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EXHIBIT 10.11
EXECUTION COPY
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$45,000,000
CREDIT AGREEMENT
among
ALLIED RISER COMMUNICATIONS HOLDINGS, INC.,
ALLIED RISER COMMUNICATIONS, INC.,
as Borrower,
The Several Lenders
from Time to Time Parties Hereto,
THE CHASE MANHATTAN BANK,
as Administrative Agent
Dated as of March 25, 1999
CHASE SECURITIES INC.,
as Lead Arranger and Book Manager
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS ............................................................... 1
1.1 Defined Terms ......................................................... 1
1.2 Other Definitional Provisions ......................................... 14
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS ........................................... 14
2.1 Commitments ........................................................... 14
2.2 Procedure for Loan Borrowing .......................................... 14
2.3 Commitment Fees, Etc. ................................................. 15
2.4 Termination or Reduction of Commitments ............................... 15
2.5 Optional Prepayments .................................................. 15
2.6 Mandatory Prepayments and Commitment Reductions ....................... 15
2.7 Conversion and Continuation Options ................................... 16
2.8 Limitations On Eurodollar Tranches .................................... 16
2.9 Interest Rates and Payment Dates ...................................... 16
2.10 Computation of Interest and Fees ...................................... 17
2.11 Inability to Determine Interest Rate .................................. 17
2.12 Pro Rata Treatment and Payments ....................................... 18
2.13 Requirements of Law ................................................... 18
2.14 Taxes ................................................................. 19
2.15 Indemnity ............................................................. 21
2.16 Change of Lending Office .............................................. 21
2.17 Replacement of Lenders ................................................ 21
SECTION 3. REPRESENTATIONS AND WARRANTIES ............................................ 22
3.1 Financial Condition ................................................... 22
3.2 No Change ............................................................. 22
3.3 Corporate Existence; Compliance With Law .............................. 23
3.4 Corporate Power; Authorization; Enforceable Obligations ............... 23
3.5 No Legal Bar .......................................................... 23
3.6 Litigation ............................................................ 23
3.7 No Default ............................................................ 23
3.8 Ownership of Property; Liens .......................................... 23
3.9 Intellectual Property ................................................. 24
3.10 Taxes ................................................................. 24
3.11 Federal Regulations ................................................... 24
3.12 Labor Matters ......................................................... 24
3.13 Erisa ................................................................. 24
3.14 Investment Company Act; Other Regulations ............................. 25
3.15 Subsidiaries .......................................................... 25
3.16 Use of Proceeds ....................................................... 25
3.17 Environmental Matters ................................................. 25
3.18 Accuracy of Information, etc .......................................... 26
3.19 Security Documents .................................................... 26
3.20 Solvency .............................................................. 26
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3.21 Year 2000 Matters ..................................................... 26
3.22 Real Estate ........................................................... 27
SECTION 4. CONDITIONS PRECEDENT ...................................................... 27
4.1 Conditions to Initial Extension of Credit ............................. 27
4.2 Conditions to Each Extension of Credit ................................ 29
SECTION 5. AFFIRMATIVE COVENANTS ..................................................... 29
5.1 Financial Statements .................................................. 30
5.2 Certificates; Other Information ....................................... 30
5.3 Payment of Obligations ................................................ 31
5.4 Maintenance of Existence; Compliance................................... 31
5.5 Maintenance of Property; Insurance .................................... 31
5.6 Inspection of Property; Books and Records; Discussions ................ 32
5.7 Notices ............................................................... 32
5.8 Environmental Laws .................................................... 32
5.9 Additional Collateral, Etc ............................................ 33
SECTION 6. NEGATIVE COVENANTS ........................................................ 34
6.1 Financial Condition Covenants ......................................... 34
6.2 Indebtedness .......................................................... 36
6.3 Liens ................................................................. 37
6.4 Fundamental Changes ................................................... 38
6.5 Disposition of Property ............................................... 38
6.6 Restricted Payments ................................................... 39
6.7 Capital Expenditures .................................................. 39
6.8 Investments ........................................................... 39
6.9 Optional Payments and Modifications of Certain Debt Instruments........ 40
6.10 Transactions With Affiliates .......................................... 40
6.11 Sales and Leasebacks .................................................. 40
6.12 Changes in Fiscal Periods ............................................. 40
6.13 Negative Pledge Clauses ............................................... 41
6.14 Clauses Restricting Subsidiary Distributions .......................... 41
6.15 Lines of Business ..................................................... 41
6.16 New License Agreements................................................. 41
SECTION 7. EVENTS OF DEFAULT ......................................................... 41
SECTION 8. THE ADMINISTRATIVE AGENT .................................................. 44
8.1 Appointment ........................................................... 44
8.2 Delegation of Duties .................................................. 44
8.3 Exculpatory Provisions ................................................ 44
8.4 Reliance by Administrative Agent ...................................... 45
8.5 Notice of Default ..................................................... 45
8.6 Non-reliance On Agents and Other Lenders .............................. 45
8.7 Indemnification ....................................................... 46
8.8 Agent in Its Individual Capacity ...................................... 46
8.9 Successor Administrative Agent ........................................ 46
SECTION 9. MISCELLANEOUS ............................................................. 47
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9.1 Amendments and Waivers ................................................ 47
9.2 Notices ............................................................... 47
9.3 No Waiver; Cumulative Remedies ........................................ 48
9.4 Survival of Representations and Warranties ............................ 48
9.5 Payment of Expenses and Taxes ......................................... 48
9.6 Successors and Assigns; Participations and Assignments ................ 49
9.7 Adjustments; Set-off .................................................. 51
9.8 Effectiveness; Counterparts ........................................... 51
9.9 Severability .......................................................... 51
9.10 Integration ........................................................... 52
9.11 GOVERNING LAW ......................................................... 52
9.12 Submission to Jurisdiction; Waivers ................................... 52
9.13 Acknowledgements ...................................................... 52
9.14 Releases of Guarantees and Liens ...................................... 53
9.15 Confidentiality ....................................................... 53
9.16 WAIVERS OF JURY TRIAL ................................................. 53
SCHEDULES:
1.1A Commitments
3.4 Consents, Authorizations, Filings and Notices
3.15 Subsidiaries
3.19 UCC Filing Jurisdictions
6.2(d) Existing Indebtedness
6.3(f) Existing Liens
7(k) Capital Stock of Holdings Owned by Permitted Investors
EXHIBITS:
A Form of Guarantee and Collateral Agreement
B Form of Compliance Certificate
C Form of Closing Certificate
D Form of Consent
E Form of Assignment and Acceptance
F-1 Form of Legal Opinion of Xxxxxxxx & Xxxxx
F-2 Form of Legal Opinion of Local Counsel
G Form of Exemption Certificate
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CREDIT AGREEMENT, dated as of March 25, 1999, among ALLIED RISER
COMMUNICATIONS HOLDINGS, INC., a Delaware corporation ("Holdings"), ALLIED RISER
COMMUNICATIONS, INC., a Delaware corporation (the "Borrower"), the several banks
and other financial institutions or entities from time to time parties to this
Agreement (the "Lenders"), and THE CHASE MANHATTAN BANK, as administrative
agent.
The parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the terms listed in this
Section 1.1 shall have the respective meanings set forth in this Section 1.1.
"ABR": for any day, a rate per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) equal to the greatest of (a) the Prime Rate in effect on
such day, (b) the Base CD Rate in effect on such day plus 1% and (c) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. For purposes hereof:
"Prime Rate" shall mean the rate of interest per annum publicly announced from
time to time by the Reference Lender as its prime rate in effect at its
principal office in New York City (the Prime Rate not being intended to be the
lowest rate of interest charged by the Reference Lender in connection with
extensions of credit to debtors); "Base CD Rate" shall mean the sum of (a) the
product of (i) the Three-Month Secondary CD Rate and (ii) a fraction, the
numerator of which is one and the denominator of which is one minus the C/D
Reserve Percentage and (b) the C/D Assessment Rate; and "Three-Month Secondary
CD Rate" shall mean, for any day, the secondary market rate for three-month
certificates of deposit reported as being in effect on such day (or, if such day
shall not be a Business Day, the next preceding Business Day) by the Board
through the public information telephone line of the Federal Reserve Bank of New
York (which rate will, under the current practices of the Board, be published in
Federal Reserve Statistical Release H.15(519) during the week following such
day), or, if such rate shall not be so reported on such day or such next
preceding Business Day, the average of the secondary market quotations for
three-month certificates of deposit of major money center banks in New York City
received at approximately 10:00 A.M., New York City time, on such day (or, if
such day shall not be a Business Day, on the next preceding Business Day) by the
Reference Lender from three New York City negotiable certificate of deposit
dealers of recognized standing selected by it. Any change in the ABR due to a
change in the Prime Rate, the Three-Month Secondary CD Rate or the Federal Funds
Effective Rate shall be effective as of the opening of business on the effective
day of such change in the Prime Rate, the Three-Month Secondary CD Rate or the
Federal Funds Effective Rate, respectively.
"ABR Loans": Loans the rate of interest applicable to which is based
upon the ABR.
"Administrative Agent": The Chase Manhattan Bank, together with its
affiliates, as the arranger of the Commitments and as the administrative agent
for the Lenders under this Agreement and the other Loan Documents, together with
any of its successors.
"Affiliate": as to any Person, any other Person that, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. For purposes of this definition, "control" of a Person means the
power, directly or indirectly, either to (a) vote 10% or more of the securities
having ordinary voting power for the election of directors (or persons
performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.
"Aggregate Exposure": with respect to any Lender at any time, an amount
equal to (a) until the Closing Date, the aggregate amount of such Lender's
Commitments at such time and (b)
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thereafter, the amount of such Lender's Commitment then in effect or, if the
Commitments have been terminated, the amount of such Lender's Extensions of
Credit then outstanding.
"Aggregate Exposure Percentage": with respect to any Lender at any
time, the ratio (expressed as a percentage) of such Lender's Aggregate Exposure
at such time to the Aggregate Exposure of all Lenders at such time.
"Agreement": this Credit Agreement, as amended, supplemented or
otherwise modified from time to time.
"Applicable Margin": for ABR Loans, 3.5% per annum, and for Eurodollar
Loans, 4.5% per annum.
"Assignee": as defined in Section 9.6(c).
"Assignment and Acceptance": an Assignment and Acceptance,
substantially in the form of Exhibit E.
"Assignor": as defined in Section 9.6(c).
"Available Commitment": as to any Lender at any time, an amount equal
to the excess, if any, of (a) such Lender's Commitment then in effect over (b)
such Lender's Extensions of Credit then outstanding.
"Benefitted Lender": as defined in Section 9.7(a).
"Board": the Board of Governors of the Federal Reserve System of the
United States (or any successor).
"Borrower": as defined in the preamble hereto.
"Borrowing Date": any Business Day specified by the Borrower as a date
on which the Borrower requests the relevant Lenders to make Loans hereunder.
"Building Unit": 500,000 square feet of commercially rentable space.
"Business": as defined in Section 3.17(b).
"Business Day": a day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
close, provided that with respect to notices and determinations in connection
with, and payments of principal and interest on, Eurodollar Loans, such day is
also a day for trading by and between banks in Dollar deposits in the interbank
eurodollar market.
"Capital Expenditures": for any period, with respect to any Person, the
aggregate of all expenditures by such Person and its Subsidiaries for the
acquisition or leasing (pursuant to a capital lease) of fixed or capital assets
or additions to equipment (including replacements, capitalized repairs and
improvements during such period) that should be capitalized under GAAP on a
consolidated balance sheet of such Person and its Subsidiaries.
"Capital Lease Obligations": as to any Person, the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal
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property, or a combination thereof, which obligations are required to be
classified and accounted for as capital leases on a balance sheet of such Person
under GAAP and, for the purposes of this Agreement, the amount of such
obligations at any time shall be the capitalized amount thereof at such time
determined in accordance with GAAP.
"Capital Stock": any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests in a Person (other than a corporation) and any
and all warrants, rights or options to purchase any of the foregoing.
"Cash Balance": at any time, the amount which, in conformity with GAAP,
would constitute cash and Cash Equivalents of Holdings and its Subsidiaries on a
consolidated balance sheet of Holdings for such time.
"Cash Equivalents": (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition; (b) demand
deposits, certificates of deposit, time deposits, eurodollar time deposits or
overnight bank deposits having maturities of six months or less from the date of
acquisition issued by any Lender or by any commercial bank organized under the
laws of the United States or any state thereof having combined capital and
surplus of not less than $500,000,000; (c) commercial paper of an issuer rated
at least A-1 by Standard & Poor's Ratings Services ("S&P") or P-1 by Xxxxx'x
Investors Service, Inc. ("Moody's"), or carrying an equivalent rating by a
nationally recognized rating agency, if both of the two named rating agencies
cease publishing ratings of commercial paper issuers generally, and maturing
within six months from the date of acquisition; (d) repurchase obligations of
any Lender or of any commercial bank satisfying the requirements of clause (b)
of this definition, having a term of not more than 30 days, with respect to
securities issued or fully guaranteed or insured by the United States
government; (e) securities with maturities of one year or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory
of the United States, by any political subdivision or taxing authority of any
such state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at least A
by S&P or A by Moody's; (f) securities with maturities of six months or less
from the date of acquisition backed by standby letters of credit issued by any
Lender or any commercial bank satisfying the requirements of clause (b) of this
definition; or (g) shares of money market mutual or similar funds which invest
exclusively in assets satisfying the requirements of clauses (a) through (f) of
this definition.
"C/D Assessment Rate": for any day as applied to any ABR Loan, the
annual assessment rate in effect on such day that is payable by a member of the
Bank Insurance Fund maintained by the Federal Deposit Insurance Corporation (the
"FDIC") classified as well-capitalized and within supervisory subgroup "B" (or a
comparable successor assessment risk classification) within the meaning of 12
C.F.R. Section 327.4 (or any successor provision) to the FDIC (or any successor)
for the FDIC's (or such successor's) insuring time deposits at offices of such
institution in the United States.
"C/D Reserve Percentage": for any day as applied to any ABR Loan, that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board, for determining the maximum reserve requirement for a
Depositary Institution (as defined in Regulation D of the Board as in effect
from time to time) in respect of new non-personal time deposits in Dollars
having a maturity of 30 days or more.
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"Closing Date": the date on which the conditions precedent set forth in
Section 4.1 shall have been satisfied.
"Code": the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral": all property of the Loan Parties, now owned or hereafter
acquired, upon which a Lien is purported to be created by any Security Document.
"Commitment": as to any Lender, the Commitment of such Lender.
"Commitment": as to any Lender, the obligation of such Lender, if any,
to make Loans in an aggregate principal and/or face amount not to exceed the
amount set forth under the heading "Commitment" opposite such Lender's name on
Schedule 1.1A or in the Assignment and Acceptance pursuant to which such Lender
became a party hereto, as the same may be changed from time to time pursuant to
the terms hereof. The original amount of the Total Commitments is $45,000,000.
"Commitment Fee Rate": 1.5% per annum.
"Commitment Period": the period from and including the Closing Date to
the Scheduled Termination Date.
"Commonly Controlled Entity": an entity, whether or not incorporated,
that is under common control with the Borrower within the meaning of Section
4001 of ERISA or is part of a group that includes the Borrower and that is
treated as a single employer under Section 414 of the Code.
"Compliance Certificate": a certificate duly executed by a Responsible
Officer substantially in the form of Exhibit B.
"Consolidated Total Revenue": for any period, the total revenue of
Holdings and its Subsidiaries for such period, determined on a consolidated
basis in accordance with GAAP.
"Continuing Directors": the directors of Holdings on the Closing Date,
after giving effect to the transactions contemplated hereby, and each other
director, if, in each case, such other director's nomination for election to the
board of directors of Holdings is recommended by at least 66-2/3% of the then
Continuing Directors or such other director receives the vote of the Permitted
Investors in his or her election by the shareholders of Holdings.
"Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Default": any of the events specified in Section 7, whether or not any
requirement for the giving of notice, the lapse of time, or both, has been
satisfied.
"Disposition": with respect to any property, any sale, lease, sale and
leaseback, assignment, conveyance, transfer or other disposition thereof. The
terms "Dispose" and "Disposed of" shall have correlative meanings.
"Dollars" and "$": dollars in lawful currency of the United States.
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"Domestic Subsidiary": any Subsidiary of the Borrower organized under
the laws of any jurisdiction within the United States.
"EBITDA": for any fiscal period, the Net Income or Net Loss, as the
case may be, for such fiscal period, after restoring thereto amounts deducted
for, without duplication, (a) interest expense, (b) income tax expense, (c)
depreciation and amortization and (d) other non-cash charges.
"Environmental Laws": any and all foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements of Law
(including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the environment,
as now or may at any time hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal fraction) of reserve requirements in effect on such day
(including basic, supplemental, marginal and emergency reserves under any
regulations of the Board or other Governmental Authority having jurisdiction
with respect thereto) dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board) maintained by a member bank of the Federal Reserve
System.
"Eurodollar Base Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum determined on the
basis of the rate for deposits in Dollars for a period equal to such Interest
Period commencing on the first day of such Interest Period appearing on Page
3750 of the Dow Xxxxx Markets screen as of 11:00 A.M., London time, two Business
Days prior to the beginning of such Interest Period. In the event that such rate
does not appear on Page 3750 of the Dow Xxxxx Markets screen (or otherwise on
such screen), the "Eurodollar Base Rate" shall be determined by reference to
such other comparable publicly available service for displaying eurodollar rates
as may be selected by the Administrative Agent or, in the absence of such
availability, by reference to the rate at which the Administrative Agent is
offered Dollar deposits at or about 11:00 A.M., New York City time, two Business
Days prior to the beginning of such Interest Period in the interbank eurodollar
market where its eurodollar and foreign currency and exchange operations are
then being conducted for delivery on the first day of such Interest Period for
the number of days comprised therein.
"Eurodollar Loans": Loans the rate of interest applicable to which is
based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest Period
pertaining to a Eurodollar Loan, a rate per annum determined for such day in
accordance with the following formula (rounded upward to the nearest 1/100th of
1%):
Eurodollar Base Rate
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1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche": the collective reference to Eurodollar Loans the
then current Interest Periods with respect to all of which begin on the same
date and end on the same later date (whether or not such Loans shall originally
have been made on the same day).
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"Event of Default": any of the events specified in Section 7, provided
that any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.
"Excluded Foreign Subsidiary": any Foreign Subsidiary in respect of
which either (a) the pledge of all of the Capital Stock of such Subsidiary as
Collateral or (b) the guaranteeing by such Subsidiary of, or its granting of a
Lien to secure, the Obligations, would, in the good faith judgment of the
Borrower, result in adverse tax consequences to the Borrower.
"Extensions of Credit": as to any Lender at any time, an amount equal
to the aggregate principal amount of all Loans held by such Lender then
outstanding.
"Federal Funds Effective Rate": for any day, the weighted average of
the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for the day of such transactions received by the Reference Lender
from three federal funds brokers of recognized standing selected by it.
"Foreign Subsidiary": any Subsidiary of the Borrower that is not a
Domestic Subsidiary.
"Funding Office": the office of the Administrative Agent specified in
Section 9.2 or such other office as may be specified from time to time by the
Administrative Agent as its funding office by written notice to the Borrower and
the Lenders.
"GAAP": generally accepted accounting principles in the United States
as in effect from time to time, except that for purposes of Section 6.1, GAAP
shall be determined on the basis of such principles in effect on the date hereof
and consistent with those used in the preparation of the most recent audited
financial statements delivered pursuant to Section 3.1(b). In the event that any
"Accounting Change" (as defined below) shall occur and such change results in a
change in the method of calculation of financial covenants, standards or terms
in this Agreement, then the Borrower and the Administrative Agent agree to enter
into negotiations in order to amend such provisions of this Agreement so as to
equitably reflect such Accounting Changes with the desired result that the
criteria for evaluating the Borrower's financial condition shall be the same
after such Accounting Changes as if such Accounting Changes had not been made.
Until such time as such an amendment shall have been executed and delivered by
the Borrower, the Administrative Agent and the Required Lenders, all financial
covenants, standards and terms in this Agreement shall continue to be calculated
or construed as if such Accounting Changes had not occurred. "Accounting
Changes" refers to changes in accounting principles required by the promulgation
of any rule, regulation, pronouncement or opinion by the Financial Accounting
Standards Board of the American Institute of Certified Public Accountants or, if
applicable, the SEC.
"Governmental Authority": any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization (including the National Association of Insurance Commissioners).
"Guarantee and Collateral Agreement": the Guarantee and Collateral
Agreement to be executed and delivered by Holdings, the Borrower and each
Subsidiary Guarantor, substantially in the form of Exhibit A, as the same may be
amended, supplemented or otherwise modified from time to time.
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"Guarantee Obligation": as to any Person (the "guaranteeing person"),
any obligation of (a) the guaranteeing person or (b) another Person (including
any bank under any letter of credit) to induce the creation of which the
guaranteeing person has issued a reimbursement, counterindemnity or similar
obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "primary obligations")
of any other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to advance or
supply funds (1) for the purchase or payment of any such primary obligation or
(2) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (iv) otherwise to assure or hold
harmless the owner of any such primary obligation against loss in respect
thereof; provided, however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as determined by the
Borrower in good faith.
"Guarantors": the collective reference to Holdings and the Subsidiary
Guarantors.
"Hedge Agreements": all interest rate swaps, caps or collar agreements
or similar arrangements providing for protection against fluctuations in
interest rates or currency exchange rates or the exchange of nominal interest
obligations, either generally or under specific contingencies.
"Holdings": as defined in the preamble hereto.
"Indebtedness": of any Person at any date, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of property or services (other than
current trade payables and accrued expenses incurred in the ordinary course of
such Person's business), (c) all obligations of such Person evidenced by notes,
bonds, debentures or other similar instruments, (d) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights and remedies
of the seller or lender under such agreement in the event of default are limited
to repossession or sale of such property), (e) all Capital Lease Obligations of
such Person, (f) all obligations of such Person, contingent or otherwise, as an
account party under acceptance, letter of credit or similar facilities, (g) the
liquidation value of all preferred Capital Stock of such Person redeemable at
the option of the holder thereof (other than preferred Capital Stock issued and
outstanding on the date hereof), (h) all Guarantee Obligations of such Person in
respect of obligations of the kind referred to in clauses (a) through (g) above;
(i) all obligations of the kind referred to in clauses (a) through (h) above
secured by (or for which the holder of such obligation has an existing right,
contingent or otherwise, to be secured by) any Lien on property (including
accounts and contract rights) owned by such Person, whether or not such Person
has assumed or become liable for the payment of such obligation; and (j) for the
purposes of Section 7(e) only, all obligations of such Person in respect of
Hedge Agreements.
"Insolvency": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
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"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including
copyrights, copyright licenses, patents, patent licenses, trademarks, trademark
licenses, technology, know-how and processes, and all rights to xxx at law or in
equity for any infringement or other impairment thereof, including the right to
receive all proceeds and damages therefrom.
"Interest Payment Date": (a) as to any ABR Loan, the last day of each
March, June, September and December to occur while such Loan is outstanding and
the final maturity date of such Loan, (b) as to any Eurodollar Loan having an
Interest Period of three months or less, the last day of such Interest Period,
(c) as to any Eurodollar Loan having an Interest Period longer than three
months, each day that is three months, or a whole multiple thereof, after the
first day of such Interest Period and the last day of such Interest Period and
(d) as to any Loan (other than any Loan that is an ABR Loan), the date of any
repayment or prepayment made in respect thereof.
"Interest Period": as to any Eurodollar Loan, (a) initially, the period
commencing on the borrowing or conversion date, as the case may be, with respect
to such Eurodollar Loan and ending one, two, three or six months thereafter, as
selected by the Borrower in its notice of borrowing or notice of conversion, as
the case may be, given with respect thereto; and (b) thereafter, each period
commencing on the last day of the next preceding Interest Period applicable to
such Eurodollar Loan and ending one, two, three or six months thereafter, as
selected by the Borrower by irrevocable notice to the Administrative Agent not
less than three Business Days prior to the last day of the then current Interest
Period with respect thereto; provided that, all of the foregoing provisions
relating to Interest Periods are subject to the following:
(i) if any Interest Period would otherwise end on a day that
is not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month in which event such
Interest Period shall end on the immediately preceding Business Day;
(ii) the Borrower may not select an Interest Period that would
extend beyond the Scheduled Termination Date;
(iii) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of a calendar month; and
(iv) the Borrower shall select Interest Periods so as not to
require a payment or prepayment of any Eurodollar Loan during an Interest
Period for such Loan.
"Investments": as defined in Section 6.8.
"Lenders": as defined in the preamble hereto.
"License Agreement": a license, right-of-entry, construction or other
comparable agreement entered into by Holdings or any of its Subsidiaries and the
owner of a building pursuant to which Holdings or its Subsidiaries have a right
to install, operate and maintain its System in such building.
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"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including any conditional sale or
other title retention agreement and any capital lease having substantially the
same economic effect as any of the foregoing).
"Loans": as defined in Section 2.1(a).
"Loan Documents": this Agreement, the Security Documents and the Notes.
"Loan Parties": Holdings, the Borrower and each other Subsidiary of
Holdings that is a party to a Loan Document.
"Material Adverse Effect": a material adverse effect on (a) the
business, property, operations or condition (financial or otherwise) of the
Borrower and its Subsidiaries taken as a whole or (b) the validity or
enforceability of this Agreement or any of the other Loan Documents or the
rights or remedies of the Administrative Agent or the Lenders hereunder or
thereunder.
"Material Environmental Amount": an amount payable by the Borrower
and/or its Subsidiaries in excess of $500,000 for remedial costs, compliance
costs, compensatory damages, punitive damages, fines, penalties or any
combination thereof.
"Materials of Environmental Concern": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Law, including asbestos, polychlorinated biphenyls
and urea-formaldehyde insulation.
"Multiemployer Plan": a Plan that is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": (a) in connection with any Recovery Event, the
proceeds thereof in the form of cash and Cash Equivalents (including any such
proceeds received by way of deferred payment of principal pursuant to a note or
installment receivable or purchase price adjustment receivable or otherwise, but
only as and when received) of such Recovery Event, net of attorneys' fees,
accountants' fees, investment banking fees, amounts required to be applied to
the repayment of Indebtedness secured by a Lien expressly permitted hereunder on
any asset that is the subject of such Recovery Event (other than any Lien
pursuant to a Security Document) and other customary fees and expenses actually
incurred in connection therewith and net of taxes paid or reasonably estimated
to be payable as a result thereof (after taking into account any available tax
credits or deductions and any tax sharing arrangements) and net of any reserves
for indemnities and (b) in connection with any issuance or sale of equity
securities or debt securities or instruments or the incurrence of loans, the
cash proceeds received from such issuance or incurrence, net of attorneys' fees,
investment banking fees, accountants' fees, underwriting discounts and
commissions and other customary fees and expenses actually incurred in
connection therewith.
"Net Income" or "Net Loss": for any fiscal period, the amount which, in
conformity with GAAP, would constitute net income or net loss, as the case may
be, of Holdings and its Subsidiaries on a consolidated basis for such fiscal
period, provided that Net Income or Net Loss shall exclude extraordinary,
unusual or non-recurring gains or losses.
"Non-Excluded Taxes": as defined in Section 2.14(a).
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"Non-U.S. Lender": as defined in Section 2.14(d).
"Notes": the collective reference to any promissory note evidencing
Loans.
"Obligations": the unpaid principal of and interest on (including
interest accruing after the maturity of the Loans and interest accruing after
the filing of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding)
the Loans and all other obligations and liabilities of the Borrower to the
Administrative Agent or to any Lender (or, in the case of Hedge Agreements, any
affiliate of any Lender), whether direct or indirect, absolute or contingent,
due or to become due, or now existing or hereafter incurred, which may arise
under, out of, or in connection with, this Agreement, any other Loan Document or
any Hedge Agreement entered into with any Lender or any affiliate of any Lender,
whether on account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses (including all fees, charges and disbursements of
counsel to the Administrative Agent or to any Lender that are required to be
paid by the Borrower pursuant hereto) or otherwise.
"Other Taxes": any and all present or future stamp or documentary taxes
or any other excise or property taxes, charges or similar levies arising from
any payment made hereunder or from the execution, delivery or enforcement of, or
otherwise with respect to, this Agreement or any other Loan Document.
"Participant": as defined in Section 9.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA (or any successor).
"Percentage": as to any Lender at any time, the percentage which such
Lender's Commitment then constitutes of the Total Commitments (or, at any time
after the Commitments shall have expired or terminated, the percentage which the
aggregate principal amount of such Lender's Loans then outstanding constitutes
of the aggregate principal amount of the Loans then outstanding).
"Permitted Investors": the collective reference to EGI-ARC Investors,
L.L.C. and Telecom Partners II, L.P.
"Permitted Subordinated Indebtedness": unsecured subordinated
Indebtedness of Holdings having no amortization of principal and a scheduled
final maturity no earlier than the Scheduled Termination Date and having
subordination terms and other terms and conditions (including, covenants, events
of default, interest rate) as shall be satisfactory to the Required Lenders in
the exercise of their sole discretion.
"Person": an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, Governmental Authority or other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan that is covered
by ERISA and in respect of which the Borrower or a Commonly Controlled Entity is
(or, if such plan were terminated at such time, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"Pro Forma Balance Sheet": as defined in Section 3.1(a).
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"Projections": as defined in Section 5.2(c).
"Properties": as defined in Section 3.17(a).
"Recovery Event": any settlement of or payment in respect of any
property or casualty insurance claim or any condemnation proceeding relating to
any asset of the Borrower or any of its Subsidiaries.
"Register": as defined in Section 9.6(d).
"Regulation U": Regulation U of the Board as in effect from time to
time.
"Reinvestment Deferred Amount": with respect to any Reinvestment Event,
the aggregate Net Cash Proceeds received by Holdings, the Borrower or any of its
Subsidiaries in connection therewith that are not applied to reduce the
Commitments pursuant to Section 2.6(b) as a result of the delivery of a
Reinvestment Notice.
"Reinvestment Event": any Recovery Event in respect of which the
Borrower has delivered a Reinvestment Notice.
"Reinvestment Notice": a written notice executed by a Responsible
Officer stating that no Event of Default has occurred and is continuing and that
the Borrower (directly or indirectly through a Subsidiary) intends and expects
to use all or a specified portion of the Net Cash Proceeds of a Recovery Event
to acquire, repair or replace assets (including by means of acquisitions of
Persons owning such assets) useful in its business.
"Reinvestment Prepayment Amount": with respect to any Reinvestment
Event, the Reinvestment Deferred Amount relating thereto less any amount
expended or contractually committed to be expended prior to the relevant
Reinvestment Prepayment Date to acquire, repair or replace assets (including by
means of acquisitions of Persons owning such assets) useful in the Borrower's
business.
"Reinvestment Prepayment Date": with respect to any Reinvestment Event,
the earlier of (a) the date occurring six months after such Reinvestment Event
and (b) the date on which the Borrower shall have determined not to, or shall
have otherwise ceased to, acquire, repair or replace assets (including by means
of acquisitions of Persons owning such assets) useful in the Borrower's business
with all or any portion of the relevant Reinvestment Deferred Amount.
"Reorganization": with respect to any Multiemployer Plan, the condition
that such plan is in reorganization within the meaning of Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section 4043(b) of
ERISA, other than those events as to which the thirty day notice period is
waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC Reg.
Section 4043.
"Required Lenders": at any time, the holders of more than 50% of (a)
until the Closing Date, the Commitments then in effect and (b) thereafter, the
Total Commitments then in effect or, if the Commitments have been terminated,
the Total Extensions of Credit then outstanding.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or
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determination of an arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"Responsible Officer": the chief executive officer, president or chief
financial officer of the Borrower, but in any event, with respect to financial
matters, the chief financial officer of the Borrower.
"Restricted Payments": as defined in Section 6.6.
"Scheduled Termination Date": October 24, 2000.
"SEC": the Securities and Exchange Commission, any successor thereto
and any analogous Governmental Authority.
"Security Documents": the collective reference to the Guarantee and
Collateral Agreement and all other security documents hereafter delivered to the
Administrative Agent granting a Lien on any property of any Person to secure the
obligations and liabilities of any Loan Party under any Loan Document.
"Senior Debt": at any time, Total Debt less the principal amount of
Permitted Subordinated Debt, in each case, at such time.
"SG&A Expenses": for any period, the amount which, in conformity with
GAAP, would constitute selling, general and administrative expenses of Holdings
and its Subsidiaries on a consolidated income statement of Holdings for such
period.
"Single Employer Plan": any Plan that is covered by Title IV of ERISA,
but that is not a Multiemployer Plan.
"Solvent": when used with respect to any Person, means that, as of any
date of determination, (a) the amount of the "present fair saleable value" of
the assets of such Person will, as of such date, exceed the amount of all
"liabilities of such Person, contingent or otherwise", as of such date, as such
quoted terms are determined in accordance with applicable federal and state laws
governing determinations of the insolvency of debtors, (b) the present fair
saleable value of the assets of such Person will, as of such date, be greater
than the amount that will be required to pay the liability of such Person on its
debts as such debts become absolute and matured, (c) such Person will not have,
as of such date, an unreasonably small amount of capital with which to conduct
its business, and (d) such Person will be able to pay its debts as they mature.
For purposes of this definition, (i) "debt" means liability on a "claim", and
(ii) "claim" means any (x) right to payment, whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (y)
right to an equitable remedy for breach of performance if such breach gives rise
to a right to payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured or unmatured, disputed,
undisputed, secured or unsecured.
"Subsidiary": as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock or other ownership
interests having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise
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qualified, all references to a "Subsidiary" or to "Subsidiaries" in this
Agreement shall refer to a Subsidiary or Subsidiaries of Holdings.
"Subsidiary Guarantor": each Subsidiary of Holdings other than the
Borrower and any Excluded Foreign Subsidiary.
"System": any structured fiber optic communications network consisting
of fiber optic cabling installed in a building in a dedicated conduit system
with junction boxes, intermediate distribution frames, main distribution frames
and all related electronics necessary to operate and provide communications
services over such network.
"Total Capitalization": at any time, the sum of (a) Total Debt at such
time plus (b) the aggregate amount in cash which shall theretofore have been
received by Holdings as a contribution to or in respect of its issuance of
equity capital plus (c) the fair market value of property or services which
shall theretofore have been received by or provided to Holdings in respect of
its equity capital; provided that, for purposes of calculating Total
Capitalization, the amount included under the foregoing clause (c) shall not
exceed $5,000,000.
"Total Commitments": at any time, the aggregate amount of the
Commitments then in effect.
"Total Debt": at any time, the aggregate amount of Indebtedness of
Holdings and its Subsidiaries on a consolidated basis then outstanding
(including capitalized and accreted interest).
"Total Extensions of Credit": at any time, the aggregate amount of the
Extensions of Credit of the Lenders outstanding at such time.
"Transferee": any Assignee or Participant.
"Type": as to any Loan, its nature as an ABR Loan or a Eurodollar Loan.
"Uniform Customs": the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No. 500,
as the same may be amended from time to time.
"United States": the United States of America.
"U.S. Taxes": as defined in Section 9.6(d).
"Wholly Owned Subsidiary": as to any Person, any other Person all of
the Capital Stock of which (other than directors' qualifying shares required by
law) is owned by such Person directly and/or through other Wholly Owned
Subsidiaries.
"Wholly Owned Subsidiary Guarantor": any Subsidiary Guarantor that is a
Wholly Owned Subsidiary of the Borrower.
"Wired Building Units": Building Units in which the Borrower (a) shall
have installed its fiber optic cable and other equipment and (b) is then able to
provide commercial service to all the tenants of such Building Units.
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1.2 Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in the other Loan Documents or any certificate or other document made
or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any certificate
or other document made or delivered pursuant hereto or thereto, (i) accounting
terms relating to Holdings, the Borrower and its Subsidiaries not defined in
Section 1.1 and accounting terms partly defined in Section 1.1, to the extent
not defined, shall have the respective meanings given to them under GAAP, (ii)
the words "include", "includes" and "including" shall be deemed to be followed
by the phrase "without limitation", (iii) the word "incur" shall be construed to
mean incur, create, issue, assume, become liable in respect of or suffer to
exist (and the words "incurred" and "incurrence" shall have correlative
meanings), and (iv) the words "asset" and "property" shall be construed to have
the same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including cash, Capital Stock, securities, revenues,
accounts, leasehold interests and contract rights.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, Schedule and
Exhibit references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Commitments. (a) Subject to the terms and conditions hereof, each
Lender severally agrees to make revolving credit loans ("Loans") to the Borrower
from time to time during the Commitment Period in an aggregate principal amount
at any one time outstanding which does not exceed the amount of such Lender's
Commitment. During the Commitment Period the Borrower may use the Commitments by
borrowing, prepaying the Loans in whole or in part, and reborrowing, all in
accordance with the terms and conditions hereof. The Loans may from time to time
be Eurodollar Loans or ABR Loans, as determined by the Borrower and notified to
the Administrative Agent in accordance with Sections 2.2 and 2.7.
(b) The Borrower shall repay all outstanding Loans on the Scheduled
Termination Date.
2.2 Procedure for Loan Borrowing. The Borrower may borrow under the
Commitments during the Commitment Period on any Business Day, provided that the
Borrower shall give the Administrative Agent irrevocable notice (which notice
must be received by the Administrative Agent prior to 12:00 Noon, New York City
time, (a) three Business Days prior to the requested Borrowing Date, in the case
of Eurodollar Loans, or (b) on the requested Borrowing Date, in the case of ABR
Loans), specifying (i) the amount and Type of Loans to be borrowed, (ii) the
requested Borrowing Date and (iii) in the case of Eurodollar Loans, the
respective amounts of each such Type of Loan and the respective lengths of the
initial Interest Period therefor. Each borrowing under the Commitments shall be
in an amount equal to (x) in the case of ABR Loans, $1,000,000 or a whole
multiple thereof (or, if the then aggregate Available Commitments are less than
$1,000,000, such lesser amount) and (y) in the case of Eurodollar Loans,
$5,000,000 or a whole multiple of $1,000,000 in excess thereof. Upon receipt of
any such notice from the Borrower, the Administrative Agent shall promptly
notify each Lender thereof. Each Lender will make the amount of its pro rata
share of each borrowing available to the Administrative Agent for the account of
the Borrower at the Funding Office prior to 12:00 Noon, New York City time, on
the Borrowing Date requested by the Borrower in funds immediately available to
the Administrative
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Agent. Such borrowing will then be made available to the Borrower by the
Administrative Agent crediting the account of the Borrower on the books of such
office with the aggregate of the amounts made available to the Administrative
Agent by the Lenders and in like funds as received by the Administrative Agent.
2.3 Commitment Fees, etc. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Lender a commitment fee for the
period from and including the Closing Date to the last day of the Commitment
Period, computed at the Commitment Fee Rate on the average daily amount of the
Available Commitment of such Lender during the period for which payment is made,
payable quarterly in arrears on the last day of each March, June, September and
December and on the Scheduled Termination Date, commencing on the first of such
dates to occur after the date hereof.
(b) The Borrower agrees to pay to the Administrative Agent the fees in
the amounts and on the dates previously agreed to in writing by the Borrower and
the Administrative Agent.
2.4 Termination or Reduction of Commitments. The Borrower shall have
the right, upon not less than three Business Days' notice to the Administrative
Agent, to terminate the Commitments or, from time to time, to reduce the amount
of the Commitments; provided that no such termination or reduction of
Commitments shall be permitted if, after giving effect thereto and to any
prepayments of the Loans made on the effective date thereof, the Total
Extensions of Credit would exceed the Total Commitments. Any such reduction
shall be in an amount equal to $1,000,000, or a whole multiple thereof, and
shall reduce permanently the Commitments then in effect.
2.5 Optional Prepayments. The Borrower may at any time and from time to
time prepay the Loans, in whole or in part, without premium or penalty, upon
irrevocable notice delivered to the Administrative Agent at least three Business
Days prior thereto in the case of Eurodollar Loans and at least one Business Day
prior thereto in the case of ABR Loans, which notice shall specify the date and
amount of prepayment and whether the prepayment is of Eurodollar Loans or ABR
Loans; provided, that if a Eurodollar Loan is prepaid on any day other than the
last day of the Interest Period applicable thereto, the Borrower shall also pay
any amounts owing pursuant to Section 2.15. Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender thereof. If any
such notice is given, the amount specified in such notice shall be due and
payable on the date specified therein, together with (except in the case of
Loans that are ABR Loans) accrued interest to such date on the amount prepaid.
Partial prepayments of Loans shall be in an aggregate principal amount of
$1,000,000 or a whole multiple thereof.
2.6 Mandatory Prepayments and Commitment Reductions. (a) Unless the
Required Lenders shall otherwise agree, if any Capital Stock or Indebtedness
shall be issued or incurred by Holdings or any of its Subsidiaries (excluding
any Indebtedness issued or incurred in accordance with Section 6.2 as in effect
on the date of this Agreement), an amount equal to 100% of the Net Cash Proceeds
thereof shall be applied on the date of such issuance or incurrence toward the
reduction of the Commitments as set forth in Section 2.6(c); provided that,
notwithstanding the foregoing, an amount equal to $75,000,000 in the aggregate
of the Net Cash Proceeds from the issuance or incurrence of Capital Stock and
Permitted Subordinated Indebtedness may be excluded from the foregoing
requirement.
(b) Unless the Required Lenders shall otherwise agree, if on any date
Holdings or any of its Subsidiaries shall receive Net Cash Proceeds from any
Recovery Event then, unless a Reinvestment Notice shall be delivered in respect
thereof, such Net Cash Proceeds shall be applied on such date toward the
reduction of the Commitments as set forth in Section 2.6(c); provided, that,
notwithstanding the foregoing, (i) the aggregate Net Cash Proceeds of Recovery
Events that may be excluded from the
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foregoing requirement pursuant to a Reinvestment Notice shall not exceed
$2,000,000 in any fiscal year of the Borrower and (ii) on each Reinvestment
Prepayment Date, an amount equal to the Reinvestment Prepayment Amount with
respect to the relevant Reinvestment Event shall be applied toward the reduction
of the Commitments as set forth in Section 2.6(c).
(c) Amounts to be applied in connection with Commitment reductions made
pursuant to Section 2.6 shall be applied to reduce permanently the Commitments.
Any such reduction of the Commitments shall be accompanied by prepayment of the
Loans to the extent, if any, that the Total Extensions of Credit exceed the
amount of the Total Commitments as so reduced. The application of any prepayment
pursuant to Section 2.6 shall be made, first, to ABR Loans and, second, to
Eurodollar Loans. Each prepayment of the Loans under Section 2.6 (except in the
case of Loans that are ABR Loans) shall be accompanied by accrued interest to
the date of such prepayment on the amount prepaid.
2.7 Conversion and Continuation Options. (a) The Borrower may elect
from time to time to convert Eurodollar Loans to ABR Loans by giving the
Administrative Agent at least two Business Days' prior irrevocable notice of
such election, provided that any such conversion of Eurodollar Loans may only be
made on the last day of an Interest Period with respect thereto. The Borrower
may elect from time to time to convert ABR Loans to Eurodollar Loans by giving
the Administrative Agent at least three Business Days' prior irrevocable notice
of such election (which notice shall specify the length of the initial Interest
Period therefor), provided that no ABR Loan may be converted into a Eurodollar
Loan when any Event of Default has occurred and is continuing and the
Administrative Agent or the Required Lenders have determined in its or their
sole discretion not to permit such conversions. Upon receipt of any such notice
the Administrative Agent shall promptly notify each relevant Lender thereof.
(b) Any Eurodollar Loan may be continued as such upon the expiration of
the then current Interest Period with respect thereto by the Borrower giving
irrevocable notice to the Administrative Agent, in accordance with the
applicable provisions of the term "Interest Period" set forth in Section 1.1, of
the length of the next Interest Period to be applicable to such Loans, provided
that no Eurodollar Loan may be continued as such when any Event of Default has
occurred and is continuing and the Administrative Agent has or the Required
Lenders have determined in its or their sole discretion not to permit such
continuations, and provided, further, that if the Borrower shall fail to give
any required notice as described above in this paragraph or if such continuation
is not permitted pursuant to the preceding proviso such Loans shall be
automatically converted to ABR Loans on the last day of such then expiring
Interest Period. Upon receipt of any such notice the Administrative Agent shall
promptly notify each relevant Lender thereof.
2.8 Limitations on Eurodollar Tranches. Notwithstanding anything to the
contrary in this Agreement, all borrowings, conversions and continuations of
Eurodollar Loans hereunder and all selections of Interest Periods hereunder
shall be in such amounts and be made pursuant to such elections so that, (a)
after giving effect thereto, the aggregate principal amount of the Eurodollar
Loans comprising each Eurodollar Tranche shall be equal to $5,000,000 or a whole
multiple of $1,000,000 in excess thereof and (b) no more than five Eurodollar
Tranches shall be outstanding at any one time.
2.9 Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall
bear interest for each day during each Interest Period with respect thereto at a
rate per annum equal to the Eurodollar Rate determined for such day plus the
Applicable Margin.
(b) Each ABR Loan shall bear interest at a rate per annum equal to the
ABR plus the Applicable Margin.
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(c) (i) If all or a portion of the principal amount of any Loan shall
not be paid when due (whether at the stated maturity, by acceleration or
otherwise), all outstanding Loans (whether or not overdue) shall bear interest
at a rate per annum equal to the rate that would otherwise be applicable thereto
pursuant to the foregoing provisions of this Section plus 2%, and (ii) if all or
a portion of any interest payable on any Loan or any commitment fee or other
amount payable hereunder shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), such overdue amount shall bear interest
at a rate per annum equal to the rate then applicable to ABR Loans plus 2%, in
each case, with respect to clauses (i) and (ii) above, from the date of such
non-payment until such amount is paid in full (as well after as before
judgment).
(d) Interest shall be payable in arrears on each Interest Payment Date,
provided that interest accruing pursuant to paragraph (c) of this Section shall
be payable from time to time on demand.
2.10 Computation of Interest and Fees. (a) Interest and fees payable
pursuant hereto shall be calculated on the basis of a 360-day year for the
actual days elapsed, except that, with respect to ABR Loans the rate of interest
on which is calculated on the basis of the Prime Rate, the interest thereon
shall be calculated on the basis of a 365- (or 366-, as the case may be) day
year for the actual days elapsed. The Administrative Agent shall as soon as
practicable notify the Borrower and the relevant Lenders of each determination
of a Eurodollar Rate. Any change in the interest rate on a Loan resulting from a
change in the ABR or the Eurocurrency Reserve Requirements shall become
effective as of the opening of business on the day on which such change becomes
effective. The Administrative Agent shall as soon as practicable notify the
Borrower and the relevant Lenders of the effective date and the amount of each
such change in interest rate.
(b) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to Section 2.9(a).
2.11 Inability to Determine Interest Rate. If prior to the first day of
any Interest Period:
(a) the Administrative Agent shall have determined (which determination
shall be conclusive and binding upon the Borrower) that, by reason of
circumstances affecting the relevant market, adequate and reasonable means
do not exist for ascertaining the Eurodollar Rate for such Interest Period,
or
(b) the Administrative Agent shall have received notice from the
Required Lenders that the Eurodollar Rate determined or to be determined
for such Interest Period will not adequately and fairly reflect the cost to
such Lenders (as conclusively certified by such Lenders) of making or
maintaining their affected Loans during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the relevant Lenders as soon as practicable thereafter. If such
notice is given (x) any Eurodollar Loans requested to be made on the first day
of such Interest Period shall be made as ABR Loans, (y) any Loans that were to
have been converted on the first day of such Interest Period to Eurodollar Loans
shall be continued as ABR Loans and (z) any outstanding Eurodollar Loans shall
be converted, on the last day of the then-current Interest Period, to ABR Loans.
Until such notice has been withdrawn by the Administrative Agent, no further
Eurodollar Loans shall be made or continued as such, nor shall the Borrower have
the right to convert Loans to Eurodollar Loans.
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2.12 Pro Rata Treatment and Payments. (a) Each borrowing by the
Borrower from the Lenders hereunder, each payment by the Borrower on account of
any commitment fee and any reduction of the Commitments of the Lenders shall be
made pro rata according to the Percentages of the Lenders.
(b) Each payment (including each prepayment) by the Borrower on account
of principal of and interest on the Loans shall be made pro rata according to
the respective outstanding principal amounts of the Loans then held by the
Lenders.
(c) All payments (including prepayments) to be made by the Borrower
hereunder, whether on account of principal, interest, fees or otherwise, shall
be made without setoff or counterclaim and shall be made prior to 12:00 Noon,
New York City time, on the due date thereof to the Administrative Agent, for the
account of the Lenders, at the Funding Office, in Dollars and in immediately
available funds. The Administrative Agent shall distribute such payments to the
Lenders promptly upon receipt in like funds as received. If any payment
hereunder (other than payments on the Eurodollar Loans) becomes due and payable
on a day other than a Business Day, such payment shall be extended to the next
succeeding Business Day. If any payment on a Eurodollar Loan becomes due and
payable on a day other than a Business Day, the maturity thereof shall be
extended to the next succeeding Business Day unless the result of such extension
would be to extend such payment into another calendar month, in which event such
payment shall be made on the immediately preceding Business Day. In the case of
any extension of any payment of principal pursuant to the preceding two
sentences, interest thereon shall be payable at the then applicable rate during
such extension.
(d) Unless the Administrative Agent shall have been notified in writing
by any Lender prior to a borrowing that such Lender will not make the amount
that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is not made available to the Administrative
Agent by the required time on the Borrowing Date therefor, such Lender shall pay
to the Administrative Agent, on demand, such amount with interest thereon at a
rate equal to the daily average Federal Funds Effective Rate for the period
until such Lender makes such amount immediately available to the Administrative
Agent. A certificate of the Administrative Agent submitted to any Lender with
respect to any amounts owing under this paragraph shall be conclusive in the
absence of manifest error. If such Lender's share of such borrowing is not made
available to the Administrative Agent by such Lender within three Business Days
of such Borrowing Date, the Administrative Agent shall also be entitled to
recover such amount with interest thereon at the rate per annum applicable to
ABR Loans, on demand, from the Borrower.
(e) Unless the Administrative Agent shall have been notified in writing
by the Borrower prior to the date of any payment being made hereunder that the
Borrower will not make such payment to the Administrative Agent, the
Administrative Agent may assume that the Borrower is making such payment, and
the Administrative Agent may, but shall not be required to, in reliance upon
such assumption, make available to the Lenders their respective pro rata shares
of a corresponding amount. If such payment is not made to the Administrative
Agent by the Borrower within three Business Days of such required date, the
Administrative Agent shall be entitled to recover, on demand, from each Lender
to which any amount which was made available pursuant to the preceding sentence,
such amount with interest thereon at the rate per annum equal to the daily
average Federal Funds Effective Rate. Nothing herein shall be deemed to limit
the rights of the Administrative Agent or any Lender against the Borrower.
2.13 Requirements of Law. (a) If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof or compliance
by any Lender with any request or
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directive (whether or not having the force of law) from any central bank or
other Governmental Authority made subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever with
respect to this Agreement or any Eurodollar Loan made by it, or change the
basis of taxation of payments to such Lender in respect thereof (except for
Non-Excluded Taxes covered by Section 2.14 and changes in the rate of tax
on the overall net income of such Lender);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any
office of such Lender that is not otherwise included in the determination
of the Eurodollar Rate hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount that such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans, or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, the Borrower shall
promptly pay such Lender, upon its demand, any additional amounts necessary to
compensate such Lender for such increased cost or reduced amount receivable (but
only to the extent actually suffered); provided that the Borrower shall not be
required to compensate a Lender pursuant to this paragraph for any amounts
incurred more than six months prior to the date that such Lender notifies the
Borrower of such Lender's intention to claim compensation therefor; and
provided, further, that, if the circumstances giving rise to such claim have a
retroactive effect, then such six-month period shall be extended to include the
period of such retroactive effect.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder to a level below that which such Lender
or such corporation could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy) by an amount deemed by such Lender to
be material, then from time to time, after submission by such Lender to the
Borrower (with a copy to the Administrative Agent) of a written request
therefor, the Borrower shall pay to such Lender such additional amount or
amounts as will compensate such Lender for such reduction; provided that the
Borrower shall not be required to compensate a Lender pursuant to this paragraph
for any amounts incurred more than six months prior to the date that such Lender
notifies the Borrower of such Lender's intention to claim compensation therefor;
and provided, further, that, if the circumstances giving rise to such claim have
a retroactive effect, then such six-month period shall be extended to include
the period of such retroactive effect.
(c) A certificate as to any additional amounts payable pursuant to this
Section submitted by any Lender to the Borrower (with a copy to the
Administrative Agent) shall be conclusive in the absence of manifest error. The
obligations of the Borrower pursuant to this Section shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
2.14 Taxes. (a) All payments made by the Borrower under this Agreement
shall be made free and clear of, and without deduction or withholding for or on
account of, any present or future
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income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions
or withholdings, now or hereafter imposed, levied, collected, withheld or
assessed by any Governmental Authority, excluding net income taxes and franchise
taxes (imposed in lieu of net income taxes) imposed on the Administrative Agent
or any Lender as a result of a present or former connection between the
Administrative Agent or such Lender and the jurisdiction of the Governmental
Authority imposing such tax or any political subdivision or taxing authority
thereof or therein (other than any such connection arising solely from the
Administrative Agent or such Lender having executed, delivered or performed its
obligations or received a payment under, or enforced, this Agreement or any
other Loan Document). If any such non-excluded taxes, levies, imposts, duties,
charges, fees, deductions or withholdings ("Non-Excluded Taxes") or Other Taxes
are required to be withheld from any amounts payable to the Administrative Agent
or any Lender hereunder, the amounts so payable to the Administrative Agent or
such Lender shall be increased to the extent necessary to yield to the
Administrative Agent or such Lender (after payment of all Non-Excluded Taxes and
Other Taxes) interest or any such other amounts payable hereunder at the rates
or in the amounts specified in this Agreement, provided, however, that the
Borrower shall not be required to increase any such amounts payable to any
Lender with respect to any Non-Excluded Taxes (i) that are attributable to such
Lender's failure to comply with the requirements of paragraph (d) or (e) of this
Section or (ii) that are United States withholding taxes imposed on amounts
payable to such Lender at the time the Lender becomes a party to this Agreement,
except to the extent that such Lender's assignor (if any) was entitled, at the
time of assignment, to receive additional amounts from the Borrower with respect
to such Non-Excluded Taxes pursuant to this paragraph.
(b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are payable by the
Borrower, as promptly as possible thereafter the Borrower shall send to the
Administrative Agent for its own account or for the account of the relevant
Lender, as the case may be, a certified copy of an original official receipt
received by the Borrower showing payment thereof. If the Borrower fails to pay
any Non-Excluded Taxes or Other Taxes when due to the appropriate taxing
authority or fails to remit to the Administrative Agent the required receipts or
other required documentary evidence, the Borrower shall indemnify the
Administrative Agent and the Lenders for any incremental taxes, interest or
penalties that may become payable by the Administrative Agent or any Lender as a
result of any such failure.
(d) Each Lender (or Transferee) that is not a citizen or resident of
the United States of America, a corporation, partnership or other entity created
or organized in or under the laws of the United States of America (or any
jurisdiction thereof), or any estate or trust that is subject to federal income
taxation regardless of the source of its income (a "Non-U.S. Lender") shall
deliver to the Borrower and the Administrative Agent (or, in the case of a
Participant, to the Lender from which the related participation shall have been
purchased) two copies of either U.S. Internal Revenue Service Form 1001 or Form
4224, or, in the case of a Non-U.S. Lender claiming exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of "portfolio interest", a statement substantially in the form of
Exhibit G and a Form W-8, or any subsequent versions thereof or successors
thereto, properly completed and duly executed by such Non-U.S. Lender claiming
complete exemption from, or a reduced rate of, U.S. federal withholding tax on
all payments by the Borrower under this Agreement and the other Loan Documents.
Such forms shall be delivered by each Non-U.S. Lender on or before the date it
becomes a party to this Agreement (or, in the case of any Participant, on or
before the date such Participant purchases the related participation). In
addition, each Non-U.S. Lender shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such Non-U.S.
Lender. Each Non-U.S. Lender shall promptly notify the Borrower at any time it
determines that it is no longer in a position to provide any previously
delivered certificate to the Borrower (or any other form of certification
adopted by the U.S. taxing authorities for
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such purpose). Notwithstanding any other provision of this paragraph, a Non-U.S.
Lender shall not be required to deliver any form pursuant to this paragraph that
such Non-U.S. Lender is not legally able to deliver.
(e) A Lender that is entitled to an exemption from or reduction of
non-U.S. withholding tax under the law of the jurisdiction in which the Borrower
is located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Borrower, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate, provided that such Lender is
legally entitled to complete, execute and deliver such documentation and in such
Lender's judgment such completion, execution or submission would not materially
prejudice the legal position of such Lender.
(f) The agreements in this Section shall survive the termination of
this Agreement and the payment of the Loans and all other amounts payable
hereunder.
2.15 Indemnity. The Borrower agrees to indemnify each Lender and to
hold each Lender harmless from any loss or expense that such Lender may sustain
or incur as a consequence of (a) default by the Borrower in making a borrowing
of, conversion into or continuation of Eurodollar Loans after the Borrower has
given a notice requesting the same in accordance with the provisions of this
Agreement, (b) default by the Borrower in making any prepayment of or conversion
from Eurodollar Loans after the Borrower has given a notice thereof in
accordance with the provisions of this Agreement or (c) the making of a
prepayment of Eurodollar Loans on a day that is not the last day of an Interest
Period with respect thereto. Such indemnification may include an amount equal to
the excess, if any, of (i) the amount of interest that would have accrued on the
amount so prepaid, or not so borrowed, converted or continued, for the period
from the date of such prepayment or of such failure to borrow, convert or
continue to the last day of such Interest Period (or, in the case of a failure
to borrow, convert or continue, the Interest Period that would have commenced on
the date of such failure) in each case at the applicable rate of interest for
such Loans provided for herein (excluding, however, the Applicable Margin
included therein, if any) over (ii) the amount of interest (as reasonably
determined by such Lender) that would have accrued to such Lender on such amount
by placing such amount on deposit for a comparable period with leading banks in
the interbank eurodollar market. A certificate as to any amounts payable
pursuant to this Section submitted to the Borrower by any Lender shall be
conclusive in the absence of manifest error. This covenant shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
2.16 Change of Lending Office. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Section 2.13 or 2.14(a)
with respect to such Lender, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Loans affected by such event with the
object of avoiding the consequences of such event; provided that such
designation is made on terms that, in the sole judgment of such Lender, cause
such Lender and its lending office(s) to suffer no economic, legal or regulatory
disadvantage, and provided, further, that nothing in this Section shall affect
or postpone any of the obligations of any Borrower or the rights of any Lender
pursuant to Section 2.13 or 2.14(a).
2.17 Replacement of Lenders. The Borrower shall be permitted to replace
any Lender that (a) requests reimbursement for amounts owing pursuant to Section
2.13 or 2.14(a) or (b) defaults in its obligation to make Loans hereunder, with
a replacement financial institution; provided that (i) such replacement does not
conflict with any Requirement of Law, (ii) no Event of Default shall have
occurred and be continuing at the time of such replacement, (iii) prior to any
such replacement, such Lender shall
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have taken no action under Section 2.16 so as to eliminate the continued need
for payment of amounts owing pursuant to Section 2.13 or 2.14(a), (iv) the
replacement financial institution shall purchase, at par, all Loans and other
amounts owing to such replaced Lender on or prior to the date of replacement,
(v) the Borrower shall be liable to such replaced Lender under Section 2.15 if
any Eurodollar Loan owing to such replaced Lender shall be purchased other than
on the last day of the Interest Period relating thereto, (vi) the replacement
financial institution, if not already a Lender, shall be reasonably satisfactory
to the Administrative Agent, (vii) the replaced Lender shall be obligated to
make such replacement in accordance with the provisions of Section 9.6 (provided
that the Borrower shall be obligated to pay the registration and processing fee
referred to therein), (viii) until such time as such replacement shall be
consummated, the Borrower shall pay all additional amounts (if any) required
pursuant to Section 2.13 or 2.14(a), as the case may be, and (ix) any such
replacement shall not be deemed to be a waiver of any rights that the Borrower,
the Administrative Agent or any other Lender shall have against the replaced
Lender.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into this
Agreement and to make the Loans, Holdings and the Borrower hereby jointly and
severally represent and warrant to the Administrative Agent and each Lender
that:
3.1 Financial Condition. (a) The unaudited pro forma consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as at December
31, 1998 (including the notes thereto) (the "Pro Forma Balance Sheet"), copies
of which have heretofore been furnished to each Lender, has been prepared giving
effect (as if such events had occurred on such date) to (i) the Loans to be made
on the Closing Date and the use of proceeds thereof and (ii) the payment of fees
and expenses in connection with the foregoing. The Pro Forma Balance Sheet has
been prepared based on the best information available to the Borrower as of the
date of delivery thereof, and presents fairly on a pro forma basis the estimated
financial position of Borrower and its consolidated Subsidiaries as at December
31, 1998, assuming that the events specified in the preceding sentence had
actually occurred at such date.
(b) The audited consolidated balance sheets of the Borrower as at
December 31, 1997 and December 31, 1998, and the related consolidated statements
of income and of cash flows for the fiscal years ended on such dates, reported
on by and accompanied by an unqualified report from Xxxxxx Xxxxxxxx LLP, present
fairly the consolidated financial condition of the Borrower as at such dates,
and the consolidated results of its operations and its consolidated cash flows
for the respective fiscal years then ended. The unaudited consolidated balance
sheet of the Borrower as at January 31, 1999, and the related unaudited
consolidated statements of income and cash flows for the one-month period ended
on such date, present fairly the consolidated financial condition of the
Borrower as at such date, and the consolidated results of its operations and its
consolidated cash flows for the one-month period then ended (subject to normal
year-end audit adjustments). All such financial statements, including the
related schedules and notes thereto, have been prepared in accordance with GAAP
applied consistently throughout the periods involved (except as approved by the
aforementioned firm of accountants and disclosed therein). Holdings, the
Borrower and its Subsidiaries do not have any material Guarantee Obligations,
contingent liabilities and liabilities for taxes, or any long-term leases or
unusual forward or long-term commitments, including any interest rate or foreign
currency swap or exchange transaction or other obligation in respect of
derivatives, that are not reflected in the most recent financial statements
referred to in this paragraph. During the period from December 31, 1998 to and
including the date hereof there has been no Disposition by the Borrower of any
material part of its business or property.
3.2 No Change. Since December 31, 1998 there has been no development or
event that has had or could reasonably be expected to have a Material Adverse
Effect.
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3.3 Corporate Existence; Compliance with Law. Each of Holdings and its
Subsidiaries (a) is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, (b) has the corporate power
and authority, and the legal right, to own and operate its property, to lease
the property it operates as lessee and to conduct the business in which it is
currently engaged, (c) is duly qualified as a foreign corporation and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such qualification
and (d) is in compliance with all Requirements of Law except to the extent that
the failure to comply therewith could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.
3.4 Corporate Power; Authorization; Enforceable Obligations. Each Loan
Party has the corporate power and authority, and the legal right, to make,
deliver and perform the Loan Documents to which it is a party and, in the case
of the Borrower, to borrow hereunder. Each Loan Party has taken all necessary
corporate action to authorize the execution, delivery and performance of the
Loan Documents to which it is a party and, in the case of the Borrower, to
authorize the borrowings on the terms and conditions of this Agreement. No
consent or authorization of, filing with, notice to or other act by or in
respect of, any Governmental Authority or any other Person is required in
connection with the borrowings hereunder or with the execution, delivery,
performance, validity or enforceability of this Agreement or any of the Loan
Documents, except (i) consents, authorizations, filings and notices described in
Schedule 3.4, which consents, authorizations, filings and notices have been
obtained or made and are in full force and effect and (ii) the filings referred
to in Section 3.19. Each Loan Document has been duly executed and delivered on
behalf of each Loan Party party thereto. This Agreement constitutes, and each
other Loan Document upon execution will constitute, a legal, valid and binding
obligation of each Loan Party party thereto, enforceable against each such Loan
Party in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).
3.5 No Legal Bar. The execution, delivery and performance of this
Agreement and the other Loan Documents, the borrowings hereunder and the use of
the proceeds thereof will not violate any Requirement of Law or any Contractual
Obligation of Holdings or any of its Subsidiaries and will not result in, or
require, the creation or imposition of any Lien on any of their respective
properties or revenues pursuant to any Requirement of Law or any such
Contractual Obligation (other than the Liens created by the Security Documents).
No Requirement of Law or Contractual Obligation applicable to Holdings or any of
its Subsidiaries could reasonably be expected to have a Material Adverse Effect.
3.6 Litigation. No litigation, investigation or proceeding of or before
any arbitrator or Governmental Authority is pending or, to the knowledge of
Holdings or the Borrower, threatened by or against Holdings or any of its
Subsidiaries or against any of their respective properties or revenues (a) with
respect to any of the Loan Documents or any of the transactions contemplated
hereby or thereby, or (b) that could reasonably be expected to have a Material
Adverse Effect.
3.7 No Default. Neither Holdings nor any of its Subsidiaries is in
default under or with respect to any of its Contractual Obligations in any
respect that could reasonably be expected to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
3.8 Ownership of Property; Liens. Each of Holdings and its Subsidiaries
has title in fee simple to, or a valid leasehold interest in, or rights to use,
all its real property, and good title to, or a valid leasehold interest in, or
rights to use, all its other property, and none of such property is subject to
any Lien except as permitted by Section 6.3.
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3.9 Intellectual Property. Holdings and each of its Subsidiaries owns,
is licensed to use or has made all necessary applications or registrations for
all Intellectual Property necessary for the conduct of its business as currently
conducted. No material claim has been asserted and is pending by any Person
challenging or questioning the use of any Intellectual Property or the validity
or effectiveness of any Intellectual Property, nor does Holdings or the Borrower
know of any valid basis for any such claim. The use of Intellectual Property by
Holdings and its Subsidiaries does not infringe on the rights of any Person in
any material respect.
3.10 Taxes. Each of Holdings and each of its Subsidiaries has filed or
caused to be filed all Federal, state and other material tax returns and
extensions that are required to be filed and has paid all taxes shown to be due
and payable on said returns or on any assessments made against it or any of its
property and all other taxes, fees or other charges imposed on it or any of its
property by any Governmental Authority (other than any the amount or validity of
that are currently being contested in good faith by appropriate proceedings and
with respect to which reserves in conformity with GAAP have been provided on the
books of Holdings or its Subsidiaries, as the case may be); no tax Lien has been
filed, and, to the knowledge of Holdings and the Borrower, no claim is being
asserted, with respect to any such tax, fee or other charge.
3.11 Federal Regulations. No part of the proceeds of any Loans will be
used for "buying" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation U as now and from time to
time hereafter in effect or for any purpose that violates the provisions of the
Regulations of the Board. If requested by any Lender or the Administrative
Agent, the Borrower will furnish to the Administrative Agent and each Lender a
statement to the foregoing effect in conformity with the requirements of FR Form
G-3 or FR Form U-1, as applicable, referred to in Regulation U.
3.12 Labor Matters. Except as, in the aggregate, could not reasonably
be expected to have a Material Adverse Effect: (a) there are no strikes or other
labor disputes against Holdings or any of its Subsidiaries pending or, to the
knowledge of Holdings or the Borrower, threatened; (b) hours worked by and
payment made to employees of Holdings and its Subsidiaries have not been in
violation of the Fair Labor Standards Act or any other applicable Requirement of
Law dealing with such matters; and (c) all payments due from Holdings or any of
its Subsidiaries on account of employee health and welfare insurance have been
paid or accrued as a liability on the books of Holdings or the relevant
Subsidiary.
3.13 ERISA. Neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied in all material respects with the applicable provisions of ERISA
and the Code. No termination of a Single Employer Plan has occurred, and no Lien
in favor of the PBGC or a Plan has arisen, during such five-year period. The
present value of all accrued benefits under each Single Employer Plan (based on
those assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is made or deemed
made, exceed the value of the assets of such Plan allocable to such accrued
benefits by a material amount. Neither the Borrower nor any Commonly Controlled
Entity has had a complete or partial withdrawal from any Multiemployer Plan that
has resulted or could reasonably be expected to result in a material liability
under ERISA, and neither the Borrower nor any Commonly Controlled Entity would
become subject to any material liability under ERISA if the Borrower or any such
Commonly Controlled Entity were to withdraw completely from all Multiemployer
Plans as of the valuation date most closely preceding the date on which this
representation is made or deemed made. No such Multiemployer Plan is in
Reorganization or Insolvent.
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3.14 Investment Company Act; Other Regulations. No Loan Party is an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. No Loan
Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) that limits its ability to incur Indebtedness.
3.15 Subsidiaries. Except as disclosed to the Administrative Agent by
the Borrower in writing from time to time after the Closing Date, () Schedule
3.15 sets forth the name and jurisdiction of incorporation of each Subsidiary
and, as to each such Subsidiary, the percentage of each class of Capital Stock
owned by any Loan Party and () there are no outstanding subscriptions, options,
warrants, calls, rights or other agreements or commitments (other than stock
options granted to employees or directors and directors' qualifying shares) of
any nature relating to any Capital Stock of the Borrower or any other Subsidiary
of Holdings, except as created by the Loan Documents.
3.16 Use of Proceeds. The proceeds of the Loans shall be used to
finance the Borrower's build-out of fiber optic networks, to pay related fees
and expenses, to finance the working capital needs of the Borrower and its
Subsidiaries in the ordinary course of business and for other general corporate
purposes.
3.17 Environmental Matters. Except as, in the aggregate, could not
reasonably be expected to result in the payment of a Material Environmental
Amount:
(a) to the best knowledge of the Borrower after reasonable
investigation, the facilities and properties owned, leased or operated by
Holdings, the Borrower or any of its Subsidiaries (the "Properties") do not
contain, and have not previously contained, any Materials of Environmental
Concern in amounts or concentrations or under circumstances that constitute
or constituted a violation of, or could give rise to liability under, any
Environmental Law;
(b) neither Holdings, the Borrower nor any of its Subsidiaries has
received or is aware of any notice of violation, alleged violation,
non-compliance, liability or potential liability regarding environmental
matters or compliance with Environmental Laws with regard to any of the
Properties or the business operated by Holdings or any of its Subsidiaries
(the "Business"), nor does Holdings or the Borrower have knowledge or
reason to believe that any such notice will be received or is being
threatened;
(c) to the best knowledge of the Borrower after reasonable
investigation, Materials of Environmental Concern have not been transported
or disposed of from the Properties in violation of, or in a manner or to a
location that could give rise to liability under, any Environmental Law,
nor have any Materials of Environmental Concern been generated, treated,
stored or disposed of at, on or under any of the Properties in violation
of, or in a manner that could give rise to liability under, any applicable
Environmental Law;
(d) to the best knowledge of the Borrower after reasonable
investigation, no judicial proceeding or governmental or administrative
action is pending or, to the knowledge of Holdings and the Borrower,
threatened, under any Environmental Law to which Holdings, the Borrower or
any Subsidiary is or will be named as a party with respect to the
Properties or the Business, nor are there any consent decrees or other
decrees, consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any Environmental
Law with respect to the Properties or the Business;
(e) to the best knowledge of the Borrower after reasonable
investigation, there has been no release or threat of release of Materials
of Environmental Concern at or from the Properties,
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or arising from or related to the operations of Holdings or any Subsidiary
in connection with the Properties or otherwise in connection with the
Business, in violation of or in amounts or in a manner that could give
rise to liability under Environmental Laws;
(f) the Properties and all operations at the Properties are in
compliance, and have in the last two years been in compliance, with all
applicable Environmental Laws, and there is no contamination at, under or
about the Properties or violation of any Environmental Law with respect to
the Properties or the Business; and
(g) neither Holdings nor any of its Subsidiaries has assumed any
liability of any other Person under Environmental Laws.
3.18 Accuracy of Information, etc. No statement or information
contained in this Agreement, any other Loan Document or any other document,
certificate or statement prepared by or on behalf of and furnished by or on
behalf of any Loan Party to the Administrative Agent or the Lenders, or any of
them, for use in connection with the transactions contemplated by this Agreement
or the other Loan Documents, contained as of the date such statement,
information, document or certificate was so furnished, any untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements contained herein or therein not misleading. The projections and pro
forma financial information contained in the materials referenced above are
based upon good faith estimates and assumptions believed by management of the
Borrower to be reasonable at the time made, it being recognized by the Lenders
that such financial information as it relates to future events is not to be
viewed as fact and that actual results during the period or periods covered by
such financial information may differ from the projected results set forth
therein by a material amount. There is no fact known to any Loan Party that
could reasonably be expected to have a Material Adverse Effect that has not been
expressly disclosed herein, in the other Loan Documents or in any other
documents, certificates and statements furnished to the Administrative Agent and
the Lenders for use in connection with the transactions contemplated hereby and
by the other Loan Documents.
3.19 Security Documents. The Guarantee and Collateral Agreement is
effective to create in favor of the Administrative Agent, for the benefit of the
Lenders, a legal, valid and enforceable security interest in the Collateral
described therein and proceeds thereof. In the case of the Pledged Stock
described in the Guarantee and Collateral Agreement, when stock certificates
representing such Pledged Stock are delivered to the Administrative Agent, and
in the case of the other Collateral described in the Guarantee and Collateral
Agreement, when financing statements and other filings specified on Schedule
3.19 in appropriate form are filed in the offices specified on Schedule 3.19,
the Guarantee and Collateral Agreement shall constitute a fully perfected Lien
on (to the extent a security interest is perfected by the filing of a financing
statement), and security interest in, all right, title and interest of the Loan
Parties in such Collateral and the proceeds thereof, as security for the
Obligations (as defined in the Guarantee and Collateral Agreement), in each case
prior and superior in right to any other Person (except, in the case of
Collateral other than Pledged Stock, Liens permitted by Section 6.3).
3.20 Solvency. Each Loan Party is, and after giving effect to the
incurrence of all Indebtedness and obligations being incurred in connection
herewith will be and will continue to be, Solvent.
3.21 Year 2000 Matters. Any reprogramming required to permit the proper
functioning (but only to the extent that such proper functioning would otherwise
be impaired by the occurrence of the year 2000) in and following the year 2000
of material computer systems and other equipment containing embedded microchips,
in either case owned or operated by Holdings or any of its Subsidiaries or used
or relied upon in the conduct of their business (including, to the best
knowledge of Holdings and the
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Borrower, any such systems and other equipment supplied by others or with which
the computer systems of Holdings or any of its Subsidiaries interface), and the
testing of all such systems and other equipment as so reprogrammed, will be
completed on or before September 30, 1999. The costs to Holdings and its
Subsidiaries that have not been incurred as of the date hereof for such
reprogramming and testing and for the other reasonably foreseeable consequences
to them of any improper functioning of other computer systems and equipment
containing embedded microchips due to the occurrence of the year 2000 could not
reasonably be expected to result in a Default or Event of Default or to have a
Material Adverse Effect. Except for any reprogramming referred to above, the
computer systems of Holdings and its Subsidiaries are and, with ordinary course
upgrading and maintenance, will continue for the term of this Agreement to be,
sufficient for the conduct of their business as currently conducted.
3.22 Real Estate. None of Holdings or any of its Subsidiaries holds any
real property having a value (together with improvements thereof) of at least
$250,000 which property is not covered by a mortgage in favor of the
Administrative Agent, for the benefit of the Lenders.
SECTION 4. CONDITIONS PRECEDENT
4.1 Conditions to Initial Extension of Credit. The agreement of each
Lender to make the initial extension of credit requested to be made by it is
subject to the satisfaction, prior to or concurrently with the making of such
extension of credit on the Closing Date (but in any event no later than the
Scheduled Termination Date), of the following conditions precedent:
(a) Credit Agreement; Guarantee and Collateral Agreement. The
Administrative Agent shall have received (i) this Agreement, executed and
delivered by the Administrative Agent, Holdings, the Borrower and each
Person listed on Schedule 1.1A, (ii) the Guarantee and Collateral
Agreement, executed and delivered by Holdings, the Borrower and each
Subsidiary Guarantor and (iii) an Acknowledgement and Consent in the form
attached to the Guarantee and Collateral Agreement, executed and delivered
by each Issuer (as defined therein), if any, that is not a Loan Party.
(b) Pro Forma Balance Sheet; Financial Statements. The Lenders shall
have received (i) the Pro Forma Balance Sheet, (ii) audited consolidated
financial statements of the Borrower for the 1997 and 1998 fiscal years and
(iii) unaudited interim consolidated financial statements of the Borrower
for each fiscal month and quarterly period ended subsequent to the date of
the latest applicable financial statements delivered pursuant to clause
(ii) of this paragraph as to which such financial statements are available,
and such financial statements shall not, in the reasonable judgment of the
Lenders, reflect any material adverse change in the consolidated financial
condition of the Borrower.
(c) Approvals. All governmental and third party approvals (including
landlords' and other consents) necessary or, in the discretion of the
Administrative Agent, advisable in connection with the continuing
operations of Holdings and its Subsidiaries and the transactions
contemplated hereby shall have been obtained and be in full force and
effect, and all applicable waiting periods shall have expired without any
action being taken or threatened by any competent authority that would
restrain, prevent or otherwise impose adverse conditions on the financing
contemplated hereby.
(d) Lien Searches. The Administrative Agent shall have received the
results of a recent lien search in each of the jurisdictions where assets
of the Loan Parties are located, and such search shall reveal no liens on
any of the assets of the Borrower or its Subsidiaries except for
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liens permitted by Section 6.3 or discharged on or prior to the Closing
Date pursuant to documentation satisfactory to the Administrative Agent.
(e) Fees. The Lenders and the Administrative Agent shall have received
all fees required to be paid, and all expenses for which invoices have been
presented (including the reasonable fees and expenses of legal counsel), on
or before the Closing Date. All such amounts will be paid with proceeds of
Loans made on the Closing Date and will be reflected in the funding
instructions given by the Borrower to the Administrative Agent on or before
the Closing Date.
(f) Closing Certificate. The Administrative Agent shall have received,
with a counterpart for each Lender, a certificate of each Loan Party, dated
the Closing Date, substantially in the form of Exhibit C, with appropriate
insertions and attachments.
(g) Legal Opinions. The Administrative Agent shall have received the
following executed legal opinions:
(i) the legal opinion of Xxxxxxxx & Xxxxx, counsel to Holdings
and its Subsidiaries, substantially in the form of Exhibit F-1;
(ii) the legal opinion of local counsel in each of California,
Texas, Massachusetts, Georgia and Washington, DC, and of such other
special and local counsel as may be required by the Administrative
Agent, such opinions to be substantially in the form of Exhibit F-2;
and
(iii) the legal opinion of special telecommunications counsel
to Holdings and its Subsidiaries, in form and substance satisfactory
to the Lenders.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent may
reasonably require.
(h) Pledged Stock; Stock Powers; Pledged Notes. The Administrative
Agent shall have received (i) the certificates representing the shares of
Capital Stock pledged pursuant to the Guarantee and Collateral Agreement,
together with an undated stock power for each such certificate executed in
blank by a duly authorized officer of the pledgor thereof and (ii) each
promissory note (if any) pledged to the Administrative Agent pursuant to
the Guarantee and Collateral Agreement endorsed (without recourse) in blank
(or accompanied by an executed transfer form in blank) by the pledgor
thereof.
(i) Filings, Registrations and Recordings. Each document (including any
Uniform Commercial Code financing statement) required by the Security
Documents or under law or reasonably requested by the Administrative Agent
to be filed, registered or recorded in order to create in favor of the
Administrative Agent, for the benefit of the Lenders, a perfected Lien on
the Collateral described therein, prior and superior in right to any other
Person (other than with respect to Liens expressly permitted by Section
6.3), shall be in proper form for filing, registration or recordation.
(j) License Agreement Consents. The Administrative Agent shall have
received consents, in form and substance satisfactory to the Administrative
Agent and at least covering the items set forth in Exhibit D, from
licensors under all License Agreements to the assignment of such License
Agreements pursuant to the Guarantee and Collateral Agreement.
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(k) Insurance. The Administrative Agent shall have received insurance
certificates satisfying the requirements of Section 5.2(b) of the Guarantee
and Collateral Agreement.
(l) Permitted Subordinated Indebtedness; Capital Structure. If Holdings
has issued or incurred any Permitted Subordinated Indebtedness, the
Administrative Agent shall have received satisfactory evidence that the
terms and conditions of such Permitted Subordinated Indebtedness are
acceptable to the Administrative Agent, in its sole discretion. The capital
structure of each Loan Party shall be satisfactory in all respects to the
Administrative Agent.
(m) Business Plan. The Lenders shall have received a satisfactory
business plan for fiscal years 1999-2002 and a satisfactory written
analysis of the business and prospects of the Borrower and its Subsidiaries
for the period from the Closing Date through the Scheduled Termination
Date.
(n) Budget. The Lenders shall have received a detailed budget for
fiscal year 2000 of the Borrower and its Subsidiaries in form and substance
satisfactory to the Lenders.
(o) Financial Covenants. The Lenders and the Borrower shall have
executed and delivered an amendment to this Agreement whereby (i) amounts
and numbers for each month ending after fiscal year 1999 with respect to
the covenants set forth in Sections 6.1(d), (e) and (f) shall be added to
this Agreement and (ii) amounts for Capital Expenditures with respect to
the covenant set forth in Section 6.7(b) shall be added to this Agreement,
such amendment to be satisfactory to the Lenders in their absolute and sole
discretion.
4.2 Conditions to Each Extension of Credit. The agreement of each
Lender to make any extension of credit requested to be made by it on any date
(including its initial extension of credit) is subject to the satisfaction of
the following conditions precedent:
(a) Representations and Warranties. Each of the representations and
warranties made by any Loan Party in or pursuant to the Loan Documents
shall be true and correct in all material respects on and as of such date
as if made on and as of such date.
(b) No Default. No Default or Event of Default shall have occurred and
be continuing on such date or after giving effect to the extensions of
credit requested to be made on such date.
(c) Utilization of Other Capital. (i) All but $12,500,000 of the
aggregate Net Cash Proceeds of sales or issuances of equity securities
prior to the Closing Date by Holdings and its Subsidiaries and (ii) all the
Net Cash Proceeds from the incurrence of Permitted Subordinated
Indebtedness by Holdings, shall have been utilized, with evidence, in form
and substance satisfactory to the Administrative Agent, of such utilization
having been delivered to the Administrative Agent.
Each borrowing by the Borrower hereunder shall constitute a representation and
warranty by the Borrower as of the date of such extension of credit that the
conditions contained in this Section 4.2 have been satisfied.
SECTION 5. AFFIRMATIVE COVENANTS
Holdings and the Borrower hereby jointly and severally agree that, so
long as the Commitments remain in effect or any Loan or other amount (other than
contingent obligations and indemnities which are not then due and payable but
which survive repayment of the Loans and
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termination of the Commitments) is owing to any Lender or the Administrative
Agent hereunder, each of Holdings and the Borrower shall and shall cause each of
its Subsidiaries to:
5.1 Financial Statements. Furnish to the Administrative Agent and each
Lender:
(a) as soon as available, but in any event within 90 days after the end
of each fiscal year of Holdings, a copy of the audited consolidated balance
sheet of Holdings and its consolidated Subsidiaries as at the end of such
year and the related audited consolidated statements of income and of cash
flows for such year, setting forth in each case in comparative form the
figures for the previous year, reported on without a "going concern" or
like qualification or exception, or qualification arising out of the scope
of the audit, by Xxxxxx Xxxxxxxx LLP or other independent certified public
accountants of nationally recognized standing;
(b) as soon as available, but in any event not later than 45 days after
the end of each of the first three quarterly periods of each fiscal year of
Holdings, the unaudited consolidated balance sheet of Holdings and its
consolidated Subsidiaries as at the end of such quarter and the related
unaudited consolidated statements of income and of cash flows for such
quarter and the portion of the fiscal year through the end of such quarter,
setting forth in each case in comparative form the figures for the previous
year, certified by a Responsible Officer as being fairly stated in all
material respects (subject to normal year-end audit adjustments); and
(c) as soon as available, but in any event not later than 45 days after
the end of each month occurring during each fiscal year of Holdings (other
than the third, sixth, ninth and twelfth such month), the unaudited
consolidated balance sheets of Holdings and its Subsidiaries as at the end
of such month and the related unaudited consolidated statements of income
and of cash flows for such month and the portion of the fiscal year through
the end of such month, setting forth in each case in comparative form the
figures for the previous year, certified by a Responsible Officer as being
fairly stated in all material respects (subject to normal year-end audit
adjustments).
All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
5.2 Certificates; Other Information. Furnish to the Administrative
Agent and each Lender (or, in the case of clause (g), to the relevant Lender):
(a) concurrently with the delivery of the financial statements referred
to in Section 5.1(a), a certificate of the independent certified public
accountants reporting on such financial statements stating that in making
the examination necessary therefor no knowledge was obtained of any Default
or Event of Default, except as specified in such certificate;
(b) concurrently with the delivery of any financial statements pursuant
to Section 5.1, (i) a certificate of a Responsible Officer stating that, to
the best of each such Responsible Officer's knowledge, each Loan Party
during such period has observed or performed all of its covenants and other
agreements, and satisfied every condition, contained in this Agreement and
the other Loan Documents to which it is a party to be observed, performed
or satisfied by it, and that such Responsible Officer has obtained no
knowledge of any Default or Event of Default except as specified in such
certificate and (ii) in the case of quarterly or annual financial
statements, (x) a Compliance Certificate containing all information and
calculations necessary for determining
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compliance by Holdings and its Subsidiaries with the provisions of this
Agreement referred to therein as of the last day of the fiscal quarter or
fiscal year of Holdings, as the case may be, and (y) to the extent not
previously disclosed to the Administrative Agent, a listing of any county
or state within the United States where any Loan Party keeps inventory or
equipment and of any federally-registered Intellectual Property acquired
by any Loan Party since the date of the most recent list delivered
pursuant to this clause (y) (or, in the case of the first such list so
delivered, since the Closing Date);
(c) as soon as available, and in any event no later than 45 days after
the end of each fiscal year of the Borrower, a detailed consolidated budget
for the following fiscal year (including a projected consolidated balance
sheet of Holdings and its Subsidiaries as of the end of the following
fiscal year, the related consolidated statements of projected cash flow,
projected changes in financial position and projected income and a
description of the underlying assumptions applicable thereto), and, as soon
as available, significant revisions, if any, of such budget and projections
with respect to such fiscal year (collectively, the "Projections"), which
Projections shall in each case be accompanied by a certificate of a
Responsible Officer stating that such Projections are based on reasonable
estimates, information and assumptions and that such Responsible Officer
has no reason to believe that such Projections are incorrect or misleading
in any material respect;
(d) within 45 days after the end of each fiscal quarter of Holdings, a
narrative discussion and analysis of the financial condition and results of
operations of Holdings and its Subsidiaries for such fiscal quarter and for
the period from the beginning of the then current fiscal year to the end of
such fiscal quarter, as compared to the portion of the Projections covering
such periods and to the comparable periods of the previous year;
(e) within five days after the same are sent, copies of all financial
statements and reports that Holdings or the Borrower sends to the holders
of any class of its debt securities or public equity securities and, within
five days after the same are filed, copies of all financial statements and
reports that Holdings or the Borrower may make to, or file with, the SEC;
and
(f) promptly, such additional financial and other information as any
Lender may from time to time reasonably request.
5.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
material obligations (other than Indebtedness) of whatever nature, except where
the amount or validity thereof is currently being contested in good faith by
appropriate proceedings and reserves in conformity with GAAP with respect
thereto have been provided on the books of Holdings, the Borrower or its
Subsidiaries, as the case may be.
5.4 Maintenance of Existence; Compliance. (a) (i) preserve, renew and
keep in full force and effect its corporate existence and (ii) take all
reasonable action to maintain all rights, privileges and franchises necessary or
desirable in the normal conduct of its business, except, in each case, as
otherwise permitted by Section 6.4 and except, in the case of clause (ii) above,
to the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect; and (b) comply with all Contractual Obligations and
Requirements of Law except to the extent that failure to comply therewith could
not, in the aggregate, reasonably be expected to have a Material Adverse Effect.
5.5 Maintenance of Property; Insurance. (a) Keep all property useful
and necessary in its business in good working order and condition, ordinary wear
and tear excepted and (b) maintain with financially sound and reputable
insurance companies insurance on all its property in at least such
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amounts and against at least such risks (but including in any event public
liability, product liability and business interruption) as are usually insured
against in the same general area by companies engaged in the same or a similar
business.
5.6 Inspection of Property; Books and Records; Discussions. (a) Keep
proper books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities and (b) permit
representatives of any Lender to visit and inspect any of its properties and
examine and make abstracts from any of its books and records at any reasonable
time and as often as may reasonably be desired and to discuss the business,
operations, properties and financial and other condition of Holdings and its
Subsidiaries with officers and employees of Holdings and its Subsidiaries and
with its independent certified public accountants.
5.7 Notices. Promptly give notice to the Administrative Agent and each
Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of Holdings or any of its Subsidiaries or (ii) litigation,
investigation or proceeding that may exist at any time between Holdings or
any of its Subsidiaries and any Governmental Authority, that in either
case, if not cured or if adversely determined, as the case may be, could
reasonably be expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting Holdings or any of its
Subsidiaries in which the amount involved is $100,000 or more and not
covered by insurance or in which injunctive or similar relief is sought;
(d) the following events, as soon as possible and in any event within
30 days after Holdings or the Borrower knows or has reason to know thereof:
(i) the occurrence of any Reportable Event with respect to any Plan, a
failure to make any required contribution to a Plan, the creation of any
Lien in favor of the PBGC or a Plan or any withdrawal from, or the
termination, Reorganization or Insolvency of, any Multiemployer Plan or
(ii) the institution of proceedings or the taking of any other action by
the PBGC or the Borrower or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the termination,
Reorganization or Insolvency of, any Plan; and
(e) any development or event that has had or could reasonably be
expected to have a Material Adverse Effect.
Each notice pursuant to this Section 5.7 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action Holdings or the relevant Subsidiary proposes to
take with respect thereto.
5.8 Environmental Laws. (a) Comply in all material respects with all
applicable Environmental Laws, and obtain and comply in all material respects
with and maintain any and all licenses, approvals, notifications, registrations
or permits required by applicable Environmental Laws, to the extent that failure
to comply with or so obtain could reasonably be expected to have a Material
Adverse Effect.
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all
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material respects with all lawful orders and directives of all Governmental
Authorities regarding Environmental Laws.
5.9 Additional Collateral, etc. (a) With respect to any property
acquired after the Closing Date by Holdings or any of its Subsidiaries (other
than (x) any property described in paragraph (b), (c) or (d) below, (y) any
property subject to a Lien expressly permitted by Section 6.3(g) and (z)
property acquired by any Excluded Foreign Subsidiary) as to which the
Administrative Agent, for the benefit of the Lenders, does not have a perfected
Lien, promptly (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and Collateral Agreement or such other documents as
the Administrative Agent deems necessary or advisable to grant to the
Administrative Agent, for the benefit of the Lenders, a security interest in
such property and (ii) take all actions necessary or advisable to grant to the
Administrative Agent, for the benefit of the Lenders, a perfected first priority
security interest in such property, including the filing of Uniform Commercial
Code financing statements in such jurisdictions as may be required by the
Guarantee and Collateral Agreement or by law or as may be requested by the
Administrative Agent; provided that Holdings and its Subsidiaries shall not be
required to comply with the requirements of this Section 5.9(a) if the
Administrative Agent, in its sole discretion, determines that the cost of such
compliance is excessive in relation to the value of the collateral security to
be afforded thereby.
(b) With respect to any fee interest in any real property having a
value (together with improvements thereof) of at least $500,000 acquired after
the Closing Date by Holdings, the Borrower or any of its Subsidiaries (other
than (x) any such real property subject to a Lien expressly permitted by Section
6.3(g) and (z) real property acquired by any Excluded Foreign Subsidiary),
promptly (i) execute and deliver a first priority mortgage (in form and
substance satisfactory to the Administrative Agent), in favor of the
Administrative Agent, for the benefit of the Lenders, covering such real
property, (ii) if requested by the Administrative Agent, provide the Lenders
with (x) title and extended coverage insurance covering such real property in an
amount at least equal to the purchase price of such real property (or such other
amount as shall be reasonably specified by the Administrative Agent) as well as
a current ALTA survey thereof, together with a surveyor's certificate and (y)
any consents or estoppels reasonably deemed necessary or advisable by the
Administrative Agent in connection with such mortgage or deed of trust, each of
the foregoing in form and substance reasonably satisfactory to the
Administrative Agent and (iii) if requested by the Administrative Agent, deliver
to the Administrative Agent legal opinions relating to the matters described
above, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Administrative Agent.
(c) With respect to any new Subsidiary (other than an Excluded Foreign
Subsidiary) created or acquired after the Closing Date by Holdings (which, for
the purposes of this paragraph (c), shall include any existing Subsidiary that
ceases to be an Excluded Foreign Subsidiary) or any of its Subsidiaries,
promptly (i) execute and deliver to the Administrative Agent such amendments to
the Guarantee and Collateral Agreement as the Administrative Agent deems
necessary or advisable to grant to the Administrative Agent, for the benefit of
the Lenders, a perfected first priority security interest in the Capital Stock
of such new Subsidiary that is owned by Holdings or any of its Subsidiaries,
(ii) deliver to the Administrative Agent the certificates representing such
Capital Stock, together with undated stock powers, in blank, executed and
delivered by a duly authorized officer of Holdings or such Subsidiary, as the
case may be, (iii) cause such new Subsidiary (A) to become a party to the
Guarantee and Collateral Agreement, (B) to take such actions necessary or
advisable to grant to the Administrative Agent for the benefit of the Lenders a
perfected first priority security interest in the Collateral described in the
Guarantee and Collateral Agreement with respect to such new Subsidiary,
including the filing of Uniform Commercial Code financing statements in such
jurisdictions as may be required by the Guarantee and Collateral Agreement or by
law or as may be requested by the Administrative Agent and (C) to deliver to the
Administrative Agent a certificate of such Subsidiary, substantially in the form
of Exhibit C, with
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appropriate insertions and attachments, and (iv) if requested by the
Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
(d) With respect to any new Excluded Foreign Subsidiary created or
acquired after the Closing Date by Holdings, the Borrower or any of its
Subsidiaries, promptly (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and Collateral Agreement as the Administrative Agent
deems necessary or advisable to grant to the Administrative Agent, for the
benefit of the Lenders, a perfected first priority security interest in the
Capital Stock of such new Subsidiary that is owned by Holdings, the Borrower or
any of its Subsidiaries (provided that in no event shall more than 65% of the
total outstanding voting Capital Stock of any such new Subsidiary be required to
be so pledged), (ii) deliver to the Administrative Agent the certificates
representing such Capital Stock, together with undated stock powers, in blank,
executed and delivered by a duly authorized officer of Holdings, the Borrower or
such Subsidiary, as the case may be, and take such other action as may be
necessary or, in the opinion of the Administrative Agent, desirable to perfect
the Administrative Agent's security interest therein, and (iii) if requested by
the Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
(e) With respect to any License Agreement entered into by Holdings or
any of its Subsidiaries after the Closing Date, promptly (i) cause to be filed
such further UCC financing statements or other documents as requested by the
Administrative Agent to protect the Administrative Agent's and the Lenders'
Liens under the Guarantee and Collateral Agreement in connection therewith,
including, without limitation, any fixture filings which are so requested and
(ii) cause the building owner party to such License Agreement to execute and
deliver a consent in substantially the form of Exhibit D to the extent the
provisions of such Exhibit D are not included in such License Agreement.
SECTION 6. NEGATIVE COVENANTS
Holdings and the Borrower hereby jointly and severally agree that, so
long as the Commitments remain in effect or any Loan or other amount (other than
contingent obligations and indemnities which are not then due and payable but
which survive repayment of the Loans and termination of the Commitments) is
owing to any Lender or the Administrative Agent hereunder, each of Holdings and
the Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly:
6.1 Financial Condition Covenants.
(a) Minimum Cash Balance. Permit the Cash Balance on any date to be
less than $6,000,000.
(b) Maximum Senior Debt to Total Capitalization. Permit the ratio of
Senior Debt to Total Capitalization on any date to exceed 0.55 to 1.
(c) Maximum Total Debt to Total Capitalization. Permit the ratio of
Total Debt to Total Capitalization on any date to exceed 0.70 to 1.
(d) Minimum Buildings Units Wired and Revenue. (i) Permit the number of
Wired Building Units on any of the dates set forth below to be less than the
number set forth opposite such date:
Dates Number
----- ------
June 30, 1999 36
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July 31, 1999 41
August 31, 1999 58
September 30, 1999 67
October 31, 1999 77
November 30, 1999 88
December 31, 1999 99
or permit the number of Wired Building Units on the last day of each month
thereafter to be less than the number agreed upon pursuant to Section 4.1(o), or
(ii) permit Consolidated Total Revenue for the month ended on any of the dates
set forth below to be less than the amount set forth opposite such date:
Dates Amount
----- ------
June 30, 1999 $ 42,000
July 31, 1999 $ 45,000
August 31, 1999 $ 91,000
September 30, 1999 $ 94,000
October 31, 1999 $129,000
November 30, 1999 $270,000
December 31, 1999 $352,000
or permit Consolidated Total Revenue for the the month ended on the last day of
each month thereafter to be less than the amount agreed upon pursuant to Section
4.1(o). On any date specified in the foregoing clauses (i) and (ii), Holdings
and the Borrower shall be required to comply with either the covenant set forth
in clause (i) or the covenant in clause (ii), and shall not be required to
comply on such date with the covenants set forth in both clauses (i) and (ii).
(e) Maximum SG&A Expenses. Permit SG&A Expenses for the three months
ended on any of the dates set forth below to exceed the amount set forth
opposite such date:
Dates Amount
----- ------
March 31, 1999 $5,400,000
April 30, 1999 $6,600,000
May 31, 1999 $7,200,000
June 30, 1999 $7,700,000
July 31, 1999 $7,900,000
August 31, 1999 $7,900,000
September 30, 1999 $7,900,000
October 31, 1999 $7,900,000
November 30, 1999 $7,900,000
December 31, 1999 $7,900,000
or permit SG&A Expenses for the three months ended on the last day of each month
thereafter to exceed the amount agreed upon pursuant to Section 4.1(o).
(f) Minimum EBITDA. Permit EBITDA for the three months ended on any of
the dates set forth below to be less than the amount set forth opposite such
date:
Dates Amount
----- ------
March 31, 1999 ($6,500,000)
April 30, 1999 ($7,800,000)
May 31, 1999 ($8,800,000)
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June 30, 1999 ($9,400,000)
July 31, 1999 ($9,800,000)
August 31, 1999 ($9,800,000)
September 30, 1999 ($9,800,000)
October 31, 1999 ($9,500,000)
November 30, 1999 ($9,500,000)
December 31, 1999 ($9,500,000)
or permit EBITDA for the three months ended on the last day of each month
thereafter to be less than the amount agreed upon pursuant to Section 4.1(o).
6.2 Indebtedness. Create, issue, incur, assume, become liable in
respect of or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any Loan Document;
(b) Indebtedness of the Borrower to any Subsidiary and of any Wholly
Owned Subsidiary Guarantor to the Borrower or any other Subsidiary;
(c) Guarantee Obligations incurred in the ordinary course of business
by the Borrower or any of its Subsidiaries of obligations of any Wholly
Owned Subsidiary Guarantor;
(d) Indebtedness outstanding on the date hereof and listed on Schedule
6.2(d) and any refinancings, refundings, renewals or extensions thereof
(without increasing, or shortening the maturity of, the principal amount
thereof);
(e) Indebtedness (including, without limitation, Capital Lease
Obligations) secured by Liens permitted by Section 6.3(g) in an aggregate
principal amount not to exceed (i) at all times on or prior to December 31,
1999, $16,000,000 and (ii) thereafter, $20,000,000, in each case at any one
time outstanding;
(f) (i) Permitted Subordinated Indebtedness in an aggregate principal
amount not to exceed $75,000,000; provided that the Net Cash Proceeds of
such Indebtedness are immediately (A) contributed as cash equity to the
Borrower or (B) loaned to the Borrower, provided that no amortization of
principal of such loan shall occur until after the Scheduled Termination
Date and after all Obligations have been fully paid and satisfied and such
loan shall have subordination terms and other terms and conditions
(including, covenants, events of default, interest rate) as shall be
satisfactory to the Required Lenders in the exercise of their sole
discretion, and (ii) Guarantee Obligations of the Borrower and any
Subsidiary Guarantor in respect of such Permitted Subordinated Indebtedness,
provided that such Guarantee Obligations are subordinated to the same extent
as the obligations of Holdings in respect of the Permitted Subordinated
Indebtedness;
(g) Indebtedness resulting from refinancings, refundings, renewals or
extensions of Permitted Subordinated Indebtedness which do not increase or
shorten the maturity of the principal amount thereof and which is on terms
and conditions (including, covenants, events of default, interest rate) as
are satisfactory to the Required Lenders in the exercise of their sole
discretion;
(h) Indebtedness of a corporation which becomes a Subsidiary after the
date hereof, provided that (A) such Indebtedness existed at the time such
corporation became a Subsidiary
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and was not created in anticipation of the acquisition and (B) immediately
after giving effect to the acquisition of such corporation by the Borrower
no Default or Event of Default shall have occurred and be continuing; and
(i) additional Indebtedness of the Borrower or any of its Subsidiaries
in an aggregate principal amount (for the Borrower and all Subsidiaries) not
to exceed $1,000,000 at any one time outstanding.
6.3 Liens. Create, incur, assume or suffer to exist any Lien upon any
of its property, whether now owned or hereafter acquired, except for:
(a) Liens for taxes not yet due or that are being contested in good
faith by appropriate proceedings, provided that adequate reserves with
respect thereto are maintained on the books of the Borrower or its
Subsidiaries, as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, landlords', mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business
that are not overdue for a period of more than 30 days or that are being
contested in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation;
(d) 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;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business that, in the
aggregate, are not substantial in amount and that do not in any case
materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of the
Borrower or any of its Subsidiaries;
(f) Liens in existence on the date hereof listed on Schedule 6.3(f),
securing Indebtedness permitted by Section 6.2(d), provided that no such
Lien is spread to cover any additional property after the Closing Date and
that the amount of Indebtedness secured thereby is not increased, and
extensions, renewals and replacements of such Liens that do not increase
the outstanding principal amount thereof;
(g) Liens securing Indebtedness of the Borrower or any other Subsidiary
incurred pursuant to Section 6.2(e) to finance the acquisition of fixed or
capital assets, provided that (i) such Lien shall be created substantially
simultaneously with the acquisition of such fixed or capital assets, (ii)
such Lien does not at any time encumber any property other than the
property financed by such Indebtedness and (iii) the amount of Indebtedness
secured by any such Lien is not increased; and extensions, renewals and
replacements of each such Lien that do not increase the outstanding
principal amount secured by such Lien;
(h) Liens created pursuant to the Security Documents;
(i) any interest or title of a lessor or licensor under any lease or
License Agreement entered into by the Borrower or any other Subsidiary in
the ordinary course of its business and covering only the assets so leased
or licensed, and any restriction or encumbrance to which the interest or
title of such lessor or licensor may be subject, and extensions, renewals
and
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replacements of such restrictions and encumbrances that do not increase the
outstanding principal amount thereof;
(j) any Lien existing on any property or asset prior to the acquisition
thereof by the Borrower or any Subsidiary or existing on any property or
asset of any Person that becomes a Subsidiary after the date hereof prior
to the time such Person becomes a Subsidiary; provided that (i) such Lien
is not created in contemplation of or in connection with such acquisition
or such Person becoming a Subsidiary, as the case may be, (ii) such Lien
shall not apply to any other property or assets of the Borrower or any
Subsidiary and (iii) such Lien shall secure only those obligations which it
secures on the date of such acquisition or the date such Person becomes a
Subsidiary, as the case may be, and extensions, renewals and replacements
thereof that do not increase the outstanding principal amount thereof; and
(k) Liens not otherwise permitted by this Section so long as neither
(i) the aggregate outstanding principal amount of the obligations secured
thereby nor (ii) the aggregate fair market value (determined as of the date
such Lien is incurred) of the assets subject thereto exceeds (as to the
Borrower and all Subsidiaries) $500,000 at any one time.
6.4 Fundamental Changes. Enter into any merger, consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or Dispose of, all or substantially all of its
property or business, except that:
(a) any Subsidiary of the Borrower may be merged or consolidated with
or into the Borrower (provided that the Borrower shall be the continuing or
surviving corporation) or with or into any Wholly Owned Subsidiary
Guarantor (provided that the Wholly Owned Subsidiary Guarantor shall be the
continuing or surviving corporation);
(b) any Subsidiary of the Borrower may Dispose of any or all of its
assets (upon voluntary liquidation or otherwise) to the Borrower or any
Wholly Owned Subsidiary Guarantor; and
(c) any Subsidiary of the Borrower may effect pursuant to a merger or
consolidation any Investment permitted by Section 6.8(f).
6.5 Disposition of Property. Dispose of any of its property, whether
now owned or hereafter acquired, or, in the case of any Subsidiary, issue or
sell any shares of such Subsidiary's Capital Stock to any Person, except:
(a) the Disposition of obsolete or worn out property and property no
longer used or useful in the ordinary course of business;
(b) the sale of inventory in the ordinary course of business;
(c) Dispositions permitted by Section 6.4(b);
(d) the sale or issuance of any Subsidiary's Capital Stock to the
Borrower or any Wholly Owned Subsidiary Guarantor;
(e) the lease or license of property to non-Affiliates in the ordinary
course of business;
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(f) the Disposition of Cash Equivalents in exchange for Cash
Equivalents of substantially equal value; and
(g) the Disposition of other property having a fair market value not to
exceed $500,000 in the aggregate for any fiscal year of the Borrower.
6.6 Restricted Payments. Declare or pay any dividend (other than
dividends payable solely in common stock of the Person making such dividend) on,
or make any payment on account of, or set apart assets for a sinking or other
analogous fund for, the purchase, redemption, defeasance, retirement or other
acquisition of, any Capital Stock of Holdings or any Subsidiary, whether now or
hereafter outstanding, or make any other distribution in respect thereof, either
directly or indirectly, whether in cash or property or in obligations of
Holdings or any Subsidiary (collectively, "Restricted Payments"), except that:
(a) any Subsidiary may make Restricted Payments to the Borrower or any
Wholly Owned Subsidiary Guarantor of the Borrower; and
(b) the Borrower may pay dividends to Holdings to permit Holdings to
(i) pay corporate overhead expenses incurred in the ordinary course of
business not to exceed $100,000 in any fiscal year, (ii) pay interest
expenses incurred and payable in connection with Permitted Subordinated
Indebtedness, (iii) repurchase shares of Capital Stock of Holdings from
former employees of Holdings, provided that the aggregate amount of
dividends paid for such purpose shall not exceed $100,000 in any fiscal
year, and (iv) pay any taxes that are due and payable by Holdings and the
Borrower as part of a consolidated group.
6.7 Capital Expenditures. (a) Make or commit to make any Capital
Expenditure in respect of the build out of the Borrower's System in excess of
$500,000 per Building Unit in which the Borrower is installing its System.
(b) Make or commit to make any other Capital Expenditure, except (i)
Capital Expenditures of the Borrower and its Subsidiaries in the ordinary course
of business not exceeding an amount to be agreed upon pursuant to Section
4.1(o); provided that (A) an amount to be agreed upon pursuant to Section 4.1(o)
of any such amount referred to above, if not so expended in the fiscal year for
which it is permitted, may be carried over for expenditure in the next
succeeding fiscal year and (B) Capital Expenditures made pursuant to this clause
(i) during any fiscal year shall be deemed made, first, in respect of amounts
permitted for such fiscal year as provided above and, second, in respect of
amounts carried over from the prior fiscal year pursuant to subclause (A) above
and (ii) Capital Expenditures made with the proceeds of any Reinvestment
Deferred Amount.
6.8 Investments. Make any advance, loan, extension of credit (by way of
guaranty or otherwise) or capital contribution to, or purchase any Capital
Stock, bonds, notes, debentures or other debt securities of, or any assets
constituting a business unit of, or make any other investment in, any Person
(all of the foregoing, "Investments"), except:
(a) extensions of trade credit in the ordinary course of business;
(b) investments in Cash Equivalents;
(c) Guarantee Obligations permitted by Section 6.2;
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(d) loans and advances to employees of Holdings, the Borrower or any
Subsidiary of the Borrower in the ordinary course of business (including
for travel, entertainment and relocation expenses) in an aggregate amount
for Holdings, the Borrower or any Subsidiary of the Borrower not to exceed
$250,000 at any one time outstanding;
(e) Investments in assets useful in the business of the Borrower and
its Subsidiaries made by the Borrower or any of its Subsidiaries with the
proceeds of any Reinvestment Deferred Amount;
(f) Investments by Holdings or any of its Subsidiaries in the Borrower
or any Person that, prior to such investment is, or (in the case of
newly-created Subsidiaries) simultaneously with such investment becomes, a
Wholly Owned Subsidiary Guarantor; and
(g) in addition to Investments otherwise expressly permitted by this
Section, Investments by the Borrower or any of its Subsidiaries in an
aggregate amount (valued at cost) not to exceed $500,000 during the term of
this Agreement.
6.9 Optional Payments and Modifications of Certain Debt Instruments.
(a) Make or offer to make any optional or voluntary payment, prepayment,
repurchase or redemption of or otherwise optionally or voluntarily defease or
segregate funds with respect to any Permitted Subordinated Indebtedness, (b)
amend, modify, waive or otherwise change, or consent or agree to any amendment,
modification, waiver or other change to, any of the terms of any Permitted
Subordinated Indebtedness (other than any such amendment, modification, waiver
or other change that (i) would extend the maturity or reduce the amount of any
payment of principal thereof or reduce the rate or extend any date for payment
of interest thereon and (ii) does not involve the payment of a consent fee) or
(c) amend, modify, waive or otherwise change, or consent or agree to any
amendment, modification, waiver or other change to, any of the terms of the
Series A-1 Preferred Stock or Series A-2 Preferred Stock of Holdings (other than
any such amendment, modification, waiver or other change that (i) would extend
the scheduled redemption date or reduce the amount of any scheduled redemption
payment or reduce the rate or extend any date for payment of dividends thereon
and (ii) does not involve the payment of a consent fee).
6.10 Transactions with Affiliates. Enter into any transaction,
including any purchase, sale, lease or exchange of property, the rendering of
any service or the payment of any management, advisory or similar fees, with any
Affiliate (other than Holdings, the Borrower or any Wholly Owned Subsidiary
Guarantor) unless such transaction is (a) otherwise permitted under this
Agreement, (b) in the ordinary course of business of Holdings, the Borrower or
such Subsidiary, as the case may be, and (c) upon fair and reasonable terms no
less favorable to Holdings, the Borrower or such Subsidiary, as the case may be,
than it would obtain in a comparable arm's length transaction with a Person that
is not an Affiliate.
6.11 Sales and Leasebacks. Enter into any arrangement with any Person
providing for the leasing by Holdings, the Borrower or any Subsidiary of real or
personal property that has been or is to be sold or transferred by Holdings, the
Borrower or such Subsidiary to such Person or to any other Person to whom funds
have been or are to be advanced by such Person on the security of such property
or rental obligations of Holdings, the Borrower or such Subsidiary.
6.12 Changes in Fiscal Periods. Permit the fiscal year of Holdings and
the Borrower to end on a day other than December 31 or change Holdings' and the
Borrower's method of determining fiscal quarters.
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6.13 Negative Pledge Clauses. Enter into or suffer to exist or become
effective any agreement that prohibits or limits the ability of Holdings or any
of its Subsidiaries to create, incur, assume or suffer to exist any Lien upon
any of its property or revenues, whether now owned or hereafter acquired, or to
secure its obligations under the Loan Documents to which it is a party, other
than (a) this Agreement and the other Loan Documents, (b) any agreements
governing any purchase money Liens or Capital Lease Obligations otherwise
permitted hereby (in which case, any prohibition or limitation shall only be
effective against the assets financed thereby) and (c) any agreement governing
any Liens permitted by Section 6.3(i).
6.14 Clauses Restricting Subsidiary Distributions. Enter into or suffer
to exist or become effective any consensual encumbrance or restriction on the
ability of any Subsidiary of the Borrower to (a) make Restricted Payments in
respect of any Capital Stock of such Subsidiary held by, or pay any Indebtedness
owed to, the Borrower or any other Subsidiary of the Borrower, (b) make loans or
advances to, or other Investments in, the Borrower or any other Subsidiary of
the Borrower or (c) transfer any of its assets to the Borrower or any other
Subsidiary of the Borrower, except for such encumbrances or restrictions
existing under or by reason of (i) any restrictions existing under the Loan
Documents, (ii) any restrictions with respect to a Subsidiary imposed pursuant
to an agreement that has been entered into in connection with the Disposition of
all or substantially all of the Capital Stock or assets of such Subsidiary and
(iii) any restrictions with respect to Liens permitted by Section 6.3(i).
6.15 Lines of Business. Enter into any lines of business, either
directly or through any Subsidiary, except for those lines of businesses in
which the Borrower and its Subsidiaries are engaged on the date of this
Agreement or that are reasonably related thereto and activities incidental
thereto.
6.16 New License Agreements. Enter into any License Agreement after the
Closing Date which does not include the provision of Exhibit D (or such other
provisions which have in all material respects the same substantive effect of
the provisions of Exhibit D).
SECTION 7. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) the Borrower shall fail to pay any principal of any Loan when due
in accordance with the terms hereof; or the Borrower shall fail to pay any
interest on any Loan, or any other amount payable hereunder or under any
other Loan Document, within five days after any such interest or other
amount becomes due in accordance with the terms hereof; or
(b) any representation or warranty made or deemed made by any Loan
Party herein or in any other Loan Document or that is contained in any
certificate, document or financial or other statement furnished by it at
any time under or in connection with this Agreement or any such other Loan
Document shall prove to have been inaccurate in any material respect on or
as of the date made or deemed made; or
(c) (i) any Loan Party shall default in the observance or performance
of any agreement contained in clause (i) or (ii) of Section 5.4(a) (with
respect to Holdings and the Borrower only), Section 5.7(a) or Section 6 of
this Agreement or Sections 5.5 and 5.7(b) of the Guarantee and Collateral
Agreement or (ii) an "Event of Default" under and as defined in any
Mortgage shall have occurred and be continuing; or
(d) any Loan Party shall default in the observance or performance of
any other agreement contained in this Agreement or any other Loan Document
(other than as provided in
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paragraphs (a) through (c) of this Section), and such default shall
continue unremedied for a period of 30 days after notice to the Borrower
from the Administrative Agent or any Lender; or
(e) Holdings or any of its Subsidiaries shall (i) default in making any
payment of any principal of any Indebtedness (including any Guarantee
Obligation, but excluding the Loans) on the scheduled or original due date
with respect thereto; or (ii) default in making any payment of any interest
on any such Indebtedness beyond the period of grace, if any, provided in
the instrument or agreement under which such Indebtedness was created; or
(iii) default in the observance or performance of any other agreement or
condition relating to any such Indebtedness or contained in any instrument
or agreement evidencing, securing or relating thereto, or any other event
shall occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or beneficiary of such
Indebtedness (or a trustee or agent on behalf of such holder or
beneficiary) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or (in the case of
any such Indebtedness constituting a Guarantee Obligation) to become
payable; provided, that a default, event or condition described in clause
(i), (ii) or (iii) of this paragraph (e) shall not at any time constitute
an Event of Default unless, at such time, one or more defaults, events or
conditions of the type described in clauses (i), (ii) and (iii) of this
paragraph (e) shall have occurred and be continuing with respect to
Indebtedness the outstanding principal amount of which exceeds in the
aggregate $1,000,000; or
(f) (i) Holdings or any of its Subsidiaries shall commence any case,
proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or
its debts, or (B) seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any substantial
part of its assets, or Holdings or any of its Subsidiaries shall make a
general assignment for the benefit of its creditors; or (ii) there shall be
commenced against Holdings or any of its Subsidiaries any case, proceeding
or other action of a nature referred to in clause (i) above that (A)
results in the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or unbonded for a
period of 60 days; or (iii) there shall be commenced against Holdings or
any of its Subsidiaries any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar
process against all or any substantial part of its assets that results in
the entry of an order for any such relief that shall not have been vacated,
discharged, or stayed or bonded pending appeal within 60 days from the
entry thereof; or (iv) Holdings or any of its Subsidiaries shall take any
action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or (iii)
above; or (v) Holdings or any of its Subsidiaries shall generally not, or
shall be unable to, or shall admit in writing its inability to, pay its
debts as they become due; or
(g) (i) any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan or
any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall
occur with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to terminate,
any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion of
the Required Lenders, likely to result in the termination of such Plan for
purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (v) the Borrower or any
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Commonly Controlled Entity shall, or in the reasonable opinion of the
Required Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer
Plan or (vi) any other event or condition shall occur or exist with respect
to a Plan; and in each case in clauses (i) through (vi) above, such event
or condition, together with all other such events or conditions, if any,
could, in the sole judgment of the Required Lenders, reasonably be expected
to have a Material Adverse Effect; or
(h) one or more judgments or decrees shall be entered against Holdings
or any of its Subsidiaries involving in the aggregate a liability (not paid
or fully covered by insurance as to which the relevant insurance company
has acknowledged coverage) of $1,000,000 or more, and all such judgments or
decrees shall not have been vacated, discharged, stayed or bonded pending
appeal within 30 days from the entry thereof; or
(i) any of the Security Documents shall cease to be in full force and
effect (other than by reason of a release of Collateral in accordance with
the terms thereof, including by reason of a Disposition permitted by
Section 6.5), or any Loan Party or any Affiliate of any Loan Party shall so
assert, or any Lien created by any of the Security Documents shall cease to
be enforceable and of the same effect and priority purported to be created
thereby; or
(j) the guarantee contained in Section 2 of the Guarantee and
Collateral Agreement shall cease, for any reason, to be in full force and
effect (other than in accordance with its terms) or any Loan Party or any
Affiliate of any Loan Party shall so assert; or
(k) (i) either of the Permitted Investors shall cease to have the power
to vote or direct the voting of securities for the election of at least two
directors of Holdings (the number of directors of Holdings not to exceed
thirteen after the date hereof); (ii) either of the Permitted Investors
shall cease to own of record and beneficially an amount of Capital Stock of
Holdings equal to at least 95% of the amount of each type of Capital Stock
of Holdings owned by the Permitted Investors of record and beneficially as
of the Closing Date, which amount is set forth on Schedule 7(k) for each of
the Permitted Investors; (iii) either of the Permitted Investors shall
cease to own of record and beneficially less than 10% of the outstanding
common stock of Holdings; (iv) the board of directors of Holdings shall
cease to consist of a majority of Continuing Directors; or (v) Holdings
shall cease to own and control, of record and beneficially, directly, 100%
of each class of outstanding Capital Stock of the Borrower free and clear
of all Liens (except Liens created by the Guarantee and Collateral
Agreement); or
(l) Holdings shall (i) conduct, transact or otherwise engage in, or
commit to conduct, transact or otherwise engage in, any business or
operations other than those incidental to its ownership of the Capital
Stock of the Borrower and the Subsidiaries set forth on Schedule 3.15, (ii)
incur, create, assume or suffer to exist any Indebtedness or other
liabilities or financial obligations, except (A) nonconsensual obligations
imposed by operation of law, (B) pursuant to the Loan Documents to which it
is a party, (C) obligations with respect to its Capital Stock, (D)
Permitted Subordinated Indebtedness, (E) Guarantee Obligations with respect
to the Obligations and (F) corporate overhead expenses incurred in the
ordinary course of business or (iii) own, lease, manage or otherwise
operate any properties or assets (including cash (other than cash received
in connection with dividends made by the Borrower in accordance with
Section 6.6 pending application in the manner contemplated by said Section)
and cash equivalents) other than the ownership of shares of Capital Stock
of the Borrower and the Subsdiaries set forth on Schedule 3.15; or
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(m) any Permitted Subordinated Indebtedness or any guarantee thereof
shall cease, for any reason, to be validly subordinated to the Obligations
or the obligations of the Subsidiary Guarantors under the Guarantee and
Collateral Agreement, as the case may be, or any Loan Party, any Affiliate
of any Loan Party, the trustee in respect of any Permitted Subordinated
Indebtedness or the holders of at least 25% in aggregate principal amount
of any Permitted Subordinated Indebtedness shall so assert;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents shall immediately become due and payable,
and (B) if such event is any other Event of Default, either or both of the
following actions may be taken: (i) with the consent of the Required Lenders,
the Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Borrower declare the Commitments to
be terminated forthwith, whereupon the Commitments shall immediately terminate;
and (ii) with the consent of the Required Lenders, the Administrative Agent may,
or upon the request of the Required Lenders, the Administrative Agent shall, by
notice to the Borrower, declare the Loans hereunder (with accrued interest
thereon) and all other amounts owing under this Agreement and the other Loan
Documents to be due and payable forthwith, whereupon the same shall immediately
become due and payable. Except as expressly provided above in this Section,
presentment, demand, protest and all other notices of any kind are hereby
expressly waived by the Borrower.
SECTION 8. THE ADMINISTRATIVE AGENT
8.1 Appointment. Each Lender hereby irrevocably designates and appoints
the Administrative Agent as the agent of such Lender under this Agreement and
the other Loan Documents, and each such Lender irrevocably authorizes the
Administrative Agent, in such capacity, to take such action on its behalf under
the provisions of this Agreement and the other Loan Documents and to exercise
such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Administrative Agent.
8.2 Delegation of Duties. The Administrative Agent may execute any of
its duties under this Agreement and the other Loan Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or attorneys
in-fact selected by it with reasonable care.
8.3 Exculpatory Provisions. Neither any Agent nor any of their
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except to the extent that any of the foregoing are found by
a final and nonappealable decision of a court of competent jurisdiction to have
resulted from its or such Person's own gross negligence or willful misconduct)
or (ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by any Loan Party or any officer
thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agents under or in connection with, this Agreement or any
other Loan
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Document or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document or for any failure
of any Loan Party a party thereto to perform its obligations hereunder or
thereunder. The Agents shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of any Loan Party.
8.4 Reliance by Administrative Agent. The Administrative Agent shall be
entitled to rely, and shall be fully protected in relying, upon any instrument,
writing, resolution, notice, consent, certificate, affidavit, letter, telecopy,
telex or teletype message, statement, order or other document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of legal counsel
(including counsel to Holdings or the Borrower), independent accountants and
other experts selected by the Administrative Agent. The Administrative Agent may
deem and treat the payee of any Note as the owner thereof for all purposes
unless a written notice of assignment, negotiation or transfer thereof shall
have been filed with the Administrative Agent. The Administrative Agent shall be
fully justified in failing or refusing to take any action under this Agreement
or any other Loan Document unless it shall first receive such advice or
concurrence of the Required Lenders (or, if so specified by this Agreement, all
Lenders) as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense that may
be incurred by it by reason of taking or continuing to take any such action. The
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement and the other Loan Documents in
accordance with a request of the Required Lenders (or, if so specified by this
Agreement, all Lenders), and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders and all future holders of
the Loans.
8.5 Notice of Default. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received notice from a Lender,
Holdings or the Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default". In the
event that the Administrative Agent receives such a notice, the Administrative
Agent shall give notice thereof to the Lenders. The Administrative Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders (or, if so specified by this
Agreement, all Lenders); provided that unless and until the Administrative Agent
shall have received such directions, the Administrative Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Lenders.
8.6 Non-Reliance on Agents and Other Lenders. Each Lender expressly
acknowledges that neither the Agents nor any of their respective officers,
directors, employees, agents, attorneys-in-fact or affiliates have made any
representations or warranties to it and that no act by any Agent hereinafter
taken, including any review of the affairs of a Loan Party or any affiliate of a
Loan Party, shall be deemed to constitute any representation or warranty by any
Agent to any Lender. Each Lender represents to the Agents that it has,
independently and without reliance upon any Agent or any other Lender, and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and their
affiliates and made its own decision to make its Loans hereunder and enter into
this Agreement. Each Lender also represents that it will, independently and
without reliance upon any Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition
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and creditworthiness of the Loan Parties and their affiliates. Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the Administrative Agent hereunder, the Administrative Agent shall
not have any duty or responsibility to provide any Lender with any credit or
other information concerning the business, operations, property, condition
(financial or otherwise), prospects or creditworthiness of any Loan Party or any
affiliate of a Loan Party that may come into the possession of the
Administrative Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates.
8.7 Indemnification. The Lenders agree to indemnify each Agent in its
capacity as such (to the extent not reimbursed by Holdings or the Borrower and
without limiting the obligation of Holdings or the Borrower to do so), ratably
according to their respective Aggregate Exposure Percentages in effect on the
date on which indemnification is sought under this Section (or, if
indemnification is sought after the date upon which the Commitments shall have
terminated and the Loans shall have been paid in full, ratably in accordance
with such Aggregate Exposure Percentages immediately prior to such date), from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever that may at any time (whether before or after the payment of the
Loans) be imposed on, incurred by or asserted against such Agent in any way
relating to or arising out of, the Commitments, this Agreement, any of the other
Loan Documents or any documents contemplated by or referred to herein or therein
or the transactions contemplated hereby or thereby or any action taken or
omitted by such Agent under or in connection with any of the foregoing; provided
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements that are found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted from such Agent's
gross negligence or willful misconduct. The agreements in this Section shall
survive the payment of the Loans and all other amounts payable hereunder.
8.8 Agent in Its Individual Capacity. Each Agent and its affiliates may
make loans to, accept deposits from and generally engage in any kind of business
with any Loan Party as though such Agent was not an Agent. With respect to its
Loans made or renewed by it, each Agent shall have the same rights and powers
under this Agreement and the other Loan Documents as any Lender and may exercise
the same as though it were not an Agent, and the terms "Lender" and "Lenders"
shall include each Agent in its individual capacity.
8.9 Successor Administrative Agent. The Administrative Agent may resign
as Administrative Agent upon 10 days' notice to the Lenders and the Borrower. If
the Administrative Agent shall resign as Administrative Agent under this
Agreement and the other Loan Documents, then the Required Lenders shall appoint
from among the Lenders a successor agent for the Lenders, which successor agent
shall (unless an Event of Default under Section 7(a) or Section 7(f) with
respect to the Borrower shall have occurred and be continuing) be subject to
approval by the Borrower (which approval shall not be unreasonably withheld or
delayed), whereupon such successor agent shall succeed to the rights, powers and
duties of the Administrative Agent, and the term "Administrative Agent" shall
mean such successor agent effective upon such appointment and approval, and the
former Administrative Agent's rights, powers and duties as Administrative Agent
shall be terminated, without any other or further act or deed on the part of
such former Administrative Agent or any of the parties to this Agreement or any
holders of the Loans. If no successor agent has accepted appointment as
Administrative Agent by the date that is 10 days following a retiring
Administrative Agent's notice of resignation, the retiring Administrative
Agent's resignation shall nevertheless thereupon become effective and the
Lenders shall assume and perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Required Lenders appoint a successor
agent as provided for above. After any retiring Administrative Agent's
resignation as Administrative Agent, the provisions of
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this Section 8 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Administrative Agent under this Agreement and the
other Loan Documents.
SECTION 9. MISCELLANEOUS
9.1 Amendments and Waivers. Neither this Agreement, any other Loan
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 9.1. The
Required Lenders and each Loan Party party to the relevant Loan Document may,
or, with the written consent of the Required Lenders, the Administrative Agent
and each Loan Party party to the relevant Loan Document may, from time to time,
(a) enter into written amendments, supplements or modifications hereto and to
the other Loan Documents for the purpose of adding any provisions to this
Agreement or the other Loan Documents or changing in any manner the rights of
the Lenders or of the Loan Parties hereunder or thereunder or (b) waive, on such
terms and conditions as the Required Lenders or the Administrative Agent, as the
case may be, may specify in such instrument, any of the requirements of this
Agreement or the other Loan Documents or any Default or Event of Default and its
consequences; provided, however, that no such waiver and no such amendment,
supplement or modification shall (i) forgive the principal amount or extend the
final scheduled date of maturity of any Loan, reduce the stated rate of any
interest or fee payable hereunder or extend the scheduled date of any payment
thereof, or increase the amount or extend the expiration date of any Lender's
Commitment, in each case without the consent of each Lender directly affected
thereby; (ii) amend, modify or waive any provision of this Section 9.1 or reduce
any percentage specified in the definition of Required Lenders, consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement and the other Loan Documents, release all or substantially
all of the Collateral or release all or substantially all of the Subsidiary
Guarantors from their obligations under the Guarantee and Collateral Agreement,
in each case without the written consent of all Lenders; (iii) reduce the
percentage specified in the definition of Required Lenders without the written
consent of all Lenders; or (iv) amend, modify or waive any provision of Section
8 without the written consent of the Administrative Agent. Any such waiver and
any such amendment, supplement or modification shall apply equally to each of
the Lenders and shall be binding upon the Loan Parties, the Lenders, the
Administrative Agent and all future holders of the Loans. In the case of any
waiver, the Loan Parties, the Lenders and the Administrative Agent shall be
restored to their former position and rights hereunder and under the other Loan
Documents, and any Default or Event of Default waived shall be deemed to be
cured and not continuing; but no such waiver shall extend to any subsequent or
other Default or Event of Default, or impair any right consequent thereon.
9.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed as follows in the case of Holdings, the Borrower and the
Administrative Agent, and as set forth in an administrative questionnaire
delivered to the Administrative Agent in the case of the Lenders, or to such
other address as may be hereafter notified by the respective parties hereto:
Holdings: Allied Riser Communications Holdings, Inc.
0000 Xxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Finance Department
Telecopy: 000-000-0000
Telephone: 000-000-0000
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The Borrower: Allied Riser Communications, Inc.
0000 Xxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Finance Department
Telecopy: 000-000-0000
Telephone: 000-000-0000
The Administrative Agent: The Chase Manhattan Bank
0 Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxx
Telecopy: 000-000-0000
Telephone: 000-000-0000
with a copy to: The Chase Manhattan Bank
10 South La Salle Street, Suite 2300
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxx X. Xxxxxx
Telecopy: 000-000-0000
Telephone: 000-000-0000
provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders shall not be effective until received.
9.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay
in exercising, on the part of the Administrative Agent or any Lender, any right,
remedy, power or privilege hereunder or under the other Loan Documents shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
9.4 Survival of Representations and Warranties. All representations and
warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans and other extensions of credit hereunder.
9.5 Payment of Expenses and Taxes. The Borrower agrees (a) to pay or
reimburse the Administrative Agent for all its out-of-pocket costs and expenses
incurred in connection with the development, preparation and execution of, and
any amendment, supplement or modification to, this Agreement and the other Loan
Documents and any other documents prepared in connection herewith or therewith,
and the consummation and administration of the transactions contemplated hereby
and thereby, including the reasonable fees and disbursements of counsel to the
Administrative Agent and filing and recording fees and expenses, with statements
with respect to the foregoing to be submitted to the Borrower prior to the
Closing Date (in the case of amounts to be paid on the Closing Date) and from
time to time thereafter on a quarterly basis or such other periodic basis as the
Administrative Agent shall deem appropriate, (b) to pay or reimburse each Lender
and the Administrative Agent for all its costs and expenses incurred in
connection with the enforcement or preservation of any rights under this
Agreement, the other Loan Documents and any such other documents, including the
fees and disbursements of counsel (including the allocated fees and expenses of
in-house counsel) to each Lender and of counsel to the Administrative Agent, (c)
to pay, indemnify, and hold each Lender and the
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Administrative Agent harmless from, any and all recording and filing fees and
any and all liabilities with respect to, or resulting from any delay in paying,
stamp, excise and other taxes, if any, that may be payable or determined to be
payable in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the other Loan Documents and any such other documents, and (d)
to pay, indemnify, and hold each Lender and the Administrative Agent and their
respective officers, directors, employees, affiliates, agents and controlling
persons (each, an "Indemnitee") harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of this
Agreement, the other Loan Documents and any such other documents, including any
of the foregoing relating to the use of proceeds of the Loans or the violation
of, noncompliance with or liability under, any Environmental Law applicable to
the operations of Holdings, the Borrower any of its Subsidiaries or any of the
Properties and the reasonable fees and expenses of legal counsel in connection
with claims, actions or proceedings by any Indemnitee against any Loan Party
under any Loan Document (all the foregoing in this clause (d), collectively, the
"Indemnified Liabilities"), provided, that the Borrower shall have no obligation
hereunder to any Indemnitee with respect to Indemnified Liabilities to the
extent such Indemnified Liabilities resulted from the gross negligence or
willful misconduct of such Indemnitee. Without limiting the foregoing, and to
the extent permitted by applicable law, the Borrower agrees not to assert and to
cause its Subsidiaries not to assert, and hereby waives and agrees to cause its
Subsidiaries to so waive, all rights for contribution or any other rights of
recovery with respect to all claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature, under or
related to Environmental Laws, that any of them might have by statute or
otherwise against any Indemnitee. All amounts due under this Section 9.5 shall
be payable not later than five days after written demand therefor. Statements
payable by the Borrower pursuant to this Section 9.5 shall be submitted to
Finance Department (Telephone No. 000-000-0000) (Telecopy No. 214-210-3009), at
the address of the Borrower set forth in Section 9.2, or to such other Person or
address as may be hereafter designated by the Borrower in a written notice to
the Administrative Agent. The agreements in this Section 9.5 shall survive
repayment of the Loans and all other amounts payable hereunder.
9.6 Successors and Assigns; Participations and Assignments. (a) This
Agreement shall be binding upon and inure to the benefit of Holdings, the
Borrower, the Lenders, the Administrative Agent, all future holders of the Loans
and their respective successors and assigns, except that the Borrower may not
assign or transfer any of its rights or obligations under this Agreement without
the prior written consent of each Lender.
(b) Any Lender may, without the consent of the Borrower, in accordance
with applicable law, at any time sell to one or more banks, financial
institutions or other entities (each, a "Participant") participating interests
in any Loan owing to such Lender, any Commitment of such Lender or any other
interest of such Lender hereunder and under the other Loan Documents. In the
event of any such sale by a Lender of a participating interest to a Participant,
such Lender's obligations under this Agreement to the other parties to this
Agreement shall remain unchanged, such Lender shall remain solely responsible
for the performance thereof, such Lender shall remain the holder of any such
Loan for all purposes under this Agreement and the other Loan Documents, and the
Borrower and the Administrative Agent shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations under
this Agreement and the other Loan Documents. In no event shall any Participant
under any such participation have any right to approve any amendment or waiver
of any provision of any Loan Document, or any consent to any departure by any
Loan Party therefrom, except to the extent that such amendment, waiver or
consent would reduce the principal of, or interest on, the Loans or any fees
payable hereunder, or postpone the date of the final maturity of the Loans, in
each case to the extent subject to such participation. The Borrower agrees that
if amounts outstanding under this
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Agreement and the Loans are due or unpaid, or shall have been declared or shall
have become due and payable upon the occurrence of an Event of Default, each
Participant shall, to the maximum extent permitted by applicable law, be deemed
to have the right of setoff in respect of its participating interest in amounts
owing under this Agreement to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement, provided that, in purchasing such participating interest, such
Participant shall be deemed to have agreed to share with the Lenders the
proceeds thereof as provided in Section 9.7(a) as fully as if it were a Lender
hereunder. The Borrower also agrees that each Participant shall be entitled to
the benefits of Sections 2.13, 2.14 and 2.15 with respect to its participation
in the Commitments and the Loans outstanding from time to time as if it was a
Lender; provided that, in the case of Section 2.14, such Participant shall have
complied with the requirements of said Section and provided, further, that no
Participant shall be entitled to receive any greater amount pursuant to any such
Section than the transferor Lender would have been entitled to receive in
respect of the amount of the participation transferred by such transferor Lender
to such Participant had no such transfer occurred.
(c) Any Lender (an "Assignor") may, in accordance with applicable law,
at any time and from time to time assign to any Lender or any affiliate thereof
or, with the consent of the Borrower and the Administrative Agent (which, in
each case, shall not be unreasonably withheld or delayed), to an additional
bank, financial institution or other entity (an "Assignee") all or any part of
its rights and obligations under this Agreement pursuant to an Assignment and
Acceptance, executed by such Assignee, such Assignor and any other Person whose
consent is required pursuant to this paragraph, and delivered to the
Administrative Agent for its acceptance and recording in the Register. Upon such
execution, delivery, acceptance and recording, from and after the effective date
determined pursuant to such Assignment and Acceptance, (x) the Assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender hereunder
with a Commitment and/or Loans as set forth therein, and (y) the Assignor
thereunder shall, to the extent provided in such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all of an Assignor's rights and obligations
under this Agreement, such Assignor shall cease to be a party hereto).
Notwithstanding any provision of this Section 9.6, the consent of the Borrower
shall not be required for any assignment that occurs when an Event of Default
pursuant to Section 7(f) shall have occurred and be continuing with respect to
the Borrower.
(d) The Administrative Agent shall, on behalf of the Borrower, maintain
at its address referred to in Section 9.2 a copy of each Assignment and
Acceptance delivered to it and a register (the "Register") for the recordation
of the names and addresses of the Lenders and the Commitment of, and the
principal amount of the Loans owing to, each Lender from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrower, each other Loan Party, the Administrative Agent and the
Lenders shall treat each Person whose name is recorded in the Register as the
owner of the Loans and any Notes evidencing the Loans recorded therein for all
purposes of this Agreement. Any assignment of any Loan, whether or not evidenced
by a Note, shall be effective only upon appropriate entries with respect thereto
being made in the Register (and each Note shall expressly so provide). Any
assignment or transfer of all or part of a Loan evidenced by a Note shall be
registered on the Register only upon surrender for registration of assignment or
transfer of the Note evidencing such Loan, accompanied by a duly executed
Assignment and Acceptance, and thereupon one or more new Notes shall be issued
to the designated Assignee.
(e) Upon its receipt of an Assignment and Acceptance executed by an
Assignor, an Assignee and any other Person whose consent is required by Section
9.6(c), together with payment to the Administrative Agent of a registration and
processing fee of $4,000, the Administrative Agent shall (i)
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promptly accept such Assignment and Acceptance and (ii) record the information
contained therein in the Register on the effective date determined pursuant
thereto.
(f) For avoidance of doubt, the parties to this Agreement acknowledge
that the provisions of this Section 9.6 concerning assignments of Loans and
Notes relate only to absolute assignments and that such provisions do not
prohibit assignments creating security interests, including any pledge or
assignment by a Lender of any Loan or Note to any Federal Reserve Bank in
accordance with applicable law.
(g) The Borrower, upon receipt of written notice from the relevant
Lender, agrees to issue Notes to any Lender requiring Notes to facilitate
transactions of the type described in paragraph (f) above.
9.7 Adjustments; Set-off. (a) Except to the extent that this Agreement
expressly provides for payments to be allocated to a particular Lender, if any
Lender (a "Benefitted Lender") shall receive any payment of all or part of the
Obligations owing to it, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, pursuant to events or proceedings of
the nature referred to in Section 7(f), or otherwise), in a greater proportion
than any such payment to or collateral received by any other Lender, if any, in
respect of the Obligations owing to such other Lender, such Benefitted Lender
shall purchase for cash from the other Lenders a participating interest in such
portion of the Obligations owing to each such other Lender, or shall provide
such other Lenders with the benefits of any such collateral, as shall be
necessary to cause such Benefitted Lender to share the excess payment or
benefits of such collateral ratably with each of the Lenders; provided, however,
that if all or any portion of such excess payment or benefits is thereafter
recovered from such Benefitted Lender, such purchase shall be rescinded, and the
purchase price and benefits returned, to the extent of such recovery, but
without interest.
(b) If an Event of Default shall have occurred and be continuing, in
addition to any rights and remedies of the Lenders provided by law, each Lender
shall have the right, without prior notice to Holdings or the Borrower, any such
notice being expressly waived by Holdings and the Borrower to the extent
permitted by applicable law, upon any amount becoming due and payable by
Holdings or the Borrower hereunder (whether at the stated maturity, by
acceleration or otherwise), to set off and appropriate and apply against such
amount any and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by such Lender or any branch or
agency thereof to or for the credit or the account of Holdings or the Borrower,
as the case may be. Each Lender agrees promptly to notify the Borrower and the
Administrative Agent after any such setoff and application made by such Lender,
provided that the failure to give such notice shall not affect the validity of
such setoff and application.
9.8 Effectiveness; Counterparts. This Agreement shall be effective upon
execution and delivery by all parties hereto. This Agreement may be executed by
one or more of the parties to this Agreement on any number of separate
counterparts, and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. Delivery of an executed signature page
of this Agreement by facsimile transmission shall be effective as delivery of a
manually executed counterpart hereof. A set of the copies of this Agreement
signed by all the parties shall be lodged with the Borrower and the
Administrative Agent.
9.9 Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or
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unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
9.10 Integration. This Agreement and the other Loan Documents represent
the agreement of Holdings, the Borrower, the Administrative Agent and the
Lenders with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agent or any
Lender relative to subject matter hereof not expressly set forth or referred to
herein or in the other Loan Documents.
9.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
9.12 Submission To Jurisdiction; Waivers. Each of Holdings and the
Borrower hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the courts of
the State of New York, the courts of the United States for the Southern
District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or proceeding may
be effected by mailing a copy thereof by registered or certified mail (or
any substantially similar form of mail), postage prepaid, to Holdings or
the Borrower, as the case may be at its address set forth in Section 9.2 or
at such other address of which the Administrative Agent shall have been
notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect service
of process in any other manner permitted by law or shall limit the right to
xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to
in this Section any special, exemplary, punitive or consequential damages.
9.13 Acknowledgements. Each of Holdings and the Borrower hereby
acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has any fiduciary
relationship with or duty to Holdings or the Borrower arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between Administrative Agent and Lenders, on
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one hand, and Holdings and the Borrower, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby
among the Lenders or among Holdings, the Borrower and the Lenders.
9.14 Releases of Guarantees and Liens. (a) Notwithstanding anything to
the contrary contained herein or in any other Loan Document, the Administrative
Agent is hereby irrevocably authorized by each Lender (without requirement of
notice to or consent of any Lender except as expressly required by Section 9.1)
to take any action requested by the Borrower having the effect of releasing any
Collateral or Guarantee Obligations (i) to the extent necessary to permit
consummation of any transaction not prohibited by any Loan Document or that has
been consented to in accordance with Section 9.1 or (ii) under the circumstances
described in paragraph (b) below.
(b) At such time as the Loans and the other obligations under the Loan
Documents (other than obligations under or in respect of Hedge Agreements) shall
have been paid in full and the Commitments have been terminated, the Collateral
shall be released from the Liens created by the Security Documents, and the
Security Documents and all obligations (other than those expressly stated to
survive such termination) of the Administrative Agent and each Loan Party under
the Security Documents shall terminate, all without delivery of any instrument
or performance of any act by any Person.
9.15 Confidentiality. Each of the Administrative Agent and each Lender
agrees to keep confidential all non-public information provided to it by any
Loan Party pursuant to this Agreement; provided that nothing herein shall
prevent the Administrative Agent or any Lender from disclosing any such
information (a) to the Administrative Agent, any other Lender or any affiliate
of any Lender, (b) to any Transferee or prospective Transferee that agrees to
comply with the provisions of this Section, (c) to its employees, directors,
agents, attorneys, accountants and other professional advisors or those of any
of its affiliates, (d) upon the request or demand of any Governmental Authority,
(e) in response to any order of any court or other Governmental Authority or as
may otherwise be required pursuant to any Requirement of Law, (f) if required to
do so in connection with any litigation or similar proceeding, (g) that has been
publicly disclosed, (h) to the National Association of Insurance Commissioners
or any similar organization or any nationally recognized rating agency that
requires access to information about a Lender's investment portfolio in
connection with ratings issued with respect to such Lender, or (i) in connection
with the exercise of any remedy hereunder or under any other Loan Document;
provided further that, if permitted under applicable law, with respect to
clauses (d), (e) and (f), the Administrative Agent or the Lender, as applicable,
shall give notice to the relevant Loan Party of any request, demand, order or
requirement for such information.
9.16 WAIVERS OF JURY TRIAL. HOLDINGS, THE BORROWER, THE ADMINISTRATIVE
AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY
IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
ALLIED RISER COMMUNICATIONS HOLDINGS,
INC.
By: /s/ XXXX XXXXXXX
--------------------------------------
Title: CFO
ALLIED RISER COMMUNICATIONS, INC.
By: /s/ XXXX XXXXXXX
--------------------------------------
Title: CFO
THE CHASE MANHATTAN BANK, as Administrative
Agent and as a Lender
By: /s/ XXXXXXX X. XXXXXXX
--------------------------------------
Title: Vice President
59
EXHBIT A
===============================================================================
GUARANTEE AND COLLATERAL AGREEMENT
made by
ALLIED RISER COMMUNICATIONS HOLDINGS, INC.
and certain of its Subsidiaries, including
ALLIED RISER COMMUNICATIONS, INC.
in favor of
THE CHASE MANHATTAN BANK,
as Administrative Agent
Dated as of __________ ___, 1999
===============================================================================
60
TABLE OF CONTENTS
Page
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SECTION 1. DEFINED TERMS........................................................................ 1
1.1 Definitions........................................................................ 1
1.2 Other Definitional Provisions...................................................... 5
SECTION 2. GUARANTEE............................................................................ 5
2.1 Guarantee.......................................................................... 5
2.2 Right of Contribution.............................................................. 6
2.3 No Subrogation..................................................................... 6
2.4 Amendments, etc. with respect to the Borrower Obligations.......................... 6
2.5 Guarantee Absolute and Unconditional............................................... 7
2.6 Reinstatement...................................................................... 8
2.7 Payments........................................................................... 8
SECTION 3. GRANT OF SECURITY INTEREST........................................................... 8
SECTION 4. REPRESENTATIONS AND WARRANTIES....................................................... 9
4.1 Title; No Other Liens.............................................................. 9
4.2 Perfected First Priority Liens..................................................... 9
4.3 Chief Executive Office.............................................................10
4.4 Inventory and Equipment............................................................10
4.5 Farm Products......................................................................10
4.6 Investment Property................................................................10
4.7 Receivables........................................................................10
4.8 Contracts..........................................................................10
4.9 Intellectual Property..............................................................11
SECTION 5. COVENANTS............................................................................11
5.1 Delivery of Instruments, Certificated Securities and Chattel Paper.................12
5.2 Maintenance of Insurance...........................................................12
5.3 Payment of Obligations.............................................................12
5.4 Maintenance of Perfected Security Interest; Further Documentation..................12
5.5 Changes in Locations, Name, etc....................................................13
5.6 Notices............................................................................13
5.7 Investment Property................................................................13
5.8 Receivables........................................................................14
5.9 Contracts..........................................................................14
5.10 Intellectual Property.............................................................15
SECTION 6. REMEDIAL PROVISIONS..................................................................16
6.1 Certain Matters Relating to Receivables............................................16
6.2 Communications with Obligors; Grantors Remain Liable...............................16
6.3 Pledged Stock......................................................................17
6.4 Proceeds to be Turned Over To Administrative Agent.................................18
6.5 Application of Proceeds............................................................18
6.6 Code and Other Remedies............................................................18
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Page
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6.7 Sale of Pledged Stock..............................................................19
6.8 Waiver; Deficiency.................................................................19
SECTION 7. THE ADMINISTRATIVE AGENT.............................................................19
7.1 Administrative Agent's Appointment as Attorney-in-Fact, etc........................19
7.2 Duty of Administrative Agent.......................................................21
7.3 Execution of Financing Statements..................................................21
7.4 Authority of Administrative Agent..................................................21
SECTION 8. MISCELLANEOUS........................................................................22
8.1 Amendments in Writing..............................................................22
8.2 Notices............................................................................22
8.3 No Waiver by Course of Conduct; Cumulative Remedies................................22
8.4 Enforcement Expenses; Indemnification..............................................22
8.5 Successors and Assigns.............................................................23
8.6 Set-Off............................................................................23
8.7 Counterparts.......................................................................23
8.8 Severability.......................................................................23
8.9 Section Headings...................................................................23
8.10 Integration.......................................................................23
8.11 GOVERNING LAW.....................................................................24
8.12 Submission To Jurisdiction; Waivers...............................................24
8.13 Acknowledgements..................................................................24
8.14 Additional Grantors...............................................................25
8.15 Releases..........................................................................25
8.16 WAIVER OF JURY TRIAL..............................................................25
SCHEDULES
Schedule 1 Notice Addresses
Schedule 2 Investment Property
Schedule 3 Perfection Matters
Schedule 4 Jurisdictions of Organization and Chief Executive Offices
Schedule 5 Inventory and Equipment Locations
Schedule 6 Intellectual Property
Schedule 7 Contracts
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GUARANTEE AND COLLATERAL AGREEMENT
GUARANTEE AND COLLATERAL AGREEMENT, dated as of _________ __,
1999, made by each of the signatories hereto (together with any other entity
that may become a party hereto as provided herein, the ("Grantors"), in favor
of THE CHASE MANHATTAN BANK, as Administrative Agent (in such capacity, the
"Administrative Agent") for the banks and other financial institutions (the
"Lenders") from time to time parties to the Credit Agreement, dated as of March
25, 1999 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among Allied Riser Communications Holdings, Inc.
("Holdings"), Allied Riser Communications, Inc. (the "Borrower"), the Lenders
and the Administrative Agent.
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make extensions of credit to the Borrower upon the terms
and subject to the conditions set forth therein;
WHEREAS, the Borrower is a member of an affiliated group of
companies that includes each other Grantor;
WHEREAS, the proceeds of the extensions of credit under the
Credit Agreement will be used in part to enable the Borrower to make valuable
transfers to one or more of the other Grantors in connection with the operation
of their respective businesses;
WHEREAS, the Borrower and the other Grantors are engaged in
related businesses, and each Grantor will derive substantial direct and
indirect benefit from the making of the extensions of credit under the Credit
Agreement; and
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective extensions of credit to the Borrower under the
Credit Agreement that the Grantors shall have executed and delivered this
Agreement to the Administrative Agent for the ratable benefit of the Lenders;
NOW, THEREFORE, in consideration of the premises and to
induce the Administrative Agent and the Lenders to enter into the Credit
Agreement and to induce the Lenders to make their respective extensions of
credit to the Borrower thereunder, each Grantor hereby agrees with the
Administrative Agent, for the ratable benefit of the Lenders, as follows:
SECTION 1. DEFINED TERMS
1.1 Definitions. (a) Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given
to them in the Credit Agreement, and the following terms are used herein as
defined in the New York UCC: Accounts, Certificated Security, Chattel Paper,
Documents, Equipment, Farm Products, Instruments and Inventory.
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(b) The following terms shall have the following meanings:
"Agreement"": this Guarantee and Collateral Agreement, as the
same may be amended, supplemented or otherwise modified from time to
time.
"Borrower Obligations": the collective reference to the
unpaid principal of and interest on the Loans and all other
obligations and liabilities of the Borrower (including, without
limitation, interest accruing at the then applicable rate provided in
the Credit Agreement after the maturity of the Loans and interest
accruing at the then applicable rate provided in the Credit Agreement
after the filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization or like proceeding, relating to the
Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) to the Administrative Agent or
any Lender (or, in the case of any Lender Hedge Agreement, any
Affiliate of any Lender), whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with, the
Credit Agreement, this Agreement, the other Loan Documents or any
Lender Hedge Agreement, in each case whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs,
expenses or otherwise (including, without limitation, all fees and
disbursements of counsel to the Administrative Agent or to the Lenders
that are required to be paid by the Borrower pursuant to the terms of
any of the foregoing agreements).
"Collateral": as defined in Section 3.
"Collateral Account": any collateral account established by
the Administrative Agent as provided in Section 6.1 or 6.4.
"Contracts": the contracts and agreements listed in Schedule
7, as the same may be amended, supplemented or otherwise modified from
time to time, including, without limitation, (i) all rights of any
Grantor to receive moneys due and to become due to it thereunder or in
connection therewith, (ii) all rights of any Grantor to damages
arising thereunder and (iii) all rights of any Grantor to perform and
to exercise all remedies thereunder.
"Copyrights": (i) all copyrights arising under the laws of
the United States, whether registered or unregistered and whether
published or unpublished (including, without limitation, those listed
in Schedule 6), all registrations and recordings thereof, and all
applications in connection therewith, including, without limitation,
all registrations, recordings and applications in the United States
Copyright Office, and (ii) the right to obtain all renewals thereof.
"Copyright Licenses": any written agreement naming any
Grantor as licensor or licensee (including, without limitation, those
listed in Schedule 6), granting any right under any Copyright,
including, without limitation, the grant of rights to manufacture,
distribute, exploit and sell materials derived from any Copyright.
"Deposit Account": as defined in the Uniform Commercial Code
of any applicable jurisdiction and, in any event, including, without
limitation, any demand, time, savings, passbook or like account
maintained with a depositary institution.
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3
"Foreign Subsidiary": any Subsidiary organized under the laws
of any jurisdiction outside the United States of America.
"Foreign Subsidiary Voting Stock": the voting Capital Stock
of any Foreign Subsidiary.
"General Intangibles": all "general intangibles" as such term
is defined in Section 9-106 of the New York UCC and, in any event,
including, without limitation, with respect to any Grantor, all
contracts, agreements, instruments and indentures in any form, and
portions thereof, to which such Grantor is a party or under which such
Grantor has any right, title or interest or to which such Grantor or
any property of such Grantor is subject, as the same may from time to
time be amended, supplemented or otherwise modified, including,
without limitation, (i) all rights of such Grantor to receive moneys
due and to become due to it thereunder or in connection therewith,
(ii) all rights of such Grantor to damages arising thereunder and
(iii) all rights of such Grantor to perform and to exercise all
remedies thereunder, in each case to the extent the grant by such
Grantor of a security interest pursuant to this Agreement in its
right, title and interest in such contract, agreement, instrument or
indenture is not prohibited by such contract, agreement, instrument or
indenture without the consent of any other party thereto, would not
give any other party to such contract, agreement, instrument or
indenture the right to terminate its obligations thereunder, or is
permitted with consent if all necessary consents to such grant of a
security interest have been obtained from the other parties thereto
(it being understood that the foregoing shall not be deemed to
obligate such Grantor to obtain such consents); provided that the
foregoing limitation shall not affect, limit, restrict or impair the
grant by such Grantor of a security interest pursuant to this
Agreement in any Receivable or any money or other amounts due or to
become due under any such contract, agreement, instrument or
indenture.
"Guarantor Obligations": with respect to any Guarantor, all
obligations and liabilities of such Guarantor which may arise under or
in connection with this Agreement (including, without limitation,
Section 2) or any other Loan Document to which such Guarantor is a
party, in each case whether on account of guarantee obligations,
reimbursement obligations, fees, indemnities, costs, expenses or
otherwise (including, without limitation, all fees and disbursements
of counsel to the Administrative Agent or to the Lenders that are
required to be paid by such Guarantor pursuant to the terms of this
Agreement or any other Loan Document).
"Guarantors": the collective reference to each Grantor other
than the Borrower.
"Intellectual Property": the collective reference to all
rights, priorities and privileges relating to intellectual property,
whether arising under United States laws, including, without
limitation, the Copyrights, the Copyright Licenses, the Patents, the
Patent Licenses, the Trademarks and the Trademark Licenses, and all
rights to xxx at law or in equity for any infringement or other
impairment thereof, including the right to receive all proceeds and
damages therefrom.
"Intercompany Note": any promissory note evidencing loans
made by any Grantor to Holdings or any of its Subsidiaries.
"Investment Property": the collective reference to (i) all
"investment property" as such term is defined in Section 9-115 of the
New York UCC (other than any Foreign Subsidiary
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Voting Stock excluded from the definition of "Pledged Stock") and (ii)
whether or not constituting "investment property" as so defined, all
Pledged Notes and all Pledged Stock.
"Issuers": the collective reference to each issuer of any
Investment Property.
"Lender Hedge Agreements": all interest rate swaps, caps or
collar agreements or similar arrangements entered into by the Borrower
with any Lender (or any Affiliate of any Lender) providing for
protection against fluctuations in interest rates or currency exchange
rates or the exchange of nominal interest obligations, either
generally or under specific contingencies.
"New York UCC": the Uniform Commercial Code as from time to
time in effect in the State of New York.
"Obligations": (i) in the case of the Borrower, the Borrower
Obligations, and (ii) in the case of each Guarantor, its Guarantor
Obligations.
"Patents": (i) all letters patent of the United States, all
reissues and extensions thereof and all goodwill associated therewith,
including, without limitation, any of the foregoing referred to in
Schedule 6, (ii) all applications for letters patent of the United
States and all divisions, continuations and continuations-in-part
thereof, including, without limitation, any of the foregoing referred
to in Schedule 6, and (iii) all rights to obtain any reissues or
extensions of the foregoing.
"Patent License": all agreements, whether written or oral,
providing for the grant by or to any Grantor of any right to
manufacture, use or sell any invention covered in whole or in part by
a Patent, including, without limitation, any of the foregoing referred
to in Schedule 6.
"Pledged Notes": all promissory notes listed on Schedule 2,
all Intercompany Notes at any time issued to any Grantor and all other
promissory notes issued to or held by any Grantor (other than
promissory notes issued in connection with extensions of trade credit
by any Grantor in the ordinary course of business).
"Pledged Stock": the shares of Capital Stock listed on
Schedule 2, together with any other shares, stock certificates,
options or rights of any nature whatsoever in respect of the Capital
Stock of any Person that may be issued or granted to, or held by, any
Grantor while this Agreement is in effect; provided that in no event
shall more than 65% of the total outstanding Foreign Subsidiary Voting
Stock of any Foreign Subsidiary held by Holdings or any Subsidiary of
Holdings which is not a Foreign Subsidiary be required to be pledged
hereunder and in no event shall any of the shares of Capital Stock of
any Person held by any Foreign Subsidiary be required to be pledged
hereunder.
"Proceeds": all "proceeds" as such term is defined in Section
9-306(1) of the New York UCC and, in any event, shall include, without
limitation, all dividends or other income from the Investment
Property, collections thereon or distributions or payments with
respect thereto.
"Receivable": any right to payment for goods sold or leased
or for services rendered, whether or not such right is evidenced by an
Instrument or Chattel Paper and whether or not it has been earned by
performance (including, without limitation, any Account).
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"Securities Act": the Securities Act of 1933, as amended.
"System": any structured fiber optic communications network
consisting of fiber optic cabling installed in a building in a
dedicated conduit system with junction boxes, intermediate
distribution frames, main distribution frames and all related
electronics necessary to operate and provide communications services
over such network.
"Trademarks": (i) all trademarks, trade names, corporate
names, company names, business names, fictitious business names, trade
styles, service marks, logos and other source or business identifiers,
and all goodwill associated therewith, now existing or hereafter
adopted or acquired, all registrations and recordings thereof, and all
applications in connection therewith, whether in the United States
Patent and Trademark Office or in any similar office or agency of the
United States or any State thereof, and all common-law rights related
thereto, including, without limitation, any of the foregoing referred
to in Schedule 6, and (ii) the right to obtain all renewals thereof.
"Trademark License": any agreement, whether written or oral,
providing for the grant by or to any Grantor of any right to use any
Trademark, including, without limitation, any of the foregoing
referred to in Schedule 6.
1.2 Other Definitional Provisions. (a) The words "hereof,"
"herein", "hereto" 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 and Schedule references are
to this Agreement unless otherwise specified.
(b) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
(c) Where the context requires, terms relating to the
Collateral or any part thereof, when used in relation to a Grantor, shall refer
to such Grantor's Collateral or the relevant part thereof.
SECTION 2. GUARANTEE
2.1 Guarantee. (a) Each of the Guarantors hereby, jointly and
severally, unconditionally and irrevocably, guarantees to the Administrative
Agent, for the ratable benefit of the Lenders and their respective successors,
indorsees, transferees and assigns, the prompt and complete payment and
performance by the Borrower when due (whether at the stated maturity, by
acceleration or otherwise) of the Borrower Obligations.
(b) Anything herein or in any other Loan Document to the
contrary notwithstanding, the maximum liability of each Guarantor hereunder and
under the other Loan Documents shall in no event exceed the amount which can be
guaranteed by such Guarantor under applicable federal and state laws relating
to the insolvency of debtors (after giving effect to the right of contribution
established in Section 2.2).
(c) Each Guarantor agrees that the Borrower Obligations may
at any time and from time to time exceed the amount of the liability of such
Guarantor hereunder without impairing the guarantee
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contained in this Section 2 or affecting the rights and remedies of the
Administrative Agent or any Lender hereunder.
(d) The guarantee contained in this Section 2 shall remain in
full force and effect until all the Borrower Obligations and the obligations of
each Guarantor under the guarantee contained in this Section 2 shall have been
satisfied by payment in full and the Commitments shall be terminated,
notwithstanding that from time to time during the term of the Credit Agreement
the Borrower may be free from any Borrower Obligations.
(e) No payment made by the Borrower, any of the Guarantors,
any other guarantor or any other Person or received or collected by the
Administrative Agent or any Lender from the Borrower, any of the Guarantors,
any other guarantor or any other Person by virtue of any action or proceeding
or any set-off or appropriation or application at any time or from time to time
in reduction of or in payment of the Borrower Obligations shall be deemed to
modify, reduce, release or otherwise affect the liability of any Guarantor
hereunder which shall, notwithstanding any such payment (other than any payment
made by such Guarantor in respect of the Borrower Obligations or any payment
received or collected from such Guarantor in respect of the Borrower
Obligations), remain liable for the Borrower Obligations up to the maximum
liability of such Guarantor hereunder until the Borrower Obligations are paid
in full and the Commitments are terminated.
2.2 Right of Contribution. Each Guarantor hereby agrees that
to the extent that a Guarantor shall have paid more than its proportionate
share of any payment made hereunder, such Guarantor shall be entitled to seek
and receive contribution from and against any other Guarantor hereunder which
has not paid its proportionate share of such payment. Each Guarantor's right of
contribution shall be subject to the terms and conditions of Section 2.3. The
provisions of this Section 2.2 shall in no respect limit the obligations and
liabilities of any Guarantor to the Administrative Agent and the Lenders, and
each Guarantor shall remain liable to the Administrative Agent and the Lenders
for the full amount guaranteed by such Guarantor hereunder.
2.3 No Subrogation. Notwithstanding any payment made by any
Guarantor hereunder or any set-off or application of funds of any Guarantor by
the Administrative Agent or any Lender, no Guarantor shall be entitled to be
subrogated to any of the rights of the Administrative Agent or any Lender
against the Borrower or any other Guarantor or any collateral security or
guarantee or right of offset held by the Administrative Agent or any Lender for
the payment of the Borrower Obligations, nor shall any Guarantor seek or be
entitled to seek any contribution or reimbursement from the Borrower or any
other Guarantor in respect of payments made by such Guarantor hereunder, until
all amounts then owing and due and payable to the Administrative Agent and the
Lenders by the Borrower on account of the Borrower Obligations are paid in full
and the Commitments are terminated. If any amount shall be paid to any
Guarantor on account of such subrogation rights at any time when all of the
Borrower Obligations shall not have been paid in full, such amount shall be
held by such Guarantor in trust for the Administrative Agent and the Lenders,
segregated from other funds of such Guarantor, and shall, forthwith upon
receipt by such Guarantor, be turned over to the Administrative Agent in the
exact form (if in physical form) received by such Guarantor (duly indorsed by
such Guarantor to the Administrative Agent, if required), to be applied against
the Borrower Obligations, whether matured or unmatured, in such order as the
Administrative Agent may determine.
2.4 Amendments, etc. with respect to the Borrower
Obligations. Each Guarantor shall remain obligated hereunder notwithstanding
that, without any reservation of rights against any Xxxxxxxxx
00
0
and without notice to or further assent by any Guarantor, any demand for
payment of any of the Borrower Obligations made by the Administrative Agent or
any Lender may be rescinded by the Administrative Agent or such Lender and any
of the Borrower Obligations continued, and the Borrower Obligations, or the
liability of any other Person upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, extended, amended,
modified, accelerated, compromised, waived, surrendered or released by the
Administrative Agent or any Lender, and the Credit Agreement and the other Loan
Documents and any other documents executed and delivered in connection
therewith may be amended, modified, supplemented or terminated, in whole or in
part, as the Administrative Agent (or the Required Lenders or all Lenders, as
the case may be) may deem advisable from time to time, and any collateral
security, guarantee or right of offset at any time held by the Administrative
Agent or any Lender for the payment of the Borrower Obligations may be sold,
exchanged, waived, surrendered or released. Neither the Administrative Agent
nor any Lender shall have any obligation to protect, secure, perfect or insure
any Lien at any time held by it as security for the Borrower Obligations or for
the guarantee contained in this Section 2 or any property subject thereto.
2.5 Guarantee Absolute and Unconditional. Each Guarantor
waives any and all notice of the creation, renewal, extension or accrual of any
of the Borrower Obligations and notice of or proof of reliance by the
Administrative Agent or any Lender upon the guarantee contained in this Section
2 or acceptance of the guarantee contained in this Section 2; the Borrower
Obligations, and any of them, shall conclusively be deemed to have been
created, contracted or incurred, or renewed, extended, amended or waived, in
reliance upon the guarantee contained in this Section 2; and all dealings
between the Borrower and any of the Guarantors, on the one hand, and the
Administrative Agent and the Lenders, on the other hand, likewise shall be
conclusively presumed to have been had or consummated in reliance upon the
guarantee contained in this Section 2. Each Guarantor waives diligence,
presentment, protest, demand for payment and notice of default or nonpayment to
or upon the Borrower or any of the Guarantors with respect to the Borrower
Obligations. Each Guarantor understands and agrees that the guarantee contained
in this Section 2 shall be construed as a continuing, absolute and
unconditional guarantee of payment without regard to (a) the validity or
enforceability of the Credit Agreement or any other Loan Document, any of the
Borrower Obligations or any other collateral security therefor or guarantee or
right of offset with respect thereto at any time or from time to time held by
the Administrative Agent or any Lender, (b) any defense, set-off or
counterclaim (other than a defense of payment or performance) which may at any
time be available to or be asserted by the Borrower or any other Person against
the Administrative Agent or any Lender, or (c) any other circumstance
whatsoever (with or without notice to or knowledge of the Borrower or such
Guarantor) which constitutes, or might be construed to constitute, an equitable
or legal discharge of the Borrower for the Borrower Obligations, or of such
Guarantor under the guarantee contained in this Section 2, in bankruptcy or in
any other instance. When making any demand hereunder or otherwise pursuing its
rights and remedies hereunder against any Guarantor, the Administrative Agent
or any Lender may, but shall be under no obligation to, make a similar demand
on or otherwise pursue such rights and remedies as it may have against the
Borrower, any other Guarantor or any other Person or against any collateral
security or guarantee for the Borrower Obligations or any right of offset with
respect thereto, and any failure by the Administrative Agent or any Lender to
make any such demand, to pursue such other rights or remedies or to collect any
payments from the Borrower, any other Guarantor or any other Person or to
realize upon any such collateral security or guarantee or to exercise any such
right of offset, or any release of the Borrower, any other Guarantor or any
other Person or any such collateral security, guarantee or right of offset,
shall not relieve any Guarantor of any obligation or liability hereunder, and
shall not impair or affect the rights and remedies, whether express, implied or
available as a matter of law, of the Administrative Agent or any Lender against
any Guarantor.
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For the purposes hereof "demand" shall include the commencement and continuance
of any legal proceedings.
2.6 Reinstatement. The guarantee contained in this Section 2
shall continue to be effective, or be reinstated, as the case may be, if at any
time payment, or any part thereof, of any of the Borrower Obligations is
rescinded or must otherwise be restored or returned by the Administrative Agent
or any Lender upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Borrower or any Guarantor, or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, the Borrower or any Guarantor or any substantial part of its
property, or otherwise, all as though such payments had not been made.
2.7 Payments. Each Guarantor hereby guarantees that payments
hereunder will be paid to the Administrative Agent without set-off or
counterclaim in Dollars at the office of the Administrative Agent located at
000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
SECTION 3. GRANT OF SECURITY INTEREST
Each Grantor hereby assigns and transfers to the
Administrative Agent, and hereby grants to the Administrative Agent, for the
ratable benefit of the Lenders, a security interest in, all of the following
property now owned or at any time hereafter acquired by such Grantor or in
which such Grantor now has or at any time in the future may acquire any right,
title or interest (collectively, the "Collateral"), as collateral security for
the prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of such Grantor's Obligations:
(a) all Accounts;
(b) all Chattel Paper;
(c) all Contracts;
(d) all Deposit Accounts;
(e) all Documents;
(f) all Equipment (other than any Equipment that is subject
to a Lien permitted under Sections 6.3(f), (g), (i) or (j) to the
extent that documentation creating, evidencing or otherwise relating
to such Lien prohibits a grant of a security interest therein under
this Agreement);
(g) all General Intangibles;
(h) all Instruments;
(i) all Intellectual Property (other than any Intellectual
Property that is subject to a Lien permitted under Sections 6.3(f),
(i) or (j) to the extent that documentation creating, evidencing or
otherwise relating to such Lien prohibits a grant of a security
interest therein under this Agreement);
(j) all Inventory;
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(k) all Investment Property;
(l) all other property not otherwise described above,
including all of the fixtures, chattels, fiber optic cable, co-axial
and copper wires, business machines, machinery, apparatus, equipment,
furnishings, fittings and articles of personal property of every kind
and nature whatsoever, and all appurtenances and additions thereto and
substitutions or replacements thereof (together with, in each case,
attachments, components, parts and accessories) currently owned or
subsequently acquired by such Grantor and now or subsequently attached
to, or contained in a System located in or on any building,
improvement or structure located on the parcels of real property which
are subject to Contracts, including but without limiting the
generality of the foregoing, all Equipment relating to Systems,
appliances, fittings and fixtures of every kind and description (other
than any such property that is subject to a Lien permitted under
Sections 6.3(f), (g), (i) or (j) to the extent that documentation
creating, evidencing or otherwise relating to such Lien prohibits a
grant of a security interest therein under this Agreement);
(m) all books and records pertaining to the Collateral; and
(n) to the extent not otherwise included, all Proceeds and
products of any and all of the foregoing and all collateral security
and guarantees given by any Person with respect to any of the
foregoing.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter
into the Credit Agreement and to induce the Lenders to make their respective
extensions of credit to the Borrower thereunder, each Grantor hereby represents
and warrants to the Administrative Agent and each Lender that:
4.1 Title; No Other Liens. Except for the security interest
granted to the Administrative Agent for the ratable benefit of the Lenders
pursuant to this Agreement and the other Liens permitted to exist on the
Collateral by the Credit Agreement, such Grantor owns or has rights in each
item of the Collateral free and clear of any and all Liens or claims of others.
No financing statement or other public notice with respect to all or any part
of the Collateral is on file or of record in any public office, except such as
have been filed in favor of the Administrative Agent, for the ratable benefit
of the Lenders, pursuant to this Agreement or as are permitted by the Credit
Agreement.
4.2 Perfected First Priority Liens. The security interests
granted pursuant to this Agreement (a) upon completion of the filings and other
actions specified on Schedule 3 (which, in the case of all filings and other
documents referred to on said Schedule, have been delivered to the
Administrative Agent in completed and duly executed form) will constitute valid
perfected security interests in all of the Collateral in favor of the
Administrative Agent, for the ratable benefit of the Lenders, as collateral
security for such Grantor's Obligations, enforceable in accordance with the
terms hereof against all creditors of such Grantor and any Persons purporting
to purchase any Collateral from such Grantor and (b) are prior to all other
Liens on the Collateral in existence on the date hereof except for Liens
permitted by the Credit Agreement which have priority over the Liens created
hereby on the Collateral by operation of law.
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4.3 Chief Executive Office. On the date hereof, such
Grantor's jurisdiction of organization and the location of such Grantor's chief
executive office or sole place of business are specified on Schedule 4.
4.4 Inventory and Equipment. On the date hereof, the
Inventory and the Equipment (other than mobile goods) are kept at the locations
listed on Schedule 5.
4.5 Farm Products. None of the Collateral constitutes, or is
the Proceeds of, Farm Products.
4.6 Investment Property. (a) The shares of Pledged Stock
pledged by such Grantor hereunder constitute all the issued and outstanding
shares of all classes of the Capital Stock of each Issuer owned by such Grantor
or, in the case of Foreign Subsidiary Voting Stock, if less, 66% of the
outstanding Foreign Subsidiary Voting Stock of each relevant Issuer.
(b) All the shares of the Pledged Stock have been duly and
validly issued and are fully paid and nonassessable.
(c) Each of the Pledged Notes constitutes the legal, valid
and binding obligation of the obligor with respect thereto, enforceable in
accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
(d) Such Grantor is the record and beneficial owner of, and
has good and marketable title to, the Investment Property pledged by it
hereunder, free of any and all Liens or options in favor of, or claims of, any
other Person, except the security interest created by this Agreement.
4.7 Receivables. (a) No amount payable to such Grantor under
or in connection with any Receivable is evidenced by any Instrument or Chattel
Paper which has not been delivered to the Administrative Agent.
(b) None of the obligors on any Receivables is a Governmental
Authority.
(c) The amounts represented by such Grantor to the Lenders
from time to time as owing to such Grantor in respect of the Receivables will
at such times be accurate.
4.8 Contracts. (a) Except as set forth on Schedule 3.4 of the
Credit Agreement, no consent of any party (other than such Grantor) to any
Contract is required, or purports to be required, in connection with the
execution, delivery and performance of this Agreement.
(b) Each Contract is in full force and effect and constitutes
a valid and legally enforceable obligation of the Grantor which is a party
thereto, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.
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(c) No consent or authorization of, filing with or other act
by or in respect of any Governmental Authority is required in connection with
the execution, delivery, performance, validity or enforceability of any of the
Contracts by any party thereto other than those which have been duly obtained,
made or performed, are in full force and effect and do not subject the scope of
any such Contract to any material adverse limitation, either specific or
general in nature.
(d) Neither such Grantor nor (to the best of such Grantor's
knowledge) any of the other parties to the Contracts is in default in the
performance or observance of any of the terms thereof in any manner that, in
the aggregate, could reasonably be expected to have a Material Adverse Effect.
(e) The right, title and interest of such Grantor in, to and
under the Contracts are not subject to any defenses, offsets, counterclaims or
claims that, in the aggregate, could reasonably be expected to have a Material
Adverse Effect.
(f) Such Grantor has delivered to the Administrative Agent a
complete and correct copy of each Contract, including all amendments,
supplements and other modifications thereto.
(g) No amount payable to such Grantor under or in connection
with any Contract is evidenced by any Instrument or Chattel Paper which has not
been delivered to the Administrative Agent.
(h) None of the parties to any Contract is a Governmental
Authority.
4.9 Intellectual Property. (a) Schedule 6 lists all
Intellectual Property owned by such Grantor in its own name on the date hereof.
(b) On the date hereof, all Intellectual Property is valid,
subsisting, unexpired and enforceable, has not been abandoned and does not
infringe the intellectual property rights of any other Person in any manner
that could reasonably be expected to have a Material Adverse Effect.
(c) Except as set forth in Schedule 6, on the date hereof,
none of the Intellectual Property is the subject of any licensing or franchise
agreement pursuant to which such Grantor is the licensor or franchisor.
(d) No holding, decision or judgment has been rendered as of
the date hereof by any Governmental Authority which would limit, cancel or
question the validity of, or such Grantor's rights in, any Intellectual
Property in any respect that could reasonably be expected to have a Material
Adverse Effect.
(e) No action or proceeding is pending, or, to the knowledge
of such Grantor, threatened, on the date hereof (i) seeking to limit, cancel or
question the validity of any Intellectual Property or such Grantor's ownership
interest therein, or (ii) which, if adversely determined, would have a material
adverse effect on the value of any Intellectual Property.
SECTION 5. COVENANTS
Each Grantor covenants and agrees with the Administrative
Agent and the Lenders that, from and after the date of this Agreement until the
Obligations shall have been paid in full (other than
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contingent obligations and indemnities which are not then due and payable but
which survive repayment of the Loans and termination of the Commitments) and
the Commitments shall have terminated:
5.1 Delivery of Instruments, Certificated Securities and
Chattel Paper. If any amount payable under or in connection with any of the
Collateral shall be or become evidenced by any Instrument, Certificated
Security or Chattel Paper, such Instrument, Certificated Security or Chattel
Paper shall be immediately delivered to the Administrative Agent, duly indorsed
in a manner satisfactory to the Administrative Agent, to be held as Collateral
pursuant to this Agreement.
5.2 Maintenance of Insurance. (a) Such Grantor will maintain,
with financially sound and reputable companies, insurance policies (i) insuring
the Inventory and Equipment against loss by fire, explosion, theft and such
other casualties as may be reasonably satisfactory to the Administrative Agent
and (ii) insuring such Grantor, the Administrative Agent and the Lenders
against liability for personal injury and property damage relating to such
Inventory and Equipment, such policies to be in such form and amounts and
having such coverage as may be reasonably satisfactory to the Administrative
Agent and the Lenders.
(b) All such insurance shall (i) provide that no
cancellation, material reduction in amount or material change in coverage
thereof shall be effective until at least 30 days after receipt by the
Administrative Agent of written notice thereof, (ii) name the Administrative
Agent as insured party or loss payee and (iii) be reasonably satisfactory in
all other respects to the Administrative Agent.
(c) The Borrower shall deliver to the Administrative Agent
and the Lenders a report of a reputable insurance broker with respect to such
insurance substantially concurrently with each delivery of the Borrower's
audited annual financial statements and such supplemental reports with respect
thereto as the Administrative Agent may from time to time reasonably request.
5.3 Payment of Obligations. Such Grantor will pay and
discharge or otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, all taxes, assessments and governmental charges
or levies imposed upon the Collateral or in respect of income or profits
therefrom, as well as all other claims of any kind which if not paid,
discharged or otherwise satisfied would become a Lien thereon (including,
without limitation, claims for labor, materials and supplies) against or with
respect to the Collateral, except that no such charge need be paid if the
amount or validity thereof is currently being contested in good faith by
appropriate proceedings, reserves in conformity with GAAP with respect thereto
have been provided on the books of such Grantor and such proceedings could not
reasonably be expected to result in the sale, forfeiture or loss of any
material portion of the Collateral or any interest therein.
5.4 Maintenance of Perfected Security Interest; Further
Documentation. (a) Such Grantor shall maintain the security interest created by
this Agreement as a perfected security interest having at least the priority
described in Section 4.2 and shall defend such security interest against the
claims and demands of all Persons whomsoever.
(b) Such Grantor will furnish to the Administrative Agent and
the Lenders from time to time statements and schedules further identifying and
describing the assets and property of such Grantor and such other reports in
connection therewith as the Administrative Agent may reasonably request, all in
reasonable detail.
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(c) At any time and from time to time, upon the written
request of the Administrative Agent, and at the sole expense of such Grantor,
such Grantor will promptly and duly execute and deliver, and have recorded,
such further instruments and documents and take such further actions as the
Administrative Agent may reasonably request for the purpose of obtaining or
preserving the full benefits of this Agreement and of the rights and powers
herein granted, including, without limitation, (i) filing any financing or
continuation statements under the Uniform Commercial Code (or other similar
laws) in effect in any jurisdiction with respect to the security interests
created hereby and (ii) in the case of Investment Property, Deposit Accounts
and any other relevant Collateral, taking any actions necessary to enable the
Administrative Agent to obtain "control" (within the meaning of the applicable
Uniform Commercial Code) with respect thereto.
5.5 Changes in Locations, Name, etc. Such Grantor will not,
except upon 15 days' prior written notice to the Administrative Agent and
delivery to the Administrative Agent of (a) all additional executed financing
statements and other documents reasonably requested by the Administrative Agent
to maintain the validity, perfection and priority of the security interests
provided for herein and (b) if applicable, a written supplement to Schedule 5
showing any additional location at which Inventory or Equipment shall be kept:
(i) permit any of the Inventory or Equipment to be kept at a
location other than those listed on Schedule 5;
(ii) change its jurisdiction of organization or the location
of its chief executive office or sole place of business from that
referred to in Section 4.3; or
(iii) change its name, identity or corporate structure to
such an extent that any financing statement filed by the
Administrative Agent in connection with this Agreement would become
misleading.
5.6 Notices. Such Grantor will advise the Administrative
Agent and the Lenders promptly, in reasonable detail, of:
(a) any Lien (other than security interests created hereby or
Liens permitted under the Credit Agreement) on any of the Collateral which
would adversely affect the ability of the Administrative Agent to exercise any
of its remedies hereunder; and
(b) of the occurrence of any other event which could
reasonably be expected to have a material adverse effect on the aggregate value
of the Collateral or on the security interests created hereby.
5.7 Investment Property. (a) If such Grantor shall become
entitled to receive or shall receive any stock certificate (including, without
limitation, any certificate representing a stock dividend or a distribution in
connection with any reclassification, increase or reduction of capital or any
certificate issued in connection with any reorganization), option or rights in
respect of the Capital Stock of any Issuer, whether in addition to, in
substitution of, as a conversion of, or in exchange for, any shares of the
Pledged Stock, or otherwise in respect thereof, such Grantor shall accept the
same as the agent of the Administrative Agent and the Lenders, hold the same in
trust for the Administrative Agent and the Lenders and deliver the same
forthwith to the Administrative Agent in the exact form received, duly indorsed
by such Grantor to the Administrative Agent, if required, together with an
undated stock power covering such certificate duly executed in blank by such
Grantor and with, if the Administrative Agent so
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requests, signature guaranteed, to be held by the Administrative Agent, subject
to the terms hereof, as additional collateral security for the Obligations. Any
sums paid upon or in respect of the Investment Property upon the liquidation or
dissolution of any Issuer shall be paid over to the Administrative Agent to be
held by it hereunder as additional collateral security for the Obligations, and
in case any distribution of capital shall be made on or in respect of the
Investment Property or any property shall be distributed upon or with respect
to the Investment Property pursuant to the recapitalization or reclassification
of the capital of any Issuer or pursuant to the reorganization thereof, the
property so distributed shall, unless otherwise subject to a perfected security
interest in favor of the Administrative Agent, be delivered to the
Administrative Agent to be held by it hereunder as additional collateral
security for the Obligations. If any sums of money or property so paid or
distributed in respect of the Investment Property shall be received by such
Grantor, such Grantor shall, until such money or property is paid or delivered
to the Administrative Agent, hold such money or property in trust for the
Lenders, segregated from other funds of such Grantor, as additional collateral
security for the Obligations.
(b) Without the prior written consent of the Administrative
Agent, such Grantor will not (i) vote to enable, or take any other action to
permit, any Issuer to issue any stock or other equity securities of any nature
or to issue any other securities convertible into or granting the right to
purchase or exchange for any stock or other equity securities of any nature of
any Issuer, (ii) sell, assign, transfer, exchange, or otherwise dispose of, or
grant any option with respect to, the Investment Property or Proceeds thereof
(except pursuant to a transaction expressly permitted by the Credit Agreement),
(iii) create, incur or permit to exist any Lien or option in favor of, or any
claim of any Person with respect to, any of the Investment Property or Proceeds
thereof, or any interest therein, except for the security interests created by
this Agreement or (iv) enter into any agreement or undertaking restricting the
right or ability of such Grantor or the Administrative Agent to sell, assign or
transfer any of the Investment Property or Proceeds thereof.
(c) In the case of each Grantor which is an Issuer, such
Issuer agrees that (i) it will be bound by the terms of this Agreement relating
to the Investment Property issued by it and will comply with such terms insofar
as such terms are applicable to it, (ii) it will notify the Administrative
Agent promptly in writing of the occurrence of any of the events described in
Section 5.7(a) with respect to the Investment Property issued by it and (iii)
the terms of Sections 6.3(c) and 6.7 shall apply to it, mutatis mutandis, with
respect to all actions that may be required of it pursuant to Section 6.3(c) or
6.7 with respect to the Investment Property issued by it.
5.8 Receivables. Other than in the ordinary course of
business consistent with its past practice, such Grantor will not (i) grant any
extension of the time of payment of any Receivable, (ii) compromise or settle
any Receivable for less than the full amount thereof, (iii) release, wholly or
partially, any Person liable for the payment of any Receivable, (iv) allow any
credit or discount whatsoever on any Receivable or (v) amend, supplement or
modify any Receivable in any manner that could adversely affect the value
thereof.
5.9 Contracts. (a) Such Grantor will not amend, modify,
terminate or waive any provision of any Contract in any manner which could
reasonably be expected to materially adversely affect the value of the
Contracts as Collateral, taken as a whole.
(b) Such Grantor will exercise promptly and diligently each
and every material right which it may have under each Contract (other than any
right of termination).
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(c) Such Grantor will deliver to the Administrative Agent a
copy of each material demand, notice or document received by it relating in any
way to any Contract that questions the validity or enforceability of such
Contract.
5.10 Intellectual Property. (a) Such Grantor (either itself
or through licensees) will (i) continue to use each material Trademark on each
and every trademark class of goods applicable to its current line as reflected
in its current catalogs, brochures and price lists in order to maintain such
Trademark in full force free from any claim of abandonment for non-use, (ii)
maintain as in the past the quality of products and services offered under such
Trademark, (iii) use such Trademark with the appropriate notice of registration
and all other notices and legends required by applicable Requirements of Law,
(iv) not adopt or use any xxxx which is confusingly similar or a colorable
imitation of such Trademark unless the Administrative Agent, for the ratable
benefit of the Lenders, shall obtain a perfected security interest in such xxxx
pursuant to this Agreement, and (v) not (and not permit any licensee or
sublicensee thereof to) do any act or knowingly omit to do any act whereby such
Trademark may become invalidated or impaired in any way.
(b) Such Grantor (either itself or through licensees) will
not do any act, or omit to do any act, whereby any material Patent may become
forfeited, abandoned or dedicated to the public.
(c) Such Grantor (either itself or through licensees) (i)
will employ each material Copyright and (ii) will not (and will not permit any
licensee or sublicensee thereof to) do any act or knowingly omit to do any act
whereby any material portion of the material Copyrights may become invalidated
or otherwise impaired. Such Grantor will not (either itself or through
licensees) do any act whereby any material portion of the material Copyrights
may fall into the public domain.
(d) Such Grantor (either itself or through licensees) will
not do any act that knowingly uses any material Intellectual Property to
infringe the intellectual property rights of any other Person.
(e) Such Grantor will notify the Administrative Agent and the
Lenders immediately if it knows, or has reason to know, that any application or
registration relating to any material Intellectual Property may become
forfeited, abandoned or dedicated to the public, or of any adverse
determination or development (including, without limitation, the institution
of, or any such determination or development in, any proceeding in the United
States Patent and Trademark Office, the United States Copyright Office or any
court or tribunal in any country) regarding such Grantor's ownership of, or the
validity of, any material Intellectual Property or such Grantor's right to
register the same or to own and maintain the same.
(f) Whenever such Grantor, either by itself or through any
agent, employee, licensee or designee, shall file an application for the
registration of any Intellectual Property with the United States Patent and
Trademark Office, the United States Copyright Office, such Grantor shall report
such filing to the Administrative Agent within five Business Days after the
last day of the fiscal quarter in which such filing occurs. Upon request of the
Administrative Agent, such Grantor shall execute and deliver, and have
recorded, any and all agreements, instruments, documents, and papers as the
Administrative Agent may request to evidence the Administrative Agent's and the
Lenders' security interest in any Copyright, Patent or Trademark and the
goodwill and general intangibles of such Grantor relating thereto or
represented thereby.
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(g) Such Grantor will take all reasonable and necessary
steps, including, without limitation, in any proceeding before the United
States Patent and Trademark Office, the United States Copyright Office or any
similar office or agency, to maintain and pursue each application (and to
obtain the relevant registration) and to maintain each registration of the
material Intellectual Property, including, without limitation, filing of
applications for renewal, affidavits of use and affidavits of incontestability.
(h) In the event that any material Intellectual Property is
infringed, misappropriated or diluted by a third party, such Grantor shall (i)
take such actions as such Grantor shall reasonably deem appropriate under the
circumstances to protect such Intellectual Property and (ii) if such
Intellectual Property is of material economic value, promptly notify the
Administrative Agent after it learns thereof and xxx for infringement,
misappropriation or dilution, to seek injunctive relief where appropriate and
to recover any and all damages for such infringement, misappropriation or
dilution.
SECTION 6. REMEDIAL PROVISIONS
6.1 Certain Matters Relating to Receivables. (a) The
Administrative Agent shall have the right to make test verifications of the
Receivables in any manner and through any medium that it reasonably considers
advisable, and each Grantor shall furnish all such assistance and information
as the Administrative Agent may require in connection with such test
verifications. At any time after the occurrence and during the continuance of
an Event of Default, upon the Administrative Agent's request and at the expense
of the relevant Grantor, such Grantor shall cause independent public
accountants or others satisfactory to the Administrative Agent to furnish to
the Administrative Agent reports showing reconciliations, aging and test
verifications of, and trial balances for, the Receivables.
(b) The Administrative Agent hereby authorizes each Grantor
to collect such Grantor's Receivables, subject to the Administrative Agent's
direction and control, and the Administrative Agent may curtail or terminate
said authority at any time after the occurrence and during the continuance of
an Event of Default. If required by the Administrative Agent at any time after
the occurrence and during the continuance of an Event of Default, any payments
of Receivables, when collected by any Grantor, (i) shall be forthwith (and, in
any event, within two Business Days) deposited by such Grantor in the exact
form received (if received in physical form), duly indorsed by such Grantor to
the Administrative Agent if required, in a Collateral Account maintained under
the sole dominion and control of the Administrative Agent, subject to
withdrawal by the Administrative Agent for the account of the Lenders only as
provided in Section 6.5, and (ii) until so turned over, shall be held by such
Grantor in trust for the Administrative Agent and the Lenders, segregated from
other funds of such Grantor. Each such deposit of Proceeds of Receivables shall
be accompanied by a report identifying in reasonable detail the nature and
source of the payments included in the deposit.
(c) At any time after the occurrence and during the
continuance of an Event of Default, upon the Administrative Agent's request,
each Grantor shall deliver to the Administrative Agent all original and other
documents evidencing, and relating to, the agreements and transactions which
gave rise to the Receivables, including, without limitation, all original
orders, invoices and shipping receipts.
6.2 Communications with Obligors; Grantors Remain Liable. (a)
At any time after the occurrence and during the continuance of an Event of
Default, the Administrative Agent in its own name or in the name of others may
at any time communicate with obligors under the Receivables and parties to the
Contracts to verify with them to the Administrative Agent's satisfaction the
existence, amount and terms of any Receivables or Contracts.
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(b) Upon the request of the Administrative Agent at any time
after the occurrence and during the continuance of an Event of Default, each
Grantor shall notify obligors on the Receivables and parties to the Contracts
that the Receivables and the Contracts have been assigned to the Administrative
Agent for the ratable benefit of the Lenders and that payments in respect
thereof shall be made directly to the Administrative Agent.
(c) Notwithstanding anything herein to the contrary, each
Grantor shall remain liable under each of the Receivables and Contracts to
observe and perform all the conditions and obligations to be observed and
performed by it thereunder, all in accordance with the terms of any agreement
giving rise thereto. Neither the Administrative Agent nor any Lender shall have
any obligation or liability under any Receivable (or any agreement giving rise
thereto) or Contract by reason of or arising out of this Agreement or the
receipt by the Administrative Agent or any Lender of any payment relating
thereto, nor shall the Administrative Agent or any Lender be obligated in any
manner to perform any of the obligations of any Grantor under or pursuant to
any Receivable (or any agreement giving rise thereto) or Contract, to make any
payment, to make any inquiry as to the nature or the sufficiency of any payment
received by it or as to the sufficiency of any performance by any party
thereunder, to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times.
6.3 Pledged Stock. (a) Unless an Event of Default shall have
occurred and be continuing and the Administrative Agent shall have given notice
to the relevant Grantor of the Administrative Agent's intent to exercise its
corresponding rights pursuant to Section 6.3(b), each Grantor shall be
permitted to receive all cash dividends paid in respect of the Pledged Stock
and all payments made in respect of the Pledged Notes, in each case paid in the
normal course of business of the relevant Issuer and consistent with past
practice, to the extent permitted in the Credit Agreement, and to exercise all
voting and corporate rights with respect to the Investment Property; provided,
however, that no vote shall be cast or corporate right exercised or other
action taken which, in the Administrative Agent's reasonable judgment, would
impair the Collateral or which would be inconsistent with or result in any
violation of any provision of the Credit Agreement, this Agreement or any other
Loan Document.
(b) If an Event of Default shall occur and be continuing and
the Administrative Agent shall give notice of its intent to exercise such
rights to the relevant Grantor or Grantors, (i) the Administrative Agent shall
have the right to receive any and all cash dividends, payments or other
Proceeds paid in respect of the Investment Property and make application
thereof to the Obligations in such order as the Administrative Agent may
determine, and (ii) any or all of the Investment Property shall be registered
in the name of the Administrative Agent or its nominee, and the Administrative
Agent or its nominee may thereafter exercise (x) all voting, corporate and
other rights pertaining to such Investment Property at any meeting of
shareholders of the relevant Issuer or Issuers or otherwise and (y) any and all
rights of conversion, exchange and subscription and any other rights,
privileges or options pertaining to such Investment Property as if it were the
absolute owner thereof (including, without limitation, the right to exchange at
its discretion any and all of the Investment Property upon the merger,
consolidation, reorganization, recapitalization or other fundamental change in
the corporate structure of any Issuer, or upon the exercise by any Grantor or
the Administrative Agent of any right, privilege or option pertaining to such
Investment Property, and in connection therewith, the right to deposit and
deliver any and all of the Investment Property with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms and
conditions as the Administrative Agent may determine), all without liability
except to account for property actually received by it, but the Administrative
Agent shall
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have no duty to any Grantor to exercise any such right, privilege or option and
shall not be responsible for any failure to do so or delay in so doing.
(c) Each Grantor hereby authorizes and instructs each Issuer
of any Investment Property pledged by such Grantor hereunder to (i) comply with
any instruction received by it from the Administrative Agent in writing that
(x) states that an Event of Default has occurred and is continuing and (y) is
otherwise in accordance with the terms of this Agreement, without any other or
further instructions from such Grantor, and each Grantor agrees that each
Issuer shall be fully protected in so complying, and (ii) unless otherwise
expressly permitted hereby, pay any dividends or other payments with respect to
the Investment Property directly to the Administrative Agent.
6.4 Proceeds to be Turned Over To Administrative Agent. In
addition to the rights of the Administrative Agent and the Lenders specified in
Section 6.1 with respect to payments of Receivables, if an Event of Default
shall occur and be continuing, all Proceeds received by any Grantor consisting
of cash, checks and other near-cash items shall be held by such Grantor in
trust for the Administrative Agent and the Lenders, segregated from other funds
of such Grantor, and shall, forthwith upon receipt by such Grantor, be turned
over to the Administrative Agent in the exact form received by such Grantor
(duly indorsed by such Grantor to the Administrative Agent, if required). All
Proceeds received by the Administrative Agent hereunder shall be held by the
Administrative Agent in a Collateral Account maintained under its sole dominion
and control. All Proceeds while held by the Administrative Agent in a
Collateral Account (or by such Grantor in trust for the Administrative Agent
and the Lenders) shall continue to be held as collateral security for all the
Obligations and shall not constitute payment thereof until applied as provided
in Section 6.5.
6.5 Application of Proceeds. At such intervals as may be
agreed upon by the Borrower and the Administrative Agent, or, if an Event of
Default shall have occurred and be continuing, at any time at the
Administrative Agent's election, the Administrative Agent may apply all or any
part of Proceeds held in any Collateral Account in payment of the Obligations
in such order as the Administrative Agent may elect, and any part of such funds
which the Administrative Agent elects not so to apply and deems not required as
collateral security for the Obligations shall be paid over from time to time by
the Administrative Agent to the Borrower or to whomsoever may be lawfully
entitled to receive the same. Any balance of such Proceeds remaining after the
Obligations shall have been paid in full and the Commitments shall have
terminated shall be paid over to the Borrower or to whomsoever may be lawfully
entitled to receive the same.
6.6 Code and Other Remedies. If an Event of Default shall
occur and be continuing, the Administrative Agent, on behalf of the Lenders,
may exercise, in addition to all other rights and remedies granted to them in
this Agreement and in any other instrument or agreement securing, evidencing or
relating to the Obligations, all rights and remedies of a secured party under
the New York UCC or any other applicable law. Without limiting the generality
of the foregoing, the Administrative Agent, without demand of performance or
other demand, presentment, protest, advertisement or notice of any kind (except
any notice required by law referred to below) to or upon any Grantor or any
other Person (all and each of which demands, defenses, advertisements and
notices are hereby waived), may in such circumstances forthwith collect,
receive, appropriate and realize upon the Collateral, or any part thereof,
and/or may forthwith sell, lease, assign, give option or options to purchase,
or otherwise dispose of and deliver the Collateral or any part thereof (or
contract to do any of the foregoing), in one or more parcels at public or
private sale or sales, at any exchange, broker's board or office of the
Administrative Agent or any Lender or elsewhere upon such terms and conditions
as it may deem advisable and at such prices as
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it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. The Administrative Agent or any Lender shall
have the right upon any such public sale or sales, and, to the extent permitted
by law, upon any such private sale or sales, to purchase the whole or any part
of the Collateral so sold, free of any right or equity of redemption in any
Grantor, which right or equity is hereby waived and released. Each Grantor
further agrees, at the Administrative Agent's request, to assemble the
Collateral and make it available to the Administrative Agent at places which
the Administrative Agent shall reasonably select, whether at such Grantor's
premises or elsewhere. The Administrative Agent shall apply the net proceeds of
any action taken by it pursuant to this Section 6.6, after deducting all
reasonable costs and expenses of every kind incurred in connection therewith or
incidental to the care or safekeeping of any of the Collateral or in any way
relating to the Collateral or the rights of the Administrative Agent and the
Lenders hereunder, including, without limitation, reasonable attorneys' fees
and disbursements, to the payment in whole or in part of the Obligations, in
such order as the Administrative Agent may elect, and only after such
application and after the payment by the Administrative Agent of any other
amount required by any provision of law, including, without limitation, Section
9-504(1)(c) of the New York UCC, need the Administrative Agent account for the
surplus, if any, to any Grantor. To the extent permitted by applicable law,
each Grantor waives all claims, damages and demands it may acquire against the
Administrative Agent or any Lender arising out of the exercise by them of any
rights hereunder. If any notice of a proposed sale or other disposition of
Collateral shall be required by law, such notice shall be deemed reasonable and
proper if given at least 10 days before such sale or other disposition.
6.7 Sale of Pledged Stock. Each Grantor recognizes that the
Administrative Agent may be unable to effect a public sale of any or all the
Pledged Stock, by reason of certain prohibitions contained in the Securities
Act and applicable state securities laws or otherwise, and may be compelled to
resort to one or more private sales thereof to a restricted group of purchasers
which will be obliged to agree, among other things, to acquire such securities
for their own account for investment and not with a view to the distribution or
resale thereof. Each Grantor acknowledges and agrees that any such private sale
may result in prices and other terms less favorable than if such sale were a
public sale and, notwithstanding such circumstances, agrees that any such
private sale shall be deemed to have been made in a commercially reasonable
manner. The Administrative Agent shall be under no obligation to delay a sale
of any of the Pledged Stock for the period of time necessary to permit the
Issuer thereof to register such securities for public sale under the Securities
Act, or under applicable state securities laws, even if such Issuer would agree
to do so.
6.8 Waiver; Deficiency. Each Grantor shall remain liable for
any deficiency if the proceeds of any sale or other disposition of the
Collateral are insufficient to pay its Obligations and the fees and
disbursements of any attorneys employed by the Administrative Agent or any
Lender to collect such deficiency.
SECTION 7. THE ADMINISTRATIVE AGENT
7.1 Administrative Agent's Appointment as Attorney-in-Fact,
etc. (a) Each Grantor hereby irrevocably constitutes and appoints the
Administrative Agent and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of such Grantor and in the name of
such Grantor or in its own name, for the purpose of carrying out the terms of
this Agreement, to take any and all appropriate action and to execute any and
all documents and instruments which may be necessary or desirable to accomplish
the purposes of this Agreement, and, without limiting the generality of the
foregoing, each Grantor hereby
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gives the Administrative Agent the power and right, on behalf of such Grantor,
without notice to or assent by such Grantor, to do any or all of the following:
(i) in the name of such Grantor or its own name, or
otherwise, take possession of and indorse and collect any checks,
drafts, notes, acceptances or other instruments for the payment of
moneys due under any Receivable or Contract or with respect to any
other Collateral and file any claim or take any other action or
proceeding in any court of law or equity or otherwise deemed
appropriate by the Administrative Agent for the purpose of collecting
any and all such moneys due under any Receivable or Contract or with
respect to any other Collateral whenever payable;
(ii) in the case of any Intellectual Property, execute and
deliver, and have recorded, any and all agreements, instruments,
documents and papers as the Administrative Agent may request to
evidence the Administrative Agent's and the Lenders' security interest
in such Intellectual Property and the goodwill and general intangibles
of such Grantor relating thereto or represented thereby;
(iii) pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, effect any repairs or any insurance
called for by the terms of this Agreement and pay all or any part of
the premiums therefor and the costs thereof;
(iv) execute, in connection with any sale provided for in
Section 6.6 or 6.7, any indorsements, assignments or other instruments
of conveyance or transfer with respect to the Collateral; and
(v) (1) direct any party liable for any payment under any of
the Collateral to make payment of any and all moneys due or to become
due thereunder directly to the Administrative Agent or as the
Administrative Agent shall direct; (2) ask or demand for, collect, and
receive payment of and receipt for, any and all moneys, claims and
other amounts due or to become due at any time in respect of or
arising out of any Collateral; (3) sign and indorse any invoices,
freight or express bills, bills of lading, storage or warehouse
receipts, drafts against debtors, assignments, verifications, notices
and other documents in connection with any of the Collateral; (4)
commence and prosecute any suits, actions or proceedings at law or in
equity in any court of competent jurisdiction to collect the
Collateral or any portion thereof and to enforce any other right in
respect of any Collateral; (5) defend any suit, action or proceeding
brought against such Grantor with respect to any Collateral; (6)
settle, compromise or adjust any such suit, action or proceeding and,
in connection therewith, give such discharges or releases as the
Administrative Agent may deem appropriate; (7) assign any Copyright,
Patent or Trademark (along with the goodwill of the business to which
any such Copyright, Patent or Trademark pertains), throughout the
world for such term or terms, on such conditions, and in such manner,
as the Administrative Agent shall in its sole discretion determine;
and (8) generally, sell, transfer, pledge and make any agreement with
respect to or otherwise deal with any of the Collateral as fully and
completely as though the Administrative Agent were the absolute owner
thereof for all purposes, and do, at the Administrative Agent's option
and such Grantor's expense, at any time, or from time to time, all
acts and things which the Administrative Agent deems necessary to
protect, preserve or realize upon the Collateral and the
Administrative Agent's and the Lenders' security interests therein and
to effect the intent of this Agreement, all as fully and effectively
as such Grantor might do.
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Anything in this Section 7.1(a) to the contrary notwithstanding, the
Administrative Agent agrees that it will not exercise any rights under the
power of attorney provided for in this Section 7.1(a) unless an Event of
Default shall have occurred and be continuing.
(b) If any Grantor fails to perform or comply with any of its
agreements contained herein, the Administrative Agent, at its option, but
without any obligation so to do, may perform or comply, or otherwise cause
performance or compliance, with such agreement.
(c) The expenses of the Administrative Agent incurred in
connection with actions undertaken as provided in this Section 7.1, together
with interest thereon at a rate per annum equal to the highest rate per annum
at which interest would then be payable on any category of past due ABR Loans
under the Credit Agreement, from the date of payment by the Administrative
Agent to the date reimbursed by the relevant Grantor, shall be payable by such
Grantor to the Administrative Agent on demand.
(d) Each Grantor hereby ratifies all that said attorneys
shall lawfully do or cause to be done by virtue hereof. All powers,
authorizations and agencies contained in this Agreement are coupled with an
interest and are irrevocable until this Agreement is terminated and the
security interests created hereby are released.
7.2 Duty of Administrative Agent. The Administrative Agent's
sole duty with respect to the custody, safekeeping and physical preservation of
the Collateral in its possession, under Section 9-207 of the New York UCC or
otherwise, shall be to deal with it in the same manner as the Administrative
Agent deals with similar property for its own account. Neither the
Administrative Agent, any Lender nor any of their respective officers,
directors, employees or agents shall be liable for failure to demand, collect
or realize upon any of the Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of any Grantor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof. The powers
conferred on the Administrative Agent and the Lenders hereunder are solely to
protect the Administrative Agent's and the Lenders' interests in the Collateral
and shall not impose any duty upon the Administrative Agent or any Lender to
exercise any such powers. The Administrative Agent and the Lenders shall be
accountable only for amounts that they actually receive as a result of the
exercise of such powers, and neither they nor any of their officers, directors,
employees or agents shall be responsible to any Grantor for any act or failure
to act hereunder, except for their own gross negligence or willful misconduct.
7.3 Execution of Financing Statements. Pursuant to Section
9-402 of the New York UCC and any other applicable law, each Grantor authorizes
the Administrative Agent to file or record financing statements and other
filing or recording documents or instruments with respect to the Collateral
without the signature of such Grantor in such form and in such offices as the
Administrative Agent determines appropriate to perfect the security interests
of the Administrative Agent under this Agreement, provided that the
Administrative Agent shall first give the Grantor a reasonable opportunity to
sign any such financing statements. A photographic or other reproduction of
this Agreement shall be sufficient as a financing statement or other filing or
recording document or instrument for filing or recording in any jurisdiction.
7.4 Authority of Administrative Agent. Each Grantor
acknowledges that the rights and responsibilities of the Administrative Agent
under this Agreement with respect to any action taken by the Administrative
Agent or the exercise or non-exercise by the Administrative Agent of any
option, voting
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right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the Administrative
Agent and the Lenders, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Administrative Agent and the Grantors, the Administrative Agent
shall be conclusively presumed to be acting as agent for the Lenders with full
and valid authority so to act or refrain from acting, and no Grantor shall be
under any obligation, or entitlement, to make any inquiry respecting such
authority.
SECTION 8. MISCELLANEOUS
8.1 Amendments in Writing. None of the terms or provisions of
this Agreement may be waived, amended, supplemented or otherwise modified
except in accordance with subsection 9.1 of the Credit Agreement.
8.2 Notices. All notices, requests and demands to or upon the
Administrative Agent or any Grantor hereunder shall be effected in the manner
provided for in subsection 9.2 of the Credit Agreement; provided that any such
notice, request or demand to or upon any Guarantor shall be addressed to such
Guarantor at its notice address set forth on Schedule 1.
8.3 No Waiver by Course of Conduct; Cumulative Remedies.
Neither the Administrative Agent nor any Lender shall by any act (except by a
written instrument pursuant to Section 8.1), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default. No failure to exercise, nor any
delay in exercising, on the part of the Administrative Agent or any Lender, any
right, power or privilege hereunder shall operate as a waiver thereof. No
single or partial exercise of any right, power or privilege hereunder shall
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. A waiver by the Administrative Agent or any Lender
of any right or remedy hereunder on any one occasion shall not be construed as
a bar to any right or remedy which the Administrative Agent or such Lender
would otherwise have on any future occasion. The rights and remedies herein
provided are cumulative, may be exercised singly or concurrently and are not
exclusive of any other rights or remedies provided by law.
8.4 Enforcement Expenses; Indemnification. (a) Each Guarantor
agrees to pay or reimburse each Lender and the Administrative Agent for all its
costs and expenses incurred in collecting against such Guarantor under the
guarantee contained in Section 2 or otherwise enforcing or preserving any
rights under this Agreement and the other Loan Documents to which such
Guarantor is a party, including, without limitation, the fees and disbursements
of counsel (including the allocated fees and expenses of in-house counsel) to
each Lender and of counsel to the Administrative Agent.
(b) Each Guarantor agrees to pay, and to save the
Administrative Agent and the Lenders harmless from, any and all liabilities
with respect to, or resulting from any delay in paying, any and all stamp,
excise, sales or other taxes which may be payable or determined to be payable
with respect to any of the Collateral or in connection with any of the
transactions contemplated by this Agreement.
(c) Each Guarantor agrees to pay, and to save the
Administrative Agent and the Lenders harmless from, any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution,
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delivery, enforcement, performance and administration of this Agreement to the
extent the Borrower would be required to do so pursuant to Section 9.5 of the
Credit Agreement.
(d) The agreements in this Section 8.4 shall survive
repayment of the Obligations and all other amounts payable under the Credit
Agreement and the other Loan Documents.
8.5 Successors and Assigns. This Agreement shall be binding
upon the successors and assigns of each Grantor and shall inure to the benefit
of the Administrative Agent and the Lenders and their successors and assigns;
provided that no Grantor may assign, transfer or delegate any of its rights or
obligations under this Agreement without the prior written consent of the
Administrative Agent.
8.6 Set-Off. Each Grantor hereby irrevocably authorizes the
Administrative Agent and each Lender at any time and from time to time after
the occurrence and during the continuance of an Event of Default, without
notice to such Grantor or any other Grantor, any such notice being expressly
waived by each Grantor, to set-off and appropriate and apply any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by the Administrative Agent or such Lender
to or for the credit or the account of such Grantor, or any part thereof in
such amounts as the Administrative Agent or such Lender may elect, against and
on account of the obligations and liabilities of such Grantor to the
Administrative Agent or such Lender hereunder and claims of every nature and
description of the Administrative Agent or such Lender against such Grantor, in
any currency, whether arising hereunder, under the Credit Agreement, any other
Loan Document or otherwise, as the Administrative Agent or such Lender may
elect, whether or not the Administrative Agent or any Lender has made any
demand for payment and although such obligations, liabilities and claims may be
contingent or unmatured. The Administrative Agent and each Lender shall notify
such Grantor promptly of any such set-off and the application made by the
Administrative Agent or such Lender of the proceeds thereof, provided that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of the Administrative Agent and each Lender under this
Section 8.6 are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which the Administrative Agent or such
Lender may have.
8.7 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
8.8 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
8.9 Section Headings. The Section headings used in this
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation
hereof.
8.10 Integration. This Agreement and the other Loan Documents
represent the agreement of the Grantors, the Administrative Agent and the
Lenders with respect to the subject matter hereof and thereof, and there are no
promises, undertakings, representations or warranties by the
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Administrative Agent or any Lender relative to subject matter hereof and
thereof not expressly set forth or referred to herein or in the other Loan
Documents.
8.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
8.12 Submission To Jurisdiction; Waivers. Each Grantor hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action
or proceeding relating to this Agreement and the other Loan Documents
to which it is a party, or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive general jurisdiction
of the Courts of the State of New York, the courts of the United
States of America for the Southern District of New York, and appellate
courts from any thereof;
(b) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to such Grantor at its address referred to in Section 8.2 or
at such other address of which the Administrative Agent shall have
been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or
shall limit the right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or
proceeding referred to in this Section any special, exemplary,
punitive or consequential damages.
8.13 Acknowledgements. Each Grantor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents
to which it is a party;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to any Grantor arising out of or
in connection with this Agreement or any of the other Loan Documents,
and the relationship between the Grantors, on the one hand, and the
Administrative Agent and Lenders, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Grantors and the
Lenders.
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8.14 Additional Grantors. Each Subsidiary of Holdings that is
required to become a party to this Agreement pursuant to Section 5.9 of the
Credit Agreement shall become a Grantor for all purposes of this Agreement upon
execution and delivery by such Subsidiary of an Assumption Agreement in the
form of Annex 1 hereto.
8.15 Releases. (a) At such time as the Loans and the other
Obligations (other than contingent obligations and indemnities which are not
then due and payable but which survive repayment of the Loans and termination
of the Commitments) shall have been paid in full and the Commitments have been
terminated, the Collateral shall be released from the Liens created hereby, and
this Agreement and all obligations (other than those expressly stated to
survive such termination) of the Administrative Agent and each Grantor
hereunder shall terminate, all without delivery of any instrument or
performance of any act by any party, and all rights to the Collateral shall
revert to the Grantors. At the request and sole expense of any Grantor
following any such termination, the Administrative Agent shall deliver to such
Grantor any Collateral held by the Administrative Agent hereunder, and execute
and deliver to such Grantor such documents as such Grantor shall reasonably
request to evidence such termination.
(b) If any of the Collateral shall be sold, transferred or
otherwise disposed of by any Grantor in a transaction permitted by the Credit
Agreement, then the Administrative Agent, at the request and sole expense of
such Grantor, shall execute and deliver to such Grantor all releases or other
documents reasonably necessary or desirable for the release of the Liens
created hereby on such Collateral. At the request and sole expense of the
Borrower, a Guarantor shall be released from its obligations hereunder in the
event that all the Capital Stock of such Guarantor shall be sold, transferred
or otherwise disposed of in a transaction permitted by the Credit Agreement;
provided that the Borrower shall have delivered to the Administrative Agent, at
least ten Business Days prior to the date of the proposed release, a written
request for release identifying the relevant Guarantor and the terms of the
sale or other disposition in reasonable detail, including the price thereof and
any expenses in connection therewith, together with a certification by the
Borrower stating that such transaction is in compliance with the Credit
Agreement and the other Loan Documents.
8.16 WAIVER OF JURY TRIAL. EACH GRANTOR HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM
THEREIN.
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IN WITNESS WHEREOF, each of the undersigned has caused this
Guarantee and Collateral Agreement to be duly executed and delivered as of the
date first above written.
ALLIED RISER COMMUNICATIONS, INC.
By:
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Title:
ALLIED RISER COMMUNICATIONS HOLDINGS, INC.
By:
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Title:
ARC TEXAS, INC. D/B/A ALLIED RISER OF TEXAS, INC.
By:
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Title:
ALLIED RISER OF CALIFORNIA, INC.
By:
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Title:
ALLIED RISER OF CONNECTICUT, INC.
By:
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Title:
ALLIED RISER OF GEORGIA, INC.
By:
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Title:
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ALLIED RISER OF MASSACHUSETTS, INC.
By:
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Title:
ALLIED RISER OF NEW YORK, INC.
By:
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Title:
ALLIED RISER OF OHIO, INC.
By:
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Title:
ALLIED RISER OF PENNSYLVANIA, INC.
By:
----------------------------------------------
Title:
ALLIED RISER OF VIRGINIA, INC.
By:
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Title:
ALLIED RISER OF WASHINGTON, INC.
By:
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Title:
ALLIED RISER OF D.C., INC.
By:
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Title:
89
EXHIBIT B
FORM OF
COMPLIANCE CERTIFICATE
This Compliance Certificate is delivered to you pursuant to
Section 5.2 of the Credit Agreement, dated as of March 25, 1999 as amended,
supplemented or modified from time to time (the "Credit Agreement"), among
ALLIED RISER COMMUNICATIONS HOLDINGS, INC., a Delaware corporation, ALLIED
RISER COMMUNICATIONS, INC., a Delaware corporation (the "Borrower"), the
several banks and other financial institutions or entities from time to time
parties thereto (the "Lenders"), and THE CHASE MANHATTAN BANK, as
administrative agent (in such capacity, the "Administrative Agent"). Terms
defined in the Credit Agreement and not otherwise defined herein are used
herein with the meanings so defined.
1. I am the duly elected, qualified and acting [position of
certifying Responsible Officer] of the Borrower.
2. I have reviewed and are familiar with the contents of
this Certificate.
3. I have reviewed the terms of the Credit Agreement and the
Loan Documents and have made or caused to be made under my supervision, a
review in reasonable detail of the transactions and condition of the Borrower
during the accounting period covered by the financial statements attached
hereto as Attachment 1 (the "Financial Statements"). Such review did not
disclose the existence during or at the end of the accounting period covered by
the Financial Statements, and I have no knowledge of the existence, as of the
date of this Certificate, of any condition or event which constitutes a Default
or Event of Default [, except as set forth below].
4. Attached hereto as Attachment 2 are the computations
showing compliance with the covenants set forth in Section 6.1, 6.2, and 6.7 of
the Credit Agreement.
IN WITNESS WHEREOF, I execute this Certificate this ____ day
of ____________________, _____.
ALLIED RISER COMMUNICATIONS, INC.
By:
-----------------------------------------
Title:
90
Attachment 2
to Compliance Certificate
The information described herein is as of _______, ____, and
pertains to the period from _______ __, ____ to ________________ __, ____.
[Set forth Covenant Calculations]
91
EXHIBIT C
FORM OF
CLOSING CERTIFICATE
I, the undersigned, [President/Executive Vice President/Chief
Financial Officer] of [Name of Loan Party], a corporation organized and
existing under the laws of the State of _______________ (the "Company"), do
hereby certify on behalf of the Company that:
1. This Certificate is furnished pursuant to the Credit Agreement,
dated as of March 25, 1999, among Allied Riser Communications Holdings, Inc., a
Delaware corporation, Allied Riser Communications, Inc., a Delaware
corporation, the Lenders party thereto, and The Chase Manhattan Bank, as
Administrative Agent (such Credit Agreement, as in effect on the date of this
Certificate, being herein called the "Credit Agreement"). Unless otherwise
defined herein, capitalized terms used in this Certificate shall have the
meanings set forth in the Credit Agreement.
2. The following named individuals are elected or appointed officers
of the Company, each holds the office of the Company set forth opposite his
name and has held such office since __________________, 19__(1). The signature
written opposite the name and title of each such officer is his genuine
signature.
Name(2) Office Signature
------- ------ ---------
---------------- ---------------- ----------------------
---------------- ---------------- ----------------------
---------------- ---------------- ----------------------
3. Attached hereto as Exhibit A is a certified copy of the
Certificate of Incorporation of the Company, as filed in the Office of the
Secretary of State of the State of ______________ on __________________, 19__,
together with all amendments thereto adopted through the date hereof.
4. Attached hereto as Exhibit B is a true and correct copy of
the By-Laws of the Company which were duly adopted, are in full force and
effect on the date hereof, and have been in effect since __________________,
19__.
5. Attached hereto as Exhibit C is a true and correct copy of
resolutions which were duly adopted on ________, 19___ [by unanimous written
consent of the Board of Directors of the
----------------------
(1) Insert a date prior to the time of any corporate action relating to the Loan
Documents or related documentation
(2) Include name, office and signature of each officer who will sign any Loan
Document, including the officer who will sign the certification at the end of
this Certificate or related documentation.
92
C-2
Company] [by a meeting of the Board of Directors of the Company at which a
quorum was present and acting throughout], and said resolutions have not been
rescinded, amended or modified. Except as
attached hereto as Exhibit C, no resolutions have been adopted by the Board of
Directors of the Company which deal with the execution, delivery or performance
of any of the Loan Documents to which the Company is party.
6. On the date hereof, all of the conditions set forth in
Sections 4.1 and 4.2 of the Credit Agreement have been satisfied.
7. On the date hereof, the representations and warranties [of
each Loan Party] [of the Company](3) set forth in the Credit Agreement and in
the other Loan Documents are true and correct with the same effect as though
such representations and warranties had been made on the date hereof.
8. On the date hereof, no Default or Event of Default has
occurred and is continuing or would result from any Borrowing to occur on the
date hereof or the application of the proceeds thereof.
9. There is no proceeding for the dissolution or liquidation
of the Company or threatening its existence.
10. As of the date hereof, there are at least 68 Wired
Business Units.(4)
IN WITNESS WHEREOF, I have hereunto set my hand this ___ day
of _________, ___.
[NAME OF LOAN PARTY]
By:
-----------------------
Title:
----------------------
(3) Holdings and the Borrower bring down the representations and warranties
for each Loan Party, and each other Loan Party brings down the
representations and warranties made by it.
(4) To be included only in the Closing Certificate of the Borrower.
93
C-3
I, the undersigned, [Secretary/Assistant Secretary] of the Company, do hereby
certify that:
1. [Name of Person making above certifications] is the duly
elected and qualified [President/Executive Vice President/Chief Financial
Officer] of the Company and the signature above is his genuine signature.
2. The certifications made by [name of Person making above
certifications] in Items 2, 3, 4, 5, 6, 7, 8 and 9 above are true and correct.
IN WITNESS WHEREOF, I have hereunto set my hand this ______
day of ________, ____.
[NAME OF LOAN PARTY]
By:
-----------------------------
Title:
94
EXHIBIT D
FORM OF CONSENT
CONSENT, dated _____________, ____ (this "Consent"), made by
__________________________________ (the "Consenting Party") in favor of The
Chase Manhattan Bank, as administrative agent (the "Administrative Agent").
W I T N E S S E T H :
WHEREAS, the Consenting Party and Allied Riser
Communications, Inc. (the "Borrower") have entered into a [Communications
License Agreement], dated as of ___________, _____ (the "Contract");
WHEREAS, the Borrower, Allied Riser Communications Holdings,
Inc. ("Holdings"), several lenders (the "Lenders") and the Administrative
Agent, are parties to a Credit Agreement, dated as of March 25, 1999 (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"); and
WHEREAS, to secure the obligations of the Borrower under the
Credit Agreement, the Borrower has granted a security interest in the Contract
to the Administrative Agent, for the benefit of the Lenders, pursuant to an
agreement herein referred to as the "Guarantee and Collateral Agreement";
NOW, THEREFORE, the Consenting Party hereby agrees as
follows:
SECTION 1. CONSENT TO ASSIGNMENT, ETC.
1.1 Consent to Assignment and Perfection. Notwithstanding any
provision in the Contract to the contrary, the Consenting Party (a) consents to
the assignment to the Administrative Agent of all of the Borrower's rights,
title and interest in, to and under the Contract pursuant to the Guarantee and
Collateral Agreement (the "Assigned Interest"), (b) consents to any filings
necessary to perfect the security interests created by the Guarantee and
Collateral Agreement with respect to the Collateral (as defined therein) and
(c) acknowledges the right of the Administrative Agent to exercise its rights
and remedies under the Guarantee and Collateral Agreement[, including the right
to assign the rights of the Borrower under the Contract to a third party].
1.2 Right to Cure. In the event of a default by the Borrower
in the performance of any of its obligations under the Contract which would
immediately or ultimately enable the Consenting Party to terminate or suspend
its obligations under the Contract (hereinafter a "default"), the Consenting
Party will not terminate the Contract unless it has first given the
Administrative Agent notice of such default and affords the Administrative
Agent the same time period to correct such default as it is required to give
the Borrower under the Contract.
1.3 Notice of Transfer. The Consenting Party will not sell,
lease, assign, convey, transfer or otherwise dispose of the [Building] or
[Property] (each as defined in the Contract) to which the Contract relates
unless (a) it has given the Administrative Agent 30 days' written notice of
such disposition and (b) the Consenting Party shall have assigned the Contract
to such purchaser (or other
95
transferee) and such purchaser (or other transferee) shall have executed and
delivered a consent in favor of the Administrative Agent substantially in the
form of this Consent.
1.4 No Liability. The Consenting Party acknowledges and
agrees that neither the Administrative Agent nor any other lender or agent
which is a party to the Credit Agreement shall have any liability or obligation
under the Contract as a result of this Consent or the Guarantee and Collateral
Agreement, unless they become party to the Contract.
SECTION 2. MISCELLANEOUS
2.1 Notices. All notices and other communications hereunder
shall be in writing, shall be sent by first class mail, by personal delivery or
by a nationally recognized courier service, and shall be directed (a) if to the
Consenting Party, in accordance with the Contract, (b) if to the Administrative
Agent, at 0 Xxxxx Xxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx
Xxxxxxxx or (c) to such other address or addressee as the Consenting Party or
the Administrative Agent, as the case may be, may designate by notice given
pursuant hereto.
2.2 GOVERNING LAW. THIS CONSENT SHALL BE GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK.
2.3 Successors and Assigns. This Consent shall be binding
upon the Consenting Party and its permitted successors and assigns and shall
inure to the benefit of the Administrative Agent, and its respective successors
and assigns.
96
IN WITNESS WHEREOF, the Consenting Party has caused this
Consent to be executed and delivered by its duly authorized officer, as of the
date first above written.
[NAME OF CONSENTING PARTY]
By:
-----------------------------
Title:
97
EXHIBIT E
FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement, dated as of March
25, 1999 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among Allied Riser Communications Holdings, Inc.
("Holdings"), Allied Riser Communications, Inc. (the "Borrower"), the Lenders
named therein and The Chase Manhattan Bank, as administrative agent for the
Lenders (in such capacity, the "Administrative Agent"). Unless otherwise
defined herein, terms defined in the Credit Agreement and used herein shall
have the meanings given to them in the Credit Agreement.
The Assignor identified on Schedule l hereto (the "Assignor")
and the Assignee identified on Schedule l hereto (the "Assignee") agree as
follows:
1. The Assignor hereby irrevocably sells and assigns to the
Assignee without recourse to the Assignor, and the Assignee hereby
irrevocably purchases and assumes from the Assignor without recourse
to the Assignor, as of the Effective Date (as defined below), the
interest described in Schedule 1 hereto (the "Assigned Interest") in
and to the Assignor's rights and obligations under the Credit
Agreement with respect to those credit facilities contained in the
Credit Agreement as are set forth on Schedule 1 hereto (individually,
an "Assigned Facility"; collectively, the "Assigned Facilities"), in a
principal amount for each Assigned Facility as set forth on Schedule 1
hereto.
2. The Assignor (a) makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties
or representations made in or in connection with the Credit Agreement
or with respect to the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement, any other
Loan Document or any other instrument or document furnished pursuant
thereto, other than that the Assignor has not created any adverse
claim upon the interest being assigned by it hereunder and that such
interest is free and clear of any such adverse claim; (b) makes no
representation or warranty and assumes no responsibility with respect
to the financial condition of Holdings, any of its Subsidiaries or any
other obligor or the performance or observance by Holdings, any of its
Subsidiaries or any other obligor of any of their respective
obligations under the Credit Agreement or any other Loan Document or
any other instrument or document furnished pursuant hereto or thereto;
and (c) attaches any Notes held by it evidencing the Assigned
Facilities and (i) requests that the Administrative Agent, upon
request by the Assignee, exchange the attached Notes for a new Note or
Notes payable to the Assignee and (ii) if the Assignor has retained
any interest in the Assigned Facility, requests that the
Administrative Agent exchange the attached Notes for a new Note or
Notes payable to the Assignor, in each case in amounts which reflect
the assignment being made hereby (and after giving effect to any other
assignments which have become effective on the Effective Date).
3. The Assignee (a) represents and warrants that it is
legally authorized to enter into this Assignment and Acceptance; (b)
confirms that it has received a copy of the Credit Agreement, together
with copies of the financial statements delivered pursuant to Section
3.1 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into
this Assignment and Acceptance; (c) agrees that it will, independently
and without reliance upon the Assignor, the Administrative Agent or
any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Credit
98
E-2
Agreement, the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto; (d) appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Credit Agreement, the other Loan Documents
or any other instrument or document furnished pursuant hereto or thereto as are
delegated to the Administrative Agent by the terms thereof, together with such
powers as are incidental thereto; and (e) agrees that it will be bound by the
provisions of the Credit Agreement and will perform in accordance with its
terms all the obligations which by the terms of the Credit Agreement are
required to be performed by it as a Lender including, if it is organized under
the laws of a jurisdiction outside the United States, its obligation pursuant
to Section 2.14(d) of the Credit Agreement.
4. The effective date of this Assignment and Acceptance shall
be the Effective Date of Assignment described in Schedule 1 hereto
(the "Effective Date"). Following the execution of this Assignment and
Acceptance, it will be delivered to the Agent for acceptance by it and
recording by the Agent pursuant to the Credit Agreement, effective as
of the Effective Date (which shall not, unless otherwise agreed to by
the Administrative Agent, be earlier than five Business Days after the
date of such acceptance and recording by the Administrative Agent).
5. Upon such acceptance and recording, from and after the
Effective Date, the Administrative Agent shall make all payments in
respect of the Assigned Interest (including payments of principal,
interest, fees and other amounts) to the Assignor for amounts which
have accrued to the Effective Date and to the Assignee for amounts
which have accrued subsequent to the Effective Date. The Assignor and
the Assignee shall make all appropriate adjustments in payments by the
Administrative Agent for periods prior to the Effective Date or with
respect to the making of this assignment directly between themselves.
6. From and after the Effective Date, (a) the Assignee shall
be a party to the Credit Agreement and, to the extent provided in this
Assignment and Acceptance, have the rights and obligations of a Lender
thereunder and under the other Loan Documents and shall be bound by
the provisions thereof and (b) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and
be released from its obligations under the Credit Agreement.
7. This Assignment and Acceptance shall be governed by and
construed in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Acceptance to be executed as of the date first above written by
their respective duly authorized officers on Schedule 1 hereto.
99
EXHIBIT F-1
FORM OF OPINION OF XXXXXXXX & XXXXX
[K&E LETTERHEAD]
[Closing Date]
The Chase Manhattan Bank, as Administrative
Agent under the Credit Agreement, as hereinafter
defined
and
The Lenders which are parties to the Credit Agreement
on the date hereof (the "Initial Lenders")
Re: Allied Riser Communications Holdings
Ladies and Gentlemen:
We have acted as special counsel to (i) Allied Riser Communications
Holdings, Inc., a Delaware corporation ("Holdings"), (ii) Allied Riser
Communications, Inc., a Delaware corporation (the "Borrower") and the
additional Subsidiaries of Holdings identified on the Schedule of Subsidiaries
attached hereto (each a "Guarantor" and collectively the "Guarantors")
(Holdings, the Borrower and the Guarantors, collectively referred to herein as
the "Credit Parties"), in connection with the transactions contemplated in that
certain Credit Agreement dated as of March __, 1999, among Holdings, the
Borrower, The Chase Manhattan Bank, as Administrative Agent and each of the
Lenders from time to time a party thereto (as amended as of [Closing Date] the
"Credit Agreement"). Our knowledge of the Credit Parties' business, records,
transactions and activities is limited to the information which has been
brought to our attention by the Credit Parties in connection with such matters
or by a certificate executed and delivered to us by officers of the Credit
Parties in connection with this opinion letter. The opinions expressed below
are being provided pursuant to Section 4.1(g)(i) of the Credit Agreement.
Capitalized terms used but not otherwise defined herein shall have the
respective meanings accorded such terms in the Credit Agreement (with
references herein to the Credit Agreement and each document defined therein
meaning the Credit Agreement and each such document as executed and delivered
this date (or if executed and delivered on an earlier date, as the same is in
effect on the date hereof)). The Initial Lenders and the Administrative Agent
are herein sometimes called "you".
For purposes of this opinion letter, we have reviewed the Credit
Agreement, the Guarantee and Collateral Agreement of even date herewith
executed and delivered by the Credit Parties in favor of the Administrative
Agent for the Lenders (the "Security Agreement") and the UCC Form-1 Financing
Statements executed by each Credit Party, as debtor, and the Administrative
Agent, as secured party, to be filed in the filing offices listed on Exhibit A
attached hereto (the "Financing Statements"). The Credit
000
Xxx Xxxxx Xxxxxxxxx Bank
[Closing Date]
Page 2
Agreement and the Security Agreement are referred to herein collectively as the
"Operative Documents," and the Operative Documents and the Financing Statements
are referred to herein collectively as the "Loan Documents." We have also
examined originals or copies of the Certificates of Incorporation and By-Laws
of each Credit Party.
Subject to the assumptions, qualifications, exclusions and other
limitations which are identified in this opinion letter and in the schedules
attached to this opinion letter, it is our opinion that:
1. Each of the Credit Parties is a corporation existing and in good
standing under the Delaware General Corporation Law (the "DGCL"). Each
of the Credit Parties has the corporate power and authority to own and
lease its properties of which we are aware and to carry on the
business, in which, to our knowledge, it is presently engaged.
2. Each Credit Party is qualified to do business as a foreign corporation
and is in good standing in the jurisdictions noted on the Schedule of
Foreign Qualifications attached hereto.
3. Each Credit Party has the corporate power to execute and deliver the
Loan Documents to which it is party, to borrow money under the Credit
Agreement (in the case of the Borrower), to pledge and grant or convey
security interests in and liens upon its assets as collateral as
required under the Operative Documents to which it is a party, and to
perform its obligations under the Operative Documents to which it is
party.
4. All corporate action by each Credit Party has been duly taken or
obtained to authorize such Credit Party's execution and delivery of
each of the Loan Documents to which it is a party and its performance
of each of the Operative Documents to which it is a party.
5. Each Loan Document to which any Credit Party is a party has been duly
executed and delivered by authorized officers of such Credit Party.
6. Each of the Loan Documents is a valid and binding obligation of each
Credit Party that is a party thereto and is enforceable against such
Credit Party in accordance with its terms.
7. The execution and delivery by each Credit Party of the Loan Documents
to which it is a party, the creation and perfection of the security
interests contemplated thereby, the consummation of the transactions
contemplated by each Operative Document to which it is a party to be
consummated on or prior to the Closing Date, the incurrence of the
Loans under the Credit Agreement and the performance of its
obligations under each Operative Document to which it is a party will
not (a) violate any provisions of the Certificate of Incorporation or
By-Laws of such Credit Party, (b) constitute a violation by such
Credit Party of any applicable provision of existing State of New York
or United States Federal statutory law or governmental regulation
covered by this opinion letter, (c) to our actual knowledge, violate
any order, writ, injunction, judgment, determination, award or decree
of any court or governmental instrumentality applicable to such Credit
Party of which we are aware, (d) result in a material breach or other
violation of, or constitute a default under any agreement listed on
the Schedule of Specified Agreements attached hereto (the "Specified
Agreements") (except that we express no opinion
101
The Chase Manhattan Bank
[Closing Date]
Page 3
with respect to conflicts, breaches or default under cross-default
provisions arising out of a default under any agreement which is not a
Specified Agreement or with respect to financial covenants or tests)
or (e) result in the creation or imposition of (or obligation to
create or impose) any lien, charge, or encumbrance on, or security
interest in, any material property of any Credit Parties pursuant to
the provisions of any of the Specified Agreements, other than Liens
created under the Loan Documents.
8. To our actual knowledge, but without our having made any independent
investigation, there are no actions, suits or proceedings pending or
threatened against or affecting any Credit Party or any properties of
any Credit Party at law or in equity, before any court or
administrative officer or agency, except for the matters disclosed in
the Credit Agreement and the Schedules thereto.
9. None of the Credit Parties is presently required to obtain any
consent, approval, authorization or order of any court or governmental
or regulatory agency in order to obtain the right to execute and
deliver the Loan Documents, to borrow money under the Credit
Agreement, to pledge and grant or convey security interests in and
liens upon its assets as collateral as required under the Operative
Documents, and to perform its obligations under the Operative
Documents except for: (a) those obtained or made prior to the Closing
Date (and which continue in effect), (b) any actions or filings to
perfect the liens and security interests granted under the Operative
Documents or to release existing liens and (c) actions or filings
required in connection with the ordinary course conduct by each Loan
Party of its business and ownership or operation by each Loan Party of
its assets.
10. The Security Agreement creates valid security interests in your favor
in the Collateral therein respectively described which constitutes
property in which a security interest can be granted under Article 9
of the Uniform Commercial Code as enacted in New York (the "New York
UCC"). Such Collateral is referred to herein as the "Code Collateral."
11. Under Section 9-103 of the New York UCC, the perfection and effect of
perfection of your security interests in the Code Collateral (a) which
constitutes documents, instruments and ordinary goods will, as a
general matter, be governed by the laws of the jurisdiction in which
such personal property is located, (b) which constitutes accounts,
general intangibles and mobile goods will, as a general matter, be
governed by the laws of the jurisdiction in which the applicable
grantor's chief executive office is located, (c) which constitutes
certificated securities will be governed by the local law of the
jurisdiction in which the security certificates are located (other than
perfection by filing, which is governed by the local law of the
jurisdiction in which the applicable grantor's chief executive office
is located), and (d) which constitutes other categories will be
governed by the laws of the jurisdiction or jurisdictions specified in
such Section 9-103. To the extent that under the principles described
in the first sentence of this paragraph, the perfection and effect of
perfection of your security interests in the Code Collateral are
governed by the laws of the State of New York, when the Financing
Statements are filed in the filing offices in the State of New York as
set forth on Exhibit A hereto, your security interests under the
Security Agreement in the Code Collateral will be perfected to the
extent such security interests can be perfected by the filing of
financing statements in New York. To the extent that under the
principles described in the first sentence of this paragraph, the
perfection
000
Xxx Xxxxx Xxxxxxxxx Bank
[Closing Date]
Page 4
and effect of perfection of your security interests in the Code
Collateral are governed by the laws of the State of Illinois, when the
Financing Statement are filed in the filing offices in the State of
Illinois as set forth on Exhibit A hereto, your security interests
under the Security Agreement in the Cash Collateral will be perfected
to the extent such security interests can be perfected by the filing of
financing statements in Illinois. To the extent that under the
principles described in the first sentence of this paragraph, the
perfection and effect of perfection of your security interests in the
Code Collateral are governed by the laws of the states other than New
York and Illinois, although we express no opinion as to such laws, we
have reviewed the Commerce Clearing House, Inc. Secured Transactions
Guide as supplemented through ___________, 1999 (the "Guide") and,
based solely on such review, it appears that when the Financing
Statements are duly filed or recorded, as appropriate, in the filing
offices in the states other than New York and Illinois set forth on
Exhibit I attached hereto, your security interests under the Security
Agreement in such remaining Code Collateral will be perfected to the
extent such security interests can be perfected by the filing of
financing statements in such other states.
12. With respect to the "Pledged Stock" as defined in the Security
Agreement, assuming (in addition to all other assumptions upon which
this letter is based) that you have taken and are retaining possession
in the State of New York of the certificates representing the Pledged
Stock, duly endorsed to you or in blank by an effective indorsement
(within the meaning of Section 8-102(a)(11) of the New York UCC), your
security interest in such Pledged Stock is perfected under the New
York UCC; and assuming further (in addition to all other assumptions
upon which this letter is based) that you have taken possession of
such certificates and such accompanying indorsements without notice
(actual or constructive), at or prior to the time of the delivery of
such certificates and endorsements to you, of any adverse claim within
the meaning of Section 8-102(a)(1) of the New York UCC, you have
acquired your security interest in such Pledged Stock free of any such
adverse claims. With respect to "Pledged Notes" as defined in the
Security Agreement, assuming (in addition to all other assumptions
upon which this letter is based) that you have taken and are retaining
possession in the State of New York of each Pledged Note, your
security interest in such Pledged Note is perfected under the New York
UCC and is prior to any other security interest therein arising under
the New York UCC.
13. Upon the due filing and recordation of the Security Agreement in the
United States Patent and Trademark Office (the "PTO") and the United
States Copyright Office (the "Copyright Office") and the payment of
all filing and recordation fees associated therewith, the security
interest created under the Security Agreement in the United States
Patents, United States registered Trademarks (and Trademarks for which
United States registration applications are pending) and United States
registered Copyrights specifically identified in Schedule 6 to the
Security Agreement (the "Registered IP Collateral") will be perfected
to the extent the same may be perfected by such filing. We note for
your information that filing with the PTO and the Copyright Office
alone may not be sufficient to perfect fully the security interests in
such Collateral, and that under the applicable Uniform Commercial Code
and federal law, appropriate UCC financing statements may also be
required to be filed in order to perfect fully such security
interests.
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[Closing Date]
Page 5
14. No Credit Party is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
15. The consummation on the date hereof of the making and borrowing under
the Loan Documents will not violate or result in a violation of
Regulation T, U or X of the Board of Governors of the Federal Reserve
System.
Each opinion in this letter is subject to the General Qualifications
that are recited in Schedule A to this letter to the extent relevant to that
opinion. In preparing this opinion letter, we have relied without any
independent verification upon the assumptions recited in Schedule B to this
opinion letter and upon: (i) factual information contained in certificates
obtained from governmental authorities, (ii) factual information represented to
be true in the Credit Agreement and the other Loan Documents; (iii) factual
information provided to us in a support certificate signed by each of the
Credit Parties; and (iv) factual information we have obtained from such other
sources as we have deemed reasonable. We have examined the originals or copies
certified to our satisfaction, of such other corporate records of the Credit
Parties as we deem necessary for or relevant to this opinion, certificates of
public officials and other officers of the Credit Parties and we have assumed
without investigation that there has been no relevant change or development
between the dates as of which the information cited in the preceding sentence
was given and the date of this opinion letter and that the information upon
which we have relied is accurate and does not permit disclosures necessary to
prevent such information from being misleading.
While we have not conducted any independent investigation to determine
facts upon which our opinions are based or to obtain information about which
this opinion letter advises you, we confirm that we do not have any actual
knowledge which has caused us to conclude that our reliance and assumptions
cited in the preceding paragraph are unwarranted or that any information
supplied in this opinion letter is wrong. The terms "knowledge" and "actual
knowledge" and references to "awareness" whenever used in this opinion letter
with respect to our firm means conscious awareness at the time this opinion
letter is delivered on the date it bears by the following Xxxxxxxx & Xxxxx
lawyers who are the only lawyers at Xxxxxxxx & Xxxxx that have had significant
involvement with (i) the negotiation and preparation of the Credit Agreement or
(ii) the Credit Parties (herein called "our Designated Transaction Lawyers"):
Xxxxxx X. Xxxxxxx and Xxxxxxxxx X. Xxxxx [other K&E lawyers to be added as
appropriate].
Our advice on every legal issue addressed in this opinion letter is
based exclusively on such internal laws of the State of New York (and, for
purposes of paragraph 11, Illinois) and such federal law of the United States
which is in our experience normally applicable to general business corporations
not engaged in regulated business activities and to transactions of the type
contemplated in the Loan Documents between the Credit Parties, on the one hand,
and you on the other hand (but without our having made any special
investigation as to any other laws), except that we express no opinion or
advice as to any law or legal issue (i) which might be violated by any
misrepresentation or omission or a fraudulent act, (ii) to which any Credit
Party may be subject as a result of your legal or regulatory status, your sale
or transfer of the Loans or interests therein or your (as opposed to any other
lender's) involvement in the transactions contemplated by the Loan Documents,
or (iii) identified on Schedule C; provided, that the opinions in paragraphs 1
and 3 through 5 are based on the DGCL and except that the opinion in paragraph
11 (other than with respect to the laws of the State of Illinois) is based
exclusively on our review of the Guide. For purposes of each opinion in the
first sentence of paragraph 1 and each
000
Xxx Xxxxx Xxxxxxxxx Bank
[Closing Date]
Page 6
opinion in paragraph 2, we have relied exclusively upon certificates issued by
a governmental authority in each relevant jurisdiction and such opinion is not
intended to provide any conclusion or assurance beyond that conveyed by such
certificates. We advise you that some issues addressed by this opinion letter
may be governed in whole or in part by other laws, but we express no opinion as
to whether any relevant difference exists between the laws upon which our
opinions are based and any other laws which may actually govern. Our opinions
do not cover or otherwise address any provision of the Operative Documents of
any type identified in Schedule D. Provisions in the Operative Documents which
are not excluded by Schedule D or any other part of this opinion letter or its
attachments are called the "Relevant Agreement Terms."
Our advice on each legal issue addressed in this letter represents our
opinion as to how that issue would be resolved were it to be considered by the
highest court of the jurisdiction upon whose law our opinion on that issue is
based. The manner in which any particular issue would be treated in any actual
court case would depend in part on facts and circumstances particular to the
case, and this letter is not intended to guarantee the outcome of any legal
dispute which may arise in the future. It is possible that some Relevant
Agreement Terms may not prove enforceable for reasons other than those cited in
this letter should an actual enforcement action be brought, but (subject to all
the exceptions, qualifications, exclusions and other limitations contained in
this letter) such unenforceability would not in our opinion prevent you from
realizing the principal benefits purported to be provided by the Relevant
Agreement Terms.
This opinion letter speaks as of the time of its delivery on the date
it bears. We do not assume any obligation to provide you with any subsequent
opinion or advice by reason of any fact about which our Designated Transaction
Lawyers did not have actual knowledge at that time, by reason of any change
subsequent to that time in any law covered by any of our opinions, or for any
other reason. The attached schedules are an integral part of this opinion
letter, and any term defined in this opinion letter or any schedule has that
defined meaning wherever it is used in this opinion letter or in any schedule
to this opinion letter.
You may rely upon this letter only for the purpose served by the
provision in the Agreement cited in the initial paragraph of this opinion
letter in response to which it has been delivered. Without our written consent:
(i) no person other than you may rely on this opinion letter for any purpose;
(ii) this opinion letter may not be cited or quoted in any financial statement,
prospectus, private placement memorandum or other similar document; (iii) this
opinion letter may not be cited or quoted in any other document or
communication which might encourage reliance upon this opinion letter by any
person or for any purpose excluded by the restrictions in this paragraph; and
(iv) copies of this opinion letter may not be furnished to anyone for purposes
of encouraging such reliance. Notwithstanding the foregoing persons who
subsequently become Lenders in accordance with the terms of 9.6 of the Credit
Agreement (or participants in accordance with the terms of Section 9.6 of the
Credit Agreement) may rely on this opinion letter as of the time of its
delivery on the date hereof as if this letter were addressed to them.
Sincerely,
Xxxxxxxx & Xxxxx
105
EXHIBIT F-2
FORM OF OPINION OF LOCAL COUNSEL
______________ __, 1999
The Chase Manhattan Bank, as Administrative Agent
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
And each of the Lenders parties to the
Credit Agreement referred to below
We have acted as special counsel in the State of (the "State") to
Allied Riser Communications Holdings, Inc., a Delaware corporation
("Holdings"), and its Subsidiaries in connection with (a) the Credit Agreement,
dated as of March 25, 1999 (as amended, the "Credit Agreement"), among
Holdings, the Borrower, the lenders parties thereto (the "Lenders") and The
Chase Manhattan Bank, as administrative agent for the Lenders (in such
capacity, the "Administrative Agent"), and (b) the Security Documents listed on
Schedule 1 attached hereto delivered pursuant to the Credit Agreement.
The opinions expressed below are furnished to you pursuant to
subsection 4.1(g)(ii) of the Credit Agreement. Unless otherwise defined herein,
terms defined in the Credit Agreement and used herein shall have the meanings
given to them in the Credit Agreement.
In arriving at the opinions expressed below,
a. we have examined and relied on the originals, or copies certified
or otherwise identified to our satisfaction, of each of (1) the Credit
Agreement and (2) the Security Documents listed on Schedule 1;
b. we have examined copies of the financing statements listed on
Schedule 2 (collectively, the "Financing Statements") naming the Borrower,
Holdings or the Subsidiaries as Debtor and the Administrative Agent as Secured
Party and describing the Collateral (as defined in the Guarantee and Collateral
Agreement) as to which security interests may be perfected by filing under the
Uniform Commercial Code of the State (the "Filing Collateral"), which we
understand will be filed in the filing offices listed on Schedule 2 (the
"Filing Offices");
c. we have examined the report[s] listed on Schedule 3 as to UCC
financing statements ([collectively,] the "UCC Search Report"); and
d. we have examined such corporate documents and records of the
Borrower, Holdings and its Subsidiaries and such other instruments and
certificates of public officials, officers and representatives of
106
the Borrower, Holdings and its Subsidiaries and other Persons, and we have made
such investigations of law, in each case as we have deemed appropriate as a
basis for such opinions.
In rendering the opinions expressed below, we have assumed, with your
permission, without independent investigation or inquiry, (a) the authenticity
of all documents submitted to us as originals, (b) the genuineness of all
signatures on all documents that we examined (other than those of the Borrower,
Holdings and its Subsidiaries and officers of the Borrower, Holdings and its
Subsidiaries) and (c) the conformity to authentic originals of documents
submitted to us as certified, conformed or photostatic copies.
Based upon and subject to the foregoing, we are of the opinion that:
1. The execution and delivery by each of the Borrower, Holdings and its
Subsidiaries of Security Documents listed on Schedule 1 to which it is
a party, the performance by the Borrower, Holdings and its
Subsidiaries of its obligations thereunder and the creation and
perfection of any security interest upon or with respect to any of the
properties of the Borrower, Holdings or its Subsidiaries provided for
therein do not and will not violate any Requirement of Law of the State
and, except for [consents, authorizations, approvals, notices and
filings described on Schedule 4 attached hereto, all of which have been
obtained, made or waived and are in full force and effect, and] the
filings described on Schedule 2 to perfect the security interests
created by the Guarantee and Collateral Agreement with respect to the
Filing Collateral, do not and will not require any consent or
authorization of, approval by, notice to, filing with or other act by
or in respect of, any Governmental Authority of the State.
2. a. The provisions of the Guarantee and Collateral Agreement
create in favor of the Administrative Agent a legal, valid
and enforceable security interest on the Collateral (as
defined in the Guarantee and Collateral Agreement).
b. The Administrative Agent upon filing of the Financing
Statement[s] in the Filing Offices will have a perfected
security interest in the Filing Collateral.
c. The UCC Search Report sets forth the proper filing office[s]
and the proper debtor[s] necessary to identify those Persons
who have on file in the State financing statements covering
the Filing Collateral as of the dates and times specified on
Schedule 3. Except for the matters listed on Schedule 3, the
UCC Search Report identifies no Person who has filed in any
Filing Office a financing statement describing the Filing
Collateral prior to the effective date[s] of the UCC Search
Report.
3. The courts of the State will enforce those provisions in the Guarantee
and Collateral Agreement which provide that the validity, construction
and enforceability of such documents will be governed by the laws of
the State of New York, except that the Courts of the State may apply
the internal law of the State to determine the perfection and effect
of perfection of the liens created under such documents and the
application of remedies in enforcing such liens with respect to
property located in the State.
Our opinions set forth in paragraph 2 above are subject to the effects
of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws relating to or affecting creditors' rights generally,
general equitable principles (whether considered in a proceeding in equity or
at law) and an implied covenant of good faith and fair dealing.
107
We are members of the bar of the State and we express no opinion as to
the laws of any jurisdiction other than the laws of the State, the General
Corporate Law of the State of Delaware and the Federal laws of the United
States of America.
Very truly yours,
108
EXHIBIT G
FORM OF EXEMPTION CERTIFICATE
CERTIFICATE RE NON-BANK STATUS
Reference is made to that certain Credit Agreement dated, as
of March 25, 1999 (as the same may be amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among Allied Riser
Communications Holdings, Inc., a Delaware corporation, Allied Riser
Communications, Inc., a Delaware corporation, the lenders parties thereto, and
The Chase Manhattan Bank, as Administrative Agent. Capitalized terms used
herein that are not defined herein shall have the meanings ascribed to them in
the Credit Agreement. [Name of Non-U.S. Person] (the "Lender") is providing
this certificate pursuant to subsection 2.14(d) of the Credit Agreement. The
Lender hereby represents and warrants that:
1. The Lender is the sole record and beneficial owner of the
Note(s) in respect of which it is providing this certificate and it shall
remain the sole beneficial owner of the Notes at all times during which it is
the record holder of such Notes.
2. The Lender is not a "bank" for purposes of Section
881(c)(3)(A) of the Internal Revenue Code of 1986, as amended (the "Code"). In
this regard, the Lender represents and warrants that:
(a) the Lender is not subject to regulatory or other legal
requirements as a bank in any jurisdiction; and
(b) the Lender has not been treated as a bank for purposes of any tax,
securities law or other filing or submission made to any governmental
authority, any application made to a rating agency or qualification for any
exemption from tax, securities law or other legal requirements.
3. The Lender meets all of the requirements under Code
Section 871(a) or 881(c) to be eligible for a complete exemption from
withholding of Taxes on interest payments made to it under the Credit Agreement
(i.e., the Borrower will not be required to withhold any amounts under U.S. tax
law with respect to such interest payments), including without limitation that
it is not a 10-percent shareholder (within the meaning of Section 871(h)(3)(B)
or the Code) of the Borrower and is not a controlled foreign corporation
related to the Borrower (within the meaning of Section 864(d)(4) of the Code).
4. The Lender shall promptly notify the Company and the
Administrative Agent if any of the representations and warranties made herein
are no longer true and correct.
IN WITNESS WHEREOF, the undersigned has duly executed this
certificate as of the __day of _______________, _______.
[NAME OF LENDER]
By:
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Title:
