Exhibit 10.17
LOAN AND SECURITY AGREEMENT
---------------------------
This LOAN AND SECURITY AGREEMENT ("Agreement"), is dated as of December
___, 1998 (the "Closing Date"), by and between the following parties:
LENDER/SECURED PARTY: NTFC CAPITAL CORPORATION, a Delaware corporation with
offices at 000 Xxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxx,
Xxxxxxxxx 00000 ("Lender")
BORROWER/DEBTOR: FOCAL COMMUNICATIONS CORPORATION, a Delaware
corporation with its principal place of business at 000
Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000
("Borrower")
This Loan and Security Agreement includes the general terms and conditions
contained herein and all the exhibits and schedules attached hereto, all of
which are incorporated herein. In the event of a conflict between the general
terms and conditions and any schedule, the additional terms and conditions
stated in the schedule shall control.
By executing this Loan and Security Agreement, Lender agrees to make loans to
Borrower, and Borrower agrees to borrow from Lender and to provide collateral to
secure such loans, all on the terms and conditions set forth herein.
IN WITNESS WHEREOF, the parties have executed this Loan and Security Agreement
by their duly authorized representatives:
LENDER: BORROWER:
------ --------
NTFC CAPITAL CORPORATION FOCAL COMMUNICATIONS CORPORATION
BY: /s/ X.X. XXXXXXXXX BY: /s/ XXXXXX X. XXXXXX
--------------------- ---------------------------
TITLE: Vice President TITLE: Executive V.P./CFO
----------------- -----------------------
DATE: 12/30/98 DATE: 12/30/98
----------------- -----------------------
LOAN AND SECURITY AGREEMENT
---------------------------
This LOAN AND SECURITY AGREEMENT ("Agreement"), is dated as of December___,
1998 (the "Closing Date"), by and between the following parties:
LENDER/SECURED PARTY: NTFC CAPITAL CORPORATION, a Delaware corporation with
offices at 000 Xxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxx,
Xxxxxxxxx 00000 ("Lender")
BORROWER/DEBTOR: FOCAL COMMUNICATIONS CORPORATION, a Delaware
corporation with its principal place of business at
000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000
("Borrower")
This Loan and Security Agreement includes the general terms and conditions
contained herein and all the exhibits and schedules attached hereto, all of
which are incorporated herein. In the event of a conflict between the general
terms and conditions and any schedule, the additional terms and conditions
stated in the schedule shall control.
By executing this Loan and Security Agreement, Lender agrees to make loans, to
Borrower, and Borrower agrees to borrow from Lender and to provide collateral to
secure such loans, all on the terms and conditions set forth herein.
IN WITNESS WHEREOF, the parties have executed this Loan and Security Agreement
by their duly authorized representatives:
LENDER: BORROWER:
------ --------
NTFC CAPITAL CORPORATION FOCAL COMMUNICATIONS CORPORATION
BY:_____________________ BY:_____________________________
TITLE:__________________ TITLE:__________________________
DATE:___________________ DATE:___________________________
TABLE OF CONTENTS
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Page
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ARTICLE 1: DEFINITIONS...................................................... 1
1.01. Certain Definitions............................................. 1
1.02. Accounting Principles; Subsidiaries............................. 9
1.03. UCC Terms....................................................... 9
1.04. General Construction; Captions.................................. 10
1.05. References to Documents and Laws................................ 10
ARTICLE 2: LOANS............................................................ 10
2.01. Commitment...................................................... 10
2.02. Note and Payment Terms.......................................... 10
2.03. Procedures for Borrowing........................................ 12
2.04. Prepayments..................................................... 13
2.05. Computation of Interest......................................... 14
2.06. Payments........................................................ 14
2.07. Indemnity....................................................... 14
2.08. Use of Proceeds................................................. 14
2.09. Fees............................................................ 14
2.10. Lender's Expenses............................................... 15
ARTICLE 3: COLLATERAL AND SECURITY AGREEMENT................................ 15
3.01. Grant of Security Interest...................................... 15
3.02. Priority of Security Interests.................................. 16
3.03. Further Documentation; Pledge of Instruments.................... 16
3.04. Further Identification of Collateral............................ 17
3.05. Remedies........................................................ 17
3.06. Standard of Care................................................ 17
3.07. Advances to Protect Collateral.................................. 17
3.08. License to Use.................................................. 17
3.09. Subsidiary Guaranties........................................... 17
ARTICLE 4: REPRESENTATIONS AND WARRANTIES................................... 18
4.01. Organization and Qualification.................................. 18
4.02. Authority and Authorization..................................... 18
4.03. Execution and Binding Effect.................................... 18
4.04. Governmental Authorizations..................................... 18
4.05. Regulatory Authorizations....................................... 18
4.06. Material Agreement; Absence of Conflicts........................ 18
4.07. No Restrictions................................................. 19
4.08. Financial Statements............................................ 19
4.09. Financial Accounting Practices.................................. 19
4.10. Accurate and Complete Disclosure................................ 19
4.11. No Event of Default; Compliance with Material Agreements........ 20
i
4.12. Litigation....................................................... 20
4.13. Rights to Property............................................... 20
4.14. Financial Condition.............................................. 20
4.15. Taxes............................................................ 20
4.16. No Material Adverse Change....................................... 20
4.17. No Regulatory Event.............................................. 20
4.18. Trade Relations.................................................. 21
4.19. No Brokerage Fees................................................ 21
4.20. Margin Stock; Regulation U....................................... 21
4.21. Investment Company; Public Utility Holding Company............... 21
4.22. Personal Holding Company; Subchapter S........................... 21
4.23. ERISA............................................................ 21
4.24. Environmental Warranties......................................... 22
4.25. Security Interests............................................... 22
4.26. Place of Business................................................ 22
4.27. Location of Collateral........................................... 22
4.28. Clear Title To Collateral........................................ 22
4.29. Assumed Names.................................................... 22
4.30. Transactions with Affiliates..................................... 22
4.31. Nortel and Vendor Purchase Agreement............................. 22
ARTICLE 5: CONDITIONS OF CLOSING............................................. 23
5.01. Borrower's Certificate........................................... 23
5.02. Opinions of Counsel.............................................. 23
5.03. Closing Documents................................................ 23
ARTICLE 6: CONDITIONS OF LENDING............................................. 24
6.01. Conditions for Initial Advance................................... 24
6.02. Conditions for All Advances...................................... 24
6.03. Affirmation of Representations and Warranties.................... 26
6.04. Deadline for Funding Conditions.................................. 26
ARTICLE 7: AFFIRMATIVE COVENANTS............................................. 26
7.01. Reporting and Information Requirements........................... 26
7.02. Other Notices.................................................... 27
7.03. Notice of Pension-Related Events................................. 28
7.04. Inspection Rights................................................ 28
7.05. Preservation of Corporate Existence and Qualification............ 29
7.06. Continuation of Business......................................... 29
7.07. Insurance........................................................ 29
7.08. Payment of Taxes, Charges, Claims and Current Liabilities........ 30
7.09. Financial Accounting Practices................................... 31
7.10. Compliance with Laws............................................. 31
7.11. Use of Proceeds.................................................. 31
7.12. Government Authorizations; Regulatory Authorizations, Etc........ 31
7.13. Contracts and Franchises......................................... 32
7.14. Consents......................................................... 32
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7.15. Financial Covenants.............................................. 32
7.16. Construction and Storage......................................... 32
7.17. Upgrade Equipment................................................ 32
ARTICLE 8: NEGATIVE COVENANTS................................................ 32
8.01. Additional Indebtedness.......................................... 33
8.02. Restrictions on Liens and Sale of Collateral..................... 33
8.03. Limitation on Contingent Obligations............................. 33
8.04. Prohibition of Mergers, Acquisitions,
Name, Office or Business Changes................................ 33
8.05. Limitation on Equity Payments.................................... 34
8.06. Limitation on Investments, Advances and Loans.................... 34
8.07. Capital Expenditures............................................. 35
8.08. Limitation on Leases............................................. 35
8.09. Termination of Nortel Purchase Agreement......................... 35
8.10. Removal of Collateral............................................ 35
8.11. Assumed Names.................................................... 35
ARTICLE 9: EVENTS OF DEFAULT................................................. 35
9.01. Events of Default................................................ 35
9.02. Consequences of an Event of Default.............................. 38
9.03. Exercise of Rights............................................... 38
9.04. Rights of Secured Party.......................................... 38
9.05. Notices, Etc. Waived............................................. 39
9.06. Additional Remedies.............................................. 39
9.07. Application of Proceeds.......................................... 40
9.08. Discontinuance of Proceedings.................................... 40
9.09. Power of Attorney................................................ 40
9.10. Regulatory Matters............................................... 41
ARTICLE 10: GENERAL CONDITIONS/MISCELLANEOUS................................. 41
10.01. Modifications and Waivers....................................... 41
10.02. Advances Not Implied Waivers.................................... 42
10.03. Deviation from Covenants........................................ 42
10.04. Holidays........................................................ 42
10.05. Records......................................................... 42
10.06. Notices......................................................... 43
10.07. FCC and PUC Approval............................................ 43
10.08. Lender Sole Beneficiary......................................... 43
10.09. Lender's Review of Information.................................. 44
10.10. No Joint Venture................................................ 44
10.11. Severability.................................................... 44
10.12. Rights Cumulative............................................... 44
10.13. Duration; Survival.............................................. 44
10.14. Governing Law................................................... 44
10.15. Counterparts.................................................... 45
10.16. Successors and Assigns.......................................... 45
10.17. Participation................................................... 45
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10.18. Time of Essence................................................. 45
10.19. Disclosures and Confidentiality................................. 45
10.20. Jurisdiction and Venue.......................................... 47
10.21. Jury Waiver..................................................... 47
10.22. Limitation on Liability......................................... 48
10.23. Borrower Waivers................................................ 48
10.24. Schedules....................................................... 48
10.25. Agreement to Govern............................................. 48
10.26. Entire Agreement................................................ 48
iv
SCHEDULES TO LOAN AND SECURITY AGREEMENT
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Schedule 1 Borrower Information
Schedule 1.01(a) Subsidiary Execution Page(s)
Schedule 1.01(b) Subsidiary Information
Schedule 2.01 Maximum Loan Amount
Schedule 2.02 Payment Terms and Governing Law
Schedule 2.09 Fees
Schedule 4.04 Required Consents
Schedule 4.05 Regulatory Authorizations
Schedule 4.07 Restrictions on Loans
Schedule 4.08 Financial Statements
Schedule 4.12 Pending Litigation
Schedule 4.25 UCC Filing Offices
Schedule 4.26 Principal Offices and Location of Collateral
Schedule 4.29 Assumed Names
Schedule 4.31 Nortel Purchase Agreement
Schedule 6.02 Post-Closing Items
Schedule 7.07 Insurance/Certificate
Schedule 7.16 Financial Covenants
Schedule 8.02 Permitted Specific Encumbrances
Schedule 8.06 Permitted Equity Payments
EXHIBITS TO LOAN AND SECURITY AGREEMENT
---------------------------------------
Exhibit A Form of Note
Exhibit B Form of Borrowing Certificate
Exhibit C Form of Opinion of Counsel for Borrower
Exhibit D Form of Opinion of Regulatory Counsel for Borrower
Exhibit E Form of Landlord's Consent
Exhibit F Form of Mortgagee's Consent
Exhibit G Form of Guaranty
LOAN AND SECURITY AGREEMENT
---------------------------
THIS LOAN AND SECURITY AGREEMENT ("Agreement") is dated as of the "Closing
Date" set forth on Schedule 2.02 hereto, by and between the entity or entities
described on Schedule 1 hereto (collectively, "Borrower") and NTFC CAPITAL
CORPORATION, a Delaware corporation ("Lender"), with offices at 000 Xxxxxxxxx
Xxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxx 00000.
B A C K G R O U N D:
-------------------
A. Borrower has entered into a certain purchase agreement with Northern
Telecom Inc., as described on Schedule 4.31 hereto, providing for Borrower's
purchase of certain telecommunications equipment and the license of associated
software, all as described therein, and has requested Lender to extend credit to
Borrower to finance such purchase and license, as described on Schedule 4.31
hereto, and to make credit available for the purchase of additional
telecommunications equipment, in each case as described herein.
B. Lender is willing to extend such credit to 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 1: DEFINITIONS
----------------------
1.01. Certain Definitions. Certain terms are defined on Schedule 2.02
hereto. In addition to other words and terms defined in the preamble hereof or
elsewhere in this Agreement, or on the Schedules hereto, the following words and
terms shall have the following meanings unless the context otherwise clearly
requires:
"Advance(s)": any advance or loan of funds made by Lender to Borrower
pursuant to this Agreement.
"Affiliate": as applied to any Person, any second Person directly or
indirectly controlling, controlled by, or under common control with that Person,
or related to such Person by blood, marriage or adoption. For purposes of this
definition and the definition of "Subsidiary", a Person shall be deemed to
control another Person if such first Person possesses, directly or indirectly,
the power to direct, or to cause the direction of, the management and policies
of such other Person, whether through ownership of voting securities, by
contract or otherwise. The "Affiliates" of Borrower shall also include the
Owners.
"Basic Agreements": a collective reference to this Agreement, the Note, and
the Security Documents.
"Borrowing Certificate": a certificate substantially in the form of Exhibit
B hereto.
"Borrowing Date": any Business Day on which an Advance is made to Borrower
hereunder.
"Business Day": a day other than a Saturday, Sunday or other day on which
commercial banks in Nashville, Tennessee or Chicago, Illinois are authorized or
required by law to close.
"Calendar Quarter": each three month period starting on each January 1,
April 1, July 1, and October 1, during the term of this Agreement.
"Carrier": any interexchange carrier or other provider of
telecommunications long distance service, or local exchange company or other
provider of local telecommunications service.
"Cash": at any time, the cash, cash equivalents or marketable investment
grade securities held by Borrower free of any claims or encumbrances.
"Cash Flow": during any fiscal period of Borrower, EBITDA, less any Equity
Payments pursuant to Section 8.06 hereof or payments on Subordinated
Indebtedness made during such period.
"Change in Control": any "Change of Control" as defined in that certain
Indenture with respect to Borrower's 12.125% Senior Discount Notes Due 2008,
dated as of February 18,1998, by and between Borrower and Xxxxxx Trust and
Savings Bank.
"Closing Date": as defined on Schedule 2.02 hereto.
"Code": the Internal Revenue Code of 1986, as amended from time to time.
"Collateral": as defined in Section 3.01 hereof.
"Commitment": as defined in Section 2.01 hereof.
"Communications Law": any and all of (i) the Communications Act of 1934, as
amended and any similar or successor federal statute, and the rules and
regulations of the FCC thereunder, (ii) any state law governing the provision of
telecommunications services, and the rules and regulations of the PUC, all as
the same may be in effect from time to time.
"Consent": a consent to a collateral assignment of the NTI Purchase
Agreement, a consent to a collateral assignment of the Vendor Purchase
Agreement, a Landlord Consent, and/or a Mortgagee's Consent.
"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
9
indirectly, including, without limitation, 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.
"Debt Service": for any fiscal period of Borrower, the sum of all
principal and interest payments that Borrower is required to make during such
period on account of all of its Indebtedness including, without limitation, (a)
amounts due during such period on account of capitalized leases, (b) the then
current portion of any long-term Indebtedness, including any Subordinated
Indebtedness, (c) amounts due on short-term Indebtedness, and (d) amounts due
under this Agreement and the Note.
"Default": any of the conditions or occurrences specified in Section 9.01,
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": a rate of interest equal to the lesser of (i) three percent
(3%) over the Interest Rate, or (ii) the maximum permissible rate under
applicable law in effect at any time.
"EBITDA": for any fiscal period, Borrower's actual operating earnings from
ongoing operations and before interest, taxes, depreciation and amortization and
non-cash charges for such fiscal period.
"Environmental Law": any current or future federal, state and local law
(including common law), statute, regulation, ordinance, rulings, codes, judicial
order, administrative order or terms of licenses or permits applicable to
environmental conditions (including without limitation conditions relating to
ambient air, surface water, groundwater, land surface or subsurface strata),
including without limitation all such laws governing the employment, generation,
use, storage, disposal or transportation of toxic or hazardous substances or
wastes (including, without limitation, asbestos and petroleum products), the
Comprehensive Environmental Response, Compensation and Liability Act, the
Resource Conservation and Recovery Act, the Superfund Amendment and
Reauthorization Act of 1986, the Toxic Substances Control Act, the Clean Air
Act, the Water Pollution Control Act, the Hazardous Waste Management Act, the
Mineral Lands and Leasing Act, the Surface Mining Control and Reclamation Act,
U.S. Department of Transportation Regulations, and all similar state and local
laws, regulations, all as now or hereafter amended.
"ERISA": the Employee Retirement Income Security Act of 1974, as amended
from time
3
to time, and any successor statute.
"Equipment": as defined in Section 3.01 hereof.
"Equity Payment": any distribution of earnings or capital to any Owner, or
any redemption of stock or other ownership interests, either directly or
indirectly, whether in cash or property or in obligations of Borrower.
"Event of Default": any of the events specified in Section 9.01 hereof,
provided that any requirement for the giving of notice, the lapse of time, or
both, or any other condition, under Section 9.01 or otherwise, has been
satisfied.
"FCC": the Federal Communications Commission of the United States of
America, and any successor, in whole or in part, to its jurisdiction.
"Financing Termination Date": as defined on Schedule 2.02 hereto.
"First Borrowing Date": the date of the first borrowing by Borrower
hereunder.
"Fixed Charges": for any fiscal period of Borrower, its Debt Service, plus
non-financed capital expenditures.
"GAAP": subject to Section 1.02 hereof, 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 Borrower's independent certified public accountants concur), applied
both to classification of items and amounts.
"General Intangibles": as defined in Section 3.01 hereof.
"Governmental Actions": actions by any Governmental Authority.
"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.
"Indebtedness": as to any Person, at a particular time, (a) indebtedness
for borrowed money or for the deferred purchase price of property or services in
respect of which such Person is liable, contingently or otherwise, as obligor,
guarantor or otherwise, or in respect of which such Person otherwise assures a
creditor against loss, (b) obligations under leases which shall have been or
should be, in accordance with GAAP, recorded as capital leases in respect of
which obligations such Person is liable, contingently or otherwise, as obligor,
guarantor or otherwise, or in respect of which obligations such Person assures a
creditor against loss (c) obligations of such Person to purchase or repurchase
accounts receivable, chattel paper or other payment rights
4
sold or assigned by such Person, and (d) indebtedness or obligations of such
Person under or with respect to letters of credit, notes, bonds or other debt
instruments.
"Initial Payment Date": as defined on Schedule 2.02 hereto.
"Interest Rate": as defined on Schedule 2.02 hereto.
"Landlord Consent": a consent substantially in the form of Exhibit E hereto
or in other form acceptable to Lender, to be executed by the owner/landlord,
sublessor and/or licensor (including carriers) of any real property where any of
the Collateral is to be located.
"Law": any law (including common law), constitution, statute, regulation,
rule, ordinance, order, injunction, writ, decree or award of any governmental
body or court of competent jurisdiction or of any arbitrator (including but not
limited to 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's Expenses": as defined in Section 2.10 hereof.
"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,
without limitation, any installment contract, conditional sale or other title
retention arrangement, any sale of accounts receivable or chattel paper, and 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.
"Loan": each of the loans and loan facilities described in Section 2.01
hereof and all Advances pursuant hereto.
"Loan Documents": a collective reference to this Agreement, the Note, the
Security Documents, and all other documents, instruments, agreements and
certificates evidencing or securing any advance hereunder or any obligation for
the payment or performance thereof and/or executed and delivered in connection
with any of the foregoing.
"Mandatory Prepayments": as defined in Section 2.04(b) hereof.
"Material Adverse Effect": or "Material Adverse Change": a material adverse
effect on, or material adverse change in, (i) the business, operations or
financial condition of Borrower, (ii) the ability of Borrower to perform its
obligations under this Loan Agreement, the Note, or the other Loan Documents, or
(iii) Lender's 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.
5
"Mortgagee's Consent": a consent substantially in the form of Exhibit F
hereto, to be executed by any Person holding a lien on real property leased or
otherwise provided to Borrower, on which any of the Equipment is located.
"Maturity Date": the date defined on Schedule 2.02 hereto, on which all
principal, interest, premium if any, expenses, fees, penalties and other amounts
due under the Note shall be finally due and payable.
"Nortel": Northern Telecom Inc., a Delaware corporation.
"Nortel Equipment": the equipment and licensed or sub-licensed software
manufactured or supplied by Nortel to Borrower with respect to which Advances
hereunder are used directly or indirectly to finance the acquisition cost
thereof at any time pursuant to the Nortel Purchase Agreement or any purchase
order issued by Borrower to Nortel or otherwise, including installation and
construction services provided by Nortel pursuant thereto.
"Nortel Purchase Agreement": the Nortel Purchase Agreement identified on
Schedule 4.31 hereto, together with any amendments or supplements thereto, and
any other purchase agreement between Nortel and Borrower and all purchase orders
and invoices issued pursuant thereto, all subject to the approval of Lender.
"Note": collectively, one or more promissory notes issued by Borrower to
Lender pursuant to this Agreement, and all extensions, renewals, modifications,
replacements, amendments, restatements and refinancings thereof.
"Obligations": all indebtedness, liabilities and obligations of Borrower to
Lender of any class or nature, arising under or in connection with this
Agreement and/or the other Loan Documents, whether now existing or hereafter
incurred, direct or indirect, absolute or contingent, secured or unsecured,
matured or unmatured, joint or several, whether for principal, interest, fees,
expenses, lease obligations, indemnities or otherwise, including, without
limitation, future advances of any sort, all future advances made by Lender for
taxes, levies, insurance and/or repairs to or maintenance of the Collateral, the
unpaid principal amount of, and accrued interest on, the Note, and any expenses
of collection or protection of Lender's rights, including reasonable attorneys'
fees.
"Organizational Documents": with respect to a corporation, the 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
articles of organization and operating agreement of such limited liability
company; and in any case, any other document governing the formation and conduct
of business by such entity.
6
"Owners": all presently existing and future shareholders of Borrower and
all other Persons with direct ownership interests in Borrower.
"Payment Date": as defined on Schedule 2.02 hereto.
"Payment Schedule": as defined on Schedule 2.02 hereto.
"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 the Equipment (excluding
Regulatory Authorizations), issued or obtained as and when required in
accordance with all Requirements of Law.
"Permitted Encumbrances": the Liens permitted under Section 8.02 hereof.
"Person": an individual, corporation, limited liability company,
partnership, business or other trust, unincorporated association, joint venture,
joint-stock company, Governmental Authority or any other entity.
"Plan": any employee pension benefit plan to which Section 4021 of ERISA
applies and (i) which is maintained for employees of Borrower or (ii) to which
Borrower made, or was required to make, contributions at any time within the
preceding five (5) years.
"Proceeds": as defined in Section 3.01 hereof.
"PUC": the public utilities commission for the state or any other
jurisdiction in which Borrower operates its telecommunications business or any
portion of the Equipment is located, or any successor agency, and any successor,
in whole or in part, to its functions or jurisdictions, and any other Persons
specified as such on Schedule 2.02 hereto.
"Purchase Agreement": individually and collectively, the Nortel Purchase
Agreement and the Vendor Purchase Agreement.
"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 or
other regulatory authority, including, without limitation, any certificates of
public convenience and all grants, approvals, licenses, filings and
registrations from or to the FCC or PUC or under any Communications Law
necessary in order to enable Borrower to own, construct, maintain and operate
the Equipment, and any authorizations
7
specified on Schedule 4.05 hereto.
"Regulatory Event": any of the following events: (i) 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 (ii) Borrower
becomes subject to regulation by any Governmental Authority in any way that is
materially different from the regulation existing at the Closing Date and that
could materially adversely affect Borrower's ability to perform its material
obligations under the Loan Documents or Lender's rights thereunder, or (iii) the
FCC or PUC issues an order revoking, denying or refusing to renew, or
recommending the revocation, denial or non-renewal of, any Regulatory
Authorization.
"Reportable Event": (i) a reportable event described in Section 4043 of
ERISA and regulations thereunder, (ii) 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 (iii) 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": the Governmental Authority approvals or consents of
other Persons required with respect to Borrower's execution, delivery and
performance of this Agreement and the other Loan Documents, as described in
Section 4.04 hereto.
"Requirement of Law": as to any Person, the Organizational Documents of
such Person, and any law, treaty, rule or regulation, or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its properties or transactions or to
which such Person or any of its property or transactions is subject, including
without limitation, all applicable common law and equitable principles, all
provisions of all applicable state and federal constitutions, statutes, rules,
regulations and orders of governmental bodies, all Permits or Regulatory
Authorizations issued to Borrower, all Communications Laws, and all
Environmental Laws.
"Responsible Officer": with respect to a corporation, its President or any
Vice President or Treasurer; with respect to a partnership, its general partner
(or the President, any Vice President or Treasurer of any corporate general
partner, as applicable); with respect to a limited liability company, a member
or manager (or the President, any Vice President or Treasurer of any corporate
member or manager), or the President or any Vice President of any other Person.
"Security Documents": this Agreement, the Consents, all financing
statements, and any other documents granting, evidencing, or perfecting any
security interest or Lien with respect to or securing any of the Obligations.
"Site(s)": any of the sites where Equipment is or is to be located.
8
"Software" and "Software Licenses": any software now or hereafter owned by,
or licensed to, Borrower or with respect to which Borrower has or may have
license or use rights.
"Subordinated Indebtedness": Indebtedness of Borrower for money borrowed
for the use of Borrower, payment of which is fully subordinated to the payment
of all Obligations of Borrower to Lender upon terms and provisions reasonably
acceptable to Lender.
"Subordination Agreement": one or more Subordination Agreements reasonably
acceptable to Lender.
"Subsidiary": as to any Person, any corporation or other entity that is an
Affiliate of such Person and of which shares of stock or equity interests having
ordinary voting power with respect to the election of one or more directors or
other managers of such corporation are at the time directly or indirectly owned
or controlled by such Person (regardless of any contingency which does or may
suspend or dilute the voting rights of such class).
"System": Borrower's complete telecommunications network or system
constructed and/or operated by Borrower, of which the Equipment forms a part, as
described on Schedule 2.02 hereto.
"UCC": the Uniform Commercial Code as the same may from time to time be in
effect in the State of Tennessee, or the Uniform Commercial Code of another
jurisdiction, to the extent it may be required to apply to any item or items of
Collateral.
"Vendor" means any manufacturer or supplier of Vendor Equipment or licensor
or supplier of Software, in each case other than Nortel.
"Vendor Equipment" means any equipment, upgrades, switches and licensed or
sub-licensed Software manufactured, or supplied to Borrower, by a Vendor.
"Vendor Purchase Agreement": any purchase agreement, together with any
amendments or supplements thereto, between a Vendor and Borrower or an assignor
of Borrower and all purchase orders and invoices issued pursuant thereto for the
sale of Vendor Equipment, all subject to the approval of Lender, not to be
unreasonably withheld or delayed.
1.02. 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 Borrower has any Subsidiaries, all accounting and financial
terms herein shall be deemed to include references to consolidated and
consolidating principles, and
9
covenants, representations and agreements with respect to Borrower and its
properties and activities shall be deemed to refer to Borrower and its
consolidated Subsidiaries collectively.
1.03. 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.
1.04. 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", "herein" and "hereunder" and words of similar import when used
in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement, and Section, subsection, schedule and
exhibit references are to this Agreement unless otherwise specified. 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.
1.05. References to Documents and Laws. All defined terms and references
in this Agreement or the other Loan Documents with respect to any agreements,
notes, instruments, certificates or other documents shall be deemed to refer to
such documents and to any amendments, modifications, renewals, extensions,
replacements, restatements, substitutions and supplements of and to such
documents. All references to statutes and related regulations shall include any
amendments thereof and any successor statutes and regulations.
ARTICLE 2: LOANS
----------------
2.01. Commitment. Subject to the terms and conditions herein provided, and
so long as no Default has occurred and is continuing hereunder, Lender agrees to
lend to Borrower from time to time before the Financing Termination Date, an
aggregate principal amount not to exceed the amount set forth on Schedule 2.01
hereto as the maximum principal amount (the "Commitment"). All amounts advanced
hereunder shall be used solely for the purchase of Nortel Equipment and related
services from Nortel, and amounts not exceeding the amount (if any) specified on
Schedule 2.01 hereto may be used for legal fees, charges, expenses and closing
costs and other expenses incurred by Borrower or incurred by Lender and payable
by Borrower under Section 2.10 hereof, provided, however, that up to thirty
percent (30%) of the Commitment hereunder may be used for purchases of Vendor
Equipment and related services, provided, further, that in each case such amount
has been approved by Nortel prior to the date of the Advance therefore.
2.02. Note and Payment Terms.
(a) Promissory Note. The Loans shall be evidenced by one or more Notes
substantially in the form of Exhibit A hereto, with appropriate insertions.
The Note shall be executed by Borrower, payable to the order of Lender, and
shall evidence the obligation of Borrower to repay all principal amounts
advanced under or pursuant to this
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Agreement, together with interest and all other amounts due thereunder. The
Note shall be dated the Closing Date, have a stated maturity that is the
Maturity Date, and bear interest at the Interest Rate specified on Schedule
2.02 applicable to each Advance thereunder from the applicable Borrowing
Date until the Note or any amount thereunder is paid in full (whether on
the Maturity Date, by acceleration or otherwise). All schedules attached to
the Note shall be deemed a part thereof. Any such schedule may be amended
by Lender from time to time to reflect changes in the amounts includable
thereon, but the failure to attach or amend any schedule shall not diminish
the obligation of Borrower to repay all amounts due hereunder or on the
Note.
(b) Interest Payments. Interest shall continue to accrue on the
principal amount outstanding on the Note at the Interest Rate and shall be
payable, in arrears, on each Payment Date, with the principal payments
described below.
(c) Principal Payments. All principal amounts due with respect to the
Note shall be payable in installments in accordance with the Payment
Schedule set forth on Schedule 2.02 hereto, commencing on the Initial
Payment Date and on each Payment Date thereafter until the Maturity Date.
The principal payment amounts shall be recalculated by Lender if any
Advances are made hereunder after the Initial Payment Date, based on the
aggregate amount of all Advances made at any time. Borrower and Lender
understand that this payment schedule is intended to amortize fully the
principal amount of the Note and any other principal and interest amounts
outstanding will be added to the final payment on the Maturity Date. In any
event, the entire outstanding principal amount of the Note and all accrued
but unpaid interest and all other outstanding amounts due thereunder shall
be paid on the Maturity Date.
(d) Late Payments and Default Rate. Notwithstanding the foregoing, if
Borrower shall fail to pay within ten (10) days after the due date any
principal amount or interest or other amount payable under this Agreement
or under the Note, Borrower shall pay to Lender, to defray the
administrative costs of handling such late payments, an amount equal to
interest on the amount unpaid, to the extent permitted under applicable
law, at the Default Rate (instead of the Interest Rate), from the due date
until such overdue principal amount, interest or other unpaid amount is
paid in full (both before and after judgment) whether or not any notice of
default in the payment thereof has been delivered under Section 9.01
hereof. In addition, but without duplication, upon the occurrence and
during the continuance of an Event of Default, all outstanding amounts
hereunder shall bear interest at the Default Rate (instead of the Interest
Rate) until such amounts are paid in full or such Event of Default is
waived in writing by Lender.
(e) Excess Interest. Notwithstanding any provision of the Note, this
Agreement or any other Loan Document to the contrary, it is the intent of
Lender and Borrower that Lender or any subsequent holder of the Note shall
never be entitled to receive, collect, reserve or apply, as interest, any
amount in excess of the maximum rate
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of interest permitted to be charged by applicable Law, as amended or
enacted from time to time. In the event Lender, or any subsequent holder of
the Note, ever receives, collects, reserves or applies, as interest, any
such excess, such amount which would be excessive interest shall be deemed
a partial prepayment of principal and treated as such, or, if the principal
indebtedness and all other amounts due are paid in full, any remaining
excess funds shall immediately be applied to any other outstanding
indebtedness of Borrower due to Lender, and if none is outstanding, shall
be paid to Borrower. In determining whether or not the interest paid or
payable, under any specific contingency, exceeds the highest lawful rate,
Borrower and Lender shall, to the maximum extent permitted under applicable
law, (a) exclude voluntary prepayments and the effects thereof as it may
relate to any fees charged by Lender, and (b) amortize, prorate, allocate,
and spread, in equal parts, the total amount of interest throughout the
entire term of the indebtedness; provided that if the indebtedness is paid
and performed in full prior to the end of the full contemplated term
hereof, and if the interest received for the actual period of existence
hereof exceeds the maximum lawful rate, Lender or any subsequent holder of
any Note shall refund to Borrower the amount of such excess or credit the
amount of such excess against the principal portion of the indebtedness, as
of the date it was received, and, in such event, Lender shall not be
subject to any penalties provided by any laws for contracting for,
charging, reserving or receiving interest in excess of the maximum lawful
rate.
2.03. Procedures for Borrowing.
(a) Timing of Advances. Advances shall not be made more than once per
calendar month, and all Advances in any calendar month shall be made on the
same Borrowing Date. Each Advance (other than the last Advance) shall be in
an aggregate principal amount of not less than $25,000. No amounts may be
borrowed hereunder on or after the Financing Termination Date. Lender is
hereby authorized to retain from each Advance all amounts of Lender's
Expenses accrued and unpaid by Borrower, for which invoices have been sent
to Borrower at least two (2) Business Days before such Advance. In any
event, all outstanding Commitment Fee installments, legal fees, charges and
expenses not paid by Borrower prior to any Borrowing Date shall be paid
before any Advance is made or concurrently with such Advance.
(b) Borrowing Certificates. To request an Advance hereunder, Borrower
shall send to Lender, at least ten (10) Business Days prior to the
requested Borrowing Date, a completed Borrowing Certificate, along with
invoices and such other supporting documentation as Lender may reasonably
request. Lender is hereby authorized to add to any Borrowing Certificate
all amounts payable by Borrower to Lender in respect of legal fees, charges
and expenses arising or incurred by Lender, to the extent such fees,
charges and expenses have then been incurred or charged and may be paid
from proceeds of the Loan.
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(c) Transmission of Advances. Advances shall be made by wire
transfer to the account(s) specified in the applicable Borrowing
Certificate, except that (i) proceeds of the Loans may be transmitted, at
Lender's option, directly to a Nortel or Vendor account for payment of any
unpaid Nortel or Vendor invoices, and (ii) Advances shall be made to
Borrower only to the extent that Borrower provides Lender with satisfactory
evidence that the amount of such Advance has been paid to Nortel or the
Vendor. No further authorization shall be necessary for any such direct
disbursements, and each such Advance shall satisfy pro tanto the
obligations of Lender under this Agreement.
(d) Borrowing Dates. Advances shall be made by Lender on the
Borrowing Date specified in the applicable Borrowing Certificate if all
conditions for such Advance have been satisfied, or on such later Business
Date as all conditions for such Advance shall have been satisfied, as
reasonably determined by Lender.
(e) Advances After Default. At its option, after the occurrence and
continuance of a Default, Lender may but shall not be obligated to make
advances of portions of the Loan proceeds to any Person (including without
limitation Nortel and any Vendor, suppliers, sub-contractors and
materialmen) to whom Lender in good faith determines payment is due with
respect to the Equipment, and any proceeds so disbursed by Lender shall be
deemed disbursed as of the date on which the Person to whom payment is made
receives the same. No further authorization from Borrower shall be
necessary to warrant such direct advances, and the execution of this Loan
Agreement by Borrower shall, and hereby does, constitute an irrevocable
authorization and power of attorney so to advance proceeds hereunder.
2.04. Prepayments.
(a) Voluntary Prepayments. Borrower may, at its option, at any time
and from time to time after the first anniversary of the first Advance
under any Note, prepay such Note in whole or in part, upon at least thirty
(30) Business Days prior written notice to Lender specifying the date and
amount of prepayment, in a minimum amount of $50,000, plus the premium
described below, and all accrued but unpaid interest thereon. 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:
three percent (3%) if the prepayment is made prior to the second
anniversary of the date of the first Advance, one and one half percent (1-
1/2%) if the prepayment is made after the second but prior to the third
anniversary of the date of the first Advance, and without a premium if the
prepayment is made thereafter. Amounts prepaid may not be reborrowed and
shall be applied to the amortization schedules as requested by Borrower and
otherwise as provided in Section 2.04(c). Mandatory Prepayments, excess
interest payments under Section 2.02(e) or prepayments made from insurance
proceeds pursuant to Section 6.03 or with any
13
condemnation proceeds shall not be subject to a prepayment premium.
(b) Mandatory Prepayments. Upon Lender's written demand, within five
(5) days of such demand, Borrower shall be required to prepay, without
premium, the Obligations hereunder as follows: (i) all Obligations if a
Change in Control occurs, or (ii) Obligations arising from Advances for
Equipment and/or Software financed for purchase under the Nortel Purchase
Agreement if that Agreement is terminated prior to the completion and
acceptance of such Equipment and related Software ("Mandatory
Prepayments").
(c) Application of Prepayments. Any prepayments shall be applied
first to interest, then to premium, then to expenses, and then to the
installments of principal in reverse chronological order.
2.05. Computation of Interest. Interest shall be calculated daily on the
basis of a 365-day year for the actual days elapsed in the period during which
it accrues.
2.06. Payments. All payments and prepayments to be made in respect of
principal, interest, prepayment premiums or other amounts due from Borrower
hereunder or under the Note shall be payable on or before 1:00 p.m., Nashville
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 Lender at Lender's office at
000 Xxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxx 00000, or such other location
specified in writing by Lender, in immediately available funds, without setoff,
recoupment, counterclaims or any other deduction of any nature.
2.07. Indemnity. Borrower hereby indemnifies Lender against any losses,
claims, penalties, expenses, actions, suits, obligations, liabilities and Liens
(and all costs and expenses, including reasonable attorneys' fees incurred in
connection therewith), that Lender has sustained or incurred or may sustain or
incur in connection with any of the Collateral, or the enforcement, performance
or administration of the Loan Documents, or as a consequence of any default by
Borrower in the performance or observance of any covenant or condition contained
in this Agreement or the Loan Documents, including without limitation, the
breach of any representation or warranty, any failure of Borrower to pay when
due (by acceleration or otherwise) any principal, interest, fee or any other
amount due hereunder or under the Note, and any failure of Borrower to comply
with all applicable Requirements of Law (collectively, "Claims") except to the
extent of any Claims caused solely by Lender's gross negligence or willful
misconduct. Borrower's obligations under this Section 2.07 shall be part of the
Obligations and shall be secured by the Collateral. Borrower agrees that upon
written notice by Lender of the assertion of any Claims, Borrower shall, at
Lender's option, either assume full responsibility for, or reimburse Lender for
the reasonable costs and expenses of, the defense thereof. Lender shall have no
liability for consequential or incidental damages of any nature. The provisions
of this Section 2.07 shall survive the termination of this Agreement and payment
of
14
the Obligations.
2.08. Use of Proceeds. The proceeds of the Advances hereunder shall be
used by Borrower only for the purposes and in the amounts described in Section
2.01 hereof, and no amounts repaid may be reborrowed (except for any voluntary
prepayments as permitted pursuant to Section 2.04(a).
2.09. Fees. Borrower shall pay Lender the fees described on Schedule 2.09
hereto in connection with this Agreement.
2.10. Lender's Expenses. Borrower agrees (a) to pay or reimburse Lender
for all its reasonable costs, fees, charges and expenses incurred or arising in
connection with the negotiation, review, preparation and execution of this
Agreement, the Loan Documents, any commitment or proposal letter, or any
amendment, supplement, waiver, modification to, or restructuring of this
Agreement, the Obligations or the other Loan Documents, including, without
limitation, reasonable legal fees and disbursements, expenses, document charges
and other charges and expenses of Lender, (b) to pay or reimburse Lender for all
its reasonable costs, fees, charges and expenses incurred in connection with the
administration of the Loans or the enforcement, protection or preservation of
any rights under or in connection with this Agreement or any other Loan
Documents, including, without limitation, reasonable legal fees and
disbursements, audit fees and charges, and all out-of-pocket expenses, (c) to
pay, indemnify, and to hold 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 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
"Lender's Expenses", shall be payable upon Lender's demand, and shall accrue
interest at the Interest Rate in effect when such demand is made from five (5)
days after the date of demand until paid in full. All Lender's Expenses, and
interest thereon, shall be part of the Obligations and shall be secured by the
Collateral. The agreements in this Section 2.10 shall survive repayment of the
Obligations. All Lender's Expenses that are outstanding on any Borrowing Date
shall be paid before or with such advance. If Borrower has not paid to Lender
the amount of all Lender's Expenses billed to Borrower at least five (5)
Business Days before such Borrowing Date, Lender shall be authorized to retain
from any Advance on such Borrowing Date the amount of such Lender's Expenses
that remain unpaid. Borrower's obligation to pay Lender's 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 Lender's Expenses accrued at the time of any Advance before any of
Borrower's legal fees or similar expenses.
ARTICLE 3: COLLATERAL AND SECURITY AGREEMENT
--------------------------------------------
15
3.01. Grant of Security Interest. Borrower (as debtor) hereby assigns to
Lender as collateral, and grants to Lender (as secured party) a continuing
security interest in and to, all of Borrower'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 Nortel Equipment financed or refinanced with proceeds
of an Advance and all Vendor Equipment financed or refinanced with
proceeds of an Advance, and in each case 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,
including installation services provided by Nortel or any other
Vendor in connection therewith (collectively, "Equipment") and
Borrower's rights under each Nortel Purchase Agreement and each
Vendor Purchase Agreement relating to such Equipment;
(b) All general intangibles and intangible property (including
all contracts and contract rights) constituting part of, or provided
by or through Nortel or any Vendor in connection with, the Equipment
or associated with the System which are necessary for the proper
operation of the Equipment, including without limitation insurance
proceeds and amounts due under insurance policies, 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),
refunds, warranties and indemnification rights, and all amounts owed
at any time to Borrower by Lender or Nortel or by a Vendor in
connection with a Vendor Purchase Agreement relating to Equipment
(collectively, "General Intangibles"); and
(c) All proceeds of any of the foregoing, including without
limitation (i) any and all proceeds of any insurance, indemnity,
warranty or guaranty payable to Borrower 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 Borrower from time to
time in connection with any requisition, confiscation, condemnation,
seizure or forfeiture of all or any part of the Collateral by any
Governmental Authority (or any Person acting under color of
governmental authority), and (iii) any and all cash proceeds and
non-cash proceeds in the form of equipment, inventory, contracts,
accounts, general intangibles, chattel paper, documents,
instruments, securities, or other proceeds (collectively,
"Proceeds").
3.02. Priority of Security Interests. The security interests granted by
Borrower to
16
Lender are and shall be continuing and indefeasible first-priority
security interests in the Collateral, subject to no Liens except for Liens
permitted under Section 8.02 hereof.
3.03. Further Documentation; Pledge of Instruments. At any time and from
time to time, upon the written request of Lender, and at the sole expense of
Borrower, Borrower shall promptly execute, deliver and record any documents,
instruments, agreements and amendments, and take all such further action, as
Lender may reasonably deem desirable in obtaining the full benefits of this
Agreement and of the rights and powers herein granted, including, without
limitation, the filing of any financing statements or amendments under the UCC.
Borrower also hereby authorizes Lender to file any such financing statement or
amendment thereto, without the signature of Borrower, or with a copy or telecopy
of Borrower's signature, to the extent permitted by applicable law, or to
execute any financing statement or amendment thereof on behalf of Borrower as
Borrower's attorney-in-fact. If any amount payable under or in connection
with any of the Collateral 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 Lender hereunder, duly
endorsed in a manner satisfactory to Lender.
3.04. Further Identification of Collateral. Borrower shall furnish to
Lender from time to time statements and schedules further identifying and
describing the Collateral and such other reports in connection with the
Collateral as Lender may reasonably request, all in reasonable detail.
3.05. Remedies. Lender 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 Article 9 hereof or otherwise available at law or in equity upon
the occurrence of an Event of Default.
3.06. Standard of Care. Lender 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 Borrower requests in
writing, but Lender's failure to comply with any such request shall not of
itself be deemed a failure to exercise reasonable care, and no failure of Lender
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 Borrower, shall be deemed a failure to exercise reasonable
care in the custody or preservation of such Collateral.
3.07. Advances to Protect Collateral. All insurance expense and all
expenses of protecting, storing, warehousing, insuring, handling, maintaining
and shipping the Collateral (including, without limitation, all rent payable by
Borrower 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 Borrower. Lender 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 lease
agreements for Sites or advances to pay taxes, insurance and the like, and all
such advances shall become part of the Obligations owing to Lender hereunder and
shall be payable to Lender on demand, with interest thereon from the date of
such advance until paid at the Default Rate in effect on the date of such
advance.
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3.08. License to Use. Lender is hereby granted a license or other right to
use, without charge, Borrower's labels, patents, copyrights, rights of use of
any name, trade secrets, tradenames, trademarks and advertising matter, or any
tangible or intangible property or rights of a similar nature, as it pertains to
the Collateral, in advertising for sale and selling any Collateral, and
Borrower's rights under all licenses and franchise agreements with respect to
the Collateral shall inure to Lender's benefit.
3.09. Subsidiary Guaranties. Payment of the Borrower's Obligations shall
also be unconditionally guaranteed by all existing Subsidiaries of the Borrower
listed on Schedule 1.01 (b), as well as all future Subsidiaries of the Borrower,
pursuant to the form of Guaranty Agreement attached as Exhibit G to this
Agreement.
ARTICLE 4: REPRESENTATIONS AND WARRANTIES
-----------------------------------------
Borrower hereby represents and warrants to Lender as follows:
4.01. Organization and Qualification. Borrower is duly organized, validly
existing and in good standing as a corporation under the laws of its state of
organization. Borrower 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.
4.02. Authority and Authorization. Borrower has all requisite corporate
right, power, authority and legal right 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 Note.
Borrower's execution, delivery and performance of the Basic Agreements have been
duly and validly authorized by all necessary corporate proceedings on the part
of Borrower.
4.03. Execution and Binding Effect. This Agreement, the Note and all other
Basic Agreements have been or will be duly and validly executed and delivered by
Borrower, and constitute or, when executed and delivered will constitute, the
legal, valid and binding obligations of Borrower 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.
4.04. Governmental Authorizations. Except for the consents identified on
Schedule 4.04 hereto (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 execution and delivery of
this Agreement, the Note or any other Loan Documents by Borrower, consummation
of the transactions herein or therein contemplated, performance of or compliance
by Borrower with the terms and conditions
18
hereof or thereof or the legality, validity and enforceability hereof or
thereof.
4.05. Regulatory Authorizations. Borrower holds all authorizations,
permits and licenses required by the FCC or the PUC or any Communications Law
for the construction and operation of the System, and all such Regulatory
Authorizations are in full force and effect, are subject to no further
administrative or judicial review and are therefore final. Lender will not by
reason of the execution, delivery and performance (other than the enforcement of
remedies) of any of the Loan Documents, be subject to the regulation or control
of either the FCC or the PUC. The Regulatory Authorizations are described on
Schedule 4.05.
4.06. Material Agreement; Absence of Conflicts. The execution and delivery
of this Agreement, the Note 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 Borrower will not
(a) materially violate any applicable Law; (b) conflict with or result in a
material breach of or a default under the Organizational Documents of Borrower
or any agreement or instrument to which Borrower is a party or by which Borrower
or its properties is bound; or (c) result in the creation or imposition of any
Lien upon any property (now owned or hereafter acquired) of Borrower except as
otherwise contemplated by this Agreement.
4.07. No Restrictions. Borrower is not 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. Borrower is not 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 4.07, none of which prohibit Borrower's execution
of or compliance with this Agreement. Borrower has not 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.
4.08. Financial Statements. Borrower has furnished to Lender the most
recent annual and quarterly financial statements of Borrower, audited in the
case of annual financial statements, and certified by a Responsible Officer of
Borrower, including balance sheets and related statements of income and retained
earnings and changes in financial position, as described on Schedule 4.08
hereof. Such financial statements (including the notes thereto) present fairly
the financial condition of Borrower on a consolidated 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. Any
projections and pro forma financial statements delivered by Borrower to Lender
were prepared in good faith, based on reasonable assumptions, including without
limitation, the cost of capital.
4.09. Financial Accounting Practices. Borrower has made and kept books,
records and accounts which, in reasonable detail, accurately and fairly reflect
its respective transactions and
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dispositions of its assets, and Borrower shall 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.
4.10. Accurate and Complete Disclosure. No representation or warranty made
by Borrower under this Agreement and no statement made by Borrower or by any
Owner in any financial statement, certificate, report, exhibit or document
furnished by Borrower or any Owner to Lender pursuant to or in connection with
this Agreement (including without limitation any filings with the Securities
Exchange Commission, the FCC or the PUC) 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 that evidence or create a Material
Adverse Effect, or, so far as Borrower can now foresee, will evidence or create
a Material Adverse Effect, which has not been set forth in the financial
statements referred to in Section 4.08 hereof or otherwise disclosed in writing
to Lender prior to the First Borrowing Date.
4.11. 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 after giving effect to the Advance to be made on
the First Borrowing Date. As of the date hereof, Borrower is not in violation of
any term of its material agreements or instruments to which it is a party or by
which it or its properties is bound.
4.12. Litigation. Except as set forth in Schedule 4.12, there is no
pending action, suit or threatened proceeding by or before any Governmental
Authority against or affecting Borrower or any of its properties, rights or
licenses which if adversely decided would have a Material Adverse Effect.
4.13. Rights to Property; Intellectual Property. Borrower has good and
marketable title, subject only to the Permitted Encumbrances, to the Collateral
and to all personal and real property purported to be owned by it as reflected
in the most recent balance sheet referred to in Section 4.08 hereof (except as
sold or otherwise disposed of in the ordinary course of business as no longer
used or useful in the conduct of the business). Borrower owns or possesses the
right to use all patents, trademarks, service marks, trade names, copyrights,
know-how, franchises, software and software licenses which in the Borrower's
best judgement are necessary for the operation of its business, free from
burdensome restrictions.
4.14. Financial Condition. As of the date hereof, Borrower's financial
condition is accurately described in the most recent financial statements
provided to Lender by Borrower
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pursuant hereto.
4.15. Taxes. Borrower's federal tax identification number is set forth on
Schedule 1 hereto. All tax returns required to be filed by Borrower have been
properly prepared, executed and filed, and all taxes, assessments, fees and
other governmental charges upon Borrower 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 Borrower is contesting in good faith. The reserves and provisions for
taxes on the books of Borrower are adequate for all open years and for its
current fiscal period.
4.16. No Material Adverse Change. Since the date of the financial
statements referenced in Section 4.08, there has been no Material Adverse
Change.
4.17. No Regulatory Event. No Regulatory Event has occurred and is
continuing.
4.18. Trade Relations. There exists no actual or threatened termination,
cancellation or limitation of, or any modification or change in, the business
relationship between Borrower and any Carrier, any labor organizations, any
customer or any group thereof whose agreements with Borrower or use of the
System individually or in the aggregate are material to the business of
Borrower, or with any material Supplier, and there exists no present condition
or state of facts or circumstances which would have a Material Adverse Effect or
prevent Borrower from conducting its business after the consummation of the
transaction contemplated by this Agreement.
4.19. No Brokerage Fees. No brokerage or other fee, commission or
compensation is to be paid by Borrower to any Person in connection with the
loans to be made hereunder. Borrower hereby indemnifies Lender against any
claims brought against Lender for brokerage fees or commissions of any Person
based on an agreement with Borrower and agrees to pay all expenses incurred by
Lender in connection with the defense of any action or proceeding brought to
collect any such brokerage fees or commissions.
4.20. Margin Stock; Regulation U. Borrower is not 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 Regulations U or X of the Board
of Governors of the Federal Reserve System.
4.21. Investment Company; Public Utility Holding Company. Borrower is not
an "investment company" or a "company controlled by 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.
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4.22. Personal Holding Company; Subchapter S. Borrower is not a "personal
holding company" as defined in Section 542 of the Code, and Borrower is not a
"Subchapter S" corporation within the meaning of the Code.
4.23. ERISA. (i) With respect to any Plan, there is no Reportable Event
currently under consideration by the PBGC which may reasonably result in any
material liability to the PBGC with respect to any Plan which is likely to cause
a Material Adverse Effect, (ii) no Plan has been terminated, (iii) no trustee
has been appointed by any United States District Court to administer any Plan
which is likely to cause a Material Adverse Effect, (iv) the PBGC has not
instituted proceedings to terminate any Plan or to appoint a trustee to
administer any such Plan which is likely to cause a Material Adverse Effect, (v)
neither Borrower nor any Affiliate has withdrawn, completely or partially, from
any Plan which is likely to cause a Material Adverse Effect and (vi) neither
Borrower nor any Affiliate has incurred secondary liability for withdrawal
liability payments under any Plan which is likely to cause a Material Adverse
Effect.
4.24. Environmental Warranties. Borrower is in compliance in all material
respects with all Environmental Laws applicable to Borrower or its business or
to the real or personal property owned, leased or operated by Borrower. Borrower
has not received notice of, and is not aware of, any violations or alleged
violations, or any liability or asserted liability, under any such Environmental
Laws, with respect to Borrower or its business or its properties.
4.25. Security Interests. The provisions of Article 3 hereof are effective
to create in favor of Lender a legal, valid and enforceable Lien on or security
interest in all of the Collateral, and, when the recordings and filings
described on Schedule 4.25 hereto have been effected in the public offices
listed on said Schedule 4.25, this Agreement will create a perfected first-
priority security interest in all right, title, estate and interest of Borrower
in the Collateral, and subject to no other Liens except for Permitted
Encumbrances. All action necessary or desirable to protect and perfect such
security interest in each item of the Collateral will have been duly taken prior
to the First Borrowing Date. The recordings and filings shown on said Schedule
4.25 are all the actions necessary or advisable in order to establish, protect
and perfect the interest of Lender in the Collateral.
4.26. Place of Business. The chief executive offices of Borrower are
identified on Schedule 1 hereto. Borrower's principal place of business in the
state(s) where the Equipment is located is identified on Schedule 4.26 hereto.
Borrower's records concerning the Collateral are kept at one or both of these
addresses.
4.27. Location of Collateral. The Collateral is and will be kept at the
locations identified on Schedule 4.26 hereto or such other locations as may be
permitted under Section 8.10.
4.28. Clear Title To Collateral. Borrower is the sole owner of each item
of the Collateral, having good and marketable title thereto, free and clear of
any and all Liens, claims,
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or rights of others, except for the security interest granted herein to Lender
and the other Permitted Encumbrances.
4.29. Assumed Names. Except as set forth on Schedule 4.29 hereto, Borrower
does not conduct business under any assumed names or trade names, and has not
conducted business under any other names, or any assumed names or trade names,
at any time prior to the date hereof.
4.30. Intentionally Omitted.
4.31. Nortel and Vendor Purchase Agreement. The Nortel Purchase Agreement
for Nortel Equipment already acquired has been duly executed and delivered by
Borrower and Nortel, is in full force and effect, and a true, correct and
complete copy thereof (including all annexes, attachments and amendments
thereto) has been delivered to Lender, and there are no other side letters,
waivers or other agreements affecting the terms thereof.
4.32. Subsidiaries of Borrower. A true and correct list of all direct and
indirect Subsidiaries of the Borrower, together with the jurisdiction of
formation of each Subsidiary, appears on Schedule 1.01(b) to this Agreement.
ARTICLE 5: CONDITIONS OF CLOSING
--------------------------------
On or before the Closing Date, the following conditions shall have been
satisfied unless listed on Schedule 6.02 hereto:
5.01 Borrower's Certificate. A certificate of Borrower signed by a duly
authorized Responsible Officer, certifying as to (i) true copies of
Organizational Documents of Borrower in effect on such date; (ii) true copies of
all corporate action taken by Borrower relative to this Agreement, the Note(s)
and the other Loan Documents; (iii) the names, true signatures and incumbency of
the Responsible Officers of Borrower authorized to execute and deliver this
Agreement, the Note and the other Loan Documents; (iv) a Certificate of Good
Standing (or equivalent certificate) for Borrower duly issued by the Secretary
of State of each state in which Borrower intends to do business; and (v) such
other matters as Lender shall request.
5.02 Opinions of Counsel. Lender shall have received the following
opinions, all dated as of the Closing Date and in form and substance
satisfactory to Lender:
(a) A written opinion of counsel to Borrower and of any Subsidiary
that will own or possess any Collateral, substantially in the form of
Exhibit C hereto;
(b) A written opinion of regulatory counsel for Borrower,
substantially in the form of Exhibit D hereto; and
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5.03. Closing Documents. Lender shall have received the following
documents, all in form and substance satisfactory to Lender:
(a) Agreement. This Agreement, duly executed by Borrower;
(b) Note(s). One or more Note(s), as required, duly executed by
Borrower;
(c) Financing Statements. All UCC-1 financing statements necessary
to perfect the Liens granted hereby, each duly executed by Borrower, and
duly recorded in all the offices identified on Schedule 4.25 hereto;
(d) Guaranty Agreements. A Guaranty Agreement, duly executed by all
of the existing Subsidiaries of the Borrower, in the form attached as
Exhibit G to this Agreement.
(e) Purchase Agreement. Lender shall have received a copy of the
executed Nortel Purchase Agreement and a Vendor Purchase Agreement of any
Vendor with respect to which proceeds of an Advance shall be used to
acquire Equipment on or about the First Borrowing Date.
(f) Insurance. Policies and certificates of insurance required by
Section 7.07, accompanied by evidence of the payment of the premiums
therefor;
(g) Financial Statements. The financial statements described in
Section 4.08 hereof;
(h) Balance Sheet. A balance sheet of Borrower, dated as of the end
of the month preceding the Closing Date, certified by a Responsible Officer
as fairly presenting the financial condition of Borrower.
ARTICLE 6: CONDITIONS OF LENDING
--------------------------------
6.01. Conditions for Initial Advance. On or before the First Borrowing
Date, the following conditions shall have been met to Lender's satisfaction or
waived:
(a) Form UCC-1 Financing Statements. Lender shall have received
executed Ucc-1 Financing Statements satisfactory to it for all
jurisdictions reasonably determined by Lender to be appropriate, for filing
in those jurisdictions.
(b) Required Consents. Lender shall have received satisfactory
evidence of Borrower's obtaining the Required Consents.
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6.02. Conditions for All Advances. The obligation of Lender to make any
Advance hereunder is subject to Borrower's performance of its obligations
hereunder on or before the date of such Advance, and to the satisfaction of the
following further conditions on or before the Borrowing Date for any Advance,
including the first Advance:
(a) Filings, Registrations and Recordings. Any financing statements
or other recordings required hereunder shall have been properly prepared
for filing, registration or recordation in each office in each jurisdiction
required in order to create in favor of Lender a perfected first-priority
Lien on the Collateral, subject to no other Lien; when filed Lender shall
receive acknowledgment copies of all such filings, registrations and
recordations stamped by the appropriate filing officer; and Lender shall
receive results of searches of such filing offices, and satisfactory
evidence that any other Liens (other than Permitted Encumbrances) on the
Collateral have been duly released, that all necessary filing fees,
recording fees, taxes and other expenses related to such filings,
registrations and recordings have been paid in full.
(b) Borrowing Certificate. Lender shall have received a duly
executed Borrowing Certificate in the form of Exhibit B, including a
detailed itemization of all costs of goods and services to be paid with the
proceeds of the Advance and accompanied by supporting documentation
satisfactory to Lender.
(c) Reporting Requirements. Borrower shall have provided Lender with
all relevant reports and information required under Article 7 hereof.
(d) No Regulatory Event. No Regulatory Event (in either Borrower's
or Lender's reasonable determination) shall have occurred and be continuing
or would exist upon the consummation of transactions to occur on such
Borrowing Date.
(e) 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 transactions to occur on such Borrowing Date.
(f) No Material Adverse Change. No Material Adverse Change shall
have occurred, or would occur after giving effect to such Advance, since
the date of the last financial statements delivered to Lender pursuant to
Section 4.08 or 7.01 hereof.
(g) Representations and Warranties. The representations and
warranties contained in Article 4 hereof shall be true on and as of the
date of each such Advance hereunder.
(h) Lender's Expenses. All closing costs, and other Lender's
Expenses shall have been paid in full (or shall be paid first from such
Advance as provided in Section 2.03 hereof).
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(i) Details, Proceedings and Documents. All legal details and
proceedings in connection with the transactions contemplated by this
Agreement shall be reasonably satisfactory to Lender and Lender 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 Lender, as Lender may from
time to time request.
(j) Consents. Lender shall have received Consents duly executed by
all parties and in form satisfactory to Lender.
(k) Fees. Lender shall have received the fee(s) described in Section
2.09 hereof.
(l) Purchase Agreement. Lender shall have received a copy of an
executed Vendor Purchase Agreement with respect to which proceeds of an
Advance shall be used to acquire Equipment, and Lender shall have reviewed
and approved the Equipment to be acquired with proceeds of an Advance.
6.03. Affirmation of Representations and Warranties. Any Borrowing
Certificate or other request for any Advance hereunder shall constitute a
representation and warranty that (a) the representations and warranties
contained in Article 4 hereof 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 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 (for this purpose such Advance being deemed to have been made on
the date of such request). Failure of Lender to receive notice from Borrower to
the contrary before such Advance is made shall constitute a further
representation and warranty by Borrower that (x) the representations and
warranties of Borrower contained in the first sentence of this Section 6.03 are
true and correct on and as of the date of such Advance with the same effect as
though made on and as of the date of such Advance and (y) on the date of the
Advance no Default or Event of Default has occurred and is continuing or exists
or will occur or exist after giving effect to such Advance.
6.04. Deadline for Funding Conditions. Lender shall have no obligation to
make any Advances hereunder if all of the conditions set forth in Article 5 and
in Sections 6.01 and 6.02 hereof have not been fully satisfied or waived by
Lender, and the first Advance made hereunder, within the period of twelve (12)
calendar months following the Closing Date.
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ARTICLE 7: AFFIRMATIVE COVENANTS
--------------------------------
Borrower hereby agrees that as long as the commitment hereunder remains in
effect, the Note remains outstanding or unpaid or any other amount is owing to
Lender hereunder or under any of the Loan Documents, Borrower shall keep and
perform fully each and all of the following covenants:
7.01. 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 Borrower,
Borrower shall furnish or cause to be furnished to Lender audited
statements of income, statements of cash flow and retained earnings for
such fiscal year and Borrower's balance sheet as of the close of such
fiscal year, and notes to each, all in reasonable detail, and setting forth
in comparative form the corresponding figures for the preceding fiscal
year, with such statements and balance sheet to be certified without
qualification by independent certified public accountants of recognized
regional or national standing selected by Borrower and reasonably
satisfactory to Lender.
(b) Quarterly Reports. Within forty-five (45) days after the end of
each fiscal quarter, Borrower shall furnish to Lender unaudited
consolidated statements of income, statements of cash flow and retained
earnings for Borrower for such quarter and for the period from the
beginning of Borrower's then current fiscal year to the end of such
quarter, and an unaudited consolidated balance sheet of Borrower as of the
end of such quarter, all in reasonable detail and certified by a
Responsible Officer of Borrower as presenting fairly the financial position
of Borrower as of the end of such quarter and the results of its operations
and the changes in its financial position for such quarter, in conformity
with GAAP (except for accompanying notes thereto), subject to year-end
audit adjustments.
(c) Compliance Certificates. Within forty-five (45) days after the
end of each fiscal quarter, Borrower shall deliver to Lender a certificate
dated as of the end of such fiscal quarter, signed on behalf of Borrower by
a Responsible Officer of 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 Borrower; (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 Borrower's compliance with the financial
covenants set forth in Section 7.15 hereof.
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(d) Accountants' Certificate. Each set of year-end audited
consolidated statements and balance sheet delivered pursuant to Section
7.01(a) hereof 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 Default, or if they did become so aware, such
certificate or report shall state the nature and period of existence
thereof.
(e) Press Releases. Promptly upon their becoming available to
Borrower, Borrower shall deliver to Lender copies of all press releases
issued by or concerning Borrower or the System.
(f) Further Information. Borrower will promptly furnish to Lender
such other information (including any report by independent auditors) in
such form as Lender may reasonably request.
7.02. Other Notices. Promptly upon a Responsible Officer of Borrower
becoming aware of any of the following, Borrower shall give Lender notice
thereof, together with a written statement of a Responsible Officer of Borrower
setting forth the details thereof and any action with respect thereto taken or
contemplated to be taken by Borrower:
(a) a Default or Event of Default;
(b) any Material Adverse Change;
(c) a material default or breach by Borrower under any other
contractual obligation to which it is a party or by which it or its
properties is bound, if the consequences of such breach or default are
material to the business, operations or financial condition of Borrower and
is likely to have a Material Adverse Effect;
(d) any event that Borrower reasonably determines would constitute a
Regulatory Event;
(e) the commencement, existence or threat of any proceeding by or
before any Governmental Authority against Borrower which, if adversely
decided, would have a Material Adverse Effect;
(f) Borrower's receipt of any notice of violation of, or liability
under, any Environmental Laws affecting Borrower or any of its properties;
(g) any Change in Control or any material change in the management of
Borrower; or
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(h) any change in the location or ownership of Collateral.
7.03. Notice of Pension-Related Events. Borrower shall promptly furnish
Lender with written notice upon the receipt by Borrower or the administrator of
any Plan of any notice, correspondence or other communication from the PBGC, the
IRS, the Secretary of 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. Such notice shall be accompanied by any pertinent documents including, but
not limited to, the relevant notice, correspondence or other communication and a
statement of a Responsible Officer of Borrower describing the event or the
action taken and the reasons therefor.
7.04. Inspection Rights. Borrower shall upon reasonable notice and during
regular business hours permit such persons as Lender may designate to visit and
inspect the Collateral or any other properties of Borrower, to examine its books
and records and take copies and extracts therefrom and discuss its respective
affairs with its officers, employees and independent engineers at such times and
as often as Lender may reasonably request. Borrower hereby authorizes such
officers, employees, and independent engineers to discuss with Lender the
affairs of Borrower.
7.05. Preservation of Corporate Existence and Qualification. Borrower
shall maintain its existence, good standing and rights in full force and effect
in its jurisdiction of organization. Borrower 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.
7.06. Continuation of Business. Borrower shall continue to engage solely
in the business described on Schedule 1 hereto, and shall acquire and maintain
in full force and effect all rights, privileges, franchises and licenses
necessary for the operation and maintenance of the System (including, without
limitation any license or authorization required by the FCC or any PUC).
7.07. Insurance.
(a) Borrower shall 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 the System and
Borrower are located, as may be satisfactory to Lender, as shown on
Schedule 7.07 hereto, and otherwise as may be required by the Security
Documents.
29
(b) Borrower shall cause (i) all liability insurance policies to name
Lender as an additional insured, (ii) all physical damage insurance
policies to contain a lender's or mortgagee's loss payable provision
acceptable to Lender with respect to the Collateral, (iii) all insurance
policies to provide that no assignment, cancellation, modification,
reduction in amount or adverse change in coverage thereof shall be
effective until at least thirty (30) days after receipt by Lender of
written notice thereof, (iv) all insurance policies to insure the interests
of Lender with respect to the Collateral regardless of any breach of or
violation by Borrower of any warranties, declarations or conditions
contained therein and (v) all insurance policies to provide that Lender
shall have no obligation or liability for premiums, commissions,
assessments or calls in connection with such insurance. Lender shall be
under no obligation to verify the adequacy or existence of any insurance
coverage. Borrower shall furnish Lender copies of, or acceptable
certificates with respect to, all such policies prior to the Closing Date,
and shall provide to Lender, at least thirty days prior to each policy
expiration date, evidence of the insurance being maintained by Borrower in
compliance with this Section 7.07(b). Certificates for insurance required
under subsection (i) above shall be in XXXXX Form 27 (attached hereto at
Schedule 7.07), and all certificates shall be satisfactory in form and
substance to Lender.
(c) If the Collateral is partially or totally damaged or destroyed,
Borrower shall give prompt notice to Lender, and all insurance proceeds,
less the costs of collection thereof, shall be paid to or retained by
Lender. Settlements, adjustments or compromises of any claims for loss,
damage or destruction to the Collateral shall be made by Borrower and
Lender as long as no Event of Default has occurred and is continuing, and
otherwise shall be made solely by Lender. Borrower hereby authorizes and
directs any affected insurance company to pay such proceeds directly to
Lender, and to rely on Lender's statement as to whether an Event of Default
has occurred. Borrower shall pay all costs of collection of insurance
proceeds payable on account of such damage or destruction. If no Default or
Event of Default has occurred and is continuing on the date the Collateral
is partially or totally damaged or destroyed, Lender shall make available
to Borrower the proceeds of any physical damage insurance actually paid to
Lender in respect of such damage or destruction of the Collateral (after
deducting therefrom any sums retained by Lender in reimbursement for costs
of collection) to pay the cost of restoration, and Borrower shall proceed
promptly with the work of restoration of the Collateral and shall pursue
the work of restoration diligently to completion. If any Default or 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
Default or Event of Default shall occur prior to completion of such work of
restoration, then Lender, at its option, may apply such insurance proceeds
in payment of any of the Obligations, in such order as Lender may elect in
its sole discretion. Any insurance proceeds remaining after completion of
work or restoration shall, at Lender's election, be applied in accordance
with Section 2.04(c) hereof (but without prepayment premium), or paid over
to
30
Borrower. Upon completion of any restoration, Borrower shall deliver to
Lender a certificate stating that the restoration has been duly completed
and accounting for the use of any insurance proceeds in such restoration.
7.08. Payment of Taxes, Charges, Claims and Current Liabilities. Borrower
shall pay or discharge:
(a) on or prior to the date on which penalties thereto 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 which are
overdue longer than thirty (30) days of materialmen, mechanics, carriers,
warehousemen, and other like persons which if unpaid could result in
creation of a Lien upon any such property (other than permitted
encumbrances);
(c) on or prior to the date when due, all other lawful claims which
are overdue for longer than thirty (30) days and 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 Borrower in a case under
Title 11 (Bankruptcy) of the United States Code, as amended, or in any
insolvency proceeding or dissolution or winding-up involving Borrower; and
(d) all other current liabilities so that none is overdue more than
sixty (60) days.
Notwithstanding the foregoing, Borrower shall be entitled to contest or
appeal the requirements of any Law or Governmental Authority or the payment of
any tax, assessment, charge, levy or claim, or any judgment entered against
Borrower (collectively, in this Section 7.08, the "requirements"), as long as
(i) such requirements are being contested in good faith by appropriate
proceedings diligently conducted; (ii) Borrower has given Lender written notice
of such requirements and its intent to contest them, with supporting reasons for
such contest, before the addition of any interest or penalties that may accrue
on such requirements; (iii) Borrower maintains adequate cash reserves and makes
other 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 way jeopardize Borrower's ability
or authority to operate all or any part of the Collateral or the continuing
priority of Lender's security interests in the Collateral; (vi) the contesting
of, or failure to comply with, such requirements does not have a Material
Adverse Effect; and (vii) any foreclosure, attachment, execution, sale or
similar proceeding against Borrower 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
31
proceedings.
7.09. Financial Accounting Practices. Borrower 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.
7.10. Compliance with Laws. Borrower shall comply in all material respects
with all Laws applicable to Borrower, provided that Borrower shall not be deemed
to be in violation of this Section 7.10 as a result of any failure to comply
which would not result in any liability or exposure to Lender or any fines,
penalties, injunctive relief or other civil or criminal liabilities which, in
the aggregate, would materially affect the business, operations or financial
condition of Borrower or the ability of Borrower to perform its obligations
under this Agreement or the Note.
7.11. Use of Proceeds. Borrower shall use the proceeds of Advances
hereunder only as set forth in Section 2.01 hereof.
7.12. Government Authorizations; Regulatory Authorizations, Etc. Borrower
shall at all times obtain and maintain in force all Regulatory Authorizations
and all other authorizations, permits, consents, approvals, licenses, exemptions
and other actions by, and all registrations, qualifications, designations,
declarations and other filings with, any Governmental Authority necessary in
connection with the execution and delivery of this Agreement or the Note,
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.
7.13. Contracts and Franchises. Borrower 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 it may have or hereafter acquire, provided that Borrower
shall not be deemed to be in violation of this Section 7.13 as a result of any
failure to comply with any agreement if such failure would not have Material
Adverse Effect.
7.14. Consents. Borrower shall obtain such Landlord's Consents,
Mortgagee's Consents and other third party consents as Lender shall reasonably
request to protect its Liens and its access to the Collateral.
32
7.15. Financial Covenants. Borrower shall comply with the financial
covenants set forth on Schedule 7.15 hereto.
7.16. Construction and Storage. The Collateral shall be installed and
equipped in full compliance with the Requirements of Law affecting the
Collateral except to the extent a failure to so comply would not have a Material
Adverse Effect on the construction or operation of the Collateral. All Equipment
financed with the proceeds of the Loan shall be safeguarded and stored until
installed in appropriate storage facilities owned or leased by Borrower. In the
event of any cessation of construction for more than fifteen (15) successive
calendar days, Borrower shall make adequate provision, reasonably acceptable to
Lender, for the protection of all materials stored on site against
deterioration, loss or damage.
7.17. Upgrade Equipment. Borrower shall update the software customarily
used in equipment of the same type as the Equipment within two releases of the
most current batch change supplement release. Borrower shall maintain the
Equipment in good working order in accordance with established maintenance
procedures such that the Equipment performs to published specifications and
shall upgrade its functionality to include batch change supplements releases
generally available to customers of Nortel or the applicable Vendor, as the case
may be, and batch change supplements upgrades included in the original purchase
price of the Purchase Agreement in the form in effect on the date of the Closing
Date, and in any event within two of the manufacturer's latest "Product
Computing Loads."
ARTICLE 8: NEGATIVE COVENANTS
-----------------------------
Borrower hereby agrees that so long as the Commitment hereunder remains in
effect or the Note remains outstanding and unpaid or any other amount is owing
to Lender hereunder or under any of the Loan Documents, Borrower shall not
directly or indirectly without prior written consent of Lender, do or permit to
exist any of the following:
8.01. Additional Indebtedness. Create, incur, assume or suffer to exist at
any one time any Indebtedness that would cause Borrower not to comply with the
ratios set forth in Schedule 7.15 hereto.
8.02. Restrictions on Liens and Sale of Collateral. Create or suffer to
exist any Lien on the Collateral, or any part thereof, whether superior or
subordinate to the Lien of the Security Documents, or assign, convey, sell or
otherwise dispose of or encumber its interest in the Collateral, or any part
thereof (including, without limitation, execution of any lease), nor permit any
such action to be taken, except for the following permitted dispositions and
encumbrances (the "Permitted Encumbrances"): (i) the Lien created hereby; (ii)
Liens for taxes not yet due, or which are being contested in good faith and by
appropriate proceedings in accordance with Section 7.08 hereof; (iii) carriers',
warehousemen's, mechanics', materialmen's, repairmen's or other like Liens
arising in the ordinary course of business which are overdue for a period not
longer than thirty (30) days or which are being contested in good faith and by
appropriate
33
proceedings in accordance with Section 7.08 hereof; (iv) pledges or liens in
connection with workers' compensation, unemployment insurance and other social
security legislation; (v) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory obligations, surety
and appeal bonds, performance bonds and other obligations of a like nature
incurred in the 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 the property
subject thereto or interfere with the ordinary conduct of the business of
Borrower; (vii) judgment liens with respect to which execution has been stayed
within ten (10) days by appropriate judicial proceedings and the posting of
adequate security which may not be any of the Collateral; and (viii) specific
liens, if any, identified on Schedule 8.02 hereto. Any of the foregoing Liens
shall remain "Permitted Encumbrances" as long as they are being contested by
Borrower in compliance with Section 7.08 hereof.
8.03. 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 those created
or contemplated by the Loan Documents, and except for those that would not cause
Borrower to fail to meet its financial covenants set forth in Schedule 7.15
hereto.
8.04. Prohibition of Mergers, Acquisitions, Name, Office or Business
Changes, Etc.
(a) Enter into or become the subject of, any transaction of merger,
acquisition or consolidation or 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 any substantial part of Borrower's business or assets, whether now owned
or hereafter acquired.
(b) Change its name or corporate structure without giving Lender at
least ten (10) days advance written notice of such change, and ensuring
that any steps that Lender may deem necessary to continue the perfection
and priority of Lender's security interests in the Collateral shall have
been taken.
(c) Change the fiscal year end of Borrower from December 31, except
with the prior written consent of Lender, which consent shall not be
unreasonably withheld.
(d) Amend, restate or otherwise modify, or violate any terms of, its
Organizational Documents without ten (10) days advance written notice
thereof and in the event the Lender reasonably concludes that such
amendment, restatement, modification or violation would cause a Material
Adverse Effect and Lender so informs the Borrower within five (5) Business
Days of receipt of such notice
34
(e) 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 other than in the
telecommunications business.
(f) Acquire or purchase substantially all of the stock, partnership,
membership or other ownership interests in, or substantially all of the
business, assets, customers or operations of, any other entity other than
in the telecommunications business.
(g) Enter into any new business or make any material change in any of
Borrower's business objectives, purposes and operations from those
currently undertaken.
8.05. Limitation on Equity Payments. Make any Equity Payment, except that,
as long as no Default or Event of Default has occurred and is continuing, or
would be caused thereby, and if no other provision contained herein will be
violated by the disbursement of such Equity Payment, Borrower may make Equity
Payments described on Schedule 8.06 hereto. Before making any Equity Payment in
accordance with this Section 8.06, Borrower shall deliver to Lender a
certificate of a Responsible Officer of Borrower, setting forth in detail the
calculation supporting Borrower's compliance with the financial covenants,
stating that no Material Adverse Change has occurred since the date of the
latest financial statement delivered pursuant to Section 7.01(a), and stating
that no Default or Event of Default has occurred and is continuing or will be
caused by such Equity Payment.
8.06. Limitation on Investments, Advances and Loans. Organize, create,
acquire, capitalize or own any Subsidiaries without Lender's prior written
consent, or 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, without
limitation, any officers of Borrower, any Affiliate of Borrower or any Owner, or
any officers of any Affiliate of Borrower other than in the telecommunications
business.
8.07. Capital Expenditures. Directly or indirectly make or commit to make
any 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 its current operations and normal replacements
and maintenance which are properly charged to current operations and except for
expenditures that would not cause Borrower to fail to meet its financial
covenants set forth on Schedule 7.15 hereto.
8.08. Limitation on Leases. Enter into any agreement, or be or become
liable under any agreement, not in existence as of the date hereof and reflected
on Borrower's financial statements, for the lease, hire or use of any real or
personal property in excess of $100,000 in the aggregate, including, without
limitation, capital or operating leases, that would cause Borrower not to comply
with the ratios set forth in Schedule 7.15 hereto.
35
8.09. Termination of Nortel Purchase Agreement. Fail to satisfy its
purchase obligations under a Purchase Agreement or terminate any Purchase
Agreement prior to the completion of the installation of Equipment and related
Software at a particular Site.
8.10. Removal of Collateral. Remove or permit the removal of any material
part of the Collateral from the locations identified on Schedule 4.26, without
giving Lender thirty (30) days prior written notice of such move and ensuring
that any steps Lender may deem necessary to continue the perfection and priority
of Lender's security interest in the Collateral shall have been taken.
8.11. Assumed Names. Without notice to Lender to transact or engage in
business under any assumed name, fictitious name, tradestyle or "d/b/a" except
those identified on Schedule 4.29.
ARTICLE 9: EVENTS OF DEFAULT AND REMEDIES
-----------------------------------------
9.01. 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. If Borrower fails to pay any sum, whether of
principal or interest on the Note or any prepayment premiums, or any other
amount due hereunder or under the Note within five (5) calendar days after
such amount becomes due; or
(b) False Statement. If any statement, representation or warranty
made by Borrower or any Owner in any Loan Document or made in any financial
statement, certificate, report, exhibit or document furnished to 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
(including by omission of material information necessary to make such
representation, warranty or statement not misleading) and such untruth,
falsity, misleading statement or omission shall not have been corrected or
remedied to the satisfaction of Lender within ten (10) calendar days after
the earlier of Borrower's (or Owner's) knowledge thereof or receipt of
written notice thereof from Lender; or
(c) Covenant Defaults. If Borrower defaults in the performance or
observance of any covenant or agreement in this Agreement, and such default
continues for a period of ten (10) calendar days after the earlier of
Borrower's knowledge thereof or receipt of written notice from Lender
thereof, except for violations of Section 7.08(d), which shall become an
Event of Default at the end of the sixty (60) day period stated therein and
36
except for specific Defaults listed elsewhere in this Section 9.01, as to
which no notice or cure period shall apply unless specified; or
(d) Undischarged Judgments. If one or more judgments for the payment
of money has been entered against Borrower in an amount in excess of
$300,000, and such judgment or judgments have remained undischarged and
unstayed for a period of thirty (30) calendar days, unless the validity
thereof is contested in compliance with Section 7.08 hereof; or
(e) Attachments, etc. If a writ or warrant of attachment,
garnishment, execution, distraint or similar process has been issued
against Borrower or any of its properties which has remained undischarged
and unstayed for a period of thirty (30) consecutive days and is not being
contested in compliance with Section 7.08 hereof; or
(f) Default Under Third Party Agreements. If a default, or event or
condition which with notice or lapse of time or both would become a
default, occurs and the creditor accelerates in respect of any other
obligation of Borrower for borrowed money (including lease obligations) in
the amount of $300,000 in the aggregate, or under any two or more such
other obligations of any amount; or
(g) Dissolution; Discontinuance of Business, Etc. If Borrower
discontinues its usual business, dissolves, winds up or liquidates itself
or its business; or
(h) Involuntary Bankruptcy or Receivership Proceedings. If a
receiver, custodian, liquidator, or trustee of Borrower, or of any of its
property is appointed by the order or decree of any court or agency or
supervisory authority having jurisdiction; or an order is entered
adjudicating Borrower as bankrupt or insolvent; or any of the property of
Borrower is sequestered by court order; or a petition is filed against
Borrower under any state or federal bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution, liquidation, or
receivership law of any jurisdiction, whether now or hereafter in effect;
or
(i) Voluntary Bankruptcy. If Borrower takes affirmative steps to
prepare to file, or files, a petition in voluntary bankruptcy or to seek
relief under any provision of any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution, or liquidation law of any
jurisdiction, whether now or hereafter in effect, or consents to the filing
of any petition against it under any such law; or
(j) Assignments for Benefit of Creditors, Etc. If Borrower makes an
assignment for the benefit of creditors, or admits in writing its inability
to pay its debts generally as they become due, or consents to the
appointment of a receiver, trustee, or liquidator of itself or of all or
any part of its properties; or
37
(k) Non-compliance with Governmental Requirements. If Borrower fails
to comply with any requirement of any Governmental Authority within ten
(10) calendar days after notice in writing of such requirement shall have
been given to Borrower by such Governmental Authority, or such longer
period of time permitted Borrower by such Governmental Authority; or
(l) Regulatory Authorizations. If any Regulatory Authorization in
connection with this Agreement or any other Loan Document or any such
Regulatory Authorization now or hereafter necessary or advisable to make
this Agreement or the other Loan Documents legal, valid, enforceable and
admissible in evidence or to permit Borrower to conduct its business is not
obtained or has ceased to be in full force and effect or has been modified
or amended or has been held to be illegal or invalid or is revoked or
terminated, and is not being contested by Borrower in compliance with
Section 7.08 hereof and Lender has reasonably determined in good faith
(which determination shall be conclusive) that such event or occurrence may
have a Material Adverse Effect or a material adverse effect on Lender's
rights under this Agreement or any other Loan Documents; or
(m) Consents. If Borrower fails to provide any Consent required
hereunder and Lender determines in its sole discretion that such failure
results in a material impairment of Lender's security for the Loans; or
(n) ERISA Defaults. If, with respect to any Plan, (i) there has
occurred a Reportable Event being considered by the PBGC which may
reasonably result in any material liability to the PBGC with respect to any
Plan, (ii) a Plan has been terminated, (iii) a trustee has been appointed
by a United States District Court to administer a Plan, (iv) a PBGC or any
other person has instituted proceedings to terminate a Plan or to appoint a
trustee to administer any such Plan, (v) either Borrower or any Affiliate
has withdrawn, completely or partially, from any Plan (vi) either Borrower
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 any of the above
(i) through (iii) is likely to cause a Material Adverse Change; or
(o) Defaults Under Other Loan Documents. If any default,
misrepresentation or breach should occur under any Security Document or
other Loan Document and is not cured or waived within the time permitted
therein, or any such Loan Documents should cease to be in full force and
effect, or any party thereto should assert any unenforceability of, or deny
liability on, or admit inability to perform under, any such Loan Document.
9.02. Consequences of an Event of Default. If any Event of Default shall
occur and be continuing or shall exist, Lender shall be under no further
obligation to make Advances hereunder, at Lender's option, any remaining
commitment hereunder shall immediately terminate, with no further notice, and
Lender may, by notice to Borrower, declare the unpaid
38
principal amount of the Note, interest accrued thereon and all other amounts
owing by Borrower hereunder or under the Note to be immediately due and payable
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived, and an action therefor shall immediately accrue.
Such consequences shall occur automatically upon the occurrence of an Event of
Default under Section 9.01 (h), (i), (j) or (k), without any notice or demand.
Upon the occurrence of an Event of Default, Lender may, in its sole discretion,
exercise any and all remedies available to it under this Article 9 or under any
of the Loan Documents or under applicable law without further notice or period
of grace or opportunity to cure.
9.03. Exercise of Rights. Subject to any requirements for FCC or other
governmental approval upon the occurrence of any Event of Default, the rights,
powers and privileges provided in this Section and all other remedies available
to Lender under this Agreement or by statute or by rule of law may be exercised
by Lender at any time from time to time whether or not the Obligations shall be
due and payable, and whether or not Lender shall have instituted any foreclosure
or other action for the enforcement of this Agreement or the Note. No failure to
exercise nor any delay in exercising on the part of 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.
9.04. Rights of Secured Party; Possession or Sale of Collateral. Without
limiting the generality of the foregoing, Lender shall have all the rights and
remedies of a secured party under the UCC, and Lender may, without demand and
without advertisement or notice, all of which Borrower waives, at any time or
times, sell and deliver any or all Collateral held by or for it at public or
private sale, for cash, upon credit or otherwise, at such prices and upon such
terms as Lender deems advisable, in its sole discretion, and/or collect, or
enforce the collection of, the Collateral. Lender may be the purchaser at any
such sale. Upon the occurrence of an Event of Default and upon Lender's request,
Borrower shall assemble, at its own expense, any or all Equipment and other
Collateral at a convenient place acceptable to Lender and shall pay to Lender or
reimburse Lender for, on demand, all costs of collection of all amounts due, and
enforcement of all rights hereunder, including reasonable attorneys' fees and
legal expenses, and expenses of any repairs to any realty or other property to
which any of such Collateral may be affixed. Upon an Event of Default Lender
may, to the full extent permitted by applicable law, without notice,
advertisement, hearing or process of law of any kind, enter upon any premises
where any of the Collateral may be located and take possession of and remove
such Collateral.
9.05. Notices, Etc. Waived. Except as expressly provided in this Article
9, Borrower hereby expressly waives, to the full extent permitted by applicable
law, presentment, demand, protest, any and all notices of any kind,
advertisements, hearing or process of law in connection with the exercise by
Lender of any of its rights and remedies upon the occurrence of an Event of
Default. If any notification of intended disposition of any of the Collateral is
required by law,
39
such notification shall be deemed reasonably and properly given if given in
accordance with Section 10.06 hereto at least ten (10) days before such
disposition.
9.06. Additional Remedies. Lender's remedies 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. Lender shall be entitled to file one
or more suits at law or in equity to collect the Obligations and/or to
foreclose on Lender's Liens on and security interests created by this
Agreement or the Security Documents. Lender may apply or require Borrower
to apply for any necessary transfers, assignments, orders, consents or
licenses in connection with the operation or abandonment of the Collateral
or any part thereof, and Lender 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 Borrower 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 and
to continue the operation of the business of Borrower, 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. Borrower hereby consents to the
appointment of such receiver.
(b) Right to Cure. If Borrower fails in any material respect to
perform or comply with any of its agreements contained herein or in any of
the other Loan Documents, Lender 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
Borrower.
(c) Setoff. If the unpaid principal amount of the Note, interest
accrued thereon or any other amount owing by Borrower hereunder or under
the Note shall have become due and payable (by acceleration or otherwise),
Lender shall have the right, in addition to all other rights and remedies
available to it, without notice to Borrower, to setoff 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, Borrower by
Lender. Such right shall exist whether or not Lender shall have given
notice or made any demand hereunder or under the Note, whether or not such
debt owing to or funds held for the account of Borrower 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
Lender. Borrower hereby consents to and confirms the foregoing arrangements
and confirms Lender's rights of setoff.
9.07. Application of Proceeds. Any proceeds of any of the Collateral,
received by Lender through sale or disposition of the Collateral or otherwise,
may be applied by Lender
40
toward the payment of the Obligations, including expenses in connection with the
Collateral (including reasonable fees and legal expenses) in such order of
application as Lender may from time to time elect.
9.08. Discontinuance of Proceedings. If 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 Lender hereunder shall continue as if no such proceeding had been
taken.
9.09. Power of Attorney. For the purpose of carrying out the provisions
and exercising the rights, powers and privileges granted by the Loan Documents,
including, without limitation, this Article 9, Borrower hereby irrevocably
constitutes and appoints Lender its true and lawful attorney-in-fact to execute,
acknowledge and deliver any instruments and do and perform any acts such as are
referred to in the Loan Documents, including, without limitation, this Article
9, in the name and on behalf of Borrower, from time to time in Lender'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 is a power coupled with an interest and cannot be
revoked. Borrower hereby ratifies all that said attorney-in-fact shall lawfully
do or cause to be done by virtue and in accordance with the terms hereof.
Without limiting the generality of the foregoing, Lender may after the
occurrence and during the continuance of an Event of Default do the following
without notice to or assent by Borrower to accomplish the purposes of this
Agreement:
(a) upon failure of Borrower to 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 Loan Agreement or
any other Loan Document, and pay all or any part of the premiums therefor
and the costs thereof;
41
(b) (i) direct any party liable for any payment on any Collateral to
make payment of any and all monies due and to become due thereunder
directly to Lender or as Lender shall direct; (ii) in the name of
Borrower 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 the Collateral; (iv) commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent jurisdiction
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 Borrower 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 Lender may reasonably deem appropriate; and (vii)
generally sell, use, operate, transfer, pledge, make any agreement
with respect to or otherwise deal with any of the Collateral as fully
and completely as though Lender were the absolute owner thereof for
all purposes, and, at Lender's option and Borrower's 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
Lender reasonably deems necessary to protect, preserve or realize upon
the Collateral and Lender's security interest therein, in order to
effect the intent of this Agreement and the other Loan Documents all
as fully and effectively as Borrower might do.
9.10. Regulatory Matters. Notwithstanding any provision to the contrary
contained herein, Lender 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 Lender reasonably determines that the consent of the FCC
or PUC is required in connection with any of the actions that may be taken by
Lender in the exercise of its rights hereunder or under any of the other Loan
Documents, then Borrower, at its sole cost and expense, agrees to use its best
efforts to secure such consent and to cooperate with Lender in any action
commenced by Lender to secure such consent. Upon the occurrence and during the
continuation of an Event of Default, 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 Borrower fails or
refuses to execute such documents, the clerk of the court with jurisdiction may
execute such documents on behalf of Borrower.
ARTICLE 10: GENERAL CONDITIONS/MISCELLANEOUS
--------------------------------------------
The following conditions shall be applicable throughout the term of this
Agreement:
42
10.01. Modifications and Waivers. This Agreement, the other Loan
Documents, or any provision thereof may not be changed, waived or terminated
orally, but only by an instrument in writing signed by the party against whom
enforcement of the change, waiver or termination is sought. No action or course
of dealing on the part of Lender, its officers, employees, consultants, or
agents, nor any failure or delay by Lender with respect to exercising any right,
power, or privilege of Lender under the Note, this Agreement, or any other Loan
Document shall operate as a waiver thereof, except as otherwise provided in this
Agreement. Any waiver shall be effective only to the extent and for the instance
specifically identified in such writing, and shall not be deemed to imply any
future waivers or other waivers. No amendment to the Loan Documents shall be
effective without written agreement signed by both Borrower and Lender.
10.02. Advances Not Implied Waivers. No waiver of the requirements
contained in any Loan Document shall be effective unless in writing duly signed
by Lender. No Advance hereunder shall constitute a waiver of any of the
conditions of Lender's obligation to make further Advances nor, in the event
Borrower is unable to satisfy any such condition, shall any waiver of such
condition have the effect of precluding Lender from thereafter declaring such
inability to be an Event of Default as herein provided. Any Advance made by
Lender and any sums expended by 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 of
Lender existing by reason of such Event of Default, including, without
limitation, the right to accelerate the maturity of the Indebtedness evidenced
by the Note or to foreclose the Lien on the Collateral or to refuse to make
further advances hereunder.
10.03. Deviation from Covenants. The procedure to be followed by Borrower
to obtain the consent of Lender to any deviation from the covenants contained in
this Agreement or any other Loan Document shall be as follows:
(a) Borrower shall send a written notice to Lender setting forth (i)
the covenant(s) relevant to the matter, (ii) the requested deviation from
the covenant(s) involved, and (iii) the reason for the requested deviation
from the covenant(s); and
(b) Lender, within a reasonable time, will send a written notice to
Borrower, permitting or refusing the request, but in no event will any
deviation from the covenants of this Agreement or any other Loan Document
be effective without the express prior written consent of Lender. Lender's
failure to provide such written notice shall be deemed a refusal of such
request.
10.04. Holidays. Except as otherwise provided herein, whenever any payment
or action to be made or taken hereunder or under the Note 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 following Business Day and such extension of time shall be
included in computing interest or fees, if any, in connection
43
with such payment or action.
10.05. Records. From time to time, Lender may send Borrower statements of
the unpaid principal amount of the Note, 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 Loan,
and each statement shall be deemed correct and conclusively binding on Borrower
(absent manifest error) unless Borrower notifies Lender of an error in the
statement in writing within thirty (30) days of the date of any such statement
is provided to Borrower.
10.06. 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 in writing mailed first-class, in
all cases with charges prepaid, and any such properly given notice shall be
effective upon the earlier of receipt or (i) when delivered by hand, or (ii) the
third Business Day after being mailed, or (iii) the following Business Day if
sent by overnight courier service, or (iv) when sent by facsimile, answer back
received. All notices shall be addressed as follows:
If to Borrower, to the Notice Address set forth on Schedule 1, with
copies, if any, as set forth on Schedule 1.
If to Lender: NTFC Capital Corporation
000 Xxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxx 00000
Attention: Manager, Credit
Telecopy: (000) 000-0000
With a copy to: NTFC Capital Corporation
000 Xxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxx 00000
Attention: Legal Department
Telecopy: (000) 000-0000
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.
10.07. FCC and PUC Approval. The exercise of any rights or remedies
hereunder or under any other Loan Document by Lender that may require FCC or PUC
approval shall be subject to obtaining such approval. Pending the receipt of any
PUC or FCC approval, Borrower
44
shall not do anything to delay, hinder, interfere with or obstruct the exercise
of Lender's rights or remedies hereunder or the obtaining of such approvals.
10.08. Lender Sole Beneficiary. All conditions of the obligation of Lender
to make any Advances hereunder are imposed solely and exclusively for the
benefit of Lender and its assigns and no other Person shall have standing to
require satisfaction of such conditions in accordance with their terms or be
entitled to assume that Lender will refuse to make any Advances in the absence
of strict compliance with any or all such conditions, and no 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 Lender at any time if in
its sole discretion it deems it advisable to do so. Inspections and approvals of
the System, and the workmanship and materials used therein impose no
responsibility or liability of any nature whatsoever on Lender, and no Person
shall, under any circumstances, be entitled to rely upon such inspections and
approvals by Lender for any reason. Lender's sole obligation hereunder is to
make the Advances if and to the extent required by this Agreement or the Notes.
10.09. Lender's Review of Information. Borrower acknowledges and agrees
that any review or analysis by Lender of financial information, operating
information, marketing data or other information provided to Lender by or on
behalf of Borrower at any time is and shall be conducted solely for Lender's
benefit and internal use and that Lender is under no duty or obligation to make
the results of such review or analysis available to Borrower. Borrower is not
relying, and will not rely, on Lender for financial or business advice.
10.10. No Joint Venture. Nothing in any of the Loan Documents or in this
Agreement shall be deemed to constitute any kind of partnership, joint venture
or fiduciary relationship between Lender and Borrower or between Lender and any
Owners.
10.11. Severability. The provisions of this Agreement are intended to be
severable. If any provision of this Agreement or the other Loan Documents shall
be held invalid or unenforceable in whole or in part in any jurisdiction such
provision shall, as to such jurisdiction, be ineffective to the extent of such
invalidity or unenforceability without in any manner affecting the validity or
enforceability thereof in any other jurisdiction or the remaining provisions
hereof or thereof in any jurisdiction.
10.12. Rights Cumulative. All rights, powers and remedies herein given to
Lender are cumulative and not alternative, and are in addition to all statutes
or rules of law.
10.13. Duration; Survival. All representations and warranties of Borrower
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 Lender, or the making of any Advances
hereunder. All covenants and agreements of Borrower contained herein shall
continue in full force and effect from and after the date hereof so long as it
may borrow hereunder and until payment in full of the Notes, interest thereon,
all fees and all
45
other Obligations of Borrower. Without limitation, it is understood that all
obligations of Borrower to make payments to or indemnify Lender shall survive
the payment in full of the Notes and of all other Obligations.
10.14. Governing Law. This Agreement and the Notes and each of the other
Loan Documents shall be governed by and construed and enforced in accordance
with the internal laws of the State of Tennessee except to the extent that the
laws of jurisdictions where the Collateral is located may be required to apply
to the Collateral.
10.15. 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 but one and
the same instrument.
10.16. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of Lender and Borrower and their respective successors and
assigns; provided, however, that Borrower may not assign or transfer any of its
rights or obligations hereunder or under the other Loan Documents (in whole or
in part) without the prior written consent of Lender. Lender may assign,
transfer or pledge any of its respective rights or obligations hereunder or
under the other Loan Documents without notice to or the prior written consent of
Borrower. Upon receipt of written notice from Lender of such assignment,
Borrower shall promptly acknowledge receipt thereof in writing. If Borrower is
given written notice of any assignment, it shall perform its obligations with
respect to this Agreement for the ratable benefit of the applicable assignee(s),
and, if so directed, shall pay all amounts due or to become due hereunder
directly to the applicable assignee(s) or to any other party designated by such
assignee(s). Borrower shall not assert against any such assignee any set-off,
defense or counterclaim that Borrower may have against Lender or any person
other than such assignee. Borrower shall also execute and deliver to Lender such
documentation as any such assignee may reasonably require, including but not
limited to amended promissory notes and acknowledgment of or consent to the
assignment which may require Borrower to make certain representations or
reaffirmations as to some of the basic terms and covenants contained herein.
Lender shall not be relieved of its obligations hereunder as a result of any
such sale, assignment, transfer, grant or pledge, unless such assignee
specifically assumes all or part of Lender's future obligations hereunder in a
writing, a copy of which shall be delivered to Borrower, in which event after
the date of such assignment, Borrower's obligations to any such assignee shall
be proportionately as set forth herein with respect to Lender, and Borrower
shall not look to Lender to perform any of such assignee's obligations hereunder
which arise after the date thereof. Any assignee shall be entitled to rely on
Borrower's agreements as stated herein, as applicable, and shall be considered a
third party beneficiary thereof. Except to the extent otherwise required by the
context of this Agreement, the word "Lender" where used in this Agreement shall
mean and include any holder of any Note originally issued to Lender hereunder,
and any such holder of any Note shall be bound by and have the benefits of this
Agreement the same as if such holder had been a signatory hereto.
46
10.17. Participation. Lender shall have the right to enter into one or
more participation agreements, syndication agreements or similar agreements with
one or more participating lenders or other parties approved by Lender on such
terms and conditions as Lender shall deem advisable. Borrower shall furnish a
sufficient number of copies of reports and certificates to Lender so that Lender
and each participating lender shall receive a copy of each such document.
10.18. Time of Essence. Time is of the essence of this Agreement and the
Note and the other Loan Documents.
10.19. Disclosures and Confidentiality.
(a) Borrower agrees that it will obtain Lender's written consent
before using or generating any press release, advertisement, publicity
materials or other publication in which the name or logo of Lender or any
of its Affiliates is used or may be reasonably inferred, and will not
distribute any such materials in the absence of such prior written
approval.
(b) Borrower 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 Lender
or its Affiliates learned by Borrower during the course of negotiation
thereof. The term "third party" shall exclude only Borrower, its Affiliates
and their respective attorney(s) and certified public accountant(s). This
Section 10.19(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 agency, including without limitation
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, PUC or Commissions, Borrower shall provide
Lender with advance notice of any such required disclosure of information
so that Lender may seek an appropriate protective order and/or waive
compliance with this Section. Borrower shall not oppose any action taken by
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 10.19(b) shall survive the
termination of this Agreement.
(c) The disclosure of information by either Lender or Borrower 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 properly (other than proposal letters, commitment
letters or other correspondence between Lender and Borrower) within the
legitimate possession of the receiving party prior to disclosure hereunder;
(iii) subsequent to disclosure hereunder, is
47
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;
(v) is or becomes publicly available free of any obligation to keep it
confidential.
(d) Borrower authorizes Lender to discuss with and furnish to any
Affiliate of Lender, to any government or self-regulatory agency with
jurisdiction over Lender, to any other Governmental Authority or to any
assignee, successor, participant, successor, or prospective assignee,
successor or participant, all financial statements, audit reports and other
information pertaining to Borrower and/or its Subsidiaries whether such
information was provided by Borrower or prepared or obtained by Lender or
third parties. Neither Lender nor any of its employees, officers, directors
or agents make any representation or warranty to any existing or
prospective assignee, successor or participant regarding any audit reports
or other analyses of Borrower that Lender may distribute, whether such
information was provided by Borrower or prepared or obtained by Lender or
third parties, nor shall Lender or any of its 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.
(e) Every reference in this Agreement to disclosures of Borrower to
Lender (except the 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 Lender 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 Lender, except to the extent
that such previous disclosures are again presented to Lender in writing
concurrently with the execution of this Agreement.
10.20. Jurisdiction and Venue. BORROWER HEREBY IRREVOCABLY CONSENTS TO THE
JURISDICTION OF THE COURTS LOCATED IN DAVIDSON COUNTY, TENNESSEE, INCLUDING
WITHOUT LIMITATION FEDERAL COURTS SITTING IN THE MIDDLE DISTRICT OF TENNESSEE
AND THE CHANCERY COURT FOR DAVIDSON COUNTY, TENNESSEE, 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 OR JURISDICTION IN ANY SUCH
COURTS. In any such litigation, Borrower waives personal service of any summons,
complaint or other process, and agrees that the service thereof may be made by
certified or registered mail direct to Borrower at its address set forth in
Section 10.06 hereof. Within thirty (30) days after such mailing, Borrower shall
appear and answer to such summons, complaint or other process. Should Borrower
fail to appear or answer within the said
48
30-day period, then such party shall be deemed in default and judgment may be
entered against Borrower for the amount or other relief as demanded in any
summons, complaint or other process so served. In the alternative, in its sole
discretion, Lender may effect service upon Borrower in any other form or manner
permitted by law. 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.
10.21. Jury Waiver. BORROWER AND LENDER 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
BETWEEN LENDER AND BORROWER. BORROWER WARRANTS AND REPRESENTS 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.
10.22. Limitation on Liability. LENDER SHALL HAVE NO LIABILITY UNDER OR IN
CONNECTION WITH 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.
10.23. Borrower Waivers. To the full extent permitted by law, Borrower
hereby waives (i) presentment, demand and protest and notice of presentment,
protest, default, non payment, 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 Lender
on which Borrower may in any way be liable and hereby ratifies and confirms
whatever Lender may do in this regard; (ii) notice prior to taking possession or
control of the Collateral or any bond or security which might be required by any
court prior to allowing Lender to exercise any of Lender's remedies, including
the issuance of an immediate writ of possession, except as expressly required in
any of the Loan Documents; (iii) any marshalling of assets, or any right to
compel Lender to resort first to any Collateral or other Persons before pursuing
Borrower for payment of the Obligations and any defenses based on suretyship or
impairment of Collateral; (iv) the benefit of all valuation, appraisement and
exemption laws; (v) any right to require Lender to terminate its security
interest in the Collateral or in any other property of Borrower until
termination of this Agreement and the execution by Borrower and by any person
whose loans to Borrower are used in whole or in part to satisfy the Obligations,
of an
49
agreement indemnifying Lender from any loss or damage Lender may incur as
the result of dishonored or unsatisfied items of any account debtor applied to
the Obligations; and (vi) notice of acceptance hereof. Borrower acknowledges
that the foregoing waivers are a material inducement to Lender's entering into
this Agreement and that Lender is relying upon the foregoing waivers in its
future dealings with Borrower.
10.24. Schedules. The Schedules and Exhibits attached to this Agreement
are an integral part hereof, and are hereby made a part of this Agreement.
10.25. 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.
10.26. Entire Agreement. This Agreement, the other Loan Documents and
other documents, agreements and certificates executed by the parties
contemporaneously herewith or subsequent hereto constitute the entire agreement
of the parties and supersede all prior understandings and agreements, written or
oral, between the parties hereto relating to the subject matter hereof. Borrower
is not entering into this Agreement in reliance on statements or representations
made by any Person other than as set forth herein.
10.27. Construction. The parties acknowledge that each party and/or its
legal counsel have reviewed and made revisions to this Agreement. The rule of
construction requiring the resolution of any ambiguities in this Agreement
against the drafting party shall not apply to the construction of this Agreement
or any schedules or exhibits to this Agreement.
[END OF GENERAL TERMS AND CONDITIONS. NEXT PAGE IS SCHEDULE 1.]
[SIGNATURES ARE ON COVER PAGE.]
50
SCHEDULE 1 TO
-------------
LOAN AND SECURITY AGREEMENT
---------------------------
BORROWER INFORMATION
--------------------
Borrower: FOCAL COMMUNICATIONS CORPORATION, a Delaware corporation
Borrower's federal employer/tax identification number: 00-0000000
----------
Borrower's chief executive offices (including county):
000 Xxxxx XxXxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000
Borrower's Notice Address:
000 Xxxxx XxXxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
with copies to:
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx
0000 Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx
Borrower's Initials:____
Lender's Initials: ____
58
SCHEDULE 1.01(a) TO
-------------------
LOAN AND SECURITY AGREEMENT
---------------------------
SUBSIDIARY EXECUTION PAGE(S)
----------------------------
By executing this Schedule attached to and forming a part of the Loan and
Security Agreement dated as of December ____, 1998 (the "Agreement"), by and
among NTFC CAPITAL CORPORATION, FOCAL COMMUNICATIONS CORPORATION (the
"Borrower"), each direct or indirect Subsidiary of the Borrower listed below
represents and warrants that it is a Subsidiary of the Borrower, joins as a
party to the Loan Agreement for the purpose of granting a security interest in
the Collateral to the extent of its interest therein.
Each of the undersigned further acknowledges and agrees that: (i) future
Subsidiaries of the Borrower may be required to grant security interest(s) under
the Agreement without the consent of any other Subsidiary by the execution of a
form of the Annex to this Schedule of Subsidiary Execution Page(s); (ii) the
Lender is willing to extend certain credit to the Borrower, subject to the terms
and conditions set forth in the Agreement, including the condition that the
undersigned will provide the Guaranties they have provided and by granting the
security interest(s) granted hereby; (iii) without this condition, Lender would
not be willing to extend credit to the Borrower; and (iv) the undersigned are
related entities, and the undersigned expect to increase their respective
businesses, and to benefit directly and indirectly, through the use of the
Collateral owned or to be acquired by it and the other Subsidiaries with the
proceeds of the Advances to be made pursuant to the Agreement.
This Schedule of Subsidiary Execution Page(s) to the Agreement is attached
to and forms a part of the Agreement, and shall be construed in accordance with
and governed by the laws of the jurisdiction specified in Schedule 2.02 to the
Agreement under the caption "Governing Law" except to the extent the internal
laws of another jurisdiction are required to be applied in connection with the
exercise of rights pertaining to Collateral in that jurisdiction. Capitalized
terms used in this Schedule without definition shall have the meanings set forth
in the Agreement to which this Schedule is attached and forms a part.
This Schedule 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 but one and the same document.
Borrower's Initials:____
Lender's Initials: ____
59
IN WITNESS WHEREOF, the below Subsidiaries have executed this Schedule by
their duly authorized representatives all as of the effective date of the
Agreement stated in the Preamble to it:
SUBSIDIARIES:
-------------
1. Focal Communications of Pennsylvania /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President and
Chief Financial Officer
2. Focal Communications of California /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President and
Chief Financial Officer
3. Focal Communications of the Mid-Atlantic /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President and
Chief Financial Officer
4. Focal Communications of Washington /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President and
Chief Financial Officer
5. Focal Communications of Michigan /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President and
Chief Financial Officer
Borrower's Initials:____
Lender's Initials: ____
60
ANNEX A TO SCHEDULE 1.01(a) TO
------------------------------
LOAN AND SECURITY AGREEMENT
---------------------------
ANNEX TO SUBSIDIARY EXECUTION PAGE(S)
-------------------------------------
By executing this Annex to the Schedule of Subsidiary Execution Page(s)
attached to and forming a part of the Loan and Security Agreement dated as of
December ____, 1998 (the "Agreement"), by and between NTFC CAPITAL CORPORATION
and FOCAL COMMUNICATIONS CORPORATION, each direct or indirect Subsidiary of the
Borrower listed below represents and warrants that it is a Subsidiary of the
Borrower, joins as a party to the Agreement for the purpose of granting a
security interest in the Collateral to the extent of its interest therein.
Each of the undersigned further acknowledges and agrees that: (i) future
Subsidiaries of the Borrower may be required to grant security interest(s) under
the Agreement without the consent of any other Subsidiary by the execution of a
form of this Annex; (ii) the Lender is willing to extend certain credit to the
Borrower, subject to the terms and conditions set forth in the Agreement,
including the condition that the undersigned will provide the Guaranties they
have provided and by granting the security interest(s) granted hereby; (iii)
without this condition, Lender would not be willing to extend credit to the
Borrower; and (iv) the undersigned are related entities, and the undersigned
expect to increase their respective businesses, and to benefit directly and
indirectly, through the use of the Collateral owned or to be acquired by it and
the other Subsidiaries with the proceeds of the Advances to be made pursuant to
the Agreement.
This Annex to Schedule of Subsidiary Execution Page(s) is attached to and
forms a part of the Agreement, and shall be construed in accordance with and
governed by the laws of the jurisdiction specified in Schedule 2.02 to the
Agreement under the caption "Governing Law" except to the extent the internal
laws of another jurisdiction are required to be applied in connection with the
exercise of rights pertaining to Collateral in that jurisdiction. Capitalized
terms used in this Schedule without definition shall have the meanings set forth
in the Agreement to which this Schedule is attached and forms a part.
This Annex 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 but one and the same document.
Borrower's Initials:____
Lender's Initials: ____
61
IN WITNESS WHEREOF, the undersigned has executed this Annex to Subsidiary
Execution Page(s) by its duly authorized officer or representative this ___ day
of _______________, _____:
Subsidiary:
----------
----------------------------------
BY:_______________________________
TITLE:____________________________
Borrower's Initials:____
Lender's Initials: ____
62
SCHEDULE 1.01(b) TO
-------------------
LOAN AND SECURITY AGREEMENT
---------------------------
SUBSIDIARY INFORMATION
----------------------
[SEE ATTACHED]
Borrower's Initials:____
Lender's Initials: ____
63
SCHEDULE 2.01 TO
----------------
LOAN AND SECURITY AGREEMENT
---------------------------
MAXIMUM LOAN AMOUNTS
--------------------
Maximum principal amount of all Loans: Up to Twenty-Five Million (US) Dollars
($25,000,000)
Borrower's Initials:____
Lender's Initials: ____
64
SCHEDULE 2.02 TO
----------------
LOAN AND SECURITY AGREEMENT
---------------------------
PAYMENT TERMS AND GOVERNING LAW
-------------------------------
"Closing Date": December 30, 1998
"Financing Termination Date": December 31, 1999.
"Governing Law": The internal laws of the State of Tennessee shall govern
the construction and enforcement of the Loan Documents except to the extent that
the laws of jurisdictions where the Collateral is located may be required to
apply to the Collateral.
"Initial Payment Date": The first Business Day of the month beginning at
least 30 days after the each applicable Borrowing Date.
"Interest Rate": For each Advance, a fixed rate equal to the five (5) year
Swap rate as shown on the Telerate screen page 19901 on the Borrowing Date of
the Advance, plus 395 basis points. Interest shall accrue monthly based on a 365
day year. The Interest Rate is subject to adjustment as follows: When the
Borrower has met the conditions set forth below for two consecutive fiscal
quarters, the 395 basis point margin stated above will be reduced to the
applicable margin as set forth in the table below, and the new margin will apply
so long as the required Cash Flow Coverage continues to exist. Should the
Borrower fail to maintain the required Cash Flow Coverage that permitted the
reduced margin for one fiscal quarter, then the margin shall return to the
appropriate margin until a reduction is again permitted hereunder.
Condition Margin
--------- ------
Cash Flow Coverage (greater than or equal) 1:1 350 Basis Points
Cash Flow Coverage (greater than or equal) 1.5:1 325 Basis Points
Cash Flow Coverage (greater than or equal) 2:1 300 Basis Points
Cash Flow Coverage (greater than or equal) 2.5:1 275 Basis Points
For purposes of this provision, Cash Flow Coverage is defined as (EBITDA +
Interest Income)/Scheduled Principal Payments + Required Interest Payments
on all outstanding Debt)
"Maturity Date": The Sixtieth (60th) Payment Date, on which date all then-
outstanding principal, interest, premium, expenses, fees, penalties and other
amounts due under the Note shall be finally due and payable.
"Payment Date": The Initial Payment Date and the First (1st) Business Day
of each month thereafter.
Borrower's Initials:____
Lender's Initials: ____
65
"Payment Schedule": For each Note, Borrower shall repay the Indebtedness
represented thereby according to an amortization table prepared by Lender which
requires even payments of principal and interest monthly in arrears on each
Payment Date until the Maturity Date.
"PUC": PUC includes any public utility commission or similar state or
territorial regulatory body having jurisdiction over the Borrower or any
Subsidiary thereof
"System": Borrower's Competitive Local Exchange Carrier networks and all
Equipment therein in each location in which Borrower conducts business at any
time during the Term of this Agreement.
"Term": From the Closing Date through the Maturity Date.
Borrower's Initials:____
Lender's Initials: ____
66
SCHEDULE 2.09 TO
----------------
LOAN AND SECURITY AGREEMENT
---------------------------
FEES
----
Commitment Deposit: A Commitment Deposit of $90,000 has been deposited with
Lender, and is non-refundable.
Commitment Fee: A Commitment Fee of one percent (1%) of the Total
Commitment has been earned by Lender and shall be due and payable in
installments equal to one percent (1%) of each Advance on each Borrowing
Date. The Commitment Deposit shall be applied toward the Commitment Fee
until it is exhausted. The Commitment Fee shall be non-refundable.
Borrower's Initials:____
Lender's Initials: ____
67
SCHEDULE 4.04 TO
----------------
LOAN AND SECURITY AGREEMENT
---------------------------
REQUIRED CONSENTS
-----------------
[NONE]
Borrower's Initials:____
Lender's Initials: ____
68
SCHEDULE 4.05 TO
----------------
LOAN AND SECURITY AGREEMENT
---------------------------
REGULATORY AUTHORIZATIONS
-------------------------
[NONE]
Borrower's Initials:____
Lender's Initials: ____
69
SCHEDULE 4.07 TO
----------------
LOAN AND SECURITY AGREEMENT
---------------------------
RESTRICTIONS ON LOANS
---------------------
[NONE]
Borrower's Initials:____
Lender's Initials: ____
70
SCHEDULE 4.08 TO
----------------
LOAN AND SECURITY AGREEMENT
---------------------------
FINANCIAL STATEMENTS
--------------------
[Separately Provided]
Borrower's Initials:____
Lender's Initials: ____
71
SCHEDULE 4.12 TO
-----------------
LOAN AND SECURITY AGREEMENT
---------------------------
PENDING LITIGATION
------------------
[To be completed by Borrower and approved by Lender]
Borrower's Initials:____
Lender's Initials: ____
72
SCHEDULE 4.25 TO
----------------
LOAN AND SECURITY AGREEMENT
---------------------------
UCC FILING OFFICES
------------------
Illinois Secretary of State, UCC Division
Xxxxxxx Bldg., Room 030
2nd and Xxxxxxx Xx.
Xxxxxxxxxxx, XX 00000
Pennsylvania Department of State
UCC Division
000 Xxxxx Xxxxxx Xxxx.
Xxxxxxxxxx, XX 00000
Philadelphia County
Office of the Prothonotary
Broad & Mkt.
Xxxxxxxxxxxx, XX 00000
Michigan Department of State
UCC Division
X.X. Xxx 00000
Xxxxxxx, XX 00000-0000
Secretary of State, UCC Division
0000 00xx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Recorder of Deeds, D.C.
515 "D" St., NW, Xxxx 000
Xxxxxxxxxx, X.X. 00000
Department of Licensing, XXX Xxxxxxx
X.X. Xxx 0000
Xxxxxxx, Xxxxxxxxxx 00000-0000
Borrower's Initials:____
Lender's Initials: ____
73
SCHEDULE 4.26 TO
----------------
LOAN AND SECURITY AGREEMENT
---------------------------
PRINCIPAL OFFICES AND LOCATION OF COLLATERAL
--------------------------------------------
Name Address County
---------------------- ----------------------------- -------------
Focal Communications 000 Xxxxxx Xx. Xxxxxxxxxxxx
of Pennsylvania Xxxxxxxxxxxx, XX 00000
Focal Communications 0000 X. 0xx Xx., Xxxxx X0-000 Xxx Xxxxxxx
of California Xxx Xxxxxxx, XX 00000
000 Xxxxxxxx, Xxxxx 000 Xxx Xxxxxxxxx
Xxx Xxxxxxxxx, XX 00000
Focal Communications Decatur Building King
of Washington 0000 0xx Xxxxxx
Xxxxxxx, XX 00000
Focal Communications 0000 Xxxxxxx Xxx.
xx Xxx-Xxxxxxxx Xxxxxxxxxx, X.X. 00000
Focal Communications 00000 Xxxx Xxx Xxxx Xxxx Xxxxxxx
xx Xxxxxxxx The Xxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Borrower's Initials:____
Lender's Initials: ____
74
SCHEDULE 4.29 TO
----------------
LOAN AND SECURITY AGREEMENT
---------------------------
ASSUMED NAMES
-------------
[NONE]
Borrower's Initials:____
Lender's Initials: ____
75
SCHEDULE 4.31 TO
----------------
LOAN AND SECURITY AGREEMENT
---------------------------
NORTEL PURCHASE AGREEMENT
-------------------------
Networks Products Purchase Agreement Number JRD0197FCC dated January 21,
1997, executed by and between Northern Telecom Inc. and Borrower as may be
amended, modified or supplemented from time to time.
Borrower's Initials:____
Lender's Initials: ____
76
SCHEDULE 6.02 TO
----------------
LOAN AND SECURITY AGREEMENT
---------------------------
POST-CLOSING ITEMS
------------------
The following closing conditions shall be satisfied as indicated:
1. The Opinion of Regulatory Counsel shall be delivered within fourteen
(14) days of Closing.
2. Landlord Consents required hereunder shall be obtained on a reasonable
best efforts basis and delivered as promptly as reasonably possible, but in any
event within the later of thirty (30) days of Closing or the date of location of
Equipment having a value exceeding $100,000 at a Site by Borrower or a
Subsidiary thereof.
3. Any other Required Consents or Consents required for Closing or
initial funding hereunder not supplied at Closing shall be delivered as promptly
as reasonably possible, but in any event within thirty (30) days of Closing
unless the Lender extends the time therefor in writing.
Borrower's Initials:____
Lender's Initials: ____
77
SCHEDULE 7.07 TO
----------------
LOAN AND SECURITY AGREEMENT
---------------------------
INSURANCE
---------
[See attached certificate(s)]
78
SCHEDULE 7.15 TO
----------------
LOAN AND SECURITY AGREEMENT
---------------------------
FINANCIAL COVENANTS
-------------------
1. Total Secured Debt to Total Capitalization. At the time of each advance and
at the end of each fiscal quarter, Borrower shall maintain a ratio of Total
Secured Debt to Total Capitalization of not more than *** to ***. For purposes
of this ratio, the following definitions apply:
Total Capitalization: All equity as shown on the balance sheet of Borrower
plus all funded Indebtedness of Borrower.
Total Secured Debt: Indebtedness of Borrower secured by a lien on assets of
the Borrower, excluding Indebtedness secured by accounts receivable.
2. Cash Flow Coverage Ratio. Borrower shall maintain a minimum Cash Flow
Coverage Ratio (measured at the end of each fiscal quarter for the past four
fiscal quarters) of at least ***, beginning in the last fiscal quarter of fiscal
year 2001. For purposes of this ratio, the following definitions apply:
Cash Flow Coverage Ratio: At the end of any fiscal period, the ratio of
Borrower's Cash Flow (as defined in the agreement) plus interest income
for such fiscal period to Borrower's Debt Service for such fiscal
period.
Debt Service: For any fiscal period of Borrower, the sum of all principal
and interest payments that Borrower is required to make during such
period on account of all its Indebtedness including, without limitation,
(a) amounts due during such period on account of capitalized leases, (b)
the then current portion of any long term Indebtedness, including any
Subordinated indebtedness, (c) amounts due on short term Indebtedness,
and (d) amounts due under the NTFC Agreement and the Note.
3. Minimum Revenues: Borrower shall maintain minimum revenues in an amount
equal to or greater than 85% of the levels set forth below:
Fiscal Year Ended Projected Revenues
----------------- ------------------
December 31, 1999 $ ***
December 31, 2000 $ ***
December 31, 2001 $ ***
December 31, 2002 $ ***
December 31, 2003 $ ***
December 31, 2004 $ ***
4. Minimum EBITDA. Borrower shall maintain minimum EBITDA in an amount equal
to or greater than the levels set forth below:
Borrower's Initials:____
Lender's Initials: ____
---------------
***Confidential information omitted pursuant to a request for confidential
treatment filed separately with the Securities and Exchange Commission.
79
Fiscal Year Ended Projected EBITDA
----------------- ----------------
December 31, 1999 $ ***
December 31, 2000 $ ***
December 31, 2001 $ ***
December 31, 2002 $ ***
December 31, 2003 $ ***
December 31, 2004 $ ***
So long as Borrower maintains a cash balance of at least $***, the Minimum
EBITDA covenant for 1999 will not apply. In its place, Borrower will be required
to maintain a minimum gross margin of ***% of revenues for 1999. Gross margin is
defined as revenues less settlement expenses.
Borrower's Initials:____
Lender's Initials: ____
---------------
***Confidential information omitted pursuant to a request for confidential
treatment filed separately with the Securities and Exchange Commission.
80
SCHEDULE 8.02 TO
----------------
LOAN AND SECURITY AGREEMENT
---------------------------
PERMITTED SPECIFIC ENCUMBRANCES
-------------------------------
[NONE]
Borrower's Initials: ___
Lender's Initials: ___
74
SCHEDULE 8.06 TO
----------------
LOAN AND SECURITY AGREEMENT
---------------------------
PERMITTED EQUITY PAYMENTS
-------------------------
Borrower may make Equity Payments which, in the aggregate, will not cause
Borrower to fail to meet its financial covenants set forth in Schedule 7.15 to
the Agreement and which do not involve the payment, exchange, repurchase or
redemption of more than five percent (5%) of the then outstanding capital stock
of Borrower, in the aggregate.
Borrower's Initials: ___
Lender's Initials: ___
75
PROMISSORY NOTE
US$25,000,000.00 December 30, 1998
FOR VALUE RECEIVED, FOCAL COMMUNICATIONS CORPORATION, a Delaware
corporation with its principal place of business at 000 Xxxxx XxXxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000 ("Borrower") promises and agrees to pay to the order of
NTFC CAPITAL CORPORATION, a Delaware corporation, its successors, assigns or any
subsequent holder of this Note (the "Lender") at its offices located at 000
Xxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxx 00000, or at such other place as may
be designated in writing by Lender, in lawful money of the United States of
America in immediately available funds the lesser of Twenty-five Million Dollars
and 00/100 ($US$25,000,000.00), or all amounts advanced hereunder pursuant to
Section 2.02 of the Loan Agreement (defined below), as noted on any and all
amortization schedules attached hereto, together with interest thereon and other
amounts due as provided below. The amortization schedules attached hereto are
for convenience only, and the failure of the Lender to attach an amortization
schedule, or any error or incorrect notation by the Lender on any amortization
schedule, shall not diminish the obligations of the Borrower under this Note.
This Note shall mature on the later of (i) January 1, 2004, (ii) the sixtieth
(60th) Payment Date, or (iii) the first Business Day of the sixty-first (61st)
month after the first Advance hereunder (the "Maturity Date").
This Note is issued pursuant to that certain Loan and Security Agreement
dated December ___, 1998, by and between Borrower and Lender (as it may be
modified, amended or restated from time to time, the "Loan Agreement"). Any term
not otherwise defined in this Note shall have the same meaning as in the Loan
Agreement. Reference is made to the Loan Agreement, which, among other things,
permits the acceleration of the maturity hereof upon the occurrence of certain
events and for prepayments in certain circumstances and upon certain terms and
conditions. This Note is secured by, among other things, the Collateral
described in the Loan Agreement and the Security Documents.
Each Advance hereunder shall bear interest from the date of such Advance
until such amount is due and payable (whether on any Payment Date, at the
Maturity Date, by acceleration, or otherwise) based on a rate equal to the five
(5) year "Swap Rate" as shown on the Telerate screen page 19901 on the date of
such Advance hereunder, plus 395 basis points (the "Interest Rate"). Interest
shall be paid monthly with principal, and shall accrue based on a 365 day year.
The Interest Rate is subject to adjustment as follows: When the Borrower has met
the conditions set forth below for two consecutive fiscal quarters, the 395
basis point margin stated above will be reduced to the applicable margin as set
forth in the table below, and the new margin will apply so long as the required
Cash Flow Coverage continues to exist. Should the Borrower fail to maintain the
required Cash Flow Coverage that permitted the reduced margin for one fiscal
quarter, then the margin shall return to the appropriate margin until a
reduction is again permitted hereunder.
Condition Margin
--------- ------
Cash Flow Coverage greater than or equal to 1:1 350 Basis Points
Cash Flow Coverage greater than or equal to 1.5:1 325 Basis Points
Cash Flow Coverage greater than or equal to 2:1 300 Basis Points
Cash Flow Coverage greater than or equal to 2.5:1 275 Basis Points
For purposes of this provision, Cash Flow Coverage is defined as (EBITDA +
Interest Income)/Scheduled Principal Payments + Required Interest Payments
on all outstanding Debt)
Commencing with the Initial Payment Date (defined below), principal amounts
outstanding hereunder on each Advance and interest thereon at the applicable
Interest Rate shall be amortized and paid in sixty (60) monthly equal
installment payments, commencing on the first Business Day of the first Calendar
Month to commence at least thirty (30) days after the date of such Advance (the
"Initial Payment Date") and on the first Business Day of each calendar month
thereafter (each, a "Payment Date"), in accordance with a separate amortization
schedule attached hereto. In the event of any additional Advances hereunder an
additional amortization schedule will be attached for each additional Advance,
reflecting the principal amount of such Advance and the applicable Interest
Rate. All such amortization schedules shall provide for equal monthly
amortization of principal and interest through the Maturity Date. If any
principal, interest, or other charge or expense remains outstanding on the
Maturity Date, such amount shall be added to the payment due on the Maturity
Date.
Notwithstanding the foregoing, if Borrower shall fail to pay within ten
(10) days after the due date any principal amount or interest or other amount
payable under this Note, Borrower shall pay to Lender, to defray the
administrative costs of handling such late payments, an amount equal to interest
on the amount unpaid, to the extent permitted under applicable law, at a rate
equal to the lesser of three percent (3%) higher than the then applicable
interest rate or the maximum permissible interest rate under applicable law (the
"Default Rate") (instead of the Interest Rate), from the due date until such
overdue principal amount, interest or other unpaid amount is paid in full (both
before and after judgment) whether or not any notice of default in the payment
thereof has been delivered under the Loan Agreement. In addition, but without
duplication, upon the occurrence and during the continuance of an Event of
Default, all outstanding amounts hereunder shall bear interest at the Default
Rate (instead of the Interest Rate) until such amounts are paid in full or such
Event of Default is waived in writing by Lender.
Notwithstanding any provision of this Note or the Loan Agreement to the
contrary, it is the intent of the Lender and the Borrower that the Lender or any
subsequent holder of this Note shall never be entitled to receive, collect,
reserve or apply, as interest, any amount in excess of the maximum rate of
interest permitted to be charged by applicable law, as amended or enacted, from
time to time. In the event Lender, or any subsequent holder of this Note, ever
receives, collects, reserves or applies, as interest, any such excess, such
amount which would be excessive interest shall be deemed a partial prepayment of
principal and treated as such (except that no prepayment premium will be payable
thereon), or, if the principal indebtedness and all other amounts due are paid
in full, any remaining excess funds shall immediately be paid to the Borrower.
In determining whether or not the interest paid or payable, under any specific
contingency, exceeds the highest lawful rate, the Borrower and the Lender shall,
to the maximum extent permitted under applicable law, (a) exclude voluntary
prepayments and the effects thereof as it may relate to any fees charged by the
Lender, and (b) amortize, prorate, allocate, and spread,
2
in equal parts, the total amount of interest throughout the entire term of the
indebtedness; provided that if the indebtedness is paid and performed in full
prior to the end of the full contemplated term hereof, and if the interest
received for the actual period of existence hereof exceeds the maximum lawful
rate, the Lender or any subsequent holder of the Note shall refund to the
Borrower the amount of such excess or credit the amount of such excess against
the principal portion of the indebtedness, as of the date it was received, and,
in such event, the Lender shall not be subject to any penalties provided by any
laws for contracting for, charging, reserving or receiving interest in excess of
the maximum lawful rate.
All amounts received for payment under this Note shall at the option of
Lender be applied first to any unpaid expenses due Lender under this Note or
under any other documents evidencing or securing the obligations of Borrower to
Lender, then to any unpaid late charges, then to any unpaid interest accrued at
the Default Rate, then to all other accrued but unpaid interest due under this
Note and finally to the reduction of outstanding principal due under this Note.
Upon the occurrence of any one or more of the Events of Default specified
in the Loan Agreement (each, an "Event of Default"), all amounts then remaining
unpaid on this Note shall be, or may be declared to be, immediately due and
payable as provided in the Loan Agreement, without further notice, at the option
of the Lender. Lender may waive any Event of Default before or after the same
has been declared and restore this Note to full force and effect without
impairing any rights hereunder, such right of waiver being a continuing one, but
one waiver shall not imply any additional or subsequent waiver. Time is of the
essence of this Note.
Demand, presentment, notice and protest are expressly waived, except for
notices to Borrower otherwise expressly required in the Loan Agreement. Borrower
and any and all endorsers, guarantors and other parties liable on this Note, and
any and all general partners of Borrower or any endorsers, guarantors or other
parties liable on this Note (collectively, the "Obligors") jointly and severally
waive presentment for payment, protest, notice of protest, notice of nonpayment
of this Note, demand and all legal diligence in enforcing collection, and hereby
expressly consent to (i) any and all delays, extensions, renewals or other
modifications of this Note or any waivers of any term hereof, (ii) any release
or discharge by Lender of any of the Obligors, (iii) any release, substitution
or exchange of any security for the payment hereof, (iv) any failure to act on
the part of Lender, and (vi) any indulgence shown by Lender from time to time
(without notice or further assent from any of the Obligors) and hereby agree
that no such action, failure to act or failure to exercise any right or remedy
by Lender shall in any way affect or impair the obligations of any of the
Obligors.
BORROWER HEREBY IRREVOCABLY CONSENTS TO THE JURISDICTION OF THE COURTS
LOCATED IN DAVIDSON COUNTY, TENNESSEE, INCLUDING WITHOUT LIMITATION FEDERAL
COURTS SITTING IN THE MIDDLE DISTRICT OF TENNESSEE AND THE CHANCERY COURT FOR
DAVIDSON COUNTY, TENNESSEE, FOR ANY SUIT BROUGHT OR ACTION COMMENCED IN
CONNECTION WITH THIS NOTE, ANY DOCUMENTS EXECUTED OR DELIVERED IN CONNECTION
HEREWITH, INCLUDING WITHOUT LIMITATION THE LOAN AGREEMENT, OR ANY RELATIONSHIP
BETWEEN LENDER AND BORROWER, AND AGREES NOT TO CONTEST OR CHALLENGE VENUE IN ANY
SUCH COURTS.
Borrower irrevocably consents to the service of process of any such courts
in any such action or proceeding by the mailing of copies thereof by registered
or certified mail, postage prepaid, return receipt
3
such mailing. However, nothing herein shall affect the right of Lender or
Borrower to serve process in any other manner permitted by law or to commence
legal proceedings or otherwise proceed against Lender or Borrower in any other
jurisdiction.
BORROWER HEREBY KNOWINGLY, WILLINGLY AND IRREVOCABLY WAIVES ITS RIGHTS TO
DEMAND A JURY TRIAL IN ANY ACTION OR PROCEEDING INVOLVING THIS NOTE, ANY
DOCUMENTS EXECUTED OR DELIVERED IN CONNECTION HEREWITH INCLUDING WITHOUT
LIMITATION THE LOAN AGREEMENT OR ANY RELATIONSHIP BETWEEN BORROWER AND LENDER.
BORROWER AGREES THAT LENDER MAY FILE AN ORIGINAL COUNTERPART OR COPY OF THIS
PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF BORROWER'S EXPRESS WAIVER OF ITS
RIGHT TO TRIAL BY JURY.
IN ANY ACTION TO ENFORCE THIS NOTE, BORROWER HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL
RIGHTS UNDER THE LAWS OF ANY STATE TO CLAIM OR RECOVER ANY SPECIAL, EXEMPLARY,
PUNITIVE, CONSEQUENTIAL OR OTHER DAMAGES OTHER THAN ACTUAL DIRECT DAMAGES.
In the event this Note is placed in the hands of one or more attorneys for
collection or enforcement or protection of the holder's rights described herein
or in the Loan Agreement or the other Loan Documents, the Borrower agrees to pay
all reasonable attorneys' fees and all court and other out-of-pocket costs
incurred by the holder hereof (as of which shall be due on demand and shall bear
interest at the rate then payable hereunder from five (5) days after such demand
is made until paid).
This Note is governed by and shall be construed in accordance with the
internal laws of the State of Tennessee. If any provision of this Note should
for any reason be invalid or unenforceable, the remaining provisions hereof
shall remain in full force and effect.
This Note may not be changed, extended or terminated except in writing. No
waiver of any term or provision hereof shall be valid unless in writing signed
by Lender.
Executed as of December 30, 1998.
FOCAL COMMUNICATIONS CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
--------------------
Title: Exec VP/CFO
-----------------
4
EXHIBIT B
---------
FORM OF
BORROWING CERTIFICATE
Pursuant to Section 2.03(b) of the Loan and Security Agreement dated as of
December 30, 1998, between FOCAL COMMUNICATIONS CORPORATION, a Delaware
corporation (the "Borrower"), and NTFC CAPITAL CORPORATION (the "Lender"), (as
amended, modified or supplemented from time to time, the "Loan Agreement"), the
undersigned Responsible Officer of the Borrower hereby certifies as set forth
below. Capitalized terms used herein which are defined in the Loan Agreement
shall have their defined meanings when used herein (unless otherwise indicated).
1. The Borrower hereby represents and warrants that its representations
and warranties contained in Article 4 of the Loan Agreement are true and correct
on and as of the date of this Certificate.
2. Immediately prior to and immediately after the making of the Advance
requested hereunder, no Default or Event of Default has or will have occurred
and will be continuing under the Loan Agreement.
3. All other applicable conditions of Article 6 of the Loan Agreement
have been satisfied; all applicable covenants contained in Article 7 of the Loan
Agreement have been met; and no violations of Article 8 have occurred and remain
uncured.
4. The Borrowing Date on which the Advance is requested is
_______________________________, 199_______.
5. The total amount of the Advance requested hereunder is
$_______________________, to be disbursed and allocated as follows:
(a) $__________________________, to be paid directly to NTI for the
purchase by the Borrower of Equipment provided in accordance with the
Purchase Agreement (evidenced by the copies of unpaid NTI invoices attached
to this Certificate);
(b) $__________________________, to be paid to the Borrower as
reimbursement for amounts paid to NTI under the Purchase Agreement by
Borrower, as evidenced by the attached invoices and copies of Borrower's
cancelled checks in payment thereof;
(c) $__________________________, to be paid either to other Suppliers
for the purchase by the Borrower of Equipment and Services provided by
other Suppliers or for other direct construction costs (evidenced by the
copies of unpaid invoices attached to this Certificate);
(d) $___________________________, to be paid to the Borrower as
reimbursement for amounts paid to other Suppliers by Borrower, as evidenced
by the attached invoices and copies of Borrower's cancelled checks in
payment thereof;
(e) $___________________________, to be paid to the Lender, as
reimbursement for Lender's Expenses; and
(f) $___________________________, to be paid to Borrower to pay
Borrower's legal fees and closing costs, as evidenced by the attached
invoices and statements.
1
6. The amount of the Advance described in 5(a) above (if any) is equal to
the amount due and owing on the date hereof under the Purchase Agreement.
7. The Advance requested on the date hereof is for a proper purpose as
set forth in Section 2.02 of the Loan Agreement.
============
8. Wire instructions for Advances to be disbursed to Borrower are as
follows:
Account Number:____________________________________________________
Account Name:______________________________________________________
Bank:______________________________________________________________
ABA routing number:________________________________________________
IN WITNESS WHEREOF, the undersigned has duly executed this Borrowing
Certificate in the name of the Borrower as of the ______ day of _______________,
199___.
FOCAL COMMUNICATIONS CORPORATION
By:_______________________________________________
Title:____________________________________________
2
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx
0000 XXXXX XXXXX
XXXXXXX, XXXXXXXX 00000-0000 (000) 000-0000
FACSIMILE
(000) 000-0000
Xxxxxxxx X. Xxxxxxx
(000) 000-0000
December 30, 1998
NTFC Capital Corporation
000 Xxxxxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Re: Loans to Focal Communications Corporation
Gentlemen:
We have acted as counsel to Focal Communications Corporation, a Delaware
corporation (the "Borrower"), in connection with that certain Loan and Security
Agreement dated December 30, 1998, between NTFC Capital Corporation ("Lender")
and Borrower (the "Loan Agreement"; capitalized terms used herein without
definition shall have the meanings given such terms in the Loan Agreement. In
that capacity, we have examined, among other things, the following agreements,
instruments and documents (hereinafter referred to as the "Documents"):
a. the Loan Agreement;
b. $25,000,000 Note dated December 30, 1998 made by Borrower payable to
Lender;
c. Guaranty Agreement; and
d. the Uniform Commercial Code Financing Statements in the forms attached
hereto as group Exhibit A ("UCCs") executed in connection with the foregoing.
In addition to the foregoing, we have examined (a) the original or
certified, conformed or photostatic copies of the Borrower's (i) Certificate of
Incorporation, as amended to date; (ii) qualifications to do business and
certificates of good standing in all states in which the Borrower is qualified
to do business; (iii) By-Laws, as amended to date; (iv) records of corporate
proceedings relating to the Documents; and (v) such other documents, records and
legal matters as we have deemed necessary or relevant for purposes of issuing
the opinions hereinafter expressed.
CHICAGO KANSAS CITY LONDON LOS ANGELES NEW YORK
SAN FRANCISCO ST. LOUIS WASHINGTON, D.C.
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx
NTFC Capital Corporation
December 30, 1998
Page 2
In all such examinations, we have assumed the genuineness of all signatures
(other than those of the Borrower), the accuracy and completeness of all
documents and records we have reviewed, the authenticity of documents submitted
to us as originals and the conformity to the originals of all documents
submitted to us as certified, conformed or photostatic copies.
The lawyers in this firm representing the Borrower in connection with this
transaction are licensed only to practice law in Illinois. We note that the
Documents are governed by the laws of the state of Tennessee. With your
permission, we have assumed for purposes of our opinions with regard to
enforceability contained herein, that Tennessee law is identical to Illinois
law. We have examined such questions of law under the laws of the State of
Illinois, the corporate laws of the State of Delaware and the federal laws
and regulations of the United States of America as we have considered necessary
or appropriate in order to render the opinions set forth below. In addition,
we express no opinion herein concerning any statutes, ordinances, administrative
decisions, rules or regulations of any county, town, county municipality or
special political subdivision (whether created or enabled through legislative
action at the federal, state or regional level).
We have further assumed that:
(i) All natural persons involved in the transaction contemplated by
the Loan Agreement (the "Transaction") have sufficient legal
capacity to enter into and perform their respective obligations
under the Documents or to carry out their roles in the
Transaction:
(ii) The Lender and each Subsidiary is duly organized, existing and
in good standing under the laws of its jurisdiction of
organization and has power (corporate and otherwise) to enter
into the Documents;
(iii) All authorizations and actions and all consents or approvals by
any person or party necessary for each of the Lender and the
Subsidiaries to enter into, execute or deliver the Documents
have been taken or obtained;
(iv) The Documents have been duly executed and delivered by the
Lender and each of the Subsidiaries and are the valid, binding
and enforceable obligations of the Lender; and
(V) The Borrower and each of the Subsidiaries holds the requisite
title and rights to any of their respective property involved
in the Transaction
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx
NTFC Capital Corporation
December 30, 1998
Page 3
In rendering this opinion as to questions of fact material to this opinion
we have relied to the extent we have deemed such reliance appropriate, without
investigation, on certificates and other communications from public officials
and from officers of the Borrower and the Subsidiaries and on representations of
the Borrower and the Subsidiaries set forth in the Documents.
Wherever we indicate that our opinion with respect to the existence or
absence of facts is based on our knowledge, our opinion is based solely on the
current actual knowledge of the attorneys in this firm who are representing
the Borrower in connection with the Transaction, and we have conducted no
special investigation of factual matters in connection with this opinion.
The opinions set forth in paragraphs 4, 5, and 6 below are subject to the
following additional assumptions and qualifications:
(a) the effect of bankruptcy, insolvency, reorganization, arrangement,
moratorium, fraudulent conveyance or other similar laws and any judicial
decisions, heretofore or hereafter enacted or decided, relating to or affecting
the rights of creditors generally, now or hereafter enacted;
(b) limitations imposed by general principals of equity upon the
availability or enforceability of any of the rights, remedies, waivers,
convenants or other provisions of the Documents, and upon the availability of
specific performance and other equitable remedies generally (regardless of
whether sought in proceedings at law or in equity);
(c) we have assumed that the Lender has given "value" to the Borrower as
defined in Section 1-201(44) of the Uniform Commercial Code as effect in the
State of Illinois;
(d) we call to your attention that the security interest of the Lender
in proceeds is limited to the extent set forth in Section 9-306 of the Illinois
Uniform Commercial Code and to a property of a type subject to the Illinois
Uniform Commercial Code;
(e) we express no opinion regarding the security interest of the Lender
in any item of the Collateral (i) not subject to Article 9 of the Illinois
Uniform Commercial Code including items of a type listed in Section 9-104 of
the Illinois Uniform Commercial Code, (ii) any interest in or claim in or under
any insurance policy, or (iii) proceeds of the foregoing items;
(f) we express no opinion with respect to the priority of any security
interest granted to the Lender by the Borrower or any Subsidiary;
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx
NTFC Capital Corporation
December 30, 1998
Page 4
(g) we call to your attention that the perfection of the security interest
of the Lender will be terminated as to any of the Collateral acquired by the
Borrower or a Subsidiary more than four months after such party changes its
name, identity or corporate structure so as to make the UCCs seriously
misleading unless new appropriate financing statements indicating the new name,
identity or corporate structure of the Borrower are properly filed before the
expiration of such four months. The Illinois Uniform Commercial Code requires
the filing of continuation statements within the period of six months prior to
the expiration of five years from the date of the filing of the original UCCs
or the filing of any continuation statement in order to maintain the
effectiveness of the original UCCs;
(h) we express no opinion with respect to chattel paper in a case where a
purchaser who gives new value acquires possession thereof;
(i) certain remedial provisions of the Documents may be unenforceable in
whole or in part, but the inclusion of such provisions does not affect the
validity of the Documents and the Documents contain adequate provisions for
enforcing payment of the obligations of the Borrower and the Subsidiaries under
the Documents;
(j) we express no opinion regarding (i) any interest in or claim in or
under any insurance policy, (ii) any interest in goods which are covered by a
certificate of title, (iii) any interest which constitutes real estate or
fixtures or (iv) proceeds of the foregoing; and
(k) we express no opinion regarding the security interests in any goods
which are an accession to, or commingled or processed with other goods to the
extent that the security interests are limited by Section 9-314 or 9-315 of the
Uniform Commercial Code in effect in Illinois.
Based on the foregoing and subject to the limitations, qualifications,
exceptions and assumptions set forth herein, it is our opinion that:
1. The Borrower is a corporation duly organized, validly existing and
in good standing under the laws of its state of incorporation, has full
power and authority to own and lease its properties and to carry on its
business as presently conducted and as presently proposed to be conducted.
2. The Borrower has the full right, power and authority to execute and
deliver the Documents and to perform its obligations thereunder. The
execution, delivery and performance of the Documents by the borrower will
not conflict with, or result in a breach of, the Borrower's Certificate of
Incorporation or By-Laws. The execution, delivery and performance of the
Documents by the Borrower will not result in a
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx
NTFC Capital Corporation
December 30, 1998
Page 5
breach or other violation of any of the terms, conditions or provisions of
any law or any of the terms, conditions or provisions of any material
agreement, instrument or document to which the Borrower is a party or by
which the Borrower or its properties is bound and of which we are aware.
3. The execution and delivery of each Document and the performance of
the transactions contemplated thereby have been duly authorized and
approved by all requisite action on the part of the Borrower.
4. Each of the Documents to which the Borrower is a party has been
duly executed and delivered by a duly authorized officer of the Borrower.
Each of the Documents constitutes the legal, valid and binding obligation
of the Borrower and each Subsidiary a party thereto enforceable in
accordance with its terms.
5. The provisions of the Loan Agreement are sufficient to create in
favor of the Lender a security interest in all right, title and interest of
the Borrower and the Subsidiaries in those items and types of collateral
described in the Loan Agreement in which a security interest may be created
under Article 9 of the Illinois Uniform Commercial Code.
6. By the filing of the UCCs in the jurisdictions indicated thereon,
the security interest granted to the Lender under the terms of the Loan
Agreement shall be perfected in those items and types of Collateral located
(or deemed located) in Illinois and described in the Loan Agreement in
which a security interest may be perfected by the filing of a financing
statement under the Uniform Commercial Code as in effect in the State of
Illinois ("Illinois UCC") and, assuming the Uniform Commercial Code
applicable in other jurisdictions where the UCCs are to be filed is
identical to the Illinois UCC, the security interest purported to be
granted to Lender under the Loan Agreement shall be perfected in those
items and types of Collateral described in the Loan Agreement in which a
security interest may be perfected by the filing of a financing statement.
7. To the best of our knowledge, except as set forth in Schedule 4.12
of the Loan Agreement, no judgments are outstanding against the Borrower,
nor, except as otherwise disclosed in the Loan Agreement, is there now
pending or threatened, any litigation, contested claim or governmental
proceeding by or against the Borrower or affecting the Borrower or any of
their respective properties which if decided adversely to Borrower would
have a material adverse effect on the Borrower's ability to perform its
obligations under the Documents. To the best of our knowledge, the Borrower
is not in default with respect to any order, writ, injunction of decree of
any
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx
NTFC Capital Corporation
December 30, 1998
Page 6
court, governmental or regulatory authority or in default under any law,
order, regulation or demand of any governmental agency or instrumentality,
a default under which would have a material adverse effect on the Borrower
or its financial condition or properties.
This opinion is given as of the date hereof and we assume no obligation to
advise you of changes that may hereafter be brought to our attention. This
opinion is being provided to you in connection with the Loan Agreement and may
not be relied upon by you for any other purpose. Except as may be required by
law or by order of any court or governmental body, this opinion may not be
relied upon, by, or furnished, quoted, copied, distributed, delivered or
disclosed to, anyone other than the Lender, any participants in the Loan
Agreement, and their respective attorneys or legal representatives, nor is it to
be filed with any governmental agency or any other person without our prior
written consent.
Very truly yours,
XXXXXXXXXXXX XXXX & XXXXXXXXX
By: /s/ Xxxxxxxx X. Xxxxxxx
Xxxxxxxx X. Xxxxxxx
--------------------------------------------------------------------------------
1. DEBTOR (LAST NAME FIRST - IF AN INDIVIDUAL)
Focal Communications Corporation
--------------------------------------------------------------------------------
1A. SOCIAL SECURITY OR FEDERAL TAX NO.
00-0000000
--------------------------------------------------------------------------------
1B. MAILING ADDRESS
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 000
--------------------------------------------------------------------------------
1C. CITY, STATE
Chicago, IL
--------------------------------------------------------------------------------
1D. ZIP CODE
60601
--------------------------------------------------------------------------------
2. ADDITIONAL DEBTOR (IF ANY)(LAST NAME FIRST--IF AN INDIVIDUAL)
--------------------------------------------------------------------------------
2A. SOCIAL SECURITY OR FEDERAL TAX NO.
--------------------------------------------------------------------------------
2B. MAILING ADDRESS
--------------------------------------------------------------------------------
2C. CITY, STATE
--------------------------------------------------------------------------------
2D. ZIP CODE
--------------------------------------------------------------------------------
3. DEBTOR'S TRADE NAMES OR STYLES (IF ANY)
--------------------------------------------------------------------------------
3A. FEDERAL TAX NUMBER
--------------------------------------------------------------------------------
4. SECURED PARTY
NAME NTFC Capital Corporation
MAILING ADDRESS 000 Xxxxxxxxx Xxxxxx Xxxxx, Xxxxx 000
XXXX Xxxxxxxx XXXXX XX ZIP CODE 37067
--------------------------------------------------------------------------------
4A. SOCIAL SECURITY NO., FEDERAL TAX NO. OR BANK TRANSIT AND A.B.A. NO.
00-0000000
--------------------------------------------------------------------------------
5. ASSIGNEE OF SECURED PARTY (IF ANY)
NAME
MAILING ADDRESS
CITY STATE ZIP CODE
--------------------------------------------------------------------------------
5A. SOCIAL SECURITY NO., FEDERAL TAX NO. OR BANK TRANSIT AND A.B.A. NO.
--------------------------------------------------------------------------------
6. This FINANCING STATEMENT covers the following types or items of
property (include description of real property on which located and owner of
record when required by instruction 4).
See Exhibit A attached
--------------------------------------------------------------------------------
7. CHECK IF APPLICABLE [X]
--------------------------------------------------------------------------------
7A. PRODUCTS OF COLLATERAL ARE ALSO COVERED [ ]
--------------------------------------------------------------------------------
7B. DEBTOR(S) SIGNATURE NOT REQUIRED IN ACCORDANCE WITH INSTRUCTION 5(A) ITEM:
[ ] (1) [ ] (2) [ ] (3) [ ] (4)
--------------------------------------------------------------------------------
8. CHECK IF APPLICABLE [X]
--------------------------------------------------------------------------------
[X] DEBTOR IS A "TRANSMITTING UTILITY" IN ACCORDANCE WITH UCC (S) 9105 (i) (n)
--------------------------------------------------------------------------------
9. /s/ Xxxxxx X Xxxxxx Date: 12/30/98
SIGNATURE(S) OF DEBTOR(S)
--------------------------------------------------------------------------------
Focal Communications Corporation
TYPE OR PRINT NAMES OF DEBTOR(S)
--------------------------------------------------------------------------------
SIGNATURE(S) OF SECURED PARTY(IES)
--------------------------------------------------------------------------------
NTFC Capital Corporation
TYPE OR PRINT NAME(S) OF SECURED PARTY(IES)
--------------------------------------------------------------------------------
10. THIS SPACE FOR USE OF FILING OFFICER
(DATE, TIME, FILE NUMBER, FILING OFFICER)
CODE
1 6
2 7
3 8
4 9
5 0
--------------------------------------------------------------------------------
11. Return copy to:
NAME Xxxxxx X. Xxxx
ADDRESS Tuke Xxxx & Xxxxxxx
CITY 000 Xxxxx Xxxxxx, Xxxxx 0000
XXXXX Xxxxxxxxx, Xxxxxxxxx
ZIP CODE 37219
--------------------------------------------------------------------------------
FORM UCC-1
Approved by the Secretary of State
--------------------------------------------------------------------------------
(1) FILING OFFICER COPY
PARTIES
--------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
Focal Communications Corporation
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xx 00000
00-0000000 1
--------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
1a
--------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
1b
--------------------------------------------------------------------------------
Secured Party(ies) name(s) (last name first if individual) and address for
security interest information:
NTFC Capital Corporation
000 Xxxxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
00-0000000 2
--------------------------------------------------------------------------------
Assignee(s) of Secured Party(ies) name(s) (last name first if individual) and
address for security interest information;
2a
--------------------------------------------------------------------------------
Special Types of Parties (check if applicable):
[_] The terms "Debtor" and "Secured Party" mean "Lessee" and "Lessor",
respectively.
[_] The terms "Debtor" and "Secured Party" mean "Consignee" and "Consignor,"
respectively
[x] Debtor is a Transmitting Utility.
3
--------------------------------------------------------------------------------
SECURED PARTY SIGNATURE(S)
--------------------------------------------------------------------------------
This statement is filed with only the Secured Party's signature to perfect
security interest in collateral (check applicable box(es))-
a. [_] acquired after a change of name, identity or corporate structure of the
debtor.
b. [_] as to which the filing has lapsed.
c. already subject to a security interest in another county in Pennsylvania-
[_] when the collateral was moved to this county.
[_] when the Debtor's residence or place of business was moved to this
county.
d. already subject to a security interest in another jurisdiction-
[_] when the collateral was moved to Pennsylvania.
[_] when the Debtor's location was moved to Pennsylvania.
e. [_] which is proceeds of the collateral described in block 9, in which a
security interest was previously perfected (also describe proceeds in
block 9, if purchased with cash proceeds and not adequately described on
the original financing statement).
Secured Party Signature(s)
(required only if box(es) is checked above):
NTFC Capital Corporation
---------------------------
---------------------------
--------------------------- 4
--------------------------------------------------------------------------------
FINANCING STATEMENT
Uniform Commercial Code Form UCC-1
IMPORTANT - Please read instructions before completing
--------------------------------------------------------------------------------
Filing No. (stamped by filing officer): Date, Time, Filing office (stamped by
filing officer):
5
--------------------------------------------------------------------------------
This Financing Statement is presented for filing pursuant to the Uniform
Commercial Code, and is to be filed with the (check applicable box):
[x] Secretary of the Commonwealth
[_] Prothonotary of _________________________ county.
[_] real estate records of __________________ county.
6
--------------------------------------------------------------------------------
Number of Additional Sheets (if any): 7
--------------------------------------------------------------------------------
Optional Special Identification (Max. 10 characters): 8
--------------------------------------------------------------------------------
COLLATERAL
--------------------------------------------------------------------------------
Identify collateral by item and/or type:
See Exhibit A attached
[_] (check only if desired) Products of the collateral are also covered. 9
--------------------------------------------------------------------------------
Identify related real estate, if applicable: The collateral is, or includes
(check appropriate box(es))-
a. [_] crops growing or to be grown on -
b. [_] goods which are or are to become fixtures on -
c. [_] minerals or the like (including oil and gas) as extracted on -
d. [_] accounts resulting from the sale of minerals or the like (including oil
and gas) at the wellhead or minehead on -
the following real estate:
Street Address:
Described at: Book___of (check one) [_] Deeds [_] Mortages, at Page(s)_____
for _________________ County. Uniform Parcel Identifer ____________________
[_] Described on Additional Sheet.
Name of record owner (required only if no Debtor has an interest of record):
10
--------------------------------------------------------------------------------
DEBTOR SIGNATURE(S)
--------------------------------------------------------------------------------
Debtor Signature(s):
1 Focal Communications Corporation
--------------------------------------------------------------------------------
1a /s/ Xxxxxx X. Xxxxxx
--------------------------------------------------------------------------------
1b 11
--------------------------------------------------------------------------------
RETURN RECEIPT TO:
Xxxxxx X. Xxxx
Tuke Xxxx & Xxxxxxx
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
12
--------------------------------------------------------------------------------
UNIFORM COMMERCIAL CODE -- FINANCING STATEMENT -- FORM XXX-0
XXXXXXXX XX XXXXXXXX
INSTRUCTIONS
1. Remove Secured Party and Debtor copies and send other 3 copies to the filing
officer. Enclose filing fee.
2. If the space provided for any item(s) on the form is inadequate the item(s)
should be continued on additional sheets, preferably 5" x 8" or 8" x 10". Only
one copy of such additional sheets need be presented to the filing officer with
a set of three copies of the financing statement. Long schedules of collateral,
indentures, etc., may be on any size paper that is convenient for the secured
party.
3. If collateral is crops or goods which are or are to become fixtures, describe
generally the real estate and give name of record owner.
4. When a copy of the security agreement is used as a financing statement, it is
requested that it be accompanied by a completed but unsigned set of these forms,
without extra fee.
5. At the time of original filing, filing officer should return third copy as an
acknowledgement. At a later time, secured party may date and sign Termination
Legend and use third copy as a Termination Statement.
cut here
--------------------------------------------------------------------------------
This FINANCING STATEMENT is filed presented to a filing officer for filing
pursuant to the Uniform Commercial Code
--------------------------------------------------------------------------------
1 Debtor(s) (Last Name First) and address(es)
Focal Communications Corporation
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
00-0000000
--------------------------------------------------------------------------------
2 Secured Party(ies) and address(es)
NTFC Capital Corporation
000 Xxxxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, Xx 00000
00-0000000
--------------------------------------------------------------------------------
3 Maturity date (if any):
For Filing Officer (Date, Time, Number, and Filing Office)
--------------------------------------------------------------------------------
4 This financing statement covers the following types (or items) or property:
See Exhibit A attached
--------------------------------------------------------------------------------
5 Assignee(s) of Secured Party and Address(es)
--------------------------------------------------------------------------------
Check [x] if covered:
[x] Proceeds of Collateral are also covered
[_] Products of Collateral are also covered.
No. of additional sheets presented:
--------------------------------------------------------------------------------
Filed with : Recorder of Deeds of the District of Columbia
................................................................................
--------------------------------------------------------------------------------
Focal Communications Corporation NTFC Capital Corporation
................................ .........................................
/s/Xxxxxx X. Xxxxxx
By:............................. By:......................................
Signature(s) of Debtor(s) Signature(s) of Secured Party(ies)
FILING OFFICER COPY - ALPHABETICAL
STANDARD FORM --- UNIFORM COMMERCIAL CODE --- FORM UCC-1
--------------------------------------------------------------------------------
cut here
This UCC-1 FINANCING STATEMENT is presented for filing pursuant to the
WASHINGTON UNIFORM COMMERCIAL CODE, chapter 62A.9 RCW, to perfect a security
interest in the below named collateral.
PLEASE TYPE FORM Filing fee: $12.00.
--------------------------------------------------------------------------------
1. DEBTOR(S) 00-0000000
[_] PERSONAL (last, first, middle name and address)
[X] BUSINESS (legal business name and address)
FOCAL COMMUNICATIONS CORPORATION
000 XXXXX XXXXXXX XXXXXX, XXXXX 000
XXXXXXX, XX 00000
TRADE NAME, DBA, AKA:
--------------------------------------------------------------------------------
2. FOR OFFICE USE ONLY - DO NOT WRITE IN THIS BOX
--------------------------------------------------------------------------------
3. SECURED PARTY(IES) (name and address) 00-0000000
NTFC CAPITAL CORPORATION
000 XXXXXXXXX XXXXXX XXXXX, XXXXX 000
XXXXXXXX, XX 00000
--------------------------------------------------------------------------------
4. ASSIGNEE(S) of SECURED PARTY(IES) if applicable
(name and address)
--------------------------------------------------------------------------------
5. SECURED PARTY CONTACT PERSON: XXXXXX X. XXXX Phone: (000) 000-0000
--------------------------------------------------------------------------------
6. CHECK ONLY IF APPLICABLE: (For definitions of TRANSMITTING UTILITY AND
PRODUCTS OF COLLATERAL, see instructions.)
[X] Debtor is a Transmitting Utility
[_] Products of collateral are also covered
--------------------------------------------------------------------------------
7. THIS FINANCING STATEMENT covers the following collateral: (Attach
additional 8-1/2" x 11" sheet(s) if needed.)
SEE EXHIBIT A ATTACHED
--------------------------------------------------------------------------------
8. RETURN ACKNOWLEDGMENT COPY TO: (name and address)
XXXXXX X. XXXX
TUKE XXXX & XXXXXXX
000 XXXXX XXXXXX, XXXXX 0000
XXXXXXXXX, XXXXXXXXX 00000
--------------------------------------------------------------------------------
9. FILE WITH:
UNIFORM COMMERCIAL CODE
DEPARTMENT OF LICENSING
X.X. XXX 0000
XXXXXXX, XX 00000-0000
(000) 000-0000
MAKE CHECKS PAYABLE TO THE
DEPARTMENT OF LICENSING
--------------------------------------------------------------------------------
10. FOR OFFICE USE ONLY IMAGES TO
BE FILMED [__]
--------------------------------------------------------------------------------
11. If collateral is described below, this statement may be signed by the
Secured Party instead of the debtor. Please check the appropriate box,
complete the adjacent lines and box 13, if collateral is:
a. [_] already subject to a security in another jurisdiction when it was
brought into this state or when the debtor's location was changed to
this state. (complete adjacent lines 1 and 2)
b. [_] proceeds of the original collateral described above in which a
security interest was perfected. (complete adjacent lines 1 and 2)
c. [_] listed on a filing which has lapsed. (complete adjacent lines
1 and 2)
d. [_] acquired after a change of name, identity, or corporate structure of
the debtor(s). (complete adjacent lines 1, 2 and 3)
1.
-----------------------------------------
ORIGINAL FILING NUMBER
2.
-----------------------------------------
FILING OFFICE WHERE FILED
3.
-----------------------------------------
FORMER NAME OR DEBTOR(S)
--------------------------------------------------------------------------------
12. DEBTOR NAME(S) AND SIGNATURE(S):
FOCAL COMMUNICATIONS CORPORATION
------------------------------------------------------
TYPE NAME(S) OF DEBTOR(S) AS IT APPEARS IN BOX 1
/s/ Xxxxxx X. Beatlz
------------------------------------------------------
SIGNATURE(S) OF DEBTOR(S)
------------------------------------------------------
SIGNATURE(S) OF DEBTOR(S)
--------------------------------------------------------------------------------
13. SECURED PARTY NAME(S) AND SIGNATURE(S) ARE REQUIRED IF BOX 11 HAS BEEN
COMPLETED.
NTFC CAPITAL CORPORATION
----------------------------------------------------------------
TYPE NAME(S) OF SECURED PARTY(ES) AS IT APPEARS IN BOX 3 OR 4.
----------------------------------------------------------------
SIGNATURE(S) OF SECURED PARTY(ES)
----------------------------------------------------------------
SIGNATURE(S) OF SECURED PARTY(ES)
--------------------------------------------------------------------------------
FORM APPROVED FOR USE IN THE STATE OF WASHINGTON (R/7/93)
WASHINGTON UCC-1
COPY 1 - FILING OFFICER - INDEX LASER PRINT
--------------------------------------------------------------------------------
This FINANCING STATEMENT is presented for filing (Please Type All Information)
pursuant to the Michigan Uniform Commercial Code.
--------------------------------------------------------------------------------
Debtor(s) (Last Name First, if individual) & Address(es) Soc. Security/Tax ID#
FOCAL COMMUNICATIONS CORPORATION
00-0000000
-------------------------------------------------------- ---------------------
Address
000 XXXXX XXXXXXX XXXXXX, XXXXX 000
-------------------------------------------------------- -----------------
Xxxx Xxxxx Xxx Xxxx
XXXXXXX XX 00000
-------------------------------------------------------- -----------------
Debtor(s) (Last Name First, if individual) & Address(es)
-----------------
-------------------------------------------------------- -----------------
Address
-------------------------------------------------------- -----------------
City State Zip Code
--------------------------------------------------------------------------------
FOR FILING OFFICER
(Date, Time, Number, and Filing Officer)
----------------------------------------------------
DO NOT WRITE IN THIS SPACE
----------------------------------------------------
2. If filing without debtor signature.
Item a, b, c, or d must be marked [X].
a. [ ] Collateral was already subject to the security interest in another state
when it was brought into Michigan, or when the Debtor's location changed to
Michigan;
b. [ ] Collateral is proceeds of the original collateral in which a security
interest was perfected;
c. [ ] A previous filing covering the collateral has lapsed.
(Prev. Filing # ).
d. [ ] The filing covers collateral acquired after a change of name identity,
or corporate structure of Debtor (MCLA 440.9402(2) & (7))
FROM:
--------------------------------------------------------------------------
-------------------------------------------------------------------------------
(Prev. Filing # ).
-------------------------------------------------------------------------------
3. Secured Party(ies) and Address(es) Secured Party #
-----------------
NTFC CAPITAL CORPORATION
000 XXXXXXXXXXX XXXXXX XXXXX, XXXXX 000
XXXXXXXX, XX 00000
00-0000000
-------------------------------------------------------------------------------
4. MAIL ACKNOWLEDGEMENT COPY TO:
XXXXXX X. XXXX
TUKE XXXX & XXXXXXX
000 XXXXX XXXXXX, XXXXX 0000
XXXXXXXXX, XXXXXXXXX 00000
-------------------------------------------------------------------------------
5. No. of Add's Sheets 6. State Account No.
-------------------------------------------------------------------------------
7. (Xxxx [X] if applicable):
[ ] Products of collateral are also covered.
[X} The debtor is a transmitting utility as defined in MCLA 440.9105 (1)(o).
-------------------------------------------------------------------------------
8. Assignee(es) (if any) and Address(es) Secured Party #
--------------------
-------------------------------------------------------------------------------
9. This financing statement covers the following types (or items) or property:
SEE EXHIBIT A ATTACHED
-------------------------------------------------------------------------------
FOCAL COMMUNICATIONS CORPORATION NTFC CAPITAL CORPORATION
X /s/ Xxxxxx X. Xxxxxx X
-------------------------------------- --------------------------------------
Signature(s) of Debtor(s) Signature(s) of Secured Party(ies) or
Assignee(s) of Record
X X
-------------------------------------- --------------------------------------
Signature(s) of Debtor(s) Signature(s) of Secured Party(ies) or
Assignee(s) of Record
IF YOU WISH THE ACKNOWLEDGEMENT COPY TO BE MAILED TO AN ADDRESS OTHER THAN THE
SECURED PARTY SHOWN IN ITEM 3, PROVIDE COMPLETE MAILING INFORMATION IN ITEM 4.
SECRETARY OF STATE COPY
STATE OF ILLINOIS
UNIFORM COMMERCIAL CODE - FINANCING STATEMENT - FORM UCC-1
INSTRUCTIONS
1. Remove Secured Party and Debtor copies and send other 3 copies with
interleaved carbon paper to the filing officer. Enclose filing fee
2. If the space provided for any item(s) on the form is inadequate the item(s)
should be continued on additional sheets, preferably 5" x 8" or 8" x 10".
Only one copy of such additional sheets need be presented to the filing
officer with a set of three copies of the financing statements. Long
schedules of collateral, indentures, etc., may be on any size paper that is
convenient for the secured party.
cut here
--------------------------------------------------------------------------------
This STATEMENT is presented to a filing officer for filing pursuant to the
Uniform Commercial Code.
--------------------------------------------------------------------------------
Debtor(s) (Last Name First) and address(es) Secured Party(ies) and address(es)
Focal Communications NTFC Capital Corporation
Corporation 000 Xxxxxxxxx Xxxxxx Xxxxx,
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 000
Xxxxx 000 Xxxxxxxx, XX 00000
Xxxxxxx, XX 00000
00-0000000 00-0000000
--------------------------------------------------------------------------------
For Filing Officer
(Date, Time, Number, and Filing Office)
--------------------------------------------------------------------------------
1. This financing statement covers the following types (or items) of property:
See Exhibit A attached
2 [ ] Products of Collateral are also covered. [X] Proceeds of Collateral are
also covered.
--------------------------------------------------------------------------------
ASSIGNEE OF SECURED PARTY
-----------------------------------
Addition sheets presented.
------
X Filed with Office of Secretary of State of Illinois
------
X Debtor is a transmitting utility as defined in UCC (S)9-105.
------
FILING OFFICER-ALPHABETICAL
This form of financing statement is approved by the Secretary of State.
STANDARD FORM - UNIFORM COMMERCIAL CODE - FORM UCC-1 - REV. 1-75
--------------------------------------------------------------------------------
Focal Communications Corporation
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------------------
Signature of (Debtor)
(Secured Party)*
* Signature of Debtor Required in Most Cases:
Signature of Secured Party in Cases Covered by UCC (S)9-402 (2)
--------------------------------------------------------------------------------
cut here
PARTIES
--------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
Focal Communications Corporation of Pennsylvania
000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
00-0000000 1
--------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
1a
--------------------------------------------------------------------------------
Debtor name (last name first if individual) and mailing address:
1b
--------------------------------------------------------------------------------
Secured Party(ies) name(s) (last name first if individual) and address for
security interest information:
NTFC Capital Corporation
000 Xxxxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
00-0000000 2
--------------------------------------------------------------------------------
Assignee(s) of Secured Party(ies) name(s) (last name first if individual) and
address for security interest information:
2a
--------------------------------------------------------------------------------
Special Types of Parties (check if applicable):
[_] The terms "Debtor" and "Secured Party" mean "Lessee" and "Lessor",
respectively.
[_] The terms "Debtor" and "Secured Party" mean "Consignee" and "Consignor,"
respectively.
[X] Debtor is a Transmitting Utility.
3
--------------------------------------------------------------------------------
SECURED PARTY SIGNATURE(S)
--------------------------------------------------------------------------------
This statement is filed with only the Secured Party's signature to perfect a
security interest in collateral (check applicable box(es))-
a. [_] acquired after a change of name, identity or corporate structure of the
debtor.
b. [_] as to which the filing has lapsed.
c. already subject to a security interest in another county in Pennsylvania-
[_] when the collateral was moved to this county.
[_] when the Debtor's residence or place of business was moved to this
county.
d. already subject to a security interest in another jurisdiction-
[_] when the collateral was moved to Pennsylvania.
[_] when the Debtor's location was moved to Pennsylvania.
e. [_] which is proceeds of the collateral described in block 9, in which a
security interest was previously perfected (also describe proceeds in
block 9, if purchased with cash proceeds and not adequately described on
the original financing statement).
Secured Party Signature(s)
(required only if box(es) is checked above):
NTFC Capital Corporation
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
4
--------------------------------------------------------------------------------
STANDARD FORM - FORM UCC-1 (7-89)
Approved by Secretary of Commonwealth of Pennsylvania
FINANCING STATEMENT
Uniform Commercial Code Form UCC-1
IMPORTANT - Please read instructions before completing
--------------------------------------------------------------------------------
Filing No. (stamped by filing officer): Date, Time, Filing Office (stamped
by filing officer):
5
--------------------------------------------------------------------------------
This Financing Statement is presented for filing pursuant to the Uniform
Commercial Code, and is to be filed with the (check applicable box):
[X] Secretary of the Commonwealth
[_] Prothonotary of County.
------------------------------------------------------
[_] real estate records of County.
-----------------------------------------------
6
--------------------------------------------------------------------------------
Number of Additional Sheets (if any): 7
--------------------------------------------------------------------------------
Optional Special Identification (Max. 10 characters): 8
--------------------------------------------------------------------------------
COLLATERAL
--------------------------------------------------------------------------------
Identify collateral by item and/or type:
See Exhibit A attached
[_] (check only if desired) Products of the collateral are also covered. 9
--------------------------------------------------------------------------------
Identify related real estate, if applicable: The collateral is, or includes
(check appropriate box(es))-
a. [_] crops growing or to be grown on -
b. [_] goods which are or are to become fixtures on -
c. [_] minerals or the like (including oil and gas) as extracted on -
d. [_] accounts resulting from the sale of minerals or the like (including oil
and gas) at the wellhead or minehead on -
the following real estate:
Street Address:
Described at: Book of (check one) [_] Deeds [_] Mortgages, at Page(s)
------ ------
for County. Uniform Parcel Identifier
------------------------ ---------------------
[_] Described on Additional Sheet.
Name of record owner (required only if no Debtor has an interest of record):
10
--------------------------------------------------------------------------------
DEBTOR SIGNATURE(S)
--------------------------------------------------------------------------------
Debtor Signature(s):
1 Focal Communications Corporation of Pennsylvania
--------------------------------------------------------------------------------
1a Xxxxxx X. Xxxxxx
--------------------------------------------------------------------------------
1b 11
--------------------------------------------------------------------------------
RETURN RECEIPT TO:
Xxxxxx X. Xxxx
Tuke Xxxx & Xxxxxxx
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
12
--------------------------------------------------------------------------------
FILING OFFICE ORIGINAL
NOTE - This page will not be returned by the Department of State.
--------------------------------------------------------------------------------
1. DEBTOR (LAST NAME FIRST - IF AN INDIVIDUAL)
Focal Communications Corporation of California
--------------------------------------------------------------------------------
1A. SOCIAL SECURITY OR FEDERAL TAX NO.
00-0000000
--------------------------------------------------------------------------------
1B. MAILING XXXXXXX
000 Xxxxxxxx, Xxxxx 0000X
--------------------------------------------------------------------------------
1C. CITY, STATE
San Francisco, CA
--------------------------------------------------------------------------------
1D. ZIP CODE
94103
--------------------------------------------------------------------------------
2. ADDITIONAL DEBTOR (IF ANY)(LAST NAME FIRST--IF AN INDIVIDUAL)
--------------------------------------------------------------------------------
2A. SOCIAL SECURITY OR FEDERAL TAX NO.
--------------------------------------------------------------------------------
2B. MAILING ADDRESS
--------------------------------------------------------------------------------
2C. CITY, STATE
--------------------------------------------------------------------------------
2D. ZIP CODE
--------------------------------------------------------------------------------
3. DEBTOR'S TRADE NAMES OR STYLES (IF ANY)
--------------------------------------------------------------------------------
3A. FEDERAL TAX NUMBER
--------------------------------------------------------------------------------
4. SECURED PARTY
NAME NTFC Capital Corporation
MAILING ADDRESS 000 Xxxxxxxxx Xxxxxx Xxxxx, Xxxxx 000
XXXX Xxxxxxxx XXXXX XX ZIP CODE 37067
--------------------------------------------------------------------------------
4A. SOCIAL SECURITY NO., FEDERAL TAX NO. OR BANK TRANSIT AND A.B.A. NO.
00-0000000
--------------------------------------------------------------------------------
5. ASSIGNEE OF SECURED PARTY (IF ANY)
NAME
MAILING ADDRESS
CITY STATE ZIP CODE
--------------------------------------------------------------------------------
5A. SOCIAL SECURITY NO., FEDERAL TAX NO. OR BANK TRANSIT AND A.B.A. NO.
--------------------------------------------------------------------------------
6. This FINANCING STATEMENT covers the following types or items of
property (include description of real property on which located and owner of
record when required by instruction 4).
See Exhibit A attached
--------------------------------------------------------------------------------
7. CHECK IF APPLICABLE [X]
--------------------------------------------------------------------------------
7A. PRODUCTS OF COLLATERAL ARE ALSO COVERED [ ]
--------------------------------------------------------------------------------
7B. DEBTOR(S) SIGNATURE NOT REQUIRED IN ACCORDANCE WITH INSTRUCTION 5(A) ITEM:
[ ] (1) [ ] (2) [ ] (3) [ ] (4)
--------------------------------------------------------------------------------
8. CHECK IF APPLICABLE [X]
--------------------------------------------------------------------------------
[X] DEBTOR IS A "TRANSMITTING UTILITY" IN ACCORDANCE WITH UCC (S) 9105 (i) (n)
--------------------------------------------------------------------------------
9. /s/ Xxxxxx X Xxxxxx Date: 12/30/98
SIGNATURE(S) OF DEBTOR(S)
--------------------------------------------------------------------------------
Focal Communications Corporation of California
TYPE OR PRINT NAMES OF DEBTOR(S)
--------------------------------------------------------------------------------
SIGNATURE(S) OF SECURED PARTY(IES)
--------------------------------------------------------------------------------
NTFC Capital Corporation
TYPE OR PRINT NAME(S) OF SECURED PARTY(IES)
--------------------------------------------------------------------------------
10. THIS SPACE FOR USE OF FILING OFFICER
(DATE, TIME, FILE NUMBER, FILING OFFICER)
CODE
1 6
2 7
3 8
4 9
5 0
--------------------------------------------------------------------------------
11. Return copy to:
NAME Xxxxxx X. Xxxx
ADDRESS Tuke Xxxx & Xxxxxxx
CITY 000 Xxxxx Xxxxxx, Xxxxx 0000
XXXXX Xxxxxxxxx, Xxxxxxxxx
ZIP CODE 37219
--------------------------------------------------------------------------------
FORM UCC-1
Approved by the Secretary of State
--------------------------------------------------------------------------------
(1) FILING OFFICER COPY
--------------------------------------------------------------------------------
1. DEBTOR (LAST NAME FIRST - IF AN INDIVIDUAL)
Focal Communications Corporation of California
--------------------------------------------------------------------------------
1A. SOCIAL SECURITY OR FEDERAL TAX NO.
00-0000000
--------------------------------------------------------------------------------
1B. MAILING ADDRESS
0000 Xxxx 0xx Xxxxxx #X0-000
--------------------------------------------------------------------------------
1C. CITY, STATE
Los Angeles, CA
--------------------------------------------------------------------------------
1D. ZIP CODE
90017
--------------------------------------------------------------------------------
2. ADDITIONAL DEBTOR (IF ANY)(LAST NAME FIRST--IF AN INDIVIDUAL)
--------------------------------------------------------------------------------
2A. SOCIAL SECURITY OR FEDERAL TAX NO.
--------------------------------------------------------------------------------
2B. MAILING ADDRESS
--------------------------------------------------------------------------------
2C. CITY, STATE
--------------------------------------------------------------------------------
2D. ZIP CODE
--------------------------------------------------------------------------------
3. DEBTOR'S TRADE NAMES OR STYLES (IF ANY)
--------------------------------------------------------------------------------
3A. FEDERAL TAX NUMBER
--------------------------------------------------------------------------------
4. SECURED PARTY
NAME NTFC Capital Corporation
MAILING ADDRESS 000 Xxxxxxxxx Xxxxxx Xxxxx, Xxxxx 000
XXXX Xxxxxxxx XXXXX XX ZIP CODE 37067
--------------------------------------------------------------------------------
4A. SOCIAL SECURITY NO., FEDERAL TAX NO. OR BANK TRANSIT AND A.B.A. NO.
00-0000000
--------------------------------------------------------------------------------
5. ASSIGNEE OF SECURED PARTY (IF ANY)
NAME
MAILING ADDRESS
CITY STATE ZIP CODE
--------------------------------------------------------------------------------
5A. SOCIAL SECURITY NO., FEDERAL TAX NO. OR BANK TRANSIT AND A.B.A. NO.
--------------------------------------------------------------------------------
6. This FINANCING STATEMENT covers the following types or items of
property (include description of real property on which located and owner of
record when required by instruction 4).
See Exhibit A attached
--------------------------------------------------------------------------------
7. CHECK IF APPLICABLE [X]
--------------------------------------------------------------------------------
7A. PRODUCTS OF COLLATERAL ARE ALSO COVERED [ ]
--------------------------------------------------------------------------------
7B. DEBTOR(S) SIGNATURE NOT REQUIRED IN ACCORDANCE WITH INSTRUCTION 5(A) ITEM:
[ ] (1) [ ] (2) [ ] (3) [ ] (4)
--------------------------------------------------------------------------------
8. CHECK IF APPLICABLE [X]
--------------------------------------------------------------------------------
[X] DEBTOR IS A "TRANSMITTING UTILITY" IN ACCORDANCE WITH UCC (S) 9105 (i) (n)
--------------------------------------------------------------------------------
9. /s/ Xxxxxx X Xxxxxx Date: 12/30/98
SIGNATURE(S) OF DEBTOR(S)
--------------------------------------------------------------------------------
Focal Communications Corporation of California
TYPE OR PRINT NAMES OF DEBTOR(S)
--------------------------------------------------------------------------------
SIGNATURE(S) OF SECURED PARTY(IES)
--------------------------------------------------------------------------------
NTFC Capital Corporation
TYPE OR PRINT NAME(S) OF SECURED PARTY(IES)
--------------------------------------------------------------------------------
10. THIS SPACE FOR USE OF FILING OFFICER
(DATE, TIME, FILE NUMBER, FILING OFFICER)
CODE
1 6
2 7
3 8
4 9
5 0
--------------------------------------------------------------------------------
11. Return copy to:
NAME Xxxxxx X. Xxxx
ADDRESS Tuke Xxxx & Xxxxxxx
CITY 000 Xxxxx Xxxxxx, Xxxxx 0000
XXXXX Xxxxxxxxx, Xxxxxxxxx
ZIP CODE 37219
--------------------------------------------------------------------------------
FORM UCC-1
Approved by the Secretary of State
--------------------------------------------------------------------------------
(1) FILING OFFICER COPY
UNIFORM COMMERCIAL CODE -- FINANCING STATEMENT -- FORM XXX-0
XXXXXXXX XX XXXXXXXX
INSTRUCTIONS
1. Remove Secured Party and Debtor copies and send other 3 copies to the filing
officer. Enclose filing fee.
2. If the space provided for any item(s) on the form is inadequate the item(s)
should be continued on additional sheets, preferably 5" x 8" or 8" x 10". Only
one copy of such additional sheets need be presented to the filing officer with
a set of three copies of the financing statement. Long schedules of collateral,
indentures, etc., may be on any size paper that is convenient for the secured
party.
3. If collateral is crops or goods which are or are to become fixtures, describe
generally the real estate and give name of record owner.
4. When a copy of the security agreement is used as a financing statement, it is
requested that it be accompanied by a completed but unsigned set of these forms,
without extra fee.
5. At the time of original filing, filing officer should return third copy as an
acknowledgement. At a later time, secured party may date and sign Termination
Legend and use third copy as a Termination Statement.
cut here
--------------------------------------------------------------------------------
This FINANCING STATEMENT is filed presented to a filing officer for filing
pursuant to the Uniform Commercial Code
--------------------------------------------------------------------------------
1 Debtor(s) (Last Name First) and address(es)
Focal Communications Corporation of the Mid-Atlantic
0000 Xxxxxxx Xxxxxx, Xxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
00-0000000
--------------------------------------------------------------------------------
2 Secured Party(ies) and address(es)
NTFC Capital Corporation
000 Xxxxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, Xx 00000
00-0000000
--------------------------------------------------------------------------------
3 Maturity date (if any):
For Filing Officer (Date, Time, Number, and Filing Office)
--------------------------------------------------------------------------------
4 This financing statement covers the following types (or items) or property:
See Exhibit A attached
--------------------------------------------------------------------------------
5 Assignee(s) of Secured Party and Address(es)
--------------------------------------------------------------------------------
Check [x] if covered:
[x] Proceeds of Collateral are also covered
[_] Products of Collateral are also covered.
No. of additional sheets presented:
--------------------------------------------------------------------------------
Filed with : Recorder of Deeds of the District of Columbia
................................................................................
--------------------------------------------------------------------------------
NTFC Capital Corporation
................................ .........................................
/s/ Xxxxxx X. Xxxxxx
By:............................. By:......................................
Signature(s) of Debtor(s) Signature(s) of Secured Party(ies)
FILING OFFICER COPY - ALPHABETICAL
STANDARD FORM --- UNIFORM COMMERCIAL CODE --- FORM UCC-1
--------------------------------------------------------------------------------
cut here
--------------------------------------------------------------------------------
This FINANCING STATEMENT is presented for filing
pursuant to the Michigan Uniform Commercial Code. (Please Type All Information)
--------------------------------------------------------------------------------
Debitor(s) (Last Name First, if individual) & Address(es) Soc. Security #
/ Tax ID #
FOCAL COMMUNICATIONS CORPORATION OF MICHIGAN
00-0000000
-----------------
------------------------------------------------------------ -----------------
Address
23800 West Ten Mile Road, The Vanguard Center
------------------------------------------------------------ -----------------
City State Zip Code
Xxxxxxxxxx XX 00000
------------------------------------------------------------ -----------------
Debtor(s) (Last Name First, if individual) & Address(es)
-----------------
------------------------------------------------------------ -----------------
Address
------------------------------------------------------------ -----------------
City State Zip Code
--------------------------------------------------------------------------------
FOR FILING OFFICER
(Date, Time, Number, and Filing Officer)
----------------------------------------------------
DO NOT WRITE IN THIS SPACE
----------------------------------------------------
2. If filing without debtor signature,
item a, b, c, or d must be marked [X].
a. [ ] Collateral was already subject to the security interest in another state
when it was brought into Michigan, or when the Debtor's location changed to
Michigan;
b. [ ] Collateral is proceeds of the original collateral in which a security
interest was perfected;
c. [ ] A previous filing covering the collateral has lapsed.
(Prev. Filing # );
d. [ ] The filing covers collateral acquired after a change of name identity,
or corporate structure of Debtor (MCLA 440.9402(2) & (7))
FROM:
--------------------------------------------------------------------------
-------------------------------------------------------------------------------
(Prev. Filing # ).
-------------------------------------------------------------------------------
3. Secured Party(ies) and Address(es) Secured Party #
-----------------
NTFC CAPITAL CORPORATION
000 XXXXXXXXX XXXXXX XXXXX, XXXXX 000
XXXXXXXX, XX 00000
00-0000000
-------------------------------------------------------------------------------
4. MAIL ACKNOWLEDGEMENT COPY TO:
XXXXXX X. XXXX
TUKE XXXX & XXXXXXX
000 XXXXX XXXXXX, XXXXX 0000
XXXXXXXXX, XXXXXXXXX 00000
-------------------------------------------------------------------------------
5. No. of Add'l Sheets 6. State Account No.
-------------------------------------------------------------------------------
7. (Xxxx [X] if applicable):
[ ] Products of collateral are also covered.
[X} The debtor is a transmitting utility as defined in MCLA 440.9105 (1)(o).
-------------------------------------------------------------------------------
8. Assignee(es) (if any) and Address(es) Secured Party #
--------------------
-------------------------------------------------------------------------------
9. This financing statement covers the following types (or items) of property:
SEE EXHIBIT A ATTACHED
-------------------------------------------------------------------------------
FOCAL COMMUNICATIONS CORPORATION NTFC CAPITAL CORPORATION
OF MICHIGAN
X /s/ Xxxxxx X. Xxxxxx X
-------------------------------------- ----------------------------------
Signature(s) of Debtor(s) Signature(s) of Secured Party(ies)
or Assignee(s) of Record
X X
-------------------------------------- ----------------------------------
Signature(s) of Debtor(s) Signature(s) of Secured Party(ies)
or Assignee(s) of Record
IF YOU WISH THE ACKNOWLEDGEMENT COPY TO BE MAILED TO AN ADDRESS OTHER THAN THE
SECURED PARTY SHOWN IN ITEM 3, PROVIDE COMPLETE MAILING INFORMATION IN ITEM 4.
SECRETARY OF STATE COPY
The UCC-1 FINANCING STATEMENT is presented for filing pursuant to the WASHINGTON
UNIFORM COMMERCIAL CODE, chapter 62A.9 RCW, to perfect a security interest in
the below named collateral. PLEASE TYPE FORM Filing fee: $12.00.
--------------------------------------------------------------------------------
1. DEBTOR(S) 00-0000000
[ ] PERSONAL (last, first, middle name and address)
[X] BUSINESS (legal business name and address)
FOCAL COMMUNICATIONS CORPORATION
OF WASHINGTON
0000 0XX XXXXXX, 0XX XXXXX
XXXXXXX, XX 00000
TRADE NAME, DBA, AKA:
--------------------------------------------------------------------------------
2. FOR OFFICE USE ONLY - DO NOT WRITE IN THIS BOX
--------------------------------------------------------------------------------
3. SECURED PARTY(IES) (name and address) 00-0000000
[ NTFC CAPITAL CORPORATION ]
000 XXXXXXXXX XXXXXX XXXXX, XXXXX 000
XXXXXXXX, XX 00000
[ ]
--------------------------------------------------------------------------------
4. ASSIGNEE(S) of SECURED PARTY(IES) if applicable
(name and address)
--------------------------------------------------------------------------------
5. SECURED PARTY CONTACT PERSON: XXXXXX X. XXXX Phone: (000) 000-0000
----------------------- ---------------
--------------------------------------------------------------------------------
6. CHECK ONLY IF APPLICABLE: (For definitions of TRANSMITTING UTILITY AND
PRODUCTS OF COLLATERAL, see instructions.)
[X] Debtor is a Transmitting Utility [ ] Products of collateral are
also covered
--------------------------------------------------------------------------------
7. THIS FINANCING STATEMENT covers the following collateral: (Attach additional
8-1/2" x 11" sheet(s) if needed.)
SEE EXHIBIT A ATTACHED
--------------------------------------------------------------------------------
8. RETURN ACKNOWLEDGEMENT COPY TO: (name and address)
[ XXXXXX X. XXXX ]
TUKE XXXX & XXXXXXX
000 XXXXX XXXXXX, XXXXX 0000
XXXXXXXXX, XXXXXXXXX 00000
[ ]
--------------------------------------------------------------------------------
9. FILE WITH:
UNIFORM COMMERCIAL CODE
DEPARTMENT OF LICENSING
X.X. XXX 0000
XXXXXXX, XX 00000-0000
(000) 000-0000
MAKE CHECKS PAYABLE TO THE
DEPARTMENT OF LICENSING
--------------------------------------------------------------------------------
10. FOR OFFICE USE ONLY IMAGES TO [ ]
BE FILMED
--------------------------------------------------------------------------------
11. If collateral is described below, this statement may be signed by the
Secured Party instead of the Debtors. Please check the appropriate box,
complete the adjacent lines and box 13, if collateral is:
a. [ ] already subject to a security interest in another jurisdiction when
it was brought into this state or when the debtor's location was
changed to this state. (complete adjacent lines 1 and 2)
b. [ ] proceeds of the original collateral described above in which a
security interest was perfected. (complete adjacent lines 1 and 2)
c. [ ] listed on a filing which has lapsed. (complete adjacent lines 1 and
2)
d. [ ] acquired after a change of name, identity, or corporate structure of
the debtor(s). (Complete adjacent lines 1, 2 and 3)
1.
-----------------------------------------
ORIGINAL FILING NUMBER
2.
-----------------------------------------
FILING OFFICE WHERE FILED
3.
-----------------------------------------
FORMER NAME OR DEBTOR(S)
--------------------------------------------------------------------------------
12. DEBTOR NAME(S) AND SIGNATURE(S):
FOCAL COMMUNICATIONS CORPORATION OF WASHINGTON
------------------------------------------------------
TYPE NAME(S) OF DEBTOR(S) AS IT APPEARS IN BOX 1
/s/ Xxxxxx X. Beatlz
------------------------------------------------------
SIGNATURE(S) OF DEBTOR(S)
------------------------------------------------------
SIGNATURE(S) OF DEBTOR(S)
--------------------------------------------------------------------------------
13. SECURED PARTY NAME(S) AND SIGNATURE(S) ARE REQUIRED IF BOX 11 HAS BEEN
COMPLETED.
NTFC CAPITAL CORPORATION
----------------------------------------------------------------
TYPE NAME(S) OF SECURED PARTY(IES) AS IT APPEARS IN BOX 3 OR 4.
----------------------------------------------------------------
SIGNATURE(S) OF SECURED PARTY(IES)
----------------------------------------------------------------
SIGNATURE(S) OF SECURED PARTY(IES)
--------------------------------------------------------------------------------
FORM APPROVED FOR USE IN THE STATE OF WASHINGTON (R/7/93)
WASHINGTON UCC-1
COPY 1 - FILING OFFICER - INDEX LASER PRINT
EXHIBIT G
---------
UNCONDITIONAL GUARANTY
THIS UNCONDITIONAL GUARANTY ("Guaranty") is executed this ___ day of
_______________, 19__ by ______________________________________________, a
___________________ corporation ("Guarantor"), in favor of NTFC CAPITAL
CORPORATION, a Delaware corporation with its principal offices in Nashville,
Tennessee ("Lender").
BACKGROUND:
A. Guarantor desires to induce Lender to extend credit to FOCAL
COMMUNICATIONS CORPORATION, a Delaware corporation ("Borrower").
B. Lender is willing to extend certain credit to Borrower, subject to the
terms and conditions set forth in the Loan and Security Agreement executed by
and between Lender and Borrower dated as of December 30, 1998 (as amended,
modified, supplemented or replaced from time to time, the "Loan Agreement") and
related instruments, agreements and documents executed by and between Borrower
and Lender (as amended, modified, supplemented or replaced from time to time,
the "Loan Documents").
C. One of the conditions of the Loan Agreement is that Guarantor must
unconditionally guarantee the obligations of Borrower to Lender. Without this
Guaranty, Lender would not be willing to extend credit to Borrower.
D. Guarantor and Borrower are related entities, and Guarantor expects to
increase its business through the use of the System to be constructed by
Borrower with the proceeds of the loans to be made pursuant to the Loan
Agreement. Guarantor will receive significant direct and indirect benefit from
Lender's extension of credit to Borrower.
NOW, THEREFORE, in order to induce Lender to extend credit to Borrower and
for other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, Guarantor hereby agrees as follows:
ARTICLE I: DEFINITIONS
1.01 Definitions in Loan Agreement. Capitalized terms used in this Guaranty
without definition shall have the same meaning as in the Loan Agreement, unless
the context requires otherwise.
1.02 Certain Definitions. In addition to other words and terms defined in
the preamble hereof or elsewhere in this Agreement, or on the Schedules hereto,
the following words and terms shall have the following meanings unless the
context otherwise clearly requires:
"Borrower": Focal Communications Corporation, a Delaware corporation,
and its successors and assigns, and includes, without limitation: (i) the
Borrower as debtor-in-possession or any trustee in any bankruptcy
proceeding, (ii) any trustee, receiver, custodian, conservator, or other
similar appointee over Borrower or over any of Borrower's Property pursuant
to any court proceeding of any kind, and (iii) any successor Person.
"Collateral": all of the properties, rights and assets securing the
Indebtedness at any time, including without limitation the "Collateral" as
defined in the Loan Agreement.
"Guarantor": As defined in the Preamble and its successors and
assigns, and shall include without limitation: (i) the Guarantor as debtor-
in-possession or any trustee in any bankruptcy proceeding, (ii) any
trustee, receiver, custodian, conservator or other similar appointee over
Guarantor or over Guarantor's Property pursuant to any court proceeding of
any kind, and (iii) any successor Person.
"Indebtedness": any and all indebtedness and obligations of any kind
and character whatsoever of Borrower to Lender under and in connnection
with the Loan Agreement and any and all extensions, renewals and
replacements of such indebtedness, whether such indebtedness is:
(i) for principal, interest, fees, costs, expenses or
otherwise;
(ii) presently existing or hereafter incurred or arising;
(iii) from time to time reduced and thereafter increased or
entirely extinguished and thereafter reincurred;
(iv) foreseen or unforeseen, direct or indirect, absolute or
contingent, primary or secondary, secured or unsecured, matured or
unmatured, of the same class or type or of different classes or types;
(v) created by or arising under contract, tort, guaranty,
overdraft, recovery of avoided payments or otherwise;
(vi) contracted for by Borrower alone or jointly and severally
with another or others;
(vii) incurred by Borrower prior to, during, or after any filing
by Borrower or against Borrower of any petition or request for
liquidation, reorganization, arrangement, adjudication as a bankrupt,
relief as a debtor, or other relief under bankruptcy, insolvency, or
similar laws now or hereafter in affect in the United States of
America or any state or territory thereof or any foreign jurisdiction,
and notwithstanding Borrower's legal status as a debtor or a debtor-
in-possession or Borrower's discharge in any such proceeding;
(viii) created or incurred with or without notice to Guarantor;
and/or
(ix) created by an original obligation of Borrower to Lender or
arises under Lender's purchase of an obligation of Borrower.
The Indebtedness includes without limitation all indebtedness and
obligations evidenced by or arising under that certain Promissory Note of
even date herewith executed by Borrower in favor of Lender, in the
principal amount of $25,000,0000.00, and any and all extensions, renewals,
amendments, modifications, replacements, substitutions and changes in form
thereof and therefor (the "Note"), the Loan Agreement, and/or the other
Loan Documents, and any fees, expenses, or costs including attorneys' fees
incurred by Lender in attempting to collect any of such indebtedness,
whether from Borrower, Guarantor, any other guarantor, any other Person
liable for the Indebtedness or any Collateral, or in protecting any of
Lender's rights with respect to such indebtedness, Borrower, Guarantor, any
other guarantor, any other Person liable for the Indebtedness or any
Collateral.
"Property": any and all tangible and intangible, real and personal
property and property rights of Guarantor.
1.03 Accounting Principles; Subsidiaries. Except as otherwise provided in
this Guaranty, all
computations and determinations as to accounting or financial matters and all
financial statements 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 Guarantor has any Subsidiaries, all accounting and
financial terms herein shall be deemed to include references to consolidated and
consolidating principles, and covenants, representations and agreements with
respect to Guarantor and its properties and activities shall be deemed to refer
to Guarantor and its consolidated Subsidiaries collectively.
1.03 UCC Terms. Except as otherwise provided or amplified (but not
limited) herein, terms used in this Guaranty that are defined in the UCC shall
have the same meanings herein.
1.04 General Construction; Captions. All definitions and other terms used
in this Guaranty 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", "herein" and "hereunder" and words of similar import when used
in this Agreement shall refer to this Guaranty as a whole and not to any
particular provision of this Guaranty, and Section, subsection, schedule and
exhibit references are to this Guaranty unless otherwise specified. The captions
and table of contents in this Guaranty are for convenience only, and in no way
limit or amplify the provisions hereof.
1.05 References to Documents and Laws. All defined terms and references in
this Guaranty with respect to any agreements, notes, instruments, certificates
or other documents shall be deemed to refer to such documents and to any
amendments, modifications, renewals, extensions, replacements, restatements,
substitutions and supplements of and to such documents. All references to
statutes and related regulations shall include any amendments thereof and any
successor statutes and regulations.
ARTICLE II: GUARANTY
2.01 Guaranty of Payment. Guarantor hereby unconditionally and irrevocably
guarantees to Lender the timely payment and performance of the Indebtedness.
2.02 Guaranty Unconditional. Guarantor's guaranty of the Indebtedness is
absolute and unconditional. Without limiting the foregoing, the validity of this
Guaranty and Guarantor's obligations hereunder shall not be impaired by any
event whatsoever, including without limitation any of the following, whether or
not with notice to or consent of Guarantor:
(a) the invalidity, irregularity, illegality or unenforceability of,
or any defect in, any instrument, document, agreement or contract
evidencing, comprising, securing, guarantying or otherwise relating to or
executed or delivered in connection with the Indebtedness;
(b) any present or future law, order or regulation of any government
or of any governmental agency purporting to reduce, amend, vary the payment
terms or otherwise affect the Indebtedness, the Borrower, any other
guarantor, any other Person liable for the Indebtedness or any Collateral
or any other obligation of the Borrower or any other Person liable for the
Indebtedness;
(c) any claim of immunity, defense, set-off or counterclaim (other
than full and final payment of the Indebtedness) on behalf of the Borrower,
any Other Guarantor or any other Person liable for the Indebtedness;
(d) any change in the time, place or manner of payment or
performance, or any release, waiver, indulgence, compromise, settlement,
increase, decrease, extension, renewal, acceleration, impairment or
termination (voluntary or otherwise) with respect to any or all of the
Indebtedness;
3
(e) any release, addition, exchange, waiver, indulgence, compromise,
or settlement with respect to the Borrower, any other guarantor, any other
Person liable for the Indebtedness, or any Collateral, or any failure to
take, perfect or protect any lien or interest intended as Collateral;
(f) any modification, amendment, restatement or replacement (in whole
or in part) of any documents, agreements or instruments evidencing,
comprising, securing, guarantying or otherwise relating to, executed or
delivered in connection with the Indebtedness or of any covenants,
obligations or terms set forth in such documents, agreements or
instruments;
(g) any failure by Lender to exercise diligence in the collection of
the Indebtedness or perfect any interests in the Collateral, or any action,
omission or delay on the part of Lender or any other Person to assert or
enforce any claim, demand, right, power or remedy referred to, conferred in
or arising under this Guaranty or any of the other instruments, agreements,
contracts or documents evidencing, comprising, securing, guarantying or
otherwise relating to, executed or delivered in connection with the
Indebtedness, or any failure by Lender to file suit against Borrower for
any reason, including, without limitation Borrower's insolvency or intent
to leave the state;
(h) the failure of any other Person to guarantee or xxxxx x xxxx or
security interest as collateral for any or all of the Indebtedness;
(i) the voluntary or involuntary liquidation of, sale or other
disposition of all or substantially all the assets of, cessation of
business of, marshalling of assets and liabilities of, receivership of,
financial decline of, insolvency of, bankruptcy of, assignment for the
benefit of creditors of, reorganization of, arrangement of, composition
with creditors or readjustment of, or other similar proceedings affecting,
the Borrower or any of its subsidiaries or its assets or any allegation or
contest of the validity of the Indebtedness or this Guaranty, or the
disaffirmance or attempted disaffirmance of the Indebtedness or this
Guaranty, in any such proceedings;
(j) the merger, consolidation or dissolution of Borrower or a change
in Borrower's form, business, operations or management;
(k) the termination of any relationship between Guarantor and
Borrower or Borrower's business, including, without limitation, any
relationship of employment, ownership, management or commerce, unless this
Guaranty has been terminated pursuant to Section 2.11 hereof;
(l) the default or failure of the Guarantor fully to perform any of
its obligations set forth in this Guaranty;
(m) Lender's failure to notify Guarantor of the breach of any
provisions under this Guaranty, the occurrence of any event of default or
breach of any of the Indebtedness, acceleration of any of the Indebtedness,
the foreclosure or sale of any Collateral, any other action by or on behalf
of Lender with respect to the Indebtedness, or any of the events or
circumstances listed in this Section 2.02; and/or
(n) to the extent permitted by law, any other event, action or
circumstance that would, in the absence of this paragraph, result in the
release or discharge of the Guarantor from the performance or observance of
any obligation, covenant or agreement contained in this Guaranty.
4
2.03 Guaranty Irrevocable. Guarantor's guaranty of the Indebtedness is
irrevocable. This Guaranty cannot be cancelled by Guarantor and shall remain in
full force and effect until full and final payment and discharge of the
Indebtedness.
2.04 Primary Liability of Guarantor. This Guaranty constitutes a guarantee
of payment and performance and not of collection. Accordingly, Lender may
enforce this Guaranty against Guarantor without first making demand on Borrower
or any other Person, or taking action against any Collateral, or instituting
collection proceedings upon the Indebtedness. Guarantor's liability for the
Indebtedness is hereby declared to be primary, and not secondary, and each
document presently or hereafter executed by Borrower to evidence or secure an
obligation to Lender is incorporated herein by reference and shall be fully
enforceable against Guarantor. Guarantor's liability for the Indebtedness is
joint and several with any Other Guarantor or Person liable for the
Indebtedness, and Guarantor shall not be entitled to satisfy this Guaranty by
contributing ratably with any other guarantor or otherwise paying less than the
entire unpaid indebtedness. If any event occurs that would allow Lender to
accelerate all or any part of the Indebtedness, but such acceleration as to
Borrower is prevented by law or otherwise, Guarantor agrees that for purposes of
this Guaranty the Indebtedness shall be deemed accelerated, and Guarantor shall
make payment on demand to Lender as required hereunder.
2.05 Bankruptcy and Insolvency. Without limitation, the Guarantor's
obligations hereunder shall not be limited by: (a) the filing of a petition in
bankruptcy by or against the Borrower or the appointment of a trustee, receiver,
custodian, conservator, or other similar appointment over Borrower or any of
Borrower's assets under any jurisdiction, or (b) any order, ruling, or action
taken by any Person in any such proceeding or estate. In any such event or
circumstance, Lender may in its discretion deal with Borrower, or the debtor-in-
possession or any such trustee, receiver, custodian, conservator, or similar
person as if any such person were Borrower, to modify any of the terms of the
Indebtedness or to enter into cash collateral orders or post-petition financing
arrangements. Any such liability shall be included as part of the Indebtedness.
The Indebtedness guaranteed hereby shall also include any interest and fees
(including legal fees) that would have accrued on or in connection with the
Indebtedness even though the commencement of any bankruptcy case, insolvency
proceeding or similar action involving the Borrower might suspend or terminate
the accrual of such interest and fees as to the Borrower.
2.06 Recovery of Avoided Payments. If any amount applied by Lender to the
Indebtedness is subsequently challenged by a bankruptcy trustee or debtor-in-
possession as an avoidable transfer on the grounds that the payment constituted
a preferential payment or a fraudulent conveyance under state law or the
Bankruptcy Code or any successor statute thereto or on any other grounds, Lender
may, at its option and in its sole discretion, elect whether and to what extent
to contest such challenge. If Lender contests the avoidance action, all costs of
the proceeding, including Lender's attorneys' fees, will become part of the
Indebtedness. If any of the contested amounts are successfully avoided (whether
through settlement or otherwise), the avoided amount will become reinstated as
part of the Indebtedness hereunder. If Lender elects not to contest the
avoidance action, Lender may tender the amount subject to the avoidance action
to the bankruptcy court, trustee or debtor-in-possession and the amount so
advanced shall become part of the Indebtedness hereunder. Guarantor's obligation
to reimburse Lender for amounts due under this Section shall survive the
purported cancellation hereof.
2.07 Waivers by Guarantor. Guarantor hereby knowingly, willingly, and
irrevocably waives the following rights, defenses and benefits of law or equity
with respect to this Guaranty and the Indebtedness:
(a) the issuance of instruments evidencing the Indebtedness,
acceptance of this Guaranty, presentment, protest, demand, notice and proof
of reliance on this Guaranty, and the filing of claims with a court in the
event of bankruptcy of Borrower, any other guarantor or any other Person
liable for the Indebtedness;
5
(a) any right to require Lender to marshal assets or proceed
first against Borrower, the Collateral, any other guarantor or any
other Person liable for the Indebtedness;
(b) any claim or defense of impairment of collateral or impairment of
recourse or any requirement of diligence on the part of Lender in
collecting the Indebtedness or in taking, perfecting, protecting or
proceeding against the Collateral;
(c) any right of notice or consent, including without limitation
notice of or consent to: (i) any release, addition, exchange, sale, waiver,
indulgence, compromise, settlement, increase, decrease, extension, renewal,
acceleration, impairment, or termination of or with respect to the
Indebtedness, any Collateral, any other guarantor or any other Person
liable for the Indebtedness; (ii) any of the other events or circumstances
set forth in Section 2.02 of this Guaranty; (iii) any action taken,
omission or determination not to act by Lender, Borrower, any Other
Guarantor or any other Person liable for the Indebtedness with respect to
the Indebtedness; (iv) dishonor, default and all other notices that may be
required of Lender in connection with the Indebtedness;
(d) any right (if any) to require Lender to advise Guarantor of any
information known to Lender regarding the Indebtedness or the financial or
other condition of Borrower;
(e) any right (if any) to assert as a condition to Guarantor's
performance under this Guaranty any event, circumstance, action or failure
to act on the part of Lender, Borrower, any other guarantor or any other
Person liable for the Indebtedness, including without limitation any of
those events and circumstances set forth in Section 2.02 of this Guaranty;
and
2.09 Statute of Limitations. Guarantor acknowledges that the statute of
limitation applicable to this Guaranty shall begin to run only upon Lender's
accrual of a cause of action against Guarantor hereunder caused by Guarantor's
refusal to honor a demand for performance hereunder made by Lender in writing;
provided, however, if, subsequent to the demand upon Guarantor, Lender reaches
an agreement with Borrower on any terms causing Lender to forbear in the
enforcement of its demand upon Guarantor, the statute of limitation shall be
reinstated for its full duration, and shall not again begin to run until Lender
subsequently again makes demand upon Guarantor.
2.10 Subordination. Guarantor agrees that any presently existing or
hereafter arising loan or extension of credit made by Guarantor to Borrower and
any other presently existing or hereafter arising obligation of Borrower to
Guarantor shall be subordinate to the Indebtedness as to both payment and
collection. Accordingly, Guarantor agrees not to accept any payment whatsoever
from Borrower or to allow any payment by Borrower on Guarantor's behalf until
this Guaranty has been satisfied in full and terminated and released by Lender.
Guarantor hereby grants Lender a security interest in all amounts owed to
Guarantor by Borrower and all instruments, chattel paper and other property
constituting obligations of Borrower to Guarantor. All such property in which a
security interest may be perfected by possession shall be delivered to Lender
immediately upon Guarantor's receipt thereof. Guarantor agrees that in the event
of a bankruptcy or other insolvency proceeding involving Borrower, Guarantor
will timely file a claim for the amount of the subordinated debt, in form
approved by Lender. Guarantor agrees to pursue said claim with diligence and to
comply with any instructions from Lender pertaining to the pursuit of the claim.
The proceeds of such claim shall be delivered to Lender to the extent Guarantor
owes Lender any amounts under this Guaranty.
2.11 Termination. This Guaranty can only be terminated by Lender's delivery
to Guarantor of a written instrument expressly terminating this Guaranty. Lender
shall provide such a written termination in the event the Guarantor ceases to be
a Subsidiary of the Borrower and no Event of Default under the Loan
6
Agreement exists before or would exist after the termination of this Guaranty.
ARTICLE III: REPRESENTATIONS, WARRANTIES AND COVENANTS
Guarantor hereby represents and warrants to Lender that as of the date
hereof:
3.01 Recitals. The recitals set forth at the beginning of this Guaranty
are true.
3.02 In Furtherance of Business Purposes. The extension of credit to
Borrower by Lender is a direct financial benefit to Guarantor and the execution
of this Guaranty is made in furtherance of the business purposes of the
Guarantor.
3.03 Independent Investigation. Guarantor delivers this Guaranty based
solely on Guarantor's own independent investigation and in no part upon any
representation or statement of Lender or its agents with respect to any matter
whatsoever. Guarantor is in a position to and hereby assumes full responsibility
for obtaining any additional information concerning the Indebtedness or the
financial or other condition of Borrower.
3.04 Not a Replacement or Substitute Guaranty. This Guaranty is not a
substitute or replacement for any other guaranty executed by Guarantor or any
other Person.
3.05 Corporate Existence. Guarantor is a corporation duly organized,
legally existing, and in good standing under the laws of the State of
_______________________ and it is duly qualified as a foreign corporation in all
jurisdictions in which the property owned or the business transacted by it makes
such qualification necessary. Guarantor will not commence doing business in any
state unless and until it shall have qualified to do business in such state.
3.06 Corporate Power and Authorization. Guarantor is duly authorized and
empowered to execute, deliver, and perform under this Guaranty; the Guarantor's
board of directors (and, if necessary, its shareholders) have authorized the
Guarantor to execute and perform under this Guaranty; and all other corporate
and/or shareholder action on Guarantor's part required for the due execution,
delivery, and performance of this Guaranty has been duly and effectively taken.
3.07 Legal and Binding Agreement. The execution, delivery and performance
of this Guaranty will not violate any provisions of the charter or bylaws of
Guarantor or any judicial or administrative order or governmental law or
regulation, and this Guaranty is valid and binding in every respect according to
its terms, subject to no defense, counterclaim, set-off or objection of any
kind, except, as to enforcement only, the effect of applicable bankruptcy,
reorganization, insolvency, moratorium, fraudulent conveyance and other similar
laws relating to or affecting the rights of creditors generally. Lender has
neither taken nor failed to take any action that subjects it to any liability to
Guarantor.
3.08 No Consent Required. Guarantor's execution and performance of this
Guaranty do not require the consent of or the giving of notice to any other
Person, including without limitation the PUC or FCC.
3.09 No Burdensome Agreements. The execution and performance of this
Guaranty will not cause a default under any other contract or agreement to which
Guarantor or any of Guarantor's properties are subject, nor result in the
creation or imposition of any lien upon any of Guarantor's properties.
3.10 Litigation. Except as set forth on Schedule A hereto, Guarantor is not
presently a defendant in any pending counterclaim, litigation, arbitration or
administrative proceeding or the subject of any investigation; there is no
counterclaim, litigation, arbitration, administrative proceeding or
investigation
7
threatened against Guarantor; and Guarantor is not subject to any outstanding
court or administrative order. Guarantor covenants to give Lender prompt written
notice of any counterclaim, litigation, administrative proceeding or
investigation that may hereafter be instituted or threatened against Guarantor,
whether or not Guarantor's liability under such proceeding would be covered by
insurance.
3.11 Solvency. Guarantor is solvent as of the date of execution of this
Guaranty and is generally paying its debts as they become due. The fair value of
Guarantor's assets substantially exceeds the sum total of Guarantor's
liabilities. Guarantor has not, since the date of Guarantor's most recent
financial statement delivered to Lender, experienced a material adverse change
in its financial condition or sold or otherwise conveyed or assigned any
material asset to any Person except pursuant to an arms-length transaction with
a Person unrelated to or unaffiliated with Guarantor or Borrower for full and
adequate consideration. For so long as any portion of the Indebtedness remains
unpaid, Guarantor shall not make any sale, conveyance or assignment of any
material assets to (i) any Person related to or affiliated with Guarantor or
Borrower who is not also a Guarantor or Borrower or (ii) any independent third
party except pursuant to an arms-length transaction in which Guarantor receives
cash or other payment immediately upon such transfer in an amount reasonably
equivalent to the value of the asset transferred.
3.12 Capital. Guarantor now has and plans at all times hereafter to have
capital sufficient to carry on its business and transactions and all businesses
and transactions in which it is about to engage.
3.13 No Unpaid Taxes. Guarantor is not presently delinquent in the payment
of any taxes imposed by any governmental authority or in the filing of any tax
return or other required report for itself, Guarantor's business or Guarantor's
Properties. Guarantor is not involved in a dispute with any taxing authority
over tax amounts due. Guarantor covenants that all future taxes assessed against
Guarantor, Guarantor's business and Guarantor's Properties shall be timely paid
and that all tax returns and reports required of Guarantor shall be timely
filed.
3.14 Compliance with Law. Guarantor's properties are maintained and
Guarantor's business activities are conducted in accordance with all applicable
laws and regulations, including without limitation all telecommunications,
licensing, environmental and zoning laws, and Guarantor covenants to maintain
its properties and conduct its business activities in compliance with all such
laws and regulations.
3.15 Filings. To the date hereof, Guarantor has filed all reports, tariffs,
notices and statements required to be filed with the PUC, FCC and any other
applicable governmental regulatory agencies, if any.
3.16 No Default. Guarantor is not in violation of its articles of
incorporation or bylaws or in default in any respect that affects its business,
properties, operations, or condition, financial or otherwise, under any
indenture, mortgage, deed of trust, credit agreement, note, agreement, or other
contract to which Guarantor is a party or by which it or its Properties are
bound.
3.17 Title, Etc. Guarantor has and covenants to maintain good title to its
Properties, free and clear of all liens except those referenced or reflected in
the financial statements delivered to Lender. Guarantor possesses all
trademarks, copyrights, trade names, patents, licenses, permits and rights
therein, adequate in all material respects for the conduct of its business as
now conducted and presently proposed to be conducted, without conflict with the
rights or claimed rights of others.
ARTICLE IV: MISCELLANEOUS PROVISIONS
4.01 No Fiduciary Relationship; No Third Party Beneficiaries. Nothing
contained herein or in any related document shall be deemed to create any
partnership, joint venture or other fiduciary relationship between Lender and
Borrower or Guarantor for any purpose. This Guaranty and any
8
documents securing the Indebtedness have been executed for the sole benefit of
Lender as an inducement to cause it to extend credit to Borrower, and neither
Guarantor nor any other third party is authorized to rely upon Lender's rights
hereunder or to rely upon an assumption that Lender has or will exercise its
rights under any document.
4.02 Survival. All warranties, representations, and covenants made by the
Guarantor herein shall be deemed to have been relied upon by the Lender and the
holder(s) from time to time of the Indebtedness and shall survive the delivery
to the Lender of this Guaranty regardless of any investigation made by the
Lender or the holder(s) from time to time of the Indebtedness.
4.03 Entire Agreement; No Oral Representations Limiting Enforcement. This
Guaranty represents the entire agreement between the parties concerning the
liability of Guarantor for the Indebtedness, superseding any and all other
agreements, promises or representations existing prior to or made simultaneously
with this Guaranty. Any oral statements regarding Guarantor's liability for the
Indebtedness are merged herein. Without limiting the foregoing, Guarantor
acknowledges that Lender has made no oral statements to Guarantor that could be
construed as a waiver of Lender's right to enforce this Guaranty by all
available legal means.
4.04 Assignment. This Guaranty shall be binding upon the heirs, successors
and assigns of Guarantor, except that Guarantor shall not assign any rights or
delegate any obligations arising hereunder without the prior written consent of
Lender. Any attempted assignment or delegation by Guarantor without the required
prior consent shall be void. The Lender may assign and transfer this Guaranty in
whole or in part to any assignee of all or part of the Indebtedness. The
Lender's successors and assigns shall have the right to rely upon this Guaranty
with respect to the Indebtedness and any additional transactions with Borrower,
its successors and assigns, in reliance hereon, in the same manner and with the
same force and effect as if such successor or assign were specifically named as
Lender herein.
4.05 Notices. All notices, requests, demands, directions and other
communications (collectively "notices") required under the provisions of this
Guaranty 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 in writing mailed first-class, in all cases with charges prepaid,
and any such properly given notice shall be effective upon the earlier of
receipt or (i) when delivered by hand, or (ii) the third Business Day after
being mailed, or (iii) the following Business Day if sent by overnight courier
service, or (iv) when sent by facsimile, answer back received. All notices shall
be addressed as follows:
If to Guarantor: _______________________________
_______________________________
_______________________________
With a copy to: _______________________________
_______________________________
_______________________________
If to Lender: NTFC Capital Corporation
000 Xxxxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxx 00000
Attention: Legal Department
Telecopy: (000) 000-0000
With a copy to: NTFC Capital Corporation
000 Xxxxxxxxx Xxxxxx Xxxxx, Xxxxx 000
9
Xxxxxxxx, Xxxxxxxxx 00000
Attention: Manager, Credit
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.
4.06 Cumulative Remedies. The remedies provided Lender in this Guaranty
are not exclusive of any other remedies that may be available to Lender under
any other document or at law or equity.
4.07 Severability. Should any provision of this Guaranty be invalid or
unenforceable for any reason, the remaining provisions hereof shall remain in
full effect.
4.08 Applicable Law. The validity, construction and enforcement of this
Guaranty and all other documents executed with respect to the Indebtedness shall
be determined according to the internal laws of Tennessee.
4.09 Jurisdiction; Venue; Service of Process. GUARANTOR HEREBY IRREVOCABLY
CONSENTS TO THE JURISDICTION OF THE COURTS LOCATED IN DAVIDSON COUNTY,
TENNESSEE, INCLUDING WITHOUT LIMITATION FEDERAL COURTS SITTING IN THE MIDDLE
DISTRICT OF TENNESSEE AND THE CHANCERY COURT FOR DAVIDSON COUNTY, TENNESSEE, FOR
ANY SUIT BROUGHT OR ACTION COMMENCED IN CONNECTION WITH THIS GUARANTY, ANY OF
THE INDEBTEDNESS, ANY COLLATERAL, ANY OTHER GUARANTOR, OR ANY RELATIONSHIP
BETWEEN LENDER AND GUARANTOR, AND AGREES NOT TO CONTEST OR CHALLENGE VENUE IN
ANY SUCH COURTS. Guarantor irrevocably consents to the service of process of
any such courts in any such action or proceeding by registered or certified
mail, postage prepaid, return receipt requested, to Guarantor at the address
listed in this Guaranty or to such other address as Guarantor may have furnished
to Lender in writing, and agrees that such service shall become effective thirty
(30) days after such mailing. However, nothing herein shall affect the right of
Lender or Guarantor to serve process in any other manner permitted by law or to
commence legal proceedings or otherwise proceed against Lender or Guarantor in
any other jurisdiction.
4.10 Jury Waiver. EACH OF GUARANTOR AND LENDER HEREBY KNOWINGLY,
WILLINGLY AND IRREVOCABLY WAIVES ITS RIGHTS TO DEMAND A JURY TRIAL IN ANY ACTION
OR PROCEEDING INVOLVING THIS GUARANTY, ANY OF THE INDEBTEDNESS, ANY COLLATERAL,
ANY OTHER GUARANTOR OR ANY RELATIONSHIP BETWEEN THE LENDER AND GUARANTOR.
GUARANTOR WARRANTS AND REPRESENTS 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.
4.11 Waiver of Damages. Except to the extent prohibited by law, in any
action or proceeding involving this Guaranty, any of the Indebtedness, any
Collateral, any other guarantor or any relationship between the Lender and
Guarantor, Guarantor hereby irrevocably and unconditionally waives any and all
rights under the laws of any state to claim or recover any special, exemplary,
punitive, consequential or other damages other than actual direct damages.
4.12 Costs and Expenses. Guarantor agrees to pay all costs and expenses,
including, without limitation, attorneys' fees and compensation for time spent
by Lender's employees, that Lender may incur in enforcing the terms of this
Guaranty against Guarantor, in protecting Lender's rights hereunder, or in
amending or modifying any of the terms hereof.
10
4.13 Indulgence Not Waiver. Lender's indulgence in the existence of a
default with respect to the Indebtedness or under this Guaranty or any other
departure from the terms of this Guaranty shall not
prejudice any of Lender's rights, including without limitation Lender's rights
to make demand and recover from Guarantor. No waiver, amendment, release or
modification of this Guaranty shall be established by conduct, custom or course
of dealing.
4.14 Amendment and Waiver in Writing. No provision of this Guaranty can be
amended or waived, except by a statement in writing signed by the party against
which enforcement of the amendment or waiver is sought.
4.15 Counterparts. This Guaranty may be executed in any number of
counterparts (by facsimile transmission or otherwise), each of which, when so
executed, shall be deemed an original, but all such counterparts shall
constitute but one and the same instrument.
Executed the date first written above.
GUARANTOR:
----------
Focal Communications of Colorado
By: Xxxxxx X. Xxxxxx
Title: Executive Vice President & Chief
Financial Officer
Accepted as of _________________________, 199__
NTFC CAPITAL CORPORATION
By:____________________________________________
Title:__________________________________________
11
EXHIBIT D
---------
FORM OF OPINION OF REGULATORY COUNSEL FOR BORROWER
[FCC opinions]
[Closing Date]
NTFC Capital Corporation
000 Xxxxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Re: Amended and Restated Loan and Security Agreement by and between NTFC
Capital Corporation and _____________________
Ladies and Gentlemen:
We have acted as special regulatory counsel for __________________, a
corporation organized under the laws of the State of __________________
("Borrower"), in connection with the execution and delivery of the Amended and
Restated Loan and Security Agreement dated as of _____________________ between
NTFC Capital Corporation ("Lender") and Borrower (the "Loan Agreement") and
the execution and delivery pursuant thereto of the Note and other agreements
executed by the Borrower. This opinion is being delivered to you pursuant to
Section 5.02 of the Loan Agreement. Capitalized terms used herein which are not
otherwise defined shall have the meanings assigned to them in the Loan
Agreement.
We have assumed (i) the genuineness of all signatures, the authenticity of
documents submitted to us as originals, and the conforming to authentic original
documents of all documents submitted to us as certified, conformed or
photostatic copies, and (ii) the correctness of public files, records and
certificates of, or furnished by, governmental or regulatory agencies or
authorities.
We are licensed to practice in the state of ___________. We express no
opinion as to any laws other than the laws of the State of _____________ and
federal law.
This opinion is based upon an examination of the rules, regulations,
documents, certificates, public files and records of the Federal Communications
Commission ("FCC"), and of the Loan Agreement and the other Loan Documents (the
"Transaction Agreements").
We understand and assume that the Transaction Agreements have been executed
and delivered as of the date hereof substantially in the form delivered to us on
March __, 1997.
In rendering the opinions herein, we have considered duly the
Communications Act of 1934, as amended, and the rules and regulations
promulgated thereunder (collectively, the "Act"), as they relate to the
regulation of the Borrower as a provider of telecommunication and telephone
services.
Based upon the foregoing and subject to the limitations set forth herein,
we are of the opinion that:
1. No consent, approval, authorization or order of the FCC is required to
be obtained, and no notice to or filing with the FCC is required to be made, in
connection with the execution, delivery or enforceability of the Transaction
Agreements and the consummation of the transactions contemplated
therein except to the extent, if any, described on Exhibit A hereto.
2. The Borrower and its operations [are subject to regulation under the
Act, and are in full compliance therewith] [are not subject to regulation under
the Act].
3. As described on Exhibit B hereto, the Borrower has obtained all
permits, licenses, authorizations and approvals from the FCC, and has made all
filings with the FCC, as may be necessary for (i) the purchase, installation,
construction or operation of the Equipment, or (ii) the operation of the
Borrower's business in accordance with its business plan, or (iii) the
execution, delivery, performance and enforcement of the Transaction Documents
(collectively, the "Regulatory Authorizations").
4. All such Regulatory Authorizations have been duly made and validly
issued, are in full force and effect, and are not subject to any further
administrative review, objection or appeal. There are no notices of violation,
orders to show cause, or complaints issued by or before the FCC or by anyone
else against Borrower, its Affiliates or the Equipment that could adversely
affect any such Regulatory Authorizations.
5. There is no action, suit, proceeding or arbitration involving the type
of telecommunications business conducted by the Borrower that is pending before
the FCC in which there is a reasonable possibility of an adverse decision that
could reasonably be expected to materially and adversely affect the Borrower's
operation of its business as contemplated in its Business Plan.
6. The Lender will not, solely by reason of the execution and delivery of
the Transaction Agreements or the consummation of the transactions contemplated
therein, be subject to the jurisdiction of the FCC except to the extent, if any
(as described on Exhibit A hereto) required in the event that the Lender seeks
to enforce its rights as a secured party to sell or otherwise dispose of, or to
operate or cease operation of, the Collateral.
This opinion is rendered only for the benefit of the Lender and its
successors and assigns, and may not be relied upon by other parties without our
prior written consent.
Very truly yours,
EXHIBIT A TO REGULATORY OPINION
REQUIRED APPROVALS FOR TRANSACTION AGREEMENTS
---------------------------------------------
EXHIBIT B TO REGULATORY OPINION
PERMITS/AUTHORIZATIONS FOR BUSINESS
-----------------------------------
EXHIBIT E
---------
FORM OF
LANDLORD'S WAIVER AND CONSENT
THIS LANDLORD'S WAIVER AND CONSENT ("Consent"), made and entered into this
__ day of _____________, 199__, by ____________________, ("Landlord") in favor
of NTFC CAPITAL CORPORATION, a Delaware corporation ("Lender").
BACKGROUND:
A. Landlord is the owner of certain real property located in ______
County, __________, being more particularly described on Exhibit A attached
hereto (the "Premises").
B. The Premises have been leased to _________________ ("Lessee") by Lease
Agreement dated __________ (the "Lease") a memorandum of which is attached
hereto as Exhibit B and is of record at Book ______, Page ____, in the Office
of the [Recorder of Deeds] for ______________County, ____________.
C. Lender will be extending loans and other financial accommodations to
Lessee for the purpose of financing Lessee's acquisition, construction,
installation, maintenance and operation of a fiberoptic transmission
communications system (the "System"), part of which may be located on the
Premises.
D. As a condition to extending such loans and other financial
accommodations, Lender has required, among other things, that Lessee grant to
Lender security interests in the System and in certain of Lessee's property,
including, without limitation, machinery, equipment, fixtures and inventory,
whether now owned or hereafter acquired ("Collateral"), a portion of which
Collateral is and may hereafter be located on or about the Premises, and that
Lessee execute a leasehold mortgage or collateral assignment of lease, conveying
to Lender Lessee's leasehold interest in the Premises as collateral for the
loans to be made by Lender to Lessee.
NOW, THEREFORE, in order to induce Lender to continue to extend financial
accommodations to Lessee, which will aid Lessee in meeting its obligations to
Landlord, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Landlord hereby agrees with Lender
as follows:
1. Landlord hereby consents to Lessee's granting to Lender a lien on
Lessee's leasehold interest in the Premises (including any purchase option,
access rights, utility easements and rights of way) and executing a leasehold
mortgage, leasehold deed of trust, or collateral assignment in favor of Lender
(the "Leasehold Mortgage").
2. Landlord consents to Lessee's granting Lender a security interest in
the Collateral. Lender's security interests and liens in the Collateral shall be
superior to any title or interest which the Landlord may at any time have
therein, and, during the term of this Agreement, Landlord will not assert
against any of the Collateral any title or any statutory, common law,
contractual or possessory lien, including, without limitation, rights of levy or
distraint for rent, all of which Landlord hereby subordinates in favor of
Lender.
3. Landlord hereby agrees that none of the Collateral is subject to the
Lease and hereby disclaims any and all right, title, interest or claim in or to
the Collateral and any cash or non-cash proceeds of the Collateral (except with
respect to the subordinated landlord lien referred to in Section 2 above). The
Collateral may be affixed to or used in conjunction with the Premises, but shall
remain the
1
Lessee's personal property, subject to Lender's lien, at all times. Landlord
agrees not to impound or remove any of the Collateral from the Premises as long
as this Consent is in effect, except as set forth herein.
4. Landlord agrees that Lender may enter upon the Premises at any time or
times, during normal business hours, with reasonable advance notice to Landlord,
to inspect or to remove the Collateral therefrom, without charge, except for
reimbursement for any physical damage to the Premises caused by such removal.
Landlord will not hinder Lender's actions in enforcing its liens and remedies
with respect to the Collateral. Landlord agrees that Lender may conduct public
or private sales of the Collateral at the Premises and that interested parties
will be permitted access to the Premises during normal business hours, with
reasonable advance notice to Landlord, for the purpose of inspecting the
Collateral prior to any such sale.
5. Landlord agrees that as long as Landlord receives in a timely fashion
all rental payments as and when due, and as long as the obligations of the
Lessee to maintain the Premises are being fulfilled (whether by Lessee or, at
Lender's option, by Lender or any designee of Lender), Landlord will not
terminate the Lease or take any action to impound or remove the Collateral or to
require Lessee, Lender or Lender's designee to surrender possession of the
Premises until termination of the Lease.
6. In the event that Lessee defaults in its obligations under the Lease,
Landlord hereby agrees to give Lender written notice of default under the Lease,
at the same time and in the same manner as such notice is given to Lessee and
further agrees that Lender may, but shall not be obligated to, cure such
defaults, at its option, within the applicable notice and cure periods and/or
assume the Lease in the place of Lessee.
7. Lender shall have no obligations under the Lease unless and until
Lender delivers to Landlord written notice of assumption, if Lender elects to
assume the Lease. Upon delivery of such a written notice of assumption to
Landlord, then Lender (or its designee) shall be entitled to all rights and
benefits of the Lease, and shall be obligated for all of Lessee's obligations
thereunder. Landlord agrees that, in the event that a default occurs under the
Leasehold Mortgage and Lender, or any agent or designee of Lender, takes
possession of the Premises or forecloses and sells Lessee's leasehold interest
in the Premises, Lender, and its designees, successors, assigns or transferees
shall be permitted to use the Premises for any purpose permitted under the
Lease, as long as such party does not use or occupy the Premises in violation of
the laws, ordinances or regulations of any government or agency having
jurisdiction or in violation of Lessor's insurance contract(s). Landlord's
acceptance of Lender (or its designee) as substitute tenant shall not release
Lessee from any liability.
8. If the Lease is terminated and Lender does not elect to assume the
Lease, Landlord agrees to allow the Collateral to remain on the Premises for a
reasonable time not less than ninety (90) days, during which time Lender may, at
its discretion, remove, sell or otherwise dispose of such Lender's Collateral as
Lender may elect, as long as Landlord receives the rental payments due under the
Lease, and as long as Lessee's obligations to maintain the Premises are being
fulfilled.
9. Landlord agrees that in the event of termination of the Lease by
reason of any default by Lessee, or upon Lessee's rejection of the Lease in any
bankruptcy or insolvency proceeding, at Lender's option, Landlord will enter
into a new lease of the Premises with Lender or its designee(s), for the
remainder of the term, effective as of the date of such termination, at the rent
and upon the terms, provisions, covenants and agreements as contained in the
Lease and subject only to the same conditions of title as the Lease is subject
to on the date of the execution hereof, and to the rights, if any, of any
parties then in possession of any part of the Premises.
10. Landlord agrees and acknowledges that, in the event of a default under
the Leasehold Mortgage, Lender may exercise any of the remedies contained
therein and may assume or transfer to a third party the Lessee's interest in the
Lease (including any purchase option, access rights, utility
2
easements and rights of way) pursuant to the terms of the Leasehold Mortgage.
Any transfer of the Lease shall be subject to Landlord's rights under the Lease.
11. Landlord states that the Lease is presently in full force and effect,
that all rentals have been paid up to date, and that the Lease is not in
default.
12. This Consent shall remain in full force and effect until all
obligations of Lessee to Lender have been paid and satisfied in full and Lender
has terminated its financing agreements with Lessee.
13. The provisions of this Consent may not be modified or terminated
orally, and shall be binding upon the successors and assigns of the Landlord,
and upon any successor owner or transferee of the Premises and shall inure to
the benefit of the Lender and its successors and assigns. Notwithstanding any
other provision of this Consent or the Lease to the contrary, all of Lender's
right, title and interest in and to the Lease and any obligations thereunder may
be assigned and transferred to an affiliate or successor of Lender without
notice to Landlord, and to other parties with notice to Landlord.
14. All notices shall be in writing and shall be mailed by first class
registered or certified mail, postage prepaid, as follows:
(a) If to Lender:
NTFC Capital Corporation
000 Xxxxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxx 00000
Attention: Vice President, Marketing
(b) If to Landlord:
________________
________________
Attention: _____
15. This Landlord's Consent may be recorded in any appropriate locations.
16. This document shall in all respects be governed by and construed in
accordance with the laws of the State in which the Premises are located.
3
IN WITNESS WHEREOF, Landlord has executed this Landlord's Waiver and
Consent on the date first above written.
Landlord:
______________________________
By:___________________________
Title:________________________
[OR]
[LIMITED PARTNERSHIP] _____________________________
By:___________________________
Its: General Partner
By:_______________________
Title:____________________
[OR]
[INDIVIDUAL] __________________________
Landlord
4
[form of notary acknowledgement] [sample: variable by state and type of entity]
[Corporation]
STATE OF ________)
COUNTY OF _________)
Before me,______, a Notary Public of said County and State, personally
appeared ______________ with whom I am personally acquainted (or proved to me on
the basis of satisfactory evidence), and who, upon oath, acknowledged
himself/herself to be __________ (or other officer authorized to execute the
instrument) of __________, the within named bargainor, a corporation, and that
he/she as such _________ executed the foregoing instrument for the purposes
therein contained, by signing the name of the corporation by himself/herself as
______________.
Witness my hand and seal, at Office in __________, this _______ day of
______, 19__.
______________________
Notary Public
My Commission Expires:_________________
This Document Prepared By:
______________________________
______________________________
______________________________
After Recording Return To:
______________________________
______________________________
______________________________
5
EXHIBIT A TO LANDLORD'S
WAIVER AND CONSENT
Property Description
6
EXHIBIT A
Property Description
4
EXHIBIT B
Mortgage
5
EXHIBIT F
FORM OF
MORTGAGEE'S CONSENT
THIS MORTGAGEE'S WAIVER AND CONSENT ("Consent"), made and entered into this
__ day of ________, 1998, by _________________, ("Mortgagee") in favor of NTFC
CAPITAL CORPORATION, a Delaware corporation ("Lender").
BACKGROUND
A. Mortgagee holds liens on certain real property, being more particularly
described on Exhibit A attached hereto (the "Premises"), owned by ______________
("Landlord"), pursuant to the mortgage described on Exhibit B hereto (the
"Mortgage").
B. Landlord leased a portion of the Premises to FOCAL COMMUNICATIONS
CORPORATION (the "Borrower") pursuant to a lease dated as of ________, 199_
executed between Landlord and the Borrower (as amended from time to time, the
"Lease").
C. Lender has extended and/or will be extending loans and other financial
accommodations to the Borrower for the purpose of financing the Borrower's
purchase and installation of the equipment, cabling and other materials
constituting a fiberoptic telecommunications system (the "System"), part of
which will be located on a portion of the Premises.
D. As a condition to maintaining and/or extending such loans and other
financial accommodations, Lender has required, among other things, that the
Borrower grant to Lender security interests in the System, including all
equipment, machinery, fixtures and inventory of the Borrower, whether now owned
or hereafter acquired (the "Collateral"), a portion of which Collateral is and
may hereafter be located on or about the Premises, and Borrower's rights under
the Lease.
NOW, THEREFORE, in order to induce Lender to continue to extend financial
accommodations to Borrower, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Mortgagee hereby
agrees with Lender as follows:
1. Mortgagee agrees that Lender's security interests and liens in the
Collateral shall be superior to any title or interest which the Mortgagee may at
any time have therein, and, during the term of this Agreement, Mortgagee will
not assert against any of the Collateral any title or any statutory, common law,
contractual or possessory lien, including, without limitation, rights of levy or
distraint for rent, all of which Mortgagee hereby subordinates in favor of
Lender.
2. Mortgagee hereby agrees that none of the Collateral is subject to the
Mortgage and hereby disclaims any and all right, title, interest or claim in or
to the Collateral and any cash or non-cash proceeds of the Collateral. The
Collateral may be affixed to or used in conjunction with the Premises, but shall
remain the Borrower's personal property, subject to Lender's lien, at all times.
Mortgagee agrees not to remove any of the Collateral from the Premises without
giving Lender prior written notice.
3. Mortgagee agrees that, if Mortgagee should foreclose upon or take
possession of the Premises, Mortgagee will so notify Lender, and, so long as
Mortgagee receives the rental payments due
under the Lease, Lender may enter upon the Premises at any time or times within
ninety (90) days after Mortgagee's taking possession, to remove the Collateral
therefrom, without charge, except for reimbursement for any physical damage to
the Premises caused by such removal. Mortgagee will not hinder Lender's actions
in enforcing its liens and remedies with respect to the Collateral.
4. Mortgagee agrees that, if Mortgagee should foreclose upon or take
possession of the Premises, and as long as Mortgagee receives in a timely
fashion all rental payments under the Lease as and when due, and as long as the
obligations of the Borrower to maintain the Premises are being fulfilled
(whether by Borrower or, at its option, Lender or any designee of Lender),
Mortgagee will not terminate the Lease or disturb the quiet enjoyment of the
Borrower, Lender or Lender's designee thereunder, or take any action to require
Borrower, Lender or Lender's designee to surrender possession of the Premises or
the Collateral until termination of the Lease.
5. This Consent shall remain in full force and effect until all obligations
of Borrower to Lender have been paid and satisfied in full and Lender has
terminated its financing agreements with Borrower.
6. The provisions of this Consent may not be modified or terminated orally,
and shall be binding upon the successors and assigns of the Mortgagee, and upon
any successor owner or transferee of the Premises and shall inure to the benefit
of the Lender and its successors and assigns.
7. All notices shall be in writing and shall be mailed by first class
registered or certified mail, postage prepaid, as follows:
(a) If to Lender, to
NTFC Capital Corporation
000 Xxxxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxx 00000
Attention: Legal Department
(b) If to Mortgagee, to
_____________________
_____________________
_____________________
8. This Mortgagee's Consent may be filed and recorded in the appropriate
locations.
9. This document shall in all respects be governed by and construed in
accordance with the laws of the State in which the Premises are located.
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IN WITNESS WHEREOF, Mortgagee has executed this Mortgagee's Consent on the
date first above written.
MORTGAGEE:
__________
By:____________
Title:_________
[form of corporate acknowledgment]
[sample: variable by state and type of entity]
STATE OF ________)
COUNTY OF _________)
Before me,___________, a Notary Public of said County and State, personally
appeared ___________, with whom I am personally acquainted (or proved to me on
the basis of satisfactory evidence), and who, upon oath, acknowledged
himself/herself to be __________ (or other officer authorized to execute the
instrument) of __________, the within named bargainor, a corporation, and that
he/she as such __________ executed the foregoing instrument for the purposes
therein contained, by signing the name of the corporation by himself/herself as
__________.
Witness my hand and seal, at Office in __________, this __ day of ______
19__.
_____________
Notary Public
My Commission Expires:___________________
3
