SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
July 6, 1998
TELIGENT, INC.
(Exact name of Registrant as specified in its Charter)
Delaware 0-23387 54-1866562
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
8065 Leesburg Pike, Vienna, Virginia 22182
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (703) 762-5100
<PAGE>
Item 5. Other Events
On July 6, 1998, the Registrant issued the attached press release
announcing that it had closed $800 million in senior secured credit facilities
underwritten by Chase Securities Inc., Goldman Sachs Credit Partners L.P. and TD
Securities (USA) Inc. These facilities effectively replace an existing $780
million vendor financing commitment previously provided by Nortel (Northern
Telecom).
The foregoing information does not purport to be complete and is qualified
in its entirety by reference to the Exhibits to this Report.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
The Exhibits listed on the accompanying Exhibit Index are filed as part
of this Report and are incorporated herein by reference.
3
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
TELIGENT, INC.
Date: August 12, 1998 By:/s/ Abraham L. Morris
------------------------------
Abraham L. Morris
Senior Vice President, Chief
Financial Officer and Treasurer
(Principal Financial Officer)
4
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
10 Credit Agreement, dated July 2, 1998 among Teligent,
Inc., several banks and other financial institutions
or entities, Chase Securities Inc., Goldman Sachs
Credit Partners L.P. and TD Securities (USA) Inc.,
as advisers and arrangers, Goldman Sachs Credit
Partners L.P., as syndication agent, The Chase
Manhattan Bank, as administrative agent and Toronto
Dominion (Texas), Inc. as documentation agent.*
99 Press release of Teligent, Inc. dated July 6, 1998.
* - Portions of this document have been omitted pursuant to a request for
confidential treatment.
Note: Certain material has been omitted from this document pursuant to a request
for confidential treatment and has been filed separately with the SEC. Notations
of [redacted] have been used to indicate such an omission.
================================================================================
CREDIT AGREEMENT
among
TELIGENT, INC.,
as Borrower,
The Several Lenders
from Time to Time Parties Hereto,
CHASE SECURITIES INC.,
GOLDMAN SACHS CREDIT PARTNERS L.P.
and
TD SECURITIES (USA) INC.,
as Arrangers
GOLDMAN SACHS CREDIT PARTNERS L.P.,
as Syndication Agent
TORONTO DOMINION (TEXAS), INC.,
as Documentation Agent
and
THE CHASE MANHATTAN BANK,
as Administrative Agent
Dated as of July 2, 1998
================================================================================
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-vi-
TABLE OF CONTENTS
<TABLE>
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Page
SECTION 1. DEFINITIONS
<S> <C> <C>
1.1 Defined Terms 1
1.2 Other Definitional Provisions 30
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS AND 31
2.1 Tranche A Term Loan Commitments;
Delayed Draw Term Loan Commitments 31
2.2 Procedure for Tranche A Term Loan
Borrowing and Delayed Draw Term
Loan Borrowing 31
2.3 Revolving Credit Commitments 32
2.4 Procedure for Revolving Credit Borrowing 32
2.5 Extension of 33
2.6 Conversion Term Loans 35
2.7 Optional Term Loans 35
2.8 Repayment of Loans 36
2.9 Repayment of Loans; Evidence of Debt 38
2.10 Commitment Fees, etc. 39
2.11 Termination or Reduction of
Commitments 39
2.12 Optional Prepayments 40
2.13 Mandatory Prepayments and Commitment
Reductions; Change of Control 40
2.14 Conversion and Continuation Options 42
2.15 Minimum Amounts and Maximum Number
of Eurodollar Tranches 43
2.16 Interest Rates and Payment Dates 43
2.17 Computation of Interest and Fees 44
2.18 Inability to Determine Interest Rate 44
2.19 Pro Rata Treatment and Payments 44
2.20 Requirements of Law 46
2.21 Taxes 47
2.22 Indemnity 49
2.23 Illegality 49
2.24 Change of Lending Office 50
SECTION 3. REPRESENTATIONS AND WARRANTIES 50
3.1 Financial Condition 50
3.2 No Change 51
3.3 Corporate Existence; Compliance with
Law 51
3.4 Corporate Power; Authorization;
Enforceable Obligations 51
3.5 No Legal Bar 51
3.6 No Material Litigation 52
3.7 No Default 52
3.8 Ownership of Property; Liens 52
3.9 Intellectual Property 52
3.10 Taxes 52
3.11 Federal Regulations 53
3.12 ERISA 53
3.13 Investment Company Act; Other
Regulations 53
3.14 Subsidiaries 53
3.15 Use of Proceeds 54
3.16 Absence of Material Obligations 54
3.17 Environmental Matters 54
3.18 Accuracy of Information, etc 55
3.19 Security Documents 56
3.20 Solvency 56
3.21 FCC and State Regulatory Compliance
56
3.22 Collateral 57
3.23 Year 2000 57
SECTION 4. CONDITIONS PRECEDENT 58
4.1 Conditions to Initial Loans 58
4.2 Conditions to Each Loan 60
SECTION 5. AFFIRMATIVE COVENANTS 60
5.1 Financial Statements 60
5.2 Certificates; Other Information
61
5.3 Payment of Obligations 62
5.4 Conduct of Business and Maintenance
of Existence, etc. 62
5.5 Maintenance of Property; Insurance
63
5.6 Inspection of Property; Books and
Records; Discussions 63
5.7 Notices 63
5.8 Environmental Laws 64
5.9 Interest Rate Protection 64
5.10 After-Acquired Assets 64
5.11 Limitations on Transfer of LeasingCo
66
SECTION 6. NEGATIVE COVENANTS 66
6.1 Financial Condition Covenants 66
6.2 Limitation on Indebtedness and
Preferred Stock 69
6.3 Limitation on Liens 70
6.4 Limitation on Fundamental Changes
72
6.5 Limitation on Disposition of Property
73
6.6 Limitation on Restricted Payments
73
6.7 Limitation on Investments 74
6.8 Limitation on Optional Payments and
Modifications of Debt Instruments, etc. 75
6.9 Limitation on Transactions with
Affiliates 75
6.10 Limitation on Changes in Fiscal Periods 76
6.11 Limitation on Restrictions on
Subsidiary Distributions 76
6.12 Limitation on Lines of Business;
Liabilities of Subsidiaries 76
SECTION 7. EVENTS OF DEFAULT 77
SECTION 8. THE AGENTS 80
8.1 Appointment 80
8.2 Delegation of Duties 80
8.3 Exculpatory Provisions 80
8.4 Reliance by Agents 80
8.5 Notice of Default 81
8.6 Non-Reliance on Agents and Other
Lenders 81
8.7 Indemnification 82
8.8 Agent in Its Individual Capacity
82
8.9 Successor Administrative Agent 82
8.10 Authorization to Release Liens 83
8.11 Collateral Agency and Intercreditor
Agreement 83
8.12 The Arrangers, the Syndication Agent
and the Documentation Agent 83
SECTION 9. MISCELLANEOUS 83
9.1 Amendments and Waivers 83
9.2 Notices 84
9.3 No Waiver; Cumulative Remedies 85
9.4 Survival of Representations and
Warranties 85
9.5 Payment of Expenses 85
9.6 Successors and Assigns;
Participations and Assignments;
Replacement 86
9.7 Adjustments; Set-off 90
9.8 Counterparts 90
9.9 Severability 90
9.10 Integration 90
9.11 GOVERNING LAW 91
9.12 Submission To Jurisdiction; Waivers 91
9.13 Acknowledgements 91
9.14 Confidentiality 92
9.15 Accounting Changes 92
9.16 WAIVERS OF JURY TRIAL 93
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<TABLE>
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ANNEXES:
<S> <C>
A Pricing Grid
B Subordination Provisions
</TABLE>
<TABLE>
<CAPTION>
SCHEDULES:
<S> <C>
1.1A Commitments
3.4 Consents, Authorizations, Filings and Notices
3.6 Material Litigation
3.14 Subsidiaries
3.19(a) UCC Filing Jurisdictions
3.21 Pending Proceedings
3.21(c) State Regulatory Compliance
4.1(f) FCC Licenses of the Borrower and its Subsidiaries
on the Closing Date
6.2(d) Existing Indebtedness
6.3(f) Existing Liens
6.7(h) Existing Loans and Advances
</TABLE>
<TABLE>
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EXHIBITS:
<S> <C>
A Form of Guarantee and Collateral Agreement
B Form of Compliance Certificate
C Form of Closing Certificate
E Form of Assignment and Acceptance
F-1 Form of Legal Opinion of Skadden Arps Slate Meagher
& Flom LLP, special New York counsel to the Borrower and its
Subsidiaries
F-2 Form of Legal Opinion of Skadden Arps Slate Meagher
& Flom LLP, special FCC counsel to the Borrower and
its Subsidiaries
F-3 Form of Legal Opinion of General Counsel
F-4 Form of Legal Opinion of Dow, Lohnes & Albertson
G-1 Form of Term Note
G-2 Form of Revolving Credit Note
G-3 Form of Delayed Draw Term Note
H Form of Exemption Certificate
I Form of Collateral Agency and Intercreditor Agreement
</TABLE>
<PAGE>
CREDIT AGREEMENT, dated as of July 2, 1998, among TELIGENT,
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"), CHASE SECURITIES INC., GOLDMAN SACHS CREDIT PARTNERS L.P. and
TD SECURITIES (USA) INC., as advisors and arrangers (in such capacity, the
"Arrangers"), GOLDMAN SACHS CREDIT PARTNERS L.P., as syndication agent (in such
capacity, the "Syndication Agent"), TORONTO DOMINION (TEXAS), INC., as
documentation agent (in such capacity, the "Documentation Agent") and THE CHASE
MANHATTAN BANK, as administrative agent (in such capacity, the "Administrative
Agent").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Borrower is a party to the Network Products
Purchase Agreement, dated as of December 11, 1997, with Northern Telecom, Inc.
("Nortel"), as amended or otherwise modified from time to time (the "Nortel
Purchase Agreement"), pursuant to which the Borrower is purchasing certain
equipment for its networks and certain services related thereto;
WHEREAS, Nortel has provided to the Borrower a financing
commitment in the amount of $780,000,000 (the "Vendor Financing Commitment");
WHEREAS, the Borrower, with the approval of Nortel, has
requested the Lenders to provide the credit facilities hereunder, of which (i)
$780,000,000 will be provided on behalf of Nortel (but without any obligation or
liability of Nortel hereunder or under any other Loan Document) and will be in
substitution for the Vendor Financing Commitment and (ii) $20,000,000 will be
provided to finance the acquisition of Telecommunications Assets (as defined
below); and
WHEREAS, the Lenders are willing to make such credit
facilities available upon and subject to the terms and conditions hereinafter
set forth;
NOW, THEREFORE, in consideration of the premises and the
agreements hereinafter set forth, 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.
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
Chase as
<PAGE>
2
its prime or base 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 Chase 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
Administrative Agent 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.
"Adjustment Date": as defined in the Pricing Grid.
"Affiliate": as to any Person, any other Person which, 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.
"Agents": the collective reference to the Syndication Agent, the
Documentation Agent and the Administrative Agent.
"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) thereafter, the sum of
(i) the aggregate then unpaid principal amount of such Lender's
outstanding Loans and (ii) until the termination thereof, the
aggregate then undrawn amount of such Lender's Commitments.
<PAGE>
3
"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": (a) for each Type of Tranche A Term Loans,
Delayed Draw Term Loans, Conversion Term Loans and Revolving Credit
Loans, the rate per annum determined for such Type pursuant to the
Pricing Grid and (b) for each Type of Optional Term Loans of each
Tranche, the rate per annum for such Tranche and Type determined in
accordance with the Optional Term Loan Amendment executed for such
Tranche pursuant to Section 2.7
"Approved Fund": with respect to any Lender that is a fund, any
other fund managed or advised by a manager or advisor under common
institutional control with such Lender's manager or advisor.
"AssetCo": the collective reference to (a) Teligent
Telecommunications, Inc., a Delaware corporation and (b) any other
wholly owned Restricted Subsidiary (i) which is designated by the
Borrower from time to time as an "AssetCo", (ii) which is a grantor
and guarantor party to the Guarantee and Collateral Agreement and
(iii) all of the Capital Stock of which is pledged pursuant to the
Guarantee and Collateral Agreement.
"Asset Sale": any Disposition of Property or series of related
Dispositions of Property (excluding any such Disposition permitted by
clause (a), (b), (d), (e), (f) or (g) of Section 6.5).
"Assignee": as defined in Section 9.6(c).
"Assignor": as defined in Section 9.6(c).
"Associated Revenues": with respect to any Teligent Lease, the
portion of Consolidated Total Revenues (determined as of the last day
of the most recent fiscal quarter for which financial statements
required pursuant to Section 5.1 are available) that were generated in
(or reasonably attributable to) the market or segment thereof directly
serviced by (a) in the case of a TCO Lease, the switching center
subject to such TCO Lease, and (b) in the case of a TN Lease, the
Teligent node (or base station) subject to such TN Lease. For purposes
of this definition, (i) if Consolidated Total Revenues cannot be
determined for any such market or segment thereof, the Borrower shall
allocate a portion of Consolidated Total Revenues to such market or
segment thereof based on reasonable good faith estimates and
assumptions and (ii) Associated Revenues in respect of any TN Lease
shall not include Consolidated Total Revenues attributable to any
Teligent access site serviced through the Teligent node related to
such TN Lease if the transmissions from such Teligent access site
could be
<PAGE>
4
directed, without any material cost or diminution of quality of
service, to another Teligent node located on property subject to a TN
Lease which is a Qualifying Lease.
"Available Delayed Draw Term Loan Commitment": as to any Lender
at any time, an amount equal to the excess, if any, of (a) such
Lender's Delayed Draw Term Loan Commitment then in effect over (b) the
aggregate principal amount of such Lender's Delayed Draw Term Loans
then outstanding.
"Available Revolving Credit Commitment": as to any Revolving
Credit Lender at any time, an amount equal to the excess, if any, of
(a) such Lender's Revolving Credit Commitment then in effect over (b)
the aggregate principal amount of such Lender's Revolving Credit Loans
then outstanding.
"Available Tranche A Term Loan Commitment": as to any Lender at
any time, an amount equal to the excess, if any, of (a) such Lender's
Tranche A Term Loan Commitment then in effect over (b) the aggregate
principal amount of such Lender's Tranche A Term Loans then
outstanding.
"Benefitted Lender": as defined in Section 9.7.
"Board": the Board of Governors of the Federal Reserve System of
the United States (or any successor).
"Borrowing Date": any Business Day specified by the Borrower as a
date on which the Borrower requests the relevant Lenders to make Loans
hereunder.
"Business": as defined in Section 3.17.
"Business Day": (i) for all purposes other than as covered by
clause (ii) below, 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 and (ii) with respect to all notices and determinations
in connection with, and payments of principal and interest on,
Eurodollar Loans, any day which is a Business Day described in clause
(i) and which is also a day for trading by and between banks in Dollar
deposits in the London interbank eurodollar market.
"Business Lines Installed and Billed": each business line made
available by the Borrower to a bona fide customer which has received
at least one bill for telecommunications services provided by the
Borrower shall be deemed to constitute one "Business Line Installed
and Billed".
"Capital Expenditures": for any period, the aggregate of all
expenditures by the Borrower and its Restricted 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, and including
FCC Licenses and other Telecommunication Assets to the extent that the
acquisition of
5
such FCC Licenses or other Telecommunication Assets permits the
Borrower to avoid purchasing fixed or capital assets that would
otherwise be required) which should be capitalized under GAAP on a
consolidated balance sheet of the Borrower and its Restricted
Subsidiaries. Capital Expenditures shall be deemed to include any
amount expended for the acquisition of any Person that holds fixed or
capital assets (including FCC Licenses and other Telecommunication
Assets, subject to the limitations described above) to the extent that
the purchase of such assets directly by the Borrower or any Restricted
Subsidiary would constitute a Capital Expenditure.
"Capital Lease Obligations": as to any Person, the obligations of
such Person to pay rent or other payment amounts under any lease of
(or other arrangement conveying the right to use) real or personal
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 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) 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 of America or any state thereof or the District of
Columbia having combined capital and surplus of not less than
$100,000,000; (c) commercial paper of an issuer rated at the time of
acquisition at least A-2 by Standard & Poor's Ratings Services ("S&P")
or P-2 by Moody's Investors Service, Inc. ("Moody's"), or carrying an
equivalent rating by a nationally recognized rating agency 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 the time of acquisition
at least A-2 by S&P or P-2 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)
<PAGE>
6
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 which 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. ss. 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.
"Change of Control": the occurrence of any of the following
events: (i) any "person" or "group" (as such terms are used in Section
13(d) and 14(d) of the Exchange Act) other than a Permitted Holder is
or becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5
under the Exchange Act, except that a Person shall be deemed to have
"beneficial ownership" of all securities that such Person has the
right to acquire, whether such right is exercisable immediately or
only after the passage of time, upon the happening of an event or
otherwise), directly or indirectly, of more than 50% of the total
Voting Capital Stock of the Borrower; provided that Permitted Holders
do not otherwise control the election of a majority of the board of
directors of the Borrower; (ii) the Borrower consolidates with, or
merges with or into, another Person or sells, assigns, conveys,
transfers, leases or otherwise disposes of all or substantially all of
its assets to any Person, or any Person consolidates with, or merges
with or into, the Borrower, in any such event pursuant to a
transaction in which the outstanding Voting Capital Stock of the
Borrower is converted into or exchanged for cash, securities or other
property, and immediately after such transaction a "person" or "group"
(as such terms are used in Sections 13(d) and 14(d) of the Exchange
Act) other than a Permitted Holder is the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a
Person shall be deemed to have "beneficial ownership" of all
securities that such Person has the right to acquire, whether such
right is exercisable immediately or only after the passage of time,
upon the happening of an event or otherwise), directly or indirectly,
of more than 50% of the total Voting Capital Stock of the surviving or
transferee Person; provided that Permitted Holders do not otherwise
control the election of a majority of the board of directors of the
Borrower; (iii) during any period of two consecutive years,
individuals who at the beginning of such period constituted the board
of directors (together with any new directors whose election by the
board of directors or whose nomination for election by the members of
the Borrower was approved by (a) one or more Permitted Holders or (b)
a vote of a majority of the
<PAGE>
7
directors of the Borrower then still in office who were either
directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any
reason to constitute 66-2/3% of the board of directors then in office,
and (iv) the approval by the holders of Capital Stock of the Borrower
of any plan or proposal for the liquidation or dissolution of the
Borrower.
"Chase": The Chase Manhattan Bank.
"Closing Date": the date on which the conditions precedent set
forth in Section 4.1 shall have been satisfied, which date is July 2,
1998.
"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.
"Collateral Agency and Intercreditor Agreement": the Collateral
Agency and Intercreditor Agreement, substantially in the form of
Exhibit J, dated as of the Closing Date, entered into by Chase, as
Collateral Agent, and Chase, as Administrative Agent hereunder, to
which other creditors of the Borrower may become parties as
contemplated by Section 6.2(f) of this Agreement and Section 4 of the
Collateral Agency and Intercreditor Agreement.
"Collateral Agent": Chase,in its capacity as collateral agent
under the Collateral Agency and Intercreditor Agreement, and any
successor in such capacity.
"Commitment": as to any Lender, the sum of the Tranche A Term
Loan Commitment, the Delayed Draw Term Loan Commitment, the Optional
Term Loan Commitment and the Revolving Credit Commitment of such
Lender.
"Commitment Fee Rate": (a) in the case of the Delayed Draw Term
Loan Facility, [redacted] per annum, (b) in the case of the Tranche A
Term Loan Facility and the Revolving Credit Facility, (i) [redacted]
per annum when less than 33-1/3% of the aggregate initial Tranche A
Term Loan Commitments have been utilized, (ii) [redacted] per annum
from and after the date on which at least 33-1/3% of the aggregate
initial Tranche A Term Loan Commitments have been utilized until the
date on which at least 66-2/3% of the aggregate initial Tranche A Term
Loan Commitments have been utilized and (iii) [redacted] per annum
thereafter and (c) in the case of any Tranche of Optional Term Loan
Commitments, the rate per annum set forth or determined pursuant to
the Optional Term Loan Amendment executed for such Tranche pursuant to
Section 2.7(a).
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Borrower within
the meaning of Section 4001 of ERISA or is part of a group which
includes the Borrower and which is treated as a single employer under
Section 414 of the Code.
<PAGE>
8
"Compliance Certificate": a certificate duly executed by a
Responsible Officer substantially in the form of Exhibit B.
"Communications Act": the Communications Act of 1934, and any
similar or successor federal statute, and the rules and regulations of
the FCC thereunder, all as amended and as the same may be in effect
from time to time.
"Confidential Information Memorandum": the Confidential
Information Memorandum dated May 1998 and furnished to the Lenders.
"Consolidated Adjusted Capitalization": at any date, the sum of
(a) Consolidated Total Debt on such date, (b) $350,000,000 plus the
aggregate amount of cash equity received by the Borrower after the
Closing Date and (c) [redacted].
"Consolidated Adjusted EBITDA":for the period ended on the last
day of any fiscal quarter, the amount of Consolidated EBITDA for such
fiscal quarter, multiplied by four.
"Consolidated Adjusted Total Revenue": for the period ended on
the last day of any fiscal quarter, the amount of Consolidated Total
Revenue for such fiscal quarter, multiplied by four.
"Consolidated Cash Interest Expense": for any period, total cash
interest expense (including that attributable to Capital Lease
Obligations) of the Borrower and its Restricted Subsidiaries for such
period with respect to all outstanding Indebtedness of the Borrower
and its Restricted Subsidiaries (including, without limitation, all
commissions, discounts and other fees and charges owed with respect to
letters of credit and bankers' acceptance financing and net costs
under hedge agreements in respect of interest rates to the extent such
net costs are allocable to such period in accordance with GAAP).
"Consolidated Current Assets": at any date, all amounts (other
than cash and cash equivalents) which would, in conformity with GAAP,
be set forth opposite the caption "total current assets" (or any like
caption) on a consolidated balance sheet of the Borrower and its
Restricted Subsidiaries at such date.
"Consolidated Current Liabilities": at any date, all amounts
which would, in conformity with GAAP, be set forth opposite the
caption "total current liabilities" (or any like caption) on a
consolidated balance sheet of the Borrower and its Restricted
Subsidiaries at such date, but excluding the current portion of any
Indebtedness of the Borrower and its Restricted Subsidiaries.
"Consolidated EBITDA": for any period, Consolidated Net Income
for such period plus, without duplication and to the extent reflected
as a charge in the statement of (or otherwise deducted in determining)
such Consolidated Net Income for such period, the sum of (a) income
tax expense, (b) interest expense (including that
<PAGE>
9
attributable to Capital Lease Obligations), amortization or writeoff
of debt discount and debt issuance costs and commissions, discounts
and other fees and charges (including, without limitation, charges
relating to any premium or penalty for redemption, prepaying or
retiring any indebtedness prior to the stated maturity thereof)
associated with Indebtedness (including the Loans), letters of credit
and hedge agreements, (c) depreciation and amortization expense, (d)
amortization of intangibles (including, but not limited to, goodwill)
and organization costs, (e) any extraordinary, unusual or
non-recurring non-cash expenses or losses (including, whether or not
otherwise includable as a separate item in the statement of such
Consolidated Net Income for such period, losses on sales of assets
outside of the ordinary course of business) and (f) any other non-cash
charges (including, without limitation, stock based compensation and
any adjustments for long-term incentive compensation plan appreciation
units), and minus, to the extent included in the statement of such
Consolidated Net Income for such period, the sum of (a) interest
income, (b) any extraordinary, unusual or non-recurring non-cash
income or gains (including, whether or not otherwise includable as a
separate item in the statement of such Consolidated Net Income for
such period, gains on the sales of assets outside of the ordinary
course of business), (c) any amount for cash payments related to
non-cash charges recorded in a prior period, to the extent such
non-cash charges were added to Consolidated Net Income in calculating
Consolidated EBITDA for such prior period and (d) any other non-cash
income, all as determined on a consolidated basis for the Borrower and
its Restricted Subsidiaries.
"Consolidated Fixed Charge Coverage Ratio": for any period, the
ratio of (a) Consolidated EBITDA for such period plus the sum of (i)
the amount of cash and Cash Equivalents held by the Borrower and its
Restricted Subsidiaries, (ii) the Available Revolving Credit
Commitments, (iii) the Available Tranche A Term Loan Commitments, (iv)
the Available Delayed Draw Term Loan Commitments, and (v) any
available unused Optional Term Loan Commitments, in each case,
determined as of the last day of such period to (b) Consolidated Fixed
Charges for such period.
"Consolidated Fixed Charges": for any period, the sum (without
duplication) of (a) Consolidated Cash Interest Expense for such
period, (b) provision for cash income taxes made by the Borrower or
any of its Restricted Subsidiaries on a consolidated basis in respect
of such period and (c) scheduled payments made during such period on
account of principal of Indebtedness of the Borrower or any of its
Restricted Subsidiaries.
"Consolidated Interest Coverage Ratio": for any period, the ratio
of (a) Consolidated EBITDA for such period to (b) Consolidated Cash
Interest Expense for such period.
"Consolidated Net Income": for any period, the consolidated net
income (or net loss) of the Borrower and its Restricted Subsidiaries,
determined on a consolidated basis in accordance with GAAP; provided
that there shall be excluded therefrom, without duplication, (a) the
income (or deficit) of any Person (other than a Restricted
<PAGE>
10
Subsidiary of the Borrower) in which the Borrower or any of its
Restricted Subsidiaries has an ownership interest, except to the
extent that any such income is actually received by the Borrower or
such Restricted Subsidiary in the form of dividends or similar
distributions and (b) the undistributed earnings of any Restricted
Subsidiary of the Borrower to the extent that the declaration or
payment of dividends or similar distributions by such Restricted
Subsidiary is not at the time permitted by the terms of any
contractual obligation (other than under any Loan Document) or
requirement of law applicable to such Restricted Subsidiary.
"Consolidated Secured Debt": all Consolidated Total Debt secured
pursuant to the Security Documents or by any other security interest
in any assets of the Borrower or any of its Restricted Subsidiaries.
"Consolidated Total Debt": at any date, the amount which would
constitute Indebtedness of the Borrower and its Restricted
Subsidiaries at such date of the types described in clauses (a)
through (e) of the definition of "Indebtedness" in this Section 1.1,
determined on a consolidated basis in accordance with GAAP.
"Consolidated Total Debt Ratio": on the last day of any fiscal
quarter, the ratio of Consolidated Total Debt on such last day to
Consolidated Adjusted EBITDA for the period ended on such last day.
"Consolidated Total Revenue": for any period, the total revenue
of the Borrower and its Restricted Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP.
"Consolidated Working Capital": at any date, the excess of
Consolidated Current Assets on such date over Consolidated Current
Liabilities on such date.
"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.
"Conversion Term Loan": as defined in Section 2.6.
"Conversion Term Loan Lender": each Lender which is the holder of
a Conversion Term Loan.
"Conversion Term Loan Percentage": as to any Lender at any time,
the percentage which the aggregate principal amount of such Lender's
Conversion Term Loans then outstanding constitutes of the aggregate
principal amount of the Conversion Term Loans then outstanding.
"Credit Agreement Portion": in respect of any Specified
Prepayment, an amount equal to (a) the ratio of (i) the aggregate
principal amount of Loans then outstanding plus the aggregate amount
of unused Commitments then in effect to (ii)
<PAGE>
11
the sum of (A) the aggregate amount of indebtedness and unused
commitments under the credit facility in respect of which such
Specified Prepayment is made and under any other Indebtedness
requiring pro rata prepayment in respect of such Specified Prepayment
and (B) the amount described in the foregoing clause (i), multiplied
by (b) the amount of such Specified Prepayment.
"Default": any of the events specified in Section 8, whether or
not any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
"Delayed Draw Term Loan": as defined in Section 2.1.
"Delayed Draw Term Loan Commitment": as to any Lender, the
obligation of such Lender, if any, to make Delayed Draw Term Loans to
the Borrower hereunder in an aggregate principal amount not to exceed
the amount set forth under the heading "Delayed Draw Term Loan
Commitment" opposite such Lender's name on Schedule 1.1A. The original
aggregate amount of the Delayed Draw Term Loan Commitments is
$200,000,000.
"Delayed Draw Term Loan Commitment Period": the period commencing
on the Closing Date and ending on the Delayed Draw Commitment
Termination Date.
"Delayed Draw Term Loan Commitment Termination Date": July 1,
1999, As Such Date May Be Extended Pursuant To Section 2.5.
"Delayed Draw Term Loan Lender": each Lender which has a Delayed
Draw Term Loan Commitment or is the holder a Delayed Draw Term Loan.
"Delayed Draw Term Loan Percentage": as to Delayed Draw Loan
Lender at any time, the percentage which such Lender's Delayed Draw
Term Loan Commitment then constitutes of the aggregate Delayed Draw
Term Loan Commitments (or, at any time after the Delayed Draw Term
Loan Commitments have expired or terminated, the percentage which the
aggregate principal amount of such Lender's Delayed Draw Term Loans
then outstanding constitutes of the aggregate principal amount of the
Delayed Draw Term Loans then outstanding).
"Direct-Lien Assets": assets of the Borrower or any Restricted
Subsidiary constituting any of the following: accounts, patents,
trademarks, general intangibles and other types of Personal Property
Assets on which, under applicable law, a consensual Lien can be
perfected by a limited number of Uniform Commercial Code and/or
Federal filings naming the Borrower or such Restricted Subsidiary, as
the case may be, as debtor or by the delivery of a pledged instrument
to the party secured by such Lien.
"Disposition": with respect to any Property, any sale, lease,
sale and leaseback, assignment, conveyance, transfer or other
disposition thereof; the terms "Dispose" and "Disposed of" shall have
correlative meanings.
<PAGE>
12
"Dollars" and "$": dollars in lawful currency of the United
States of America.
"Domestic Subsidiary": any Subsidiary of the Borrower organized
under the laws of any jurisdiction within the United States of
America.
"Environmental Laws": as to any Person, 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, 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.
"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) of reserve requirements in effect on
such day (including, without limitation, 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 Jones 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 Jones Markets screen (or otherwise
on such screen), the "Eurodollar Base Rate" for purposes of this
definition 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 Chase 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.
<PAGE>
13
"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
----------------------------------------
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).
"Event of Default": any of the events specified in Section 8,
provided that any requirement for the giving of notice, the lapse of
time, or both, has been satisfied.
"Exchange Act": the Securities Exchange Act of 1934, as amended.
"Excess Cash Flow": for any fiscal year of the Borrower, the
excess, if any, of (a) the sum, without duplication, of (i)
Consolidated Net Income for such fiscal year, (ii) an amount equal to
the amount of all non-cash charges (including depreciation and
amortization) deducted in arriving at such Consolidated Net Income,
(iii) decreases in Consolidated Working Capital for such fiscal year,
(iv) an amount equal to the aggregate net non-cash loss on the sale or
other disposition of property by the Borrower and its Restricted
Subsidiaries during such fiscal year (other than sales of inventory in
the ordinary course of business), to the extent deducted in arriving
at such Consolidated Net Income and (v) the net increase during such
fiscal year (if any) in deferred tax accounts of the Borrower over (b)
the sum, without duplication, of (i) an amount equal to the amount of
all non-cash credits included in arriving at such Consolidated Net
Income, (ii) the aggregate amount actually paid by the Borrower and
its Restricted Subsidiaries in cash during such fiscal year on account
of Capital Expenditures (excluding the principal amount of
Indebtedness incurred in connection with such expenditures and any
such expenditures financed with the proceeds of any sale or other
disposition of property), (iii) the aggregate amount of all optional
prepayments and mandatory prepayments (to the extent that the event
giving rise to such mandatory prepayment generates Consolidated Net
Income) of Funded Debt during such fiscal year, (iv) the aggregate
amount of all regularly scheduled principal payments of Funded Debt of
the Borrower and its Restricted Subsidiaries made during such fiscal
year (other than in respect of any revolving credit facility to the
extent there is not an equivalent permanent reduction in commitments
thereunder), (v) increases in Consolidated Working Capital for such
fiscal year, (vi) an amount equal to the aggregate net non-cash gain
on the sale or other disposition of property by the Borrower and its
Restricted Subsidiaries during such fiscal year (other than sales of
inventory in the ordinary course of business), to the extent included
in arriving at such Consolidated Net Income, and (vii) the net
decrease during such fiscal year (if any) in deferred tax accounts of
the Borrower.
<PAGE>
14
"Excess Cash Flow Application Date": as defined in Section
2.13(c).
"Excluded Assets": at any time, the collective reference to (a)
all assets then subject to a Lien permitted by subsection 6.3(f), (g),
(j), (k) and (l), and (b) any other assets of the Borrower and its
Restricted Subsidiaries consisting of any of the following:
[redacted]
(iv) other Network Assets, property or assets not
owned, held, leased or licensed by a Special Purpose
Subsidiary and not constituting Direct-Lien Assets having an
individual purchase price or fair market value not in excess
of $2,500,000 and an aggregate purchase price or fair market
value not in excess of $10,000,000.
<PAGE>
15
"Excluded Foreign Subsidiaries": any Foreign Subsidiary in
respect of which either (i) the pledge of all of the Capital Stock of
such Subsidiary as Collateral or (ii) the guaranteeing by such
Subsidiary of the Obligations, or both, would, in the good faith
judgment of the Borrower, result in adverse tax consequences to the
Borrower.
"Excluded Taxes": as defined in Section 2.21
"Existing Affiliate Transactions": (a) transactions pursuant to
the Administrative Services Agreement, dated as of March 5, 1996,
between the Borrower (formerly DMT, LLC) and Microwave Services, Inc.,
a Subsidiary of Associated Group, Inc. as in effect on the date
hereof, and as such agreement may be amended from time to time in a
manner no less favorable to the Lenders, (b) transactions pursuant to
the Technical Services Agreement, dated as of October 22, 1997,
between the Company and NTT America, Inc. as in effect on the date
hereof, and as such agreement may be amended from time to time in a
manner no less favorable to the Lenders, (c) transactions pursuant to
the Stockholders Agreement, dated as of November 26, 1997, between the
Borrower, NTT America, Inc. and certain other stockholders of the
Borrower as in effect on the date hereof and as such agreement may be
amended from time to time in a manner no less favorable to the Lenders
and (d) transactions pursuant to arrangements in effect on the Closing
Date in an aggregate amount not to exceed $5,000,000.
"Facility": each of (a) the Tranche A Term Loan Commitments and
the Tranche A Term Loans made thereunder (the "Tranche A Term Loan
Facility"), (b) the Delayed Draw Term Loan Commitments and the Delayed
Draw Term Loans made thereunder (the "Delayed Draw Term Loan
Facility"), (c) the Conversion Term Loans (the "Conversion Term Loan
Facility"), (d) the Optional Term Loan Commitments, if any, and the
Optional Term Loans made thereunder (the "Optional Term Loan
Facility") and (e) the Revolving Credit Commitments and the Revolving
Credit Loans made thereunder (the "Revolving Credit Facility").
"FCC": the Federal Communications Commission, or any other
successor agency of the United States Government administering the
Communications Act.
"FCC Licenses": licenses issued by the FCC permitting
transmission of telecommunications services through fixed wireless
networks.
"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
which is a Business Day, the average of the quotations for the day of
such transactions received by the Administrative Agent from three
federal funds brokers of recognized standing selected by it.
<PAGE>
16
"Foreign Subsidiary": any Subsidiary of the Borrower that is not
a Domestic Subsidiary.
"Funded Debt": as to any Person, all Indebtedness of such Person
that matures more than one year from the date of its creation or
matures within one year from such date but is renewable or extendible,
at the option of such Person (without requiring the consent or
approval of the creditor(s) thereof), to a date more than one year
from such date or arises under a revolving credit or similar agreement
that obligates the lender or lenders to extend credit during a period
of more than one year from such date, including, without limitation,
all current maturities and current sinking fund payments in respect of
such Indebtedness whether or not required to be paid within one year
from the date of its creation and, in the case of the Borrower,
Indebtedness in respect of the Loans.
"Funding Office": the office of the Administrative Agent set
forth in Section 9.2.
"GAAP": generally accepted accounting principles in the United
States of America 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.
"Governmental Authority": any nation or government, any state or
other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guarantee and Collateral Agreement": the Guarantee and
Collateral Agreement to be executed and delivered by the Borrower and
each Restricted Subsidiary, substantially in the form of Exhibit A, as
the same may be amended, supplemented or otherwise modified from time
to time.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), without duplication, any obligation of (a) the guaranteeing
person or (b) another Person (including, without limitation, 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,
without limitation, any obligation of the guaranteeing person, whether
or not contingent, in any such case, which should be reflected as a
liability in the consolidated balance sheet (or in the notes thereto)
of the guaranteeing person in accordance with GAAP; 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
<PAGE>
17
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.
"Hedge Agreements": all interest rate swaps, caps or collar
agreements or similar arrangements entered into by the Borrower
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.
"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 liabilities
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 (other than current trade payables incurred
in the ordinary course of such Person's business), (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 to the extent not reflected as trade
liabilities on the balance sheet of such Person in accordance with
GAAP, (g) all obligations of such Person, contingent or otherwise, to
purchase, redeem, retire or otherwise acquire for value any capital
stock of such Person (which by its terms requires the same), (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
any Lien on property (including, without limitation, 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, the net amount of the
obligations of such Person in respect of Hedge Agreements.
"Indemnified Liabilities": as defined in Section 9.5.
"Indemnitee": as defined in Section 9.5.
"Initial Performance Test": the Initial Performance Test shall be
satisfied when there are at least ten markets in which the Borrower
(i) has deployed at least [redacted] commercially operable Teligent
node and [redacted] commercially operable Teligent access sites which,
collectively, are operating as a point to multi-point system in
accordance
<PAGE>
18
with the material specifications set forth in the applicable vendor
supply agreements under which the relevant equipment was purchased, as
certified by the Borrower and accepted by the Administrative Agent
(which acceptance shall not be unreasonably withheld or delayed), and
(ii) has at least one bona fide customer who has received and paid at
least one bill.
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section
4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": the collective reference to all rights,
priorities and privileges relating to copyrights, copyright licenses,
patents, patent licenses, trademarks, trademark licenses, technology,
know-how and processes, whether arising under United States,
multinational or foreign laws or otherwise.
"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 which 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 Revolving Credit 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) any Interest Period that would
otherwise extend, in the case Eurodollar Loans which are
Revolving Credit Loans, beyond the Revolving Credit
Termination Date or, in the case of Eurodollar Loans which are
Term
<PAGE>
19
Loans, beyond the date final payment is due on the Tranche A
Term Loans, the Conversion Term Loans or the Optional Term
Loans, as the case may be, shall end on the Revolving Credit
Termination Date or such final payment date, as applicable;
(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 use best efforts
to 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 6.7.
"Issue Date": the date on which the 11-1/2% Senior Discount Notes
due 2008 were issued pursuant to an indenture dated as of February 20,
1998, between the Borrower and First Union National Bank, as trustee,
are first authenticated and delivered.
"LeasingCo": Teligent Communications, Inc., a Delaware
corporation, and (b) any other wholly owned Restricted Subsidiary (i)
which is designated by the Borrower from time to time as a
"LeasingCo", (ii) which is a grantor and guarantor party to the
Guarantee and Collateral Agreement and (iii) all of the Capital Stock
of which is pledged pursuant to the Guarantee and Collateral
Agreement..
"LicenseCo": the collective reference to (a) Teligent License
Company I, LLC, a Delaware limited liability company, (b) Teligent
License Company II, LLC, a Delaware limited liability company, and (c)
any other wholly owned Restricted Subsidiary (i) which is designated
by the Borrower from time to time as a "LicenseCo", (ii) which is a
grantor and guarantor party to the Guarantee and Collateral Agreement
and (iii) all of the Capital Stock of which is pledged pursuant to the
Guarantee and Collateral Agreement.
"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, without limitation, any conditional sale or other title
retention agreement and any capital lease having substantially the
same economic effect as any of the foregoing).
"Loan": any Term Loan or Revolving Credit Loan made by any Lender
pursuant to this Agreement.
<PAGE>
20
"Loan Documents": this Agreement, the Security Documents, the
Collateral Agency and Intercreditor Agreement and the Notes.
"Loan Parties": the Borrower and each Restricted Subsidiary of
the Borrower which is a party to a Loan Document.
"Majority Facility Lenders": at any time, with respect to any
Facility, the holders of more than 50% of the aggregate unpaid
principal amount of the Loans outstanding plus the aggregate amount of
undrawn Commitments then in effect under such Facility.
"Material Adverse Effect": a material adverse effect on (a) the
business, assets, property, condition (financial or otherwise) or
prospects 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 Agents or the Lenders
hereunder or thereunder.
"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,
without limitation, asbestos, polychlorinated biphenyls and
urea-formaldehyde insulation.
"Mortgaged Properties": the real properties, if any, on which the
Collateral Agent shall be granted a Lien pursuant to the Mortgages.
"Mortgages": each of the mortgages and deeds of trust, if any,
made by any Loan Party in favor of, or for the benefit of, the
Collateral Agent, in a form reasonably satisfactory to the
Administrative Agent and the Collateral Agent.
"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": (a) in connection with any Asset Sale or 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 Asset Sale or Recovery Event, net of (i)
attorneys' fees, accountants' and other professionals' fees,
investment banking fees, commissions, survey costs, title insurance
premiums, amounts required to be applied to the repayment of
Indebtedness secured by a Lien (including any premium, penalty or
make-whole amount related thereto) expressly permitted hereunder on
any asset which is the subject of such Asset Sale or Recovery Event
(other than any Lien pursuant to a Security Document) and other
customary fees and expenses actually incurred in connection therewith,
(ii) taxes paid or reasonably estimated to be payable as a result
<PAGE>
21
thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements), (iii) any purchase price
adjustments reasonably expected to be payable and reserves (without
duplication for purchase price adjustments) set aside or provided
against liabilities in connection with such Asset Sale or Recovery
Event, and (iv) all contractually required distributions and other
payments made to minority interest holders of the Borrower or any of
its Restricted Subsidiaries in connection with such Asset Sale or
Recovery Event 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.
"Network Assets": all assets of the Borrower and its Restricted
Subsidiaries used in the Borrower's business of providing fixed
wireless telecommunications services.
"Non-Excluded Taxes": as defined in Section 2.21(a).
"Non-U.S. Lender": as defined in Section 2.21(d).
"Notes": the collective reference to any promissory note
evidencing Loans.
"Obligations": the unpaid principal of and interest on
(including, without limitation, 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 or Permitted Letters of Credit, 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, any Hedge Agreement entered into with, or any Permitted
Letter of Credit issued for the Borrower's account by, any Lender or
any affiliate of any Lender or any other document made, delivered or
given in connection herewith or therewith, whether on account of
principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses (including, without limitation, 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.
"Optional Term Loan": as defined in Section 2.7.
"Optional Term Loan Amendment": an amendment to this Agreement,
in form and substance acceptable to the Borrower, the Administrative
Agent and the Optional Term Loan Lenders parties thereto, executed and
delivered pursuant to Section 2.7 to establish an Optional Term Loan
Tranche.
<PAGE>
22
"Optional Term Loan Commitment": as to any Optional Term Loan
Lender, the obligation of such Lender, if any, to make an Optional
Term Loan to the Borrower hereunder in a principal amount not to
exceed the amount set forth in the Optional Term Loan Amendment
related thereto.
"Optional Term Loan Lender": each Lender which has an Optional
Term Loan Commitment or which is the holder of an Optional Term Loan.
"Optional Term Loan Percentage": as to any Lender at any time,
the percentage which the sum of (a) the aggregate principal amount of
such Lender's Optional Term Loans then outstanding plus (b) the
aggregate undrawn amount of such Lender's Optional Term Loan
Commitment then constitutes of the sum of (i) the aggregate amount of
the Optional Term Loan Commitments then in effect plus (ii) the
aggregate principal amount of Optional Term Loans then outstanding.
"Optional Term Loan Request": as defined in Section 2.7.
"Optional Term Loan Tranche": as defined in Section 2.7.
"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 other than Excluded Taxes.
"Participant": as defined in Section 9.6(b).
"Payment Office": the office of the Administrative Agent set
forth in Section 9.2.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA (or any successor).
"Permitted Holders": each of Microwave Services Inc., Digital
Services Corporation, Nippon Telegraph and Telephone Corporation, Alex
J. Mandl and their respective Affiliates on the Issue Date.
"Permitted Letters of Credit": letters of credit issued for the
account of the Borrower or any Restricted Subsidiary (other than any
Special Purpose Subsidiary) by any Lender or affiliate thereof in
aggregate undrawn face amount at any time outstanding not to exceed
(a) $15,000,000 from the Closing Date until the date on which the
ratio of Consolidated Total Debt to Consolidated Adjusted Total
Revenue is 4.5 to 1.0 or lower, and (b) thereafter, $25,000,000.
"Permitted Refinancing Indebtedness": Indebtedness of the
Borrower or any Restricted Subsidiary to the extent the proceeds
thereof are used to refinance then existing Indebtedness of the
Borrower or such Restricted Subsidiary; provided that (a)
<PAGE>
23
after giving effect to the incurrence of such Indebtedness, the
Borrower is in Pro Forma Compliance, (b) the documents under which
such Indebtedness is incurred are not inconsistent with the Loan
Documents, (c) such Indebtedness, if secured, will not be secured by
any assets other than those securing the Indebtedness being refinanced
thereby, (d) such Indebtedness, if subordinated, will be subordinated
to the Obligations at least to the same extent as the Indebtedness
being refinanced, (e) the final maturity of such Indebtedness is no
earlier than the final maturity of the Indebtedness being refinanced
thereby and the Weighted Average Life of such Indebtedness is no
shorter than that of the Indebtedness refinanced thereby and (f) the
other terms of such Indebtedness and of any agreement entered into and
of any instrument issued in connection therewith (including, without
limitation, those relating to covenant protection) are not, taken as a
whole, materially less favorable to the Borrower than the terms and
conditions of the Indebtedness being refinanced thereby.
"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.
"Personal Property Assets": all personal property of the Borrower
and its Restricted Subsidiaries (other than FCC Licenses).
"Plan": at a particular time, any employee benefit plan which 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.
"Prepayment Account": as defined in Section 2.13(e).
"Pricing Grid": the pricing grid attached hereto as Annex A.
"Pro Forma Compliance": shall exist at any date of determination
when the Borrower shall be in pro forma compliance with the covenants
set forth in Section 6.1 (computed on the basis of (i) balance sheet
amounts available as at the date of such determination (giving pro
forma effect to the event in respect of which such determination is
being made) and (ii) income statement amounts calculated using such
amounts for the most recently ended fiscal quarter for which financial
statements shall have been delivered to the Lenders, and giving pro
forma effect to the event in respect of which such determination is
being made as if such event has occurred on the first day of the
relevant period), provided that no Default or Event of Default shall
have occurred and be continuing either immediately prior to the event
with respect to which Pro Forma Compliance is being determined or
immediately after giving effect to such event.
"Projections": as defined in Section 5.2(c).
"Properties": as defined in Section 3.17.
<PAGE>
24
"Property": any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or
intangible, including, without limitation, Capital Stock.
"Qualifying Lease": any Teligent Lease which either (a) is
assigned to, or entered into by, LeasingCo or (b) if entered into by
the Borrower has been assigned as security to the Collateral Agent
with the consent of the applicable Teligent Lessor (unless such
Teligent Lease expressly permits such assignment without the consent
of such Teligent Lessor).
"Real Property Assets": all interests in real property of the
Borrower and its Restricted Subsidiaries (including leases and
licenses to use real property) other than Mortgaged Properties and
Excluded Assets.
"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 Restricted
Subsidiaries yielding Net Cash Proceeds in excess of $5,000,000 in the
aggregate while this Agreement is in effect.
"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 the Borrower or any
of its Restricted Subsidiaries in connection therewith which are not
applied to prepay the Term Loans pursuant to Section 2.13(b) as a
result of the delivery of a Reinvestment Notice.
"Reinvestment Event": any Asset Sale or 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
Restricted Subsidiary) intends and expects to use all or a specified
portion of the Net Cash Proceeds of an Asset Sale or Recovery Event to
acquire assets useful in its business.
"Reinvestment Prepayment Amount": with respect to any
Reinvestment Event, the Reinvestment Deferred Amount, if any, relating
thereto less any amount expended prior to the relevant Reinvestment
Prepayment Date to acquire assets useful in the Borrower's business.
"Reinvestment Prepayment Date": with respect to any Reinvestment
Event, the earlier of (a) the date occurring 360 days after such
Reinvestment Event and (b) the date on which the Borrower shall have
determined not to, or shall have otherwise
<PAGE>
25
ceased to, acquire 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. ss. 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 aggregate unpaid principal amount of the Loans then
outstanding plus the aggregate amount of undrawn Commitments then in
effect.
"Required Prepayment Lenders": the Majority Facility Lenders in
respect of each Facility.
"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
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,
general counsel or chief financial officer of the Borrower, but in any
event, with respect to financial matters, the chief financial officer,
treasurer or controller of the Borrower.
"Restricted Payments": as defined in Section 6.6.
"Restricted Subsidiary": each Special Purpose Subsidiary and each
other direct and indirect Domestic Subsidiary other than an
Unrestricted Subsidiary.
"Revolving Credit Commitment": as to any Lender, the obligation
of such Lender, if any, to make Revolving Credit Loans in an aggregate
principal amount not to exceed the amount set forth under the heading
"Revolving Credit Commitment" opposite such Lender's name on Schedule
1.1A, as the same may be changed from time to time pursuant to the
terms hereof. The original amount of the Total Revolving Credit
Commitments is $25,000,000.
"Revolving Credit Commitment Period": the period from and
including the Closing Date to the Revolving Credit Termination Date.
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26
"Revolving Credit Lender": each Lender which has a Revolving
Credit Commitment or which is the holder of Revolving Credit Loans.
"Revolving Credit Loans": as defined in Section 2.3.
"Revolving Credit Note": as defined in Section 2.9(e).
"Revolving Credit Percentage": as to any Revolving Credit Lender
at any time, the percentage which such Lender's Revolving Credit
Commitment then constitutes of the Total Revolving Credit Commitments
(or, at any time after the Revolving Credit Commitments shall have
expired or terminated, the percentage which the aggregate principal
amount of such Lender's Revolving Credit Loans then outstanding
constitutes of the aggregate principal amount of the Revolving Credit
Loans then outstanding).
"Revolving Credit Termination Date": July 1, 2002.
"Second Performance Test": the Second Performance Test shall be
satisfied when there are at least [redacted] in which the Borrower (i)
has deployed at least [redacted] commercially operable Teligent node
and [redacted] commercially operable Teligent access sites which,
collectively, are operating as a point to multi-point system in
accordance with the material specifications set forth in the
applicable vendor supply agreements under which the relevant equipment
was purchased, as certified by the Borrower and accepted by the
Administrative Agent (which acceptance shall not be unreasonably
withheld or delayed), and (ii) has at least one bona fide customer who
has received and paid at least one bill.
"Security Documents": the collective reference to the Guarantee
and Collateral Agreement, any Mortgage and all other security
documents hereafter delivered to the Collateral 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 Discount Note Indenture": the Indenture, dated as of
February 20, 1998, between the Borrower and First Union National Bank,
as Trustee, as in effect on the date hereof.
"Single Employer Plan": any Plan which is covered by Title IV of
ERISA, but which 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 generally
determined in accordance with applicable federal 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",
<PAGE>
27
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. It is understood that the
representation and warranty contained in Section 3.20 is made (a)
without reliance upon, or the benefit of, the services, analyses,
opinions or conclusions of any appraiser or valuation experts; (b)
without investigation or inquiry other than (i) review of the
Borrower's consolidated financial statements and business plans and
(ii) inquiry of the officers of the Company who have responsibility
for financial reporting and accounting matters as to the existence of
any events or conditions that, as of the Closing Date, would cause the
representation and warranty contained in Section 3.20 to be incorrect;
and (c) to the knowledge of the Borrower, in particular, with respect
to the terms "present fair saleable value," "liabilities of such
Person, contingent or otherwise," "unreasonably small amount of
capital," "debts" and "right to an equitable remedy" used in this
definition of Solvent and without inquiry or investigation of any
applicable state laws governing determination of the insolvency of
debtors.
"Special Purpose Subsidiary": each of LeasingCo, AssetCo and
LicenseCo.
"Specified Prepayment": any mandatory prepayment made by the
Borrower or any Restricted Subsidiary in respect of any Indebtedness
other than the Loans.
"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 qualified,
all references to a "Subsidiary" or to "Subsidiaries" in this
Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower.
"Subsidiary Guarantor": each Restricted Subsidiary.
"TAS Leases": leases, subleases, licenses or sublicenses of real
property (including buildings, rooftops and other improvements) at
customer sites or rights or interests therein for deployment and
operation of customer antennas and other customer premise equipment in
connection with the build-out and operation of Network Assets.
"TAS Lessor": the lessor, sublessor, licensor or sublicensor, as
applicable, party to a TAS Lease.
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28
"TCO Leases": leases, subleases, licenses of real property
(including buildings, rooftops and other improvements) at switching
centers or rights or interests therein for deployment and operation of
telecommunications and data switches in connection with the build-out
and operation of Network Assets.
"TCO Lessor": the lessor, sublessor, licensor or sublicensor, as
applicable, party to a TCO Lease.
"Telecommunications Assets": all assets, rights (contractual or
otherwise) and properties, whether tangible or intangible, used or
useful in connection with a Telecommunications Business.
"Telecommunications Business": when used in reference to any
Person, thatsuch Person is engaged primarily in the business of (i)
transmitting or providing services relating to transmission of voice,
video or data through owned or leased transmission facilities (ii)
creating, developing or marketing communications related network
equipment, software and other devices for use in a Telecommunications
Business or (iii) evaluating, participating in or pursuing any other
activity or opportunity that is related to those identified in (i) or
(ii) above; provided that the determination of what constitutes a
Telecommunications Business shall be made in good faith by the Board
of Directors of the Borrower.
"Teligent Lease": any TAS Lease, TN Lease or TCO Lease, as the
case may be.
"Teligent Lessor": any TAS Lessor, TN Lessor or TCO Lessor, as
the case may be.
"Term Loan Lenders": the collective reference to the Tranche A
Term Loan Lenders, the Delayed Draw Term Loan Lenders, the Conversion
Term Loan Lenders and the Optional Term Loan Lenders.
"Term Loans": the collective reference to the Tranche A Term
Loans, the Delayed Draw Term Loans, Conversion Term Loans and the
Optional Term Loans.
"Term Note": as defined in Section 2.9(e).
"TN Leases": leases, subleases, licenses of real property
(including buildings, rooftops and other improvements) at Teligent node
(or base station) sites or rights or interests therein for deployment
and operation of base station antennas and other base station equipment
in connection with the build-out and operation of Network Assets.
"TN Lessor": the lessor, sublessor, licensor or sublicensor, as
applicable, party to a TN Lease.
<PAGE>
29
"Total Revolving Credit Commitments": at any time, the aggregate
amount of the Revolving Credit Commitments then in effect.
"Tranche A Term Loan": as defined in Section 2.1.
"Tranche A Term Loan Commitment": as to any Lender, the
obligation of such Lender, if any, to make a Tranche A Term Loan to
the Borrower hereunder in a principal amount not to exceed the amount
set forth under the heading "Tranche A Term Loan Commitment" opposite
such Lender's name on Schedule 1.1A. The original aggregate amount of
the Tranche A Term Loan Commitments is $575,000,000.
"Tranche A Term Loan Commitment Period": the period commencing on
the Closing Date and ending on the fourth anniversary of the Closing
Date.
"Tranche A Term Loan Lender": each Lender which has a Tranche A
Term Loan Commitment or is the holder a Tranche A Term Loan.
"Tranche A Term Loan Percentage": as to Tranche A Term Loan
Lender at any time, the percentage which such Lender's Tranche A Term
Loan Commitment then constitutes of the aggregate Tranche A Term Loan
Commitments (or, at any time after the Closing Date, the percentage
which the aggregate principal amount of such Lender's Tranche A Term
Loans then outstanding constitutes of the aggregate principal amount
of the Tranche A Term Loans then outstanding).
"Transferee": as defined in Section 9.15.
"Type": as to any Loan, its nature as an ABR Loan or a Eurodollar
Loan.
"Unrestricted Subsidiary": any Subsidiary of the Borrower
(whether existing on the Closing Date or thereafter created or
acquired) designated by the Borrower as an Unrestricted Subsidiary;
the Borrower may designate a Subsidiary as an Unrestricted Subsidiary
only if (a) the entire investment by the Borrower and its Restricted
Subsidiaries in such Subsidiary was permitted by Section 6.7(d) and
(b) creditors of such subsidiary have no recourse to the Borrower or
any Restricted Subsidiary in respect of any obligations of such
Subsidiary.
"Unused Proceeds Basket": at any time, the sum of (a) [redacted]
of the amount of Net Cash Proceeds received by the Borrower after the
date hereof from any sale or issuance of the Borrower's Capital Stock,
(b) [redacted] of the amount of Net Cash Proceeds of unsecured debt of
the Borrower incurred pursuant to Section 6.2(g), received by the
Borrower after the date hereof, and (c) [redacted] of the amount of
Net Cash Proceeds of indebtedness to any Permitted Holder permitted by
Section 6.2(i), received by the Borrower after the date hereof, in
each case to the extent such Net Cash Proceeds have not been applied
prior to such time to make Capital Expenditures or to make investments
pursuant to the provisos to Sections 6.7(d), 6.7(e) and 6.7(f).
<PAGE>
30
"Vendor Credit Facility": as defined in the Collateral Agency and
Intercreditor Agreement.
"Voting Capital Stock": with respect to any Person, securities of
any class or classes of Capital Stock in such Person entitling the
holders thereof (whether at all times or at the times that such class
of Capital Stock has voting power by reason of the happening of any
contingency) to vote in the election of members of the board of
directors or comparable body of such Person.
"Weighted Average Life": when applied to any committed revolving
credit facility or any Indebtedness, at any date, the number of years
obtained by dividing (a) the sum of the products obtained by
multiplying (i) the amount of each then remaining scheduled commitment
reduction or, as the case may be, installment, sinking fund or other
scheduled payment of principal, including payment at final maturity,
in respect thereof, by (ii) the number of years (calculated to the
nearest one-twelfth) that will elapse between such date and the making
of such reduction or payment, by (b) in the case of the revolving
credit facility under this Agreement, the Revolving Credit
Commitments, or, in the case of any other committed revolving credit
facility, the aggregate maximum commitment to lend then in effect
under such committed revolving credit facility or, in cases other than
committed revolving credit facilities, the then outstanding principal
amount of such Indebtedness.
"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.
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,
accounting terms relating to 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.
(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.
<PAGE>
31
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS AND LOANS
2.1 Tranche A Term Loan Commitments; Delayed Draw Term Loan
Commitments. (a) Subject to the terms and conditions hereof, each Tranche A Term
Loan Lender severally agrees to make term loans ("Tranche A Term Loans") to the
Borrower from time to time during the Tranche A Term Loan Commitment Period in
an aggregate principal amount not exceeding the amount of such Lender's Tranche
A Term Loan Commitment; provided, that the aggregate principal amount of Tranche
A Term Loans, Delayed Draw Term Loans, Revolving Credit Loans and Conversion
Term Loans shall not exceed $300,000,000 until the Initial Performance Test has
been satisfied and shall not exceed $550,000,000 until the Second Performance
Test has been satisfied. The Tranche A Term 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 2.14.
(b) Subject to the terms and conditions hereof, each Delayed Draw
Term Loan Lender severally agrees to make term loans ("Delayed Draw Term Loans")
to the Borrower from time to time during the Delayed Draw Term Loan Commitment
Period in an aggregate principal amount not exceeding the amount of such
Lender's Delayed Draw Term Loan Commitment; provided, that the aggregate
principal amount of Tranche A Term Loans, Delayed Draw Term Loans, Revolving
Credit Loans and Conversion Term Loans shall not exceed $300,000,000 until the
Initial Performance Test has been satisfied and shall not exceed $550,000,000
until the Second Performance Test has been satisfied. The Delayed Draw Term
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 2.14.
2.2 Procedure for Tranche A Term Loan Borrowing and Delayed
Draw Term Loan Borrowing. (a) The Borrower may borrow under the Tranche A Term
Loan Commitments during the Tranche A Term Loan 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) one Business
Day prior to the requested Borrowing Date, in the case of ABR Loans, which
notice may be by telephone (to be confirmed in writing)), specifying (i) the
amount and Type of Tranche A Term Loans to be borrowed, (ii) the requested
Borrowing Date and (iii) in the case of Eurodollar Loans, the amount of the
requested Eurodollar Loans and the length of the initial Interest Period
therefor. Each borrowing under the Tranche A Term Loan Commitments shall be in
an amount equal to (x) in the case of ABR Loans, $10,000,000 or a whole multiple
of $1,000,000 in excess thereof (or, if the then aggregate undrawn amount of the
Tranche A Term Loan Commitments is less than $10,000,000, such lesser amount)
and (y) in the case of Eurodollar Loans, $10,000,000 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 Tranche A Term Loan Lender
thereof. Each Tranche A Term Loan 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 Agent. Such borrowing will then be
<PAGE>
32
made available to the Borrower by the Administrative Agent in like funds as
received by the Administrative Agent.
(b) The Borrower may borrow under the Delayed Draw Term Loan
Commitments during the Delayed Draw Term Loan 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) one Business Day prior
to the requested Borrowing Date, in the case of ABR Loans, which notice may be
by telephone (to be confirmed in writing)), specifying (i) the amount and Type
of Delayed Draw Term Loans to be borrowed, (ii) the requested Borrowing Date and
(iii) in the case of Eurodollar Loans, the amount of the requested Eurodollar
Loans and the length of the initial Interest Period therefor. Each borrowing
under the Delayed Draw Term Loan Commitments shall be in an amount equal to
$50,000,000 or a whole multiple of $1,000,000 in excess thereof (or, if the then
aggregate undrawn amount of the Delayed Draw Term Loan Commitments is less than
$50,000,000, such lesser amount). Upon receipt of any such notice from the
Borrower, the Administrative Agent shall promptly notify each Delayed Draw Term
Loan Lender thereof. Each Delayed Draw Term Loan 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 Agent. Such borrowing will then be made
available to the Borrower by the Administrative Agent in like funds as received
by the Administrative Agent.
2.3 Revolving Credit Commitments. Subject to the terms and
conditions hereof, each Revolving Credit Lender severally agrees to make
revolving credit loans ("Revolving Credit Loans") to the Borrower from time to
time during the Revolving Credit Commitment Period in an aggregate principal
amount at any one time outstanding not exceeding the amount of such Lender's
Revolving Credit Commitment, provided, that the aggregate principal amount of
Tranche A Term Loans, Delayed Draw Term Loans, Revolving Credit Loans and
Conversion Term Loans shall not exceed $300,000,000 until the Initial
Performance Test has been satisfied and shall not exceed $550,000,000 until the
Second Performance Test has been satisfied. During the Revolving Credit
Commitment Period the Borrower may use the Revolving Credit Commitments by
borrowing, prepaying the Revolving Credit Loans in whole or in part, and
reborrowing, all in accordance with the terms and conditions hereof. The
Revolving Credit Loans may from time to time be Eurodollar Loans or ABR Rate
Loans, as determined by the Borrower and notified to the Administrative Agent in
accordance with Sections 2.4 and 2.14, provided that no Revolving Credit Loan
shall be made as a Eurodollar Loan after the day that is one month prior to the
Revolving Credit Termination Date.
2.4 Procedure for Revolving Credit Borrowing. The Borrower may
borrow under the Revolving Credit Commitments during the Revolving Credit
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
<PAGE>
33
York City time, (a) three Business Days prior to the requested Borrowing Date,
in the case of Eurodollar Loans, or (b) one Business Day prior to the requested
Borrowing Date, in the case of ABR Loans, and which notice may be by telephone
(to be confirmed in writing)), specifying (i) the amount and Type of Revolving
Credit Loans to be borrowed, (ii) the requested Borrowing Date and (iii) in the
case of Eurodollar Loans, the amount of the requested Eurodollar Loans and the
length of the initial Interest Period therefor. Each borrowing under the
Revolving Credit 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 Revolving Credit 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 Revolving Credit
Lender thereof. Each Revolving Credit 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 Agent. Such borrowing will then be made
available to the Borrower by the Administrative Agent in like funds as received
by the Administrative Agent.
2.5 Extension of Delayed Draw Term Loan Commitment Termination
Date. (a)(i) The Borrower may request, in a notice given as herein provided to
the Administrative Agent during the 30 day period commencing on the date that is
60 days prior to the Delayed Draw Term Loan Commitment Termination Date then in
effect (the "Existing Delayed Draw Term Loan Commitment Termination Date"), that
the Delayed Draw Term Loan Commitment Termination Date be extended, which notice
shall specify the new Delayed Draw Term Loan Commitment Termination Date (which
shall be not more than 364 days after the Existing Delayed Draw Term Loan
Commitment Termination Date) to be in effect following such extension (the
"Requested Delayed Draw Term Loan Commitment Termination Date"); provided,
however, that the Borrower may request only one such extension of the Delayed
Draw Term Loan Commitment Termination Date. The Administrative Agent shall
promptly notify each Delayed Draw Term Loan Lender of such request. Each Delayed
Draw Term Loan Lender, acting in its sole discretion, shall, not later than a
date 20 days after such request from the Borrower, notify the Borrower and the
Administrative Agent in writing of its election to extend or not to extend the
Delayed Draw Term Loan Commitment Termination Date with respect to its Delayed
Draw Term Loan Commitment. Any Delayed Draw Term Loan Lender which shall not
timely notify the Borrower and the Administrative Agent of its election to
extend the Delayed Draw Term Loan Commitment Termination Date shall be deemed to
have elected not to extend the Delayed Draw Term Loan Commitment Termination
Date with respect to its Delayed Draw Term Loan Commitment (any Delayed Draw
Term Loan Lender who timely notifies the Borrower and the Administrative Agent
of an election not to extend its Delayed Draw Term Loan Commitment, and any
Lender so deemed to have elected not to extend its Delayed Draw Term Loan
Commitment being referred to as a "Terminating Delayed Draw Lender"). The
election of any Lender to agree to a requested extension shall not obligate any
other Lender to agree.
(ii) If and only if Lenders holding Delayed Draw Term Loan
Commitments that aggregate at least 75% of the aggregate amount of the Delayed
Draw Term Loan
<PAGE>
34
Commitments on the date of the notice delivered by the Borrower pursuant to
subparagraph (a)(i) above (including Delayed Draw Term Loan Commitments of all
Terminating Delayed Draw Term Loan Lenders on such date) shall have agreed
during the 20 day period referred to in such subparagraph (a)(i) to extend the
Existing Delayed Draw Term Loan Commitment Termination Date, then (A) the
Delayed Draw Term Loan Commitments of the Delayed Draw Term Loan Lenders other
than Terminating Delayed Draw Term Loan Lenders (the "Continuing Delayed Draw
Term Loan Lenders") shall, subject to the other provisions of this Agreement, be
extended to the Requested Delayed Draw Term Loan Commitment Termination Date
specified in the notice from the Borrower, and as to such Delayed Draw Term Loan
Lenders the term "Delayed Draw Term Loan Commitment Termination Date", as used
herein, shall on and after the date as of which the requested extension is
effective mean such Requested Delayed Draw Term Loan Commitment Termination
Date, provided that if such date is not a Business Day, then such Requested
Delayed Draw Term Loan Commitment Termination Date shall be the next preceding
Business Day and (B) the Delayed Draw Term Loan Commitments of the Terminating
Delayed Draw Lenders shall continue until the Existing Delayed Draw Term Loan
Commitment Termination Date, and shall then terminate, and as to the Terminating
Delayed Draw Lenders, the term "Delayed Draw Term Loan Commitment Termination
Date", as used herein, shall continue to mean such Existing Delayed Draw Term
Loan Commitment Termination Date.
(b) In the event that the Delayed Draw Term Loan Commitment
Termination Date shall have been extended for the Continuing Delayed Draw
Lenders in accordance with paragraph (a) above and, in connection with such
extension, there are Terminating Delayed Draw Lenders, the Borrower may, at its
own expense, require any Terminating Delayed Draw Lender to transfer and assign
in whole or in part, without recourse (in accordance with Section 9.6) all or
part of its interests, rights and obligations under the Delayed Draw Term Loan
Facility to an assignee (which assignee may be another Lender, if another Lender
accepts such assignment) that shall assume such assigned obligations and that
shall agree that its Delayed Draw Term Loan Commitment will expire on the
Delayed Draw Term Loan Commitment Termination Date in effect for Continuing
Delayed Draw Term Loan Lenders pursuant to such paragraph (a); provided,
however, that (i) the Borrower shall have received a written consent of the
Administrative Agent in the case of an assignee that is not a Lender (which
consent shall not unreasonably be withheld) and (ii) the assigning Lender shall
have received from the Borrower or such assignee full payment in immediately
available funds of the principal of and interest accrued to the date of such
payment on the Loans made by it hereunder to the extent that such Delayed Draw
Term Loans are subject to such assignment and all other amounts owed to it
hereunder (including any amounts that would be payable to the assigning Lender
pursuant to Section 2.22 if such assignment were, instead, a prepayment of the
Delayed Draw Term Loans of such Delayed Draw Term Loan Lender). Any such
assignee's initial Delayed Draw Term Loan Commitment Termination Date shall be
the Delayed Draw Term Loan Commitment Termination Date in effect at the time of
such assignment for the Continuing Delayed Draw Term Loan Lenders. The Borrower
shall not have any right to require a Lender to assign any part of its
interests, rights and obligations under this Agreement pursuant to this
paragraph (b) unless it has notified such Lender of its intention to require the
assignment thereof at least five days prior to the proposed assignment date.
<PAGE>
35
2.6 Conversion Term Loans. (a) Subject to the terms and
conditions hereof, the Borrower may, on the Delayed Draw Term Loan Commitment
Termination Date with respect to any Lender, convert any outstanding Delayed
Draw Term Loans of such Lender, or a portion thereof, to term loans ("Conversion
Term Loans"); provided, that if the Borrower elects to convert any portion of
the Delayed Draw Term Loans of any Lender on the Delayed Draw Term Loan
Commitment Termination Date applicable to such Lender, it must elect to the same
percentage portion of the outstanding Delayed Draw Term Loans of each other
Lender having the same Delayed Draw Term Loan Commitment Termination Date. Such
conversion shall be requested by the Borrower by irrevocable notice to the
Administrative Agent (which notice must be received by the Administrative Agent
prior to 12:00 Noon, New York City time, (a) three Business Days prior to such
Delayed Draw Term Loan Commitment Termination Date, if all or any part of the
Conversion Term Loans are to be Eurodollar Loans, or (b) one Business Day prior
to such Delayed Draw Term Loan Commitment Termination Date, otherwise),
specifying (i) the amount of Delayed Draw Term Loans to be converted to
Conversion Term Loans, (ii) the initial Type of the Conversion Term Loans and
(iii) in the case of Conversion Term Loans that are to be initially Eurodollar
Loans, the amount thereof and the length of the initial Interest Period
therefor. Upon receipt of any such notice from the Borrower, the Administrative
Agent shall promptly notify each affected Delayed Draw Term Loan Lender thereof.
On the Delayed Draw Term Loan Commitment Termination Date, outstanding Delayed
Draw Term Loans shall be converted to Conversion Term Loans in accordance with
such notice.
(b) Subject to the terms and conditions hereof, the Borrower
may, on the Revolving Credit Termination Date, convert any outstanding Revolving
Credit Loans to Conversion Term Loans; provided, that if the Borrower elects to
convert any portion of the Revolving Credit Loans of any Lender on the Revolving
Credit Termination Date, it must elect to the same percentage portion of the
outstanding Revolving Credit Loans of each other Revolving Credit Lender. Such
conversion shall be requested by the Borrower by irrevocable notice to the
Administrative Agent (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
Revolving Credit Termination Date, if all or any part of the Conversion Term
Loans are to be Eurodollar Loans, or (b) one Business Day prior to the Revolving
Credit Termination Date, otherwise), specifying (i) the amount of Revolving
Credit Loans to be converted to Conversion Term Loans, (ii) the initial Type of
the Conversion Term Loans and (iii) in the case of Conversion Term Loans that
are to be initially Eurodollar Loans, the amount thereof and the length of the
initial Interest Period therefor. Upon receipt of any such notice from the
Borrower, the Administrative Agent shall promptly notify each Revolving Credit
Lender. On the Revolving Credit Termination Date or Delayed Draw Term Loan
Commitment Termination Date, outstanding Revolving Credit Loans shall be
converted to Conversion Term Loans in accordance with such notice.
2.7 Optional Term Loans. (a) Subject to the terms and
conditions hereof, the Borrower may, with the consent of the Required Lenders,
at any time and from time to time prior to December 31, 2001, establish one or
more additional term loan tranches (each, an "Optional Term Loan Tranche")
pursuant to which term loans ("Optional Term Loans") may be made. Each Optional
Term Loan Tranche shall be in a principal amount of at least
<PAGE>
36
$50,000,000, and all Optional Term Loan Tranches shall not exceed $400,000,000
in the aggregate. The Borrower shall request the establishment of an Optional
Term Loan Tranche by delivery to the Administrative Agent of a written request
therefor (an "Optional Term Loan Request") which shall be promptly distributed
by the Administrative Agent to the Lenders. Each Optional Term Loan Request
shall (i) set forth the aggregate principal amount of the requested Optional
Term Loan Tranche and the Applicable Margin (or, if applicable, the formula for
the calculation thereof) and the commitment fee rate, if any, applicable to the
Optional Term Loans to be made under such Optional Term Loan Tranche, the
amortization and maturity date of such Optional Term Loans and the borrowing
procedures relating to the borrowing by the Borrower of such Optional Term Loans
and (ii) be accompanied by such information as the Administrative Agent shall
reasonably request for use in syndication of the requested Optional Term Loans.
All Optional Term Loans shall (I) have a Weighted Average Life (calculated on
the date the related Optional Term Loan Tranche shall become effective) that is
at least as long as the then Weighted Average Life (calculated on such date) of
the Revolving Credit Commitments and the Term Loans, taken as a whole, (II) have
a final scheduled maturity date on or after December 31, 2006, (III) bear
interest at rates no higher than those applicable to the Tranche A Term Loans
and (IV) otherwise be subject to the same terms and conditions as the other Term
Loans outstanding hereunder.
(b) The Borrower may offer to any existing Lender, or to one
or more additional banks, financial institutions or other entities reasonably
acceptable to the Administrative Agent, the opportunity to participate in all or
a portion of an Optional Term Loan Tranche.
(c) The effectiveness of any Optional Term Loan Tranche shall
be contingent upon (i) execution and delivery by the Administrative Agent, the
Borrower and each Lender providing Optional Term Loan Commitments under such
Optional Term Loan Tranche of an Optional Term Loan Amendment relating to such
Optional Term Loan Tranche and (ii) receipt by the Administrative Agent of such
corporate resolutions and officer's certificates of the Borrower and legal
opinions of counsel to the Borrower as the Administrative Agent shall reasonably
request with respect thereto, in each case, in form and substance reasonably
satisfactory to the Administrative Agent. In the case of any Optional Term Loan
Amendment executed by any Person that was not theretofore a Lender, upon the
effectiveness thereof such Person shall be a party hereto and a Lender
hereunder. The Borrower and the Administrative Agent agree to negotiate in good
faith any Optional Term Loan Amendment relating to any Optional Term Loan
Tranche.
(d) No Lender shall have any obligation to participate in any
Optional Term Loan Tranche unless it agrees to do so in its sole discretion.
2.8 Repayment of Loans. (a) The Tranche A Term Loans shall
mature in 16 consecutive quarterly installments, commencing on September 30,
2002, each of which shall equal the percentage set forth below opposite such
installment of the aggregate principal amount of Tranche A Term Loans of each
Lender outstanding on the last day of the Tranche A Term Loan Commitment Period:
<PAGE>
37
<TABLE>
<CAPTION>
Installment Percentage
<S> <C>
September 30, 2002 1.66%
December 31, 2002 1.67%
March 31, 2003 1.67%
June 30, 2003 4.25%
September 30, 2003 4.25%
December 31, 2003 4.25%
March 31, 2004 4.25%
June 30, 2004 4.50%
September 30, 2004 4.50%
December 31, 2004 4.50%
March 31, 2005 4.50%
June 30, 2005 4.75%
September 30, 2005 4.75%
December 31, 2005 4.75%
March 31, 2006 4.75%
June 30, 2006 41.00%
</TABLE>
(b) The Conversion Term Loans shall mature in 16 consecutive
quarterly installments, commencing on September 30, 2002, each of which shall
equal the percentage set forth below opposite such installment of the aggregate
principal amount of Conversion Term Loans of such Lender outstanding on the last
day of the relevant Revolving Credit Commitment Period:
<TABLE>
<CAPTION>
Installment Percentage
<S> <C>
September 30, 2002 1.66%
December 31, 2002 1.67%
March 31, 2003 1.67%
June 30, 2003 4.25%
September 30, 2003 4.25%
December 31, 2003 4.25%
March 31, 2004 4.25%
June 30, 2004 4.50%
September 30, 2004 4.50%
December 31, 2004 4.50%
March 31, 2005 4.50%
June 30, 2005 4.75%
September 30, 2005 4.75%
December 31, 2005 4.75%
March 31, 2006 4.75%
June 30, 2006 41.00%
</TABLE>
(c) The Optional Term Loans made under each Optional Term Loan
Tranche shall mature in installments payable on the dates and in the amounts set
forth in the Optional
<PAGE>
38
Term Loan Amendment executed for such Optional Term Loan Tranche pursuant to
Section 2.7.
(d) The Delayed Draw Term Loans of each Lender, to the extent
not converted to Conversion Term Loans on the applicable Delayed Draw Term Loan
Commitment Termination Date, shall mature and be payable in full on such date.
(e) The Revolving Credit Loans of each Lender, to the extent
not converted to Conversion Term Loans on the Revolving Credit Termination Date,
shall mature and be payable in full on such date.
2.9 Repayment of Loans; Evidence of Debt. (a) The Borrower
hereby unconditionally promises to pay to the Administrative Agent for the
account of the appropriate Revolving Credit Lender or Term Loan Lender, as the
case may be, (i) the then unpaid principal amount of each Revolving Credit Loan
of such Revolving Credit Lender on the applicable Revolving Credit Termination
Date (or such earlier date on which the Loans become due and payable pursuant to
Section 7), to the extent such Revolving Credit Loans are not converted to
Conversion Term Loans on such date and (ii) the principal amount of each Term
Loan of such Term Loan Lender in installments according to the amortization
schedule set forth in Section 2.8 (or on such earlier date on which the Loans
become due and payable pursuant to Section 7). The Borrower hereby further
agrees to pay interest on the unpaid principal amount of the Loans from time to
time outstanding from the date hereof until payment in full thereof at the rates
per annum, and on the dates, set forth in Section 2.16.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of the Borrower to such
Lender resulting from each Loan of such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Agreement.
(c) The Administrative Agent, on behalf of the Borrower, shall
maintain the Register pursuant to Section 9.6(e), and a subaccount therein for
each Lender, in which shall be recorded (i) the amount of each Loan made
hereunder and any Note evidencing such Loan, the Type thereof and each Interest
Period applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder
and (iii) both the amount of any sum received by the Administrative Agent
hereunder from the Borrower and each Lender's share thereof.
(d) The entries made in the Register and the accounts of each
Lender maintained pursuant to Section 2.9(b) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Loans made to
such Borrower by such Lender in accordance with the terms of this Agreement.
<PAGE>
39
(e) The Borrower agrees that, upon the request to the
Administrative Agent by any Lender, the Borrower will execute and deliver to
such Lender a promissory note of the Borrower evidencing any Term Loans or
Revolving Credit Loans, as the case may be, of such Lender, substantially in the
forms of Exhibit G-1 (a "Term Note") or G-2 (a "Revolving Credit Note"),
respectively, with appropriate insertions as to date and principal amount.
2.10 Commitment Fees, etc. (a) The Borrower agrees to pay to
the Administrative Agent for the account of each Revolving Credit Lender a
commitment fee for the period from and including the Closing Date to but
excluding the last day of the Revolving Credit Commitment Period, computed at
the Commitment Fee Rate on the average daily amount of the Available Revolving
Credit 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 Revolving Credit 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 for
the account of each Tranche A Term Loan Lender a commitment fee for the period
from and including the Closing Date to but excluding the last day of the Tranche
A Term Loan Commitment Period, computed at the Commitment Fee Rate on the
average daily amount of the Available Tranche A Term Loan 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 last day
of the Tranche A Term Loan Commitment Period, commencing on the first of such
dates to occur after the date hereof.
(c) The Borrower agrees to pay to the Administrative Agent for
the account of each Delayed Draw Term Loan Lender a commitment fee for the
period from and including the Closing Date to but excluding the last day of the
Delayed Draw Term Loan Commitment Period, computed at the Commitment Fee Rate on
the average daily amount of the Available Delayed Draw Term Loan 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
last day of the Delayed Draw Term Loan Commitment Period, commencing on the
first of such dates to occur after the date hereof.
(d) The Borrower agrees to pay to the Administrative Agent the
fees in the amounts and on the dates from time to time agreed to in writing by
the Borrower and the Administrative Agent.
2.11 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 any of the Commitments or, from time to time,
to reduce the amount of any of the Commitments; provided that no such
termination or reduction of Revolving Credit Commitments shall be permitted if,
after giving effect thereto and to any prepayments of the Revolving Credit Loans
made on the effective date thereof, the aggregate outstanding principal amount
of Revolving Credit Loans would exceed the Total Revolving Credit Commitments.
Any such reduction shall be in an amount equal to $1,000,000, or a whole
multiple thereof, and shall reduce permanently the applicable Commitments then
in effect.
<PAGE>
40
Optional reductions of the Commitments under the Tranche A Term Loan Facility,
the Delayed Draw Term Loan Facility and the Revolving Credit Facility occurring
prior to the first anniversary of the Closing Date shall be accompanied by a
reduction fee equal to 3% of the amount of such reduction.
2.12 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 except as provided in the last sentence of this Section, 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 2.22. 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
Revolving Credit Loans which are ABR Loans) accrued interest to such date on the
amount prepaid. Partial prepayments of Term Loans and Revolving Credit Loans
shall be in an aggregate principal amount of $1,000,000 or a whole multiple
thereof. Optional prepayments of the Term Loans occurring prior to the first
anniversary of the Closing Date shall be accompanied by a prepayment fee equal
to 3% of the amount of such prepayment.
2.13 Mandatory Prepayments and Commitment Reductions; Change
of Control. (a) Unless the Required Prepayment Lenders shall otherwise agree, if
the Borrower makes any Specified Prepayment, an amount equal to the Credit
Agreement Portion thereof shall be applied on the date of such Specified
Prepayment toward the prepayment of the Term Loans and the reduction of the
Revolving Credit Commitments as set forth in Section 2.13(d).
(b) Unless the Required Prepayment Lenders shall otherwise
agree, if on any date the Borrower or any of its Restricted Subsidiaries shall
receive Net Cash Proceeds from any Asset Sale or Recovery Event by the Borrower
or its Restricted Subsidiaries then, unless a Reinvestment Notice shall be
delivered in respect thereof within five Business Days after receipt of such Net
Cash Proceeds, such Net Cash Proceeds shall be applied on such date toward the
prepayment of the Term Loans and the reduction of the Revolving Credit
Commitments as set forth in Section 2.13(d); provided, that, 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 prepayment of the Term Loans and the reduction of the Revolving Credit
Commitments as set forth in Section 2.13(d). If at any time the aggregate amount
of Net Cash Proceeds in respect of which Reinvestment Notices have been
delivered and which have not been reinvested in accordance with such
Reinvestment Notices shall exceed $25,000,000 for a period of 90 days, then on
or before such 90th day of such period, the Borrower shall deliver such excess
over $25,000,000 to the Collateral Agent to be held by it in accordance with the
Collateral Agency and Intercreditor Agreement.
<PAGE>
41
(c) Unless the Required Prepayment Lenders shall otherwise
agree, if, for any fiscal year of the Borrower commencing with the fiscal year
ending December 31, 2002, there shall be Excess Cash Flow, the Borrower shall,
on the relevant Excess Cash Flow Application Date, apply 50% of such Excess Cash
Flow toward the prepayment of the Term Loans as set forth in Section 2.13(d).
Each such prepayment and commitment reduction shall be made on a date (an
"Excess Cash Flow Application Date") no later than five days after the earlier
of (i) the date on which the financial statements of the Borrower referred to in
Section 6.1(a), for the fiscal year with respect to which such prepayment is
made, are required to be delivered to the Lenders and (ii) the date such
financial statements are actually delivered.
(d) Amounts to be applied in connection with prepayments and
Commitment reductions made pursuant to this Section and Section 6.6 shall be
applied, first, to the prepayment of the Term Loans, second, to reduce
permanently the Revolving Credit Commitments and, third, to reduce permanently
any Tranche A Term Loan Commitments, Delayed Draw Term Loan Commitments and
Optional Term Loan Commitments then unused and in effect, pro rata according to
the respective amounts of Tranche A Term Loan Commitments, Delayed Draw Term
Loan Commitments and Optional Term Loan Commitments. Any such reduction of the
Revolving Credit Commitments shall be accompanied by prepayment of the Revolving
Credit Loans to the extent, if any, that the aggregate outstanding principal
amount of Revolving Credit Loans exceed the amount of the Total Revolving Credit
Commitments as so reduced. The application of any prepayment pursuant to this
Section shall be made first to ABR Loans and second to Eurodollar Loans. Each
prepayment of the Loans under this Section (except in the case of Revolving
Credit Loans that are ABR Loans) shall be accompanied by accrued interest to the
date of such prepayment on the amount prepaid. No prepayment fee shall be
payable in connection with any prepayment or Commitment reduction required by
paragraphs (a) through (c) above.
(e) Any amounts applied to Loans pursuant to Section 2.13(a),
Section 2.13(b) or Section 2.13(c) which are Eurodollar Loans shall, at the
option of the Borrower, be applied to prepay the Loans which are Eurodollar
Loans immediately and/or shall be deposited in the Prepayment Account (as
defined below). The Agent shall apply any cash deposited in the Prepayment
Account to prepay the Loans which are Eurodollar Loans on the last day of the
Interest Period therefor (or, at the direction of the Borrower, on any earlier
date) until all outstanding Loans which are Eurodollar Loans have been prepaid
or until all cash on deposit in the Prepayment Account (including, without
limitation, interest earned thereon) with respect to such Loans has been
exhausted. For purposes of this Agreement, the term "Prepayment Account" shall
mean an account established by the Borrower with the Administrative Agent and
over which the Administrative Agent shall have exclusive dominion and control,
including the right of withdrawal for application in accordance with this
Section 2.13(e). The Administrative Agent shall, at the request of the Borrower,
invest amounts on deposit in the Prepayment Account in Cash Equivalents that
mature on or prior to the last day of the applicable Interest Periods of the
Eurodollar Loans to be prepaid, provided that (i) the Administrative Agent shall
not be required to make any investment that, in its sole judgment, would require
or cause the Administrative Agent to be in, or would result in any, violation of
any Requirement of Law and (ii) the Administrative Agent shall have no
obligation to invest amounts on deposit in the Prepayment Account if a Default
or Event of Default shall have
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42
occurred and be continuing. The Borrower shall indemnify the Administrative
Agent for any losses relating to the investments made at the request of the
Borrower so that the amount available to prepay Eurodollar Loans on the last day
of the applicable Interest Periods therefor is not less than the amount that
would have been available had no investments been made. Other than any interest
earned on such investments, the Prepayment Account shall not bear interest.
Interest or profits, if any, on such investments shall be deposited and
reinvested as described above and shall be for the account of, and so long as no
Default or Event of Default shall have occurred and be continuing, shall be paid
to, the Borrower. If the maturity of the Loans has been accelerated pursuant to
Section 7, the Administrative Agent shall first apply all amounts on deposit in
the Prepayment Account to prepay the outstanding Term Loans and, then, to prepay
any outstanding Revolving Credit Loans. The Borrower hereby grants to the
Administrative Agent, for its benefit and the benefit of the Lenders, a security
interest in the Prepayment Account to secure the Obligations.
(f) In the event that a Change of Control shall occur, the
Borrower shall promptly give notice thereof to the Administrative Agent (which
shall promptly notify the Lenders thereof) and the Required Lenders may, in
their sole discretion, by notice to the Borrower at any time prior to the date
which is 30 days after such notice to the Administrative Agent of the occurrence
of such Change of Control, require the Borrower to immediately prepay all Loans
and terminate all Commitments, and upon the giving of such notice, all
Commitments shall immediately terminate and all Loans, together with accrued and
unpaid interest thereon and all other amounts payable hereunder, shall become
immediately due and payable. Any such mandatory prepayment and Commitment
reduction made as a result of a Change of Control occurring prior to the first
anniversary of the Closing Date shall be accompanied by a prepayment fee equal
to [redacted] of the amount of such mandatory prepayment and Commitment
reduction.
2.14 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 (which notice may be by telephone (to be confirmed in writing)),
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 and which notice may be by telephone (to be confirmed in
writing)), provided that no ABR Loan under a particular Facility may be
converted into a Eurodollar Loan (i) when any Event of Default has occurred and
is continuing and the Administrative Agent has, or the Majority Facility Lenders
in respect of such Facility have, determined in its or their sole discretion not
to permit such conversions or (ii) after the date that is one month prior to the
final scheduled termination or maturity date of such Facility. 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 (which notice may be by telephone (to be
confirmed in writing)) to the Administrative Agent,
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43
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 under a particular Facility may
be continued as such (i) when any Event of Default has occurred and is
continuing and the Administrative Agent has or the Majority Facility Lenders in
respect of such Facility have determined in its or their sole discretion not to
permit such continuations or (ii) after the date that is one month prior to the
final scheduled termination or maturity date of such Facility, 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.
2.15 Minimum Amounts and Maximum Number of Eurodollar
Tranches. Notwithstanding anything to the contrary in this Agreement, all
borrowings, conversions, continuations and optional prepayments 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 20 Eurodollar
Tranches shall be outstanding at any one time.
2.16 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
Interest Period plus the Applicable Margin.
(b) Each ABR Loan shall bear interest at a rate per annum
equal to the ABR plus the Applicable Margin.
(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), the principal of such Loan shall bear interest at a rate per
annum which is 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, to the extent
permitted by applicable law, shall bear interest at a rate per annum equal to
the rate then applicable to ABR Loans under the relevant Facility plus 2% (or,
in the case of any such other amounts that do not relate to a particular
Facility, the rate then applicable to ABR Loans under the Revolving Credit
Facility 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.
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44
2.17 Computation of Interest and Fees. (a) Interest, fees and
commissions 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
2.16(a).
2.18 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 Majority Facility Lenders in respect of the relevant Facility 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 under the relevant Facility requested
to be made on the first day of such Interest Period shall be made as ABR Loans,
(y) any Loans under the relevant Facility 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 under the relevant Facility
shall be converted, on the first day of such Interest Period, to ABR Loans.
Until such notice has been withdrawn by the Administrative Agent, no further
Eurodollar Loans under the relevant Facility shall be made or continued as such,
nor shall the Borrower have the right to convert Loans under the relevant
Facility to Eurodollar Loans.
2.19 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
<PAGE>
45
the respective Tranche A Term Loan Percentages, Delayed Draw Term Loan
Percentages, Optional Term Loan Percentages for the relevant Optional Term Loan
Tranche or Revolving Credit Percentages, as the case may be, of the relevant
Lenders. Each payment (other than prepayments) in respect of principal or
interest in respect of the Loans, and each payment in respect of fees payable
hereunder shall be applied to the amounts of such obligations owing to the
Lenders pro rata according to the respective amounts then due and owing to the
Lenders.
(b) The amount of each principal prepayment of the Term Loans
shall be applied to reduce the then remaining installments of the Tranche A Term
Loans, Delayed Draw Term Loans, Conversion Term Loans and Optional Term Loans,
as the case may be, pro rata based upon the then remaining principal amount
thereof. Amounts repaid on account of the Term Loans may not be reborrowed.
(c) Each payment (including each prepayment) by the Borrower
on account of principal of and interest on the Revolving Credit Loans shall be
made pro rata according to the respective outstanding principal amounts of the
Revolving Credit Loans then held by the Revolving Credit Lenders.
(d) 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 Payment 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.
(e) 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
<PAGE>
46
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 under the relevant
Facility, on demand, from the Borrower.
(f) 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.
2.20 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 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 2.21
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 which 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 which 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, within 30 days after its demand (accompanied by the
certificate contemplated by Section 2.20(c)), any additional amounts necessary
to compensate such Lender for such increased cost or reduced amount receivable.
If any Lender becomes entitled to claim any additional amounts pursuant
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47
to this Section, it shall promptly notify the Borrower (with a copy to the
Administrative Agent) of the event by reason of which it has become so entitled.
(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
(accompanied by the certificate contemplated in Section 2.20(c)), the Borrower
shall pay to such Lender such additional amount or amounts as will compensate
such Lender for such reduction.
(c) A certificate as to any additional amounts payable
pursuant to this Section 2.20 submitted by any Lender to the Borrower (with a
copy to the Administrative Agent) shall set forth in reasonable detail the
calculation of such additional amounts and the basis therefor and 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.
2.21 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 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 any Agent or any Lender ("Excluded Taxes") as a
result of a present or former connection between such 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 such 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 any Agent or any Lender hereunder, the amounts so payable to
such Agent or such Lender shall be increased to the extent necessary to yield to
such 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 or Other 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
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48
becomes a party to this Agreement, except to the extent that such Lender's
assignor (if any) was in compliance with the requirements of this Section 2.21
and entitled, at the time of assignment, to receive additional amounts from the
Borrower with respect to such Non-Excluded Taxes pursuant to Section 2.21(a).
(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 the account of the relevant Agent or 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 Agents 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 any
Agent or any Lender as a result of any such failure. The agreements in this
Section 2.21 shall survive the termination of this Agreement and the payment of
the Loans and all other amounts payable hereunder.
(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) (i) 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 I 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,
and (ii) a certificate (A) in the case of a Form 1001 or 4224, that such
Non-U.S. Lender is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes and (B) in
the case of a Form W-8, that such Non-U.S. Lender is entitled to an exemption
from United States withholding tax. Such forms, statements and certifications
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). Each Non-US Lender
shall obtain any extensions of time for filing and completing such forms,
statements or certifications as may be reasonably requested by the Borrower. In
addition, each Non-U.S. Lender shall deliver such forms, statements and
certifications promptly upon the expiration, obsolescence or invalidity of any
forms, statements and certifications 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 form or certificate to the
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49
Borrower (or any other form of certification adopted by the U.S. taxing
authorities for 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 reasonable judgment such completion, execution or
submission would not materially prejudice the legal position of such Lender.
2.22 Indemnity. The Borrower agrees to indemnify each Lender
and to hold each Lender harmless from any loss or expense (but excluding lost
profits) which such Lender has sustained or incurred 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 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 which
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 which would have accrued on the amount so prepaid, or not so
borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
such Interest Period (or, in the case of a failure to borrow, convert or
continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable Eurodollar Rate for such Eurodollar
Loans provided for herein (excluding, however, the Applicable Margin) over (ii)
the amount of interest (as reasonably determined by such Lender) which would
have accrued to such Lender on such amount by placing such amount on deposit for
a comparable period with leading banks in the interbank eurodollar market. A
certificate as to any amounts payable pursuant to this Section submitted to the
Borrower by any Lender shall set forth in reasonable detail the calculation
thereof and the basis therefor and 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.
2.23 Illegality. Notwithstanding any other provision herein,
if the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof shall make it unlawful for any Lender to
make or maintain Eurodollar Loans as contemplated by this Agreement, such Lender
shall give prompt notice thereof to the Borrower and the Administrative Agent
and thereafter (a) the commitment of such Lender hereunder to make Eurodollar
Loans, continue Eurodollar Loans as such and convert ABR Loans to Eurodollar
Loans shall forthwith be cancelled and (b) such Lender's Loans then outstanding
as
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50
Eurodollar Loans, if any, shall be converted automatically to ABR Loans on the
respective last days of the then current Interest Periods with respect to such
Loans or within such earlier period as required by law. If any such conversion
of a Eurodollar Loan occurs on a day which is not the last day of the then
current Interest Period with respect thereto, the Borrower shall pay to such
Lender such amounts, if any, as may be required pursuant to Section 2.22.
2.24 Change of Lending Office. Each Lender agrees that, upon
the occurrence of any event giving rise to the operation of Section 2.20,
2.21(a) or 2.23 with respect to such Lender, it will, if requested by the
Borrower or if it makes any demand for compensation under any such Section, use
reasonable efforts 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 2.20, 2.21(a) or 2.23.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Agents and the Lenders to enter into this
Agreement and to make the Loans, the Borrower hereby represents and warrants to
each Agent and each Lender that:
3.1 Financial Condition. The audited consolidated balance
sheet of the Borrower as at December 31, 1997 and the related consolidated
statements of income and of cash flows for the fiscal year ended on such date,
as set forth in the Borrower's annual report on Form 10-K, reported on by and
accompanied by an unqualified report from Ernst & Young LLP, presents 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
fiscal year then ended. The unaudited consolidated condensed balance sheet of
the Borrower as at March 31, 1998, and the related unaudited consolidated
condensed statements of income and cash flows for the three-month period ended
on such date, as set forth in the Borrower's quarterly report on Form 10-Q,
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 three-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 or a Responsible Officer and disclosed therein). 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, without limitation, any interest
rate or foreign currency swap or exchange transaction or other obligation in
respect of derivatives, which are not reflected in the most recent financial
statements referred to in this paragraph. During the period from December 31,
1997 to and including the date hereof there has been no Disposition by the
Borrower of any material part of its business or Property.
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51
3.2 No Change. Since December 31, 1997 there has been no
development or event which has had or could reasonably be expected to have a
Material Adverse Effect.
3.3 Corporate Existence; Compliance with Law. Each of the
Borrower 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, in each case described in the foregoing clauses (c) and (d), except to the
extent that the failure to be so qualified and in good standing, or 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, in all
material respects, been obtained or made and are in full force and effect or
waived, (ii) the filings referred to in Section 3.19 and (iii) state consents,
authorizations, filings, and notices which have, in all material respects, been
obtained or made and are in full force and effect. Each Loan Document has been
duly executed and delivered on behalf of each Loan Party which is a party
thereto. This Agreement constitutes, and each other Loan Document upon execution
will constitute, a legal, valid and binding obligation of each Loan Party which
is a 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 the Borrower 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 or pursuant to the
Security Documents and Liens permitted by Section 6.3), except to the extent
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52
that any such violations (individually or in the aggregate) could not reasonably
be expected to have a Material Adverse Effect.
3.6 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the Borrower, threatened by or against the Borrower 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) which could reasonably be expected to
have a Material Adverse Effect. Set forth on Schedule 3.6 is a description of
certain litigation which could not reasonably be expected to have a Material
Adverse Effect.
3.7 No Default. Neither the Borrower nor any of its
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect which 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 the Borrower and its
Restricted Subsidiaries has title in fee simple to, or a valid leasehold
interest in, all its real property, and good title to, or a valid leasehold
interest in, all its other Property, except to the extent that the failure to
have such title or interest (individually or in the aggregate) could not
reasonably be expected to have a Material Adverse Effect, and none of such
Property is subject to any Lien except as permitted by Section 6.3.
3.9 Intellectual Property. The Borrower and each of its
Restricted Subsidiaries owns, or is licensed to use, all Intellectual Property
necessary for the conduct of its business as currently conducted, except for
those which the failure to own or license could not reasonably be expected to
have a Material Adverse Effect. 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 that
could reasonably be expected to have a Material Adverse Effect, nor does the
Borrower know of any valid basis for any such claim. The use of Intellectual
Property by the Borrower and its Restricted Subsidiaries does not infringe on
the rights of any Person, except for infringements that, in the aggregate, could
not reasonably be expected to have a Material Adverse Effect.
3.10 Taxes. Each of the Borrower and each of its Subsidiaries
has filed or caused to be filed all Federal, state and other material tax
returns which 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 such tax returns, taxes,
fees or other charges (i) the amount or validity of which 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 the Borrower
or its Subsidiaries, as the case may be or (ii) which if not filed or paid,
could not reasonably be expected to have a Material Adverse Effect); no tax Lien
has been filed, and, to the knowledge of the Borrower, no claim is being
asserted, with respect to any such tax, fee or other charge (other than with
respect to any such tax, fee or other charge the amount or validity of which is
then
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53
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 the
Borrower or its Subsidiaries, as the case may be, and which could not reasonably
be expected to have a Material Adverse Effect).
3.11 Federal Regulations. No part of the proceeds of any Loans
will be used for "purchasing" 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 which 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 referred to in Regulation U.
3.12 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, except where the failure to so comply could not be
reasonably expected to have a Material Adverse Effect. No termination of a
Single Employer Plan has occurred except where such termination could not
reasonably be expected to have a Material Adverse Effect, 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, except to the extent that any such excess could not
reasonably be expected to have a Material Adverse Effect. Neither the Borrower
nor any Commonly Controlled Entity has had a complete or partial withdrawal from
any Multiemployer Plan which 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, in each
case, except where such liability could not reasonably be expected to have a
Material Adverse Effect. No such Multiemployer Plan is in Reorganization or
Insolvent.
3.13 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) which limits its ability to incur Indebtedness.
3.14 Subsidiaries. The Subsidiaries listed on Schedule 3.14
constitute all the Subsidiaries of the Borrower at the date hereof.
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54
3.15 Use of Proceeds. The proceeds of the Tranche A Term
Loans, the Revolving Credit Loans, the Delayed Draw Term Loans and the
Conversion Term Loans will be used to finance capital expenditures, including,
but not limited to, the purchase of equipment under the Nortel Purchase
Agreement, and for working capital and other general corporate purposes of the
Borrower and its Subsidiaries; provided, that $20,000,000 of the proceeds of
such Loans, and 100% of the proceeds of the Optional Term Loans, shall be used
solely to finance the acquisition, construction, expansion or development of
Telecommunications Assets such that such Loans will constitute
Telecommunications Assets Debt within the meaning of Section 101 of the Senior
Discount Note Indenture.
3.16 Absence of Material Obligations. None of LeasingCo,
LicenseCo or AssetCo has any material obligations or liabilities other than in
connection with (a) the Guarantee and Collateral Agreement and the other Loan
Documents to which it is a party, (b) in the case of LicenseCo, its obligations
to comply with the requirements of the FCC Licenses held by it, and (c) in the
case of each of LeasingCo and AssetCo, any lease or license in respect of real
or personal property which LeasingCo or AssetCo, as the case may be, has entered
into or assumed in the ordinary course of business and other obligations and
liabilities incurred in the ordinary course of business which are incident to
being the owner, lessee or licensee of real or personal property.
3.17 Environmental Matters. Except to the extent that the
failure of the following statements to be true could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect:
(a) The facilities and properties, or portion thereof, owned
by the Borrower or any of its Subsidiaries, and to the Borrower's knowledge,
those leased by the Borrower and its Subsidiaries (the "Properties") do not
contain, and have not previously contained, any Materials of Environmental
Concern in amounts or concentrations or under circumstances which (i) constitute
or constituted a violation by the Borrower or any of its Subsidiaries, or (ii)
could give rise to liability for the Borrower or any of its Subsidiaries under
any Environmental Law.
(b) The Properties owned by the Borrower and its Subsidiaries,
and to the Borrower's knowledge those leased by the Borrower and its
Subsidiaries, and all operations of the Borrower or any of its Subsidiaries at
the Properties are in material compliance, and have in the last five years been
in material 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 operated by the
Borrower or any of its Subsidiaries (the "Business") which could materially
interfere with the continued operation of the Properties. Neither the Borrower
nor any of its Subsidiaries has assumed any liability of any other Person under
Environmental Laws.
(c) Neither 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
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55
of the Properties or the Business, nor does the Borrower have knowledge or
reason to believe that any such notice will be received or is being threatened.
(d) 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 which 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.
(e) No judicial proceeding or governmental or administrative
action is pending or, to the knowledge of the Borrower, threatened, under any
Environmental Law to which the Borrower or any Subsidiary is or could reasonably
be expected to 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.
(f) There has been no release or threat of release of
Materials of Environmental Concern at or from the Properties, or arising from or
related to the operations of the Borrower 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.
3.18 Accuracy of Information, etc. No statement or information
(other than estimates and projections) contained in this Agreement, any other
Loan Document, the Confidential Information Memorandum or any other document,
certificate or written statement furnished to the Administrative Agent or the
Lenders or any of them, by or on behalf (with the consent, or at the direction,
of the Borrower) of any Loan Party 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 (or,
in the case of the Confidential Information Memorandum, as of the date of this
Agreement), any untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements contained herein or
therein not materially misleading in light of the circumstances under which such
statements were made. 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, in the Confidential Information Memorandum 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. To the extent that the foregoing representation and
warranty relates to the
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56
Confidential Information Memorandum, it is limited as set forth in the letter,
dated May 14, 1998, from the Borrower to the Chase Securities Inc. contained in
the Confidential Information Memorandum.
3.19 Security Documents. The Guarantee and Collateral
Agreement is effective to create in favor of the Collateral Agent 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 Collateral Agent, and in the case of the other
Collateral constituting Direct-Lien Assets described in the Guarantee and
Collateral Agreement, when financing statements in appropriate form are filed in
the offices specified on Schedule 3.19(a), the Guarantee and Collateral
Agreement shall, subject to Section 3.2 thereof, constitute a fully perfected
Lien on, 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.
3.20 Solvency. Assuming that the provisions of Sections 2.1(b)
and 2.2 of the Guarantee and Collateral Agreement are effective and satisfy the
requirements of applicable laws, as of the Closing Date, the Borrower and its
Subsidiaries after giving effect to the incurrence of the Indebtedness of the
Tranche A Term Loans and the Revolving Credit Loans (assuming full utilization
of such Loans), will be Solvent.
3.21 FCC and State Regulatory Compliance. (a) The Borrower and
LicenseCo are in compliance with the Communications Act and all applicable
communications laws and regulations of the States identified on Schedule 3.21(c)
(collectively, "States"), except to the extent that the failure to be in
compliance could not reasonably be expected to have a Material Adverse Effect.
(b) The Borrower and its Subsidiaries hold the FCC Licenses
identified in Schedule 4.1(f). Except as described in Schedule 3.21, each of
such FCC Licenses is in full force and effect and has not been revoked,
suspended, canceled, or modified in any adverse way and, except as may be set
forth on Schedule 4.1(f), is not subject to any conditions or requirements that
are not generally imposed by the FCC upon the holders of such licenses. The FCC
Licenses listed in Schedule 4.1(f) are the only FCC Licenses required for the
conduct of the business of the Borrower as presently conducted.
(c) The Borrower and its Subsidiaries have all permits,
certificates, licenses, tariff approvals and other authorizations (collectively
"State Permits") from the States required (i) to conduct its current business;
and (ii) except as identified in Schedule 3.21(c), to conduct business as a
competitive local exchange carrier, long distance service provider, and Internet
access provider as identified in such Schedule.
(d) Except as described on Schedule 3.21, (i) the Borrower has
no knowledge of any investigation, notice of apparent liability, violation,
forfeiture or other order or complaint issued by or before the FCC or the
States, or of any other proceedings (other than
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57
proceedings relating to the wireless communications industries generally) of or
before the FCC or the States, which could reasonably be expected to have a
Material Adverse Effect; and (ii) no proceedings are pending or, to the
knowledge of the Borrower, threatened, to revoke or limit any FCC License or
State Permit, except, in each case, those the absence or violation of which do
not and could not reasonably be expected to have a Material Adverse Effect.
(e) Except as described on Schedule 3.21, the Borrower has no
knowledge of the occurrence of any event which (i) results in, or after notice
or lapse of time or both would result in, revocation, suspension, adverse
modifications, non-renewal, impairment, restriction or termination of, or order
of forfeiture with respect to, any State Permit or FCC License in any respect
that could reasonably be expected to have a Material Adverse Effect, or (ii)
affects or could reasonably be expected in the future to affect any of the
rights of the Borrower or LicenseCo under any State Permit or FCC License in any
respect that could reasonably be expected to have a Material Adverse Effect.
(f) Each of the Borrower and LicenseCo has duly filed in a
timely manner all material filings, reports, applications, documents,
instruments and information required to be filed by it under the Communications
Act and all applicable State communications laws and regulations, and all such
filings were when made true, correct and complete in all material respects,
except to the extent that the failure to comply or the failure of any of the
statements made in this paragraph to be true and correct could not reasonably be
expected to have a Material Adverse Effect.
3.22 Collateral. To the extent permitted by law and required
by Section 5.10 with respect to after-acquired assets, the Collateral Agent
holds pursuant to the Security Documents a legal, valid, enforceable and,
subject to the provisions of Section 3.2 of the Guarantee and Collateral
Agreement, fully perfected Lien on all right, title and interest of the Borrower
and each Restricted Subsidiary in any asset (other than Excluded Assets) and the
proceeds thereof, and none of such assets is subject to any other Lien (except
for Liens permitted by Section 6.3). None of the assets held by any Special
Purpose Subsidiary is subject to any Lien other than Liens permitted under
subsections 6.3(a), (b), (d), (e), (h), (i) or (k).
3.23 Year 2000. The Borrower has no reason to believe that a
Material Adverse Effect will occur as a result of the failure of computer
hardware or software used in the business or operations of the Borrower and its
Subsidiaries to function in the receipt, processing, storage or other
utilization of data in the case of dates or time periods occurring after
December 31, 1999 at least as effectively as in the case of dates or time
periods occurring prior to January 1, 2000. Any reprogramming required to permit
the proper functioning, in and following the year 2000, of the Borrower's
computer hardware and software is reasonably expected to be completed by June
30, 1999, except to the extent that the Borrower has given notice to the
Administrative Agent that such reprogramming will not be completed by such date.
The cost to the Borrower of such reprogramming could not reasonably be expected
to have a Material Adverse Effect.
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58
SECTION 4. CONDITIONS PRECEDENT
4.1 Conditions to Initial Loans. The agreement of each Lender
to make the initial Loan requested to be made by it is subject to the
satisfaction, prior to or concurrently with the making of such Loan, of the
following conditions precedent:
(a) Credit Agreement and Notes. The Administrative Agent shall
have received (i) this Agreement, executed and delivered by a duly
authorized officer of the Borrower, and (ii) for the account of each
relevant Lender, Notes conforming to the requirements hereof and
executed and delivered by a duly authorized officer of the Borrower.
(b) Collateral Agency and Intercreditor Agreement. The
Collateral Agency and Intercreditor Agreement shall have been duly
executed and delivered by the parties thereto.
(c) Security Documents. The Collateral Agent shall have
received, with a copy for the Administrative Agent, the Guarantee and
Collateral Agreement, executed and delivered by a duly authorized
officer of the Borrower and each Subsidiary Guarantor.
(d) Financial Statements. The Administrative Agent shall have
received, with a copy for each Lender, (i) audited consolidated
financial statements of the Borrower for the fiscal year ended on
December 31, 1997 and (ii) unaudited interim consolidated financial
statements of the Borrower for each quarterly period ended subsequent
to the date of the latest financial statements delivered pursuant to
clause (i) of this subsection as to which such financial statements are
available.
(e) Structure. Any material change in the capital, tax and
legal structure of the Borrower and its Subsidiaries shall be
reasonably satisfactory to the Administrative Agent.
(f) FCC Licenses. The FCC Licenses listed in Schedule 4.1(f)
shall be in full force and effect and shall be held by LicenseCo.
(g) Approvals. All governmental and third party approvals
necessary in connection with the continuing operations of the Borrower
and its Subsidiaries and the transactions contemplated hereby shall
have been obtained and be in full force and effect.
(h) Related Agreements. The Administrative Agent shall have
received, with a copy for each Lender, true and correct copies,
certified as to authenticity by the Borrower, of the Nortel Purchase
Agreement and such other documents or instruments as may be reasonably
requested by the Administrative Agent, including, without limitation, a
copy of the Senior Discount Note Indenture and any other debt
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59
instrument, security agreement or other material contract to which the
Loan Parties may be a party.
(i) 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, on or before the Closing Date. All such
amounts may be paid with proceeds of Loans, if any, made on the Closing
Date and, in such case, will be reflected in the funding instructions
given by the Borrower to the Administrative Agent on or before the
Closing Date.
(j) Business Plan. The Lenders shall have received the
business plan for fiscal years 1998-2007 and written analysis of the
business and prospects of the Borrower and its Subsidiaries for the
period from the Closing Date through the final maturity of the Term
Loans (all of which was provided in the Confidential Information
Memorandum).
(k) Lien Searches. The Administrative Agent shall have
received the results of a recent lien search in each of the
jurisdictions reasonably requested by the Administrative Agent, and
such search shall reveal no liens on any of the assets of the Borrower
or its Restricted Subsidiaries except for liens permitted by Section
6.3.
(l) Closing Certificate. The Administrative Agent shall have
received, with a copy 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.
(m) Legal Opinions. The Administrative Agent shall have
received the following executed legal opinions:
(i) the legal opinion of Skadden Arps Slate Meagher &
Flom LLP, special New York counsel to the Borrower and its
Subsidiaries, substantially in the form of Exhibit F-1;
(ii) the legal opinion of Skadden Arps Slate Meagher &
Flom LLP, special FCC counsel to the Borrower and its
Subsidiaries, substantially in the form of Exhibit F-2;
(iii) the legal opinion of Laurence E. Harris, Esq.,
general counsel of the Borrower and its Subsidiaries,
substantially in the form of Exhibit F-3; and
(iv) the legal opinion of Dow, Lohnes & Albertson,
special FCC counsel to the Lenders, substantially in the
form of Exhibit F-4.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent
may reasonably require.
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60
(n) Pledged Stock; Stock Power; Pledged Notes . The Collateral
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
Collateral Agent pursuant to the Guarantee and Collateral Agreement
endorsed (without recourse) in blank (or accompanied by an executed
transfer form in blank satisfactory to the Collateral Agent) by the
pledgor thereof.
(o) Filings, Registrations and Recordings. Each document
(including, without limitation, 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 Collateral
Agent 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.
4.2 Conditions to Each Loan. The agreement of each Lender to
make any Loan requested to be made by it on any date (including, without
limitation, 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 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.
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
The Borrower hereby agrees that, so long as any Commitment
remains in effect or any Loan or other amount is owing to any Lender or any
Agent hereunder, the Borrower shall and, except in the case of delivery of
financial statements and information, reports and notices, shall cause each of
its Restricted 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 the Borrower, a copy of the audited
consolidated balance sheet, and (if there existed Unrestricted
Subsidiaries during such period) unaudited consolidating
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61
balance sheet of the Borrower and its consolidated Subsidiaries as at
the end of such year and the related audited consolidated statements
of income and of cash flows, and (if there existed Unrestricted
Subsidiaries during such period) unaudited consolidating 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, in
the case of such audited statements, without a "going concern" or like
qualification or exception, or qualification arising out of the scope
of the audit, by Ernst & Young LLP or other independent certified
public accountants of nationally recognized standing; and
(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 the Borrower, the unaudited consolidated and (if there
existed Unrestricted Subsidiaries during such period) consolidating
balance sheet of the Borrower and its consolidated Subsidiaries as at
the end of such quarter and the related unaudited consolidated and (if
there existed Unrestricted Subsidiaries during such period)
consolidating 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);
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 (f), 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) a Compliance Certificate containing all
information necessary for determining compliance by the Borrower and
its Restricted Subsidiaries with the provisions of this Agreement
referred to therein as of the last day of the fiscal quarter or fiscal
year of the Borrower, as the case may be;
<PAGE>
62
(c) as soon as available, and in any event no later than 60
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 the Borrower and its
Subsidiaries as of the end of the following fiscal year, and the
related consolidated statements of projected cash flow, projected
changes in financial position and projected income), and, as soon as
available, revisions (which are deemed to be significant in
management's reasonable judgment and have been presented to, and
approved by, the board of directors of the Borrower), 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 good faith estimates, information and assumptions believed
by management of the Borrower to be reasonable 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 the
Borrower, a narrative discussion and analysis of the financial
condition and results of operations of the Borrower 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 six Business Days after the same are sent, copies
of all financial statements and reports which the Borrower sends to the
holders of any class of its debt securities or public equity securities
and, within six Business Days after the same are filed, copies of all
financial statements and reports which the Borrower may make to, or
file with, the Securities and Exchange Commission or any successor or
analogous Governmental Authority; 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 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 the Borrower or its Restricted Subsidiaries, as the
case may be, or where the failure to so pay, discharge or satisfy such
obligation (individually or in the aggregate) could not reasonably be expected
to have a Material Adverse Effect.
5.4 Conduct of Business and Maintenance of Existence, etc. (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
(including all FCC Licenses), 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
<PAGE>
63
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, except when the failure to do so could not
reasonably be expected to have a Material Adverse Effect, and (b) maintain with
financially sound and reputable insurance companies insurance on all its
Property in at least such 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)
upon reasonable prior notice, 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 the Borrower and its Subsidiaries with officers and employees
of the Borrower 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 the Borrower or any of its Restricted Subsidiaries that
could reasonably be expected to have a Material Adverse Effect or (ii)
litigation, investigation or proceeding which may exist at any time
between the Borrower or any of its Subsidiaries and any Governmental
Authority, which could reasonably be expected to have a Material
Adverse Effect;
(c) any litigation or proceeding affecting the Borrower or any
of its Restricted Subsidiaries in which the amount involved is
$10,000,000 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 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
<PAGE>
64
to the withdrawal from, or the termination, Reorganization or
Insolvency of, any Plan; and
(e) any development or event which has had or could, in the
reasonable judgment of the Borrower, be expected to have a Material
Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Borrower 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, except, in
any such case, to the extent that the failure to so could not 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 except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect and promptly comply in all material
respects with all lawful orders and directives of all Governmental Authorities
regarding Environmental Laws, except to the extent that the same are being
contested in good faith by appropriate proceedings and the pendency of such
proceedings could not be reasonably expected to have a Material Adverse Effect.
5.9 Interest Rate Protection. If at any time more than 50% of
the Funded Debt of the Borrower and its Restricted Subsidiary bears interest at
a floating rate and is not covered by any Hedge Agreement effectively providing
a fixed or capped rate therefor for a period of at least two years thereafter,
the Borrower will, within 60 days, enter into Hedge Agreements to the extent
necessary to provide that at least 50% of the aggregate principal amount of the
Funded Debt of the Borrower and its Restricted Subsidiaries is subject to either
a fixed interest rate or interest rate protection for a period of not less than
two years, which Hedge Agreements shall have terms and conditions reasonably
satisfactory to the Administrative Agent.
5.10 After-Acquired Assets. (a) Promptly (i) transfer to
LicenseCo any FCC License held by the Borrower or any Restricted Subsidiary and
(ii) at the option of the Borrower, either (A) transfer (I) to AssetCo any
Personal Property Assets (other than Direct-Lien Assets) hereafter acquired by
the Borrower or any Restricted Subsidiary and any such Personal Property Assets
of any Person that becomes a Restricted Subsidiary or is merged with or into or
consolidated with the Borrower or any Restricted Subsidiary (in each case other
than any such Personal Property Assets constituting Excluded Assets), (II) to
LeasingCo any Real Property Assets hereafter acquired by the Borrower or any
Restricted Subsidiary and any Real Property Assets of any Person that becomes a
Restricted Subsidiary or is merged with or into or consolidated with the
Borrower or any Restricted Subsidiary (in each case other than any such Real
Property Assets constituting Excluded Assets) and (III) to the Borrower any
Direct-Lien Assets hereafter acquired by any Restricted Subsidiary and any
<PAGE>
65
Direct-Lien Assets of any Person that becomes a Restricted Subsidiary or is
merged with or into or consolidated with the Borrower or any Restricted
Subsidiary (in each case other than any Direct-Lien Assets constituting Excluded
Assets) or (B) create on terms reasonably acceptable to the Administrative Agent
a perfected first priority security interest in favor of the Collateral Agent in
such Personal Property Assets, Real Property Assets or Direct-Lien Assets, in
each case, other than Excluded Assets (which security interest may be subject to
any Liens permitted by Section 6.3 (other than those referred to in the
definition of the term "Excluded Assets)).
(b) Promptly create in favor of the Collateral Agent in
accordance with the terms of the Security Documents a first priority perfected
security interest (subject to any Liens permitted by Section 6.3) in any
Direct-Lien Assets of the Borrower or any Restricted Subsidiary (other than
Excluded Assets) that are not subject to such a security interest, including
with respect to Direct-Lien Assets that are acquired by the Borrower or any
Restricted Subsidiary after the date hereof and Direct-Lien Assets of any Person
that becomes a Restricted Subsidiary or is merged with or into or consolidated
with the Borrower or any Restricted Subsidiary.
(c) Promptly create a mortgage on terms reasonably acceptable
to the Administrative Agent in favor of the Collateral Agent on any fee simple
title in real property having at the time of acquisition thereof a purchase
price or fair market value greater than $5,000,000 of the Borrower or any
Restricted Subsidiary (other than Excluded Assets) that are not so mortgaged,
including any such properties that are acquired by the Borrower or any
Restricted Subsidiary after the date hereof and any such properties of any
Person that becomes a Restricted Subsidiary or is merged with or into or
consolidated with the Borrower or any Restricted Subsidiary.
(d) Promptly cause (i) all Capital Stock of any Subsidiary
(including, without limitation, any Subsidiary which shall be acquired by the
Borrower) held by the Borrower or its Restricted Subsidiaries to be pledged to
the Collateral Agent as Collateral; provided, that (x) only 65% of the Capital
Stock of any Excluded Foreign Subsidiary which is a Subsidiary of the Borrower
or any Domestic Subsidiary, and none of the Capital Stock of any Subsidiary of
an Excluded Foreign Subsidiary, shall be required be pledged and (ii) each
Restricted Subsidiary to become a party to the Guarantee and Collateral
Agreement and (y) the Capital Stock of Associated Communications Deutschland
GmbH shall not be required to be pledged.
(e) Promptly execute, acknowledge and deliver any and all
further documents, financing statements, agreements and instruments, and
thereafter register, file or record or take further actions (including filing
Uniform Commercial Code and other financing statements, mortgages and deeds of
trust), in each case at the Borrower's sole expense, that may be required under
applicable law, or that the Required Lenders or the Administrative Agent may
reasonably request, to effectuate the transactions contemplated by the Loan
Documents and to grant, preserve, protect and perfect the validity and first
priority of the Liens created or intended to be created by the Security
Documents.
<PAGE>
66
5.11 Limitations on Transfer of LeasingCo. Use commercially
reasonable efforts to cause all Teligent Leases to contain no term or provision
which would limit the right or ability of the Collateral Agent to foreclose
upon, or to transfer after foreclosure, the stock of LeasingCo pledged pursuant
to the Guarantee and Collateral Agreement.
SECTION 6. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as any Commitment
remains in effect or any Loan or other amount is owing to any Lender or any
Agent hereunder, the Borrower shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly:
6.1 Financial Condition Covenants.
-----------------------------
(a) Consolidated Total Debt to Consolidated Adjusted Capitalization.
Permit the ratio of Consolidated Total Debt to Consolidated Adjusted
Capitalization during any test period set forth below to be greater than the
ratio set forth below opposite such test period:
<TABLE>
<CAPTION>
Test Period Ratio
----------- -----
<S> <C>
Closing Date - 12/31/98 60%
1/1/99 - 12/31/99 65%
1/1/00 - thereafter 75%
</TABLE>
(b) Consolidated Secured Debt to Consolidated Adjusted Capitalization.
Permit the ratio of Consolidated Secured Debt to Consolidated Adjusted
Capitalization during any test period set forth below to be greater than the
ratio set forth below opposite such test period:
<TABLE>
<CAPTION>
Test Period Ratio
----------- -----
<S> <C>
Closing Date - 12/31/98 30%
1/1/99 - 12/31/99 40%
1/1/00 - thereafter 45%
</TABLE>
(c) Minimum Consolidated Total Revenue. Permit Consolidated Total
Revenue for any fiscal quarter set forth below to be less than the amount set
forth opposite such fiscal quarter below:
<TABLE>
<CAPTION>
Fiscal Quarter Ending Amount
--------------------- ------
<S> <C>
9/30/99 [redacted]
12/31/99 [redacted]
3/31/00 [redacted]
6/30/00 [redacted]
9/30/00 [redacted]
12/31/00 [redacted]
</TABLE>
<PAGE>
67
(d) Business Lines Installed and Billed. Permit the number of Business
Lines Installed and Billed on the last day of any fiscal quarter set forth below
to be less than the number set forth opposite such fiscal quarter below:
<TABLE>
<CAPTION>
Fiscal Quarter Ending Number
--------------------- ------
<S> <C>
9/30/99 [redacted]
12/31/99 [redacted]
3/31/00 [redacted]
6/30/00 [redacted]
9/30/00 [redacted]
12/31/00 [redacted]
3/31/01 [redacted]
6/30/01 [redacted]
9/30/01 [redacted]
12/31/01 [redacted]
3/31/02 [redacted]
6/30/02 [redacted]
9/30/02 [redacted]
12/31/02 [redacted]
</TABLE>
(e) Consolidated Total Debt to Consolidated Adjusted Total Revenue
Ratio. Permit the ratio of (i) the amount of Consolidated Total Debt on any date
during any test period set forth below to (ii) Consolidated Adjusted Total
Revenue for the period ending on the last day of the fiscal quarter most
recently ended prior to such date, to be greater than the ratio set forth
opposite such test period below:
<TABLE>
<CAPTION>
Test Period Ratio
----------- -----
<S> <C>
12/31/99-3/30/00 [redacted]
3/31/00-6/29/00 [redacted]
6/30/00-9/29/00 [redacted]
9/30/00-12/30/00 [redacted]
12/31/00-3/30/01 [redacted]
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
3/31/01-6/29/01 [redacted]
6/30/01-9/29/01 [redacted]
9/30/01-12/30/01 [redacted]
12/31/01-3/30/02 [redacted]
3/31/02-6/29/02 [redacted]
6/30/02-9/29/02 [redacted]
9/30/02-12/30/02 [redacted]
12/31/02-3/30/03 [redacted]
</TABLE>
(f) Capital Expenditures. Permit the amount of Capital Expenditures
during any fiscal year set forth below to be greater than the amount set forth
opposite such fiscal year below:
<PAGE>
68
<TABLE>
<CAPTION>
Fiscal Year Ending Amount
------------------ ------
<S> <C>
12/31/98 [redacted]
12/31/99 [redacted]
12/31/00 [redacted]
12/31/01 [redacted]
Per annum thereafter [redacted]
</TABLE>
Amounts not expended in any fiscal year may be carried over to
subsequent fiscal years. In addition to the amounts set forth above, Capital
Expenditures may be funded from the Unused Proceeds Basket.
(g) Consolidated Secured Debt to Consolidated Adjusted EBITDA Ratio.
Permit the ratio of (i) the amount of Consolidated Secured Debt on any date
during any test period set forth below to (ii) Consolidated Adjusted EBITDA for
the period ending on the last day of the fiscal quarter most recently ended
prior to such date, to be greater than the ratio set forth opposite such test
period below:
<TABLE>
<CAPTION>
Test Period Ratio
----------- -----
<S> <C>
12/31/02-3/30/03 9.0
3/31/03-6/29/03 8.5
6/30/03-9/29/03 7.5
9/30/03-12/30/03 6.5
12/31/03-3/30/04 5.0
3/31/04-6/29/04 4.8
6/30/04-9/29/04 4.3
9/30/04-12/30/04 3.6
12/31/04-thereafter 3.0
</TABLE>
(h) Consolidated Total Debt to Consolidated Adjusted EBITDA Ratio.
Permit the ratio of (i) the amount of Consolidated Total Debt on any date during
any test period set forth below to (ii) Consolidated Adjusted EBITDA for the
period ending on the last day of the fiscal quarter most recently ended prior to
such date, to be greater than the ratio set forth opposite such test period
below:
<TABLE>
<CAPTION>
Test Period Ratio
----------- -----
<S> <C>
12/31/03-3/30/04 8.00
3/31/04-6/29/04 7.75
6/30/04-9/29/04 7.50
9/30/04-12/30/04 7.00
12/31/04-3/30/05 6.00
3/31/05-6/29/05 6.00
6/30/05-9/29/05 5.50
</TABLE>
<PAGE>
69
<TABLE>
<CAPTION>
<S> <C>
9/30/05-12/30/05 5.00
12/31/05 - thereafter 4.00
</TABLE>
(i) Consolidated Interest Coverage Ratio. Permit the Consolidated
Interest Coverage Ratio for any period of four consecutive fiscal quarters
ending during any Test Period set forth below to be less than the ratio set
forth opposite such test period below:
<TABLE>
<CAPTION>
Test Period Ratio
----------- -----
<S> <C>
12/31/03-3/30/04 1.5
3/31/04-6/29/04 1.6
6/30/04-9/29/04 1.8
9/30/04-12/30/04 1.9
12/31/04-thereafter 2.0
</TABLE>
(j) Consolidated Fixed Charge Coverage Ratio. Permit the Consolidated
Fixed Charge Coverage Ratio for any period of four consecutive fiscal quarters
ending during any Test Period set forth below to be less than the ratio set
forth opposite such test period below:
<TABLE>
<CAPTION>
Test Period Ratio
----------- -----
<S> <C>
12/31/00 - 9/30/04 1.10
12/31/04 - thereafter 1.25
</TABLE>
6.2 Limitation on Indebtedness and Preferred Stock. Create,
incur, issue, assume or suffer to exist any Indebtedness or preferred stock,
except:
(a) Indebtedness of any Loan Party pursuant to any Loan
Document;
(b) Indebtedness of the Borrower to any Subsidiary and of any
Subsidiary Guarantor (other than, except as permitted by Section
6.7(c), any Special Purpose Subsidiary) to the Borrower or any other
Subsidiary;
(c) Indebtedness (including, without limitation, Capital Lease
Obligations) secured by Liens permitted by Section 6.3(g); provided,
that not more than $25,000,000 of such Indebtedness may be incurred to
finance the acquisition of Network Assets;
(d) Indebtedness outstanding on the date hereof and listed on
Schedule 6.2(d);
(e) Guarantee Obligations made in the ordinary course of
business by the Borrower or any of its Restricted Subsidiaries of
obligations of the Borrower or any Restricted Subsidiary, including,
without limitation, reimbursement obligations in respect of Permitted
Letters of Credit;
<PAGE>
70
(f) Indebtedness of the Borrower under Vendor Credit
Facilities, provided, that (x) the aggregate amount of such
Indebtedness, together with the aggregate outstanding principal amount
of Optional Term Loans, shall not exceed $550,000,000 prior to December
31, 2001 or $900,000,000 thereafter, (y) after giving effect to the
incurrence thereof, the Borrower shall be in Pro Forma Compliance and
(z) if such Indebtedness is to be secured, such Indebtedness may be
secured pursuant to the Security Documents if such Indebtedness is
designated as "Additional Secured Obligations" under the Collateral
Agency and Intercreditor Agreement in the manner described in Section 4
thereof;
(g) Unsecured Indebtedness or preferred stock of the Borrower;
provided, that (x) such Indebtedness or preferred stock issued or
incurred after the date hereof generating the first $500,000,000 in Net
Cash Proceeds shall provide for interest or dividends thereon to be
paid in kind (or to be paid out of amounts deposited in escrow or
pledged as collateral from the proceeds of thereof) for at least three
years after the date of incurrence or issuance thereof (it being
understood that if a portion of the cash proceeds of any such issuance
or incurrence is deposited in escrow or as collateral to pay interest
or dividends, such portion shall not be considered to constitute "Net
Cash Proceeds") and (y) after giving effect to the incurrence thereof,
the Borrower shall be in Pro Forma Compliance;
(h) Indebtedness assumed by the Borrower or any Restricted
Subsidiary in connection with any Investment permitted by Section 6.7,
provided that such indebtedness shall be treated as a portion of the
consideration for such Investment for purposes of the Investment
limitations set forth under Section 6.7;
(i) Indebtedness of the Borrower to any Permitted Holder,
provided, that (x) such indebtedness is unsecured, (y) such
Indebtedness matures after the final maturity of the Loans and is
subordinated to the Loans on the terms set forth in Annex B or on terms
approved by the Majority Lenders and (z) after giving effect to the
incurrence thereof, the Borrower shall be in Pro Forma Compliance;
(j) Permitted Refinancing Indebtedness; and
(k) Indebtedness under Hedge Agreements (i) required by
Section 5.9, or (ii) entered into in the ordinary course of business of
the Borrower and not for purposes of speculation.
6.3 Limitation on 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 which are being contested
in good faith by appropriate proceedings, provided that adequate
reserves with respect thereto are
<PAGE>
71
maintained on the books of the Borrower or its Subsidiaries, as the
case may be, in conformity with GAAP;
(b) landlords', carriers', warehousemen's, mechanics',
materialmen's, repairmen's, statutory or other like Liens which 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), utilities, 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 which, in the
aggregate, do not 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 Restricted Subsidiaries;
(f) Liens in existence on the date hereof listed on Schedule
6.3(f), securing existing Indebtedness permitted by Section 6.2(d) or
Permitted Refinancing Indebtedness which refinances such existing
Indebtedness, provided that no such Lien is spread to cover any
additional Property after the Closing Date;
(g) Liens securing Indebtedness of the Borrower or any
Restricted Subsidiary incurred pursuant to Section 6.2(c) to finance
the acquisition of fixed or capital assets, provided that (i) such
Liens shall be created within 90 days from the acquisition of such
fixed or capital assets and (ii) such Liens do not at any time encumber
any Property other than the Property financed by such Indebtedness;
(h) Liens created pursuant to the Security Documents securing
the Obligations and Indebtedness incurred pursuant to Section 6.2(f);
(i) any interest or title of a lessor under any lease entered
into by the Borrower or any Restricted Subsidiary in the ordinary
course of its business and covering only the assets so leased and any
statutory or common law Liens of any such lessors;
(j) liens on cash and cash equivalents deposited to pay
interest or dividends in respect of Indebtedness or preferred stock
incurred or issued pursuant to Section 6.2(g);
<PAGE>
72
(k) Liens on any assets acquired in connection with an
Investment permitted by Section 6.7, provided, that such Liens existed
at the time of consummation of such Investment, were not created in
contemplation thereof and are not spread to cover other assets; and
(l) Liens not otherwise permitted by this Section 6.3 so long
as (i) the aggregate outstanding principal amount of the obligations
secured thereby (determined, in the case of each such Lien, as of the
date such Lien is incurred) does not exceed (as to the Borrower and all
Restricted Subsidiaries) $10,000,000 at any one time and (ii) the fair
market value of the assets encumbered thereby, as determined in the
reasonable judgment of the Borrower, does not exceed 133-1/3% of the
amount of the obligations secured thereby.
6.4 Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, liquidate, dissolve or wind up and terminate
itself (or suffer any liquidation, dissolution, winding up or termination), or
Dispose of all or substantially all of its property, business or assets, except
that, so long as, after giving effect thereto, the Borrower would be in Pro
Forma Compliance:
(a) any Restricted Subsidiary (other than any Special Purpose
Subsidiary) may be merged or consolidated with or into the Borrower
(provided that the Borrower shall be the continuing or surviving
entity) or with or into any one or more other Restricted Subsidiaries
(other than, if such Restricted Subsidiary has any Indebtedness or
other liabilities, any Special Purpose Subsidiary) (provided that if
such Restricted Subsidiary is merged or consolidated with or into one
or more Wholly Owned Restricted Subsidiaries, the Wholly Owned
Restricted Subsidiary or Wholly Owned Restricted Subsidiaries shall be
the continuing or surviving entity or entities);
(b) any Restricted Subsidiary may Dispose of any or all of its
assets (upon voluntary liquidation or otherwise) to the Borrower or any
one or more other Restricted Subsidiaries; provided that (i) the
liabilities of such selling, leasing, transferring or disposing
Restricted Subsidiary (other than a Special Purpose Subsidiary) are not
transferred to or assumed by, and do not otherwise become liabilities
of, any Special Purpose Subsidiary, (ii) if the Restricted Subsidiary
effecting such Disposition is a Special Purpose Subsidiary, such
disposition shall be to another Special Purpose Subsidiary, (iii) the
FCC Licenses must at all times be owned by LicenseCo, and (iv)
liabilities in respect of leases or licenses of real property may not
be transferred by LeasingCo to any other Special Purpose Subsidiary,
nor may non-real property assets be transferred to LeasingCo;
(c) the Borrower or any Restricted Subsidiary (other than any
Special Purpose Subsidiary) may effect pursuant to a merger or
consolidation any Investment permitted by Section 6.7 so long as (i) in
the case of any merger or consolidation involving a Person engaged in a
business other than the telecommunications business and/or any
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businesses related thereto, an Unrestricted Subsidiary is the surviving
entity (treating all assets of the Borrower or any Restricted
Subsidiary which would become assets of such Unrestricted Subsidiary in
connection with such merger or consolidation as consideration paid in
connection with such Investment), and (ii) in the case of any Person
not engaged in a business other than the telecommunications business
and/or any businesses related thereto, the Borrower or such Restricted
Subsidiary is the surviving entity.
6.5 Limitation on Disposition of Property. Dispose of any
Property (including, without limitation, receivables and leasehold interests),
whether now owned or hereafter acquired, or, in the case of any Restricted
Subsidiary, issue or sell any shares of such Restricted Subsidiary's Capital
Stock to any Person other than the Borrower or any Wholly Owned Restricted
Subsidiary, except:
(a) the Disposition of inventory or obsolete or worn out
property or assets in the ordinary course of business;
(b) as permitted by subsection 6.4(b);
(c) so long as after giving effect thereto the Borrower is in
Pro Forma Compliance, any Asset Sale (other than any sale of
receivables permitted by subsection 6.5(d)) for fair market value;
provided that the Net Cash Proceeds are applied in accordance with
Section 2.13;
(d) the Disposition of receivables for collection;
(e) Disposition of Property yielding Net Cash Proceeds in any
fiscal year not exceeding $5,000,000 in the aggregate;
(f) the Disposition of any shares of the Capital Stock of any
Unrestricted Subsidiary; and
(g) Disposition of Cash Equivalents.
provided that in each case described in clauses (c) and (e) above, at least 75%
of the consideration received by the Borrower or its Restricted Subsidiaries for
such Disposition shall consist of cash, Cash Equivalents and the assumption of
Indebtedness (without recourse to the Borrower or Restricted Subsidiary, as the
case may be, effecting such Disposition).
6.6 Limitation on Restricted Payments. Pay any dividends 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 the Borrower or any Restricted Subsidiary
or any warrants or options to purchase any such Capital Stock, whether now or
hereafter outstanding, either directly or indirectly, whether in
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cash or property or in obligations of the Borrower or any Restricted Subsidiary
(such dividend payments, prepayments, distributions, setting apart, purchases,
redemptions, defeasances, retirements and acquisitions and distributions being
herein called "Restricted Payments"), except that (a) any Restricted Subsidiary
of the Borrower may make Restricted Payments to the Borrower and/or any
Restricted Subsidiary, (b) if (i) no Default or Event of Default shall have
occurred and be continuing or would result, after giving effect thereto and (ii)
the ratio of Consolidated Total Debt to Consolidated Adjusted EBITDA is less
than 8.00 to 1.00, the Borrower may make Restricted Payments in an amount equal
to 50% of Excess Cash Flow for any fiscal year ended after the date on which
such ratio was achieved, provided that the remaining 50% of such Excess Cash
Flow is applied toward prepayment of the Loans in the order specified in Section
2.13(d) and (c) the Borrower may make Restricted Payments to the extent made
solely with Capital Stock of the Borrower.
6.7 Limitation on 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 an ongoing business from, or make any
other investment in, any other Person, or purchase any telecommunications
license (all of the foregoing, "Investments"), except:
(a) extensions of trade credit in the ordinary course of
business;
(b) investments in Cash Equivalents;
(c) Investments among the Borrower and its Restricted
Subsidiaries, provided that none of the Special Purpose Subsidiaries
may make any Investments in any Person other than the Borrower or
another Special Purpose Subsidiary;
(d) Investments by the Borrower and its Restricted
Subsidiaries (other than the Special Purpose Subsidiaries) in
Unrestricted Subsidiaries and joint ventures, provided, that (x) such
Investments in excess of [redacted] in the aggregate must be funded
from the Unused Proceeds Basket and (y) after giving effect to such
Investment the Borrower shall be in Pro Forma Compliance;
(e) Investments in wireless telecommunications licenses issued
by a governmental authority, including FCC Licenses, and in Persons
engaged in the telecommunications business and substantially all of
whose assets consist of wireless telecommunications licenses which
become Restricted Subsidiaries as a result of such Investment,
provided, that (x) such Investments in an aggregate amount in excess of
[redacted] may be made to the extent such Investments are funded from
the Unused Proceeds Basket, (y) after giving effect to such Investment
the Borrower shall be in Pro Forma Compliance and (z) Investments made
in telecommunications licenses issued by any Governmental Authority
outside the United States in an aggregate amount in excess of
[redacted] may be made only to the extent such Investments are funded
from the Unused Proceeds Basket;
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(f) Investments in additional Telecommunications Assets,
excluding wireless telecommunications licenses, and in Persons engaged
in the telecommunications business which become Restricted Subsidiaries
as a result of such Investment, provided, that (x) such Investments in
an aggregate amount in excess of [redacted] may be made only to the
extent such Investments are funded from the Unused Proceeds Basket and
(y) after giving effect to each such Investment the Borrower shall be
in Pro Forma Compliance;
(g) Investments of the types permitted by the foregoing
clauses (d), (e) and (f), to the extent the consideration therefor
consists of the common stock of the Borrower;
(h) loans and advances described on Schedule 6.7(h);
(i) loans and advances (excluding those described on Schedule
6.7(h)) (i) to employees of the Borrower or any of its Subsidiaries in
an aggregate amount not to exceed $6,000,000 and (ii) to employees of
the Borrower or any of its Subsidiaries in connection with travel,
entertainment, relocation and other similar expenses incurred in the
ordinary course of business; and
(j) Investments received in connection with the collection of
receivables in the ordinary course of business.
6.8 Limitation on Optional Payments and Modifications of Debt
Instruments, etc. (a) Make or offer to make any optional or voluntary payment,
prepayment, repurchase or redemption of, or otherwise voluntarily or optionally
defease, any Funded Debt (except (i) with the proceeds of Permitted Refinancing
Indebtedness or (ii) Indebtedness permitted in Section 6.2(b)), (b) amend,
modify or otherwise change, or consent or agree to any amendment, modification,
waiver or other change to, any of the terms of any Funded Debt (other than any
such amendment, modification, waiver or other change which (i) would extend the
maturity or reduce the amount of any payment of principal thereof, reduce the
rate or extend the date for payment of interest thereon or relax any covenant or
other restriction applicable to the Borrower or any of its Subsidiaries or (ii)
do not adversely affect the rights, interests or powers of the Lenders under the
Loan Documents in any material respect, or their priorities therein, or the
ability of the Borrower or any Restricted Subsidiary to comply with its
obligations under the Loan Documents), or (c) amend its certificate of
incorporation (or, in the case of any Restricted Subsidiary which is a limited
liability company, its Limited Liability Company Agreement, operating agreement
or other constituent document) or the financial terms of the Nortel Purchase
Agreement in any manner reasonably determined by the Administrative Agent to be
adverse to the Lenders.
6.9 Limitation on Transactions with Affiliates. Enter into any
material transaction, including, without limitation, 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 the
Borrower or any Restricted Subsidiary) unless such
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transaction is (a) otherwise permitted under this Agreement and (b) upon fair
and reasonable terms no less favorable to the Borrower or such Restricted
Subsidiary, as the case may be, than it would obtain in a comparable arm's
length transaction with a Person which is not an Affiliate. Notwithstanding the
foregoing, the Borrower and its Restricted Subsidiaries may consummate (A) the
Existing Affiliate Transactions, (B) transactions among Restricted Subsidiaries
(other than Special Purpose Subsidiaries) that are Loan Parties and (C) the sale
of equipment or the provision of services for not less than cost.
6.10 Limitation on Changes in Fiscal Periods. Permit the
fiscal year of the Borrower to end on a day other than December 31 or change the
Borrower's method of determining fiscal quarters.
6.11 Limitation on Restrictions on Subsidiary Distributions.
Enter into or suffer to exist or become effective any consensual encumbrance or
restriction on the ability of any Restricted Subsidiary 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 Restricted Subsidiary, (b) make
Investments in the Borrower or any other Restricted Subsidiary or (c) transfer
any of its assets to the Borrower or any other Restricted Subsidiary, in each
case, more restrictive than any encumbrance or restriction, if any, set forth in
Section 6, except for such encumbrances or restrictions existing under or by
reason of (i) any restrictions existing under the Loan Documents and (ii) any
restrictions with respect to a Restricted Subsidiary imposed pursuant to an
agreement which has been entered into in connection with the Disposition of all
or substantially all of the Capital Stock or assets of such Restricted
Subsidiary.
6.12 Limitation on Lines of Business; Liabilities of
Subsidiaries. (a) Enter into any business, either directly or through any
Restricted Subsidiary, except for (i) the telecommunications business and
businesses which are related thereto and (ii) the holding of ownership interests
in Unrestricted Subsidiaries.
(b) Permit LicenseCo to incur any material liabilities (other
than pursuant to the Loan Documents) or to engage in any business or activities
other than the holding of Licenses and activities directly incident or directly
related thereto.
(c) Permit LeasingCo or AssetCo to incur any material
liabilities (other than pursuant to the Loan Documents and other liabilities
incurred in the ordinary course of business which are incident to being the
owner, licensee or lessee of real property) or to engage in any business or
activities other than (i) in the case of AssetCo, the owning of Personal
Property Assets and the leasing thereof to the Borrower, (ii) in the case of
LeasingCo, the owning or leasing, as lessee, or licensing as licensee, of Real
Property Assets and the leasing, as lessor, or, as the case may be, subleasing,
as sublessor, thereof to the Borrower, and (iii) and activities directly
incident or directly related to the businesses and
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activities described in clauses (i) and (ii), including, without limitation,
disposition of surplus interests or assets.
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 which 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) Any Loan Party shall default in the observance or
performance of any agreement contained in Section 6; 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 paragraphs (a) through
(c) of this Section), and such default shall continue unremedied for a
period of 30 days; or
(e) The Borrower or any of its Restricted Subsidiaries shall
(i) default in making any payment of any principal of or interest on
any Indebtedness (including, without limitation, any Guarantee
Obligation, but excluding the Loans) beyond the period of grace, if
any, provided in the instrument or agreement under which such
Indebtedness was created or is evidenced; or (ii) 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 and after
the expiration of all grace and cure periods applicable thereto, 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) or (ii) of this paragraph (e) shall not at any time
constitute a Default or Event of Default unless, at such time, one or
more defaults, events or conditions of the type described in clauses
(i) or (ii) of this paragraph (e) shall have occurred and be continuing
with
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respect to Indebtedness the outstanding principal amount of which
exceeds in the aggregate $10,000,000; or
(f) (i) The Borrower or any of its Restricted 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, the Borrower or any of its Restricted
Subsidiaries shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against the Borrower or any
of its Restricted Subsidiaries any case, proceeding or other action of
a nature referred to in clause (i) above which (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 the Borrower or any of its
Restricted 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 which results
in the entry of an order for any such relief which shall not have been
vacated, discharged, or stayed or bonded pending appeal within 60 days
from the entry thereof; or (iv) the Borrower or any of its Restricted
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) the Borrower or any of its
Restricted 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 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
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events or conditions, if any, could reasonably be expected to have a
Material Adverse Effect; or
(h) One or more judgments or decrees shall be entered against
the Borrower or any of its Restricted Subsidiaries involving in the
aggregate a liability (not paid or covered by insurance) of $10,000,000
or more, and all such judgments or decrees shall not have been vacated,
discharged, stayed or bonded pending appeal within 60 days from the
entry thereof; or
(i) Any of the Security Documents shall cease, for any reason,
to be in full force and effect, 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 the guarantee contained
in Section 2 of the Guarantee and Collateral Agreement shall cease, for
any reason, to be in full force and effect, and any such default shall
continue unremedied for a period of 30 days; provided that, no default,
event or condition described in this paragraph (i) existing solely as a
result of any action or failure (if any action is required by
applicable laws) to act on the part of the Administrative Agent or the
Collateral Agent shall constitute a Default or an Event of Default; or
(j) Any Loan Party shall assert in writing that any of the
Security Documents or the guarantee contained in Section 2 of the
Guarantee and Collateral Agreement is not in full force and effect or
that the Lien created by any of the Security Documents is not
enforceable and of the same effect and priority purported to be created
thereby;
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 relevant Majority
Facility Lenders, the Administrative Agent may, or upon the request of the
relevant Majority Facility Lenders, the Administrative Agent shall, by notice to
the Borrower declare the undrawn Commitments under any Facility to be terminated
forthwith, whereupon such 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.
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SECTION 8. THE AGENTS
8.1 Appointment. Each Lender hereby irrevocably designates and
appoints the Agents as the agents of such Lender under this Agreement and the
other Loan Documents, and each such Lender irrevocably authorizes each 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 such 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, no Agent shall 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 any Agent.
8.2 Delegation of Duties. Each 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. No Agent shall 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 of the Agents 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 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
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 Agents. Each 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,
without limitation, counsel to the Loan Parties), independent accountants and
other experts selected by the Administrative Agent. The Agents may deem and
treat the payee of any Note
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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. Each 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 which may be incurred by it by reason of taking or continuing to take
any such action. Each 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. No Agent shall be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless such Agent has received notice from a Lender 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, partners, trustees or
affiliates have made any representations or warranties to it and that no act by
any Agent hereafter 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 and
creditworthiness of the Loan Parties and their affiliates. Except for notices,
reports and other documents expressly required to be
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furnished to the Lenders by the Administrative Agent hereunder, no Agent shall
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 which may come into the possession of such 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 the Borrower and
without limiting the obligation of 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 which may at any time
(including, without limitation, at any time following 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 which 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 30 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
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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 Agent's resignation as Agent, the provisions of this Section
8 shall inure to its benefit as to any actions taken or omitted to be taken by
it while it was Agent under this Agreement and the other Loan Documents.
8.10 Authorization to Release Liens. The Administrative Agent
is hereby irrevocably authorized by each of the Lenders to direct the Collateral
Agent to release any Lien covering any Property of the Borrower or any of its
Subsidiaries that is the subject of a Disposition which is permitted by this
Agreement or which has been consented to in accordance with Section 9.1.
8.11 Collateral Agency and Intercreditor Agreement. The
Administrative Agent is hereby irrevocably authorized to execute and deliver the
Collateral Agency and Intercreditor Agreement, and each of the Lenders, by
becoming a party to this Agreement, hereby confirms its obligations under the
Collateral Agency and Intercreditor Agreement, including, without limitation,
its indemnification obligations under Section 7.6 thereof.
8.12 The Arrangers, the Syndication Agent and the
Documentation Agent. The Arrangers, the Syndication Agent and the Documentation
Agent, in their respective capacities as such, shall have no duties or
responsibilities, and shall incur no liability, 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. 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, deleting or revising 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)
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forgive the principal amount or extend the final scheduled date of maturity of
any Loan, extend the scheduled date of any amortization payment in respect of
any Term 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 Commitment of any Lender, 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 or Required Prepayment 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, direct the Administrative
Agent to give its consent to release all or substantially all of the Collateral
or to release all or substantially all of the Subsidiary Guarantors from their
obligations under the Guarantee and Collateral Agreement, in each case without
the consent of all Lenders; (iii) amend, modify or waive any condition precedent
to any extension of credit under any Facility set forth in Section 4.2
(including, without limitation, in connection with any waiver of an existing
Default or Event of Default) without the consent of the Majority Facility
Lenders under such Facility; (iv) reduce the percentage specified in the
definition of Majority Facility Lenders with respect to any Facility without the
written consent of all Lenders under such Facility; (v) amend, modify or waive
any provision of Section 8 without the consent of the Agents; or (vi) amend,
modify or waive any provision of Section 2.19 without the consent of each Lender
directly affected thereby; and provided, further that the Collateral Agency and
Intercreditor Agreement may be amended only in accordance with Section 8.3
thereof. 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. Any such waiver, amendment, supplement or
modification shall be effected by a written instrument signed by the parties
required to sign pursuant to the foregoing provisions of this Section; provided,
that delivery of an executed signature page of any such instrument by facsimile
transmission shall be effective as delivery of a manually executed counterpart
thereof.
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 (a) in the case of the Borrower and the Administrative
Agent, as follows and (b) in the case of the Lenders, as set forth in an
administrative questionnaire delivered to the Administrative Agent or, in the
case of a Lender which becomes a party to this Agreement pursuant to an
Assignment and Acceptance, in such Assignment and Acceptance or (c) in the case
of any party, to such other address as such party may hereafter notify to the
other parties hereto:
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85
The Borrower: Teligent, Inc.
8065 Leesburg Pike
Vienna, VA 22182
Attention: General Counsel
Tel: 703-762-5225
Fax: 703-762-5227
cc: Chief Financial Officer
Tel: 703-762-5233
Fax: 703-762-5235
The Administrative Agent The Chase Manhattan Bank
270 Park Avenue
New York, NY 10017
Attention:
Telephone:
Fax:
provided that any notice, request or demand to or upon any Agent or any Lender
under Section 2 hereof 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 any 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. The Borrower agrees (a) to pay or
reimburse the Agents for all their reasonable 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, without limitation, the reasonable fees and
disbursements of one counsel for all of the Agents, (b) to pay or reimburse each
Lender and the Agents for all its costs and expenses incurred in connection with
the enforcement or preservation of any rights under this Agreement, the other
Loan Documents
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86
and any such other documents, including, without limitation, the fees and
disbursements of counsel (including the allocated fees and expenses of in-house
counsel) to each Lender (solely during the occurrence and continuation of an
Event of Default) and of counsel to the Agents, (c) to pay, indemnify, and hold
each Lender and the Agents harmless from, any and all recording and filing fees
and any and all liabilities with respect to, or resulting from any delay in
paying, stamp, excise and other taxes, if any, which may be payable or
determined to be payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions contemplated by, or
any amendment, supplement or modification of, or any waiver or consent under or
in respect of, this Agreement, the other Loan Documents and any such other
documents, and (d) to pay, indemnify, and hold each Lender and the Agents and
their respective officers, directors, trustees, employees, affiliates, agents,
partners and controlling persons (each, an "Indemnitee") harmless from and
against any and all other liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs and 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, without limitation, 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
the Borrower any of its Subsidiaries or any of the Properties (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 so to 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, in each case solely under or related to
Environmental Laws, that any of them might have by statute or otherwise against
any indemnitee. The agreements in this Section shall survive repayment of the
Loans and all other amounts payable hereunder.
9.6 Successors and Assigns; Participations and Assignments;
Replacement. (a) This Agreement shall be binding upon and inure to the benefit
of the Borrower, the Lenders, the Agents, 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 the Agents and 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
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87
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 Agents 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 or consent to 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 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 2.20, 2.21 and 2.22 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 2.21, 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 any Approved Fund 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, substantially in the form of
Exhibit E, executed by such Assignee and such Assignor (and, where the consent
of the Borrower or the Administrative Agent is required pursuant to the
foregoing provisions, by the Borrower and such other Persons) and delivered to
the Administrative Agent for its acceptance and recording in the Register;
provided that no such assignment to an Assignee (other than any Lender or any
affiliate thereof or any Approved Fund) shall be in an aggregate principal
amount of less than $5,000,000 (other than in the case of an assignment of all
of a Lender's interests under this Agreement), unless otherwise agreed by the
Borrower and the Administrative Agent. Any such assignment need not be ratable
as among the Facilities. 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,
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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, the consent of the
Borrower shall not be required for any assignment which occurs at any time when
any Event of Default under Section 7(a) or 7(f) with respect to the Borrower
shall have occurred and be continuing.
(d) The Administrative Agent, on behalf of the Borrower, shall
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 Commitments of, and 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, 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 such 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; thereupon one or
more new Notes in the same aggregate principal amount shall be issued to the
designated Assignee, and the old Notes shall be returned by the Administrative
Agent to the Borrower marked "cancelled". The Register shall be available for
inspection by the Borrower or any Lender at any reasonable time and from time to
time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by an Assignor and an Assignee (and, in any case where the consent of any other
Person is required by Section 9.6(c), by each such other Person) together with
payment to the Administrative Agent of a registration and processing fee of
$3,500 (provided that only one such fee shall be payable in connection with
simultaneous assignments to more than one Approved Fund), the Administrative
Agent shall (i) promptly accept such Assignment and Acceptance and (ii) on the
effective date determined pursuant thereto record the information contained
therein in the Register and give notice of such acceptance and recordation to
the Lenders and the Borrower. On or prior to such effective date, the Borrower,
at its own expense, upon request, shall execute and deliver to the
Administrative Agent (in exchange for the Revolving Credit Note and/or
applicable Term Notes of the assigning Lender) a new Revolving Credit Note
and/or applicable Term Notes, as the case may be, to the order of such Assignee
in an amount equal to the Revolving Credit Commitment and/or applicable Term
Loans, as the case may be, assumed or acquired by it pursuant to such Assignment
and Acceptance and, if the Assignor has retained a Revolving Credit Commitment
and/or Term Loans, as the case may be, upon request, a new Revolving Credit Note
and/or Term Notes, as the case may be, to the order of the Assignor in an amount
equal to the Revolving Credit Commitment and/or applicable Term
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89
Loans, as the case may be, retained by it hereunder. Such new Note or Notes
shall be dated the Closing Date and shall otherwise be in the form of the Note
or Notes replaced thereby.
(f) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this Section concerning assignments of Loans
and Notes relate only to absolute assignments and that such provisions do not
prohibit assignments creating security interests, 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 shall be permitted to replace with one or
more replacement Lenders any Lender which (i) requests reimbursement for amounts
owing pursuant to Section 2.20 or 2.21, (ii) has received a written notice from
the Borrower of an impending change in law that would entitle such Lender to
payment of additional amounts under Section 2.20 or 2.21, unless such Lender
designates a different lending office before such change in law becomes
effective and such alternate lending office obviates the need for the Borrower
to make payments of additional amounts under Section 2.20 or 2.21, (iii) is
affected in the manner described in Section 2.18 or 2.23 and as a result thereof
any of the actions described in Section 2.18 or 2.23, as the case may be, are
required to be taken, (iv) does not consent to any proposed amendment,
supplement, modification, consent or waiver of any provisions of this Agreement
or any other Loan Document as contemplated by Section 9.1, or (v) defaults in
its obligation to make Loans; provided that (A) such replacement does not
conflict with any Requirement of Law, (B) no Event of Default shall have
occurred and be continuing at the time of such replacement, (C) the Borrower
shall repay (or the replacement bank or institution shall purchase, at par) all
Loans and other amounts owing to such replaced Lender prior to the date of
replacement, (D) the Borrower shall be liable to such replaced Lender under
Section 2.22 if any Eurodollar Loan owing to such replaced Lender shall be
prepaid (or purchased) other than on the last day of the Interest Period
relating thereto, (E) the replacement bank or institution, if not already a
Lender, shall be reasonably satisfactory to the Administrative Agent, (F) the
replaced Lender shall be obligated to make such replacement in accordance with
the provisions of this Section 9.6 (provided that the Borrower or replacement
Lender shall be obligated to pay the registration and processing fee), (G) until
such time as such replacement shall be consummated, the Borrower shall pay all
additional amounts (if any) required pursuant to Section 2.20 or 2.21, as the
case may be, (H) any such replacement shall not be deemed to be a waiver of any
rights which the Borrower, the Administrative Agent or any other Lender shall
have against the replaced Lender, and (I) any replacement contemplated by clause
(iv) above shall be permitted only if the consent of Lenders holding at least
90% of the aggregate unpaid principal amount of the Loans then outstanding plus
the aggregate amount of undrawn Commitments then in effect is obtained, but the
consent of one or more of the other Lenders is not obtained (other than the
withholding of any required consent pursuant to clauses (i) or (ii) of the first
proviso of Section 9.1), and each replacement Lender consents to the proposed
amendment, supplement, modification, consent or waiver.
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90
9.7 Adjustments; Set-off. (a) Except to the extent that this
Agreement provides for payments to be allocated to a particular Lender or to the
Lenders under a particular Facility, if any Lender (a "Benefitted Lender") shall
at any time 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 such other Lender's Obligations, such Benefitted Lender shall purchase for
cash from the other Lenders a participating interest in such portion of each
such other Lender's Obligations, 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) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to the
Borrower, any such notice being expressly waived by the Borrower to the extent
permitted by applicable law, upon any amount becoming due and payable by 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 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 Counterparts. 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 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.
9.10 Integration. This Agreement and the other Loan Documents
represent the agreement of the Borrower, the Administrative Agent and the
Lenders with respect to the
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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. 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 of
America for the Southern District of New York, and appellate courts
from any thereof;
(b) to the extent permitted by applicable law, 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 the Borrower 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 sue 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. 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;
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(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to 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 one
hand, 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 the Borrower and the
Lenders.
9.14 Confidentiality. Each of the Agents and the Lenders
agrees to keep confidential all non-public information provided to it by any
Loan Party pursuant to this Agreement that is designated by such Loan Party as
confidential; provided that nothing herein shall prevent any Agent or any Lender
from disclosing any such information (a) to the Administrative Agent or any
other Lender, (b) to any Participant or Assignee (each, a "Transferee") or
prospective Transferee which receives such information having been made aware of
the confidential nature thereof and which agrees to comply with the provisions
of this Section 9.14, (c) any of its employees, directors and officers who need
to know such information in accordance with customary banking practices and
affiliates of Lenders, employees, directors and officers of such affiliates, and
agents, accountants, attorneys and other professional advisors of Lenders who
receive such information having been made aware of the confidential nature
thereof and agree to comply with the provisions of this Section 9.14, (d) upon
the request or demand of any Governmental Authority having jurisdiction over it,
(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) which has
been publicly disclosed other than in breach of this Section 9.14, (h) to the
National Association of Insurance Commissioners or any securities exchange 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. In
the event that any Lender discloses any information pursuant to clauses (d), (e)
or (f) of the preceding sentence, such Lender will give notice thereof to the
Borrower if such Lender is lawfully permitted to do so and if the giving of such
notice will not, in the judgment of such Lender, be materially disadvantageous
to it.
9.15 Accounting Changes. 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
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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 (i) 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 Securities and Exchange Commission (or successors thereto or
agencies with similar functions) or (ii) the application by the Borrower of
accounting principles.
9.16 WAIVERS OF JURY TRIAL. THE BORROWER, THE AGENTS 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.
<PAGE>
94
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.
TELIGENT, INC.
By:/s/ Abraham L. Morris
--------------------------------------
Name: Abraham L. Morris
Title: Senior Vice President
Chief Financial Officer
THE CHASE MANHATTAN BANK, as
Administrative Agent and as a Lender
By:/s/ B. Joseph Lillis
---------------------------------------
Title: Managing Director
CHASE SECURITIES INC., as an Arranger
By:/s/ B. Joseph Lillis
---------------------------------------
Title: Managing Director
GOLDMAN SACHS CREDIT PARTNERS L.P.,
as an Arranger, as Syndication Agent and as a
Lender
By:/s/ John Urban
---------------------------------------
Title: Authorized Signatory
<PAGE>
95
TD SECURITIES (USA) INC., as an Arranger
By:/s/ Jorge A. Garcia
---------------------------------------
Title: Vice PResident
TORONTO DOMINION (TEXAS), INC., as
Documentation Agent and as a Lender
By:/s/ Jorge A. Garcia
---------------------------------------
Title: Vice President
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By:/s/ Fred L. Thorne
---------------------------------------
Title: Vice President
DEUTSCHE BANK SECURITIES INC.
By:/s/ Jon D. Storck
---------------------------------------
Title: Vice President
EXPORT DEVELOPMENT CORPORATION
By:/s/ Bruce Dunlop
---------------------------------------
Title: Financial Services Manager
By:/s/ Abraham Fox
---------------------------------------
Title:
<PAGE>
96
ING CAPITAL SENIOR SECURED HIGH
INCOME FUND, L.P.
By:/s/ Jane Musser Nelson
---------------------------------------
Title: Senior Vice President
By:/s/ John R. Lilly, Jr.
---------------------------------------
Title: Director
VAN KAMPEN AMERICAN CAPITAL PRIME
RATE INCOME TRUST
By:/s/Jeffrey W. Maillet
---------------------------------------
Title: Senior Vice President & Director
<PAGE>
96
ANNEX A
-------
PRICING GRID
<TABLE>
<CAPTION>
Applicable Margin
----------------------------
ABR Eurodollar
Test Margin Rate Margin
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
From Closing Date until first Adjustment Date after fiscal 2.00% 3.00%
quarter in which Consolidated Adjusted Total Revenue
exceeds [redacted]
From first Adjustment Date after fiscal quarter which 1.75% 2.75%
Consolidated Adjusted Total Revenue is greater than [redacted]
but less than or equal to [redacted], until first Adjustment
Date after fiscal quarter in which Consolidated Adjustment Total
Revenue exceeds [redacted]
From first Adjustment Date after fiscal quarter in which 1.625% 2.625%
Consolidated Adjusted Total Revenue exceeds [redacted] until
Consolidated Total Debt Ratio is [redacted]
Consolidated Total Debt Ratio <= [redacted] but > [redacted] 1.50% 2.50%
Consolidated Total Debt Ratio <= [redacted] but > [redacted] 1.25% 2.25%
Consolidated Total Debt Ratio <= [redacted] 1.00% 2.00%
</TABLE>
Changes in the Applicable Margin resulting from changes in the Consolidated
Total Debt Ratio as at the end of any fiscal period or from meeting Consolidated
Adjusted Total Revenue or Consolidated Total Debt Ratio tests as the end of any
fiscal period shall become effective on the date (the "Adjustment Date") on
which financial statements for such fiscal period required pursuant to Section
5.1 are delivered to the Lenders and shall remain in effect until the next
change to be effected pursuant to this paragraph. If any financial statements
referred to above are not delivered within the time periods specified above,
then, until such financial statements are delivered, the Applicable Margins
shall be the highest margins set forth above.
<PAGE>
1
ANNEX B
The Subordinated Obligations shall be, to the extent set forth herein,
subordinate and junior in right of payment to the Senior Obligations.
I. For purposes hereof, "subordinate and junior in right of payment"
shall mean:
(i) In the event that any or all amounts owing under
the Senior Obligations have become, or have been declared to be, due
and payable and have not been paid in accordance with their terms
(except in circumstances when the succeeding paragraph (ii) shall be
applicable), then and in any such event, any payment or distribution of
any kind or character, whether in cash, property or securities, which,
but for the subordination provisions contained herein, would otherwise
be payable or deliverable to the Subordinated Creditor upon or in
respect of the Subordinated Obligations shall instead be paid over or
delivered to the Senior Creditor Representative for the benefit of the
Senior Creditors, and the Subordinated Creditor shall not in any such
event receive any such payment or distribution or any benefit therefrom
unless and until the Senior Obligations shall have been fully paid and
satisfied.
(ii) In the event of any liquidation or other
winding-up of the Borrower or in the event of any receivership,
insolvency, reorganization or bankruptcy proceedings, assignment for
the benefit of creditors or any proceeding by or against the Borrower
for any relief under any bankruptcy, reorganization or insolvency law
or laws, Federal or state, or any law, Federal or state, relating to
the relief of debtors, readjustment of indebtedness, reorganization,
composition or extension of indebtedness, then, and in any such event,
all Senior Obligations shall first be paid in full before any payment
or distribution is made in respect of the Subordinated Obligations, and
any payment or distribution of any kind or character, whether in cash,
property or securities, which, but for the subordination provisions
contained herein, would otherwise be payable or deliverable to the
Subordinated Creditor upon or in respect of the Subordinated
Obligations, shall instead be paid over or delivered to the Senior
Creditor Representative for the benefit of the Senior Creditors, and
the Subordinated Creditor shall not receive any such payment or
distribution or any benefit therefrom unless and until the Senior
Obligations shall have been fully paid and satisfied.
(iii) If any payment, distribution or security, or
the proceeds of any thereof, is collected or received by the
Subordinated Creditor in respect of the Subordinated Obligations, and
such collection or receipt is prohibited by paragraph (i) or (ii)
above, the Subordinated Creditor will forthwith turn over the same to
the Senior Creditor Representative for the benefit of the Senior
Creditors, in each case in the form received (except for endorsement or
the assignment of the Subordinated Creditor when necessary) and, until
so turned over, the same shall be held in trust by the Subordinated
Creditor as the property of the Senior Creditors. Notwithstanding the
above or anything else contained herein, so long as no event described
in paragraph (i) or (ii) above has occurred, the Borrower may make, and
the Subordinated Creditor
<PAGE>
2
shall be entitled to receive and keep, without regard to these
subordination provisions, all interest payments when due under the
Subordinated Obligations in accordance with the terms thereof.
II. Subject to the payment in full of all Senior Obligations,
the Subordinated Creditor shall be subrogated to the rights of the holder(s) of
the Senior Obligations (to the extent of payments or distributions previously
made to such holders pursuant to the provisions of Section I above) to receive
any and all payments or distributions made in respect of the Senior Obligations
until all amounts owing on the Subordinated Obligations shall be paid in full.
No payments or distributions applicable to Senior Obligations which the
Subordinated Creditor receives by reason of being subrogated to the rights of
the holders of Senior Obligations pursuant to the provisions of this Section II
shall, as among the Borrower, its creditors other than the holder(s) of Senior
Obligations and the Subordinated Creditor, be deemed to be a payment by the
Borrower, to or for the account of the Subordinated Obligations; and for the
purposes of such subrogation, no payments or distributions to the holders of the
Senior Obligations of any cash, property or securities to which the Subordinated
Creditor would be entitled to except for these subordination provisions, and no
payment over pursuant to these subordination provisions to the holders of Senior
Obligations by the Subordinated Creditor shall, as between the Borrower and its
creditors other than the holders of Senior Obligations and the Subordinated
Obligations, be deemed to be a payment by the Borrower to or for the account of
the Senior Obligations, it being understood that these subordination provisions
are intended solely for the purpose of defining the relative rights of the
Subordinated Creditor, on the one hand, and the Senior Creditors, on the other
hand, and nothing contained in this Section or elsewhere in these subordination
provisions is intended to or shall impair, as between the Borrower and its
creditors other then the Senior Creditors and the Subordinated Creditor, the
obligation of the Borrower, which is absolute and unconditional, to pay to the
Subordinated Creditor, subject to the rights of the Senior Creditors, the
amounts due and owing under the Subordinated Obligations as and when the same
shall become due and payable in accordance with their terms, or is intended to
or shall affect the relative rights of the Subordinated Creditor and creditors
of the Borrower, other than the Senior Creditor.
III. The Subordinated Creditor consents that, without the
necessity of any reservation of rights against the Subordinated Creditor, and
without notice to or further assent by the Subordinated Creditor, (a) any demand
for payment of any Senior Obligation may be rescinded in whole or in part, and
any Senior Obligation may be continued, and the Senior Obligations, or the
liability of the Borrower or any other party upon or for any part thereof, or
any collateral security or guaranty therefor, or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, extended,
modified, accelerated, compromised, waived, surrendered, or released and (b) the
Credit Agreement, the other Loan Documents referred to therein, and any other
document or instrument evidencing or governing the term of any other Senior
Obligations or any other collateral security documents or guaranties or
documents in connection with the Credit Agreement or the Senior Obligations may
be amended, modified, supplemented or terminated, in whole or in part, as the
Senior
<PAGE>
3
Creditors may deem advisable from time to time, and any collateral security at
any time held by the Senior Creditors for the payment of any of the Senior
Obligations may be sold, exchanged, waived, surrendered or released, in each
case, all without notice to or further assent by the Subordinated Creditor,
which will remain bound under these subordination provisions, and all without
impairing, abridging, releasing or affecting the subordination provided for
herein, notwithstanding any such renewal, extension, modification, acceleration,
compromise, amendment, supplement, termination, sale, exchange, waiver,
surrender or release. The Subordinated Creditor waives any and all notice of the
creation, modification, renewal, extension or accrual of any of the Senior
Obligations and notice of or proof of reliance by the Senior Creditors upon
these subordination provisions, and the Senior Obligations and any of them shall
conclusively be deemed to have been created, contracted or incurred in reliance
upon these subordination provisions, and all dealings between the Borrower, on
the one hand, and the Senior Creditors, on the other, shall be deemed to have
been consummated in reliance upon these subordination provisions. The
Subordinated Creditor acknowledges and agrees that in entering into the Credit
Agreement and in making funds available thereunder the Senior Creditors have
relied upon these subordination provisions.
IV. As used herein, (i) the expressions "prior payment in full,"
"payment in full," "paid in full", "fully paid and satisfied" and any other
similar terms or phrases when used with respect to the Senior Obligations shall
mean the indefeasible payment in full in cash, in immediately available funds,
of all of the Senior Obligations and (ii) the following terms have the following
meanings:
"Credit Agreement": the Credit Agreement, dated as of July 2, 1998,
among Teligent, Inc., the Lenders, Syndication Agent, Documentation
Agent and Arrangers parties thereto and The Chase Manhattan Bank, as
Administrative Agent, as from time to time amended, supplemented,
amended and restated or otherwise modified.
"Senior Creditors": the holders from time to time of the Senior
Obligations.
"Senior Creditor Representative": The Chase Manhattan Bank, as
Administrative Agent under the Credit Agreement, and any successor in
such capacity.
"Senior Obligations": all Obligations (as defined in the Credit
Agreement).
"Subordinated Creditor": _________________ and any other holder from
time to time of the Subordinated Obligations.
"Subordinated Obligations": all indebtedness, obligations and
liabilities of the Borrower under or in connection with
_____________________, now existing or hereafter incurred, as the same
may be amended, extended, supplemented, restated, refinanced or
otherwise modified from time to time.
<PAGE>
SCHEDULES TO CREDIT AGREEMENT
<PAGE>
SCHEDULES 1.1A
COMMITMENTS: LENDING OFFICES AND ADDRESSES
<TABLE>
<CAPTION>
Commitments
-----------
Tranche A Delayed Draw
Name of Lender and Revolving Term Term Loan
Information for Notices Credit Commitment Loan Commitment Commitment
- ----------------------- ----------------- --------------- ------------
<S> <C> <C> <C>
Goldman Sachs & Co. $8,333,333 $74,166,667 $15,000,000
85 Broad Street
New York, NY 10004
Tel: 212-902-4390
Fax: 212-902-3757
Barclays Bank PLC $61,875,000
388 Market Street, Suite 1700
San Francisco, CA 94111-5317
Tel: 415-765-4701
Fax: 415-765-4760
JP Morgan Guaranty Trust $61,875,000
Company of New York
60 Wall Street
New York, NY 10680-0060
Tel: 212-648-8009
Fax:
PNC National Bank $30,000,000
Broad & Chestnut Streets
(100 South Broad)
Philadelphia, PA 19101
Tel: 215-585-6466
Fax: 212-585-6680
Bank of Tokyo-Mitsubishi $15,000,000
Trust Company
1251 Avenue of the Americas
12th Floor
New York, NY 10020
Tel: 212-782-4795
Fax: 212-782-4935
<PAGE>
2
<CAPTION>
Commitments
-----------
Tranche A Delayed Draw
Name of Lender and Revolving Term Term Loan
Information for Notices Credit Commitment Loan Commitment Commitment
- ----------------------- ----------------- --------------- ------------
<S> <C> <C> <C>
Paribas $20,000,000
787 Seventh Avenue
New York, NY 10019
Tel: 212-841-2595
Fax: 212-841-2369
Protective Asset Management $10,000,000
Company
13455 Noel Road
Two Galleria Tower
Suite 1150
Dallas, TX 75240
Tel: 972-233-4300
Fax: 972-233-4343
Merrill Lynch Asset $25,000,000
Management
800 Scudders Mill Road
Plainsboro, NJ 08536
Tel: 609-282-2059
Fax: 609-282-2756
The Chase Manhattan Bank $8,333,333 $74,166,667 $70,000,000
270 Park Avenue
New york, NY 10017-2070
Tel: 212-552-7488
Toronto Dominion $8,333,333 $74,166,667 $15,000,000
909 Fannin Street
Houstin, TX 77010
Tel: 713-653-8208
Fax: 713-951-9921
Bank of America $61,875,000
595 Xalifornia Street
San Francisco, CA 94104
Tel: 415-953-9181
Fax: 415-953-1515
<PAGE>
3
<CAPTION>
Commitments
-----------
Tranche A Delayed Draw
Name of Lender and Revolving Term Term Loan
Information for Notices Credit Commitment Loan Commitment Commitment
- ----------------------- ----------------- --------------- ------------
<S> <C> <C> <C>
Export Development $61,875,000
Corporation
151 O'Connor Street
Ottawa K1A 1K3
Tel: 613-598-2844
Fax: 613-598-6858
Deutsche Bank $20,000,000
31 West 52nd Street
New York, NY 10019
Tel: 212-469-8258
Fax: 613-469-3713
Canadian Imperial $20,000,000
Bank of Commerce
425 Lexington Avenue
New York, NY 10017
Tel: 212-856-3706
Fax: 212-856-3558
Van Kampen American $50,000,000
Capital Prime Rate Income
Trust
One Parkview Plaza, 5th Fl
Oakbrook Terrace, IL 60181
Tel: 630-684-6438
Fax: 630-684-6740
Dean Witter/Morgan Stanley $10,000,000
Prime Income Trust
2 World Trade Center
New York, NY 10048
Tel: 212-392-5686
Fax: 212-392-0094
ING Capital $ 5,000,000
333 South Walker
Suite 5200
Chicago, IL 60606
</TABLE>
<PAGE>
SCHEDULE 3.4
CONSENTS, AUTHORIZATIONS, FILINGS AND NOTICES
None
<PAGE>
SCHEDULE 3.6
MATERIAL LITIGATION
[See Schedule 3.21 for a description of the Teledesic proceedings]
<PAGE>
SCHEDULE 3.14
SUBSIDIARIES
<TABLE>
<CAPTION>
Jurisdiction of Percentage
Company Organization Ownership
------- ------------ ---------
<S> <C> <C>
Associated Communications
Deutschland GmbH Germany 100%
Auctel, Inc. Delaware 100%
FirstMark Communications, Inc. Delaware 100%
Teligent Communications, Inc. Delaware 100%
Teligent Telecommunications, Inc. Delaware 100%
Teligent of Virginia, Inc. Virginia 100%
Teligent License Company I, L.L.C. Delaware 100%
Teligent License Company II, L.L.C. Delaware 100%*
</TABLE>
* Includes a 1% interest owned indirectly through Teligent License Company I,
L.L.C.
<PAGE>
SCHEDULE 3.19(a)
UCC FILING JURISDICTIONS
<TABLE>
<CAPTION>
Company Jurisdictions
- ------- -------------
<S> <C>
Teligent, Inc. California - Secretary of State
Delaware - Secretary of State
New York-Secretary of State
New York-New York County
Virginia - Secretary of the Commonwealth
Virginia - Fairfax County
Auctel, Inc. Delaware - Secretary of State
Virginia - Secretary of the Commonwealth
Virginia - Fairfax County
Teligent Communications, Inc. Delaware - Secretary of State
Virginia - Secretary of the Commonwealth
Virginia - Fairfax County
Teligent Telecommunications, Inc. Delaware - Secretary of State
Virginia - Secretary of the Commonwealth
Virginia - Fairfax County
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Teligent License Company I, L.L.C. Delaware - Secretary of State
Virginia - Secretary of the Commonwealth
Virginia - Fairfax County
Teligent License Company II, L.L.C. Delaware - Secretary of State
Virginia - Secretary of the Commonwealth
Virginia - Fairfax County
</TABLE>
<PAGE>
SCHEDULE 3.21
Pending Proceedings
-------------------
By means of a Relocation Order, released March 14, 1997 by the Federal
Communications Commission ("FCC"), and a Modification Order, released June 24,
1997 by the Public Safety and Private Wireless Division, Wireless Telecom
munications Bureau of the FCC, the FCC relocated certain Digital Electronic Mes
sage Service ("DEMS") licenses, including those held by the Company and its
respec tive subsidiaries, in the 18 GHz band to the 24 GHz band. Both the
Relocation Order and the Modification Order were subject to an administrative
appeal period. During this period, five parties filed petitions with the FCC
seeking either partial or full reconsideration or review of one or both of the
orders. The parties -- BellSouth Corporation, WinStar Communications, Inc.
("WinStar"), Millimeter Wave Carrier Association, Inc., DirecTV Enterprises,
Inc. and WebCel Communications, Inc. -- challenged, inter alia, the FCC's
issuance of the Relocation Order without conducting a notice and comment
rulemaking proceeding. WinStar withdrew its Petition for Clarification regarding
the Relocation Order on October 7, 1997.
In addition, DIRECTV Enterprises, Inc. has filed a petition for rulemaking
with the FCC, requesting that the FCC grant permission for DIRECTV, and others,
to construct and operate broadcast satellite uplink facilities on a portion of
the 24 GHz frequencies allocated and granted to DEMS licensees.
On September 6, 1996, Teledesic Corporation filed a petition seeking
the dismissal of 174 applications for additional transmission (nodal) stations
in seven li censed MSI DEMS markets, and the rescission of existing licenses,
then held by or belonging to MSI or DSC. In its petition, Teledesic claimed that
its then-proposed satellite system was incompatible with existing licensed
terrestrial networks in the 18 GHz band, that the FCC's initial grants of the
DEMS licenses to MSI and DSC was inappropriate, and that MSI and DSC had failed
to construct and operate their licensed facilities in compliance with the FCC's
rules.
In their above-described petitions for reconsideration of the Relocation
Order, a number of parties raised substantially similar arguments to those
initially raised by Teledesic against the validity of the licenses now held by,
and the con structed DEMS facilities now owned by, the Company and its
respective subsidiaries.
In November and December 1996, the FCC inspected each of the MSI and DSC
DEMS facilities and determined that the companies had complied with all
applicable construction and operational requirements. In letters dated April 2,
1997,
<PAGE>
and April 8, 1997, the FCC notified MSI and DSC, respectively, that the FCC
"concluded its inquiry" and "determined not to take any further action" in
connection with the investigation. Moreover, on February 24, 1997, the Company,
MSI and DSC entered into an agreement pursuant to which Teledesic agreed to
withdraw its petition and bear some of the cost of relocating MSI's, DSC's and
the Company's 18 GHz DEMS systems to the 24 GHz band, conditioned upon the FCC's
relocation of 18 GHz DEMS licensees to the 24 GHz band. On March 21, 1997,
Teledesic filed a motion to withdraw its petition against MSI's pending
applications and MSI's and DSC's licenses, which such motion is pending.
<PAGE>
SCHEDULE 3.21(c)
Except as indicated below, Borrower is authorized to provide Internet access
services, local exchange services and intrastate long distance services in the
following states:
Alabama
* Arizona
** Arkansas
California
Colorado
Connecticut
Delaware
Florida
Georgia
Hawaii
Illinois
Indiana
Iowa
Kansas
** Kentucky
Louisiana
Maryland
Massachusetts
Michigan
Minnesota
** Missouri
Nebraska
Nevada
New Jersey
* New Mexico
New York
* North Carolina
*** Ohio
* Oklahoma
** Oregon
Pennsylvania
South Carolina
* Tennessee
Texas
Utah
Virginia
Washington
*** Washington D.C.
Wisconsin
* Borrower is authorized to provide Internet access services only.
** Borrower is authorized to provide Internet access services and
intrastate long distance services only.
*** Borrower is authorized to provide Internet access services and local ex
change services only.
<PAGE>
SCHEDULE 4.1(f)
Teligent, Inc. Authorizations
-----------------------------
ITC 97-783: Global Facilities-Based/Global Resale Services, effective
January 23, 1998. (International Section 214 Authority)
* KS2XAT: Experimental Special Temporary Authority to operate non-type
accepted 24 GHz DEMS equipment, effective June 9, 1998 for a term of
(6) six months.
* This authorization (KS2XAT) is held in the name of Teligent, Inc.
and its wholly owned subsid iaries FirstMark Communications, Inc.,
Teligent License Company I, L.L.C., and Teligent License Company II,
L.L.C.
<PAGE>
<TABLE>
<CAPTION>
Teligent License Company I, L.L.C. DEMS Licenses
------------------------------------------------
Market 24 GHz Channels(s) Call Sign Expiration Date
- ------ ------------------ --------- ---------------
<S> <C> <C> <C>
New York, NY 37 WMT315 2/1/2001
35, 38 & 39 WMT307
Los Angeles, CA 39 WMT337 2/1/2001
36 WMT314
Chicago, IL 35, 37, 38, & 39 WMT332 2/1/2001
36 WMT318
Philadelphia, PA 35, 38, & 39 WMT339 2/1/2001
37 WMT313
Detroit, MI 35, 37, 38, & 39 WPJD304 2/1/2001
36 WPJD309
Dallas, TX 35, 37, 38, & 39 WMT331 2/1/2001
36 WMT340
Houston, TX 35, 37, 38, & 39 WMT330 2/1/2001
36 WMT322
Washington, DC 35, 37, 38, & 39 WMT338 2/1/2001
36 WMT312
San Francisco, CA 35 WMT336 2/1/2001
Boston, MA 36 WMT328 2/1/2001
35, 37, 38, & 39 WMT333
Atlanta, GA 35, 37, 38, & 39 WMT335 2/1/2001
36 WMT317
San Diego, CA 35, 37, 38, & 39 WMF844 2/1/2001
Minneapolis, MN 35, 37, 38, & 39 WMF845 2/1/2001
36 WMT310
St. Louis, MO 35, 37, 38, & 39 WMF846 2/1/2001
36 WMT324
Baltimore, MD 35, 37, 38, & 39 WMF850 2/1/2001
Phoenix, AZ 35, 37, 38, & 39 WMF851 2/1/2001
36 WMT309
Seattle, WA 35, 37, 38, & 39 WMF854 2/1/2001
36 WMT323
Pittsburgh, PA 35, 37, 38, & 39 WMF852 2/1/2001
36 WMT319
</TABLE>
<PAGE>
Teligent License Company I, L.L.C. DEMS Licenses
------------------------------------------------
<TABLE>
<CAPTION>
Market 24 GHz Channels(s) Call Sign Expiration Date
- ------ ------------------ --------- ---------------
<S> <C> <C> <C>
Denver, CO 36 WMT329 2/1/2001
Miami, FL 35, 37, 38, & 39 WMT334 2/1/2001
36 WMT327
Tampa, FL 35, 37, 38, & 39 WMF849 2/1/2001
36 WMT308
Cleveland, OH 37, 38, & 39 WPJD853 2/1/2001
36 WMT341
Portland, OR 37, 38, & 39 WMF842 2/1/2001
36 WMT321
San Jose, CA 37, 38, & 39 WPJC396 2/1/2001
Cincinnati, OH 37, 38, & 39 WMF847 2/1/2001
Kansas City, MO 37, 38, & 39 WMF848 2/1/2001
36 WMT325
Sacramento, CA 37, 38, & 39 WMF843 2/1/2001
36 WMT320
Milwaukee, WI 37, 38, & 39 WMF840 2/1/2001
36 WMT311
San Antonio, TX 37, 38, & 39 WPJC397 2/1/2001
36 WMT326
Indianapolis, IN 37, 38, & 39 WMF841 2/1/2001
36 WMT316
Columbus, OH 36 WMT342 2/1/2001
</TABLE>
<PAGE>
Corresponding 18 GHz Channels for all markets still au
thorized to operate in 18 GHz Band:
Channels
--------
<TABLE>
<CAPTION>
24 GHz 18 GHz
------ ------
<S> <C>
35 30
36 31
37 32
38 33
39 34
</TABLE>
The following Teligent License Company I, L.L.C. Licenses are subject to the
conditions set forth in Schedule A:
<TABLE>
<CAPTION>
Call Sign Location
--------- --------
<S> <C>
WMF846 St. Louis, MO
WMF845 Minneapolis, MO
WMF850 Baltimore, MD
WMF844 San Diego, CA
WMF849 Tampa, CA
WMF852 Pittsburgh, PA
WMF854 Seattle, WA
WMF851 Phoenix, AZ
WPJD853 Cleveland, OH
WMF842 Portland, OR
WPJC396 San Jose, CA
WMF847 Cincinnati, OH
WMF848 Kansas City, MO
WMF843 Sacramento, CA
WMF840 Milwaukee, WI
WPJC397 San Antonio, TX
WMF841 Indianapolis, IN
WPJD304 Detroit, MI
</TABLE>
<PAGE>
Teligent License Company II, L.L.C. DEMS Licenses
-------------------------------------------------
<TABLE>
<CAPTION>
Market 24 GHz Channel(s) Call Sign Expiration Date
------ ----------------- --------- ---------------
<S> <C> <C> <C>
San Francisco, CA 35, 36, 37, 38 WMT348 2/1/2001
Los Angeles, CA 35, 36, 37, 38 WMT306 2/1/2001
New York, NY 36 WMT304 2/1/2001
Columbus, OH 37 WPNH318 2/1/2001
Salt Lake City, UT 37 WPNH283 2/1/2001
Orlando, FL 37 WPNH299 2/1/2001
New Orleans, LA 37 WPNH288 2/1/2001
Hartford, CT 38 WPNH295 2/1/2001
Nashville, TN 37 WPNH325 2/1/2001
Norfolk, VA 39 WPNH284 2/1/2001
Memphis, TN 37 WPNH323 2/1/2001
Jacksonville, FL 37 WPNH298 2/1/2001
Oklahoma City, OK 39 WPNH319 2/1/2001
Greensboro, NC 37 WPNH306 2/1/2001
Louisville, KY 37 WPNH302 2/1/2001
West Palm Beach, FL 37 WPNH300 2/1/2001
Las Vegas, NV 39 WPNH313 2/1/2001
Birmingham, AL 38 WPNH289 2/1/2001
Austin, TX 37 WPNH324 2/1/2001
Honolulu, HI 37 WPNH301 2/1/2001
Dayton, OH 35 WPNH314 2/1/2001
Albany, NY 37 WPNH311 2/1/2001
Charlotte, NC 37 WPNH305 2/1/2001
Richmond, VA 37 WPNH286 2/1/2001
Tulsa, OK 37 WPNH320 2/1/2001
Raleigh, NC 37 WPNH307 2/1/2001
Fresno, CA 37 WPNH291 2/1/2001
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Teligent License Company II, L.L.C. DEMS Licenses
-------------------------------------------------
Market 24 GHz Channel(s) Call Sign Expiration Date
------ ----------------- --------- ---------------
<S> <C> <C> <C>
San Francisco, CA 35, 36, 37, 38 WMT348 2/1/2001
Los Angeles, CA 35, 36, 37, 38 WMT306 2/1/2001
Tucson, AZ 38 WPNH290 2/1/2001
Allentown, PA 37 WPNH287 2/1/2001
Ventura, CA 38 WPNH293 2/1/2001
Syracuse, NY 37 WPNH317 2/1/2001
Akron, OH 35 WPNH312 2/1/2001
Greenville, SC 39 WPNH321 2/1/2001
El Paso, TX 38 WPNH297 2/1/2001
Omaha, NE 37 WPNH308 2/1/2001
Wilmington, DE 37 WPNH309 2/1/2001
Albuquerque, NM 38 WPNH310 2/1/2001
Springfield, MA 38 WPNH304 2/1/2001
Baton Rouge, LA 38 WPNH303 2/1/2001
Charleston, SC 38 WPNH322 2/1/2001
New Haven, CT 37 WPNH296 2/1/2001
Stockton, CA 35 WPNH294 2/1/2001
Newport News, VA 38 WPNG641 2/1/2001
Santa Barbara, CA 38 WPNH292 2/1/2001
Trenton, NJ 37 WPNH285 2/1/2001
Buffalo, NY* 37 WPNH315 2/1/2001
Rochester, NY* 37 WPNH316 2/1/2001
- --------
</TABLE>
Includes a condition that operations "may not cause interference to
any authorized Canadian communication system and authority to operate
is on a secondary, non-interference basis to any authorized Canadian
communication system until Canadian coordination can be completed for
primary operations."
<PAGE>
Corresponding 18 GHz Channels for all markets still authorized
to operate in 18 GHz Band:
<TABLE>
<CAPTION>
Channels
--------
24 GHz 18 GHz
------ ------
<S> <C>
35 30
36 31
37 32
38 33
39 34
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Teligent License Company II, L.L.C. Point-to-Point Microwave Licenses
---------------------------------------------------------------------
Call Sign Station Name Expiration Date
--------- ------------ ---------------
<S> <C> <C>
WHB513 Ontario, CA 2/1/2001
WLC649 3600 Wilshire, CA 2/1/2001
WLC650 Pepperdine, CA 2/1/2001
WLC651 Herbalife, CA 2/1/2001
WLC652 Harborgate, CA 2/1/2001
WLM499 Anaheim, CA 2/1/2001
WLM500 La Habra, CA 2/1/2001
WLM501 Broadway Plaza, CA 2/1/2001
WLN462 Paramount, CA 2/1/2001
WLU933 Kellogg Hill, CA 2/1/2001
WLU916 Kellogg Hill, CA 2/1/2001
WMJ350 Irwindale, CA 2/1/2001
WMT250 San Dimas, CA 2/1/2001
WMW590 Santa Monica, CA 2/1/2001
WMW591 Plaza La Reina, CA 2/1/2001
</TABLE>
<PAGE>
Schedule A
----------
Conditional licensee automatically forfeits this authorization if:
(a) Conditional licensee fails to construct and operate, i.e., carry
customer traffic, the following nine (9) DEMS stations within the authorized 18
month construction period, and to certify to the FCC Microwave Branch in
Gettysburg, PA when construction of each of the following stations is completed.
<TABLE>
<CAPTION>
File No. Callsign City Construction Completion Date
- -------- -------- ---- ----------------------------
<S> <C> <C> <C>
9401775 WMT334 Miami November 12, 1996
9401787 WMT335 Atlanta November 12, 1996
9401849 WMT338 D.C. November 12, 1996
9401869 WMT339 Philadelphia November 12, 1996
9401894 WMT331 Dallas November 12, 1996
9401898 WMT332 Chicago November 12, 1996
9401962 WMT330 Houston November 12, 1996
9405385 WMT336 San Francisco July 10, 1996
9405386 WMT337 Los Angeles July 10, 1996
</TABLE>
(b) Conditional licensee fails to file a copy of its dated, contractually
valid equipment order for the facilities specified herein with the Microwave
Branch within thirty days of placing such order; and
(c) Conditional licensee fails to file a copy of the equipment
manufacturers application for type acceptance or type approval for the
transmitting equipment specified herein with the Microwave Branch within thirty
days of placed equipment order.
This authorization is also granted on the condition that the Commission will not
grant any additional time to construct the facilities authorized herein, or to
extend the time limits set forth in Conditions B and C above.
RULES 21.3(B), 21.106(A)(4) AND 21.108 WAIVED BY COMMISSION ACTION DATED JANUARY
18, 1996 TO PERMIT POINT-RADIUS LICENSE, RELAXED DIGITAL EMISSION MASK AND
REDUCED ANTENNAS FOR OPERATIONS WITHIN THE AUTHORIZED 25 MILE RADIUS.
<PAGE>
SCHEDULE 6.2(d)
EXISTING INDEBTEDNESS
Debtor: Teligent, Inc.
$300,000,000 11 1/2% Senior Notes due 2007
Issued November 21, 1997
Interest payable June 1 & December 1 commencing June 1, 1998
$440,000,000 11 1/2% Senior Discount Notes due 2008
Issued February 20, 1998
$258,453,825 unamortized principal balance as of May 31, 1998
Interest payable March 1 & September 1 commencing March 1, 2003
LETTERS OF CREDIT
Total Commitments under L/C facilities are
$670,000 (PNC)
$2,778,000 (First Union)
The following letters of credit are outstanding as of the date of the Agreement:
<TABLE>
<CAPTION>
Bank Date Amount Beneficiary Expiration
- ---- Issued ------ ----------- ----------
------
<S> <C> <C> <C> <C>
PNC 12/19/97 $200,000.00 PHH Vehicle Mgt Services Corp 12/19/98
2/27/98 $340,000.00 PHH Vehicle Mgt Services Corp
(increase of existing L/C)
PNC 12/12/97 $100,000.00 Reliance Insurance Co. 12/12/98
PNC 11/20/97 $370,000.00 Fairfax Square Associates II 12/31/98
First Union 3/31/98 $500,000.00 111 Eight Avenue LLC 3/31/99
First Union 4/24/98 $60,000.00 83 Maiden Lane LLC 3/31/99
</TABLE>
<PAGE>
Debtor: Auctel, Inc.
None.
Debtor: Teligent Communications, Inc.
None.
Debtor: Teligent Telecommunications, Inc.
None.
Debtor: Teligent License Company I, L.L.C.
None.
Debtor: Teligent License Company II, L.L.C.
None.
<PAGE>
SCHEDULE 6.3(f)
EXISTING LIENS
<TABLE>
<CAPTION>
Jurisdiction of File Date File Number Description
Debtor Secured Party Filing Type of Filing --------- ----------- of Collateral
------ ------------- ------ -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Teligent, Inc. EMC Virginia UCC-1 4/22/98 9804227263 Office
Corporation Equipment
Teligent, Inc. EMC Virginia-- UCC-1 4/29/98 98003923 Office
Corporation Fairfax County Equipment
Associated Com ICON Office So- Virginia UCC-1 6/5/97 970605 7080 Copier
munications, LLC lutions
</TABLE>
<PAGE>
SCHEDULE 6.3(f)
LIENS ON CASH ACCOUNTS:
Debtor: Teligent, Inc.
Senior Indebtedness:
Pursuant to a certain Pledge Agreement between Teligent, Inc. and
First Union National Bank, as Escrow Agent, relating to the Senior
Notes described on Schedule 6.2(d), Teligent, Inc. maintains cash and
securities (consisting of US Government Securities) in escrow to fund
the first six payments on the Senior Notes. Funds are maintained in
account #5076655897 in the name of "First Union National Bank as
Trustee for Teligent Inc. 11 1/2% Senior Notes due 2007" at First
Union National Bank.
The first interest payment was made on June 1, 1998. The balance of
restricted cash and investments in the escrow account as of June 1,
1998 (after the interest payment was made) was $79,493,694.
Letters of Credit:
Total Commitments under First Union National Bank L/C facilities
listed on Schedule 6.2(d) are also secured by cash segregated in the
escrow account referenced above (account #5076655897 in the name of
"First Union National Bank as Trustee for Teligent Inc. 11 1/2% Senior
Notes due 2007" at First Union National Bank).
<PAGE>
SCHEDULE 6.7(h)
EXISTING LOANS AND ADVANCES
Teligent, Inc.:
- --------------
LOANS
Borrower Principal Amount Interest Rate Date of Note Maturity
- -------- ---------------- ------------- ------------ ---------
Alex J. Mandl $6,600,000 6.53% 9/3/96 9/3/01
Loan from MSI, carried on Teligent's books.
1/5 principal plus accrued interest forgiven each of first two
anniversaries, remaining principal plus interest forgiven at maturity
Alex J. Mandl $5,400,000 6.53% 9/3/96 9/3/01
Loan from DSC, carried on Teligent's books.
1/5 principal plus accrued interest forgiven each of first two
anniversaries, remaining principal plus interest forgiven at maturity
Kirby G. Pickle, Jr. $1,000,000 5.73% 2/1/97 2/1/00
Loan plus all accrued interest is forgivable in full at maturity date
Laurence E. Harris $600,000 6.54% 8/5/97 6/8/00
Loan plus all accrued interest is due at maturity
Laurence E. Harris $250,000 N/A 1/97 N/A
Advance payment made to Mr. Harris, to be repaid in full.
Abraham L. Morris $250,000 5.76% 10/29/97 4/10/99
Loan plus all accrued interest is forgivable in full at maturity date
Abraham L. Morris $250,000 5.76% 10/29/97 4/10/00
Loan plus all accrued interest is forgivable in full at maturity date
Steven F. Bell $666,667 5.83% 4/7/97 4/10/00
1/3 principal plus accrued interest is forgivable each anniversary date of the
loan
Keith Kaczmarek $150,000 6.14% 5/5/97 5/5/00
Loan plus all accrued interest is forgivable in full at maturity date
ADVANCES
The Company has an aggregate balance of approximately $75,000 in advances due
from various employees
<PAGE>
SCHEDULE 6.7 (h)
EXISTING LOANS AND ADVANCES
Auctel, Inc.
- ------------
Teligent Communications, Inc.
- -----------------------------
Teligent Telecommunications, Inc.
- ---------------------------------
Teligent License Company I, L.L.C.
- ----------------------------------
Teligent License Company II, L.L.C.
- -----------------------------------
None.
<PAGE>
EXHIBIT A
================================================================================
GUARANTEE AND COLLATERAL AGREEMENT
made by
TELIGENT, INC.
and certain of its Subsidiaries
in favor of
THE CHASE MANHATTAN BANK,
as Collateral Agent
Dated as of July 2, 1998
================================================================================
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C> <C>
SECTION 1. DEFINED TERMS ................................... 2
1.1 Definitions ................................................ 2
1.2 Other Definitional Provisions .............................. 8
SECTION 2. GUARANTEE ....................................... 8
2.1 Guarantee .................................................. 8
2.2 Right of Contribution ...................................... 9
2.3 No Subrogation ............................................. 9
2.4 Amendments, etc. with respect to the Secured Obligations ... 10
2.5 Guarantee Absolute and Unconditional ....................... 10
2.6 Reinstatement .............................................. 11
2.7 Payments ................................................... 11
SECTION 3. GRANT OF SECURITY INTEREST ...................... 11
3.1 Grant of Security Interest ................................. 11
3.2 Limitation on Obligation to Perfect ........................ 12
SECTION 4. REPRESENTATIONS AND WARRANTIES .................. 13
4.1 Credit Agreement Representations and Warranties ............ 13
4.2 No Other Liens ............................................. 13
4.3 Perfected Liens; Priority .................................. 13
4.4 Chief Executive Office ..................................... 14
4.5 Inventory and Equipment .................................... 14
4.6 Farm Products .............................................. 14
4.7 Pledged Securities ......................................... 14
4.8 Receivables ................................................ 14
4.9 Intellectual Property ...................................... 14
SECTION 5. COVENANTS ....................................... 15
5.1 Covenants in Secured Instruments ........................... 15
5.2 Delivery of Instruments and Chattel Paper .................. 15
5.3 Maintenance of Perfected Security Interest; Further
Documentation .............................................. 15
5.4 Changes in Locations, Name, etc ............................ 16
5.5 Notices .................................................... 16
5.6 Pledged Securities ......................................... 16
5.7 Receivables ................................................ 17
</TABLE>
i
<PAGE>
<TABLE>
<S> <C> <C>>
5.8 Intellectual Property ...................................... 18
SECTION 6. REMEDIAL PROVISIONS ............................. 19
6.1 Certain Matters Relating to Receivables .................... 19
6.2 Communications with Obligors; Grantors Remain Liable ....... 20
6.3 Certain Matters Relating to Pledged Stock .................. 20
6.4 Proceeds to be Turned Over To Collateral Agent ............. 21
6.5 Application of Proceeds .................................... 21
6.6 Code and Other Remedies .................................... 21
6.7 Registration Rights ........................................ 22
6.8 Approvals .................................................. 23
6.9 Waiver; Deficiency ......................................... 24
6.10 Issuers .................................................... 24
SECTION 7. THE COLLATERAL AGENT ............................ 25
7.1 Collateral Agent's Appointment as Attorney-in-Fact, etc .... 25
7.2 Duty of Collateral Agent ................................... 26
7.3 Execution of Financing Statements .......................... 27
7.4 Authority of Collateral Agent .............................. 27
SECTION 8. MISCELLANEOUS ................................... 27
8.1 Amendments in Writing ...................................... 27
8.2 Notices .................................................... 27
8.3 No Waiver by Course of Conduct; Cumulative
Remedies; Limitation by Law ............................... 27
8.4 Enforcement Expenses; Indemnification ...................... 28
8.5 Successors and Assigns ..................................... 28
8.6 Set-Off .................................................... 29
8.7 Counterparts ............................................... 29
8.8 Severability ............................................... 29
8.9 Section Headings ........................................... 29
8.10 Integration ................................................ 29
8.11 GOVERNING LAW .............................................. 30
8.12 Submission To Jurisdiction; Waivers ........................ 30
8.13 Acknowledgements ........................................... 30
8.14 Additional Grantors ........................................ 31
8.15 Releases ................................................... 31
8.16 WAIVER OF JURY TRIAL ....................................... 31
</TABLE>
ii
<PAGE>
1
GUARANTEE AND COLLATERAL AGREEMENT, dated as of July 2, 1998,
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 Collateral Agent (in such capacity, the "Collateral Agent")
under the Collateral Agency and Intercreditor Agreement, dated as of July 2,
1998 (the "Collateral Agency and Intercreditor Agreement"), among Teligent, Inc.
(the "Borrower"), the Collateral Agent and the Secured Parties described therein
(the "Secured Parties").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Borrower is a party to the Credit Agreement,
dated as of July 2, 1998 (as amended, supplemented or otherwise modified from
time to time, the "Credit Agreement"), among the Borrower, the banks and other
financial institutions from time to time parties thereto (the "Lenders"), Chase
Securities Inc., Goldman Sachs Credit Partners L.P. and TD Securities (USA)
Inc., as Arrangers, Goldman Sachs Credit Partners L.P., as Syndication Agent,
Toronto Dominion (Texas), Inc., as Documentation Agent, and The Chase Manhattan
Bank, as Administrative Agent;
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, it is a condition precedent to the obligations of the
Lenders to extend credit to the Borrower under the Credit Agreement that the
Borrower's obligations thereunder and under the other Loan Documents referred to
therein be secured and guaranteed as provided herein;
WHEREAS, the Borrower may from time to time incur other
obligations that are permitted by the Credit Agreement to be secured and
guaranteed pursuant hereto;
WHEREAS, pursuant to the Collateral Agency and Intercreditor
Agreement, the Collateral Agent is holding the guarantee and security interests
created hereby and by the other Security Documents;
WHEREAS, the Borrower is a member of an affiliated group of
companies thatincludes each other Grantor;
WHEREAS, the proceeds of the Secured Obligations 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;
and
WHEREAS, the Borrower and the other Grantors are engaged in
related businesses, and each Grantor will derive substantial direct and indirect
benefit from the Secured Obligations;
<PAGE>
2
NOW, THEREFORE, in consideration of the premises and to induce
the Lenders to enter into the Credit Agreement and to make their respective
extensions of credit to the Borrower thereunder and in consideration of other
Secured Obligations hereinafter incurred, each Grantor hereby agrees with the
Collateral Agent, for the ratable benefit of the Secured Parties, as follows:
SECTION 1. DEFINED TERMS
1.1 Definitions. (a) Unless otherwise defined herein, terms
defined in the Collateral Agency and Intercreditor Agreement and used herein
shall have the meanings given to them in the Collateral Agency and Intercreditor
Agreement, and the following terms which are defined in the Uniform Commercial
Code in effect in the State of New York on the date hereof are used herein as so
defined: Accounts, Chattel Paper, Documents, Equipment, Farm Products,
Instruments, Inventory and Investment Property.
(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.
"AssetCo": the collective reference to (a) Teligent
Telecommunications, Inc., a Delaware corporation and (b) any other
wholly owned Restricted Subsidiary (i) which is designated by the
Borrower from time to time as an "AssetCo", (ii) which is a grantor
and guarantor party to this Agreement and (iii) all of the Capital
Stock of which is pledged pursuant to this Agreement.
"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. "Collateral": as defined in Section
3.
"Collateral Account": as defined in the Collateral Agency and
Intercreditor Agreement.
"Communications Act": the Communications Act of 1934, and any
similar or successor federal statute, and the rules and regulations of
the FCC thereunder, all as amended and as the same may be in effect
from time to time.
"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.
<PAGE>
3
"Copyright Licenses": any written agreement naming any Grantor as
licensor or licensee (including, without limitation, those material
agreements listed in Schedule 6), granting to any Grantor any right
under any Copyright, including, without limitation, the grant of
rights to manufacture, distribute, exploit and sell materials derived
from any Copyright, 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 agreement is not prohibited by such
agreement without the consent of any other party thereto, would not
give any other party to such agreement 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 such agreement.
"Copyrights": (i) all copyrights arising under the laws of the
United States, any other country or any political subdivision thereof,
whether registered or unregistered and whether published or
unpublished (including, without limitation, those copyright
applications and registrations 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.
"Credit Agreement": the Credit Agreement, dated as of July 2,
1998, among the Borrower, the several banks and other financial
institutions or entities from time to time parties thereto, Chase
Securities Inc., Goldman Sachs Credit Partners L.P. and TD Securities
(USA) Inc., as advisors and arrangers, Goldman Sachs Credit Partners
L.P., as syndication agent, Toronto Dominion (Texas), Inc., as
documentation agent and The Chase Manhattan Bank, as administrative
agent.
"Default": as defined in the Credit Agreement.
"Domestic Subsidiary": any Subsidiary of the Borrower organized
under the laws of any jurisdiction within the United States of
America.
"Event of Default": as defined in the Credit Agreement.
"Excluded Assets": as defined in the Credit Agreement.
"Excluded Foreign Subsidiary": any Foreign Subsidiary in respect
of which either (i) the pledge of all of the Capital Stock of such
Subsidiary as Collateral or (ii) the guaranteeing by such Subsidiary
of the Obligations, or both, would, in the good faith judgment of the
Borrower, result in adverse tax consequences to the Borrower.
<PAGE>
4
"FCC": the Federal Communications Commission, or any other
successor agency of the United States Government administering the
Communications Act.
"FCC License": any license issued by the FCC, or any successor
agency of the United States Government, to any Grantor permitting any
transmission of telecommunications services through fixed wireless
networks.
"Foreign Subsidiary": any Subsidiary of the Borrower that is not
a Domestic Subsidiary.
"General Intangibles": all "general intangibles" as such term is
defined in Section 9-106 of the Uniform Commercial Code in effect in
the State of New York on the date hereof and, in any event, including,
without limitation, with respect to any Grantor, all Contractual
Obligations, 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.
"General 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, without limitation, the Copyrights, the
Copyright Licenses, the Patents, the Patent Licenses, the Trademarks
and the Trademark Licenses.
"Governmental Authority": any nation or government, any state or
other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
<PAGE>
5
"Guarantor Obligations": with respect to any Guarantor, without
duplication, 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 Security 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 Collateral Agent or to the Secured
Parties that are required to be paid by such Guarantor pursuant to the
terms of this Agreement or any other Security 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 the Copyrights, the Copyright
Licenses, the Patents, the Patent Licenses, the Trademarks and the
Trademark Licenses, whether arising under United States, multinational
or foreign laws or otherwise.
"Intercompany Note": any promissory note evidencing loans made by
any other Grantor to the Borrower or any Guarantor.
"Issuers": the collective reference to each issuer of a Pledged
Security.
"LeasingCo": Teligent Communications, Inc., a Delaware
corporation, and (b) any other wholly owned Restricted Subsidiary (i)
which is designated by the Borrower from time to time as a
"LeasingCo", (ii) which is a grantor and guarantor party to this
Agreement and (iii) all of the Capital Stock of which is pledged
pursuant to this Agreement.
"LicenseCo": the collective reference to (a) Teligent License
Company I, LLC, a Delaware limited liability company, (b) Teligent
License Company II, LLC, a Delaware limited liability company, and (c)
any other wholly owned Restricted Subsidiary (i) which is designated
by the Borrower from time to time as a "LicenseCo", (ii) which is a
grantor and guarantor party to this Agreement and (iii) all of the
Capital Stock of which is pledged pursuant to this Agreement.
"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, without limitation, any conditional sale or other title
retention agreement and any capital lease having substantially the
same economic effect as any of the foregoing).
"New York UCC": the Uniform Commercial Code as from time to time
in effect in the State of New York.
<PAGE>
6
"Non-Excluded Personal Property: any personal property other than
Excluded Assets.
"Notice of Enforcement": as defined in the Collateral Agency and
Intercreditor Agreement.
"Obligations": (i) in the case of the Borrower, the Secured
Obligations, and (ii) in the case of each Guarantor, its Guarantor
Obligations.
"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 material
agreements referred to in Schedule 6, 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 agreement is not
prohibited by such agreement without the consent of any other party
thereto, would not give any other party to such agreement 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 such agreement.
"Patents": (i) all letters patent of the United States, any other
country or any political subdivision thereof, all reissues and
extensions thereof, including, without limitation, any of the
foregoing referred to in Schedule 6, (ii) all applications for letters
patent of the United States or any other country 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.
"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.
"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 Securities": the collective reference to the Pledged
Notes and the Pledged Stock.
"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
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7
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.
"Possessory Collateral": as defined in the Collateral Agency and
Intercreditor Agreement.
"Proceeds": all "proceeds" as such term is defined in Section
9-306(1) of the Uniform Commercial Code in effect in the State of New
York on the date hereof and, in any event, shall include, without
limitation, all dividends or other income from the Pledged Securities,
collections thereon or distributions or payments with respect thereto.
"Property": any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or
intangible, including, without limitation, Capital Stock.
"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).
"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
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.
"Restricted Subsidiary": each Special Purpose Subsidiary and each
other direct and indirect Domestic Subsidiary other than an
Unrestricted Subsidiary.
"Secured Instrument": as defined in the Collateral Agency and
Intercreditor Agreement.
"Secured Obligation Commitments": as defined in the Collateral
Agency and Intercreditor Agreement.
"Secured Obligations": as defined in the Collateral Agency and
Intercreditor Agreement.
"Securities Act": the Securities Act of 1933, as amended.
"Security Documents": as defined in the Collateral Agency and
Intercreditor Agreement.
"Special Purpose Subsidiary": each of LeasingCo, AssetCo and
LicenseCo.
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8
"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 qualified,
all references to a "Subsidiary" or to "Subsidiaries" in this
Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower.
"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
material agreements referred to in Schedule 6, 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 agreement is
not prohibited by such agreement without the consent of any other
party thereto, would not give any other party to such agreement 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 such agreement.
"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, any State thereof or any other country or any political
subdivision thereof, or otherwise, and all common-law rights related
thereto, including, without limitation, any of the foregoing
registrations and applications referred to in Schedule 6, and (ii) the
right to obtain all renewals thereof.
"Unrestricted Subsidiary": any Subsidiary of the Borrower
(whether existing at the Closing Date or thereafter created or
acquired) designated by the Borrower as an Unrestricted Subsidiary;
the Borrower may designate a Subsidiary as an Unrestricted Subsidiary
only if (a) the entire investment by the Borrower and its Restricted
Subsidiaries in such Subsidiary was permitted by Section 6.7(d) of the
Credit Agreement and (b) creditors of such Subsidiary have no recourse
to the Borrower or any Restricted Subsidiary in respect of any
obligations of such Subsidiary.
<PAGE>
9
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 Collateral Agent,
for the ratable benefit of the Secured Parties 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 Secured Obligations.
(b) Anything herein or in any other Security Document to the
contrary notwithstanding, the maximum liability of each Guarantor hereunder and
under the other Security 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 Secured Obligations may at
any time and from time to time exceed the amount of the liability of such
Guarantor hereunder without impairing the guarantee contained in this Section 2
or affecting the rights and remedies of the Collateral Agent or any Secured
Party hereunder.
(d) The guarantee contained in this Section 2 shall remain in
full force and effect until all the Secured Obligations and the obligations of
each Guarantor under the guarantee contained in this Section 2 shall have been
satisfied by payment in full and all Secured Obligation Commitments shall be
terminated, notwithstanding that from time to time the Borrower may be free from
any Secured 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
Collateral Agent or any Secured Party 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 Secured Obligations shall be deemed to modify,
reduce, release or otherwise affect the liability of any Guarantor hereunder
which shall,
<PAGE>
10
notwithstanding any such payment (other than any payment made by such Guarantor
in respect of the Secured Obligations or any payment received or collected from
such Guarantor in respect of the Secured Obligations), remain liable for the
Secured Obligations up to the maximum liability of such Guarantor hereunder
until the Secured Obligations are paid in full and all Secured Obligation
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 and each other Guarantor agrees
that it will contribute its proportionate share of such payment to the
applicable Guarantor. 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 Secured Parties, and each Guarantor shall remain liable to the Secured
Parties for the full amount guaranteed by such Guarantor hereunder.
2.3 No Subrogation. Notwithstanding any payment or payments
made by any Guarantor hereunder or any set-off or application of funds of any
Guarantor by any Secured Party, no Guarantor shall be entitled to be subrogated
to any of the rights of any Secured Party against the Borrower or any other
Guarantor or any collateral security or guarantee or right of offset held by any
Secured Party for the payment of the Secured 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 owing to the Secured Parties by the Borrower on
account of the Secured Obligations are paid in full and all Secured Obligation
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 Secured
Obligations shall not have been paid in full, such amount shall be held by such
Guarantor in trust for the Secured Parties, segregated from other funds of such
Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over
to the Collateral Agent in the exact form received by such Guarantor (duly
indorsed by such Guarantor to the Collateral Agent, if required), to be applied
as provided in Section 6.5.
2.4 Amendments, etc. with respect to the Secured Obligations.
To the extent permitted by applicable law, each Guarantor shall remain obligated
hereunder notwithstanding that, without any reservation of rights against any
Guarantor and without notice to or further assent by any Guarantor, any demand
for payment of any of the Secured Obligations made by the Collateral Agent or
any Secured Party may be rescinded by the Collateral Agent or such Secured Party
and any of the Secured Obligations continued, and the Secured 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 Collateral Agent or any Secured Party, and the other Security 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
Collateral Agent or the Secured Parties
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11
may deem advisable from time to time, and any collateral security, guarantee or
right of offset at any time held by the Collateral Agent or any Secured Party
for the payment of the Secured Obligations may be sold, exchanged, waived,
surrendered or released. Neither the Collateral Agent nor any Secured Party
shall have any obligation to protect, secure, perfect or insure any Lien at any
time held by it as security for the Secured Obligations or for the guarantee
contained in this Section 2 or any property subject thereto.
2.5 Guarantee Absolute and Unconditional. To the extent
permitted by applicable law, each Guarantor waives any and all notice of the
creation, renewal, extension or accrual of any of the Secured Obligations and
notice of or proof of reliance by the Collateral Agent or any Secured Party upon
the guarantee contained in this Section 2 or acceptance of the guarantee
contained in this Section 2; the Secured 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 Collateral Agent and the Secured Parties, 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. To the extent permitted
by applicable law, 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 Secured 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 any Secured Instrument,
Security Document or related agreement, any of the Secured 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 Collateral Agent or any
Secured Party, (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 Collateral Agent or any Secured
Party, 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
Secured 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 Collateral Agent or any Secured Party 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 Secured
Obligations or any right of offset with respect thereto, and any failure by the
Collateral Agent or any Secured Party 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
Collateral Agent or any Secured Party
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12
against any Guarantor. 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 Secured Obligations is
rescinded or must otherwise be restored or returned by the Collateral Agent or
any Secured Party 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 Collateral Agent without set-off or counterclaim
in Dollars at the office of the Collateral Agent specified in the Collateral
Agency and Intercreditor Agreement.
SECTION 3. GRANT OF SECURITY INTEREST
3.1 Grant of Security Interest. Each Grantor hereby assigns
and transfers to the Collateral Agent, and hereby grants to the Collateral
Agent, for the ratable benefit of the Secured Parties, 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
in accordance with the terms thereof (whether at the stated maturity, by
acceleration or otherwise) of such Grantor's Obligations,:
(a) all Accounts;
(b) all Chattel Paper;
(c) all Documents;
(d) all Equipment;
(e) all General Intangibles;
(f) all FCC Licenses, including all rights to receive payment
or other consideration upon the assignment or transfer of any FCC
Licenses, to the extent permitted by the FCC and the Communications Act
and subject to Section 6.8;
(g) all Instruments;
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13
(h) all General Intellectual Property, including, but not
limited to, all Intellectual Property;
(i) all Inventory;
(j) all Pledged Securities;
(k) all Investment Property;
(l) all deposit accounts and other bank accounts;
(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;
provided, that Collateral shall not include any assets encumbered by Liens
described in clause (a) of the definition of Excluded Assets as defined in the
Credit Agreement to the extent that the inclusion of such assets in Collateral
would be prohibited by any Requirement of Law or Contractual Obligation relating
to such Liens.
3.2 Limitation on Obligation to Perfect. Notwithstanding the
foregoing, it is understood and agreed that (i) no Special Purpose Subsidiary
will be required to take any action to perfect any security interest created
hereby other than (A) the filing of financing statements under the Uniform
Commercial Code in the state of such Special Purpose Subsidiary's incorporation
and in the state in which such Special Purpose Subsidiary maintains its chief
executive office, (B) if such Special Purpose Subsidiary owns or holds any
material United States Patents or United States Trademarks, the filings required
in the United States Patent and Trademark Office to perfect the security
interest created hereby in such Patents or Trademarks, (C) if such Special
Purpose Subsidiary owns or holds any material United States Copyrights, the
filings required in the United States Copyright Office and the registration of
such Copyrights therein to perfect the security interest created hereby in such
Copyrights and (D) delivery to the Collateral Agent of any Possessory Collateral
owned by such Special Purpose Subsidiary and (ii) no Grantor other than a
Special Purpose Subsidiary will be required to take any action to perfect any
security interest created hereby other than (A) the filing of financing
statements under the Uniform Commercial Code in the state in which such Grantor
maintains its chief executive office, (B) the filings required in the United
States Patent and Trademark Office to perfect the security interest created
hereby in any material United States Patents or U.S. Trademarks owned or held by
such Grantor, (C) the filings and registrations required in the United States
Copyright Office to perfect the security interest created hereby in any material
United States Copyrights owned or held by such Grantor, (D) delivery to the
Collateral Agent of any Possessory Collateral owned by such Grantor and (E) any
actions required to perfect the security interest created hereby in any
Non-Excluded Personal Property which such Grantor has elected not to transfer to
<PAGE>
14
a Special Purpose Subsidiary; provided, that if after the date hereof there is
any change in law which requires actions in addition to those described above to
cause the security interests created hereby to be perfected to the same extent
as the perfection effected by the foregoing actions under laws in effect on the
date hereof, the Grantors will take such additional actions.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Secured Parties to extend credit to the
Borrower, each Grantor hereby represents and warrants to the Collateral Agent
and each Secured Party that:
4.1 Credit Agreement Representations and Warranties. Each of
the representations and warranties made in respect of such Grantor in Section 3
of the Credit Agreement is true and correct as of the date hereof.
4.2 No Other Liens. Except for the security interest granted
to the Collateral Agent for the ratable benefit of the Secured Parties pursuant
to this Agreement and the other Liens permitted to exist on the Collateral by
the Secured Instruments, such Grantor owns, holds, or has an interest in each
item of the Collateral free and clear of any and all Liens or claims of others.
Except as disclosed on Schedule 7 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 Collateral Agent,
for the ratable benefit of the Secured Parties, pursuant to this Agreement or as
are permitted by the Secured Instruments.
4.3 Perfected Liens; Priority. Subject to the limitations set
forth in Section 3.2, the security interests granted pursuant to this Agreement
(a) constitute valid perfected security interests in all of the Collateral in
favor of the Collateral Agent, for the ratable benefit of the Secured Parties,
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 provided that, with
respect to United States Patents and United States registered Trademarks and
applications, such perfection will not be effective under United States federal
law until the recordation of appropriate filings in the United States Patent and
Trademark Office, and with respect to United States Copyrights, such perfection
will not be effective under United States federal law until the recordation of
appropriate filings in the United States Copyright Office and the registration
of such Copyrights therein and (b) are prior to all other Liens on the
Collateral in existence on the date hereof except for Liens expressly permitted
by the Secured Instruments to be prior to the security interests created hereby.
4.4 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.
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15
4.5 Inventory and Equipment. On the date hereof, the Inventory
and the Equipment (other than mobile goods) in which a security interest is
required to be perfected by Section 3.2 are kept at the locations listed on
Schedule 5.
4.6 Farm Products. None of the Collateral constitutes, or is
the Proceeds of, Farm Products.
4.7 Pledged Securities. (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;
provided, that the security interest granted hereby in any Capital Stock of any
Excluded Foreign Subsidiary is limited to 65% of the Capital Stock of such
Excluded Foreign Subsidiary.
(b) All the shares of the Pledged Stock representing ownership
interests of any Subsidiary of the Borrower have been duly and validly issued
and are fully paid and nonassessable.
(c) Such Grantor is the record and beneficial owner of, and
has good and marketable title to, the Pledged Securities 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.
(d) None of the Pledged Stock issued by an Issuer which is a
limited liability company or a partnership constitutes a "security" within the
meaning of Section 8-102 of the New York UCC .
4.8 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 Collateral Agent.
(b) Except as set forth on Schedule 8 none of the obligors on
any Receivables is a Governmental Authority.
(c) The amounts represented by such Grantor to the Secured
Parties from time to time as owing to such Grantor in respect of the Receivables
will as of such time be accurate in all material respects.
4.9 Intellectual Property. (a) Schedule 6 lists all (i)
registered Trademarks and Trademark applications, (ii) Patents, (iii) registered
Copyrights and Copyright applications and (iv) all material Trademark Licenses,
material Patent Licenses and material Copyright Licenses owned or held by such
Grantor in its own name on the date hereof.
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16
(b) On the date hereof, all material Intellectual Property is
valid, subsisting, unexpired and enforceable, has not been abandoned and does
not infringe the intellectual property rights of any other Person.
(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 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 against any Grantor (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 Collateral Agent
and the Secured Parties that, from and after the date of this Agreement until
the Obligations shall have been paid in full and all Secured Obligation
Commitments shall have terminated:
5.1 Covenants in Secured Instruments. In the case of each
Guarantor, such Guarantor shall take, or shall refrain from taking, as the case
may be, each action that is necessary to be taken or not taken, as the case may
be, so that no violation of any Secured Instrument is caused by the failure to
take such action or to refrain from taking such action by such Guarantor or any
of its Subsidiaries.
5.2 Delivery of Instruments and Chattel Paper. If any amount
payable under or in connection with any of the Collateral shall be or become
evidenced by any Instrument or Chattel Paper, such Instrument or Chattel Paper
shall be immediately delivered to the Collateral Agent, duly indorsed in a
manner satisfactory to the Collateral Agent, to be held as Collateral pursuant
to this Agreement.
5.3 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 4.5 and shall defend such security interest against the
claims and demands of all Persons whomsoever.
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17
(b) Such Grantor will furnish to the Collateral Agent and the
Secured Parties statements and schedules further identifying and describing the
Collateral and such other reports in connection with the Collateral, all as the
Collateral Agent may reasonably request, all in reasonable detail.
(c) Subject to the limitations set forth in Section 3.2, at
any time and from time to time, upon the written request of the Collateral
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 Collateral 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, the filing of 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.
5.4 Changes in Locations, Name, etc. Such Grantor will not,
except upon 15 days' prior written notice to the Collateral Agent and delivery
to the Collateral Agent of (a) all additional executed financing statements and
other documents reasonably requested by the Collateral 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 in which a
security interest is required to be perfected by Section 3.2 to be kept
at a location other than those listed on Schedule 5;
(ii) change the location of its chief executive office or sole
place of business from that referred to in Section 4.6; or
(iii) change its name, identity or corporate structure to such
an extent that any financing statement filed by the Collateral Agent in
connection with this Agreement would become misleading.
5.5 Notices. Such Grantor will advise the Collateral Agent and
the Secured Parties promptly, in reasonable detail, of any Lien (other than
security interests created hereby or Liens permitted under the Secured
Instruments) on any of the material Collateral which would materially adversely
affect the ability of the Collateral Agent to exercise any of its remedies
hereunder.
5.6 Pledged Securities. (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
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18
shall accept the same as the agent of the Collateral Agent and the Secured
Parties, hold the same in trust for the Collateral Agent and the Secured Parties
and deliver the same forthwith to the Collateral Agent in the exact form
received, duly indorsed by such Grantor to the Collateral Agent, if required,
together with an undated stock power covering such certificate duly executed in
blank by such Grantor and with, if the Collateral Agent so requests, signature
guaranteed, to be held by the Collateral Agent, subject to the terms hereof, as
additional collateral security for the Obligations and the same shall constitute
"Pledged Stock" for purpose of this Agreement. Any sums paid upon or in respect
of the Pledged Securities upon the liquidation or dissolution of any Issuer
shall be paid over to the Collateral 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 Pledged Securities or any
property shall be distributed upon or with respect to the Pledged Securities
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
Collateral Agent, be delivered to the Collateral 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 Pledged Securities
shall be received by such Grantor, such Grantor shall, until such money or
property is paid or delivered to the Collateral Agent, hold such money or
property in trust for the Secured Parties, segregated from other funds of such
Grantor, as additional collateral security for the Obligations.
(b) Without the prior written consent of the Collateral 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 Pledged Securities or Proceeds thereof (except
pursuant to a transaction expressly permitted by the Secured Instruments), (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 Pledged Securities 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 Collateral Agent to sell, assign or transfer
any of the Pledged Securities 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 Pledged Securities issued by it and will comply with such terms insofar
as such terms are applicable to it, (ii) it will notify the Collateral Agent
promptly in writing of the occurrence of any of the events described in Section
5.8(a) with respect to the Pledged Securities 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 Pledged Securities issued by it.
5.7 Receivables. Other than in the ordinary course of
business, such Grantor will not (i) grant any extension of the time of payment
of any material Receivable, (ii) compromise or settle any material Receivable
for less than the full amount thereof, (iii) release, wholly or
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19
partially, any Person liable for the payment of any material Receivable, (iv)
allow any credit or discount whatsoever on any Receivable or (v) amend,
supplement or modify any material Receivable in any manner that could adversely
affect the value thereof.
5.8 Intellectual Property. (a) Such Grantor (either itself or
through licensees) will (i) continue to use each material Trademark adequately
and sufficiently so as 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 mark which
is confusingly similar or a colorable imitation of such Trademark unless the
Collateral Agent, for the ratable benefit of the Secured Parties, shall obtain a
perfected security interest in such mark pursuant to this Agreement, and (v) not
(and not knowingly 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, except, in each case, where the failure to do so is not
reasonably expected to have a Material Adverse Effect.
(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, except those not reasonably
expected to have a Material Adverse Effect.
(c) Such Grantor (either itself or through licensees) (i) will
employ each material Copyright, except where the failure to do is not reasonably
expected to have a Material Adverse Effect 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 Copyrights may become invalidated
or otherwise impaired, except those not reasonably expected to have a Material
Adverse Effect. Such Grantor will not (either itself or through licensees)
knowingly do any act whereby any material portion of the Copyrights may fall
into the public domain, except those not reasonably expected to have a Material
Adverse Effect.
(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, except those not
reasonably expected to have a Material Adverse Effect.
(e) Such Grantor will notify the Collateral Agent and the
Secured Parties 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) (except for routine "office actions", excluding
objections based on 15 USC ss.1052(d)) 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.
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20
(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 or any similar office or
agency in any other country or any political subdivision thereof, such Grantor
shall report such filing to the Collateral Agent within 30 days after the last
day of the fiscal quarter in which such filing occurs. Upon request of the
Collateral Agent, such Grantor shall execute and deliver, and have recorded, any
and all agreements, instruments, documents, and papers as the Collateral Agent
may request to evidence the Secured Parties' security interest in any Copyright,
Patent or Trademark and the goodwill and general intangibles of such Grantor
relating thereto or represented thereby.
(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 in any other country or any political subdivision thereof, 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, except where the failure to do so could not
reasonably be expected to have a material adverse effect.
(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, except where the failure to
do so could not reasonably be expected to have a material adverse effect and
(ii) if such Intellectual Property is of material economic value, promptly
notify the Collateral Agent after it learns thereof and sue 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) If an Event
of Default shall have occurred and be continuing, the Collateral 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 Collateral Agent may
require in connection with such test verifications. At any time and from time to
time (in any event, not more than once during any 365 day period), upon the
Collateral Agent's reasonable request and at the expense of the relevant
Grantor, such Grantor shall cause independent public accountants or others
satisfactory to the Collateral Agent to furnish to the Collateral Agent reports
showing reconciliations, aging and test verifications of, and trial balances
for, the Receivables.
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21
(b) The Collateral Agent hereby authorizes each Grantor to
collect such Grantor's Receivables and the Collateral Agent may curtail or
terminate said authority at any time when a Notice of Enforcement is in effect.
If required by the Collateral Agent at any time when a Notice of Enforcement is
in effect, 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, duly indorsed by such Grantor to the
Collateral Agent if required, in a Collateral Account maintained under the sole
dominion and control of the Collateral Agent, subject to withdrawal by the
Collateral Agent for the account of the Secured Parties only as provided in
Section 6.5, and (ii) until so turned over, shall be held by such Grantor in
trust for the Secured Parties, 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) If an Event of Default shall have occurred and be
continuing, at the Collateral Agent's request, each Grantor shall deliver to the
Collateral 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 when a Notice of Enforcement is in effect, the Collateral Agent in
its own name or in the name of others may at any time communicate with obligors
under the Receivables to verify with them to the Collateral Agent's satisfaction
the existence, amount and terms of any Receivables.
(b) Upon the request of the Collateral Agent at any time when
a Notice of Enforcement is in effect, each Grantor shall notify obligors on the
Receivables that the Receivables have been assigned to the Collateral Agent for
the ratable benefit of the Secured Parties and that payments in respect thereof
shall be made directly to the Collateral Agent.
(c) Anything herein to the contrary notwithstanding, each
Grantor shall remain liable under each of the Receivables 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 Collateral Agent nor any Secured Party shall have any
obligation or liability under any Receivable (or any agreement giving rise
thereto) by reason of or arising out of this Agreement or the receipt by the
Collateral Agent or any Secured Party of any payment relating thereto, nor shall
the Collateral Agent or any Secured Party 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), 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 Certain Matters Relating to Pledged Stock. (a) Unless a
Notice of Enforcement is in effect and the Collateral Agent shall have given
notice to the relevant Grantor
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22
of the Collateral 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 to the extent not prohibited by any Secured Instrument, and to
exercise all voting and corporate rights with respect to the Pledged Securities;
provided, however, that no vote shall be cast or corporate right exercised or
other action taken which impairs the Collateral or which would be inconsistent
with or result in any violation of any provision of this Agreement, any Security
Document or any other Secured Instrument.
(b) If a Notice of Enforcement is in effect and the Collateral
Agent shall have given notice of its intent to exercise such rights to the
relevant Grantor or Grantors, (i) the Collateral Agent shall have the right to
receive any and all cash dividends, payments or other Proceeds paid in respect
of the Pledged Securities and make application thereof to the Obligations in the
order set forth in Section 6.5, and (ii) any or all of the Pledged Securities
shall be registered in the name of the Collateral Agent or its nominee, and the
Collateral Agent or its nominee may thereafter exercise (x) all voting,
corporate and other rights pertaining to such Pledged Securities 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 Pledged Securities as if it were the
absolute owner thereof (including, without limitation, the right to exchange at
its discretion any and all of the Pledged Securities 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 Collateral Agent of any right, privilege or option pertaining to such
Pledged Securities, and in connection therewith, the right to deposit and
deliver any and all of the Pledged Securities with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms and
conditions as the Collateral Agent may determine), all without liability except
to account for property actually received by it, but the Collateral Agent shall
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 Pledged Securities pledged by such Grantor hereunder to (i) comply with
any instruction received by it from the Collateral Agent in writing that (x)
states that a Notice of Enforcement is in effect 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
Pledged Securities directly to the Collateral Agent.
6.4 Proceeds to be Turned Over To Collateral Agent. In
addition to the rights of the Secured Parties specified in Section 6.1 with
respect to payments of Receivables, if a Notice of Enforcement is in effect and
the Collateral Agent shall have given notice of its intent to exercise such
rights to the relevant Grantor or Grantors, 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 Secured Parties, segregated from other funds of such
Grantor, and shall, forthwith upon receipt
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23
by such Grantor, be turned over to the Collateral Agent in the exact form
received by such Grantor (duly indorsed by such Grantor to the Collateral Agent,
if required). All Proceeds received by the Collateral Agent hereunder shall be
held by the Collateral Agent in a Collateral Account maintained under its sole
dominion and control. All Proceeds while held by the Collateral Agent in a
Collateral Account (or by such Grantor in trust for the Secured Parties) 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. The Collateral Agent shall apply
all Proceeds constituting Collateral and all proceeds of the guarantee set forth
in Section 2 in the manner required by subsection 3.4 of the Collateral Agency
and Intercreditor Agreement.
6.6 Code and Other Remedies. If a Notice of Enforcement is in
effect, the Collateral Agent, on behalf of the Secured Parties, 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,
to the extent permitted by applicable law, the Collateral 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 to the extent permitted by applicable law (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 Collateral Agent or any Secured Party or
elsewhere upon such terms and conditions as it may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. The Collateral Agent or any Secured Party 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 Collateral Agent's request, to assemble the Collateral
and make it available to the Collateral Agent at places which the Collateral
Agent shall reasonably select whether at such Grantor's premises or elsewhere.
The Collateral 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 Secured Parties hereunder, including, without limitation,
reasonable attorneys' fees and disbursements, to the payment in whole or in part
of the Obligations, in the manner specified in subsection 3.4 of the Collateral
Agency and Intercreditor Agreement, and only after such application and after
the payment by the Collateral 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 Collateral 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
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24
it may acquire against the Collateral Agent or any Secured Party 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 Registration Rights. (a) If the Collateral Agent shall
determine to exercise its right to sell any or all of the Pledged Stock pursuant
to Section 6.6, and if in the opinion of the Collateral Agent it is necessary or
advisable to have the Pledged Stock, or that portion thereof to be sold,
registered under the provisions of the Securities Act, the relevant Grantor will
cause the Issuer thereof to (i) execute and deliver, and cause the directors and
officers of such Issuer to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts as may be, in the
opinion of the Collateral Agent, necessary or advisable to register the Pledged
Stock, or that portion thereof to be sold, under the provisions of the
Securities Act, (ii) use its best efforts to cause the registration statement
relating thereto to become effective and to remain effective for a period of one
year from the date of the first public offering of the Pledged Stock, or that
portion thereof to be sold, and (iii) make all amendments thereto and/or to the
related prospectus which, in the opinion of the Collateral Agent, are necessary
or advisable, all in conformity with the requirements of the Securities Act and
the rules and regulations of the Securities and Exchange Commission applicable
thereto. Each Grantor agrees to cause such Issuer to comply with the provisions
of the securities or "Blue Sky" laws of any and all jurisdictions which the
Collateral Agent shall designate and to make available to its security holders,
as soon as practicable, an earnings statement (which need not be audited) which
will satisfy the provisions of Section 11(a) of the Securities Act.
(b) Each Grantor recognizes that the Collateral 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 Collateral
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.
(c) Each Grantor agrees to use its best efforts to do or cause
to be done all such other acts as may be necessary to make such sale or sales of
all or any portion of the Pledged Stock pursuant to this Section 6.7 valid and
binding and in compliance with any and all other applicable Requirements of Law.
Each Grantor further agrees that a breach of any of the covenants contained in
this Section 6.7 will cause irreparable injury to the Secured Parties, that the
Secured Parties have no adequate remedy at law in respect of such breach and, as
a consequence, that each and every covenant contained in this Section 6.7 shall
be specifically
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25
enforceable against such Grantor, and such Grantor hereby waives and agrees not
to assert any defenses against an action for specific performance of such
covenants.
6.8 Approvals. Any provision contained herein to the contrary
notwithstanding, no action shall be taken hereunder by the Collateral Agent or
any Secured Party with respect to any Collateral in the form of FCC Licenses or
the Pledged Stock of any Issuer that holds any FCC License unless and until all
applicable requirements of the FCC, if any, under the Communications Act,
applicable state laws and the respective rules and regulations thereunder and
thereof, as well as any other laws, rules and regulations of any other
Governmental Authority applicable to or having jurisdiction over the Borrower or
the relevant Grantor or Issuer, have in the reasonable judgment of the
Collateral Agent been fully satisfied to the extent necessary to take such
action and there have been obtained such consents, approvals and authorizations,
as may be required to be obtained from the FCC, applicable state and local
regulatory authorities and municipalities and any other Governmental Authority
under the terms of any franchise, license or similar operating right held by the
Borrower or the relevant Grantor or Issuer in order to take such action. It is
the intention of the parties hereto that the pledge in favor of the Collateral
Agent of the Pledged Stock of any Issuer that holds any FCC License, and the
creation of a security interest (to the extent permitted by law) in favor of the
Collateral Agent in FCC Licenses, and all rights and remedies by the Collateral
Agent with respect to such Pledged Stock and FCC Licenses, shall in all relevant
aspects be subject to and governed by said statutes, rules and regulations and
that nothing in this Agreement shall be construed to diminish the control
exercised by the Borrower or the relevant Grantor or Issuer, except in
accordance with the provisions of such statutory requirements and rules and
regulations. By its acceptance of this Agreement, the Collateral Agent agrees
that the Collateral Agent will not take any action pursuant to this Agreement
which constitutes or results in any assignment of a license or franchise or any
change of control over the communications properties owned and operated by any
Grantor, if such assignment of license or franchise or change of control would,
under then existing law or under any franchise, require the prior approval of a
Governmental Authority, without first obtaining such approval. Upon the exercise
by the Collateral Agent of any power, right, privilege or remedy pursuant to
this Agreement which requires any consent, approval, recording, qualification or
authorization of any Governmental Authority, the Borrower or the relevant
Grantor or Issuer will execute and deliver, or will cause the execution and
delivery of, all applications, certificates, instruments and other documents and
papers that the Collateral Agent may reasonably require in order for such
governmental consent, approval, recording, qualification or authorization to be
obtained. The Borrower agrees to use its best efforts to cause such governmental
consents, approvals, recordings, qualifications and authorizations to be
forthcoming.
6.9 Waiver; Deficiency. Each Grantor waives and agrees not to
assert any rights or privileges against the Collateral Agent or any other
secured party which it may acquire under Section 9-112 of the New York UCC. 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
subject to Section 2.1(b) and the fees and disbursements of any attorneys
employed by the Collateral Agent or any Secured Party to collect such
deficiency.
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26
6.10 Issuers. Each Grantor which is an Issuer agrees, in its
capacity as an Issuer of Pledged Stock, to comply with the provisions of this
Agreement to the extent relating to such Pledged Stock. Each Grantor which is an
Issuer and a limited liability company or a partnership agrees, in its capacity
as Issuer of Pledged Stock, that if such Pledged Stock shall at any time become
a "security" within the meaning of Section 8-102 of the New York UCC such Issuer
will (i) if such securities are "certificated securities" within the meaning of
Section 8-102 of the New York UCC, deliver such certificates, or cause such
certificates to be delivered only to the Collateral Agent on behalf of the
Grantor and not to any Grantor and (ii) if such securities are "uncertificated
securities" within the meaning of Section 8-102 of the New York UCC, comply with
instructions originated by the Collateral Agent in respect of such securities
without further consent by the Grantor in respect thereof; and each Grantor
instructs each such Issuer to comply with the foregoing agreements.
SECTION 7. THE COLLATERAL AGENT
7.1 Collateral Agent's Appointment as Attorney-in-Fact, etc.
(a) Each Grantor hereby irrevocably constitutes and appoints the Collateral
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 gives the Collateral 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 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 Collateral Agent for the
purpose of collecting any and all such moneys due under any Receivable
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 Collateral Agent may request to evidence
the Secured Parties' 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;
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27
(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 Collateral Agent or as the Collateral
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 Collateral 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 Collateral 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 Collateral Agent
were the absolute owner thereof for all purposes, and do, at the
Collateral Agent's option and such Grantor's expense, at any time, or
from time to time, all acts and things which the Collateral Agent deems
necessary to protect, preserve or realize upon the Collateral and the
Secured parties' security interests therein and to effect the intent of
this Agreement, all as fully and effectively as such Grantor might do.
Anything in this Section 7.1(a) to the contrary notwithstanding, the
Collateral Agent agrees that it will not exercise any rights under the power of
attorney provided for in this Section 7.1(a) unless a Notice of Enforcement is
in effect.
(b) If any Grantor fails to perform or comply with any of its
agreements contained herein, the Collateral 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 Collateral 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 rate per annum at which
interest would then be payable on past due Revolving Credit Loans that are ABR
Loans under (and as defined in) the Credit Agreement, from the date of payment
by the Collateral Agent to the date reimbursed by the relevant Grantor, shall be
payable by such Grantor to the Collateral Agent on demand.
<PAGE>
28
(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 Collateral Agent. The Collateral 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 Collateral Agent
deals with similar property for its own account. Neither the Collateral Agent,
any Secured Party 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 Collateral Agent and
the Secured Parties hereunder are solely to protect the Secured Parties'
interests in the Collateral and shall not impose any duty upon the Collateral
Agent or any Secured Party to exercise any such powers. The Collateral Agent and
the Secured Parties 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 Collateral 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 Collateral
Agent reasonably determines appropriate to perfect the security interests of the
Collateral Agent under this Agreement, to the extent such security interests are
required to be perfected pursuant to Section 3.2. 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 Collateral Agent. Each Grantor acknowledges
that the rights and responsibilities of the Collateral Agent under this
Agreement with respect to any action taken by the Collateral Agent or the
exercise or non-exercise by the Collateral Agent of any option, voting right,
request, judgment or other right or remedy provided for herein or resulting or
arising out of this Agreement shall, as between the Collateral Agent and the
Secured Parties, be governed by the Collateral Agency and Intercreditor
Agreement and by such other agreements with respect thereto as may exist from
time to time among them, but, as between the Collateral Agent and the Grantors,
the Collateral Agent shall be conclusively presumed to be acting as agent for
the Secured Parties 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.
<PAGE>
29
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 Section 8.3 of the Collateral Agency and Intercreditor
Agreement.
8.2 Notices. All notices, requests and demands to or upon the
Collateral Agent or any Grantor hereunder shall be effected in the manner
provided for in Section 8.1 of the Collateral Agency and Intercreditor
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;
Limitation by Law. (a) Neither the Collateral Agent nor any Secured Party 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 by the Borrower under any Secured
Instrument. No failure to exercise, nor any delay in exercising, on the part of
the Collateral Agent or any Secured Party, 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 Collateral Agent or any Secured Party of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy which the Collateral Agent or such Secured Party 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.
(b) All rights, remedies, and powers provided under this
Agreement may be exercised only to the extent that the exercise thereof does not
violate any applicable provision of law, and all the provisions under this
Agreement are intended to be subject to all applicable mandatory provisions of
law which may be controlling and (subject to Section 8.8) to be limited to the
extent necessary so that they will not render this Agreement invalid,
unenforceable in whole or in part or not entitled to be recorded, registered or
filed under the provisions of any applicable law.
8.4 Enforcement Expenses; Indemnification. (a) Each Guarantor
agrees to pay or reimburse each Secured Party and the Collateral 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 Security 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 Secured
Party and of counsel to the Collateral Agent.
(b) The agreements in this Section shall survive repayment of
the Secured Obligations and all other amounts payable under the Secured
Instruments.
<PAGE>
30
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 Collateral Agent and the Secured Parties 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 Collateral Agent.
8.6 Set-Off. Each Grantor hereby irrevocably authorizes the
Collateral Agent and each Secured Party at any time and from time to time while
a Notice of Enforcement is in effect, 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 Collateral Agent or such Secured Party to or for the credit or the
account of such Grantor, or any part thereof in such amounts as the Collateral
Agent or such Secured Party may elect, against and on account of the obligations
and liabilities of such Grantor to the Collateral Agent or such Secured Party
hereunder and claims of every nature and description of the Collateral Agent or
such Secured Party against such Grantor, in any currency, whether arising
hereunder, the Security Documents, any Secured Instruments or otherwise, as the
Collateral Agent or such Secured Party may elect, whether or not the Collateral
Agent or any Secured Party has made any demand for payment and although such
obligations, liabilities and claims may be contingent or unmatured. The
Collateral Agent and each Secured Party shall notify such Grantor promptly of
any such set-off and the application made by the Collateral Agent or such
Secured Party 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 Collateral Agent and each Secured Party under this Section are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) which the Collateral Agent or such Secured Party 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 Security
Documents represent the agreement of the Grantors, the Collateral Agent and the
Secured Parties with respect to the
<PAGE>
31
subject matter hereof and thereof, and there are no promises, undertakings,
representations or warranties by the Collateral Agent or any Secured Party
relative to subject matter hereof and thereof not expressly set forth or
referred to herein or in the other Security 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 Security 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) to the extent permitted by applicable law, 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 Collateral 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 sue 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 Security
Documents to which it is a party;
(b) neither the Collateral Agent nor any Secured Party has any
fiduciary relationship with or duty to any Grantor arising out of or in
connection with this
<PAGE>
32
Agreement or any of the other Security Documents, and the relationship
between the Grantors, on the one hand, and the Collateral Agent and
Secured Parties, on the other hand, in connection herewith or therewith
is solely that of debtor and creditor; and
(c) no joint venture is created hereby, by this Agreement or
by the other Security Documents or otherwise exists by virtue of the
transactions contemplated hereby among the Secured Parties or among the
Grantors and the Secured Parties.
8.14 Additional Grantors. Each Subsidiary of the Borrower that
is required to become a party to this Agreement pursuant to a Secured Instrument
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 (including Obligations in respect of Permitted Letters of Credit,
but excluding other unaccrued contingent obligations) shall have been paid in
full and all Secured Obligation Commitments have been terminated, the Collateral
shall automatically and immediately be released from the Liens created hereby,
and this Agreement and all obligations (other than those expressly stated to
survive such termination) of the Collateral Agent and each Grantor hereunder
shall automatically and immediately 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. Upon such termination, the Collateral
Agent will promptly, at the Borrower's written request and expense, (i) execute
and deliver to the Borrower such documents and instruments and take such other
actions as the Borrower shall reasonably request to evidence or effect the
release of such Collateral and (ii) in the case of a release of all Collateral,
deliver or cause to be delivered to the Borrower all Possessory Collateral and
all other property of the Borrower (including, without limitation, all amounts
deposited or held in the Collateral Account, and all Cash Equivalents or other
investments, together with all interest, dividends or profits thereon) then held
by the Collateral Agent or any agent thereof.
(b) If any of the Collateral shall be sold, transferred or
otherwise disposed of by any Grantor in a transaction permitted by the Secured
Instruments, then the Collateral 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 or if
it is no longer required to be a Guarantor pursuant to the Secured Instruments,
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 Secured Instruments; provided that
the Borrower shall have delivered to the Collateral Agent, at least ten Business
Days prior to the date of the proposed release, a written request for release
identifying the relevant Guarantor and, if applicable, 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 Secured Instruments.
<PAGE>
33
8.16 WAIVER OF JURY TRIAL. EACH GRANTOR, THE COLLATERAL AGENT,
AND EACH SECURED PARTY (BY ITS ACCEPTANCE OF THE BENEFITS HEREOF) HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER SECURITY DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
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.
TELIGENT, INC.
By:
-----------------------------
Title:
[OTHER GRANTORS]
By:
------------------------------
Title:
<PAGE>
Annex 1 to
Guarantee and Collateral Agreement
----------------------------------
ASSUMPTION AGREEMENT, dated as of ________________, 199_, made
by ______________________________, a ______________ corporation (the "Additional
Grantor"), in favor of The Chase Manhattan Bank, as collateral agent (in such
capacity, the "Collateral Agent") under the Collateral Agency and Intercreditor
Agreement, dated July 2, 1998 (the "Collateral Agency and Intercreditor
Agreement"), among Teligent, Inc. (the "Borrower"), the Collateral Agent and the
Secured Parties described therein (the "Secured Parties"). All capitalized terms
not defined herein shall have the meaning ascribed to them in the Collateral
Agency and Intercreditor Agreement.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Borrower, banks and other financial institutions
parties to the Credit Agreement (the "Lenders"), and The Chase Manhattan Bank,
as Administrative Agent, have entered into a Credit Agreement, dated as of July
2, 1998 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement");
WHEREAS, in connection with the Credit Agreement, the Borrower
and certain of its Affiliates (other than the Additional Grantor) have entered
into the Guarantee and Collateral Agreement, dated as of July 2, 1998 (as
amended, supplemented or otherwise modified from time to time, the "Guarantee
and Collateral Agreement") in favor of the Collateral Agent for the benefit of
the Secured Parties;
WHEREAS, the Credit Agreement requires the Additional Grantor
to become a party to the Guarantee and Collateral Agreement; and
WHEREAS, the Additional Grantor has agreed to execute and
deliver this Assumption Agreement in order to become a party to the Guarantee
and Collateral Agreement;
NOW, THEREFORE, IT IS AGREED:
1. Guarantee and Collateral Agreement. By executing and
delivering this Assumption Agreement, the Additional Grantor, as provided in
Section 8.15 of the Guarantee and Collateral Agreement, hereby becomes a party
to the Guarantee and Collateral Agreement as a Grantor thereunder with the same
force and effect as if originally named therein as a Grantor and, without
limiting the generality of the foregoing, hereby expressly assumes all
obligations and liabilities of a Grantor thereunder. The information set forth
in Annex 1-A hereto is hereby
<PAGE>
2
added to the information set forth in Schedules ____________* to the Guarantee
and Collateral Agreement. The Additional Grantor hereby represents and warrants
that each of the representations and warranties as applicable to it contained in
Section 4 of the Guarantee and Collateral Agreement is true and correct on and
as the date hereof (after giving effect to this Assumption Agreement) as if made
on and as of such date.
2. GOVERNING LAW. THIS ASSUMPTION AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK.
IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first above written.
[ADDITIONAL GRANTOR]
By:
-----------------------
Name:
Title:
- --------
* Refer to each Schedule which needs to be supplemented.
<PAGE>
SCHEDULE 1
NOTICE ADDRESSES OF GRANTORS
Teligent, Inc. Auctel, Inc.
8065 Leesburg Pike 8065 Leesburg Pike
Vienna, VA 22182 Vienna, VA 22182
Att: General Counsel Att: General Counsel
Tel: 703-762-5225 Tel: 703-762-5225
Fax: 703-762-5227 Fax: 703-762-5227
cc: Chief Financial Officer cc: Chief Financial Officer
Tel: 703-762-5233 Tel: 703-762-5233
Fax: 703-762-5235 Fax: 703-762-5235
Teligent Communications, Inc. Teligent License Company I, L.L.C.
8065 Leesburg Pike 8065 Leesburg Pike
Vienna, VA 22182 Vienna, VA 22182
Att: General Counsel Att: General Counsel
Tel: 703-762-5225 Tel: 703-762-5225
Fax: 703-762-5227 Fax: 703-762-5227
cc: Chief Financial Officer cc: Chief Financial Officer
Tel: 703-762-5233 Tel: 703-762-5233
Fax: 703-762-5235 Fax: 703-762-5235
Teligent Telecommunications, Inc. Teligent License Company II, L.L.C.
8065 Leesburg Pike 8065 Leesburg Pike
Vienna, VA 22182 Vienna, VA 22182
Att: General Counsel Att: General Counsel
Tel: 703-762-5225 Tel: 703-762-5225
Fax: 703-762-5227 Fax: 703-762-5227
cc: Chief Financial Officer cc: Chief Financial Officer
Tel: 703-762-5233 Tel: 703-762-5233
Fax: 703-762-5235 Fax: 703-762-5235
1
<PAGE>
SCHEDULE 2
DESCRIPTION OF PLEDGED SECURITIES
Pledged Stock:
<TABLE>
<CAPTION>
Stock
Certificate No. of
Issuer Type of Stock No. Shares
<S> <C> <C> <C>
Pledgor: Teligent, Inc.
- -----------------------
Auctel, Inc. Common 2 1,000
FirstMark Communications, Inc. Common 3 100
Teligent Communications, Inc. Common 2 1,000
Teligent Telecommunications, Inc. Common 2 1,000
Teligent of Virginia, Inc. Common 2 1,000
</TABLE>
Pledged Membership Interests:
<TABLE>
<CAPTION>
Percentage of
Company Membership Interests
Held
<S> <C>
Pledgor: Teligent, Inc.
- ----------------------
Teligent License Company I, L.L.C. 100%
Teligent License Company II, L.L.C. 99%
Pledgor: Teligent License Company I, L.L.C.
- -------------------------------------------
Teligent License Company II, L.L.C. 1%
</TABLE>
Pledged Promissory Notes:
None.
2
<PAGE>
SCHEDULE 3
FILINGS AND OTHER ACTIONS TO
PERFECT SECURITY INTERESTS
Uniform Commercial Code Filings
<TABLE>
<CAPTION>
Grantor Jurisdictions
------- -------------
<S> <C>
Teligent, Inc. California - Secretary of State
- -------------- Delaware - Secretary of State
New York-Secretary of State
New York-New York County
Virginia - Secretary of the Commonwealth
Virginia - Fairfax County
Teligent Communications, Inc. Delaware - Secretary of State
- ----------------------------- Virginia - Secretary of the Commonwealth
Virginia - Fairfax County
Teligent Telecommunications, Inc. Delaware - Secretary of State
- --------------------------------- Virginia - Secretary of the Commonwealth
Virginia - Fairfax County
Teligent License Company I, L.L.C. Delaware - Secretary of State
- ---------------------------------- Virginia - Secretary of the Commonwealth
Virginia - Fairfax County
Teligent License Company II, L.L.C. Delaware - Secretary of State
- ---------------------------------- Virginia - Secretary of the Commonwealth
Virginia - Fairfax County
</TABLE>
3
<PAGE>
Patent and Trademark Filings
Filing of this Guarantee and Collateral Agreement with the United
States Patent and Trademark Office against the Trademarks listed on
Schedule 6 to this Agreement.
Actions with Respect to Pledged Stock
Delivery of the Share Certificates Represented on Schedule 2 to the
Collateral Agent in the State of New York
Other Actions
o None
4
<PAGE>
SCHEDULE 4
LOCATION OF JURISDICTION OF ORGANIZATION AND
CHIEF EXECUTIVE OFFICE
<TABLE>
<CAPTION>
Jurisdiction of Location of Chief
Grantor Organization Executive Office
------- ------------ ----------------
<S> <C> <C>
Teligent, Inc. Delaware 8065 Leesburg Pike
Suite 400
Vienna, Virginia 22182
(Fairfax County)
Auctel, Inc. Delaware (same as above)
Teligent Communications, Inc. Delaware (same as above)
Teligent Telecommunications, Delaware (same as above)
Teligent License Company I, L.L.C. Delaware (same as above)
Teligent License Company II, L.L.C. Delaware (same as above)
</TABLE>
5
<PAGE>
SCHEDULE 5
LOCATION OF INVENTORY AND EQUIPMENT
Grantor Locations
------- ---------
Teligent, Inc. 8065 Leesburg Pike
Suite 400
Vienna, VA 22182
3600 Wilshire Boulevard
Suite 1700
Los Angeles, CA 90010
Auctel, Inc. 8065 Leesburg Pike
Suite 400
Vienna, VA 22182
Teligent Communications, Inc. 8065 Leesburg Pike
Suite 400
Vienna, VA 22182
Teligent Telecommunications, Inc. 8065 Leesburg Pike
Suite 400
Vienna, VA 22182
Teligent License Company I, L.L.C. 8065 Leesburg Pike
Suite 400
Vienna, VA 22182
Teligent License Company II, L.L.C. 8065 Leesburg Pike
Suite 400
Vienna, VA 22182
6
<PAGE>
SCHEDULE 6
INTELLECTUAL PROPERTY
U.S. Copyright and Material Copyright Licenses
None.
U.S. Patents and Material Patent Licenses
None.
7
<PAGE>
SCHEDULE 6
U.S. Trademark Registrations and Applications and Material Trademark Licenses
-----------------------------------------------------------------------------
I. Registrations
-------------
<TABLE>
<CAPTION>
Mark Registration No. Date Registered Record Owner
- ---- ---------------- --------------- ------------
<S> <C> <C> <C>
TELIGENT 1,893,005 05/09/95 Teligent, Inc.(1)
</TABLE>
II. Applications
<TABLE>
<CAPTION>
Mark Serial No. Date Filed Record Owner
- ---- ---------- ---------- ------------
<S> <C> <C> <C>
TELIGENT 75-977,088 (ITU) 04/07/97 Teligent, L.L.C.
TELIGENT and Design 75-977,087 (ITU) 04/07/97 Teligent, L.L.C.
TELIGENT and Design 75-270,550 (ITU) 04/07/97 Teligent, Inc.*
TELIGENT 75-270,551 (ITU) 04/07/97 Teligent, Inc.*
THE SMART WAY TO 75-348,561 06/12/97 Teligent, Inc.*
COMMUNICATE
T-DSL 75-451,695 (ITU) 03/17/98 Teligent, Inc.
TDSL 75-451,696 (ITU) 03/17/98 Teligent, Inc.
T*DSL 75-451,697 (ITU) 03/17/98 Teligent, Inc.
TELIGENT DSL 75-451,725 (ITU) 03/17/98 Teligent, Inc.
T.D.S.L. 75-463,439 (ITU) 03/31/98 Teligent, Inc.
TELIGENTCARD (not yet assigned) 6/24/98 Teligent, Inc.
TELIGENTHOST (not yet assigned) 6/24/98 Teligent, Inc.
</TABLE>
III. Licenses
--------
Mark Licensee Date of License
---- -------- ---------------
- --------
(1) The ownership of this m ark is split between "Teligent, Inc." and
"Teligent, L.L.C." pursuant to an Assignment of a Part of Assignor
Interest, recorded in the U.S. Patent and Trademark Office on January
27, 1998, at Reel 1690/Frame 0705.
8
<PAGE>
TELIGENT Creative Integrative Systems, April 28, 1997
Inc.
SCHEDULE 7
LIENS
<TABLE>
<CAPTION>
Jurisdiction of Filing File Date File Number Description of
Debtor Secured Party ---------------------- Type of Filing --------- ----------- Collateral
------ ------------- -------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Teligent, Inc. EMC Virginia UCC-1 4/22/9 9804227263 Office Equipment
Corporation
Teligent, Inc. EMC Virginia-- UCC-1 4/29/ 98003923 Office
Corporation Fairfax County Equipment
Associated Commu ICON Office Solu Virginia UCC-1 6/5/ 970605 7080 Copier
nications, LLC tions
</TABLE>
9
<PAGE>
SCHEDULE 8
RECEIVABLES FROM GOVERNMENTAL AUTHORITIES
None.
10
<PAGE>
ACKNOWLEDGEMENT AND CONSENT
The undersigned hereby acknowledges receipt of a copy of the Guarantee
and Collateral Agreement dated as of July 2, 1998 (the "Agreement"), made by the
Grantors parties thereto for the benefit of The Chase Manhattan Bank, as
Collateral Agent. The undersigned agrees for the benefit of the Secured Parties
as follows:
1. The undersigned will be bound by the terms of the Agreement and will
comply with such terms insofar as such terms are applicable to the undersigned.
2. The undersigned will notify the Collateral Agent promptly in writing
of the occurrence of any of the events described in Section 5.8(a) of the
Agreement.
3. The terms of Sections 6.3(a) and 6.7 of the Agreement shall apply to
it, mutatis mutandis, with respect to all actions that may be required of it
pursuant to Section 6.3(a) or 6.7 of the Agreement.
[NAME OF ISSUER]
By:
---------------------------
Title
Address for Notices:
Fax:
<PAGE>
EXHIBIT A
to the Guarantee & Collateral Agreement
FORM OF
ADDITIONAL COLLATERAL DESIGNATION
[Date]
To: The Chase Manhattan Bank, as Collateral Agent
Re: Collateral Agency and Intercreditor Agreement, dated as of July 2, 1998,
among Teligent,Inc., The Chase Manhattan Bank, as Collateral Agent and
the Secured Parties described therein (the "Collateral Agency and the
Intercreditor Agreement")
Reference is hereby made to the Collateral Agency and the
Intercreditor Agreement. Capitalized terms which are defined in the Collateral
Agency and Intercreditor Agreement are used herein as therein defined.
In accordance with subsection 4.3 of the Collateral Agency and
Intercreditor Agreement, the following Additional Collateral is hereby added as
Collateral under the Collateral Agency and Intercreditor Agreement:
[DESCRIBE ADDITIONAL COLLATERAL]
TELIGENT, INC.
By:__________________________
Title:
Attached hereto is an executed copy of the Security document
creating the Collateral Agent's security interet in such Additional Collateral.
<PAGE>
1
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 July 2, 1998, as amended,
supplemented or modified from time to time (the "Credit Agreement"), among
Teligent, Inc. (the "Borrower"), the financial institutions from time to time
party thereto as lenders (the "Lenders"), Chase Securities Inc., Goldman Sachs
Credit Partners L.P. and TD Securities (USA) Inc., as Arrangers, Goldman Sachs
Credit Partners L.P., as Syndication Agent, Toronto Dominion (Texas), Inc., as
Documentation Agent, and The Chase Manhattan Bank, as the 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 [Chief
Financial Officer] [Vice President - Finance] 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, 6.5, 6.6
(solely to the extent that a Restricted Payment pursuant to Section 6.6(b) is,
or is to be, made) and 6.7 of the Credit Agreement.
IN WITNESS WHEREOF, I execute this Certificate this day of ,
------- ---------
[199__][200__].
TELIGENT, INC.
By:
----------------------
Title:
----------------------
<PAGE>
1
Attachment 2
to Exhibit B
The information described herein is as of , [199__] [200__], and
pertains to the period from , [199__] [200__] to ____________ __, [199__]
[200__].
[Set forth Covenant Calculations]
<PAGE>
1
EXHIBIT C
FORM OF CLOSING CERTIFICATE
Pursuant to Section 5.1(i) of the Credit Agreement dated as of
July 2, 1998 (the "Credit Agreement"; terms defined therein being used herein as
therein defined), among Teligent, Inc. (the "Borrower"), the financial
institutions from time to time party thereto as lenders (the "Lenders"), Chase
Securities Inc., Goldman Sachs Credit Partners L.P. and TD Securities (USA)
Inc., as Arrangers, Goldman Sachs Credit Partners L.P., as Syndication Agent,
Toronto Dominion (Texas), Inc., as Documentation Agent, and The Chase Manhattan
Bank, as the Administrative Agent (in such capacity, the "Administrative
Agent"), the undersigned [INSERT TITLE OF OFFICER] of [INSERT NAME OF COMPANY]
(the "Company") hereby certifies as follows:
1. The representations and warranties of the Company set
forth in each of the Loan Documents to which it is a party or which are
contained in any certificate furnished by or on behalf of the Company pursuant
to any of the Loan Documents to which it is a party are true and correct in all
material respects on and as of the date hereof with the same effect as if made
on the date hereof, except for representations and warranties expressly stated
to relate to a specific earlier date, in which case such representations and
warranties were true and correct in all material respects as of such earlier
date.
2. ___________________ is the duly elected and qualified
Corporate Secretary of the Company and the signature set forth for such officer
below is such officer's true and genuine signature.
3. No Default or Event of Default has occurred and is
continuing as of the date hereof or after giving effect to the Loans to be made
on the date hereof. [Borrower only]
4. The conditions precedent set forth in Section 4.1 of the
Credit Agreement were satisfied as of the Closing Date. [Borrower only]
The undersigned Corporate Secretary of the Company certifies
as follows:
5. There are no liquidation or dissolution proceedings pending
or to my knowledge threatened against the Company, nor has any other event
occurred adversely affecting or threatening the continued corporate existence of
the Company.
6. The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the jurisdiction of its
organization.
7. Attached hereto as Annex 1 is a true and complete copy of
resolutions duly adopted by the Board of Directors of the Company on
_________________; such resolutions have not in any way been amended, modified,
revoked or rescinded, have been in full force and effect since their adoption to
and including the date hereof and are now in full force and effect
<PAGE>
2
and are the only corporate proceedings of the Company now in force relating to
or affecting the matters referred to therein.
8. Attached hereto as Annex 2 is a true and complete copy of
the By-Laws of the Company as in effect on the date hereof.
9. Attached hereto as Annex 3 is a true and complete copy of
the Certificate of Incorporation of the Company as in effect on the date hereof,
and such certificate has not been amended, repealed, modified or restated.
10. The following persons are now duly elected and qualified
officers of the Company holding the offices indicated next to their respective
names below, and such officers have held such offices with the Company at all
times since the date indicated next to their respective titles to and including
the date hereof, and the signatures appearing opposite their respective names
below are the true and genuine signatures of such officers, and each of such
officers is duly authorized to execute and deliver on behalf of the Company each
of the Loan Documents to which it is a party and any certificate or other
document to be delivered by the Company pursuant to the Loan Documents to which
it is a party:
Name Office Date Signature
---- ------ ---- ---------
IN WITNESS WHEREOF, the undersigned have hereunto set our
names as of the date set forth below.
- ------------------------------- ------------------------------------
Name: Name:
Title: Title:
Date: July 2, 1998
<PAGE>
1
ANNEX 1
[Board Resolutions]
<PAGE>
1
ANNEX 2
[By-Laws]
<PAGE>
1
ANNEX 3
[Certificate of Incorporation]
<PAGE>
1
EXHIBIT E
FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement, dated as of July 2,
1998 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among Teligent, Inc. (the "Borrower"), the Lenders parties
thereto, Chase Securities Inc., Goldman Sachs Credit Partners L.P. and TD
Securities (USA) Inc., as Arrangers, Goldman Sachs Credit Partners L.P., as
Syndication Agent, Toronto Dominion (Texas), Inc., as Documentation Agent, and
The Chase Manhattan Bank, as the Administrative Agent (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 the Borrower, any of its Subsidiaries or
any other obligor or the performance or observance by the Borrower, 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).
<PAGE>
2
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 Agents
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 Agreement, the other Loan Documents or any
other instrument or document furnished pursuant hereto or thereto; (d) appoints
and authorizes the Agents 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 Agents 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
2.21(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"); provided, that any required consents in respect hereof have
been obtained. Following the execution of this Assignment and Acceptance, it
will be delivered to the Administrative Agent for acceptance by it and recording
by the Administrative 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] [to the Assignee whether such amounts have accrued prior to the Effective
Date or accrue subsequent to the Effective Date. The Assignor and the Assignee
shall make all appropriate adjustments in payments by the 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.
<PAGE>
3
7. The Assignee expressly acknowledges that it has received a
copy of the Collateral Agency and Intercreditor Agreement and that on the
Effective Date it will become a party to, and will be bound by the provisions
of, the Collateral Agency and Intercreditor Agreement including, without
limitation, the indemnification provisions set forth in Section 7.6 thereof.
8. 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.
<PAGE>
1
Schedule 1
to Assignment and Acceptance
Name of Assignor:
----------------------------------
Name of Assignee:
----------------------------------
Effective Date of Assignment:
---------------------
Credit Principal Commitment
Facility Assigned Amount Assigned Percentage Assigned
------------------ --------------- -------------------
$ . %
-------------- ----- ----------
[Name of Assignee] [Name of Assignor]
By: By:
------------------------------ ----------------------------
Title: Title:
Accepted: [Consented To:
THE CHASE MANHATTAN BANK, TELIGENT, INC.
as Administrative Agent
By: By:
------------------------------ ----------------------------
Title: Title:
- --------------------------
1. Calculate the Commitment Percentage that is assigned to at least 15
decimal places and show as a percentage of the aggregate commitments
of all Lenders.
<PAGE>
EXHIBIT F-1
[LETTERHEAD]
July 2, 1998
The Lenders set forth on
Schedule I hereto
The Chase Manhattan Bank,
as Administrative Agent
270 Park Avenue
New York, New York 10017
Re: Teligent, Inc. $800 Million Credit
----------------------------------
Agreement
---------
Ladies and Gentlemen:
We have acted as special counsel to (i) Teligent, Inc., a
Delaware corporation (the "Borrower"), in connection with the preparation,
execution and deliv ery of the Credit Agreement, dated as of July 2, 1998 (the
"Credit Agreement"), among the Company, the Lenders set forth on Schedule I
hereto (the "Lenders"), Chase Securities Inc., Goldman Sachs Credit Partners
L.P. and TD Securities (USA) Inc., as Arrangers, Goldman Sachs Credit Partners
L.P., as Syndication Agent, Toronto Dominion (Texas), Inc., as Documentation
Agent, and The Chase Manhattan Bank, as Administrative Agent (the "Ad
ministrative Agent"); and (ii) each of Teligent License Company I, L.L.C., a
Delaware limited liability company ("TLC I"), Teligent License Company II,
L.L.C., a Dela ware limited liability company ("TLC II," and together with TLC
I, "LicenseCo"), Teligent Communications, Inc., a Delaware corporation
("LeaseCo"), Teligent Telecommuni cations, Inc., a Delaware corporation
("AssetCo"), and Auctel, Inc., a Delaware corporation ("AUCTEL")(each a
"Restricted Subsidiary" and together, the "Restricted Subsidiaries") in
connection with the preparation, execu tion and delivery of the Guarantee and
Collateral Agree ment, dated as of the date hereof (the "Guarantee and
Collateral Agreement"), made by the Borrower and the Restricted Subsidiaries in
favor of The Chase Manhattan Bank, as Collateral Agent (the "Collateral Agent").
The
<PAGE>
The Lenders set forth
on Schedule I hereto
The Chase Manhattan Bank
July 2, 1998
Page 2
Borrower and the Restricted Subsidiaries are collectively referred to herein as
the "Companies" and individually as a "Company").
This opinion is being furnished pursuant to Section 4.1(m)(i)
of the Credit Agreement. Capitalized terms used herein and not otherwise defined
herein shall have the same meanings herein as ascribed thereto in the Credit
Agreement.
In our examination, we have assumed the genu ineness of all
signatures (other than as to the Compa nies), including endorsements, the legal
capacity of natural persons, the authenticity of all documents sub mitted to us
as originals, the conformity to original documents of all documents submitted to
us as certified or photostatic copies, and the authenticity of the origi nals of
such copies. As to any facts material to this opinion which we did not
independently establish or verify, we have relied upon statements and representa
tions of the Companies and their respective officers and other representatives,
including, without limitation, the respective representations and warranties of
the Compa nies set forth in the Loan Documents (as hereinafter defined) and the
Borrower's Certificate (as hereinafter defined), and of public officials.
In rendering the opinions set forth herein, we have examined
and relied on originals or copies of the following:
a. the Credit Agreement;
b. each of the Term Notes, dated as of the date
hereof (collectively, the "Term Notes"), exe
----------
cuted and delivered by the Borrower in favor of
each of the Lenders indicated on Schedule I as
a recipient of a Term Note and the Revolving
Credit Notes, dated as of the date hereof (col
lectively, the "Revolving Credit Notes" and
----------------------
together with the Term Notes, the "Notes"),
-----
<PAGE>
The Lenders set forth
on Schedule I hereto
The Chase Manhattan Bank
July 2, 1998
Page 3
executed and delivered by the Borrower in favor of each of the
Lenders indicated on Schedule I hereto as recipient of the
Revolving Credit Notes;
c. the Guarantee and Collateral Agreement;
d. the Collateral Agency and Intercreditor Agree ment, dated as
of the date hereof, among the Borrower, The Chase Manhattan
Bank, as Collat eral Agent, and the Secured Parties named
therein;
e. unfiled, but signed copies of financing state
ments naming each of Teligent, Inc., Auctel,
Inc., Teligent Telecommunications, Inc.,
Teligent Communications, Inc., Teligent License
Company I, L.L.C. or Teligent License Company
II, L.L.C., as debtor and The Chase Manhattan
Bank, as Collateral Agent, as secured party,
which we understand will be filed within ten
(10) days of the transfer of the security in
terest in the offices of the State Corporation
Commission of the Commonwealth of Virginia and
the office of the Recorder of Deeds of Fairfax
County, Virginia (such filing offices, the
"Filing Offices" and such financing statements,
--------------
the "Financing Statements");
-------------------
f. a certificate of the Borrower executed by an officer thereof,
dated as of the date hereof, a copy of which is attached as
Exhibit A hereto (the "Borrower's Certificate");
g. certified copies of the Certificates of Incor
poration and By-laws of each of the Borrower
and the Restricted Subsidiaries (other than
LicenseCo);
h. certified copies of the Certificates of Forma tion and the
Limited Liability Company Agree ments (collectively, the "LLC
Documents") of
each of TLC I and TLC II;
i. a certified copy of certain resolutions of the Board of
Directors of each of the Borrower and the Restricted
Subsidiaries (other than
LicenseCo);
j. a certified copy of certain resolutions of the
Members of each of TLC I and TLC II;
k. such other documents as we have deemed neces
sary or appropriate as a basis for the opinions
set forth below.
Unless otherwise indicated, (i) "Loan Docu ments" shall mean
the documents referred to in clauses (a) through (d) above; (ii) "Security
Documents" shall mean the agreements referred to in clauses (c) and (d) above;
and (iii) references to the term "UCC" shall mean (A) with respect to the
validity of the security inter ests granted under the Guarantee and Collateral
Agree ment, the Uniform Commercial Code as in effect on the date hereof in the
State of New York; (B) with respect the perfection and the effect of perfection
or non-per fection of the security interests in the UCC Filing Collateral (as
such term is hereinafter defined), the Uniform Commercial Code as in effect on
the date hereof in the Commonwealth of Virginia; and (C) with respect to the
perfection and the effect of perfection or non-per fection of the security
interests in the Pledged Stock (as such term is hereinafter defined), the
Uniform Com mercial Code as in effect on the date hereof in the State of New
York.
We express no opinion as to the laws of any other jurisdiction
other than (i) the laws of the State of New York; (ii) solely with respect to
the opinions set forth in paragraphs 1 through 4 hereof, the General Corporation
Law and the Limited Liability Company Act of the State of Delaware; (iii) solely
with respect to the
<PAGE>
The Lenders set forth
on Schedule I hereto
The Chase Manhattan Bank
July 2, 1998
Page 4
security interest opinions set forth in paragraphs 9 through 12 hereof, the UCC;
and (iv) the federal laws of the United States to the extent specifically
referred to herein. We are not admitted to the bar of the Common wealth of
Virginia and our opinion as to the UCC relating to the Uniform Commercial Code
in the Commonwealth of Virginia is based on our familiarity with the Uniform
Commercial Code as in effect on the date hereof in the Commonwealth of Virginia.
We call to your attention that provisions of the Security
Documents purport to grant to, and create in favor of, the Collateral Agent, a
direct and indirect security interest in authorizations and licenses (the
"Licenses") issued by the Federal Communications Commis sion (the "FCC") and
remedial rights, powers and remedies with respect thereto, which (including any
rights or interests therein) may be subject to Communications Laws (as
hereinafter defined) and Communications Approvals (as hereinafter defined). We
express no opinion as to the effect on the opinions expressed herein of the
applica tions or effect of Communications Laws or Communications Approvals. Our
opinion with respect to the security interest of the Collateral Agent for the
benefit of the Lenders in the Licenses and in the equity interests (including
membership interests) of each of the Companies holding the Licenses is limited
to the UCC, and Communi cations Laws (including requirements of Communications
Approvals) may limit or affect, among other things, the validity of the security
interests, the exercise of remedies with respect to the Licenses or such equity
interests (including membership interests) and the abil ity of the Collateral
Agent to realize the benefits of any security interests, rights, powers or
remedies in respect thereof. As used herein, (i) the term "Communi cations Law"
shall mean laws, rules and regulations pertaining to the Licenses, including,
without limita tion, the Communications Act of 1934, as amended, includ ing the
Telecommunications Act of 1996, and, where appli cable, the published rules,
regulations, decisions and orders of the FCC; and (ii) the term "Communications
193881.07-New YorkS5A
<PAGE>
The Lenders set forth
on Schedule I hereto
The Chase Manhattan Bank
July 2, 1998
Page 5
Approval" shall mean any consent, approval, license or authorization of, or
filing, registration or application with, the FCC or any other federal, state or
other regu latory authority pursuant to Communications Laws required to
transfer, whether directly or indirectly, the Licenses or any right or interest
therein.
Our opinions set forth below are also subject to the following
qualifications:
i. enforcement of the Loan Documents may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or other similar laws affecting creditors' rights
generally and by general principles of equity (re gardless of whether
enforcement is sought in equity or at law);
ii. certain of the remedial provisions, including
waivers, with respect to the exercise of remedies against the
collateral contained in the Security Documents may be unenforceable in
whole or in part, but the inclusion of such provisions does not affect
the validity of each such Security Docu ment, taken as a whole, and
each such Security Docu ment, taken as a whole, together with
applicable law, contains adequate provisions for the practical
realization of the benefits of the security provided thereby;
iii. we have assumed that each of the Loan Documents
constitutes the legal, valid and binding obligation of each party to
such Loan Documents (other than the Companies) enforceable against such
party (other than the Companies) in accordance with its terms;
iv. we express no opinion as to the effect on the
opinions expressed herein of (A) the compli ance or non-compliance of
the Administrative Agent, the Lenders or any party (other than each
Company)
<PAGE>
The Lenders set forth
on Schedule I hereto
The Chase Manhattan Bank
July 2, 1998
Page 6
to the Loan Documents with any state, federal or other laws or
regulations applicable to any of them, or (B) the legal or regulatory
status or the nature of the business of the Administrative Agent, the
Lenders or any party to the Loan Documents (other than each Company);
v. enforcement of the Security Documents with respect
to collateral consisting of the inter est of the Companies in
instruments, leases, con tracts or other agreements (collectively, "Con
tracts") between the Companies and the other parties to such Contracts,
may be subject to the terms of such Contracts, the rights of such other
parties to such Contracts and any claims or defenses of such other
parties against the Companies arising under or outside such Contracts;
vi. we express no opinion as to the enforceability of
any rights to contribution or indemnification provided for in any Loan
Document which are violative of the public policy underlying any law,
rule or regulation (including, without limitation, any federal or state
securities law, rule or regulation);
vii. we express no opinion as to any provision of any
Loan Document to the extent it authorizes or permits any Person
(including any purchaser of a participation interest), other than the
party to any Loan Document to whom an obligation is owed, to set-off or
apply any deposit, property or indebtedness in respect of such
obligation;
viii. we have assumed that the execution, delivery
and performance by the Companies of the Loan Documents do not and will
not conflict with, contravene, violate or constitute a default under
(a) any lease, indenture, instrument or other agree ment to which any
such Person is subject (other than Applicable Contracts as to which we
express our
<PAGE>
The Lenders set forth
on Schedule I hereto
The Chase Manhattan Bank
July 2, 1998
Page 7
opinion in paragraph 5 herein), (b) any rule, law or regulation to
which any such Person is subject (other than Applicable Laws as to
which we express our opinion in paragraph 6 herein); (c) any judicial
or administrative order or decree of any governmen tal authority (other
than Applicable Orders as to which we express our opinion in paragraph
8 herein); or (d) any consent, approval, license, authorization or
validation of, or filing, recording or regis tration with, any
governmental authority (other than Governmental Approvals as to which
we express our opinion in paragraph 7 herein);
ix. we have assumed that no authoriza tion, consent
or other approval of, notice to or filing with any court, governmental
authority or regulatory body (other than Governmental Approvals as to
which we express our opinion in paragraph 7 herein) is required to
authorize or is required in connection with the execution, delivery or
perfor mance by the Companies of the Loan Documents; and
x. we express no opinion as to the
applicability or effect of any fraudulent transfer
or similar law on the Loan Documents or the transac
tions contemplated thereby.
We understand further that you are separately receiving
opinions from other counsel (the "Other Counsel Opinions") with respect to
certain aspects of the forego ing, and we are advised that such opinions contain
quali fications. Our opinions herein stated are based on the assumptions
specified above, and we do not express any opinion as to the effect on the
opinions herein stated of the qualifications contained in the Other Counsel Opin
ions.
Based upon the foregoing and subject to the limitations,
qualifications, exceptions and assumptions set forth herein, we are of the
opinion that:
<PAGE>
The Lenders set forth
on Schedule I hereto
The Chase Manhattan Bank
July 2, 1998
Page 8
1. Each of the Companies is validly existing and in good
standing under the laws of the State of Delaware.
2. Each of the Companies has the corporate or company power
and authority to execute, deliver and perform all of its obligations under each
of the Loan Documents to which it is a party. The execution and delivery by each
of the Companies of each of the Loan Documents to which it is a party and the
consummation by each of the Companies of the transactions contemplated thereby
have been duly authorized by all requisite corpo rate or company action on the
part of each such Company.
3. Each of the Loan Documents to which each Company is a party
constitutes the valid and binding obligation of each such Company, enforceable
against each such Company in accordance with its terms.
4. Neither the execution and delivery by any of the Companies
of the Loan Documents to which it is a party nor the performance by such Company
of its obliga tions thereunder, in accordance with the provisions of the terms
thereof, will (A) in the case of each of the Companies other than TLC I and TLC
II, conflict with its respective Certificate of Incorporation or By-laws, and
(B) in the case of each of TLC I and TLC II, conflict with its respective LLC
Documents.
5. Neither the execution and delivery by any of the Companies
of the Loan Documents to which it is a party nor the performance by such Company
of its obliga tions thereunder, in accordance with the provisions of the terms
thereof, will conflict with, contravene, vio late or constitute a default under
any Applicable Con tract. "Applicable Contract" shall mean each of those
agreements set forth on Schedule II attached hereto.
6. Neither the execution and delivery by any of the Companies
of the Loan Documents to which it is a party nor the performance by such Company
of its obliga tions thereunder, in accordance with the provisions of the terms
thereof, will contravene any provision of any Applicable Law. "Applicable Laws"
shall mean the General Corporation Law and the Limited Liability Company Act of
the State of Delaware and those laws, rules and regula tions of the State of New
York and of the United States of America (including, without limitation,
Regulations U and X of the Board of Governors of the Federal Reserve System)
which, in our experience, are normally applicable to transactions of the type
contemplated by the Loan Documents and which, in any event, do not include Commu
nications Laws.
7. No Governmental Approval (as hereinafter defined), which
has not been obtained and is not in full force and effect, is required to
authorize or is required in connection with the execution, delivery or
performance of any of the Loan Documents by any of the Companies which is a
party thereto except the filing of financing statements in accordance with the
Credit Agreement and filings, recordings or registrations with respect to the
security interest of the Collateral Agent for the benefit of the Lenders in
intellectual property rights. "Govern mental Approval" shall mean any consent,
approval, li cense, authorization or validation of, or filing, record ing or
registration with, any federal, Delaware or New York executive, legislative,
judicial, administrative or regulatory body pursuant to Applicable Laws, but
shall exclude all Communications Approvals.
8. Neither the execution, delivery or perfor mance by any of
the Companies of its obligations under the Loan Documents to which it is a party
nor compliance by such Person with the terms thereof will contravene any
Applicable Order against such Company. The term "Appli cable Orders" means those
orders or decrees of courts or other governmental instrumentalities
("Governmental Authorities") set forth on Schedule I to the Officer's
Certificate which have been identified to us as all of the orders or decrees of
Governmental Authorities which are applicable to the Companies.
<PAGE>
The Lenders set forth
on Schedule I hereto
The Chase Manhattan Bank
July 2, 1998
Page 9
9. The provisions of the Guarantee and Col lateral Agreement
are effective to create, in favor of the Collateral Agent for the benefit of the
Lenders to secure the Secured Obligations (as such term is defined in the
Guarantee and Collateral Agreement), a valid security interest in the Borrower's
rights in the certif icates identified on Schedule 2 to the Guarantee and
Collateral Agreement (the "Pledged Stock").
10. Upon delivery of the Pledged Stock in the State of New
York to the Collateral Agent for the benefit of the Lenders, the security
interest of the Collateral Agent for the benefit of the Lenders will be
perfected. No interest of any other creditor of the Borrower is equal or prior
to the security interest of the Collateral Agent for the benefit of the Lenders
in the Pledged Stock.
Our opinions in paragraphs 9 and 10 are subject to the
following qualifications:
i. we have assumed that the Borrower owns the Pledged
Stock, and we express no opinion as to the nature or extent of the
Borrower's rights in, or title to, any of the Pledged Stock;
ii. our opinions with respect to the interest of the
Collateral Agent for the benefit of the Lenders are limited to Article
8 and Article 9 of the UCC, and such opinions do not address (i) laws
of jurisdictions other than New York, and of New York except for
Article 8 and Article 9 of the UCC, (ii) collateral of a type not
subject to Arti cle 8 and Article 9 of the UCC, and (iii) under
Sections 9-103 and 8-110, what law governs perfec tion of the security
interests granted in the col lateral covered by this opinion;
iii. we call to your attention that under the UCC,
events occurring subsequent to the date
<PAGE>
The Lenders set forth
on Schedule I hereto
The Chase Manhattan Bank
July 2, 1998
Page 10
hereof may affect any security interest subject to the UCC including,
but not limited to, factors of the type identified in Section 9-306
with respect to proceeds; Section 9-402 with respect to changes in
name, structure and corporate identity; Section 9-103 with respect to
changes in the location of the collateral and the location of a debtor;
Section 9-316 with respect to subordination agreements; Section 9-403
with respect to continuation state ments; and Sections 9-307, 9-308 and
9-309 with respect to subsequent purchasers of the collateral. In
addition, actions taken by a secured party (e.g., releasing or
assigning the security interest, deliv ering possession of the
collateral to a debtor or another person and voluntarily subordinating
a security interest) may affect any security interest subject to the
UCC;
iv. we express no opinion with respect to the
priority of the security interest of the Collat eral Agent for the
benefit of the Lenders in the Pledged Stock against a lien creditor to
the extent that Section 9-301(4) of the UCC limits the priority
afforded future advances;
v. we have assumed that the Collateral Agent has
acquired its interest for the benefit of the Lenders for value and that
neither the Collat eral Agent nor the Lenders has notice on or prior to
the date hereof or the date of delivery of the Pledged Stock of an
adverse claim with respect to the Pledged Stock; and
vi. we call to your attention that Section 324 of the
Delaware General Corporation Law provides that the shares of stock of
any person in a Delaware corporation may be attached and sold for a
debt or in response to other demands and, therefore, it is possible for
there to be an attachment of securities under Section 324 that takes
precedence over the pledge of securities if the securities are not
<PAGE>
The Lenders set forth
on Schedule I hereto
The Chase Manhattan Bank
July 2, 1998
Page 11
registered on the books of the issuer in the name of the Collateral
Agent for the benefit of the Lenders.
11. The provisions of the Guarantee and Col lateral Agreement
are effective to create, in favor of the Collateral Agent for the benefit of the
Lenders to secure each respective Company's Obligations (as such term is defined
in the Guarantee and Collateral Agree ment), a valid security interest in each
Company's rights in that portion of the collateral described therein which is
subject to Article 9 of the UCC (the "UCC Collateral").
12. The Financing Statements are in appropri ate form for
filing in each of the Filing Offices. With respect to that portion of the UCC
Collateral as to which the filing of a financing statement in the Commonwealth
of Virginia is a permissible method of perfection under the UCC (the "UCC Filing
Collateral"), the security interest of the Collateral Agent for the benefit of
the Lenders in that portion of the UCC Filing Collateral which is described in
the Financing Statements will be perfected upon filing of the Financing
Statements in the respective Filing Offices.
Our opinions in Paragraphs 11 and 12 are sub ject to the
following qualifications:
i. we have assumed that each Company owns, or with
respect to after-acquired property will own, the collateral pledged by
such Company, and we express no opinion as to the nature or extent of
any Company's rights in, or title to, any of the collateral and we note
that with respect to any after-acquired property, the security interest
will not attach until the Company pledging such property acquires
ownership thereof;
ii. our opinions with respect to the interest of the
Collateral Agent for the benefit of the Lenders are limited to Article
9 of the UCC, and
<PAGE>
The Lenders set forth
on Schedule I hereto
The Chase Manhattan Bank
July 2, 1998
Page 12
therefore such opinions do not address (A) laws of jurisdictions other
than the Commonwealth of Vir ginia, and of the Commonwealth of Virginia
except for Article 9 of the UCC, (B) collateral of a type not subject
to Article 9 of the UCC, and (C) under Section 9-103 of the UCC, what
law governs perfec tion of the security interests granted in the col
lateral covered by this opinion;
iii. we call to your attention that under the UCC,
events occurring subsequent to the date hereof may affect any security
interest subject to the UCC including, but not limited to, factors of
the type identified in Section 9-306 with respect to proceeds; Section
9-402 with respect to changes in name, structure and corporate identity
of the debt or; Section 9-103 with respect to changes in the location
of the collateral and the location of the debtor; Section 9-316 with
respect to subordination agreements; Section 9-403 with respect to
continua tion statements; and Sections 9-307, 9-308 and 9-309 with
respect to subsequent purchasers of the col lateral. In addition,
actions taken by a secured party (e.g., releasing or assigning the
security interest, delivering possession of the collateral to the
debtor or another person and voluntarily subor dinating a security
interest) may affect any securi ty interest subject to the UCC;
iv. we have assumed that the only place of business
of the Companies in the Commonwealth of Virginia is located in Vienna,
Fairfax County;
v. except to the extent set forth in our opinion in
paragraph 10, we express no opinion with respect to the priority of the
security interest of the Collateral Agent for the benefit of the
Lenders in any of the Collateral;
vi. in the case of chattel paper, ac counts or
general intangibles, we call to your
<PAGE>
The Lenders set forth
on Schedule I hereto
The Chase Manhattan Bank
July 2, 1998
Page 13
attention that the security interest of the Collat eral Agent for the
benefit of the Lenders may be subject to the rights of account debtors,
claims and defenses of account debtors and the terms of agree ments
with account debtors;
vii. we express no opinion regarding the security
interest of the Collateral Agent for the benefit of the Lenders in any
copyrights, patents, trademarks, service marks or other intellectual
property, the proceeds thereof or any rights (in cluding accounts or
general intangibles) with re spect to the lease, license or use thereof
except to the extent Article 9 of the UCC may be applicable to the
foregoing and except to the extent of our opin ion in paragraph 13;
viii. we call to your attention that, under U.S.
trademark law, it is generally held that transfers of trademark rights
are invalid unless accompanied by the related goodwill and the trade
marks are used on substantially the same goods as those previously
represented by the trademarks and we express no opinions as to the
assets or goodwill that would have to accompany the Trademarks to en
sure continuing validity of such Trademarks in the event of a
foreclosure and the ultimate disposition of such trademarks as a result
of a default.
ix. in the case of goods, we express no opinion
regarding the security interest of the Collateral Agent for the benefit
of the Lenders in any goods which are (A) an accession to, or commin
gled or processed with other goods to the extent that the security
interest of the Collateral Agent for the benefit of the Lenders is
limited by Section 9-314 or 9-315 of the UCC or (B) subject to a cer
tificate of title or a document of title;
x. except to the extent of the opinions expressed in
paragraph 13 of this opinion, we ex press no opinion regarding the
security interest of the Collateral Agent for the benefit of the
Lenders in any items which are subject to a statute, regula tion or
treaty of the United States of America which provides for a national or
international registra tion or a national or international certificate
of title for the perfection of a security interest therein or which
specifies a place of filing differ ent from the place specified in the
UCC for filing to perfect such security interest;
xi. we express no opinion regarding the security
interest of the Collateral Agent for the benefit of the Lenders in any
of the collateral con sisting of claims against any government or
govern mental agency (including without limitation the United States of
America or any state thereof or any agency or department of the United
States of America or any state thereof);
xii. in the case of any instrument, chat tel paper,
account or general intangible which is itself secured by other
property, we express no opinion with respect to the Collateral Agent's
rights for the benefit of the Lenders in and to such underlying
property;
xiii. we express no opinion with respect to the
security interest in any of the collateral consisting of goods which
are or are to become fixtures, equipment used in farming operations, or
farm products, or accounts or general intangibles arising from or
relating to the sale of farm prod ucts by a farmer, consumer goods,
crops growing or to be grown, timber to be cut or minerals or the like
(including oil and gas) or accounts subject to subsection 5 of Section
9-103 of the UCC;
xiv. we call to your attention that changes in the
nature of the collateral (including but not limited to collateral
consisting of the
<PAGE>
The Lenders set forth
on Schedule I hereto
The Chase Manhattan Bank
July 2, 1998
Page 14
membership interests referred to in the preceding sentence) may affect
the security interest of the Collateral Agent for the benefit of the
Lenders and we express no opinion as to the security interest of the
Collateral Agent for the benefit of the Lenders in the event that any
such changes take place (in cluding any such changes that make the
assumptions in the preceding sentence untrue);
xv. we call to your attention that the right of the
Collateral Agent for the benefit of the Lenders to become a member of a
limited liability company whose interests have been pledged may be
limited by applicable law and by the terms of the documents pursuant to
which it has been formed, as amended from time to time (we note,
however, that the LLC Documents, as in effect on the date hereof, do
not contain any such limitation) and that the only remedy may be the
right to receive distribu tions to which any Company is otherwise
entitled pursuant to such documents; and
xvi. we call to your attention that in the case of
licenses or permits issued by governmen tal authorities, the applicable
Company may not have sufficient rights therein for the security
interest of the Collateral Agent for the benefit of the Lend ers to
attach and even if such Company has suffi cient rights for the security
interest to attach, exercise of remedies may be limited by the terms of
the license or permit or require the consent of the governmental
authority issuing such license or per mit. We have assumed that to the
extent the terms of licenses or permits (or any laws or regulations
applicable thereto) prohibit or condition the trans fer of any licenses
or permits, consent to the transfer under the Guarantee and Collateral
Agree ment has been obtained.
<PAGE>
The Lenders set forth
on Schedule I hereto
The Chase Manhattan Bank
July 2, 1998
Page 15
13. To the extent that the federal trademark laws of the
United States are applicable, the provisions of the Guarantee and Collateral
Agreement, together with the recordation of the Guarantee and Collateral
Agreement in the United States Patent and Trademark office within three months
of the date hereof, will be effective to create in favor of the Collateral Agent
for the benefit of the Lenders, a valid security interest in the U.S. registered
trademarks and U.S. trademark applications set forth on Schedule 6 to the
Guarantee and Collateral Agreement (the "Trademarks"), which is effective
against subsequent purchasers of such Trademarks.
The opinions expressed in this paragraph 13 are subject to the
following qualifications:
i. we have assumed that the representa tions in the
Guarantee and Collateral Agreement, including the information on
Schedule 6 to the Guar antee and Collateral Agreement, will be accurate
and complete as of the date of the filing of the Guaran tee and
Collateral Agreement;
ii. we have assumed the Trademarks exist and that
Borrower has sufficient rights in the Trademarks for the security
interest of the Collat eral Agent to attach, and we express no opinion
as to the nature or extent of the Borrower's rights in, or title to,
any of the Trademarks;
iii. we have assumed that there has been no transfer
or other event affecting the Borrower's right, title and interest in
the Trademarks which has occurred either within three months prior to
the date hereof or earlier than three months prior to the date hereof
but which is not recorded prior to the date hereof;
iv. we express no opinion with respect to the
security interest of the Collateral Agent in any trademarks which are
either acquired by any
<PAGE>
The Lenders set forth
on Schedule I hereto
The Chase Manhattan Bank
July 2, 1998
Page 16
Company subsequent to the date hereof or otherwise
not identified in Schedule 6 to the Guarantee and
Collateral Agreement;
v. we call your attention to the fact that, under
Section 10 of the United States Trade mark Act (the "Lanham Act") (15
U.S.C. 1060), no application to register a mark based on intent to use
shall be assignable prior to the filing of a verified statement of use
with the United States Patent and Trademark Office pursuant to Section
1(d) of the Lanham Act, except to a successor to the business of the
applicant, or portion thereof, to which the mark pertains, if that
business is ongoing and existing;
vi. we call your attention to the fact that the
exercise of remedies with respect to the Trademarks may require
additional filings with the United States Patent and Trademark Office;
vii. we express no opinion as to the
priority of the security interest of the Collateral
Agent in the Trademarks;
viii. we have assumed that there are no agreements
between the Borrower and any account debtor prohibiting, restricting or
conditioning the Borrower's right to assign or grant a security in
terest in any portion of the Trademarks;
ix. we express no opinion as to the
validity or enforceability of any Trademark; and
x. we call to your attention that, under U.S.
trademark law, it is generally held that trans fers of trademark rights
are invalid unless accompa nied by the related goodwill and the
trademarks are used on substantially the same goods as those previ
ously represented by the trademarks and we express no opinions as to
the assets or goodwill that would
<PAGE>
The Lenders set forth
on Schedule I hereto
The Chase Manhattan Bank
July 2, 1998
Page 17
have to accompany the Trademarks to ensure continu ing validity of such
Trademarks in the event of a foreclosure and the ultimate disposition
of such trademarks as a result of a default.
14. No registration of any Company is required under the
Investment Company Act of 1940.
15. No Company is a "holding company" within the meaning of
the Public Utility Holding Company Act of 1935, as amended.
This opinion is being furnished only to you in connection with
the Credit Agreement and the transactions contemplated thereby and is solely for
your benefit and is not to be used, circulated, quoted, relied upon or otherwise
referred to by any other Person or used for any other purpose without our prior
written consent.
Very truly yours,
Skadden, Arps, Slate, Meagher & Flom, L.L.P.
<PAGE>
SCHEDULE I
----------
LENDERS
The Chase Manhattan Bank
Goldman Sachs Credit Partners L.P.
Toronto Dominion Bank
Barclays Bank Plc
Bank of America National Trust and Savings Association
Bank of Tokyo-Mitsubishi Trust Company
CIBC Inc.
Debt Strategies Fund, Inc.
Deutsche Morgan Grenfell
Export Development Corporation
Merrill Lynch Senior Floating Rate Fund, Inc.
Morgan Guaranty Trust Company of New York
Paribas
PNC Bank National Association
Prime Income Trust
Senior Debt Portfolio
Senior High Income Portfolio, Inc.
Van Kampen American Capital Prime Rate Income Trust
** indicates Lender has received a Term Note
+ indicates Lender has received a Revolving Credit
Note
<PAGE>
SCHEDULE II
APPLICABLE CONTRACTS
Indenture, dated as of November 26, 1997, between Teligent, Inc. and First Union
National Bank, as Trustee, relating to $300,000,000 Senior Notes due 2007.
Indenture, dated as of February 20, 1998, between Teligent,
Inc. and First Union National Bank, as Trustee, relating to
$440,000,000 Senior Discount Notes due 2008.
Network Products Purchase Agreement No. TLG970IN, dated as of December 11, 1997,
between Teligent, Inc. ("Teligent") and Northern Telecom, Inc. ("Nortel"), as
modified by (i) the letter agreement dated January 16, 1998 between Nortel and
Teligent, (ii) the letter agree ment dated March 30, 1998 between Nortel and
Teligent, and (iii) the letter agreement dated May 22, 1998 among Nortel,
Teligent, The Chase Manhattan Bank, Chase Securi ties Inc., Goldman Sachs Credit
Partners L.P., Toronto Dominion (Texas), Inc. and TD Securities (USA) Inc.
<PAGE>
EXHIBIT A
BORROWER'S CERTIFICATE
The undersigned, a duly elected and authorized officer of each
of Teligent, Inc., a Delaware corporation (the "Borrower"), Teligent License
Company I, L.L.C., a Delaware limited liability company, Teligent License
Company II, L.L.C., a Delaware limited liability company, Teligent
Telecommunications, Inc., a Delaware corporation, Teligent Communications, Inc.,
a Delaware corporation, and Auctel, Inc., a Delaware corporation , (the
aforementioned companies collectively referred to as the "Companies")
understands that pursuant to the Credit Agreement, dated as of July 2, 1998 (the
"Credit Agreement"), among the Company, the Lenders set forth on Schedule I
hereto (the "Lenders"), Chase Securities Inc., Goldman Sachs Credit Partners
L.P. and TD Securities (USA) Inc., as Arrangers, Goldman Sachs Credit Partners
L.P., as Syndication Agent, Toronto Dominion (Texas), Inc., as Documentation
Agent, and The Chase Manhattan Bank, as Administrative Agent (the
"Administrative Agent"), Skadden, Arps, Slate, Meagher & Flom LLP ("SASM&F") is
rendering an opinion dated the date hereof (the "Opinion") to the Lenders and
the Administrative Agent. Capitalized terms used herein but not otherwise
defined shall have the meanings set forth in the Opinion. The undersigned
further understands that SASM&F is relying on this officer's certificate and the
statements made herein in rendering such Opinion.
With regard to the foregoing, the undersigned certifies as
follows:
1. Due inquiry has been made of all persons deemed necessary or
appropriate to verify or confirm the statements contained herein.
2. SASM&F may rely upon the representations and warranties that the
Companies have made in the Loan Documents. The undersigned have made a careful
review of the representations and warranties of the Companies contained in the
Loan Documents and hereby confirm, to the best of their knowledge and belief,
that such representations and warranties are true, correct and complete on and
as of the date of this certificate.
<PAGE>
3. The chief executive office of each of the Companies is
located at 8065 Leesburg Pike, Vienna, Fairfax County, Virginia. The Companies
do not maintain offices in any other counties in Virginia.
4. Set forth on Schedule I hereto are all the orders,
judgments and decrees of any Governmental Authority which are specifically
applicable to the Companies.
5. Less than 25 percent of the assets of each of the Companies
on a consolidated basis and on an unconsolidated basis consist of margin stock
(as such term is defined in Regulation U of the Board of Governors of the
Federal Reserve System).
6. Each of the Companies (a) is primarily engaged, directly or
through a wholly-owned subsidiary or subsidiaries, in a business or businesses
other than that of investing, reinvesting, owning, holding or trading in
securities, (b) is not engaged and does not propose to engage in the business of
issuing face-amount certificates of the installment type, and has not been
engaged in such business and does not have any such certificate outstanding, and
(c) is not engaged and does not propose to engage in the business of investing,
reinvesting, owning, holding or trading in securities, other than the shares of
its wholly-owned subsidiary, and does not own or propose to acquire investment
securities (as defined in Section 3(a) of the Investment Company Act of 1940, as
amended) having a value exceeding 40 percent of the value of such party's total
assets (exclusive of government securities and cash items) on an unconsolidated
basis.
7. None of the Companies owns or operates facilities used for
the generation, transmission or distribution of electric energy for sale
("electric utility facilities").
8. None of the Companies owns or operates facilities used for
the distribution at retail of natural or manufactured gas for heat, light or
power ("gas utility facilities").
<PAGE>
9. None of the Companies directly or indirectly, or through
one or more intermediary companies, owns, controls or holds with power to vote
(a) 10% or more of the outstanding securities, such as notes, drafts, stock,
treasury stock, bonds, debentures, certificates of interest or participation in
any profit-sharing agreements or in oil, gas, other mineral royalties or leases,
collateral-trust certificates, preorganization certificates or subscriptions,
transferable shares, investment contracts, voting-trust certificates,
certificates of deposit for a security, receiver's or trustee's certificates or
instruments commonly known as a security (including certificates of interest or
participation in, temporary or interim certificates for, receipt for, guaranty
of, assumption of liability on or warrants or rights to subscribe to or purchase
any of the foregoing) presently entitling it to vote in the direction or
management of, or any such instrument issued under or pursuant to any trust,
agreement or arrangement whereby a trustee or trustees or agent or agents for
the owner or holder of such instrument is presently entitled to vote in the
direction or management of, any corporation, partnership, association,
joint-stock company, joint venture or trust that owns or operates any electric
utility facilities or gas utility facilities or (b) any other interest, directly
or indirectly, or through one or more intermediary entities, in (i) any
corporation, partnership association, joint-stock company, joint venture or
trust that owns or operates any electric utility facilities or gas utility
facilities (other than Permitted Sales) or (ii) any of the foregoing types of
entities which have received notice of the type described in Paragraph 10 below.
10. None of the Companies has received notice that the
Securities and Exchange Commission has determined, or may determine, that any of
the Companies exercises a controlling influence over the management or direction
of the policies of a gas utility company or any electric utility company as to
make it subject to the obligations, duties and liabilities imposed upon holding
companies by the Public Utility Holding Company Act of 1935, as amended.
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this
certificate as of July 1, 1998.
By: /s/ Laurence E. Harris
----------------------
Name: Laurence E. Harris
Title: Senior Vice President
and General Counsel
<PAGE>
Schedule I
----------
Governmental Orders and Decrees
-------------------------------
None.
<PAGE>
EXHIBIT F-2
[LETTERHEAD]
The Lenders set forth on Schedule III hereto
The Chase Manhattan Bank,
as Administrative Agent
270 Park Avenue
New York, New York 10017
July 2, 1998
Page 1
July 2, 1998
The Lenders set forth on
Schedule III hereto
The Chase Manhattan Bank
as Administrative Agent
270 Park Avenue
New York, New York 10017
Re: Teligent, Inc.
--------------
Ladies and Gentlemen:
We have acted as special counsel to (i) Teligent, Inc., a
Delaware corporation (the "Borrower"), in connection with the preparation,
execution and delivery of the Credit Agreement, dated as of July 2, 1998 (the
"Credit Agreement"), among the Borrower, the Lenders set forth on Schedule III
hereto (the "Lenders"), Chase Securities Inc., Goldman Sachs Credit Partners
L.P. and TD Securities (USA) Inc., as Arrangers, Goldman Sachs Credit Partners
L.P., as Syndication Agent, Toronto Dominion (Texas), Inc., as Documentation
Agent, and The Chase Manhattan Bank, as Administrative Agent (the
"Administrative Agent"); and (ii) each of Teligent License Company I, L.L.C., a
Delaware limited liability company ("TLC I"), Teligent License Company II,
L.L.C., a Delaware limited liability company ("TLC II," and together with TLC I,
"LicenseCo"), Teligent Telecommunications, Inc., a Delaware corporation
("AssetCo"), Teligent Communications, Inc., a Delaware corporation ("LeaseCo"),
and AUCTEL, Inc., a Delaware corporation ("AUCTEL") (each a "Restricted
Subsidiary" and together, the "Restricted Subsidiaries") in connection with the
preparation, execution and delivery of the Guarantee and Collateral Agreement,
dated July 2, 1998 (the "Guarantee and Collateral Agreement"), made by the
Borrower and the Restricted Subsidiaries in favor of The Chase Manhattan Bank,
as Collateral Agent (the "Collateral Agent"). The Borrower and the Restricted
Subsidiaries are collectively referred to herein as the "Companies." The Credit
Agreement and the Guarantee and Collateral Agreement are collectively referred
to herein as the "Transaction Documents."
<PAGE>
The Lenders set forth on Schedule III hereto
The Chase Manhattan Bank,
as Administrative Agent
270 Park Avenue
New York, New York 10017
July 2, 1998
Page 2
This opinion is being furnished pursuant to Section 4.1(m)(i)
of the Credit Agreement. Capitalized terms used and not otherwise defined herein
shall have the respective meanings set forth in the Credit Agreement.
In connection with this opinion, we have examined originals or
copies, certified or otherwise identified to our satisfaction, of (i) the Credit
Agreement, dated July 2, 1998; (ii) an executed copy of the Guarantee and
Collateral Agreement; and (iii) the authorizations and licenses issued by the
Federal Communication Commission ("FCC") to the Companies listed on Schedule I
hereto (the "Licenses"). We have also examined originals or copies, certified or
otherwise identified to our satisfaction, of such records of the Companies and
such agreements, certificates of public officials, certificates of officers or
other representatives of the Companies and such other documents, certificates
and records as we have deemed necessary or appropriate as a basis for the
opinions set forth herein.
In addition, we have examined files available to the public at
the FCC and FCC databases maintained by Interactive Systems, Inc. (which has a
contract with the FCC to provide public access to the FCC's databases) relating
to the Licenses as of June 29, 1998. We have also examined and are familiar with
originals or copies, certified or otherwise identified to our satisfaction, of
such records of the Companies, such agreements, the attached Officer's
Certificate of the Borrower ("Officer's Certificate"), and such other documents,
certificates and records as we have deemed necessary or appropriate as a basis
for the opinions set forth herein.
For purposes of our opinion, we have assumed the legal
capacity of all natural persons, the genuineness of all signatures, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as certified or photostatic
copies and the authenticity of the originals of such latter documents. In making
our examination of documents executed by par ties other than the Companies, we
have assumed that such parties had the power, corporate or other, to enter into
and perform all obligations thereunder and have also assumed the due
authorization by all requisite action, corporate or other, and execu tion and
delivery by such parties of such documents and the validity and binding effect
thereof. In addition, we have assumed that the FCC's public files and databases
are correct, complete and accurate. As to any facts material to this opinion
that we did not independently establish or verify, we have relied, without
indepen dent verification, upon oral or written statements and representations
of officers and other representatives of the Companies and others.
We have not conducted an on-site investigation of any of the
Companies' facilities associated with the Licenses (collectively the "Systems"),
nor have we examined the operations of the Systems. Thus, we express no opinion
as to the operation of the Systems or their compliance with applicable laws or
the effect of such operation or lack thereof or non-compliance, if any, on the
validity of the Licenses.
As used herein, (i) the term "Communications Act" means the
Communications Act of 1934, as amended, including the Telecommunications Act of
1996, and, where applicable, the published rules, regulations, decisions and
orders of the FCC in each case as in effect on the date hereof; and (ii) the
term "Governmental Approval" means any consent, approval, license, or
authorization of, or filing with, the FCC pursuant to the Communications Act.
Members of this firm are admitted to the Bar of the District
of Columbia and this opinion is limited to the Communications Act. We express no
opinion as to any laws of the United States other than the Communications Act or
of any foreign country or of any federal, state or local authority, or any
rules, regula tions or decisions of any other federal, state, or local agency or
administrative body other than the FCC or agency or ministry or regulatory body
of any foreign country.
Based upon and subject to the foregoing, and to the
limitations, qualifications, exceptions, facts and assumptions set forth herein,
we are of the opin ion that:
1. The Companies are duly authorized by the FCC to hold the
Authorizations and Licenses identified in Schedule I. Based on the attached
Officer's Certificate as to matters of fact, the Licenses are in full force and
effect and have not been revoked, suspended, cancelled or modified in any
adverse way and, except as set forth on Schedules I and I-A hereto, are not
subject to any conditions or require ments that are not generally imposed by the
FCC upon the holders of such licenses.
<PAGE>
The Lenders set forth on Schedule III hereto
The Chase Manhattan Bank,
as Administrative Agent
270 Park Avenue
New York, New York 10017
July 2, 1998
Page 3
2. Based solely on (i) inquiry to the appropriate officers of
the Companies without independent verification and (ii) our examination of the
publicly available files at the FCC and FCC databases as described above, and
except as set forth in Schedule II hereto, (A) the Companies have paid all fees
and have made all reports and filings, including tariffs where applicable,
required by the FCC for the conduct of their businesses in the manner as set
forth in the Teligent, Inc. Confidential Information Memorandum (May 1998)
("Information Memo"), (B) no further FCC authorizations are required by the
Companies to conduct their business as set forth in the Information Memo, and
(C) there are no complaints, investigations, protests, proceedings or petitions
outstanding or to our knowledge threatened at or by the FCC, formal or informal,
against the Companies or the Licenses or any adverse judgments, decrees,
injunctions, or published orders of any court or the FCC naming the Companies
that are likely to result in the revocation, suspension, termination,
non-renewal or material adverse modification of the Licenses or prevent the
Companies from conducting their current business as set forth in the Information
Memo.
3. Based on the attached Officer's Certificate as to matters
of fact, neither the execution or delivery of, or the performance by the
Companies of their obligations under the Transaction Documents, nor the
consummation by the Companies of the transactions contemplated therein, will
violate the Communi cations Act.
4. Based on the attached Officer's Certificate as to matters
of fact, no Governmental Approvals are necessary for the execution or delivery
of, or the performance by the Companies of their obligations under the
Transaction Documents or consummation by the Companies of the transactions
contemplated therein in accordance with the terms thereof and such consummation
will not cause any cancellation, termination, revocation, forfeiture or material
impairment of any of the Licenses or prevent the Companies from conducting their
current business as set forth in the Information Memo.
5. Based on the attached Officer's Certificate as to matters
of fact, and subject to the assumptions and qualifications set forth below, the
Borrower is in compliance with the statutory foreign ownership limitations of 47
U.S.C. ss.
<PAGE>
The Lenders set forth on Schedule III hereto
The Chase Manhattan Bank,
as Administrative Agent
270 Park Avenue
New York, New York 10017
July 2, 1998
Page 4
310(b).
<PAGE>
The Lenders set forth on Schedule III hereto
The Chase Manhattan Bank,
as Administrative Agent
270 Park Avenue
New York, New York 10017
July 2, 1998
Page 5
Assumptions and Qualifications
With respect to the opinion set forth in paragraph 5 above,
Section 310(b) of the Communications Act provides in pertinent part that no
common carrier radio station license shall be granted to or held by (1) any
corporation of which more than one-fifth of the capital stock is owned of record
or voted by aliens or their representatives or by a foreign government or
representative thereof or by any corporation organized under the laws of a
foreign country or (2) to any corporation directly or indirectly controlled by
another corporation of which more than one-fourth of the capital stock is owned
of record or voted by aliens or their representa tives or by a foreign
government or representative thereof or by any corporation organized under the
laws of a foreign country. As of the date of this opinion, the Borrower holds
FCC-issued common carrier radio station licenses through its wholly owned
subsidiaries.
To determine whether foreign ownership in an FCC license
holder (or in any company directly or indirectly controlling such license
holder) exceeds the applicable foreign ownership limitations described
immediately above, the FCC examines the percentage of foreign equity ownership
in the license holder (or in any company directly or indirectly controlling such
license holder). The FCC has also stated that it will examine the level of
capital contributions made by foreign entities to determine whether the capital
contributions of such foreign investors exceed the applicable ownership
limitations described above. See Fox Television Stations, Inc., 78 Rad. Reg.
(P&F) 2d 1294 (1995) ("Fox"). In Fox, the FCC relied upon a United States
Supreme Court case explaining "that capital stock 'is the capital upon which the
business is to be undertaken, and is represented by the property of every kind
acquired by the Company.'" Fox at P. 46, citing Wright v. Georgia R.R. & Banking
Co., 216 U.S. 420, 425 (1910) (emphasis added).
The FCC has not published any rules, regulations, decisions,
or orders determining the valuation of FCC licenses as capital contributions for
purposes of calculating foreign ownership interests as set forth in Fox. Based
on the attached Officer's Certificate as to matters of fact, we have accepted
without independent verification that the fair market value of the combined
capital contributions of shareholders in the Borrower are as set forth in the
attached Officer's Certificate. Thus, applying the definition of "capital stock"
used by the FCC in Fox and provided
<PAGE>
The Lenders set forth on Schedule III hereto
The Chase Manhattan Bank,
as Administrative Agent
270 Park Avenue
New York, New York 10017
July 2, 1998
Page 6
that the FCC were to accept the fair market value of the licenses as the basis
for determining the level of capital contribution by Microwave Services, Inc.,
Telcom- DTS Investors, L.L.C., and Lynn Forester, the Borrower is not in
violation of the for eign ownership provisions of Section 310(b) of the
Communications Act
This opinion is furnished to you solely for your benefit in connection
with the closings under the Transaction Documents occurring today and is not to
be used, circulated, quoted or otherwise referred to or relied upon for any
other purpose without our prior express written permission. The opinions
expressed herein are given as of the date of this opinion, are based upon facts
in existence as of the date of this opinion, and we assume no obligation to
advise you of any change in the foregoing opinion.
Very truly yours,
Skadden, Arps, Slate, Meagher & Flom, L.L.P.
<PAGE>
SCHEDULE III
LENDERS
The Chase Manhattan Bank
Goldman Sachs Credit Partners L.P.
Toronto Dominion Bank
Barclays Bank Plc
Bank of America National Trust and Savings Association
Bank of Tokyo-Mitsubishi Trust Company
CIBC Inc.
Debt Strategies Fund, Inc.
Deutsche Morgan Grenfell
Export Development Corporation
Merrill Lynch Senior Floating Rate Fund, Inc.
Morgan Guaranty Trust Company of New York
Paribas
PNC Bank National Association
Prime Income Trust
Senior Debt Portfolio
Senior High Income Portfolio, Inc.
Van Kampen American Capital Prime Rate Income Trust
1
<PAGE>
EXHIBIT F-3
[LETTERHEAD]
July 2, 1998
The Lenders set forth
on Schedule I hereto
c/o
The Chase Manhattan Bank,
as Administrative Agent
270 Park Avenue
New York, New York 10017
Ladies and Gentlemen:
I am General Counsel to Teligent, Inc., a Delaware corporation
("Teligent") and handle legal matters for each of each of Teligent License
Company I, L.L.C., a Delaware limited liability company ("TLC I"), Teligent
License Company II, L.L.C., a Delaware limited liability company ("TLC II," and
together with TLC I, "LicenseCo"), Teligent Communications, Inc., a Delaware
corporation ("AssetCo"), Teligent Telecommunications, Inc., a Delaware
corporation ("LeaseCo"), (collectively, the "Restricted Subsidiaries" and
together with Teligent, the "Companies") and have so acted in connection with
the preparation, execution and delivery of (i) the Credit Agreement, dated as of
July 2, 1998 (the "Credit Agreement"), among Teligent, the Lenders set forth on
Schedule I hereto (the "Lenders"), Chase Securities Inc., Goldman Sachs Credit
Partners L.P. and TD Securities (USA) Inc., as Arrangers, Goldman Sachs Credit
Partners L.P., as Syndi cation Agent, Toronto Dominion (Texas), Inc., as
Documentation Agent, and The Chase Manhattan Bank, as Administrative Agent (the
"Administrative Agent"), and (ii) the other Transaction Documents (as defined
below) to which any of the Compa nies is a party.
This opinion is being furnished pursuant to Section 4.1(m)(ii)
of the Credit Agreement. Capitalized terms used herein and not otherwise defined
herein shall have the same meanings herein as ascribed thereto in the Credit
Agreement.
1
<PAGE>
In rendering the opinions set forth herein, I have examined
and relied on originals or copies of the following documents:
1. the Credit Agreement;
2. each of the Term Notes, dated as of the date hereof
(collectively, the "Term Notes"), executed and delivered by
Teligent in favor of each of the Lenders indicated on Schedule
I as a recipient of a Term Note and the Revolving Credit
Notes, dated as of the date hereof (collectively, the
"Revolving Credit Notes" and together with the Term Notes, the
"Notes"), executed and delivered by Teligent in favor of each
of the Lenders indicated on Schedule I hereto as recipient of
the Revolving Credit Notes;
3. the Guarantee and Collateral Agreement, dated as of
the date hereof, made by Teligent and the Restricted
Subsidiaries in favor of The Chase Manhattan Bank, as
Collateral Agent;
4. the Collateral Agency and Intercreditor Agreement, dated as
of the date hereof, among Teligent, The Chase Manhattan Bank,
as Collat eral Agent, and the Secured Parties named therein;
5. copies of the Certificates of Incorporation and By-laws of
each of Teligent and the Restricted Subsidiaries (other than
LicenseCo);
6. certified copies of the Certificates of Formation of
each of TLC I and TLC II;
7. a certified copy of certain resolutions of the Board of
Directors of each of Teligent and the Restricted
Subsidiaries (other than LicenseCo);
8. a certified copy of certain resolutions of the Members of
each of TLC I and TLC II; and
9. such other documents as I have deemed necessary or
appropriate as a basis for the opinions set forth below.
2
<PAGE>
The documents referred to in items (1) through (4) above are
hereinaf ter referred to collectively as the "Transaction Documents."
I have also examined original or copies identified to my
satisfaction of such documents as I have deemed necessary or appropriate as a
basis for the opinions set forth below.
In my examination I have assumed the genuineness of all
signatures, including endorsements, the legal capacity of natural persons, the
authenticity of all documents submitted to me as originals, the conformity to
original documents of all draft, certified or photostatic copies, and the
authenticity of the originals of such copies. As to any facts material to this
opinion that I did not independently establish or verify, I have relied upon
statements and representations of the Companies and their officers and other
representatives, and of public officials.
I have made such examination of law as in my judgment is
necessary and appropriate for the purposes of this opinion. I do not, however,
purport to be an expert in, or qualified to practice under, the laws of any
State other than the Com monwealth of Pennsylvania. I do not purport to pass
upon the laws of any jurisdic tion other than the laws of the Commonwealth of
Pennsylvania.
Based upon the foregoing and subject to the limitations,
qualifica tions, exceptions and assumptions set forth herein, I am of the
opinion that:
1. Each of the Companies has the power and authority, and the
legal right, to own and operate its Property, if owned, to lease the Property it
operates as lessee and to conduct the business in which it is currently engaged;
except where failure to have such power, authority and legal right would not
result in a Material Adverse Effect.
2. Each Company 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, except where failure to be so qualified or in good standing would
not result in a Material Adverse Effect.
3. The execution, delivery and performance by each of the
Companies of the Transaction Documents to which each such Company is a party,
and the borrowings under the Credit Agreement, will not (a) violate any
Requirement
3
<PAGE>
of Law applicable to, or any Contractual Obligation of, any of the Companies; or
(b) result in, or require, the creation or imposition of any Lien (other than
the Liens granted under the Transaction Documents and Liens permitted by Section
6.3 of the Credit Agreement) upon any property or revenues of any of the
Companies, except to the extent that such violations of (a) or (b) (individually
or in the aggregate) could not reasonably be expected to have a Material Adverse
Effect.
4. Except for the litigation disclosed on Schedule 3.6 to the
Credit Agreement, no litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to my knowledge, threatened
by or against the Companies or any of their respective properties or revenues
(a) with respect to any of the Transaction Documents or (b) which could
reasonably be expected to have a Material Adverse Effect.
This opinion is furnished exclusively to you in connection
with the above-referenced transaction with the Companies, is provided on behalf
of the Companies in my capacity as General Counsel of Teligent and the person
who handles legal matters for the other aforementioned Companies, and by
acceptance hereof it is understood and agreed by any person relying hereon that
this opinion is made without personal recourse of any nature to me individually.
No party other than the addressees or their successors and assignees is
authorized or in any way entitled to rely on the opinions set forth herein
without my express written consent.
Very truly yours,
By:
------------------------------
Laurence E. Harris
4
<PAGE>
SCHEDULE I
----------
LENDERS
The Chase Manhattan Bank
Goldman Sachs Credit Partners L.P.
Toronto Dominion Bank
Barclays Bank Plc
Bank of America National Trust and Savings Association
Bank of Tokyo-Mitsubishi Trust Company
CIBC Inc.
Debt Strategies Fund, Inc.
Deutsche Morgan Grenfell
Export Development Corporation
Merrill Lynch Senior Floating Rate Fund, Inc.
Morgan Guaranty Trust Company of New York
Paribas
PNC Bank National Association
Prime Income Trust
Senior Debt Portfolio
Senior High Income Portfolio, Inc.
Van Kampen American Capital Prime Rate Income Trust
5
<PAGE>
EXHIBIT F-4
[LETTERHEAD]
June 29, 1998
The Lenders set forth on
Schedule III hereto
The Chase Manhattan Bank
as Administrative Agent
270 Park Avenue
New York, New York 10017
Re: Teligent, Inc.
Ladies and Gentlemen:
We have acted as special communications counsel to The Chase Manhattan
Bank in connection with the preparation, execution and delivery of the Credit
Agreement, dated as of June 29, 1998 (the "Credit Agreement"), among Teligent,
Inc., a Delaware corporation (the "Borrower"), the Lenders [set forth on
Schedule III hereto] (the "Lenders"), Chase Securities Inc., Goldman Sachs
Credit Partners L.P. and TD Securities (USA) Inc., as Arrangers, Goldman Sachs
Credit Partners L.P., as Syndication Agent, Toronto Dominion (Texas), Inc., as
Documentation Agent, and The Chase Manhattan Bank, as Administrative Agent (the
"Administrative Agent"); and in connection with the preparation, execution and
delivery of the Guarantee and Collateral Agreement, dated June 29, 1998 (the
"Guarantee and Collateral Agreement"), made by the Borrower and the Restricted
Subsidiaries in favor of The Chase Manhattan Bank, as Collateral Agent. We do
not represent the Borrower or its subsidiaries.
This opinion is being furnished pursuant to Section 4.1(m) of the
Credit Agreement. Capitalized terms used and not otherwise defined herein shall
have the respective meanings set forth in the Credit Agreement.
As special communications counsel to the Administrative Agent, we
address only matters within the jurisdiction of the Federal Communications
Commission ("FCC") pertaining to the regulations of the Digital Electronic
Message Service ("DEMS") under the Communications Act of 1934, as amended, and
the rules, regulations, and published and publicly available orders of the FCC
(collectively, the "Communications Act") applicable to the DEMS licenses
identified on Annex 1 hereto (the "FCC DEMS Licenses").
<PAGE>
The Lenders set forth on
Schedule III hereto
The Chase Manhattan Bank
as Administrative Agent
June 29, 1998
Page 2
The opinions stated herein do not purport to cover areas of compliance
or any other matter that can reliably determined only through an inspection of
the facilities, work product, records or operations of the Borrower or any of
its subsidiaries. In rendering the opinions herein expressed, we have assumed,
without further investigation, the accuracy and completeness of the FCC's
publicly available licensing records at the time of their examination by
International Transcription Service ("ITS"), and the absence of changes since
the date of such examination.
Our opinions with respect to the FCC DEMS Licenses are based solely
upon a review of license information made available to us on June 23, 1998, by
ITS, a private entity under contract with the FCC to make such information
available to the public. References in this opinion to the FCC's public records
refer, insofar as DEMS licensing matters may be involved, solely to information
received by us through ITS from its inspection of FCC licensing records in
Gettysburg, Pennsylvania, on June 23, 1998. Except as specifically described in
this paragraph, in connection with this opinion, we have not confirmed, nor have
we asked ITS to confirm, licensing information beyond the following: the call
signs identified in Annex 1, the corresponding license expiration dates, and
identification of the licensee. Our opinions with respect to the effectiveness
of any license are based solely upon the confirmation to us by ITS of the
expiration date for any such license. We advise you that the FCC's rules provide
for the automatic cancellation of the FCC DEMS Licenses at an earlier date than
the scheduled expiration date if certain conditions, including the completion of
construction by a specified date, are not met, and that the licensee of the FCC
DEMS Licenses may require further waivers, modifications or other authorization
in connection with the particular circumstances of its business. We have made no
investigation or other inquiry in connection with this opinion with respect to
whether such conditions have been met or any such other authorization or waiver
has been obtained; and we have assumed that all such conditions have been met
and all other authorizations or waivers have been obtained with respect to the
FCC DEMS Licenses.
Whenever any statement in this opinion is indicated to be based on our
knowledge, it is intended to signify that, during the course of our
representation to the Administrative Agent in Connection herewith, no
information has come to the attorneys in our firm involved in the preparation of
this opinion that would give those attorneys actual knowledge that such
statement is incorrect. Other than our above-described review of certain
information provided by ITS, we have not undertaken any investigation to
determine the accuracy of any such statement.
<PAGE>
The Lenders set forth on
Schedule III hereto
The Chase Manhattan Bank
as Administrative Agent
June 29, 1998
Page 3
We do not purport to express opinions herein concerning any laws other
than the Communications Act. Our opinions are limited strictly to the matters
stated herein and no opinions may be inferred or are implied beyond the matters
expressly stated herein. We have assumed no obligation to advise you beyond the
opinions specifically expressed herein.
Based upon our examination of the foregoing disclosures, documents,
records and matters of law and subject to the qualifications, assumptions and
limitations set forth herein, we are of the opinion that:
To our knowledge, based upon the above-based review of the public
records of the FCC by ITS, (i) each of the FCC DEMS Licenses is held by the
licensee identified in Annex 1, with such exceptions and qualifications as may
be set forth in Annex 1 hereto; and (ii) except as may be indicated in Annex 1,
each of the FCC DEMS Licenses set forth in Annex 1, assuming compliance with the
terms of each of such FCC DEMS Licenses and the rules and policies of the FCC,
is in effect.
We advise you that on March 14, 1997, the FCC released a Relocation
Order, and on June 24, 1997, the Public Safety and Private Wireless Division,
Wireless Telecommunications Bureau of the FCC released a Modification Order of
the Relocation Order. The effect of these two orders was to relocate DEMS
licenses from the 18GHz to the 24GHz band. Several parties have challenged the
FCC's authority to issue these orders without a notice and comment rulemaking
proceedings, and those challenges remain pending. In addition, a petition has
been filed requesting that the FCC reallocate the 24MHz band for purposes other
DEMS. We advise you that the outcome of these proceedings remain uncertain and
that a determination adverse to the Borrower could adversely affect the
operation of DEMS facilities under the FCC DEMS Licenses.
The opinions set forth herein are given as of the date hereof. We
assume no obligation to advise you of changes which any thereafter be brought to
our attention. Our opinions are based on statutory and regulatory provisions and
judicial decisions in effect at the date hereof, and we do not opine with
respect to any law, regulation, rule or governmental policy which may be enacted
or adopted after the date hereof, nor do we assume any responsibility to advise
you of future changes on our opinion.
<PAGE>
The Lenders set forth on
Schedule III hereto
The Chase Manhattan Bank
as Administrative Agent
June 29, 1998
Page 4
This opinion is rendered solely to you in connection with the execution
of the Credit Agreement on the date hereof. This opinion may not be relied upon
by you for any other purposes or relied upon by any other person without our
prior written consent.
Very truly yours,
DOW, LOHNES & ALBERTSON, PLLC
By:
---------------------------
J.G. Harrington, Member
<PAGE>
1
EXHIBIT G-1
FORM OF TRANCHE A TERM NOTE
THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MAY NOT BE TRANSFERRED EXCEPT
IN COMPLIANCE WITH THE TERMS AND PROVISIONS OF THE CREDIT AGREEMENT REFERRED TO
BELOW. TRANSFERS OF THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MUST BE
RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE
TERMS OF SUCH CREDIT AGREEMENT.
$ New York, New York
------------ July 2, 1998
FOR VALUE RECEIVED, the undersigned, TELIGENT, INC., a Delaware
corporation (the "Borrower"), hereby unconditionally promises to pay to (the
"Lender") or its registered assigns at the Payment Office specified in the
Credit Agreement (as hereinafter defined) in lawful money of the United States
and in immediately available funds, the principal amount of (a) DOLLARS ($ ),
or, if less, (b) the unpaid principal amount of the Tranche A Term Loan made by
the Lender pursuant to Section 2.1 of the Credit Agreement. The principal amount
shall be paid in the amounts and on the dates specified in Section 2.8 of the
Credit Agreement. The Borrower further agrees to pay interest in like money at
such office on the unpaid principal amount hereof from time to time outstanding
at the rates and on the dates specified in Section 2.16 of the Credit Agreement.
The holder of this Note is authorized to endorse on the
schedules annexed hereto and made a part hereof or on a continuation thereof
which shall be attached hereto and made a part hereof the date, Type and amount
of the Tranche A Term Loan and the date and amount of each payment or prepayment
of principal with respect thereto, each conversion of all or a portion thereof
to another Type, each continuation of all or a portion thereof as the same Type
and, in the case of Eurodollar Loans, the length of each Interest Period with
respect thereto. Each such endorsement shall constitute prima facie evidence of
the accuracy of the information endorsed. The failure to make any such
endorsement or any error in any such endorsement shall not affect the
obligations of the Borrower in respect of the Tranche A Term Loan.
This Note (a) is one of the Tranche A Term Notes referred to
in the Credit Agreement dated as of July 2, 1998 (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"), among the
Borrower, the Lender, the other banks and financial institutions or entities
from time to time parties thereto, Chase Securities Inc., Goldman Sachs Credit
Partners L.P. and TD Securities (USA) Inc., as Arrangers, Goldman Sachs Credit
Partners L.P., as Syndication Agent, Toronto Dominion (Texas), Inc., as
Documentation Agent, and The Chase Manhattan Bank, as the Administrative Agent,
(b) is subject to the provisions of the Credit Agreement and (c) is subject to
optional and mandatory prepayment in whole or in part as provided in the Credit
Agreement. This Note is secured and guaranteed as provided in the Loan
Documents. Reference is hereby made to the Loan Documents for a description of
the properties and assets in which a security interest has been granted, the
nature and extent of the security and
<PAGE>
2
the guarantees, the terms and conditions upon which the security interests and
each guarantee were granted and the rights of the holder of this Note in respect
thereof.
Upon the occurrence of any one or more of the Events of
Default, all principal and all accrued interest then remaining unpaid on this
Note shall become, or may be declared to be, immediately due and payable, all as
provided in the Credit Agreement.
All parties now and hereafter liable with respect to this
Note, whether maker, principal, surety, guarantor, endorser or otherwise, hereby
waive presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein shall have the meanings given to them in the Credit
Agreement.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN OR
IN THE CREDIT AGREEMENT, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AND
IN ACCORDANCE WITH THE REGISTRATION AND OTHER PROVISIONS OF SECTION 9.6 OF THE
CREDIT AGREEMENT.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
TELIGENT, INC.
By:
---------------------------------
Name:
Title:
<PAGE>
1
Schedule A
to Trance A Term Note
LOANS, CONVERSIONS AND REPAYMENTS OF ABR LOANS
<TABLE>
<CAPTION>
Amount Amount of ABR Loans
Converted to Amount of Principal of Converted to Unpaid Principal Notation Made
Date Amount of ABR Loans ABR Loans ABR Loans Repaid Eurodollar Loans Balance of ABR Loans By
<S> <C> <C> <C> <C> <C> <C>
</TABLE>
<PAGE>
1
Schedule B
to Tranche A Term Note
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
<TABLE>
<CAPTION>
Amount of
Amount Converted Interest Period and Amount of Principal Eurodollar Loans Unpaid Principal
Amount of to Eurodollar Eurodollar Rate with of Eurodollar Loans Converted to ABR Balance of Notation
Date Eurodollar Loans Loans Respect Thereto Repaid Loans Eurodollar Loans Made By
<S> <C> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
<PAGE>
1
EXHIBIT G-2
FORM OF REVOLVING CREDIT NOTE
THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MAY NOT BE TRANSFERRED EXCEPT
IN COMPLIANCE WITH THE TERMS AND PROVISIONS OF THE CREDIT AGREEMENT REFERRED TO
BELOW. TRANSFERS OF THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MUST BE
RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE
TERMS OF SUCH CREDIT AGREEMENT.
$ New York, New York
------------ July 2, 1998
FOR VALUE RECEIVED, the undersigned, TELIGENT, INC., a
Delaware corporation (the "Borrower"), hereby unconditionally promises to pay to
____________________ (the "Lender") or its registered assigns at the Payment
Office specified in the Credit Agreement (as hereinafter defined) in lawful
money of the United States and in immediately available funds, on the Revolving
Credit Termination Date the principal amount of (a) DOLLARS ($ ), or, if less,
(b) the aggregate unpaid principal amount of all Revolving Credit Loans made by
the Lender to the Borrower pursuant to Section 2.3 of the Credit Agreement. The
Borrower further agrees to pay interest in like money at such Payment Office on
the unpaid principal amount hereof from time to time outstanding at the rates
and on the dates specified in Section 2.16 of the Credit Agreement.
The holder of this Note is authorized to endorse on the
schedules annexed hereto and made a part hereof or on a continuation thereof
which shall be attached hereto and made a part hereof the date, Type and amount
of each Revolving Credit Loan made pursuant to the Credit Agreement and the date
and amount of each payment or prepayment of principal thereof, each continuation
thereof, each conversion of all or a portion thereof to another Type and, in the
case of Eurodollar Loans, the length of each Interest Period with respect
thereto. Each such endorsement shall constitute prima facie evidence of the
accuracy of the information endorsed. The failure to make any such endorsement
or any error in any such endorsement shall not affect the obligations of the
Borrower in respect of any Revolving Credit Loan.
This Note (a) is one of the Revolving Credit Notes referred to
in the Credit Agreement dated as of July 2, 1998 (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"), among the
Borrower, the Lender, the other banks and financial institutions or entities
from time to time parties thereto, Chase Securities Inc., Goldman Sachs Credit
Partners L.P. and TD Securities (USA) Inc., as Arrangers, Goldman Sachs Credit
Partners L.P., as Syndication Agent, Toronto Dominion (Texas), Inc., as
Documentation Agent, and The Chase Manhattan Bank, as the Administrative Agent,
(b) is subject to the provisions of the Credit Agreement and (c) is subject to
optional and mandatory prepayment in whole or in part as provided in the Credit
Agreement. This Note is secured and guaranteed as provided in the Loan
Documents. Reference is hereby made to the Loan Documents for a description of
the properties and assets in which a security interest has been granted, the
nature and extent of the security and
<PAGE>
2
the guarantees, the terms and conditions upon which the security interests and
each guarantee were granted and the rights of the holder of this Note in respect
thereof.
Upon the occurrence of any one or more of the Events of
Default, all principal and all accrued interest then remaining unpaid on this
Note shall become, or may be declared to be, immediately due and payable, all as
provided in the Credit Agreement.
All parties now and hereafter liable with respect to this
Note, whether maker, principal, surety, guarantor, endorser or otherwise, hereby
waive presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein shall have the meanings given to them in the Credit
Agreement.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN OR
IN THE CREDIT AGREEMENT, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AND
IN ACCORDANCE WITH THE REGISTRATION AND OTHER PROVISIONS OF SECTION 9.6 OF THE
CREDIT AGREEMENT.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.
TELIGENT, INC.
By:
--------------------------
Name:
Title:
<PAGE>
1
Schedule A
to Revolving Credit Note
LOANS, CONVERSIONS AND REPAYMENTS OF ABR LOANS
<TABLE>
<CAPTION>
Amount Amount of ABR Loans
Converted to Amount of Principal of Converted to Unpaid Principal Notation Made
Date Amount of ABR Loans ABR Loans ABR Loans Repaid Eurodollar Loans Balance of ABR Loans By
<S> <C> <C> <C> <C> <C> <C>
</TABLE>
<PAGE>
1
Schedule B
to Revolving Credit Note
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
<TABLE>
<CAPTION>
Amount of
Amount Converted Interest Period and Amount of Principal Eurodollar Loans Unpaid Principal
Amount of to Eurodollar Eurodollar Rate with of Eurodollar Loans Converted to ABR Balance of Notation
Date Eurodollar Loans Loans Respect Thereto Repaid Loans Eurodollar Loans Made By
<S> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
<PAGE>
1
EXHIBIT G-3
FORM OF DELAYED DRAW TERM NOTE
THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MAY NOT BE TRANSFERRED EXCEPT
IN COMPLIANCE WITH THE TERMS AND PROVISIONS OF THE CREDIT AGREEMENT REFERRED TO
BELOW. TRANSFERS OF THIS NOTE AND THE OBLIGATIONS REPRESENTED HEREBY MUST BE
RECORDED IN THE REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE
TERMS OF SUCH CREDIT AGREEMENT.
$ New York, New York
--------------- July 2, 1998
FOR VALUE RECEIVED, the undersigned, TELIGENT, INC., a Delaware
corporation (the "Borrower"), hereby unconditionally promises to pay to (the
"Lender") or its registered assigns at the Payment Office specified in the
Credit Agreement (as hereinafter defined) in lawful money of the United States
and in immediately available funds, the principal amount of (a) DOLLARS ($ ),
or, if less, (b) the unpaid principal amount of the Delayed Draw Term Loan made
by the Lender pursuant to Section 2.1 of the Credit Agreement. The principal
amount shall be paid in the amounts and on the dates specified in Section 2.8 of
the Credit Agreement. The Borrower further agrees to pay interest in like money
at such office on the unpaid principal amount hereof from time to time
outstanding at the rates and on the dates specified in Section 2.16 of the
Credit Agreement.
The holder of this Note is authorized to endorse on the
schedules annexed hereto and made a part hereof or on a continuation thereof
which shall be attached hereto and made a part hereof the date, Type and amount
of the Delayed Draw Term Loan and the date and amount of each payment or
prepayment of principal with respect thereto, each conversion of all or a
portion thereof to another Type, each continuation of all or a portion thereof
as the same Type and, in the case of Eurodollar Loans, the length of each
Interest Period with respect thereto. Each such endorsement shall constitute
prima facie evidence of the accuracy of the information endorsed. The failure to
make any such endorsement or any error in any such endorsement shall not affect
the obligations of the Borrower in respect of the Delayed Draw Term Loan.
This Note (a) is one of the Delayed Draw Term Notes referred
to in the Credit Agreement dated as of July 2, 1998 (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"), among the
Borrower, the Lender, the other banks and financial institutions or entities
from time to time parties thereto, Chase Securities Inc., Goldman Sachs Credit
Partners L.P. and TD Securities (USA) Inc., as Arrangers, Goldman Sachs Credit
Partners L.P., as Syndication Agent, Toronto Dominion (Texas), Inc., as
Documentation Agent, and The Chase Manhattan Bank, as the Administrative Agent,
(b) is subject to the provisions of the Credit Agreement and (c) is subject to
optional and mandatory prepayment in whole or in part as provided in the Credit
Agreement. This Note is secured and guaranteed as provided in the Loan
Documents. Reference is hereby made to the Loan Documents for a description of
the properties and assets in which a security interest has been granted, the
nature and extent of the security and
<PAGE>
2
the guarantees, the terms and conditions upon which the security interests and
each guarantee were granted and the rights of the holder of this Note in respect
thereof.
Upon the occurrence of any one or more of the Events of
Default, all principal and all accrued interest then remaining unpaid on this
Note shall become, or may be declared to be, immediately due and payable, all as
provided in the Credit Agreement.
All parties now and hereafter liable with respect to this
Note, whether maker, principal, surety, guarantor, endorser or otherwise, hereby
waive presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein shall have the meanings given to them in the Credit
Agreement.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN OR
IN THE CREDIT AGREEMENT, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AND
IN ACCORDANCE WITH THE REGISTRATION AND OTHER PROVISIONS OF SECTION 9.6 OF THE
CREDIT AGREEMENT.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.
TELIGENT, INC.
By:
----------------------------
Name:
Title:
<PAGE>
1
Schedule A
to Delayed Draw Term Note
LOANS, CONVERSIONS AND REPAYMENTS OF ABR LOANS
<TABLE>
<CAPTION>
Amount Amount of ABR Loans
Converted to Amount of Principal of Converted to Unpaid Principal Notation Made
Date Amount of ABR Loans ABR Loans ABR Loans Repaid Eurodollar Loans Balance of ABR Loans By
<S> <C> <C> <C> <C> <C> <C>
</TABLE>
<PAGE>
1
Schedule B
to Delayed Draw Term Note
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
<TABLE>
<CAPTION>
Amount Converted Interest Period and Amount of Principal Eurodollar Loans Unpaid Principal
Amount of to Eurodollar Eurodollar Rate with of Eurodollar Loans Converted to ABR Balance of Notation
Date Eurodollar Loans Loans Respect Thereto Repaid Loans Eurodollar Loans Made By
<S> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
<PAGE>
1
EXHIBIT H
FORM OF EXEMPTION CERTIFICATE
Reference is made to the Credit Agreement, dated as of July 2,
1998 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among Teligent, Inc., as Borrower, the other banks and
financial institutions or entities from time to time parties thereto, Chase
Securities Inc., Goldman Sachs Credit Partners L.P. and TD Securities (USA)
Inc., as Arrangers, Goldman Sachs Credit Partners L.P., as Syndication Agent,
Toronto Dominion (Texas), Inc., as Documentation Agent, 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.
______________________ (the "Non-U.S. Lender") is providing
this certificate pursuant to Section 2.21(d) of the Credit Agreement. The
Non-U.S. Lender hereby represents and warrants that:
1. The Non-U.S. Lender is the sole record and beneficial owner of the Loans or
the obligations evidenced by Note(s) in respect of which it is providing this
certificate.
2. The Non-U.S. 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 Non-U.S.
Lender further represents and warrants that:
(a) the Non-U.S. Lender is not subject to regulatory or
other legal requirements as a bank in any jurisdiction; and
(b) the Non-U.S. 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 Non-U.S.Lender is not a 10-percent shareholder of
the Borrower of Section 881(c)(3)(B) of the Code; and
4. The Non-U.S. Lender is not a controlled foreign corporation
receiving interest from a related person within the meaning of Section
881(c)(3)(C) of the Code.
IN WITNESS WHEREOF, the undersigned has duly executed this
certificate.
[NAME OF NON-U.S. LENDER]
By: ____________________________
Name:
Title:
<PAGE>
2
Date: ____________________
<PAGE>
EXHIBIT I
================================================================================
COLLATERAL AGENCY AND INTERCREDITOR AGREEMENT
among
TELIGENT, INC.,
THE CHASE MANHATTAN BANK,
as Collateral Agent
and
THE SECURED PARTIES
Dated as of July 2, 1998
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
Page
PREAMBLE............................................................. 1
SECTION 1 DEFINITIONS.................................... 1
1.1 Defined Terms........................................ 1
-------------
1.2 Other Definitional Provisions........................ 8
-----------------------------
SECTION 2 ENFORCEMENT OF SECURITY INTERESTS AND
GUARANTEE...................................... 8
2.1 Notice of Enforcement................................ 8
---------------------
2.2 General Authority of the Collateral Agent over the
---------------------------------------------------
Collateral and Guarantee............................. 8
------------------------
2.3 Remedies Not Exclusive............................... 9
----------------------
2.4 Waiver and Estoppel.................................. 9
-------------------
2.5 Limitation on Collateral Agent's Duty in Respect
------------------------------------------------
of Collateral........................................ 10
-------------
2.6 Limitation by Law.................................... 10
-----------------
2.7 Rights of Secured Parties Under Secured Instruments.. 10
---------------------------------------------------
SECTION 3 COLLATERAL ACCOUNT; DISTRIBUTIONS.............. 11
3.1 The Collateral Account............................... 11
----------------------
3.2 Control of Collateral Account........................ 12
-----------------------------
3.3 Investment of Funds Deposited in Collateral Account.. 12
---------------------------------------------------
3.4 Application of Moneys................................ 13
---------------------
3.5 Amounts Held for Contingent Secured Obligations...... 13
-----------------------------------------------
3.6 Application of Moneys Distributable to Holder
---------------------------------------------
Representatives...................................... 14
---------------
3.7 Collateral Agent's Calculations...................... 14
-------------------------------
SECTION 4 ADDITIONAL SECURED OBLIGATIONS; ADDITIONAL
COLLATERAL; ADDITIONAL GUARANTORS AND
GRANTORS; CERTAIN DOCUMENTATION REQUIREMENTS... 15
4.1 Delivery of Credit Agreement, Initial Security
Documents and Guarantee.............................. 15
----------------------
4.2 Additional Secured Obligations....................... 15
------------------------------
4.3 Additional Collateral; Additional Security Documents. 16
----------------------------------------------------
4.4 Additional Guarantors and Grantors................... 16
----------------------------------
4.5 Possessory Collateral................................ 16
---------------------
SECTION 5 AGREEMENTS WITH COLLATERAL AGENT............... 16
5.1 Delivery of Amendments to Secured Instruments........ 16
---------------------------------------------
5.2 Information as to Secured Parties, Holder
Representatives, Unrepresented Holders, Etc......... 16
-i-
<PAGE>
Page
5.3 Expenses............................................ 16
--------
5.4 Stamp and Other Similar Taxes....................... 17
-----------------------------
5.5 Filing Fees, Excise Taxes, Etc...................... 17
-------------------------------
5.6 Indemnification..................................... 17
---------------
5.7 Further Assurances.................................. 18
------------------
SECTION 6 POSSESSION AND USE OF COLLATERAL; PARTIAL
RELEASES...................................... 18
6.1 Use Prior to Notice of Enforcement.................. 18
----------------------------------
6.2 Releases............................................ 19
--------
6.3 Insurance and Condemnation Proceeds; Liquidating
------------------------------------------------
Dividends........................................... 20
---------
SECTION 7 THE COLLATERAL AGENT.......................... 20
7.1 Appointment......................................... 20
-----------
7.2 Delegation of Duties................................ 20
--------------------
7.3 Exculpatory Provisions.............................. 20
----------------------
7.4 Reliance by Administrative Agent.................... 21
--------------------------------
7.5 Non-Reliance on Collateral Agent or Other Secured
-------------------------------------------------
Parties............................................. 21
-------
7.6 Indemnification..................................... 22
---------------
7.7 Collateral Agent in Its Individual Capacity......... 22
-------------------------------------------
7.8 Successor Agent..................................... 22
---------------
SECTION 8 MISCELLANEOUS................................. 23
8.1 Notices............................................. 23
-------
8.2 No Waivers.......................................... 23
----------
8.3 Amendments, Supplements, Waivers and Releases....... 24
---------------------------------------------
8.4 Headings............................................ 25
--------
8.5 Severability........................................ 25
------------
8.6 Successors and Assigns.............................. 25
----------------------
8.7 Currency Conversions................................ 25
--------------------
8.8 GOVERNING LAW....................................... 25
-------------
8.9 Submission to Jurisdiction; Waivers................. 25
-----------------------------------
8.10 Counterparts....................................... 26
------------
8.11 Release of Liens; Guarantee........................ 26
---------------------------
8.12 Secured Parties.................................... 27
---------------
8.13 Complete Agreement................................. 27
------------------
-ii-
<PAGE>
SCHEDULES:
SCHEDULE I Initial Secured Obligations
SCHEDULE II Initial Security Documents
EXHIBITS:
EXHIBIT A Form of Additional Collateral Designation
EXHIBIT B Form of Additional Secured Obligations Designation
-iii-
<PAGE>
COLLATERAL AGENCY AND INTERCREDITOR AGREEMENT,
dated as of July 2, 1998, among TELIGENT, INC., a Delaware corporation (the
"Borrower"), THE CHASE MANHATTAN BANK, as Collateral Agent (in such capacity,
the "Collateral Agent") and the Secured Parties (as defined below).
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Borrower has entered into the Credit Agreement
and expects to incur certain other obligations;
WHEREAS, the Borrower wishes to cause such obligations to
become Secured Obligations hereunder by causing such obligations to be secured
by the Collateral pursuant to the Security Documents and guaranteed pursuant to
the Guarantee, all in the manner described in this Agreement;
WHEREAS, (i) the Borrower and certain of its Subsidiaries may,
from time to time, execute and deliver to the Collateral Agent certain
Additional Security Documents and, pursuant to such Additional Security
Documents, create in favor of the Collateral Agent a security interest in
Additional Collateral, and (ii) the Borrower may, as required by Section 5.10 of
the Credit Agreement, from time to time cause additional Subsidiaries to become
parties to the Guarantee and the Security Documents and cause additional
Collateral to be delivered under the Security Documents and/or additional
Security Documents to be executed and delivered, all in the manner described in
this Agreement; and
WHEREAS, the Secured Parties wish to set forth certain
agreements among them with respect to the Security Documents, the Collateral and
the Guarantee, and wish to appoint the Collateral Agent as their agent to hold
the Security Documents, the Collateral and the Guarantee;
NOW, THEREFORE, the parties hereto hereby agree as follows:
SECTION 1
DEFINITIONS
1.1 Defined Terms. As used herein, the following terms shall
have the following meanings:
"Additional Collateral": all Collateral other than the
Initial Collateral.
"Additional Collateral Designation": each Additional
Collateral Designation, substantially in the form of Exhibit A,
executed by a Responsible Officer and delivered pursuant to
subsection 4.3.
"Additional Secured Instrument": each Secured Instrument
evidencing or governing Additional Secured Obligations, as
amended, supplemented or otherwise modified from time to time in
accordance with this Agreement.
<PAGE>
2
"Additional Secured Obligations": any Permitted Additional
Secured Obligations that become Secured Obligations in the manner
provided in subsection 4.2.
"Additional Secured Obligations Designation": each
Additional Secured Obligations Designation, substantially in the
form of Exhibit B, duly completed and executed by a Responsible
Officer and the creditor or creditors in respect of such
Additional Secured Obligations and delivered pursuant to
subsection 4.2.
"Additional Security Document": each agreement or instrument
(other than the Initial Security Documents) creating or
evidencing a security interest of the Collateral Agent in, or a
lien in favor of the Collateral Agent on, any Collateral, as
amended, supplemented or otherwise modified from time to time in
accordance with this Agreement.
"Administrative Agent": The Chase Manhattan Bank, as
administrative agent under the Credit Agreement, and any
successor in such capacity.
"Agreement": this Collateral Agency and Intercreditor
Agreement, as amended, supplemented or otherwise modified from
time to time.
"Asset Sale": any sale, transfer or other disposition or
series of related sales, transfers or other dispositions by the
Borrower or any Restricted Subsidiary of any property or assets
of the Borrower or such Restricted Subsidiary (including property
subject to any Lien under any Security Document) to a Person
other than the Borrower or any Restricted Subsidiary.
"Asset Sale Proceeds Release Request": a request delivered
by the Borrower to the Collateral Agent requesting the Collateral
Agent to release funds from the Asset Sale Proceeds Sub-Account
for use by the Borrower to purchase assets in accordance with the
applicable provisions of the Credit Agreement. Each Asset Sale
Proceeds Release Request (a) shall specify (i) the amount of
funds to be released, (ii) the date of the requested release,
(iii) the purpose for which the Borrower expects to use such
funds, (iv) the applicable provisions of the Credit Agreement
permitting the requested release and proposed use of such funds,
(v) the investments to be liquidated to provide cash to make such
release, and (vi) the wire instructions for the transfer of such
funds to or for the account of the Borrower and (b) shall be
accompanied by a certificate of a Responsible Officer to the
effect that such requested release of funds and proposed use
thereof will not violate the Credit Agreement.
"Asset Sale Proceeds Prepayment Request": a request
delivered by the Borrower to the Collateral Agent requesting the
Collateral Agent to release funds from the Asset Sale Proceeds
Sub-Account for use by the Borrower to make a prepayment of
Secured Obligations in accordance with the applicable provisions
of the Credit Agreement. Each Asset Sale Proceeds Prepayment
Request (a) shall specify (i) the
<PAGE>
3
amount of funds to be released, (ii) the date of the requested
release, (iii) the applicable provisions of the Credit Agreement
permitting or requiring the requested release and proposed use of
such funds and (iv) the investments to be liquidated to provide
cash to make such release.
"Asset Sale Proceeds Sub-Account": as defined in subsection
3.1(a).
"Bank Facility Obligations": at any time, the sum (without
duplication) of (a) the aggregate principal or face amount of the
loans and other extensions of credit outstanding at such time
under the Credit Agreement and the aggregate amount of accrued
and unpaid interest thereon at such time, (b) the aggregate
amount of accrued and unpaid fees payable by the Borrower under
or in connection with the Credit Agreement at such time, and (c)
the aggregate amount of all other monetary obligations of the
Borrower that are accrued, identified and owing at such time to
any Secured Party under the Credit Agreement, including, without
limitation, indemnification and expense reimbursement
obligations.
"Bank Facility Secured Party": any Secured Party to the
extent it is a Holder of Bank Facility Obligations.
"Business Day": any day other than a day on which commercial
banks are authorized or required by law to close in New York
City.
"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) 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 commercial bank organized under
the laws of the United States of America or any state thereof or
the District of Columbia having combined capital and surplus of
not less than $100,000,000; (c) commercial paper of an issuer
rated at the time of acquisition at least A-2 by Standard &
Poor's Ratings Services ("S&P") or P-2 by Moody's Investors
Service, Inc. ("Moody's"), or carrying an equivalent rating by a
nationally recognized rating agency and maturing within six
months from the date of acquisition; (d) repurchase obligations
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 the time of
acquisition at least A-2 by S&P or P-2 by Moody's; (f) securities
with maturities of six months or
<PAGE>
4
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.
"Code": the Uniform Commercial Code as in effect from time
to time in the State of New York.
"Collateral": all the properties and assets of whatever
nature, tangible or intangible, now owned or existing or
hereafter acquired or arising, in which the Collateral Agent have
been granted a lien or security interest pursuant to any of the
Security Documents and all Proceeds thereof.
"Collateral Account": as defined in subsection 3.1.
"Collateral Agent": The Chase Manhattan Bank, in its
capacity as collateral agent under this Agreement, and any
successor collateral agent appointed hereunder.
"Credit Agreement": the Credit Agreement, dated as of July
2, 1998, among the Borrower, the Lenders, Arrangers, Syndication
Agent and Documentation Agent parties thereto and the
Administrative Agent, as amended, supplemented or otherwise
modified from time to time.
"Distribution Date": each date fixed by the Collateral Agent
or the Required Secured Parties for a distribution to the Secured
Parties of funds held in the Collateral Account, the first of
which shall be within 120 days after a Notice of Enforcement is
effective as provided in subsection 2.1(b), and the remainder of
which shall occur (x) monthly thereafter on the day of the month
corresponding to the first Distribution Date (or, if there be no
such corresponding day, the last day of such month), provided,
that if any such day is not a Business Day, such Distribution
Date shall be the next Business Day and (y) on such other dates
fixed by the Collateral Agent or the Required Secured Parties.
"Dollars" and "$": lawful currency of the United States of
America.
"Effective Date": ____________________, 1998.
"Enforcement Proceeds Sub-Account": as defined in subsection
3.1(a).
"Guarantee": the guarantee set forth in Section 2 of the
Guarantee and Collateral Agreement.
<PAGE>
5
"Guarantee and Collateral Agreement": the Guarantee and
Collateral Agreement, dated as of July 2, 1998, among the
Borrower and its Restricted Subsidiaries, the Administrative
Agent and the Collateral Agent, as amended, supplemented or
otherwise modified from time to time.
"Hedging Agreement": any interest rate swap, currency swap
or other interest rate or currency hedge arrangement (other than
any interest rate cap or other similar agreement or arrangement
under which the Borrower has no continuing payment obligations)
(a) to or under which the Borrower is a party or a beneficiary,
(b) to or under which any Lender or any affiliate thereof is the
Borrower's counterparty and (c) which is designated as a Hedging
Agreement in the Additional Secured Obligations Designation
pursuant to which the Hedging Agreement Obligations under such
Hedging Agreement become Secured Obligations hereunder.
"Hedging Agreement Obligations": at any time, the aggregate
amount of all monetary obligations of the Borrower to any Secured
Party that are accrued and unpaid at such time under any one or
more Hedging Agreements.
"Hedging Agreement Secured Party": any Secured Party to the
extent it is a Holder of Hedging Agreement Obligations.
"Holder": any direct holder of, or creditor party to a
Secured Instrument in respect of, Secured Obligations; it being
understood that participants are not Holders hereunder.
"Holder Representative": (a) with respect to any Holder of
Bank Facility Obligations, the Administrative Agent and (b) with
respect to any Holder of Vendor Facility Obligations, the Vendor
Facility Agent under the Vendor Credit Facility pursuant to which
such Vendor Facility Obligations are outstanding.
"Initial Collateral": the Collateral in existence on the
Effective Date in which a security interest is created under the
Initial Security Documents.
"Initial Secured Obligations": the Secured Obligations
described in Schedule I.
"Initial Security Documents": the documents described in
Schedule II, as amended, supplemented or otherwise modified from
time to time in accordance with this Agreement and the Secured
Instruments.
"L/C Obligations": at any time, the aggregate amount of all
monetary obligations of the Borrower to any Secured Party that
are accrued and unpaid at such time in respect of any Permitted
Letter of Credit (as defined in the Credit Agreement).
<PAGE>
6
"L/C Secured Party": any Secured Party to the extent it is a
Holder of L/C Obligations.
"Notice of Cancellation of Enforcement": with respect to any
Notice of Enforcement, a notice or notices delivered to the
Collateral Agent by the Holder Representatives and/or
Unrepresented Holders that delivered such Notice of Enforcement,
cancelling such Notice of Enforcement.
"Notice of Enforcement": a notice or notices delivered to
the Collateral Agent by Unrepresented Holders and/or Holder
Representatives representing the Required Secured Parties (a)
stating that (i) the Secured Obligations owing to the Holders
represented by such Holder Representatives have become due and
payable at or prior to the stated maturity thereof and remain
unpaid or (ii) the Holders of such Secured Obligations are then
permitted by the Secured Instrument under which such Secured
Obligations are outstanding (because of the occurrence of an
event of default or similar event under such Secured Instrument)
to cause such Secured Obligations to become immediately due and
payable prior to the stated maturity thereof with the giving of
notice as provided in such Secured Instrument and (b) requesting
the Collateral Agent to take actions in respect of the Collateral
and the Guarantee as directed by the Required Secured Parties.
"Permitted Additional Secured Obligations": at any time, any
indebtedness or other obligations that the Borrower may incur as
Vendor Facility Obligations, Hedging Agreement Obligations or L/C
Obligations, as the case may be, without violating this Agreement
or any Secured Instrument in effect at such time.
"Person": an individual, a corporation, a partnership, an
association, a trust or any other entity or organization,
including a government or political subdivision or an agency or
instrumentality thereof.
"Pledged Equity Securities": any portion of the Collateral
consisting of stock of, partnership interests in, or other
evidences of equity ownership in, any Person.
"Possessory Collateral": "instruments" and "certificated
securities" (as such terms are defined in the Code) and any other
Collateral in which the Collateral Agent's security interest may
be, in accordance with the Code, perfected only by means of
possession of such Collateral by the Collateral Agent or an agent
or bailee on its behalf.
"Proceeds": all proceeds within the meaning of the Code.
"Required Secured Parties": (a) at any time when there are
Secured Obligations outstanding under the Credit Agreement, the
Required Lenders (as defined in the Credit Agreement) and (b) at
any other time, Secured Parties holding more than 50% of the
Secured Obligations then outstanding.
<PAGE>
7
"Responsible Officer": the chief executive officer,
president, general counsel or chief financial officer of the
Borrower, but in any event, with respect to financial matters,
the chief financial officer, treasurer or controller of the
Borrower.
"Secured Instruments": at any time, the loan agreements,
credit agreements, note purchase agreements, financing
agreements, notes, Hedging Agreements and other documents and
instruments, however designated (other than the Guarantee and the
Security Documents), that evidence Secured Obligations or govern
the terms of Secured Obligations or pursuant to which Secured
Obligations were issued or are outstanding, as any of the
foregoing may be amended, supplemented or otherwise modified from
time to time in accordance with the respective terms thereof.
"Secured Obligation Commitments": the collective reference
to all obligations of Secured Parties to extend credit to the
Borrower which, when extended, will constitute outstanding
Secured Obligations.
"Secured Obligations": (a) the Bank Facility Obligations,
(b) the Vendor Facility Obligations, (c) the Hedging Agreement
Obligations and (d) L/C Obligations.
"Secured Parties": the Holders of the Secured Obligations,
including, where the context permits, the Administrative Agent
and the Vendor Facility Agents.
"Security Documents": (a) the Initial Security Documents and
(b) the Additional Security Documents.
"Sub-Account": as defined in subsection 3.1(a).
"Subsidiary": as to any Person, a corporation, partnership
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
qualified, all references to a "Subsidiary" or to "Subsidiaries"
in this Agreement shall refer to a Subsidiary or Subsidiaries of
the Borrower.
"Unrepresented Holder": any Hedging Agreement Secured Party
and any other Holder of Secured Obligations for which there is no
Holder Representative.
"Vendor Credit Facility": any credit facility (a) pursuant
to which a Person selling goods or services to the Borrower
and/or its Subsidiaries, or an affiliate of such Person (or any
financier or group of financiers acting on behalf of such person)
provides credit to the Borrower solely to finance the purchase of
goods or services
<PAGE>
8
relating to the Borrower's business and/or any costs and expenses
relating thereto and (b) which is a Permitted Additional Secured
Obligation designated as a Vendor Credit Facility in the Additional
Secured Obligations Designation pursuant to which the Vendor Facility
Obligations under such Vendor Credit Facility become Secured
Obligations hereunder.
"Vendor Facility Agent": in respect of any Vendor Credit
Facility, the Person (howsoever designated) performing the functions
customarily associated with an administrative agent for the lenders
thereunder.
"Vendor Facility Obligations": at any time, the sum (without
duplication) of (a) the aggregate principal amount of the loans
outstanding at such time under any of the Vendor Credit Facilities and
the aggregate amount of accrued and unpaid interest thereon at such
time, (b) the aggregate amount of accrued and unpaid fees payable by
the Borrower under or in connection with any of the Vendor Credit
Facilities at such time, and (c) the aggregate amount of all other
monetary obligations of the Borrower that are accrued and owing at
such time to any Secured Party under any Vendor Credit Facility,
including, without limitation, indemnification and expense
reimbursement obligations.
"Vendor Facility Secured Party": any Secured Party to the extent
it is a Holder of Vendor Facility Obligations.
1.2 Other Definitional Provisions. 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, the words "include", "includes" and "including" when used in
this Agreement shall be deemed to be followed by the phrase "without
limitation", and Schedule, section and subsection references are to this
Agreement unless otherwise specified.
SECTION 2
ENFORCEMENT OF SECURITY INTERESTS AND GUARANTEE
2.1 Notice of Enforcement. (a) Upon receipt by the Collateral
Agent of a Notice of Enforcement, the Collateral Agent shall notify the
Borrower, each Holder Representative and each Unrepresented Holder of the
receipt and contents thereof. So long as such Notice of Enforcement is in
effect, the Collateral Agent shall exercise the rights and remedies provided in
this Agreement and in the Guarantee and the Security Documents and under
applicable law in accordance with the direction of the Required Secured Parties
as provided herein.
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9
(b) A Notice of Enforcement shall become effective upon
receipt thereof by the Collateral Agent and, once effective, shall remain in
effect unless and until cancelled as provided in subsection 2.1(c).
(c) A Notice of Enforcement may be cancelled by the delivery
to the Collateral Agent of a Notice of Cancellation of Enforcement. The
Collateral Agent shall immediately notify the Borrower as to the receipt of any
such Notice of Cancellation of Enforcement and shall promptly notify the
Borrower, each Holder Representative and each Unrepresented Holder as to the
cancellation of the related Notice of Enforcement.
2.2 General Authority of the Collateral Agent over the
Collateral and Guarantee. The Collateral Agent shall have such rights and
remedies in respect of the Collateral, the Security Documents and the Guarantee
as shall be set forth herein and in the Security Documents and the Guarantee and
such other rights and remedies as shall be provided under applicable law.
2.3 Remedies Not Exclusive. (a) No remedy conferred upon or
reserved to the Collateral Agent herein or in the Guarantee or any Security
Document is intended to be exclusive of any other remedy or remedies, but every
such remedy shall be cumulative and shall be in addition to every other remedy
conferred herein, in the Guarantee or in any Security Document or now or
hereafter existing at law or in equity or by statute.
(b) No delay by the Collateral Agent in exercising or failure
by the Collateral Agent to exercise any right, remedy or power hereunder or
under the Guarantee or any Security Document shall impair any such right, remedy
or power or shall be construed to be a waiver thereof, and every right, power
and remedy given to the Collateral Agent under this Agreement, the Guarantee or
any Security Document may be exercised from time to time and as often as may be
deemed expedient by the Collateral Agent or the Required Secured Parties.
(c) If the Collateral Agent shall have proceeded to enforce
any right, remedy or power under this Agreement, the Guarantee or any Security
Document at any time when a Notice of Enforcement is in effect and the
proceeding for the enforcement thereof shall have been discontinued or abandoned
for any reason or shall have been determined adversely to the Collateral Agent,
then the Borrower, the Collateral Agent and the Secured Parties shall, subject
to any determination in such proceeding, severally and respectively be restored
to their former positions and rights hereunder or thereunder with respect to the
Collateral and the Guarantee and in all other respects, and thereafter all
rights, remedies and powers of the Collateral Agent shall continue as though no
such proceeding had been taken.
(d) To the extent permitted by applicable laws, all rights of
action under this Agreement, the Guarantee and the Security Documents may be
enforced by the Collateral Agent without the possession of any Secured
Instrument, Guarantee, Security Document or instrument evidencing any Secured
Obligation or the production thereof at any trial or other proceeding relative
thereto.
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10
2.4 Waiver and Estoppel. (a) To the extent permitted by
applicable laws, the Borrower hereby agrees that it will not at any time in any
manner whatsoever claim, or take the benefit or advantage of, any appraisement,
valuation, stay, extension, moratorium, turnover or redemption law, or any law
permitting it to direct the order in which the Collateral shall be sold, now or
at any time hereafter in force, which may delay, prevent or otherwise affect the
performance or enforcement of this Agreement, the Guarantee or any Security
Document and, to the extent permitted by applicable law, waives all benefit or
advantage of all such laws, and the Borrower hereby covenants that it will not
hinder, delay or impede the execution of any power granted to the Collateral
Agent in this Agreement, the Guarantee or any Security Document but will suffer
and permit the execution of every such power as though no such law were in
force.
(b) To the extent permitted by applicable laws, the Borrower,
on behalf of itself and all who may claim through or under it, including,
without limitation, any and all subsequent creditors, vendees, assignees and
lienors, waives and releases all rights to demand or to have any marshalling of
the Collateral upon any sale, whether made under any power of sale granted
herein or in any Security Document or pursuant to judicial proceedings or upon
any foreclosure or any enforcement of this Agreement or any Security Document
and consents and agrees that all the Collateral may at any such sale be offered
and sold as an entirety.
(c) The Borrower waives, to the extent permitted by applicable
law, presentment, demand, protest and any notice of any kind (except notices
explicitly required hereunder or under any Secured Instrument, the Guarantee or
any Security Document) in connection with this Agreement, the Guarantee and the
Security Documents, and any action taken by the Collateral Agent with respect to
the Collateral.
2.5 Limitation on Collateral Agent's Duty in Respect of
Collateral. Beyond its duties as to the custody thereof expressly provided
herein or in any Security Document and to account to the Secured Parties and the
Borrower for moneys and other property received by it hereunder or under any
Security Document, the Collateral Agent shall not have any duty to the Borrower
or to the Secured Parties as to any Collateral in its possession or control or
in the possession or control of any of its agents or nominees, or any income
thereon or as to the preservation of rights against prior parties or any other
rights pertaining thereto, except to treat such Collateral in its possession
with the same degree of care as it affords its own property and in accordance
with applicable laws. Notwithstanding the foregoing, the Collateral Agent shall
be responsible and liable for any damages arising out of its gross negligence or
willful misconduct.
2.6 Limitation by Law. All rights, remedies and powers
provided herein or in any Security Document may be exercised only to the extent
that the exercise thereof does not violate any applicable provision of law, and
all the provisions hereof are intended to be subject to all applicable
provisions of law which may be controlling and to be limited to the extent
necessary so that they will not render this Agreement invalid, unenforceable in
whole or in
<PAGE>
11
part or not entitled to be recorded, registered or filed under the provisions of
any applicable law.
2.7 Rights of Secured Parties Under Secured Instruments.
Notwithstanding any other provision of this Agreement, the Guarantee or any
Security Document, the right of each Secured Party to receive payment of the
Secured Obligations held by such Secured Party when due (whether at the stated
maturity thereof, by acceleration or otherwise) as expressed in the related
Secured Instrument or other instrument evidencing or agreement governing a
Secured Obligation or to institute suit or to obtain a judgment for the
collection of such Secured Obligations or to enforce any such judgment on or
after such due date, and to otherwise exercise the rights and remedies as a
general creditor in accordance with the Secured Instruments to which it is a
party, and the obligation of the Borrower to pay such Secured Obligation when
due, shall not be impaired or affected except as provided in such Secured
Instrument.
SECTION 3
COLLATERAL ACCOUNT; DISTRIBUTIONS
3.1 The Collateral Account. (a) On the Effective Date there
shall be established and, at all times thereafter until this Agreement shall
have terminated, there shall be maintained with the Collateral Agent at the
office of the Collateral Agent located at __________________________, a
collateral account, which shall be entitled the "Teligent, Inc. Collateral
Account" (the "Collateral Account"). The Collateral Account shall be subdivided
into two sub-accounts, designated as the "Enforcement Proceeds Sub-Account" and
the "Asset Sale Proceeds Sub-Account" (each, a "Sub-Account").
(b) All moneys which are required by this Agreement or any
Security Document to be delivered to the Collateral Agent while a Notice of
Enforcement is in effect or which are received by the Collateral Agent or any
agent or nominee of the Collateral Agent in respect of the Collateral or the
Guarantee, whether in connection with the exercise of the remedies provided in
this Agreement, the Guarantee or any Security Document or otherwise, while a
Notice of Enforcement is in effect shall be deposited in the Enforcement
Proceeds Sub- Account and, in each case, held by the Collateral Agent as part of
the Collateral and applied in accordance with the terms of this Agreement. Upon
the cancellation of each effective Notice of Enforcement pursuant to subsection
2.1(c), the Collateral Agent shall (subject to the payment of the amounts
described in the first clause of subsection 3.4(a) and the last sentence of
subsection 3.1(c)) cause all funds on deposit in the Enforcement Proceeds
Sub-Account to be paid over to the Borrower; provided, however, that funds (the
"Hold-Back Funds") in an amount equal to the sum of (x) the amount of funds
transferred to the Enforcement Proceeds Sub-Account pursuant to the second
sentence of subsection 3.1(c) and (y) the amount of funds that would have been
deposited in the Asset Sale Proceeds Sub-Account but for the effectiveness of
any Notice of Enforcement, together with all interest and income on such
<PAGE>
12
amounts, shall be deposited in the Asset Sale Proceeds Sub-Account for
application in accordance with the terms of Section 3 as if such Hold-Back Funds
had been deposited in such Asset Sale Proceeds Sub-Account (i) in the case of
funds in an amount equal to funds referred to in (x) above, since the time they
were originally deposited in the Asset Sale Proceeds Sub-Account and (ii) in the
case of funds in an amount equal to the funds referred to in (y) above, since
the time they would have been deposited in the Asset Sale Proceeds Sub-Account
if no such Notice of Enforcement had become effective.
(c) All moneys constituting proceeds of an Asset Sale which
are delivered to the Collateral Agent as required by the provisions of any
Secured Instrument shall be deposited in the Asset Sale Proceeds Sub-Account and
held by the Collateral Agent and applied in accordance with the terms of this
Agreement. Upon the receipt by the Collateral Agent of a Notice of Enforcement,
all amounts on deposit in the Asset Sale Proceeds Sub-Account shall be
transferred to the Enforcement Proceeds Sub-Account; provided, that all amounts
so transferred from the Asset Sale Proceeds Sub-Account to the Enforcement
Proceeds Sub- Account, together with all interest and income on such amounts,
shall be returned to the Asset Sale Proceeds Sub-Account under the circumstances
set forth in the proviso in subsection 3.1(b).
(d) The Borrower may, by delivery to the Collateral Agent of
an Asset Sale Proceeds Release Request, at any time within 360 days after the
deposit of any funds in the Asset Sale Proceeds Sub-Account, request a release
of such funds from the Asset Sale Proceeds Sub-Account for use in funding the
acquisition of assets in accordance with the applicable provisions of the
Secured Instruments. If no Notice of Enforcement is in effect on the date on
which such funds are requested to be released pursuant to such Asset Sale
Proceeds Release Request, the Collateral Agent shall release to the Borrower
funds from the Asset Sale Proceeds Sub-Account in accordance with such Asset
Sale Proceeds Release Request. To effect such release, the Collateral Agent
shall liquidate such investments of such funds in the Asset Sale Proceeds
Sub-Account as shall be specified in such Asset Sale Proceeds Release Request.
(e) If any funds deposited in the Asset Sale Proceeds
Sub-Account have not been withdrawn therefrom within 360 days after the date of
deposit thereof, such funds may thereafter be withdrawn only (i) by the
Collateral Agent while a Notice of Enforcement is in effect as contemplated by
the second sentence of subsection 3.1(c) to be distributed pursuant to
subsection 3.4 or (ii) pursuant to an Asset Sale Proceeds Prepayment Request, as
provided in subsection 3.1(f).
(f) The Borrower may, at any time, by delivery to the
Collateral Agent of an Asset Sale Proceeds Prepayment Request, request the
Collateral Agent to withdraw funds from the Asset Sale Proceeds Sub-Account and
transfer such funds to Secured Parties for application by such Secured Parties
toward prepayment of Secured Obligations in the manner specified by the relevant
Secured Instruments. If no Notice of Enforcement is in effect on the date on
which such funds are requested to be released pursuant to such Asset Sale
Proceeds
<PAGE>
13
Prepayment Request, the Collateral Agent shall transfer funds from the Asset
Sale Proceeds Sub-Account to Secured Parties in accordance with such Asset Sale
Proceeds Prepayment Request.
3.2 Control of Collateral Account. All right, title and
interest in and to the Collateral Account shall vest in the Collateral Agent on
behalf of the Secured Parties, and funds on deposit in the Collateral Account
shall constitute part of the Collateral. The Collateral Account shall be subject
to the sole and exclusive dominion and control of the Collateral Agent.
3.3 Investment of Funds Deposited in Collateral Account. The
Collateral Agent shall invest and reinvest moneys on deposit in the Collateral
Account at any time in Cash Equivalents; provided that the Borrower may (so long
as no Notice of Enforcement shall be in effect) specify the category or
categories of investments specified in the definition of Cash Equivalents in
Section 1 in which funds on deposit in the Asset Sale Proceeds Sub- Account
shall be invested and may specify the maturities (not in any event longer than
the maturities specified in such definition) of such investments; provided that
the Borrower or the Collateral Agent, as applicable, shall, to the extent that
the timing of distributions to be made from the Collateral Account is known or
can be reasonably anticipated, select investments for amounts equal to such
distributions that mature beyond the maturities specified in the definition of
Cash Equivalents, but prior to the anticipated dates of such distributions. All
such investments of funds in any Sub-Account, the interest and income received
thereon and the net proceeds realized on the sale or redemption thereof shall be
held in such Sub-Account as part of the Collateral.
3.4 Application of Moneys. (a) All moneys held by the
Collateral Agent in the Collateral Account or received by the Collateral Agent
while a Notice of Enforcement is in effect shall, to the extent available for
distribution (it being understood that the Collateral Agent may liquidate
investments prior to maturity to make a distribution pursuant to this subsection
3.4), be distributed (subject to the provisions of subsection 3.5) by the
Collateral Agent on each Distribution Date as follows:
First: to the Collateral Agent, in an amount equal to any unpaid
costs or expenses of the Collateral Agent incurred in performing its
duties hereunder and under the Security Documents and Guarantee;
Second: to the Secured Parties, in an amount equal to all sums
which constitute Secured Obligations then held by the Secured Parties,
including without limitation the unpaid principal or face amount of,
and unpaid interest on and other charges, if any, in respect of, the
Secured Obligations then outstanding whether or not due and payable
and the costs and expenses of the Secured Parties and their
representatives which are due and payable under the relevant Secured
Instruments and which constitute Secured Obligations as of such
Distribution Date, and, if such moneys shall be insufficient to
<PAGE>
14
pay such sums in full, then ratably to the Secured Parties in
proportion to such sums; and
Third: any surplus then remaining shall be paid to the Borrower
or its successors or assigns or to whomsoever may be lawfully entitled
to receive the same or as a court of competent jurisdiction may
direct.
(b) The Collateral Agent shall make all payments and
distributions under this subsection 3.4: (i) on account of Bank Facility
Obligations, to the Administrative Agent, for redistribution or application in
accordance with the provisions of the Credit Agreement, (ii) on account of any
Vendor Facility Obligations owing to any Vendor Facility Secured Party for which
there is a Vendor Facility Agent, to such Vendor Facility Agent, for
redistribution or application in accordance with the provisions of the relevant
Secured Instrument, (iii) on account of any Hedging Agreement Obligations or L/C
Obligations, directly to the Holder of such Hedging Agreement Obligations or L/C
Obligations, as the case may be, and (iv) on account of Secured Obligations
owing to any Unrepresented Holder, directly to such Unrepresented Holder.
3.5 Amounts Held for Contingent Secured Obligations. In the
event any Holder or Holder Representative shall receive any moneys pursuant to
subsection 3.4 in respect of the contingent portion of the outstanding Secured
Obligations, then such Holder or Holder Representative, as the case may be,
shall invest such moneys in Cash Equivalents maturing within 90 days after they
are acquired by such Holder or Holder Representative and shall hold all such
amounts so distributable, and all such investments and the net proceeds thereof,
in trust until (i) all or part of such contingent claim shall have become fixed,
in which case such Holder or Holder Representative, as the case may be, shall
apply to the payment of such fixed claim from such investments and the proceeds
thereof an amount equal to such fixed claim, and shall promptly give notice
thereof to the Borrower and the Collateral Agent or (ii) all or part of such
contingent claim shall have been extinguished, whether as the result of an
expiration without drawing of any letter of credit, payment of amounts secured
or covered by any letter of credit other than by drawing thereunder, payment of
amounts covered by any guarantee or otherwise, in which case such Holder or
Holder Representative, as the case may be, shall, as soon as practicable
thereafter, notify the Borrower and the Collateral Agent and shall distribute
from such investments, and the proceeds thereof, an amount equal to the portion
of contingent claim which has been extinguished together with interest earned
thereon from the date first invested until so distributed, to the Collateral
Agent for deposit in the Collateral Account and application in accordance with
the provisions of subsection 3.4.
3.6 Application of Moneys Distributable to Holder
Representatives. If at any time any moneys collected or received by the
Collateral Agent pursuant hereto are distributable pursuant to subsection 3.4 to
a Holder Representative, and if such Holder Representative shall notify the
Collateral Agent in writing that no provision is made under the relevant Secured
Instrument for the application by such Holder Representative of moneys (whether
because the Secured Obligations issued under such Secured Instrument have not
become due and payable
<PAGE>
15
or otherwise) and that such Secured Instrument does not effectively provide for
the receipt and the holding by such Holder Representative of such moneys pending
the application thereof, then the Collateral Agent, after receipt of such
notification, shall invest such amounts in Cash Equivalents maturing within 90
days after they are acquired by the Collateral Agent and shall hold all such
amounts so distributable and all such investments and the net proceeds thereof
in trust solely for such Holder Representative (in its capacity as such) and for
no other purpose until such time as such Holder Representative shall request in
writing the delivery thereof by the Collateral Agent for application pursuant to
such Secured Instrument; if no such request is made on or prior to the
termination of this Agreement or the relevant Secured Instrument under which the
Holder Representative is acting, all such amounts (including interest and
profits) shall be paid to the Borrower.
3.7 Collateral Agent's Calculations. In making the
determinations and allocations required by subsection 3.4, the Collateral Agent
may rely upon a certificate executed and supplied by the Holder Representatives
or (in the case of Hedging Agreement Obligations or other Secured Obligations
for which there is no Holder Representative) the Holders, as the case may be, as
to the amounts payable with respect to Secured Obligations, all in accordance
with subsection 7.4, and the Collateral Agent shall have no liability to any of
the Secured Parties for actions taken in reliance on such information provided,
that nothing in this sentence shall prevent the Borrower from contesting in good
faith any amounts claimed by any Secured Party in any information so supplied;
and provided further, however, that if any Secured Party receives on any
Distribution Date an amount pursuant to subsection 3.4(a) in excess of the
amount to which it was entitled to receive on such Distribution Date pursuant to
such subsection 3.4(a) as a result of any such certificate overstating the
amount of the Secured Obligations held by such Secured Party (or the Secured
Obligations held by all the Secured Parties under any Facility with respect to
which such Secured Party is a Holder), then such Secured Party (by becoming a
Holder of Secured Obligations and accepting the benefits of this Agreement)
shall pay such excess to the Collateral Agent for application in accordance with
subsection 3.4(a) as soon as practicable after the existence of such
overstatement shall have been determined. All distributions made by the
Collateral Agent pursuant to subsection 3.4 shall be (subject to any decree of
any court of competent jurisdiction and to the proviso in the preceding
sentence) final, and the Collateral Agent shall have no duty to inquire as to
the application by any Holder or Holder Representative of any amounts
distributed to them. By accepting the benefits of this Agreement, the Security
Documents and the Guarantee, each Secured Party and Holder Representative agrees
to act in accordance with this Agreement and not take any action inconsistent
herewith.
<PAGE>
16
SECTION 4
ADDITIONAL SECURED OBLIGATIONS;
ADDITIONAL COLLATERAL; ADDITIONAL GUARANTORS
AND GRANTORS; CERTAIN DOCUMENTATION REQUIREMENTS
4.1 Delivery of Credit Agreement, Initial Security Documents
and Guarantee. On or before the Effective Date, the Borrower shall deliver to
the Collateral Agent a true copy of the Credit Agreement and executed originals
of the Initial Security Documents and the Guarantee.
4.2 Additional Secured Obligations. The Borrower may from time
to time designate Permitted Additional Secured Obligations as Secured
Obligations hereunder by (a) delivering to the Collateral Agent an Additional
Secured Obligations Designation in respect of such Permitted Additional Secured
Obligations describing such Permitted Additional Secured Obligations and
specifying whether such Permitted Additional Secured Obligations shall
constitute Vendor Facility Obligations or Hedging Agreement Obligations and
attaching thereto a true and complete copy of all agreements (together with all
schedules, exhibits, annexes, appendices and other attachments thereto),
including but not limited to the applicable Secured Instruments, relating to
such Permitted Additional Secured Obligations to which the Borrower is a party,
and (b) delivering to the Collateral Agent such evidence as it shall reasonably
request that such obligations are Permitted Additional Secured Obligations. Upon
completion of the actions described clauses (a) and (b) of the preceding
sentence, but subject to the following sentence, the Permitted Additional
Secured Obligations designated by such Additional Secured Obligations
Designation shall constitute Secured Obligations and the Holders thereof shall
constitute Secured Parties hereunder and shall be bound by the provisions
hereof. Notwithstanding anything herein to the contrary, in no event shall any
indebtedness or other obligations of the Borrower constitute Additional Secured
Obligations hereunder if the designation of such indebtedness or other
obligations as Additional Secured Obligations would be in contravention of any
Secured Instrument, and any purported designation of any such indebtedness or
other obligations of the Borrower as Additional Secured Obligations in violation
of any Secured Instrument shall be null and void and of no force or effect.
4.3 Additional Collateral; Additional Security Documents. The
Borrower will from time to time take the actions required by the Secured
Instruments and Security Documents to perfect the security interest of the
Collateral Agent created pursuant to the Initial Security Documents then in
effect in terms of Collateral hereafter acquired by the Borrower and its
Restricted Subsidiaries. The Borrower may from time to time provide Additional
Collateral to the Collateral Agent pursuant to Additional Security Documents by
delivering to the Collateral Agent an Additional Collateral Designation in
respect of such Additional Collateral. In connection with such delivery, the
Borrower shall fulfill the requirements of the Credit Agreement or other Secured
Instrument relating to the delivery of such Additional Collateral.
<PAGE>
17
4.4 Additional Guarantors and Grantors. The Borrower may from
time to time cause a Subsidiary thereof to become a party to the Guarantee and
Security Agreement as required by Section 5.10 of the Credit Agreement.
4.5 Possessory Collateral. The Borrower shall immediately
deliver to the Collateral Agent (or an agent or bailee on its behalf designated
by the Collateral Agent at the sole cost and expense of the Borrower) all
Possessory Collateral that is or may be in the possession of the Borrower or any
of its Subsidiaries, to the extent the Borrower is required to do so by any
Security Document or Secured Instrument and as provided in Section 8.14 of the
Guarantee and Collateral Agreement.
SECTION 5
AGREEMENTS WITH COLLATERAL AGENT
5.1 Delivery of Amendments to Secured Instruments. The
Borrower shall deliver to the Collateral Agent, promptly upon the execution
thereof, a true and complete copy of all amendments, supplements or other
modifications to any Secured Instrument entered into after the Effective Date.
5.2 Information as to Secured Parties, Holder Representatives,
Unrepresented Holders, Etc.. The Borrower shall deliver to the Collateral Agent,
from time to time as may be reasonably requested by the Collateral Agent (which
request shall be made by the Collateral Agent at the reasonable direction of any
Secured Party), (i) with respect to all Secured Obligations other than Hedging
Agreement Obligations, a list, setting forth as of a specified date not more
than 30 days prior to the date of such delivery, of the aggregate unpaid
principal or face amount of Secured Obligations outstanding and the name and
address of each Holder Representative and each Unrepresented Holder and the
respective amounts of Secured Obligations attributable to each and (ii) with
respect to Hedging Agreement Obligations, a list specifying for each Hedging
Agreement the notional amount covered thereby and the payment terms thereof.
5.3 Expenses. The Borrower agrees to pay to the Collateral
Agent, from time to time upon demand, all of the reasonable fees, costs and
out-of-pocket expenses of the Collateral Agent (including, without limitation,
the reasonable fees and disbursements of its counsel and such special counsel as
the Collateral Agent shall reasonably elect to retain) (A) arising in connection
with the preparation, execution, delivery, modification, and termination of or
performance under this Agreement, the Guarantee and the Security Documents or
the enforcement of any of the provisions hereof or thereof, (B) incurred or
required to be advanced in connection with the administration of the Collateral,
the sale or other disposition of Collateral pursuant to any Security Document
and the preservation, protection, enforcement or defense of the Collateral
Agent's rights under this Agreement, the Guarantee and the Security Documents
and in and to the Collateral in accordance with the terms hereof or thereof or
(c) incurred by the Collateral Agent in connection with the replacement of the
Collateral
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18
Agent pursuant to subsection 7.8. The obligations of the Borrower under this
subsection shall survive the termination of the other provisions of this
Agreement and the resignation or removal of the Collateral Agent.
5.4 Stamp and Other Similar Taxes. The Borrower agrees to
indemnify and hold harmless the Collateral Agent and each Secured Party from any
present or future claim for liability for any stamp or any other similar tax and
any penalties or interest with respect thereto, which may be assessed, levied or
collected by any jurisdiction in connection with this Agreement, any Security
Document, any Guarantee or any Collateral. The obligations of the Borrower under
this subsection shall survive the termination of the other provisions of this
Agreement and the resignation or removal of the Collateral Agent.
5.5 Filing Fees, Excise Taxes, Etc. The Borrower agrees to pay
or to reimburse the Collateral Agent for any and all payments made by the
Collateral Agent in respect of all search, filing, recording and registration
fees, taxes, excise taxes and other similar imposts which may be payable or
determined to be payable in respect of the execution and delivery of this
Agreement, the Guarantee and the Security Documents. The obligations of the
Borrower under this subsection shall survive the termination of the other
provisions of this Agreement and the resignation or removal of the Collateral
Agent.
5.6 Indemnification. The Borrower agrees to pay, indemnify,
and hold the Collateral Agent harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including, without limitation, the fees and disbursements and other
charges of counsel) or disbursements of any kind or nature whatsoever with
respect to the execution, delivery, enforcement, performance and administration
of this Agreement, the Guarantee and the Security Documents, unless arising from
the gross negligence or willful misconduct of the indemnified party, including,
without limitation, indemnification of the Collateral Agent for liabilities of
the Collateral Agent for the net amount of taxes (after taking into account any
deduction, credit or other tax reduction or benefit available by reason of the
imposition of such tax) in any jurisdiction in which the Collateral Agent would
not otherwise be subject to tax except solely by reason of acting under this
Agreement, the Guarantee or any Security Document (directly or through agents),
provided that such indemnification for taxes (a) shall apply only in respect of
taxes attributable to the performance of the Collateral Agent's obligations as
Collateral Agent hereunder or under any Guarantee or Security Document and (b)
shall in no event cover any taxes imposed upon the Collateral Agent with respect
to or measured by its net income or profits.
In any suit, proceeding or action brought by the Collateral Agent under
or with respect to any contract, agreement, interest or obligation constituting
part of the Collateral for any sum owing thereunder, or to enforce any
provisions thereof in accordance with the provisions hereof and of the Security
Documents, the Borrower will save, indemnify and keep the Collateral Agent
harmless from and against all expense, loss or damage suffered by reason of any
defense, setoff, counterclaim, recoupment or reduction of liability whatsoever
of the obligor thereunder, arising out of a breach by the Borrower of any
obligation thereunder or
<PAGE>
19
arising out of any other agreement, indebtedness or liability at any time owing
to or in favor of such obligor or its successors from the Borrower unless
arising out of the gross negligence or willful misconduct of the Collateral
Agent, and all such obligations of the Borrower shall be and remain enforceable
against and only against the Borrower and shall not be enforceable against the
Collateral Agent. The agreements in this subsection shall survive the
termination of the other provisions of this Agreement and the resignation or
removal of the Collateral Agent.
5.7 Further Assurances. At any time and from time to time,
whether or not a Notice of Enforcement shall be in effect, upon the written
request of the Collateral Agent, and at the expense of the Borrower, the
Borrower will promptly execute and deliver any and all such further instruments
and documents and take such further action as the Collateral Agent reasonably
requests to obtain the full benefits of this Agreement and the Security
Documents and of the rights and powers herein and therein granted or to cause
any assets required under a Secured Instrument to be subject to a perfected
security interest of the Collateral Agent to be so subject, including, without
limitation, the filing of any financing or continuation statements under the
Uniform Commercial Code in effect in any jurisdiction with respect to the liens
and security interests granted under the Security Documents. The Borrower also
hereby authorizes the Collateral Agent to sign and to file any such documents,
instruments or financing or continuation statements without the signature of the
Borrower to the extent permitted by applicable law, but in no way is the
Collateral Agent obligated to do so.
SECTION 6
POSSESSION AND USE OF
COLLATERAL; PARTIAL RELEASES
6.1 Use Prior to Notice of Enforcement. (a) So long as no
Notice of Enforcement is in effect, the Borrower shall have the right (subject
to compliance with subsection 6.1(b)): (i) to remain in possession and retain
exclusive control of the Collateral (except any Possessory Collateral) with
power freely and without hindrance on the part of the Collateral Agent or the
Secured Parties to operate, manage, develop, use and enjoy the Collateral and to
receive the rents, issues, tolls, profits, royalties, revenues and other income
thereof (including, in the case of Collateral which consists of Pledged Stock,
to receive all distributions in respect of the Pledged Stock and to vote the
Pledged Stock and exercise any and all rights attached thereto, subject to the
Security Documents), and (ii) to sell or otherwise dispose of, free and clear of
the lien and security interest created by the Security Documents, any Collateral
if such sale or other disposition is not prohibited by any Secured Instrument or
Security Document. The Collateral Agent shall have no duty to monitor the
exercise by the Borrower of its rights under this subsection.
(b) If a Notice of Enforcement is in effect, cash Proceeds
received by the Borrower in connection with any Asset Sale in respect of
Collateral shall be promptly deposited in the Enforcement Proceeds Sub-Account.
Any such Proceeds received by the
<PAGE>
20
Borrower when a Notice of Enforcement is in effect shall be held by the Borrower
in trust for the Collateral Agent, shall be segregated from other funds of the
Borrower and shall, forthwith upon receipt by the Borrower, be turned over to
the Collateral Agent, in the same form as received by the Borrower (duly
indorsed to the Collateral Agent, if required) for deposit in the Enforcement
Proceeds Sub-Account.
6.2 Releases. (a) Asset Sales in respect of Collateral which
are permitted by subsection 6.1 shall not require any written or oral release or
consent of the Collateral Agent. Nevertheless, the Borrower may request that the
Collateral Agent execute and deliver to the Borrower or any purchaser of
Collateral a written release, disclaimer or quitclaim in form and substance
reasonably satisfactory to the Borrower of the Collateral Agent's interest in
any Collateral under the Security Documents, and such purchaser shall be
entitled to rely conclusively on such release, discharge, termination, consent,
disclaimer or quitclaim. Such request shall be in writing, shall describe the
property to be released in reasonable detail, and shall state that such sale,
transfer or disposition is in compliance with the requirements of such
subsection 6.1, that the proceeds of such transaction have been or will be
applied as set forth in the relevant provisions, if any, of each Secured
Instrument and that subsection 6.2(b) has been complied with in full.
(b) If it is a condition of the release of any Collateral from
the security interest under any Security Document or Secured Instrument that the
Collateral Agent be granted a first priority lien or security interest in
additional property to be held as Collateral pursuant to this Agreement, then
the Collateral Agent shall be granted such lien or security interest prior to or
concurrently with the delivery to the Borrower of any such Collateral or any
release, discharge, termination, consent, disclaimer or quitclaim in connection
therewith. The grant of such lien or security interest shall be effected by (i)
delivery to the Collateral Agent of an Additional Collateral Designation
pursuant to subsection 4.3 and (ii) fulfilling the requirements of subsection
4.3 with respect thereto.
(c) If any Collateral which is being sold or otherwise
disposed of pursuant to this Section 6 is in the possession of the Collateral
Agent or any agent or nominee thereof, the Collateral Agent or such agent or
nominee shall promptly upon the delivery to the Collateral Agent of a
certificate of a Responsible Officer (to the effect that such sale, transfer or
disposition is in compliance with the requirements of such subsection 6.1, that
the proceeds of such transaction have been or will be applied as set forth in
the relevant provisions, if any, of each Secured Instrument and that subsection
6.2(b) has been complied with in full), together with such other evidence as the
Collateral Agent shall reasonably require, release such Collateral to the
Borrower in connection with such Asset Sale.
(d) The notices, statements, directions, evidence and
certificates requested under or required by this subsection shall be full
authority for and direction to the Collateral Agent to execute and deliver the
releases, discharges, terminations, consents, disclaimers, quitclaims and other
instruments referred to in this subsection and the Collateral Agent shall
<PAGE>
21
promptly (and in any event within five business days) do so. The Collateral
Agent in so doing shall have no liability to any Person other than for its
willful misconduct or gross negligence.
6.3 Insurance and Condemnation Proceeds; Liquidating
Dividends. Any insurance proceeds, any Proceeds from the exercise of rights of
eminent domain or condemnation and any liquidating dividends paid in respect of
Pledged Equity Securities received by the Borrower or the Collateral Agent in
respect of Collateral shall be treated as cash Proceeds received pursuant to
subsection 6.1(b) and shall, if a Notice of Enforcement is in effect, be
deposited in the Collateral Account, and if no Notice of Enforcement is in
effect, such amounts shall be delivered to the Borrower unless otherwise
required by any Secured Instrument or Security Document.
SECTION 7
THE COLLATERAL AGENT
7.1 Appointment. Each Secured Party hereby irrevocably
designates and appoints the Collateral Agent as the agent of such Secured Party
under this Agreement, the Security Documents and the Guarantee, and each Secured
Party irrevocably authorizes the Collateral Agent, in such capacity, to take
such action on its behalf under the provisions of this Agreement, the Security
Documents and the Guarantee and to exercise such powers and perform such duties
as are expressly delegated to the Collateral Agent by the terms of this
Agreement, the Security Documents and the Guarantee, together with such other
powers as are reasonably incidental thereto. Notwithstanding any provision to
the contrary elsewhere in this Agreement, the Collateral Agent shall not have
any duties or responsibilities, except those expressly set forth herein, or any
fiduciary relationship with any Secured Party, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement, the Security Documents or the Guarantee or otherwise exist
against the Collateral Agent.
7.2 Delegation of Duties. The Collateral Agent may execute any
of its duties under this Agreement, the Security Documents and the Guarantee by
or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Collateral Agent
shall not be responsible for the negligence or misconduct of any agents or
attorneys in-fact selected by it with reasonable care.
7.3 Exculpatory Provisions. Neither the Collateral Agent nor
any of its 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, the
Security Documents or the Guarantee (except to the extent that any of the
foregoing resulted from its or such Person's own gross negligence or willful
misconduct) or (ii) responsible in any manner to any of the Secured Parties for
any recitals, statements, representations or warranties made by the Borrower or
any of its Subsidiaries or any officer
<PAGE>
22
thereof contained in this Agreement, the Security Documents or the Guarantee or
in any certificate, report, statement or other document referred to or provided
for in, or received by the Collateral Agent under or in connection with, this
Agreement, the Security Documents or the Guarantee or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement, the
Security Documents or the Guarantee or for any failure of the Borrower or any of
its Subsidiaries party thereto to perform its obligations hereunder or
thereunder. The Collateral Agent shall not be under any obligation to any
Secured Party to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement, the
Security Documents or the Guarantee, or to inspect the properties, books or
records of the Borrower or any of its Subsidiaries.
7.4 Reliance by Administrative Agent. The Collateral 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, without limitation, counsel to the
Borrower or any of its Subsidiaries), independent accountants and other experts
selected by the Collateral Agent. The Collateral Agent shall be fully justified
in failing or refusing to take any action under this Agreement, the Security
Documents or the Guarantee unless it shall first receive such advice or
concurrence of the Administrative Agent or the Required Secured Parties as it
deems appropriate or it shall first be indemnified to its satisfaction by the
Secured Parties against any and all liability and expense which may be incurred
by it by reason of taking or continuing to take any such action. The Collateral
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement, the Security Documents and the Guarantee in
accordance with a request of the Required Secured Parties, and such request and
any action taken or failure to act pursuant thereto shall be binding upon all
the Secured Parties and all future holders of the Secured Obligations.
7.5 Non-Reliance on Collateral Agent or Other Secured Parties.
Each Secured Party expressly acknowledges that neither the Collateral Agent nor
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates have made any representations or warranties to it and that no act by
the Collateral Agent hereafter taken, including any review of the affairs of the
Borrower or any of its Subsidiaries or any affiliate of a Loan Party, shall be
deemed to constitute any representation or warranty by the Collateral Agent to
any Secured Party. Each Secured Party represents to the Collateral Agent that it
has, independently and without reliance upon the Collateral Agent or any other
Secured Party, 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
Borrower and its affiliates and made its own decision to extend credit to the
Borrower and enter into this Agreement. Each Secured Party also represents that
it will, independently and without reliance upon the Collateral Agent or any
other Secured Party, 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
<PAGE>
23
Agreement, the Security Documents and the Guarantee, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Borrower and its affiliates. Except for notices, reports and other documents
expressly required to be furnished to the Secured Parties by the Collateral
Agent hereunder, the Collateral Agent shall not have any duty or responsibility
to provide any Secured Party with any credit or other information concerning the
business, operations, property, condition (financial or otherwise), prospects or
creditworthiness of the Borrower or any affiliate which may come into the
possession of the Collateral Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or affiliates.
7.6 Indemnification. The Secured Parties agree to indemnify
the Collateral Agent in its capacity as such (to the extent not reimbursed by
the Borrower and without limiting the obligation of the Borrower to do so),
ratably according to the amounts of Secured Obligations held by them on the date
on which indemnification is sought under this Section (or, if indemnification is
sought after the date upon which the Secured Obligations shall have been paid in
full, ratably in accordance with the amounts of Secured Obligations held by them
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 which may at any time
(including, without limitation, at any time following the payment of the Loans)
be imposed on, incurred by or asserted against the Collateral Agent in any way
relating to or arising out of this Agreement, the Security Documents or the
Guarantee 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 the Collateral Agent under or in connection with any of the foregoing;
provided that no Secured Party shall be liable for the payment of any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements which are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from the Collateral Agent's gross negligence or willful misconduct. The
agreements in this subsection shall survive the payment of the Secured
Obligations and all other amounts payable hereunder.
7.7 Collateral Agent in Its Individual Capacity. The
Collateral Agent and its affiliates may make loans to, accept deposits from and
generally engage in any kind of business with the Borrower or any of its
affiliates as though the Collateral Agent were not the Collateral Agent. With
respect to Secured Obligations held by it, the Collateral Agent shall have the
same rights and powers under this Agreement, the Security Documents and the
Guarantee as any Secured Party and may exercise the same as though it were not
an Agent, and the terms "Secured Party" and "Secured Parties" shall include the
Collateral Agent in its individual capacity.
7.8 Successor Agent. The Collateral Agent may resign as
Collateral Agent upon 30 days' notice to the Secured Parties and the Borrower.
If the Collateral Agent shall resign as Collateral Agent under this Agreement,
the Security Documents and the Guarantee, then the Required Secured Parties
shall appoint from among the Secured Parties a successor collateral agent for
the Secured Parties, which successor collateral agent shall (unless an Event
<PAGE>
24
of Default under Section 7(a) or Section 7 (f) of the Credit Agreement 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 Collateral Agent, and the term "Collateral Agent" shall mean such
successor agent effective upon such appointment and approval, and the former
Collateral Agent's rights, powers and duties as Collateral Agent shall be
terminated, without any other or further act or deed on the part of such former
Collateral Agent or any of the parties to this Agreement or any Secured Party.
After any retiring Collateral Agent's resignation as Agent, the provisions of
this Section 7 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Collateral Agent under this Agreement, the Security
Documents and the Guarantee. The resigning Collateral Agent will take such
actions as shall be reasonably required to transfer and deliver the Collateral
and Guarantee to the successor Collateral Agent.
SECTION 8
MISCELLANEOUS
8.1 Notices. Unless otherwise specified herein or in the
relevant Security Document, all notices, requests, demands or other
communications pursuant to this Agreement or any Security Document given to the
Borrower, any Subsidiary of the Borrower which is a party to any Security
Document, the Collateral Agent, the Holder Representatives or the Unrepresented
Holders to be effective shall be given in writing or by facsimile transmission
and shall be deemed to have been duly given when personally delivered or when
duly deposited in the mails, registered or certified mail postage prepaid, or if
transmitted by facsimile transmission, when received in legible form, addressed
(i) if to the Borrower or the Collateral Agent, to such party at its address
specified on the signature pages hereof or any other address which such party
shall have specified as its address for the purpose of communications hereunder,
by notice given in accordance with this subsection 8.1 to the party sending such
communication, (ii) if to any Subsidiary of the Borrower which is a party to any
Security Document, to such party c/o the Borrower at its address specified on
the signature pages hereof or any other address which such party shall have
specified as its address for the purpose of communications hereunder, by notice
given in accordance with this subsection 8.1 to the party sending such
communication or (iii) if to any of the Holder Representatives or Unrepresented
Holder, to it at its address specified from time to time in the list provided by
the Borrower to the Collateral Agent pursuant to subsection 5.2; provided that
any notice, request or demand to the Collateral Agent shall not be effective
until received by the Collateral Agent at the office designated by it pursuant
to this subsection 8.1.
8.2 No Waivers. No failure on the part of the Collateral Agent
or any Secured Party to exercise, no course of dealing with respect to, and no
delay in exercising, any right, power or privilege under this Agreement, the
Guarantee or any Security Document shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right, power or
<PAGE>
25
privilege preclude any other or further exercise thereof or the exercise of any
other right, power or privilege.
8.3 Amendments, Supplements, Waivers and Releases. (a) With
the written consent of the Required Secured Parties, the Collateral Agent and
the Borrower may, from time to time, enter into written agreements supplemental
hereto for the purpose of adding to, or waiving any provisions of, this
Agreement or changing in any manner the rights of the Collateral Agent, the
Secured Parties or the Borrower hereunder; provided that no such supplemental
agreement shall (i) (A) amend, modify or waive any provision of this subsection
8.3, (B) amend, modify or waive any provision of subsection 3.4, or the
definitions of Secured Obligations, Bank Facility Obligations, Vendor Facility
Obligations, Hedging Agreement Obligations, L/C Obligations, Secured Parties or
Required Secured Parties, unless the Collateral Agent have received a
certificate of a Responsible Officer of the Borrower to the effect that such
action does not violate any Secured Instrument, (ii) amend, modify or waive any
provision of Section 5 or 7 or alter the duties, rights or obligations of the
Collateral Agent hereunder or under the Guarantee or the Security Documents
without the written consent of the Collateral Agent or (iii) release any
Collateral or the obligations under the Guarantee except in accordance with
subsection 8.11. Any such supplemental agreement shall be binding upon the
Borrower, each Holder Representative, the Secured Parties and the Collateral
Agent and their respective successors and assigns.
(b) With the written consent of the Required Secured Parties, the
Collateral Agent and the Borrower and/or its Subsidiaries that are parties to
the relevant Security Document to such Security Document may, from time to time,
enter into written agreements supplemental to such Security document for the
purpose of adding to, or waiving any provisions of, such Security Document or
changing in any manner the rights of the Collateral Agent, the Secured Parties
or the Borrower or such Subsidiary thereunder; provided that no such
supplemental agreement shall release any Collateral or the obligations under the
Guarantee except in accordance with subsection 8.11. Any such supplemental
agreement shall be binding upon the Borrower and\or such Subsidiary, each Holder
Representative, the Secured Parties and the Collateral Agent and their
respective successors and assigns.
(c) Without the consent of any Holder Representative or any Secured
Party, the Collateral Agent and the Borrower and, in the case of any
modification of any Guarantee, the guarantor party to such Guarantee, at any
time and from time to time, may enter into one or more agreements supplemental
hereto, to any Guarantee or to any Security Document, in form satisfactory to
the Collateral Agent, (i) to add to the covenants of the Borrower, any guarantor
party to any Guarantee or any grantor party to any Security Document, for the
benefit of the Secured Parties or to surrender any right or power herein
conferred upon the Borrower; or (ii) to cure any ambiguity, to correct or
supplement any provision herein or in any Guarantee or Security Document which
may be defective or inconsistent with any other provision herein or therein, or
to make any other provision with respect to matters or questions arising
hereunder which shall not be inconsistent with any provision hereof; provided
that any such action
<PAGE>
26
contemplated by this clause (ii) shall not, and could not reasonably be expected
to, adversely affect the interests of any Secured Party.
8.4 Headings. The table of contents and the headings of
Sections and subsections have been included herein for convenience only and
should not be considered in interpreting this Agreement.
8.5 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall not invalidate 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.
8.6 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of each of the parties hereto and shall inure to
the benefit of each of the Secured Parties and their respective successors and
assigns, and nothing herein is intended or shall be construed to give any other
Person any right, remedy or claim under, to or in respect of this Agreement, the
Guarantee or any Collateral.
8.7 Currency Conversions. In calculating the amount of Secured
Obligations for any purpose hereunder, including, without limitation, voting or
distribution purposes, the amount of any Secured Obligation which is denominated
in a currency other than Dollars shall be converted into Dollars at the spot
rate for purchasing Dollars with such currency determined by the Collateral
Agent to be in effect in the New York foreign exchange market at the close of
business on the Business Day prior to the date on which such calculation is to
be made.
8.8 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK.
8.9 Submission to Jurisdiction; Waivers. The Borrower hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement, 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) to the extent permitted by applicable law, 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;
<PAGE>
27
(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 party
at its address set forth on the signature pages hereof or at such other address
of which the parties hereto shall have been notified pursuant hereto; and
(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 sue in any other jurisdiction.
8.10 Counterparts. This Agreement may be signed in any number
of counterparts with the same effect as if the signatures thereto and hereto
were upon the same instrument.
8.11 Release of Liens; Guarantee. (a) Upon (i) receipt by the
Collateral Agent of a request by the Borrower (which request must, if the Credit
Agreement is then in effect, be accompanied by a consent of the Administrative
Agent acting on the instructions of the Required Banks, when such instruction is
required by the Credit Agreement) to release the liens created by the Security
Documents in respect of any Collateral (including, without limitation, any
Collateral that is the subject of any Asset Sale), together with a certificate
of a Responsible Officer to the effect that such release will not violate any
Secured Instrument and (ii) in the case of a release of all the Collateral, the
security interests created by the Security Documents shall automatically
terminate forthwith, and all right, title and interest of the Collateral Agent
in and to such Collateral shall revert to the Borrower, its successors and
assigns.
(b) Upon receipt by the Collateral Agent of a request by the
Borrower (which request must, if the Credit Agreement is then in effect, be
accompanied by a consent of the Administrative Agent acting on the instructions
of the Required Banks, when such instruction is required by the Credit
Agreement) to release any Guarantee, together with a certificate of a
Responsible Officer to the effect that such release will not violate any Secured
Instrument, such Person shall be immediately released.
(c) Upon the termination of the Collateral Agent's security
interest and the release of any Collateral in accordance with subsection
8.11(a), the Collateral Agent will promptly, at the Borrower's written request
and expense, (i) execute and deliver to the Borrower such documents and
instruments and take such other action as the Borrower shall reasonably request
to evidence or effect the termination of such security interest or the release
of such Collateral and (ii) in the case of a release of all Collateral, deliver
or cause to be delivered to the Borrower all Possessory Collateral and all other
property of the Borrower (including, without limitation, all amounts deposited
or held in the Collateral Account and all Cash Equivalents or other investments,
together with all interest, dividends, or rights therein) then held by the
Collateral Agent or any agent thereof.
<PAGE>
28
(d) This Agreement shall automatically terminate when (i) the
Liens and security interests granted under the Security Documents have
terminated and (ii) the Collateral has been released and the Secured Obligations
have been indefeasibly paid and performed in full and all commitments to extend
credit under any Secured Instrument that when extended would constitute Secured
Obligations shall have been terminated; provided that the provisions of
subsections 5.3, 5.4, 5.5 and 5.6 shall not be affected by any such termination.
(e) The Collateral Agent shall promptly give notice to each
Holder Representative and Unrepresented Holder of any release of Collateral, and
of any release of a Person from its obligations under the Guarantee, pursuant to
this subsection.
8.12 Secured Parties. Pursuant to the Credit Agreement, the
Administrative Agent has been directed by all Lenders parties thereto to execute
and delivery this Agreement on their behalf, thereby constituting their
assumption of the rights and obligations of Secured Parties hereunder. Pursuant
to Section 9.6 of the Credit Agreement, each Person which becomes a Lender after
the date hereof automatically becomes a Secured Party hereunder by its execution
and delivery of the Assignment and Acceptance (as defined in the Credit
Agreement) by which it becomes a Lender under the Credit Agreement. Pursuant to
subsection 4.2, each Person which is a creditor in respect of an Additional
Secured Obligation becomes a Secured Party hereunder upon execution and delivery
of the Additional Secured Obligation Designation related to such Additional
Secured Obligation.
8.13 Complete Agreement. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof
and supersedes all prior representations, negotiations, writings, memoranda and
agreements.
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29
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed (by their respective authorized officers or
representatives in the case of parties other than the Collateral Agent) as of
the day and year first written above.
TELIGENT, INC.
By:_____________________________
Title: Treasurer
Address for Notices:
Attention:
Fax:
THE CHASE MANHATTAN BANK, as
Collateral Agent
By:_____________________________
Title:
Address for Notices:
Attention:
Fax:
THE CHASE MANHATTAN BANK, as Administrative Agent (for and
on behalf of itself and the other Secured Parties that are
Lenders under the Credit Agreement)
By:_____________________________
Title:
<PAGE>
1
SCHEDULE I
INITIAL SECURED OBLIGATIONS
Bank Facility Obligations under the following Bank Credit Facility:
1. Credit Agreement, dated as of _______________, as amended,
among the Borrower, the lenders from time to time parties
thereto and The Chase Manhattan Bank, as Administrative Agent.
<PAGE>
1
SCHEDULE II
INITIAL SECURITY DOCUMENTS
1. Guarantee and Collateral Agreement, dated as of July 2, 1998,
made by Teligent, Inc. and certain of its Subsidiaries in
favor of the Chase Manhattan Bank, as Collateral Agent.
<PAGE>
2
EXHIBIT A
FORM OF
ADDITIONAL COLLATERAL DESIGNATION
[Date]
To: The Chase Manhattan Bank, as Collateral Agent
Re: Collateral Agency and Intercreditor Agreement, dated as of July 2, 1998,
among Teligent, Inc., The Chase Manhattan Bank, as Collateral Agent
and the Secured Parties described therein (the "Collateral Agency and
Intercreditor Agreement")
Reference is hereby made to the Collateral Agency and
Intercreditor Agreement. Capitalized terms which are defined in the Collateral
Agency and Intercreditor Agreement are used herein as therein defined.
In accordance with subsection 4.3 of the Collateral Agency and
Intercreditor Agreement, the following Additional Collateral is hereby added as
Collateral under the Collateral Agency and Intercreditor Agreement:
[DESCRIBE ADDITIONAL COLLATERAL]
TELIGENT, INC.
By:______________________________
Title
Attached hereto is an executed copy of the Security document
creating the Collateral Agent's security interest in such Additional Collateral.
<PAGE>
1
EXHIBIT B
FORM OF
ADDITIONAL SECURED OBLIGATIONS DESIGNATION
[Date]
To: The Chase Manhattan Bank, as Collateral Agent
Re: Collateral Agency and Intercreditor Agreement, dated as of July 2, 1998,
among Teligent, Inc., The Chase Manhattan Bank, as Collateral Agent
(the "Collateral Agency and Intercreditor Agreement")
Reference is hereby made to the Collateral Agency and
Intercreditor Agreement. Capitalized terms which are defined in the Collateral
Agency and Intercreditor Agreement are used herein as therein defined.
In accordance with subsection 4.2 of the Collateral Agency and
Intercreditor Agreement, the following Permitted Additional Secured Obligations
are hereby added as Secured Obligations under the Trust Agreement:
[DESCRIBE PERMITTED ADDITIONAL SECURED OBLIGATIONS]
The Permitted Additional Secured Obligations described above
shall constitute [Vendor Facility] [Hedging Agreement] [L/C] Obligations.
Attached hereto is a true and complete copy of each agreement
(together with all schedules, exhibits, annexes, appendices and other
attachments thereto), including but not limited to the applicable Secured
Instruments relating to such Permitted Additional Secured Obligations.
<PAGE>
2
The undersigned Secured Party is the Secured Party in respect
of such Permitted Additional Secured Obligations and hereby acknowledges receipt
of a copy of the Collateral Agency and Intercreditor Agreement and acknowledges
to assume the rights and obligations of a Secured Party thereunder in accordance
with the terms thereof.
TELIGENT, INC.
By: _______________________________
Title:
[Secured Party]
By:________________________________
Title:
<PAGE>
CONTACTS: FOR IMMEDIATE RELEASE
Media Investors
Robert W. Stewart Robert H. Schwartz
703-762-5175 703-762-5237
TELIGENT CLOSES ON $800 MILLION FINANCING
Vienna, Va., July 6, 1998 - Teligent, a new integrated communications company,
today announced that it has closed $800 million in senior secured credit
facilities underwritten by The Chase Manhattan Bank, Goldman Sachs and Toronto
Dominion Bank. These facilities effectively replace an existing $780 million
vendor financing commitment previously provided by Nortel (Northern Telecom).
"This transaction represents a major milestone for Teligent and again
demonstrates the strong support that Teligent and its business plan continue to
receive in the capital markets," said Teligent Chairman and CEO Alex J. Mandl.
Teligent Senior Vice President and Chief Financial Officer Abraham L. Morris
said, "Teligent has turned a vendor financing commitment from Nortel into a
fully structured financing that provides us with the financial liquidity we
believe necessary, while providing sufficient operational flexibility on an
attractive, cost-effective basis.
"We are very pleased that we have been able to attract a group of premier,
market-leading financial institutions to the syndicate, and we look forward to
continuing a strong financial partnership with them over the coming years,"
Morris added.
The credit facilities are structured into three separate tranches and are
secured by all of the principal assets of the company. Teligent has the ability
to borrow the funds over the next four years, with a final maturity of eight
years. The facilities charge interest at a floating rate tied to the prevailing
LIBOR rate, and subsequently step-down when the company achieves key operational
and leverage benchmarks.
Based in Vienna, Va., Teligent, Inc. (NASDAQ:TGNT) is a full-service, integrated
communications company that will offer small and medium-sized businesses local,
long distance, high-speed data and Internet services over its own, digital
wireless networks in 74 major metropolitan areas throughout the United States.
For more information, visit the Teligent website at: www.teligentinc.com
Teligent is a registered trademark.
<PAGE>
Except for any historical information contained herein, the matters discussed in
this press release contain forward-looking statements that involve risks and
uncertainties, including but not limited to economic, key employee, competitive,
governmental, regulatory and technological factors affecting the company's
growth, operations, markets, products, services, licenses and other factors
discussed in the company's filings with the Securities and Exchange Commission.
Actual results may vary materially due to these and other risks and
uncertainties.
* * *
