of any rights or remedies
hereunder or under any other Loan Document by the Administrative Agent or any
Lender that may require FCC or PUC approval shall be subject to obtaining such
approval. Pending the receipt of any PUC or FCC approval, no Loan Party shall
delay, hinder, interfere with or obstruct the exercise of the Administrative
Agent's or the Lenders' rights or remedies hereunder or the obtaining of such
approvals.
12.7 Lenders Sole Beneficiary. All conditions of the obligation of the
Lenders to make any Advances hereunder are imposed solely and exclusively for
the benefit of the Lenders and their respective assigns; no other Person shall
have standing to require satisfaction of such conditions in accordance with
their terms or be entitled to assume that any Lender will refuse to make any
Advances in the absence of strict compliance with any or all such conditions;
and no other Person shall under any circumstances be deemed to be a beneficiary
of such conditions, any or all of which may be freely waived in whole or in part
by the Lenders at any time if, in their sole discretion, the Lenders deem it
advisable to do so. Each Lender's sole obligation hereunder is to make the
Advances if and to the extent required by this Agreement or any other Loan
Document.
12.8 Lender's Review of Information. Each Loan Party acknowledges and
agrees that any review or analysis by the Administrative Agent or any Lender of
financial information, operating information, marketing data or other
information provided to the Administrative Agent or such Lender by or on behalf
of such Loan Party at any time is and shall be conducted solely for the
Administrative Agent's and such Lender's benefit and internal use and that
neither the Administrative Agent nor any Lender is under any duty or obligation
to make the results of such review or analysis available to any Loan Party. No
Loan Party is relying, and will not rely, on the Administrative Agent or any
Lender for financial or business advice.
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12.9 No Joint Venture. Nothing in this Agreement or any other Loan
Document shall be deemed to constitute any kind of partnership, joint venture or
fiduciary relationship between the Administrative Agent, any Lender or any Loan
Party.
12.10 Severability. The provisions of this Agreement are intended to be
severable. Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable Law,
but if any provision of this Agreement or any other Loan Document shall be
prohibited by or invalid under applicable Law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
12.11 Rights Cumulative. All rights, powers and remedies herein given to
the Administrative Agent and the Lenders are cumulative and not alternative and
are in addition to all statutes or rules of law.
12.12 Duration; Survival. All representations and warranties of any Loan
Party contained herein or made in connection herewith shall survive the making
of and shall not be waived by the execution and delivery of this Agreement and
the other Loan Documents, any investigation by the Administrative Agent or any
Lender, or the making of any Advances hereunder. All covenants and agreements of
any Loan Party contained herein shall continue in full force and effect from and
after the date hereof so long as the Borrower may borrow hereunder and until
payment in full of the Loans, interest thereon, all Fees and all other
Obligations of the Borrower. Without limitation, it is understood that all
obligations of Loan Parties to make payments to or indemnify the Lenders shall
survive the payment in full of the Loans and of all other Obligations.
12.13 Governing Law. This Agreement, the Notes and each of the other Loan
Documents shall be governed by and construed and enforced in accordance with the
law of the State of New York, without regard to conflicts of laws principles
(other than Section 5-1401 of the General Obligations Law of the State of New
York), except to the extent that the Law of jurisdictions where the Collateral
is located may be required to apply to the Collateral.
12.14 Counterparts. This Agreement may be executed in any number of
counterparts (by facsimile transmission or otherwise) and by the different
parties hereto on separate counterparts, each of which, when so executed, shall
be deemed an original, but all such counterparts shall constitute one and the
same instrument.
12.15 Successors and Assigns. This Agreement and the other Loan Documents
shall be binding on and shall inure to the benefit of each Loan Party, the
Administrative Agent, the Lenders and their respective permitted successors and
assigns (including, in the case of any Loan Party, a debtor-in-possession on
behalf of such Loan Party), except as otherwise provided herein or therein. No
Loan Party may assign, transfer, hypothecate or otherwise convey its rights,
benefits, obligations or duties hereunder or under any of the other Loan
Documents without the prior express written consent of the Administrative Agent
and the Lenders. Any such purported assignment, transfer, hypothecation or other
conveyance by any Loan Party without the prior express written consent of the
Administrative Agent and the Lenders shall be void. The terms and provisions of
this Agreement are for the purpose of defining the relative rights and
obligations of each Loan Party, the Administrative Agent and the Lenders with
respect to the transactions contemplated hereby and no Person shall be a
third-party beneficiary of any of the terms and provisions of this Agreement or
any of the other Loan Documents.
12.16 Disclosures and Confidentiality.
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(a) Each Loan Party agrees that it and each of its Affiliates will
obtain the Administrative Agent's written consent before using or generating any
press release, advertisement, publicity materials or other publication in which
the name or logo of the Administrative Agent or any Lender or any of their
Affiliates is used or may be reasonably inferred and will not distribute any
such materials in the absence of such prior written approval.
(b) Each Loan Party agrees that it will not, directly or indirectly,
disclose to any third party the terms of this Agreement or the other Loan
Documents or prior or future correspondence relating thereto, or the
transactions contemplated hereby, or any other information regarding the
Administrative Agent, any Lender or their Affiliates learned by such Loan Party
during the course of negotiation thereof. The term "third party" shall exclude
only the Loan Parties, their Affiliates and their respective attorney(s) and
certified public accountant(s). This Section 12.16(b) shall not restrict the
disclosure of information if such disclosure is required by Law, by order of any
court or by the order, rule or regulation of any administrative or regulatory
agency, including any requirements of the FCC, any PUC or any state or federal
securities commissions (the "Commissions"); provided, however, that, except for
disclosures required by the FCC, any PUC or the Commissions, the Borrower shall
provide the Administrative Agent with advance notice of any such required
disclosure of information so that the Administrative Agent or the applicable
Lender may seek an appropriate protective order and/or waive compliance with
this Section 12.16(b). Each Loan Party shall not oppose any action taken by the
Administrative Agent or any Lender to obtain an appropriate protective order or
other reliable assurance that the information will be accorded confidential
treatment. The obligations set forth in this Section 12.16(b) shall survive the
termination of this Agreement.
(c) The Administrative Agent and each Lender agree to use
commercially reasonable efforts (equivalent to the efforts the Administrative
Agent or such Lender applies to maintaining the confidentiality of its own
confidential information) to maintain as confidential all confidential
information provided to them by the Loan Parties, except that the Administrative
Agent and each Lender may disclose such information (a) to Persons employed or
engaged by the Administrative Agent or such Lender in evaluating, approving,
structuring or administering the Loans and the Commitments; (b) to any bona fide
assignee or participant or potential assignee or participant that has agreed to
comply with the covenant contained in this Section 12.16 (and any such bona fide
assignee or participant or potential assignee or participant may disclose such
information to Persons employed or engaged by them as described in clause (b)
above); (c) as required or requested by any Governmental Authority or reasonably
believed by the Administrative Agent or such Lender to be compelled by any court
decree, subpoena or legal or administrative order or process; (d) as, in the
opinion of the Administrative Agent's or such Lender's counsel, required by Law;
(e) in connection with the exercise of any right or remedy under the Loan
Documents or in connection with any litigation to which the Administrative Agent
or such Lender is a party; or (f) which ceases to be confidential through no
fault of the Administrative Agent or such Lender.
(d) The disclosure of information by any of the Administrative
Agent, the Lenders or Loan Parties will not be restricted under this Agreement
if such information (i) has been or becomes published or is now, or in the
future, in the public domain through (A) no fault of the parties, (B) disclosure
other than unauthorized disclosure by the party to whom the information is
disclosed or (C) disclosure to third parties by the disclosing party without
similar restriction; (ii) is property (other than proposal letters, commitment
letters or other correspondence between the Lenders and the Loan Parties) within
the legitimate possession of the receiving party prior to disclosure hereunder;
(iii) subsequent to disclosure hereunder, is lawfully received from a third
party having rights therein without restriction of the third party's or
receiving party's rights to disseminate the information and without notice of
any restriction against its further disclosure; (iv) is disclosed with the
written approval of the other party; or (v) is or becomes publicly available
free of any obligation to keep it confidential.
72
(e) Each Loan Party authorizes the Administrative Agent and each
Lender to discuss with and furnish to any Affiliate of the Administrative Agent
or such Lender, any government or self-regulatory agency with jurisdiction over
the Administrative Agent or such Lender, any other Governmental Authority or,
subject to such Person's agreeing to this Section 12.16, any assignee,
successor, participant, successor, or prospective assignee, successor or
participant, all Financial Statements, audit reports and other information
pertaining to such Loan Party and/or its Subsidiaries whether such information
was provided by such Loan Party or prepared or obtained by the Administrative
Agent, the Lenders or third parties. No representation or warranty is made by
the Administrative Agent, the Lenders or any of their employees, officers,
directors or agents to any existing or prospective assignee, successor or
participant regarding any audit reports or other analyses of any Loan Party that
the Administrative Agent or any Lender may distribute, whether such information
was provided by any Loan Party or prepared or obtained by the Administrative
Agent, the Lenders or third parties, nor shall the Administrative Agent, the
Lenders or any of their employees, officers, directors or agents be liable to
any Person receiving a copy of such reports or analyses for any inaccuracy or
omission contained in such reports or analyses or relating thereto.
(f) Every reference in this Agreement to disclosures of any Loan
Party to any Lender or the Administrative Agent (except the Business Plan and
Financial Statements), to the extent that such references refer or are intended
to refer to disclosures at or prior to the execution of this Agreement, shall be
deemed strictly to refer only to written disclosures delivered to the
Administrative Agent or the Lenders concurrently with the execution of this
Agreement and referred to specifically in the Loan Documents. The parties intend
that such disclosures are to be limited to those presented in an orderly manner
at the time of executing this Agreement and are not to be deemed to include
expressly or impliedly any disclosures that previously may have been delivered
from time to time to the Administrative Agent or any Lender, except to the
extent that such previous disclosures are again presented to the Administrative
Agent or such Lender in writing concurrently with the execution of this
Agreement.
12.17 Jurisdiction and Venue. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY CONSENTS TO THE JURISDICTION OF THE STATE OR FEDERAL COURTS LOCATED
IN NEW YORK COUNTY, CITY OF NEW YORK, NEW YORK FOR ANY SUIT BROUGHT OR ACTION
COMMENCED IN CONNECTION WITH THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR THE
OBLIGATIONS AND AGREES NOT TO CONTEST VENUE IN ANY SUCH COURTS. In any such
litigation, each of the Parties hereto waives personal service of any summons,
complaint or other process, and agrees that the service thereof may be made by
certified or registered mail directly to its address provided in accordance with
Section 12.5. The choice of forum set forth herein shall not be deemed to
preclude the enforcement of any judgment obtained in such forum or the taking of
any action under this Agreement to enforce the same in any appropriate
jurisdiction.
12.18 Jury Waiver. THE PARTIES HERETO HEREBY KNOWINGLY AND WILLINGLY WAIVE
THEIR RIGHTS TO DEMAND A JURY TRIAL IN ANY ACTION OR PROCEEDING INVOLVING THIS
AGREEMENT, ANY OTHER LOAN DOCUMENT, THE OBLIGATIONS OR ANY RELATIONSHIP AMONG
THE ADMINISTRATIVE AGENT, THE LENDERS AND ANY LOAN PARTY. EACH OF THE PARTIES
HERETO REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THE FOREGOING WAIVERS WITH
ITS LEGAL COUNSEL AND HAS KNOWINGLY AND VOLUNTARILY WAIVED ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, THIS
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
12.19 Limitation on Liability. NONE OF THE ADMINISTRATIVE AGENT, ANY
LENDER OR ANY LOAN PARTY SHALL HAVE ANY LIABILITY UNDER OR IN CONNECTION WITH
73
THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS FOR SPECIAL, EXEMPLARY,
PUNITIVE, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES OF ANY SORT IN ANY SUIT
BROUGHT OR ACTION COMMENCED IN CONNECTION WITH THIS AGREEMENT, THE OTHER LOAN
DOCUMENTS OR THE OBLIGATIONS AND, EXCEPT TO THE EXTENT PROHIBITED BY LAW, EACH
PARTY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH ACTION ANY
SPECIAL, EXEMPLARY, PUNITIVE, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES OF
ANY SORT OTHER THAN ACTUAL DAMAGES.
12.20 Schedules, Exhibits and Annexes. The Schedules, Exhibits and Annexes
attached to this Agreement are an integral part hereof, and are hereby made a
part of this Agreement.
12.21 Agreement to Govern. In case of any conflict between the terms of
this Agreement and any of the other Loan Documents, the terms of this Agreement
shall govern.
12.22 Entire Agreement. This Agreement, the other Loan Documents and other
documents, agreements and certificates executed by the parties contemporaneously
herewith or subsequently hereto constitute the entire agreement of the parties
and supersede all prior understandings and agreements, written or oral, among
the parties hereto relating to the subject matter hereof. None of the parties
hereto is entering into this Agreement in reliance on statements or
representations made by any Person other than as set forth herein.
[SIGNATURE PAGE APPEARS ON THE NEXT PAGE.]
IN WITNESS WHEREOF, this Agreement has been duly executed as of the date
first above written.
GENERAL ELECTRIC CAPITAL CORPORATION,
as the Administrative Agent
By: /s/ XX Xxxxxxxxx
-------------------------------------
Name: XX Xxxxxxxxx
Title: Att. Secretary
NTFC CAPITAL CORPORATION,
as a Lender
By: /s/ XX Xxxxxxxxx
-------------------------------------
Name: XX Xxxxxxxxx
Title: Vice President
ATI OPERATING COMPANY,
as the Borrower
By: _____________________________________
Name:
Title:
ADVANCED TELECOMMUNICATIONS, INC.,
as a Guarantor
By: _____________________________________
Name:
Title:
XXXX COMMUNICATIONS, INC., as a
Guarantor
By: _____________________________________
Name:
Title:
IN WITNESS WHEREOF, this Agreement has been duly executed as of the date
first above written.
GENERAL ELECTRIC CAPITAL CORPORATION,
as the Administrative Agent
By: _____________________________________
Name:
Title:
NTFC CAPITAL CORPORATION,
as a Lender
By: _____________________________________
Name:
Title:
ATI OPERATING COMPANY,
as the Borrower
By: /s/ Xxxxxxx X. Donchve
-------------------------------------
Name: Xxxxxxx X. Donchve
Title: Treasurer
ADVANCED TELECOMMUNICATIONS, INC.,
as a Guarantor
By: /s/ Xxxxxxx X. Donchve
-------------------------------------
Name: Xxxxxxx X. Donchve
Title: Treasurer
XXXX COMMUNICATIONS, INC., as a
Guarantor
By: /s/ Xxxxxxx X. Donchve
-------------------------------------
Name: Xxxxxxx X. Donchve
Title: Treasurer
AMERICAN TELEPHONE TECHNOLOGY, INC., as a
Guarantor
By: /s/ Xxxxxxx X. Donchve
-------------------------------------
Name: Xxxxxxx X. Donchve
Title: Treasurer
ELECTRO-TEL, INC., as a Guarantor
By: /s/ Xxxxxxx X. Donchve
-------------------------------------
Name: Xxxxxxx X. Donchve
Title: Treasurer
INTELLECOM COMMUNICATIONS, INC., as a
Guarantor
By: /s/ Xxxxxxx X. Donchve
-------------------------------------
Name: Xxxxxxx X. Donchve
Title: Treasurer
XXXX TELEMANAGEMENT, INC., as a Guarantor
By: /s/ Xxxxxxx X. Donchve
-------------------------------------
Name: Xxxxxxx X. Donchve
Title: Treasurer
