<PAGE> 1
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K/A
(AMENDMENT NO. 1 TO 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): April 1, 1999
ALLEGIANCE TELECOM, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware
(State of Incorporation)
0-24509 75-2721491
(Commission File Number) (IRS Employer Identification No.)
1950 Stemmons Freeway
Suite 3026
Dallas, Texas 75207
(214) 261-7100
(Address of Principal Executive Offices) (Zip Code)
(Registrant's Telephone Number, Including Area Code)
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ITEM 5. OTHER EVENTS.
On April 5, 1999, Allegiance Telecom, Inc. issued a press release announcing
that it had closed a seven-year senior secured revolving credit facility with a
syndicate of lenders lead by Goldman Sachs Credit Partners L.P., TD Securities
(USA) Inc. and Morgan Stanley Senior Funding, Inc. A Current Report on Form 8-K
with respect to the press release and the credit and guaranty agreement was
filed by Allegiance Telecom on April 8, 1999, and included as Exhibit 10 a copy
of the credit and guaranty agreement. Certain portions of the credit and
guaranty agreement were deleted, and such deleted portions were subject to a
request for confidential treatment from the Securities and Exchange Commission.
The purpose of this amendment is to re-file the credit and guaranty agreement
because Allegiance Telecom no longer seeks confidential treatment for certain
provisions previously redacted in the credit and guaranty agreement.
A copy of the redacted credit and guaranty agreement is attached as an exhibit
to this amended report and is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) - (b) None.
(c) The exhibits filed in response to Item 601 of Regulation S-K are listed in
the Exhibit Index starting on page E-1 of this report.
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SIGNATURES
According to the requirements of the Securities Exchange Act of 1934,
Allegiance Telecom, Inc. has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized on July 20, 1999.
ALLEGIANCE TELECOM, INC.
By /s/ MARK B. TRESNOWSKI
----------------------------------
Mark B. Tresnowski
Senior Vice President, General Counsel
and Secretary
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EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
------- -----------------------------------------------------------------
*10 Form of Credit and Guaranty Agreement, dated as of April 1, 1999,
among Allegiance Finance Company, Inc., as Borrower, Allegiance
Telecom, Inc., and subsidiaries of Allegiance Telecom, Inc., as
Guarantors, various lenders, Goldman Sachs Credit Partners L.P.,
as Syndication Agent, Toronto Dominion (Texas), Inc., as
Administrative Agent, Morgan Stanley Senior Funding, Inc., as
Documentation Agent, and the Managing Agents and Co-Agents listed
thereto.
**99 Press release of Allegiance Telecom, Inc. dated April 5, 1999.
------
* Confidential treatment requested as to certain portions, which
portions are omitted and filed separately with the Securities and
Exchange Commission.
** Previously filed in Current Report on Form 8-K with the
Securities and Exchange Commission on April 8, 1999.
E-1
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EXHIBIT 10
NOTE: CERTAIN MATERIAL HAS BEEN OMITTED FROM THIS DOCUMENT PURSU-
ANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED
SEPARATELY WITH THE SEC.
CREDIT AND GUARANTY AGREEMENT
DATED AS OF APRIL 1, 1999
AMONG
ALLEGIANCE FINANCE COMPANY, INC.
AS BORROWER,
ALLEGIANCE TELECOM, INC.,
AND
SUBSIDIARIES OF ALLEGIANCE TELECOM, INC.,
AS GUARANTORS,
VARIOUS LENDERS,
GOLDMAN SACHS CREDIT PARTNERS L.P.,
AS SYNDICATION AGENT,
TORONTO DOMINION (TEXAS), INC.
AS ADMINISTRATIVE AGENT,
MORGAN STANLEY SENIOR FUNDING, INC.
AS DOCUMENTATION AGENT, AND
BANKBOSTON, N.A.,
THE BANK OF NEW YORK,
CREDIT LYONNAIS NEW YORK BRANCH,
FIRST UNION NATIONAL BANK,
GENERAL ELECTRIC CAPITAL CORPORATION,
AND
PNC BANK, NATIONAL ASSOCIATION
AS MANAGING AGENTS
* * * * * *
GOLDMAN SACHS CREDIT PARTNERS L.P.,
AND
TD SECURITIES (USA) INC.,
AS CO-LEAD ARRANGERS
--------------------------------------------------------
$225,000,000 SENIOR SECURED REDUCING REVOLVING CREDIT FACILITY
--------------------------------------------------------
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TABLE OF CONTENTS
<TABLE>
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Page
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<S> <C>
SECTION 1. DEFINITIONS AND INTERPRETATION........................................................................1
1.1. Definitions...............................................................................1
1.2. Accounting Terms.........................................................................30
1.3. Interpretation, etc......................................................................31
SECTION 2. LOANS ...............................................................................................31
2.1. Loans ...................................................................................31
2.2. Pro Rata Shares; Availability of Funds...................................................32
2.3. Use of Proceeds..........................................................................33
2.4. Evidence of Debt; Register; Lenders' Books and Records; Notes............................33
2.5. Interest Payments........................................................................34
2.6. Conversion/Continuation..................................................................35
2.7. Default Interest.........................................................................35
2.8. Fees.....................................................................................36
2.9. Scheduled Payments/Reductions............................................................36
2.10. Voluntary Prepayments/Reductions........................................................37
2.11. Mandatory Prepayments/Reductions........................................................38
2.12. Application of Prepayments/Reductions....................................................39
2.13. Allocation of Certain Payments and Proceeds.............................................39
2.14. General Provisions Regarding Payments...................................................40
2.15. Ratable Sharing.........................................................................41
2.16. Making or Maintaining Eurodollar Rate Loans.............................................42
2.17. Increased Costs; Capital Adequacy.......................................................43
2.18. Taxes; Withholding, Etc.................................................................45
2.19. Obligation to Mitigate..................................................................47
2.20. Defaulting Lenders......................................................................48
2.21. Removal or Replacement of a Lender......................................................48
SECTION 3. CONDITIONS PRECEDENT.................................................................................50
3.1. Closing Date.............................................................................50
3.2. Conditions to Each Loan..................................................................53
SECTION 4. REPRESENTATIONS AND WARRANTIES.......................................................................54
4.1. Organization; Powers; Qualification......................................................54
4.2. Authorization of Credit Documents; No Conflict...........................................54
4.3. Governmental Consents....................................................................55
4.4. Binding Obligation.......................................................................55
4.5. Historical Financial Statements; Projections.............................................55
4.6. No Material Adverse Change; No Restricted Junior Payments................................55
4.7. Adverse Proceedings, Etc.................................................................56
4.8. Payment of Taxes.........................................................................56
</TABLE>
(ii)
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<TABLE>
<S> <C>
4.9. Title to Properties......................................................................56
4.10. Collateral..............................................................................57
4.11. Environmental...........................................................................57
4.12. No Defaults; Material Contracts.........................................................58
4.13. Governmental Regulation.................................................................58
4.14. Margin Stock............................................................................58
4.15. Employee Matters........................................................................59
4.16. Employee Benefit Plans..................................................................59
4.17. Certain Fees............................................................................59
4.18. Solvency................................................................................59
4.19. Existing Indentures.....................................................................59
4.20. Year 2000 Issues........................................................................59
4.21. Disclosure..............................................................................60
4.22. No Burdensome Restrictions..............................................................60
SECTION 5. AFFIRMATIVE COVENANTS................................................................................60
5.1. Financial Statements and Other Reports...................................................61
5.2. Existence................................................................................64
5.3. Payment of Taxes and Claims..............................................................64
5.4. Maintenance of Properties................................................................65
5.5. Insurance................................................................................65
5.6. Books and Records; Inspections; Lenders Meetings.........................................65
5.7. Compliance with Laws; Contractual Obligations............................................66
5.8. Environmental............................................................................66
5.9. Subsidiaries.............................................................................67
5.10. Real Estate Assets.......................................................................68
5.11. Year 2000 Issues.........................................................................69
5.12. Certain Post Closing Matters.............................................................69
SECTION 6. NEGATIVE COVENANTS...................................................................................70
6.1. Indebtedness.............................................................................71
6.2. Liens....................................................................................72
6.3. Equitable Lien; No Further Negative Pledges..............................................74
6.4. Restricted Payments; Restrictions on Subsidiary Distributions............................75
6.5. Investments..............................................................................75
6.6. Stage 1 Financial Covenants..............................................................76
6.7. Stage 2 Financial Covenants..............................................................79
6.8. Fundamental Changes; Disposition of Assets; Acquisitions.................................81
6.9. Disposal of Subsidiary Interests.........................................................82
6.10. Sales and Lease-Backs...................................................................82
6.11. Sale or Discount of Receivables.........................................................82
6.12. Transactions with Shareholders and Affiliates...........................................83
6.13. Conduct of Business.....................................................................83
6.14. Amendments or Waivers of Existing Indentures/Subordinated
</TABLE>
(iii)
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<TABLE>
<S> <C>
Indebtedness........................................................................83
6.15. Fiscal Year.............................................................................83
SECTION 7. GUARANTY.............................................................................................84
7.1. Guaranty of the Obligations..............................................................84
7.2. Contribution by Guarantors...............................................................84
7.3. Payment by Guarantors....................................................................85
7.4. Liability of Guarantors Absolute.........................................................85
7.5. Waivers by Guarantors....................................................................87
7.6. Guarantors' Rights of Subrogation, Contribution, Etc.....................................88
7.7. Subordination of Other Obligations.......................................................88
7.8. Continuing Guaranty......................................................................89
7.9. Authority of Guarantors or Company.......................................................89
7.10. Financial Condition of Company..........................................................89
7.11. Bankruptcy, Etc.........................................................................89
7.12. Notice of Events........................................................................90
7.13. Discharge of Guaranty Upon Sale of Guarantor............................................90
SECTION 8. EVENTS OF DEFAULT....................................................................................90
8.1. Events of Default........................................................................90
SECTION 9. AGENTS...............................................................................................93
9.1. Appointment of Agents....................................................................93
9.2. Powers and Duties........................................................................93
9.3. General Immunity.........................................................................94
9.4. Agents Entitled to Act as Lender.........................................................94
9.5. Lenders' Agreements......................................................................95
9.6. Right to Indemnity.......................................................................95
9.7. Successor Administrative Agent...........................................................95
9.8. Collateral Documents and Guaranties......................................................96
SECTION 10. MISCELLANEOUS.......................................................................................97
10.1. Notices.................................................................................97
10.2. Expenses................................................................................97
10.3. Indemnity...............................................................................98
10.4. Set-Off.................................................................................99
10.5. Amendments and Waivers..................................................................99
10.6. Successors and Assigns; Participations.................................................100
10.7. Independence of Covenants..............................................................103
10.8. Survival of Representations, Warranties and Agreements.................................103
10.9. No Waiver; Remedies Cumulative.........................................................103
10.10. Marshalling; Payments Set Aide........................................................103
10.11. Severability..........................................................................103
10.12. Obligations Several; Independent Nature of Lenders' Rights............................104
</TABLE>
(iv)
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<TABLE>
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10.13. Headings..............................................................................104
10.14. APPLICABLE LAW........................................................................104
10.15. CONSENT TO JURISDICTION...............................................................104
10.16. WAIVER OF JURY TRIAL..................................................................105
10.17. Confidentiality.......................................................................105
10.18. Usury Savings Clause..................................................................106
10.19. Counterparts; Effectiveness...........................................................106
</TABLE>
(v)
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<TABLE>
<S> <C> <C>
APPENDICES: A Commitments
B Notice Addresses
SCHEDULES: 1.1 Tier 1 Geographic Markets
4.1 Organization, Etc.
4.2 Authorizations
4.3 Governmental Consents
4.7 Litigation
4.9(b) Certain Real Estate Assets
4.10(b) Certain Approvals
4.12 Material Contracts
5.12(c) Interconnection Agreement Parties
6.2 Certain Liens
EXHIBITS: A-1 Funding Notice
A-2 Conversion/Continuation Notice
B Revolving Note
C Compliance Certificate
D Opinions of Counsel
E Assignment Agreement
F Certificate Re Non-bank Status
G Closing Date Certificate
H Loan Availability Certificate
I Pledge and Security Agreement
J Mortgage
K Collateral Access Agreement
L Counterpart Agreement
M Acknowledgment Letter
</TABLE>
(vi)
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CREDIT AND GUARANTY AGREEMENT
This CREDIT AND GUARANTY AGREEMENT, dated as of April 1, 1999 is
entered into by and among ALLEGIANCE TELECOM, INC. a Delaware corporation
("COMPANY"), ALLEGIANCE FINANCE COMPANY, INC. a Delaware corporation
("BORROWER"), THE SUBSIDIARIES OF COMPANY (other than the Borrower) PARTY
HERETO, as Guarantors, the LENDERS party hereto from time to time, GOLDMAN SACHS
CREDIT PARTNERS L.P. ("GSCP"), as Syndication Agent (in such
capacity,"SYNDICATION AGENT"), TORONTO DOMINION (TEXAS), INC. ("TD"), as
Administrative Agent (together with its permitted successors in such
capacity,"ADMINISTRATIVE AGENT"), MORGAN STANLEY SENIOR FUNDING, INC. ("MSSF"),
as Documentation Agent (in such capacity,"DOCUMENTATION AGENT") GSCP and TD
SECURITIES (USA) INC., as Co-Lead Arrangers (in such capacity,"CO-LEAD
ARRANGERS"), and the MANAGING AGENTS and CO-AGENTS listed on the signature pages
hereof.
RECITALS:
WHEREAS, Borrower is a wholly-owned subsidiary of Company;
WHEREAS, Lenders have agreed to extend a certain revolving credit
facility to Borrower in an aggregate principal amount not to exceed
$225,000,000, the proceeds of which will be used to provide purchase money
financing for the cost of design, development, acquisition, construction,
installation, improvement, transportation or integration of equipment,
inventory, and network assets;
WHEREAS, Borrower has agreed to secure all of its obligations hereunder
by granting to Administrative Agent, on behalf of Lenders, a First Priority Lien
on substantially all of its real, personal and mixed property, including a
pledge of all of the equity Securities of each of its Subsidiaries, but
excluding assets secured under any Permitted Equipment Financing; and
WHEREAS, Company and Guarantors have agreed to guarantee the
obligations of Borrower hereunder and to secure all of their respective
obligations hereunder by granting to Administrative Agent, on behalf of Lenders,
a First Priority Lien on substantially all of their respective real, personal
and mixed property, including a pledge of all of the equity Securities of each
of their respective Subsidiaries (including Borrower), but excluding assets
secured under any Permitted Equipment Financing.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Company, Borrower, Guarantors,
Lenders and Agents agree as follows:
SECTION 1. DEFINITIONS AND INTERPRETATION
1.1. DEFINITIONS. The following terms used herein, including the
preamble, recitals, exhibits and schedules hereto, shall have the following
meanings:
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"ACKNOWLEDGMENT OF PLEDGE" as defined in the Pledge and Security
Agreement.
"ADDITIONAL EQUITY SECURITIES" means any equity Securities of Company
(net of underwriting discounts and commissions and other reasonable costs and
expenses associated therewith, including reasonable legal fees and expenses)
issued after the Closing Date.
"ADJUSTED EURODOLLAR RATE" means, for any Interest Rate Determination
Date with respect to an Interest Period for a Eurodollar Rate Loan, the rate per
annum obtained by dividing (i) (a) the rate per annum (rounded upward to the
nearest 1/100th) equal to the rate determined by Administrative Agent to be the
offered rate which appears on the page of the Telerate Screen which displays an
average British Bankers Association Interest Settlement Rate (such page
currently being page number 3740 or 3750, as applicable) for deposits (for
delivery on the first day of such period) with a term equivalent to such period
in Dollars, determined as of approximately 11:00 a.m. (London, England time) on
such Interest Rate Determination Date, or (b) in the event the rate referenced
in the preceding clause (a) does not appear on such page or service or if such
page or service shall cease to be available, the rate per annum (rounded upward
to the nearest 1/100th) equal to the rate determined by Administrative Agent to
be the offered rate on such other page or other service which displays an
average British Bankers Association Interest Settlement Rate for deposits (for
delivery on the first day of such period) with a term equivalent to such period
in Dollars, determined as of approximately 11:00 a.m. (London, England time) on
such Interest Rate Determination Date, or (c) in the event the rates referenced
in the preceding clauses (a) and (b) are not available, the rate per annum equal
to the offered quotation rate (carried out to the fifth decimal place) to first
class banks in the London interbank market by Administrative Agent for deposits
(for delivery on the first day of the relevant period) in Dollars of amounts in
same day funds comparable to the principal amount of the applicable Loan of
Administrative Agent, in its capacity as a Lender, for which the Adjusted
Eurodollar Rate is then being determined with maturities comparable to such
period as of approximately 11:00 a.m. (London, England time) on such Interest
Rate Determination Date, by (ii) an amount equal to (a) one minus (b) the
Applicable Reserve Requirement.
"ADMINISTRATIVE AGENT" as defined in the preamble hereto.
"ADVERSE PROCEEDING" means any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration (whether or not purportedly on behalf of Company or any of its
Subsidiaries) at law or in equity, or before or by any Governmental Authority,
domestic or foreign (including any Environmental Claims), whether pending or, to
the knowledge of Company or any of its Subsidiaries, threatened against or
affecting Company or any of its Subsidiaries or any property of Company or any
of its Subsidiaries.
"AFFECTED LENDER" as defined in Section 2.16(b).
"AFFECTED LOANS" as defined in Section 2.16(b).
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"AFFILIATE", as applied to any Person, means any other Person directly
or indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities or
by contract or otherwise. Neither any Agent nor any Lender shall be deemed
Affiliates of any Credit Party by virtue of the security interests granted by
the Pledge and Security Agreement.
"AGENT" means each of Syndication Agent, Administrative Agent,
Documentation Agent and Co-Lead Arrangers.
"AGGREGATE AMOUNTS DUE" as defined in Section 2.15.
"AGGREGATE PAYMENTS" as defined in Section 7.2.
"AGREEMENT" means this Credit and Guaranty Agreement, as it may be
amended, supplemented or otherwise modified from time to time.
"ANNUALIZED CONSOLIDATED EBITDA" means (a) prior to July 1, 2001,
Consolidated EBITDA for the most recently completed Fiscal Quarter multiplied by
four and (b) thereafter, Consolidated EBITDA for the most recently completed two
Fiscal Quarters multiplied by two.
"APPLICABLE COMMITMENT FEE PERCENTAGE" means a percentage, per annum,
determined by reference to the Facility Usage in effect from time to time as set
forth below:
<TABLE>
<CAPTION>
Facility Usage Commitment Fee
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<S> <C>
< 1/3 1.50%
- --------------------------------------------------------------------------------
< 2/3 1.125%
> or = 1/3
- --------------------------------------------------------------------------------
> or = 2/3 0.75%
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</TABLE>
"APPLICABLE MARGIN" means a percentage, per annum, determined by
reference to the Total Leverage Ratio in effect from time to time as set forth
below:
3
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<TABLE>
<CAPTION>
Eurodollar Base Rate
Total Leverage Ratio Rate Loan Loan
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<S> <C> <C>
> or = 8.00:1.00 or negative 3.75% 2.75%
- --------------------------------------------------------------------------------
< 8.00:1.00 3.50% 2.50%
> or = 7.00:1.00
- --------------------------------------------------------------------------------
< 7.00:1.00 3.25% 2.25%
> or = 6.00:1.00
- --------------------------------------------------------------------------------
< 6.00:1.00 3.00% 2.00%
> 5.00:1.00
- --------------------------------------------------------------------------------
< 5.00:1.00 2.75% 1.75%
> or = 4.00:1.00
- --------------------------------------------------------------------------------
< 4.00:1.00 2.50% 1.50%
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</TABLE>
No change in the Applicable Margin shall be effective until three Business Days
after the date on which Administrative Agent shall have received the applicable
financial statements and a Compliance Certificate pursuant to Section 5.1(d)
calculating the Total Leverage Ratio. The Applicable Margin from the Closing
Date until Administrative Agent shall have received the applicable financial
statements and a Compliance Certificate pursuant to Section 5.1(d) shall be
equal to the percentage specified in the above table as if the Total Leverage
Ratio were in excess of 8.00:1.00 or negative. At any time Borrower has not
submitted to Administrative Agent the applicable information as and when
required under Section 5.1(d), the Applicable Margin shall be determined as if
the Total Leverage Ratio were in excess of 8.00:1.00 or negative. Within one
Business Day of receipt of the applicable information as and when required under
Section 5.1(d), Administrative Agent shall give each Lender telefacsimile or
telephonic notice (confirmed in writing) of the Applicable Margin in effect from
such date.
"ANNUALIZED PRE-OVERHEAD EBITDA" means the aggregate Pre-Overhead
EBITDA for a Geographic Market for the most recent month multiplied by twelve.
"APPLICABLE RESERVE REQUIREMENT" means, at any time, for any Eurodollar
Rate Loan the maximum rate at which reserves (including, without limitation, any
marginal, special, supplemental or emergency reserves) are required to be
maintained by such member banks with respect thereto against "Eurocurrency
liabilities" (as such term is defined in Regulation D) under regulations issued
from time to time by the Board of Governors of the Federal Reserve System or
other applicable banking regulator. Without limiting the effect of the
foregoing, the Applicable Reserve Requirement shall reflect any other reserves
required to be maintained by such member banks with respect to (i) any category
of liabilities which includes deposits by reference to which the applicable
Adjusted Eurodollar Rate or any other interest rate of a Loan is to be
determined, or (ii) any category of extensions of credit or other assets which
include Eurodollar Rate Loans. A Eurodollar Rate Loan
4
<PAGE> 11
shall be deemed to constitute Eurocurrency liabilities and as such shall be
deemed subject to reserve requirements without benefits of credit for proration,
exceptions or offsets that may be available from time to time to the applicable
Lender. The rate of interest on Eurodollar Rate Loans shall be adjusted
automatically on and as of the effective date of any change in the Applicable
Reserve Requirement.
"ASSET SALE" means a sale, lease or sub-lease (as lessor or sublessor),
transfer or disposition to any Person other than Company, Borrower or any
Guarantor, in one transaction or a series of transactions, of all or any part of
Company's or any of its Subsidiaries' businesses, properties or assets, whether
now owned or hereafter acquired, including, without limitation, the equity
Securities of any of Company' Subsidiaries, other than (i) the sale of Cash
Equivalents in the ordinary course of business, (ii) inventory sold in the
ordinary course of business, (iii) disposals of obsolete, worn out or surplus
property, (iv) disposals of uneconomical, negligible or redundant property
acquired in Permitted Acquisitions in an amount not in excess of $5,000,000 per
fiscal year, provided that such property is disposed of in each case within 180
days of the acquisition thereof by Company or any of its Subsidiaries, and (v)
sales of assets in a single transaction or a series of related transactions not
in excess of $7,500,000 in the aggregate.
"ASSIGNMENT AGREEMENT" means an Assignment Agreement in the form of
Exhibit E (with such amendments or modifications as may be approved by Borrower
and Administrative Agent).
"AUTHORIZED OFFICER" means, as applied to any Person, any individual
holding the position of chairman of the board (if an officer) or president or
one of its vice presidents (or the equivalent thereof), and such Person's chief
financial officer, treasurer or controller.
"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.
"BASE RATE" means, for any day, a rate per annum (carried out to the
fifth decimal place) equal to the greater of (i) the Prime Rate in effect on
such day and (ii) Federal Funds Effective Rate in effect on such day plus 1/2 of
1%. Any change in the Base Rate resulting due to a change in the Prime Rate or
the Federal Funds Effective Rate shall be effective on the effective day of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.
"BASE RATE LOAN" means a Loan bearing interest at a rate determined by
reference to the Base Rate.
"BENEFICIARY" means each Agent, each Lender and each Lender
Counterparty.
"BUSINESS DAY" means any day, excluding all of the following: Saturday,
Sunday and any day which is a legal holiday under the laws of the State of New
York or is a day on which banking institutions located in such state are
authorized or required by law or other governmental action to close, and with
respect to all notices, determinations, fundings and payments in connection with
the
5
<PAGE> 12
Adjusted Eurodollar Rate or any Eurodollar Rate Loans, that is also a day for
trading by and between banks in Dollar deposits in the London interbank market.
"CAPITAL EXPENDITURES" means, for any period, the aggregate of all
expenditures of any Person during such period that, in accordance with GAAP, are
or should be included in "purchase of property and equipment" or similar items
reflected in the statement of cash flows of such Person.
Notwithstanding the foregoing, the term "Capital Expenditures" shall not include
capital expenditures in respect of the reinvestment of Net Asset Sale Proceeds
or Net Insurance/Condemnation Proceeds in accordance with Section 2.11(a) and
(b).
"CAPITAL LEASE" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"CASH" means money, currency or a credit balance in any demand or
deposit account.
"CASH EQUIVALENTS" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government or (b) issued by any
agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within two years
after such date; (ii) marketable direct obligations issued by any state of the
United States or any political subdivision of any such state or any public
instrumentality thereof, in each case maturing within one year after such date
and having, at the time of the acquisition thereof, a rating of at least A-1
from S&P or at least P-1 from Moody's or the equivalent thereof; (iii)
commercial paper maturing not more than one year from the date of creation
thereof and having, at the time of the acquisition thereof, a rating of at least
A-1 from S&P or at least P-1 from Moody's or the equivalent thereof; (iv) time
deposits, certificates of deposit or bankers' acceptances maturing within one
year after such date and issued or accepted by any Lender or by any commercial
bank organized under the laws of the United States or any state or territory
thereof or the District of Columbia or any foreign country recognized by the
United States or United States branches of foreign banks or the parent company
of any such bank that in each case (a) is at least "adequately capitalized" (as
defined in the regulations of its primary Federal banking regulator) and (b) has
Tier 1 capital (as defined in such regulations) of not less than $100,000,000;
(v) shares of any money market mutual fund that (a) has at least 95% of its
assets invested continuously in the types of investments referred to in clauses
(i) and (ii) above, (b) has net assets of not less than $500,000,000, and (c)
has the highest rating obtainable from either S&P or Moody's or the equivalent
thereof; (vi) repurchase agreements maturing within 30 days from the date of
acquisition thereof by Borrower or any of its Subsidiaries with any Lender or
bank referred to in clause (iv) above, in each case for underlying securities of
the type referred to in clause (i) above.
"CERTIFICATE RE NON-BANK STATUS" means a certificate in the form of
Exhibit F.
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<PAGE> 13
"CHANGE OF CONTROL" means, at any time, (i) Holland shall cease to
beneficially own and control at least 50% of the capital stock of Company owned
or controlled by Holland as of the Closing Date; provided, that, the foregoing
shall not constitute a "change of control" so long as the Total Leverage Ratio
is less than 5:00 to 1:00; (ii) Company shall cease to beneficially own and
control all of the issued and outstanding shares of capital stock of Borrower;
(iii) any "change of control" or similar event under the Existing Indentures (or
related documentation) shall occur, (iv) any "person" or "group" (as such terms
are used in Section 13(d) and 14(d) of the Exchange Act), other than Holland is
or becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act), directly or indirectly, of 20% or more of the then outstanding
voting capital stock of Company other than in a transaction having the approval
of the board of directors of Company at least a majority of which members are
Continuing Directors; or (v) Continuing Directors shall cease to constitute at
least a majority of the directors constituting the board of directors of
Company.
"CLOSING DATE" means the date of this Agreement.
"CLOSING DATE CERTIFICATE" means a certificate in the form of
Exhibit G.
"CLOSING DATE MORTGAGED PROPERTY" as defined in Section 5.10.
"CO-LEAD ARRANGERS" as defined in the preamble hereto.
"COLLATERAL" means, collectively, all of the real, personal and mixed
property (including capital stock and other equity Securities) on which Liens
are purported to be granted pursuant to the Collateral Documents as security for
the Obligations.
"COLLATERAL ACCESS AGREEMENT" means a Collateral Access Agreement in
the form of Exhibit K (with such amendments or modifications as may be approved
by Borrower and Administrative Agent).
"COLLATERAL DOCUMENTS" means the Pledge and Security Agreement, the
Mortgages and all other instruments, documents and agreements delivered by any
Credit Party pursuant to this Agreement or any of the other Credit Documents in
order to grant to Administrative Agent, on behalf of Lenders, a Lien on any
real, personal or mixed property of that Credit Party as security for the
Obligations.
"CO-LOCATION SITES" means the central office premises of a local
exchange carrier on which a Subsidiary of Borrower has located
telecommunications transmission equipment.
"COMMITMENT" means the Commitment of a Lender to make or otherwise fund
any Loan. The amount of each Lender's Commitment is set forth on Appendix A or
in the applicable Assignment Agreement, and is subject to any adjustment or
reduction pursuant to the terms and conditions hereof.
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<PAGE> 14
"COMMITMENT PERIOD" means the period from the Closing Date to but
excluding the Commitment Termination Date.
"COMMITMENT TERMINATION DATE" means the earliest to occur of (i) the
Maturity Date, (ii) the date the Commitments are permanently reduced to zero
pursuant to Section 2.10 or 2.11, and (iii) the date of the termination of the
Commitments pursuant to Section 8.1.
"COMPANY" as defined in the preamble hereto.
"COMPLIANCE CERTIFICATE" means a certificate in the form of Exhibit C.
"CONFORMING LEASEHOLD INTEREST" means any Recorded Leasehold Interest
as to which the lessor has agreed in writing for the benefit of Administrative
Agent (which writing has been delivered to Administrative Agent), whether under
the terms of the applicable lease, under the terms of a Landlord Consent and
Estoppel, or otherwise, to the matters described in the definition of "Landlord
Consent and Estoppel," which interest, if a subleasehold or sub-subleasehold
interest, is not subject to any contrary restrictions contained in a superior
lease or sublease.
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, the
aggregate of all Capital Expenditures of Company and its Subsidiaries during
such period; provided, that for purposes of calculating Free Cash Flow,
"Consolidated Capital Expenditures" shall be determined in the foregoing manner
in accordance with GAAP with respect to the acquired entity.
"CONSOLIDATED CASH INTEREST EXPENSE" means, for any period,
Consolidated Interest Expense for such period, excluding (i) any amount not
payable in Cash and (ii) Cash interest payable from funds escrowed for such
purpose by Company prior to the Closing Date.
"CONSOLIDATED EBITDA" means, for any period, an amount determined for
Company and its Subsidiaries on a consolidated basis equal to (i) to the sum of
the amounts for such period of (a) Consolidated Net Income, (b) Consolidated
Interest Expense, (c) provisions for franchise taxes and taxes based on income,
(d) total depreciation expense, (e) total amortization expense, and (f) other
non-cash items reducing Consolidated Net Income (including management ownership
allocation charge and non-cash deferred compensation), minus (ii) other non-cash
items increasing Consolidated Net Income; provided, that for purposes of (1)
calculating Free Cash Flow and (2) making the calculations in the proviso in
Section 6.6(b) and in Sections 6.6(e) and 6.7(f)(i), "Consolidated EBITDA" shall
be determined in the foregoing manner with respect to the acquired entity.
"CONSOLIDATED EXCESS CASH FLOW" means, for any period, an amount (if
positive) equal to Consolidated EBITDA minus the sum, without duplication, of
the amounts for such period of (a) voluntary and scheduled repayments of
Consolidated Total Debt (excluding repayments of Loans except to the extent the
Commitments are permanently reduced in connection with such repayments), (b)
Consolidated Capital Expenditures (net of any proceeds of any related financings
with respect to
8
<PAGE> 15
such expenditures), (c) Consolidated Cash Interest Expense, and (d) provisions
for current franchise taxes and taxes based on income of Company and its
Subsidiaries and payable in cash with respect to such period.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, total interest
expense (including that portion attributable to Capital Leases in accordance
with GAAP and capitalized interest) of Company and its Subsidiaries on a
consolidated basis with respect to all outstanding Indebtedness of Company and
its Subsidiaries, including all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance financing
and net costs under Interest Rate Agreements, but excluding, however, any
amounts referred to in Section 2.8 payable on or before the Closing Date.
"CONSOLIDATED NET INCOME" means, for any period, (i) the net income (or
loss) of Company and its Subsidiaries on a consolidated basis for such period
taken as a single accounting period determined in conformity with GAAP, minus
(ii) (a) the income of any Person (other than a Subsidiary of Company) in which
any other Person (other than Company or any of its Subsidiaries) has a joint
interest, except to the extent of the amount of dividends or other distributions
actually paid to Company or any of its Subsidiaries by such Person during such
period, (b) the income (or loss) of any Person accrued prior to the date it
becomes a Subsidiary of Company or is merged into or consolidated with Company
or any of its Subsidiaries or that Person's assets are acquired by Company or
any of its Subsidiaries, (c) the income of any Subsidiary of Company to the
extent that the declaration or payment of dividends or similar distributions by
that Subsidiary of that income is not at the time permitted by operation of the
terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Subsidiary, (d) any
after-tax gains or losses attributable to Asset Sales and other sales of assets
not constituting Asset Sales, or returned surplus assets of any Pension Plan,
and (e) (to the extent not included in clauses (a) through (d) above) any net
extraordinary gains or net non-cash extraordinary losses.
"CONSOLIDATED TOTAL DEBT" means, as at any date of determination, the
aggregate stated balance sheet amount of all Indebtedness of Company and its
Subsidiaries determined on a consolidated basis in accordance with GAAP, less
any funds escrowed for the purpose of paying interest on such Indebtedness.
"CONTINUING DIRECTORS" means individuals who at the beginning of any
period of two consecutive calendar years constituted the board of directors of
Company, together with any new directors whose election by such board of
directors or whose nomination for election was approved by a vote of at least
two-thirds of the members of such board of directors then still in office who
either were members of such board of directors at the beginning of such period
or whose election or nomination for election was previously so approved.
"CONTRACTUAL OBLIGATION" means, as applied to any Person, any provision
of any Security issued by that Person or of any material indenture, mortgage,
deed of trust, contract, undertaking,
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<PAGE> 16
agreement or other instrument to which that Person is a party or by which it or
any of its properties is bound or to which it or any of its properties is
subject.
"CONTRIBUTING GUARANTORS" as defined in Section 7.2.
"CONVERSION/CONTINUATION DATE" means the effective date of a
continuation or conversion, as the case may be, as set forth in the applicable
Conversion/Continuation Notice.
"CONVERSION/CONTINUATION NOTICE" means a notice in the form of Exhibit
A-2.
"COUNTERPART AGREEMENT" means the agreement in the form of Exhibit L.
"CREDIT DATE" means the date of a Loan.
"CREDIT DOCUMENT" means any of this Agreement, the Notes, the
Collateral Documents, and all other documents, instruments or agreements
executed and delivered by a Credit Party for the benefit of Agents or any Lender
in connection herewith, including Hedge Agreements with any Lender Counterparty,
in each case as may be amended, supplemented or otherwise modified from time to
time.
"CREDIT PARTY" means each Person (other than any Agent or any Lender or
any other representative thereof) from time to time party to a Credit Document.
"CURRENCY AGREEMENT" means any foreign exchange contract, currency swap
agreement, futures contract, option contract, synthetic cap or other similar
agreement or arrangement, each of which is for the purpose of hedging the
foreign currency risk associated with Company's and its Subsidiaries' operations
.
"DARK FIBER LEASES" as defined in Section 6.1(i).
"DEFAULT" means a condition or event that, after notice or lapse of
time or both, would constitute an Event of Default.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.
"DOLLARS" and the sign "$" mean the lawful money of the United States.
"ELIGIBLE ASSIGNEE" means (i) any Lender, any Affiliate of any Lender
and any Related Fund (any two or more Related Funds being treated as a single
Eligible Assignee for all purposes hereof), and (ii) any commercial bank,
insurance company, finance company, investment or mutual fund or other entity
that is an "accredited investor" (as defined in Regulation D under the
Securities Act) and which extends credit or buys loans as one of its businesses;
provided, no Affiliate of Company or
10
<PAGE> 17
Borrower shall be an Eligible Assignee (it being understood that MSSF is not an
Affiliate of Company or Borrower for purposes of the definition of "Eligible
Assignee") .
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as defined in
Section 3(3) of ERISA which is or was maintained or contributed to by Company,
any of its Subsidiaries or any of their respective ERISA Affiliates.
"ENVIRONMENTAL CLAIM" means any investigation, notice, notice of
violation, claim, action, suit, proceeding, demand, abatement order or other
order or directive (conditional or otherwise), by any governmental authority or
any other Person, arising (i) pursuant to or in connection with any actual or
alleged violation of any Environmental Law; (ii) in connection with any
Hazardous Material or any actual or alleged Hazardous Materials Activity; or
(iii) in connection with any actual or alleged damage, injury, threat or harm to
health, safety, natural resources or the environment.
"ENVIRONMENTAL LAWS" means any and all current or future foreign or
domestic, federal or state (or any subdivision of either of them), statutes,
ordinances, orders, rules, regulations, guidance documents, judgments,
Governmental Authorizations, or any other requirements of governmental
authorities relating to (i) environmental matters, including those relating to
any Hazardous Materials Activity; (ii) the generation, use, storage,
transportation or disposal of Hazardous Materials; or (iii) occupational safety
and health, industrial hygiene, land use or the protection of human, plant or
animal health or welfare, in any manner applicable to Company or any of its
Subsidiaries or any Facility.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor thereto.
"ERISA AFFILIATE" means, as applied to any Person, (i) any corporation
which is a member of a controlled group of corporations within the meaning of
Section 414(b) of the Internal Revenue Code of which that Person is a member;
(ii) any trade or business (whether or not incorporated) which is a member of a
group of trades or businesses under common control within the meaning of Section
414(c) of the Internal Revenue Code of which that Person is a member; and (iii)
any member of an affiliated service group within the meaning of Section 414(m)
or (o) of the Internal Revenue Code of which that Person, any corporation
described in clause (i) above or any trade or business described in clause (ii)
above is a member. Any former ERISA Affiliate of Company or any of its
Subsidiaries shall continue to be considered an ERISA Affiliate of Company or
such Subsidiary within the meaning of this definition with respect to the period
such entity was an ERISA Affiliate of Company or such Subsidiary and with
respect to liabilities arising after such period for which Company or such
Subsidiary could be liable under the Internal Revenue Code or ERISA.
"ERISA EVENT" means (i) a "reportable event" within the meaning of
Section 4043 of ERISA and the regulations issued thereunder with respect to any
Pension Plan (excluding those for which the provision for 30-day notice to the
PBGC has been waived by regulation); (ii) the failure to meet the minimum
funding standard of Section 412 of the Internal Revenue Code with respect to
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<PAGE> 18
any Pension Plan (whether or not waived in accordance with Section 412(d) of the
Internal Revenue Code) or the failure to make by its due date a required
installment under Section 412(m) of the Internal Revenue Code with respect to
any Pension Plan or the failure to make any required contribution to a
Multiemployer Plan; (iii) the provision by the administrator of any Pension Plan
pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate such
plan in a distress termination described in Section 4041(c) of ERISA; (iv) the
withdrawal by Company, any of its Subsidiaries or any of their respective ERISA
Affiliates from any Pension Plan with two or more contributing sponsors or the
termination of any such Pension Plan resulting in liability pursuant to Section
4063 or 4064 of ERISA; (v) the institution by the PBGC of proceedings to
terminate any Pension Plan, or the occurrence of any event or condition which
might constitute grounds under ERISA for the termination of, or the appointment
of a trustee to administer, any Pension Plan; (vi) the imposition of liability
on Company, any of its Subsidiaries or any of their respective ERISA Affiliates
pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application of
Section 4212(c) of ERISA; (vii) the withdrawal of Company, any of its
Subsidiaries or any of their respective ERISA Affiliates in a complete or
partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from
any Multiemployer Plan if there is any potential liability therefor, or the
receipt by Company, any of its Subsidiaries or any of their respective ERISA
Affiliates of notice from any Multiemployer Plan that it is in reorganization or
insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to
terminate or has terminated under Section 4041A or 4042 of ERISA; (viii) the
occurrence of an act or omission which could give rise to the imposition on
Company, any of its Subsidiaries or any of their respective ERISA Affiliates of
fines, penalties, taxes or related charges under Chapter 43 of the Internal
Revenue Code or under Section 409, Section 502(c), (i) or (l), or Section 4071
of ERISA in respect of any Employee Benefit Plan; (ix) the assertion of a
material claim (other than routine claims for benefits) against any Employee
Benefit Plan other than a Multiemployer Plan or the assets thereof, or against
Company, any of its Subsidiaries or any of their respective ERISA Affiliates in
connection with any Employee Benefit Plan; (x) receipt from the Internal Revenue
Service of notice of the failure of any Pension Plan (or any other Employee
Benefit Plan intended to be qualified under Section 401(a) of the Internal
Revenue Code) to qualify under Section 401(a) of the Internal Revenue Code, or
the failure of any trust forming part of any Pension Plan to qualify for
exemption from taxation under Section 501(a) of the Internal Revenue Code; or
(xi) the imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or pursuant to ERISA with respect to any Pension Plan.
"EURODOLLAR RATE LOAN" means a Loan bearing interest at a rate
determined by reference to the Adjusted Eurodollar Rate.
"EVENT OF DEFAULT" means each of the events set forth in Section 8.1.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.
"EXISTING INDENTURES" means, collectively, the Indenture dated as of
February 3, 1998 between Allegiance Telecom, Inc. and The Bank of New York,
relating to the 11-3/4% Senior
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<PAGE> 19
Discount Notes due 2008, and the Indenture dated as of July 7, 1998 between
Allegiance Telecom, Inc. and The Bank of New York, relating to the 12-7/8%
Senior Notes due 2008; in each case as in effect as of the Closing Date and
without giving effect to any extension, restatement, amendment, modification or
supplement thereof or waiver or consent with respect thereto dated after the
date hereof.
"EXPOSURE" means, with respect to any Lender as of any date of
determination, (i) prior to the termination of the Commitments, such Lender's
Commitment; and (ii) after the termination of the Commitments, the aggregate
outstanding principal amount of the Loans of such Lender.
"FACILITIES" means any real property (including all buildings, fixtures
or other improvements located thereon) now, hereafter or heretofore owned,
leased, operated or used by Company or any of its Subsidiaries or any of their
respective predecessors or Affiliates, but excluding for all purposes under this
Agreement (other than with respect to rights purported to be granted pursuant to
the Collateral Documents as security for the Obligations) all Co-Location Sites.
"FACILITY USAGE" means a fraction, calculated as of the last day of
each Fiscal Quarter, the numerator of which is equal to the average daily Total
Utilization of Commitments during such Fiscal Quarter, and the denominator of
which is equal to the average daily aggregate Commitments for all Lenders during
such Fiscal Quarter.
"FAIR SHARE CONTRIBUTION AMOUNT" as defined in Section 7.2.
"FAIR SHARE" as defined in Section 7.2.
"FAIR SHARE SHORTFALL" as defined in Section 7.2.
"FCC" means the Federal Communications Commission.
"FEDERAL FUNDS EFFECTIVE RATE" means for any day, the rate per annum
(carried out to the fifth decimal place) equal to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided, (i) if such day is not a Business Day, the Federal Funds Rate for
such day shall be such rate on such transactions on the next preceding Business
Day as so published on the next succeeding Business Day, and (ii) if no such
rate is so published on such next succeeding Business Day, the Federal Funds
Rate for such day shall be the average rate charged to Administrative Agent, in
its capacity as a Lender, on such day on such transactions as determined by
Administrative Agent.
"FINANCIAL OFFICER CERTIFICATION" means, with respect to the financial
statements for which such certification is required, the certification of the
chief financial officer or treasurer of Company that such financial statements
fairly present, in all material respects, the financial condition of Company and
its Subsidiaries as at the dates indicated and the results of their operations
and their
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cash flows for the periods indicated, subject to changes resulting from audit
and normal year-end adjustments.
"FINANCIAL PLAN" as defined in Section 5.1(j).
"FIRST PRIORITY" means, with respect to any Lien purported to be
created in any Collateral pursuant to any Collateral Document, that such Lien is
the only Lien to which such Collateral is subject, other than and subject to
Permitted Liens.
"FISCAL QUARTER" means a fiscal quarter of any Fiscal Year.
"FISCAL YEAR" means the fiscal year of Company and its Subsidiaries
ending on December 31 of each calendar year.
"FLOOD HAZARD PROPERTY" means a Mortgaged Property located in an area
designated by the Federal Emergency Management Agency as having special flood or
mud slide hazards.
"FREE CASH FLOW" means, Consolidated EBITDA for the twelve-month period
most recently ended prior to the date of determination less (i) Consolidated
Capital Expenditures made during such period and (ii) cash taxes paid or payable
with respect to such period, determined on a consolidated basis for the entity
being acquired.
"FUNDING GUARANTORS" as defined in Section 7.2.
"FUNDING NOTICE" means a notice in the form of Exhibit A-1.
"GAAP" means United States generally accepted accounting principles in
effect as of the date of determination thereof.
"GEOGRAPHIC MARKET"means the business operations conducted in a
particular geographic market in the United States by a Subsidiary of Company.
"GOVERNMENTAL ACTS" means any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto government or
governmental authority.
"GOVERNMENTAL AUTHORIZATION" means any permit, license, authorization,
plan, directive, consent order or consent decree of or from any Governmental
Authority.
"GOVERNMENTAL AUTHORITY" means any federal, state, municipal, national
or other governmental department, commission, board, bureau, court, agency or
instrumentality or political subdivision thereof or any entity or officer
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to any government or any court, in each case whether
associated with a state of the United States, the United States, or a foreign
entity or government.
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"GSCP" means Goldman Sachs Credit Partners L.P.
"GUARANTOR" means each of Company and each direct and indirect
Subsidiary of Company (other than Borrower) party hereto.
"GUARANTY" means the guaranty of each Guarantor set forth in Section 7.
"HAZARDOUS MATERIALS" means any chemical, material or substance,
exposure to which is prohibited, limited or regulated by any governmental
authority or which may or could pose a hazard to the health and safety of the
owners, occupants or any Persons in the vicinity of any Facility or to the
indoor or outdoor environment.
"HAZARDOUS MATERIALS ACTIVITY" means any past, current, proposed or
threatened activity, event or occurrence involving any Hazardous Materials,
including the use, manufacture, possession, storage, holding, presence,
existence, location, Release, threatened Release, discharge, placement,
generation, transportation, processing, construction, treatment, abatement,
removal, remediation, disposal, disposition or handling of any Hazardous
Materials, and any corrective action or response action with respect to any of
the foregoing.
"HEDGE AGREEMENT" means an Interest Rate Agreement or a Currency
Agreement entered into in the ordinary course of Company's or any of its
Subsidiaries' businesses and not for speculative purposes.
"HIGHEST LAWFUL RATE" means the maximum lawful interest rate, if any,
that at any time or from time to time may be contracted for, charged, or
received under the laws applicable to any Lender which are presently in effect
or, to the extent allowed by law, under such applicable laws which may hereafter
be in effect and which allow a higher maximum nonusurious interest rate than
applicable laws now allow.
"HISTORICAL FINANCIAL STATEMENTS" means the audited financial
statements of Company and its Subsidiaries for Fiscal Years 1997 and 1998,
consisting of balance sheets and the related consolidated statements of income,
stockholders' equity and cash flows for such periods, certified by the chief
financial officer of Company that they fairly present, in all material respects,
the financial condition of Company and its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows for the
periods indicated, subject to changes resulting from audit and normal year-end
adjustments.
"HOLLAND" means, collectively, Mr. Royce Holland, his spouse, his
direct descendants, any entity controlled by any of the foregoing or any trust
for the benefit of any of the foregoing.
"INCREMENTAL AVAILABILITY" means, as of any date of determination after
the Incremental Certified Conditions have been satisfied, an amount equal to the
aggregate Annualized Pre-Overhead EBITDA generated by all Geographic Markets to
have positive monthly Pre-Overhead EBITDA
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<PAGE> 22
(other than the first Geographic Market to have positive monthly Pre-Overhead
EBITDA) multiplied by three; provided that at any time after the Incremental
Certified Conditions have been satisfied but are no longer satisfied and any
Loans are outstanding (i) Incremental Availability shall be immediately reduced
to zero and shall remain at zero until such time that the Incremental Certified
Conditions are again satisfied and (ii) outstanding Loans shall be repaid
pursuant to Section 2.11(e).
"INCREMENTAL CERTIFIED CONDITIONS" means:
(a) Company is in pro forma compliance with all (i) covenants
contained in Sections 6.6 or 6.7, as applicable, and (ii) conditions specified
in Section 3;
(b) (i) at least two Geographic Markets shall have one month
of positive Pre-Overhead EBITDA and (ii) Company shall project positive
Pre-Overhead EBITDA on a pro forma basis for each such Geographic Market from
such date through the Maturity Date; and
(c) Each Geographic Market specified in clause (b) must be
represented by a Subsidiary (i) whose stock has been pledged to the
Administrative Agent pursuant to Section 5.12(b), (ii) which is a Guarantor
hereunder and (iii) which is a Grantor under the Pledge and Security Agreement;
such conditions to be certified in a Loan Availability Certificate, in
substantially the form of Exhibit H hereto, executed by an Authorized Officer of
Company and delivered to Administrative Agent.
"INCREASED-COST LENDERS" as defined in Section 2.21.
"INDEBTEDNESS", as applied to any Person, means, without duplication,
(i) all indebtedness for borrowed money; (ii) that portion of obligations with
respect to Capital Leases that is properly classified as a liability on a
balance sheet in conformity with GAAP; (iii) notes payable and drafts accepted
representing extensions of credit whether or not representing obligations for
borrowed money; (iv) any obligation owed for all or any part of the deferred
purchase price of property or services (excluding any such obligations incurred
under ERISA and ordinary course trade payables and accrued expenses), which
purchase price is (a) due more than six months from the date of incurrence of
the obligation in respect thereof or (b) evidenced by a note or similar written
instrument; (v) all indebtedness secured by any Lien on any property or asset
owned or held by that Person regardless of whether the indebtedness secured
thereby shall have been assumed by that Person or is nonrecourse to the credit
of that Person; (vi) the face amount of any letter of credit issued for the
account of that Person or as to which that Person is otherwise liable for
reimbursement of drawings; (vii) the direct or indirect guaranty, endorsement
(otherwise than for collection or deposit in the ordinary course of business),
co-making, discounting with recourse or sale with recourse by such Person of the
Indebtedness of another; (viii) any obligation of such Person the primary
purpose or intent of which is to provide assurance to an obligee that the
Indebtedness of the obligor thereof will be paid or discharged, or any agreement
relating thereto will be complied with, or the holders thereof will be protected
(in whole or in part) against loss in respect thereof; and (ix)
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any liability of such Person for the Indebtedness of another through any
agreement (contingent or otherwise) (a) to purchase, repurchase or otherwise
acquire such Indebtedness or any security therefor, or to provide funds for the
payment or discharge of such Indebtedness (whether in the form of loans,
advances, stock purchases, capital contributions or otherwise) or (b) to
maintain the solvency or any balance sheet item, level of income or financial
condition of another if, in the case of any agreement described under subclauses
(a) or (b) of this clause (ix), the primary purpose or intent thereof is as
described in clause (viii) above; and (x) Obligations under Hedge Agreements.
"INDEMNIFIED LIABILITIES" means, collectively, any and all liabilities,
obligations, losses, damages (including natural resource damages), penalties,
actions, judgments, suits, claims (including Environmental Claims), costs
(including the costs of any investigation, study, sampling, testing, abatement,
cleanup, removal, remediation or other response action necessary to remove,
remediate, clean up or abate any Hazardous Materials Activity), expenses and
disbursements of any kind or nature whatsoever (including the reasonable fees
and disbursements of counsel for Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or threatened by
any Person, whether or not any such Indemnitee shall be designated as a party or
a potential party thereto, and any fees or expenses incurred by Indemnitees in
enforcing this indemnity), whether direct, indirect or consequential and whether
based on any federal, state or foreign laws, statutes, rules or regulations
(including securities and commercial laws, statutes, rules or regulations and
Environmental Laws), on common law or equitable cause or on contract or
otherwise, that may be imposed on, incurred by, or asserted against any such
Indemnitee, in any manner relating to or arising out of (i) this Agreement or
the other Credit Documents or the transactions contemplated hereby or thereby
(including Lenders' agreement to make Loans or the use or intended use of the
proceeds thereof or the use or intended use of any thereof, or any enforcement
of any of the Credit Documents (including any sale of, collection from, or other
realization upon any of the Collateral or the enforcement of the Guaranty));
(ii) the statements contained in the commitment letter executed and delivered by
any Lender to Company with respect thereto; or (iii) any Environmental Claim or
any Hazardous Materials Activity relating to or arising from, directly or
indirectly, any past or present activity, operation, land ownership, or practice
of Company or any of its Subsidiaries.
"INDEMNITEE" as defined in Section 10.3.
"INITIAL AVAILABILITY" means, as of any date of determination after the
Initial Certified Conditions have been satisfied, an amount equal to the lesser
of (a) $100,000,000 and (b) the sum of (1) one-third of total Commitments
hereunder plus (2) the amount of Annualized Pre-Overhead EBITDA generated by the
first Geographic Market to have positive monthly Pre-Overhead EBITDA multiplied
by three; provided that at any time after the Initial Certified Conditions have
been satisfied but are no longer satisfied and any Loans are outstanding (i)
Loan Availability shall be immediately reduced to zero and (ii) all outstanding
Loans shall be repaid pursuant to Section 2.11(e) and shall remain at zero until
such time that the Initial Certified Conditions are again satisfied.
"INITIAL CERTIFIED CONDITIONS" means:
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(a) Company is in pro forma compliance with all (i) covenants contained
in Sections 6.6 or 6.7, as applicable, and (ii) conditions specified in Section
3;
(b) Company shall have invested a minimum of $250,000,000 in the
operations of the Borrower and/or its Subsidiaries (it being understood that for
the purposes of this clause (b), the term "invested" includes cash invested in
operations and expenses of the Borrower and/or its Subsidiaries and Capital
Expenditures of Borrower and/or its Subsidiaries);
(c) (i) one Geographic Market shall have one month of positive
Pre-Overhead EBITDA and (ii) Company shall project positive Pre-Overhead EBITDA
on a pro forma basis for such Geographic Market from such date through the
Maturity Date; and
(d) the Geographic Market specified in clause (c) must be represented
by a Subsidiary (i) whose stock has been pledged to the Administrative Agent
pursuant to Section 5.12(b), (ii) which is a Guarantor hereunder and (iii) which
is a Grantor under the Pledge and Security Agreement;
such conditions to be certified in a Loan Availability Certificate, in
substantially the form of Exhibit H hereto, executed by an Authorized Officer of
Company and delivered to Administrative Agent.
"INITIAL FUNDING DATE" means the date on which the first Loan is made.
"INSTALLMENT" as defined in Section 2.9.
"INSTALLMENT DATE" as defined in Section 2.9.
"INTELLECTUAL PROPERTY" means "Intellectual Property" as such term is
defined in the Pledge and Security Agreement.
"INTELLECTUAL PROPERTY COLLATERAL" means all of the Intellectual
Property subject to the Lien of the Pledge and Security Agreement.
"INTEREST COVERAGE RATIO" means the ratio as of the last day of any
Fiscal Quarter of (i) Annualized Consolidated EBITDA to (ii) Consolidated Cash
Interest Expense for the four-Fiscal Quarter period then ended, in each case as
set forth in the most recent Compliance Certificate delivered by Borrower to
Administrative Agent pursuant to Section 5.1(d).
"INTEREST PAYMENT DATE" means with respect to (i) any Base Rate Loan,
each March 15, June 15, September 15 and December 15 of each year, commencing on
the first such date to occur after the Closing Date; and (ii) any Eurodollar
Rate Loan, the last day of each Interest Period applicable to such Loan;
provided, in the case of each Interest Period of longer than three months
"Interest Payment Date" shall also include each date that is three months, or an
integral multiple thereof, after the commencement of such Interest Period.
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"INTEREST PERIOD" means, in connection with a Eurodollar Rate Loan, an
interest period of one, two, three or six-months, as selected by Borrower in the
applicable Notice, (i) initially, commencing on the Credit Date or
Conversion/Continuation Date thereof, as the case may be; and (ii) thereafter,
commencing on the day on which the immediately preceding Interest Period
expires; provided, (a) if an Interest Period would otherwise expire on a day
that is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day unless no further Business Day occurs in such month, in
which case such Interest Period shall expire on the immediately preceding
Business Day; (b) 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, subject to
clauses (c) and (d) of this definition, end on the last Business Day of a
calendar month; (c) no Interest Period with respect to any portion of the Loans
shall extend beyond the Commitment Termination Date; and (d) no Interest Period
with respect to any portion of Loans shall extend beyond a date on which
Borrower is required to make a scheduled reduction of Commitments, unless the
sum of (1) the aggregate principal amount of Loans that are Base Rate Loans, and
(2) the aggregate principal amount of Loans that are Eurodollar Rate Loans with
Interest Periods expiring on or before such date or reduction equals or exceeds
the amount required to be paid with respect to the Commitments on such date.
"INTEREST RATE AGREEMENT" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
agreement or arrangement, each of which is for the purpose of hedging the
interest rate exposure associated with Company's and its Subsidiaries'
operations.
"INTEREST RATE DETERMINATION DATE" means, with respect to any Interest
Period, the date that is two Business Days prior to the first day of such
Interest Period.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter, and any successor
statute.
"INVESTMENT" means (i) any direct or indirect purchase or other
acquisition by Company or any of its Subsidiaries of, or of a beneficial
interest in, any of the Securities of any other Person (other than a Guarantor);
(ii) any direct or indirect redemption, retirement, purchase or other
acquisition for value, by any Subsidiary of Company from any Person (other than
Company or any Guarantor), of any equity Securities of such Subsidiary; and
(iii) any direct or indirect loan, advance (other than advances to employees for
moving, entertainment and travel expenses, drawing accounts and similar
expenditures in the ordinary course of business) or capital contribution by
Company or any of its Subsidiaries to any other Person (other than Company),
including all indebtedness and accounts receivable from that other Person that
are not current assets or did not arise from sales to that other Person in the
ordinary course of business. The amount of any Investment shall be the original
cost of such Investment plus the cost of all additions thereto, without any
adjustments for increases or decreases in value, or write-ups, write-downs or
write-offs with respect to such Investment.
"INVESTMENT COMPANY ACT" means the Investment Company Act of 1940, as
amended.
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"INVESTMENT PROPERTY" as defined in the Pledge and Security Agreement.
"ISSUANCE NOTICE" means a notice in the form of Exhibit A-3.
"JOINT VENTURE" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form; provided, in
no event shall any corporate Subsidiary of any Person be considered to be a
Joint Venture to which such Person is a party.
"LANDLORD CONSENT AND ESTOPPEL" means, with respect to any Leasehold
Property, a letter, certificate or other instrument in writing from the lessor
under the related lease, satisfactory in form and substance to Administrative
Agent, pursuant to which such lessor agrees, for the benefit of Administrative
Agent, (i) that without any further consent of such lessor or any further action
on the part of the Credit Party holding such Leasehold Property, such Leasehold
Property may be encumbered pursuant to a Mortgage and may be assigned to the
purchaser at a foreclosure sale or in a transfer in lieu of such a sale (and to
a subsequent third party assignee if Administrative Agent, any Lender, or an
Affiliate of either so acquires such Leasehold Property), (ii) that such lessor
shall not terminate such lease as a result of a default by such Credit Party
thereunder without first giving Administrative Agent notice of such default and
at least sixty (60) days (or, if such default cannot reasonably be cured by
Administrative Agent within such period, such longer period as may reasonably be
required) to cure such default, (iii) the lessor waives any right to any Credit
Party's property or assets located or used on the real property subject to such
lease and (iv) to such other matters relating to such Leasehold Property as
Administrative Agent may reasonably request.
"LEASEHOLD PROPERTY" means any leasehold interest of any Credit Party
as lessee under any lease of real property, other than any such leasehold
interest designated from time to time by Administrative Agent in its sole
discretion as not being required to be included in the Collateral.
"LENDER" means each financial institution listed on the signature pages
hereto as a Lender, together with each such institution's successors and
permitted assigns.
"LENDER COUNTERPARTY" means each Lender or Affiliate thereof
counterparty to a Hedge Agreement.
"LIEN" means any lien, mortgage, pledge, assignment, security interest,
charge or encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof, and any agreement to give
any security interest) and any option, trust or other preferential arrangement
having the practical effect of any of the foregoing.
"LOAN" means a Loan made by a Lender to Borrower pursuant to Section
2.1(a).
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"LOAN AVAILABILITY" means, at any time, an amount, if any, equal to (i)
Initial Availability plus (ii) Incremental Availability; such Loan Availability
subject to reduction and renewed availability as specified in the definitions of
Initial Availability and Incremental Availability.
"MARGIN STOCK" as defined in Regulation U of the Board of Governors of
the Federal Reserve System as in effect from time to time.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the
business, operations, properties, assets, condition (financial or otherwise) or
prospects of Company and its Subsidiaries on a consolidated basis or (ii) the
ability of any Agent or any Lender to enforce any of their rights or to collect
any of the Obligations then due and payable.
"MATERIAL CONTRACT" means any contract or other arrangement to which
Company or any of its Subsidiaries is a party (other than the Credit Documents)
for which breach, nonperformance, cancellation or failure to renew could
reasonably be expected to have a Material Adverse Effect.
"MATERIAL REAL ESTATE ASSET" means (i) a fee-owned Real Estate Asset
having a fair market value in excess of $2,000,000 as of the date of the
acquisition thereof, and (ii) all Leasehold Properties other than those (a) with
respect to which the aggregate payments under the term of the lease are less
than $1,500,000 per annum, or (b) that relate to a site the loss of which would
not otherwise have a Material Adverse Effect.
"MATURITY DATE" means December 31, 2005.
"MOODY'S" means Moody's Investor Services, Inc.
"MORTGAGE" means a mortgage, deed of trust or similar instrument in the
form of Exhibit J, as it may be amended, supplemented or otherwise modified from
time to time.
"MSSF" as defined in the preamble.
"MULTIEMPLOYER PLAN" means any Employee Benefit Plan which is a
"multiemployer plan" as defined in Section 3(37) of ERISA.
"NARRATIVE REPORT" means, with respect to the financial statements for
which such narrative report is required, a narrative report describing the
operations of Company and its Subsidiaries in the form prepared for presentation
to senior management thereof for the applicable month, Fiscal Quarter or Fiscal
Year and for the period from the beginning of the then current Fiscal Year to
the end of such period to which such financial statements relate.
"NET ASSET SALE PROCEEDS" means, with respect to any Asset Sale, an
amount equal to: (i) Cash payments (including any Cash received by way of
deferred payment pursuant to, or by monetization of, a note receivable or
otherwise, but only as and when so received) received from
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such Asset Sale, minus (ii) any bona fide direct costs incurred in connection
with such Asset Sale, including (a) income or gains taxes reasonably estimated
to be actually payable as a result of any gain recognized in connection with
such Asset Sale, (b) payment of the outstanding principal amount of, premium or
penalty, if any, and interest on any Indebtedness (other than the Loans) that is
secured by a Lien on the stock or assets in question and that is required to be
repaid under the terms thereof as a result of such Asset Sale, (c) attorney's
fees, accountants fees, investment banking fees and other customary costs, fees,
expenses and commissions actually incurred in connection therewith, and (d) the
amount of any reasonable reserve established in accordance with GAAP against any
liabilities associated with the assets sold or disposed of; provided that the
amount of any subsequent reduction of such reserve (other than in connection
with a payment in respect of such liability) shall be deemed to be Net Sale
Asset Proceeds occurring on the date of such reduction.
"NET INSURANCE/CONDEMNATION PROCEEDS" means an amount equal to: (i) any
Cash payments or proceeds received by Company or any of its Subsidiaries (a)
under any casualty insurance policy in respect of a covered loss thereunder or
(b) as a result of the taking of any assets of Company or any of its
Subsidiaries by any Person pursuant to the power of eminent domain, condemnation
or otherwise, or pursuant to a sale of any such assets to a purchaser with such
power under threat of such a taking, minus (ii) (a) any actual and reasonable
documented costs incurred by Company or any of its Subsidiaries in connection
with the adjustment or settlement of any claims of Company or such Subsidiary in
respect thereof, and (b) any bona fide direct costs incurred in connection with
any sale of such assets as referred to in clause (i)(b) of this definition,
including income taxes reasonably estimated to be actually payable as a result
of any gain recognized in connection therewith.
"NON-US LENDER" as defined in Section 2.18(c).
"NOTE" means a promissory note in the form of Exhibit B, as it may be
amended, supplemented or otherwise modified from time to time.
"NOTICE" means a Funding Notice, an Issuance Notice, or a
Conversion/Continuation Notice.
"OBLIGATIONS" means, with respect to any Credit Party, obligations of
such Credit Party, whether now existing or hereafter made, incurred or created,
whether absolute or contingent, liquidated or unliquidated, whether due or not
due, and however arising under or in connection herewith and any other Credit
Document and any Hedge Agreement with a Lender Counterparty, including those
arising under successive borrowing transactions hereunder which shall either
continue the Obligations of such Credit Party from time to time or renew them
after they have been satisfied and including interest which, but for the filing
of a petition in bankruptcy with respect to such Credit Party, would have
accrued on any Obligation, whether or not a claim is allowed against such Credit
Party for such interest in the related bankruptcy proceeding.
"OBLIGEE GUARANTOR" as defined in Section 7.7.
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"ORGANIZATIONAL DOCUMENTS" means (i) with respect to any corporation,
its certificate or articles of incorporation, as amended, and its by-laws, as
amended, (ii) with respect to any limited partnership, its certificate of
limited partnership, as amended, and its partnership agreement, as amended,
(iii) with respect to any general partnership, its partnership agreement, as
amended, and (iv) with respect to any limited liability company, its certificate
of formation or articles of organization, as amended, and its operating
agreement, as amended. In the event any term or condition of this Agreement or
any other Credit Document requires any Organizational Document to be certified
by a secretary of state or similar governmental official, the reference to any
such "Organizational Document" shall only be to a document of a type customarily
certified by such governmental official.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code
or Section 302 of ERISA.
"PERMITTED ACQUISITION" means any acquisition, whether by purchase,
merger or otherwise, of all or substantially all of the assets of, all of the
equity Securities of, or a business line or a division of, any Person; provided:
(i) immediately prior to, and after giving effect thereto, no Default
or Event of Default shall have occurred and be continuing or would result
therefrom;
(ii) all transactions in connection therewith shall be consummated in
accordance with all applicable laws and in conformity with all applicable
Governmental Authorizations;
(iii) all of the equity Securities (except for any such Securities in
the nature of directors qualifying shares required pursuant to applicable law)
acquired or otherwise issued by such Person or any newly formed Subsidiary of
Company in connection with such acquisition shall be owned 100% by Company or a
Subsidiary thereof, and Company shall have taken, or caused to be taken, as of
the date such Person becomes a Subsidiary of Company, each of the actions set
forth in Sections 5.9, as applicable;
(iv) either (A) the consideration paid by Company or any of its
Subsidiaries for such acquisition is less than $1,000,000, (B) the aggregate
amount of all acquisitions occurring after the Closing Date , the individual
Cash component of the purchase price of which is greater than $1,000,000 in each
case, which are financed in whole or in part with Indebtedness (including all
Indebtedness incurred, repaid or assumed in connection with all such
acquisitions) and/or Cash on hand, shall not exceed (excluding the amount of
equity Securities used in connection with such acquisitions) an amount equal to
(1) $75,000,000, in the case of acquisitions of any assets, business lines,
divisions or entities which have generated positive Free Cash Flow for the
trailing twelve-month period immediately preceding such acquisition or (2)
$25,000,000, in the case of acquisitions of any assets, business lines,
divisions or entities which have generated negative Free Cash Flow for
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the trailing twelve-month period prior to such acquisition, provided such limit
specified in this clause (2) shall increase to $45,000,000 at such time as
Borrower has Incremental Availability; provided further that, so long as no
event shall have occurred and be continuing or would result from such
acquisition that would result in a Default or Event of Default:
(I) the limit specified in the foregoing clause (1) shall be
increased by an amount equal to (i)(x) the net cash proceeds received
by Company from the issuance after the Closing Date of any Additional
Equity Securities to the extent such proceeds are contributed as common
equity to the Borrower and/or its Subsidiaries multiplied by (y)
one-half less (ii) the amount of additional Capital Expenditures, if
any, made pursuant to the final proviso in Section 6.6(d) or 6.7(e), as
applicable;
(II) the $25,000,000 limit specified in the foregoing clause
(2) shall be increased by an amount equal to (i)(x) the net cash
proceeds received by Company from the issuance after the Closing Date
of any Additional Equity Securities to the extent such proceeds are
contributed as common equity to the Borrower and/or its Subsidiaries
multiplied by (y) one-sixth less (ii) the amount of additional Capital
Expenditures, if any, made pursuant to the final proviso in Section
6.6(d) or 6.7(e), as applicable; and
(III) the $45,000,000 limit specified in the foregoing clause
(2) shall be increased by an amount equal to (i)(x) the net cash
proceeds received by Company from the issuance after the Closing Date
of any Additional Equity Securities to the extent such proceeds are
contributed as common equity to the Borrower and/or its Subsidiaries
multiplied by (y) 0.30 less (ii) the amount of additional Capital
Expenditures, if any, made pursuant to the final proviso in Section
6.6(d) or 6.7(e), as applicable;
or (C) such acquisition is financed wholly with the issuance or sale of equity
Securities of Company or any of its Subsidiaries;
(v) all Persons, assets or divisions acquired shall be in the same
business or lines of business engaged in by Company and/or its Subsidiaries on
the Closing Date and similar or related businesses, or such other lines of
business as may be consented to by Requisite Lenders;
(vi) the principal operations of all Persons, assets or divisions
acquired shall be located only in those 24 "Tier 1" geographic markets specified
in Schedule 1.1 (or substitution "Tier 1" geographic markets reasonably
acceptable to the Co-Lead Arrangers); provided that acquisitions outside such 24
"Tier 1" geographic markets shall be permitted if such principal operations,
assets or divisions acquired are related to Company's core CLEC switched access
business as conducted as of the Closing Date or similar or related businesses;
and
(vii) Company and its Subsidiaries shall be in compliance with,
immediately before and after giving pro forma effect to any acquisition,
Sections 6.6 or 6.7, as applicable, and Company shall
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have delivered to Administrative Agent a certificate in the form of a Compliance
Certificate evidencing such compliance with such Sections.
"PERMITTED EQUIPMENT FINANCING" means one or more purchase money,
vendor or similar equipment financing facilities (i) in an aggregate principal
amount not in excess of $50,000,000 outstanding at any time, (ii) pursuant to
which Company or any of its Subsidiaries may be advanced funds principally to
purchase or lease network equipment or services from the provider of such
financing or its affiliates, (iii) which may be secured only by the assets being
financed thereby and (iv) the form and substance of which are reasonably
satisfactory to the Co-Lead Arrangers and Requisite Lenders.
"PERMITTED LIENS" means each of the Liens permitted pursuant to Section
6.2.
"PERSON" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments (whether federal,
state or local, domestic or foreign, and including political subdivisions
thereof) and agencies or other administrative or regulatory bodies thereof.
"PLAN OF CORRECTION" as defined in Section 4.20.
"PLEDGE AND SECURITY AGREEMENT" means the Pledge and Security Agreement
in the form of Exhibit I, as it may be amended, supplemented or otherwise
modified from time to time.
"PRE-OVERHEAD EBITDA" means, for any period, an amount determined for a
Geographic Market equal to (i) the sum of the amounts for such period of (a) the
net income of such market on a consolidated basis determined in accordance with
GAAP, (b) total interest expense (including that portion attributable to Capital
Leases in accordance with GAAP and capitalized interest) with respect to all
outstanding Indebtedness of such market, including all commissions, discounts
and other fees and charges owed with respect to letters of credit and bankers'
acceptance financing and net costs under Interest Rate Agreements, (c)
provisions for franchise taxes and taxes of such market based on income for such
market, (d) total depreciation expense of such market, (e) total amortization
expense of such market, and (f) other non-cash items reducing the net income of
such market (including management ownership allocation charge and non-cash
deferred compensation), minus the sum of (ii) (a) any net extraordinary gains or
net non-cash extraordinary losses of such Person for such market and (b) all
other non-cash items increasing the net income of such market; all of the
foregoing as calculated monthly, on a basis which excludes all amounts
attributable to corporate overhead expense of Company or any of its Subsidiaries
(other than the Subsidiary which operates in the subject Geographic Market to
the extent such overhead is allocable to such Geographic Market), and in a
manner consistent with the calculations made and delivered pursuant to Section
3.1(i) on the Closing Date (it being understood that all corporate overhead
expense is allocated as
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of the Closing Date by Company to Allegiance Service Corporation, and such
practice will continue in the same manner after the Closing Date).
"PRIME RATE" means the rate that The Toronto-Dominion Bank, New York
branch, announces from time to time as its prime lending rate, as in effect from
time to time. The Prime Rate is a reference rate and does not necessarily
represent the lowest or best rate actually charged to any customer. TD or any
other Lender may make commercial loans or other loans at rates of interest at,
above or below the Prime Rate.
"PRINCIPAL OFFICE" means the Administrative Agent's "Principal Office"
as set forth on Appendix B, or such other office as such Person may from time to
time designate in writing to Borrower, Administrative Agent and each Lender.
"PROJECTIONS" as defined in Section 4.5.
"PRO FORMA CONSOLIDATED DEBT SERVICE" means, as of any day of
determination, the sum, without duplication, of (i) Consolidated Cash Interest
Expense and (ii) all scheduled amortization (including any payment or prepayment
of principal of, premium, if any, or interest on, or redemption, purchase,
retirement, defeasance (including in-substance or legal defeasance), sinking
fund or similar payment) in respect of Indebtedness; in each case payable by
Company and its Subsidiaries during the next four consecutive Fiscal Quarters.
"PRO FORMA DEBT SERVICE COVERAGE RATIO" means the ratio as of the last
day of any Fiscal Quarter of (i) Annualized Consolidated EBITDA for any period
then ended to (ii) Pro Forma Consolidated Debt Service for the next four-Fiscal
Quarter period, in each case as set forth in the most recent Compliance
Certificate delivered by Borrower to Administrative Agent pursuant to Section
5.1(d).
"PRO RATA SHARE" means with respect to all payments, computations and
other matters relating to the Commitment or Loans of any Lender, the percentage
obtained by dividing (i) the Exposure of that Lender by (ii) the aggregate
Exposure of all Lenders. The initial Pro Rata Share of each Lender party hereto
on the Closing Date is as set forth on Appendix A.
"REAL ESTATE ASSET" means, at any time of determination, any interest
then owned by any Credit Party in any real property (including Leasehold
Property).
"RECORD DOCUMENT" means, with respect to any Leasehold Property, (i)
the lease evidencing such Leasehold Property or a memorandum thereof, executed
and acknowledged by the owner of the affected real property, as lessor, or (ii)
if such Leasehold Property was acquired or subleased from the holder of a
Recorded Leasehold Interest, the applicable assignment or sublease document,
executed and acknowledged by such holder, in each case in form sufficient to
give such constructive notice upon recordation and otherwise in form reasonably
satisfactory to Administrative Agent.
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"RECORDED LEASEHOLD INTEREST" means a Leasehold Property with respect
to which a Record Document has been recorded in all places necessary or
desirable, in Administrative Agent's reasonable judgment, to give constructive
notice of such Leasehold Property to third-party purchasers and encumbrancers of
the affected real property.
"REGISTER" as defined in Section 2.4(b).
"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"RELATED FUND" means, with respect to any Lender that is an investment
fund, any other investment fund that invests in commercial loans and that is
managed or advised by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
"RELEASE" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of any Hazardous Material into the indoor or outdoor
environment (including the abandonment or disposal of any barrels, containers or
other closed receptacles containing any Hazardous Material), including the
movement of any Hazardous Material through the air, soil, surface water or
groundwater.
"REPLACEMENT LENDER" as defined in Section 2.21.
"REQUISITE LENDERS" means one or more Lenders having or holding
Exposure representing more than 50% of the aggregate Exposure of all Lenders.
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
of Company now or hereafter outstanding, except a dividend payable solely in
shares of that class of stock to the holders of that class, (ii) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any class of stock of Company now or
hereafter outstanding, (iii) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of stock of Company now or hereafter outstanding, and (iv)
any payment or prepayment of principal of, premium, if any, or interest on, or
redemption, purchase, retirement, defeasance (including in-substance or legal
defeasance), sinking fund or similar payment with respect to any Subordinated
Indebtedness or Indebtedness outstanding under the Existing Indentures; provided
that the foregoing will not prohibit payments in respect of repurchases of stock
from former directors, officers, employees, or from consultants, of Company in
an aggregate amount not to exceed $2,500,000.
"REVENUES" means, for any Fiscal Quarter, the gross revenues of Company
and its Subsidiaries on a consolidated basis for such period taken as a single
accounting period determined in conformity with GAAP.
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"S&P" means Standard & Poor's Ratings Group, a division of The McGraw
Hill Corporation.
"SECURITIES" means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
"SECURITIES ACT" means the Securities Act of 1933, as amended from time
to time, and any successor statute.
"SENIOR LEVERAGE RATIO" means the ratio as of the last day of any
Fiscal Quarter of (i) Senior Secured Debt as of such day to (ii) Annualized
Consolidated EBITDA, in each case as set forth in the most recent Compliance
Certificate delivered by Borrower to Administrative Agent pursuant to Section
5.1(d).
"SENIOR SECURED DEBT" means an amount equal to the sum of Total
Utilization of Commitments and the outstanding principal amount of all Permitted
Equipment Financings, all secured trade payables and all Capital Leases of, in
each case, Company and its Subsidiaries; provided that "SENIOR SECURED DEBT"
does not include Dark Fiber Leases.
"SOLVENT" means, with respect to any Person, that as of the date of
determination both (i) (a) the then fair saleable value of the property of such
Person is (1) greater than the total amount of liabilities (including contingent
liabilities) of such Person and (2) not less than the amount that will be
required to pay the probable liabilities on such Person's then existing debts as
they become absolute and matured considering all financing alternatives and
potential asset sales reasonably available to such Person; (b) such Person's
capital is not unreasonably small in relation to its business or any
contemplated or undertaken transaction; and (c) such Person does not intend to
incur, or believe (nor should it reasonably believe) that it will incur, debts
beyond its ability to pay such debts as they become due; and (ii) such Person is
"solvent" within the meaning given that term and similar terms under applicable
laws relating to fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.
"STAGE 1" shall mean the period from the Closing Date to June 30, 2001.
"STAGE 2" shall mean the period from July 1, 2001 to the Maturity Date.
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<PAGE> 35
"SUBORDINATED INDEBTEDNESS" means Indebtedness outstanding under the
Existing Indentures and Indebtedness incurred by Company (i) which is unsecured,
(ii) which is structurally subordinated to the payment in full in cash of all
Obligations, (iii) which shall not mature or amortize until at least six months
beyond the Maturity Date, (iv) which does not require Cash interest payments to
be made during Stage 1 (provided that Cash interest payable from funds escrowed
for such purpose by Company shall be permitted) and (v) the provisions of the
definitive documentation of which (A) shall not contain covenants more
restrictive than those contained herein, (B) shall not provide for any mandatory
prepayments or redemptions at any time where similar payments are not required
hereunder and (C) shall otherwise be reasonably satisfactory to Administrative
Agent.
"SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, limited liability company, association, joint venture or other
business entity of which more than 50% of the total voting power of shares of
stock or other ownership interests entitled (without regard to the occurrence of
any contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar functions)
having the power to direct or cause the direction of the management and policies
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof, and which is also a "Restricted Subsidiary" as defined in the Existing
Indentures; provided, in determining the percentage of ownership interests of
any Person controlled by another Person, no ownership interest in the nature of
a "qualifying share" of the former Person shall be deemed to be outstanding.
"SUPPLEMENTAL COLLATERAL AGENT" as defined in Section 9.8(c).
"SYNDICATION AGENT" as defined in the preamble hereto.
"SYSTEMS" means any of the hardware, firmware or software systems
associated with information processing and delivery, operations or services
(e.g., security and alarms, elevators, communications, and HVAC) operated by,
provided to or otherwise reasonably necessary to the business or operations of
Company and its Subsidiaries.
"TAX" means any present or future tax, levy, impost, duty, charge, fee,
deduction or withholding of any nature and whatever called, by whomsoever, on
whomsoever and wherever imposed, levied, collected, withheld or assessed;
provided, "Tax on the overall net income" of a Person shall be construed as a
reference to a tax imposed by the jurisdiction in which that Person is organized
or in which that Person's principal office (and/or, in the case of a Lender, its
lending office) is located or in which that Person (and/or, in the case of a
Lender, its lending office) is deemed to be doing business on all or part of the
net income, profits or gains (whether worldwide, or only insofar as such income,
profits or gains are considered to arise in or to relate to a particular
jurisdiction, or otherwise) of that Person (and/or, in the case of a Lender, its
lending office).
"TD" means Toronto Dominion (Texas), Inc.
29
<PAGE> 36
"TDSI" means TD Securities (USA) Inc.
"TERMINATED LENDER" as defined in Section 2.21.
"TOTAL CAPITALIZATION" means the sum of (a) Consolidated Total Debt,
and (b) paid-in-equity capital (including preferred stock but excluding
additional equity issued as pay-in-kind dividends on issued and outstanding
equity securities) and excluding any accumulated deficits resulting from
operations.
"TOTAL LEVERAGE RATIO" means the ratio as of the last day of any Fiscal
Quarter of (a) Consolidated Total Debt to (b) Annualized Consolidated EBITDA; in
each case as set forth in the most recent Compliance Certificate delivered by
Company to Administrative Agent pursuant to Section 5.1(d).
"TOTAL UTILIZATION OF COMMITMENTS" means, as at any date of
determination, the sum of the aggregate principal amount of all outstanding
Loans.
"TRANSACTION COSTS" means the fees, costs and expenses payable by
Borrower on or before the Closing Date in connection with the transactions
contemplated by the Credit Documents.
"TYPE OF LOAN" means a Base Rate Loan or a Eurodollar Rate Loan.
"UCC" means the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect in any applicable jurisdiction.
"YEAR 2000 ISSUES" means limitations in the capacity or readiness to
handle date information for the Year 1999 or years beginning January 1, 2000 of
any of the Systems.
1.2. ACCOUNTING TERMS. Except as otherwise expressly provided herein,
all accounting terms not otherwise defined herein shall have the meanings
assigned to them in conformity with GAAP. Financial statements and other
information required to be delivered by Borrower to Lenders pursuant to Section
5.1(a), 5.1(b) and 5.1(c) shall be prepared in accordance with GAAP as in effect
at the time of such preparation (and delivered together with the reconciliation
statements provided for in Section 5.1(e), if applicable). Subject to the
foregoing, calculations in connection with the definitions, covenants and other
provisions hereof shall utilize accounting principles and policies in conformity
with those used to prepare the Historical Financial statements.
1.3. INTERPRETATION, ETC. Any of the terms defined herein may, unless
the context otherwise requires, be used in the singular or the plural, depending
on the reference. References herein to any Section, Appendix, Schedule or
Exhibit shall be to a Section, an Appendix, a Schedule or an Exhibit, as the
case may be, hereof unless otherwise specifically provided. The use herein of
the word "include" or "including", when following any general statement, term or
matter, shall not be construed to limit such statement, term or matter to the
specific items or matters set forth
30
<PAGE> 37
immediately following such word or to similar items or matters, whether or not
nonlimiting language (such as "without limitation" or "but not limited to" or
words of similar import) is used with reference thereto, but rather shall be
deemed to refer to all other items or matters that fall within the broadest
possible scope of such general statement, term or matter.
SECTION 2. LOANS
2.1. LOANS
(a) Loans.
(i) During the Commitment Period, subject to the terms and
conditions hereof, each Lender agrees to make Loans to Borrower in the
aggregate amount up to but not exceeding such Lender's Commitment;
provided, after giving effect to the making of any Loans in no event
shall the Total Utilization of Commitments exceed the lesser of the (A)
Commitments then in effect and (B) Loan Availability. Amounts borrowed
pursuant to this Section 2.1(a) may be repaid and reborrowed during the
Commitment Period. Each Lender's Commitment shall expire on the
Commitment Termination Date and all Loans and all other amounts owed
hereunder with respect to the Loans and the Commitments shall be paid
in full no later than such date.
(ii) Loans shall be made in a minimum amount of $5,000,000 and
integral multiples of $1,000,000 in excess thereof.
(iii) Whenever Borrower desires that Lenders make Loans,
Borrower shall deliver to Administrative Agent a fully executed and
delivered Funding Notice no later than 10:00 a.m. (New York City time)
at least three Business Days in advance of the proposed Credit Date in
the case of a Eurodollar Rate Loan, and at least one Business Day in
advance of the proposed Credit Date in the case of a Loan that is a
Base Rate Loan. Except as otherwise provided herein, a Funding Notice
for a Loan that is a Eurodollar Rate Loan shall be irrevocable on and
after the related Interest Rate Determination Date, and Borrower shall
be bound to make a borrowing in accordance therewith.
(iv) Notice of receipt of each Funding Notice in respect of
Loans, together with the amount of each Lender's Pro Rata Share
thereof, if any, together with the applicable interest rate, shall be
provided by Administrative Agent to each applicable Lender by
telefacsimile with reasonable promptness, but not later than 2:00 p.m.
(New York City time) on the same day as Administrative Agent's receipt
of such Notice from Borrower.
(v) Each Lender shall make the amount of its Loan available to
Administrative Agent not later than 12:00 Noon (New York City time) on
the applicable Credit Date by wire transfer of same day funds in
Dollars, at the Administrative Agent's Principal Office. Except as
provided herein, upon satisfaction or waiver of the conditions
precedent specified herein,
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<PAGE> 38
Administrative Agent shall make the proceeds of such Loans available to
Borrower on the applicable Credit Date by causing an amount of same day
funds in Dollars equal to the proceeds of all such Loans received by
Administrative Agent from Lenders to be credited to the account of
Borrower at the Administrative Agent's Principal Office or such other
account as may be designated in writing to Administrative Agent by
Borrower.
2.2. PRO RATA SHARES; AVAILABILITY OF FUNDS. (a) All Loans shall be
made by Lenders simultaneously and proportionately to their respective Pro Rata
Shares, it being understood that no Lender shall be responsible for any default
by any other Lender in such other Lender's obligation to make a Loan requested
hereunder nor shall the Commitment of any Lender be increased or decreased as a
result of a default by any other Lender in such other Lender's obligation to
make a Loan requested hereunder.
(b) Unless Administrative Agent shall have been notified by any Lender
prior to the applicable Credit Date that such Lender does not intend to make
available to Administrative Agent the amount of such Lender's Loan requested on
such Credit Date, Administrative Agent may assume that such Lender has made such
amount available to Administrative Agent on such Credit Date and Administrative
Agent may, in its sole discretion, but shall not be obligated to, make available
to Borrower corresponding amount on such Credit Date. If such corresponding
amount is not in fact made available to Administrative Agent by such Lender,
Administrative Agent shall be entitled to recover such corresponding amount on
demand from such Lender together with interest thereon, for each day from such
Credit Date until the date such amount is paid to Administrative Agent, at the
customary rate set by Administrative Agent for the correction of errors among
banks for three Business Days and thereafter at the Base Rate. If such Lender
does not pay such corresponding amount forthwith upon Administrative Agent's
demand therefor, Administrative Agent shall promptly notify Borrower and
Borrower shall immediately pay such corresponding amount to Administrative Agent
together with interest thereon, for each day from such Credit Date until the
date such amount is paid to Administrative Agent, at the rate payable hereunder
for Base Rate Loans for such Type of Loans. Nothing in this Section 2.2(b) shall
be deemed to relieve any Lender from its obligation to fulfill its Commitments
hereunder or to prejudice any rights that Borrower may have against any Lender
as a result of any default by such Lender hereunder.
2.3. USE OF PROCEEDS. The proceeds of the Loans shall be used by
Borrower and its Subsidiaries to provide purchase money financing for the cost
of design, development, acquisition, construction, installation, improvement,
transportation or integration of equipment, inventory, and network assets. No
portion of the proceeds of any Loan shall be used by Company or any of its
Subsidiaries in any manner that might cause such Loan or the application of such
proceeds to violate Regulation T, Regulation U or Regulation X of the Board of
Governors of the Federal Reserve System or any other regulation thereof or to
violate the Exchange Act, in each case as in effect on the date or dates of such
Loan and such use of proceeds.
2.4. EVIDENCE OF DEBT; REGISTER; LENDERS' BOOKS AND RECORDS; NOTES. (a)
Each Lender shall maintain on its internal records an account or accounts the
Loans to Borrower by such Lender,
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<PAGE> 39
including the amounts of the Loans made by it and each repayment and prepayment
in respect thereof. Any such recordation shall be conclusive and binding on
Borrower, absent manifest error; provided, failure to make any such recordation,
or any error in such recordation, shall not affect any Lender's Commitments or
Borrower's Obligations in respect of any applicable Loans; and provided further,
in the event of any inconsistency between the Register and any Lender's records,
the recordations in the Register shall govern.
(b) Administrative Agent shall maintain at its Principal Office a
register for the recordation of the names and addresses of Lenders and the
Commitments and Loans of each Lender from time to time (the "REGISTER"). The
Register shall be available for inspection by Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
Administrative Agent shall record in the Register the Commitments and the Loans,
and each repayment or prepayment in respect of the principal amount of the
Loans, and any such recordation shall be conclusive and binding on Borrower and
each Lender, absent manifest error; provided, failure to make any such
recordation, or any error in such recordation, shall not affect any Lender's
Commitments or Borrower's Obligations in respect of any Loan. Borrower hereby
designates TD to serve as Borrower's agent solely for purposes of maintaining
the Register as provided in this Section 2.4, and Borrower's hereby agrees that,
to the extent TD serves in such capacity, TD and its officers, directors,
employees, agents and affiliates shall constitute "Indemnitees".
(c) If so requested by any Lender by written notice to Borrower (with a
copy to Administrative Agent) at least two Business Days prior to the Closing
Date, or at any time thereafter, Borrower shall execute and deliver to such
Lender (and/or, if applicable and if so specified in such notice, to any Person
who is an assignee of such Lender pursuant to Section 10.6) on the Closing Date
(or, if such notice is delivered after the Closing Date, promptly after
Borrower's receipt of such notice) a Note or Notes to evidence such Lender's
Loans.
2.5. INTEREST PAYMENTS. (a) Except as otherwise set forth herein, each
Loan shall bear interest on the unpaid principal amount thereof from the date
made through maturity (whether by acceleration or otherwise) as follows:
(i) if a Base Rate Loan, at the Base Rate plus
the Applicable Margin; or
(ii) if a Eurodollar Rate Loan, at the Adjusted
Eurodollar Rate plus the Applicable Margin.
(b) The basis for determining the rate of interest with respect to any
Loan and the Interest Period with respect to any Eurodollar Rate Loan, shall be
selected by Borrower and notified to Administrative Agent and Lenders pursuant
to the applicable Funding Notice or Conversion/Continuation Notice, as the case
may be; provided, no Eurodollar Rate Loan with an Interest Period in excess of
one month shall be available until the date that Syndication Agent notifies
Borrower that the primary syndication of the Loans and Commitments has been
completed, as determined by Syndication Agent, which date shall not in any event
be more than 90 days after the
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<PAGE> 40
Closing Date. If on any day a Loan is outstanding with respect to which a
Funding Notice or Conversion/Continuation Notice has not been delivered to
Administrative Agent in accordance with the terms hereof specifying the
applicable basis for determining the rate of interest, then for that day such
Loan shall be a Base Rate Loan.
(c) In connection with Eurodollar Rate Loans there shall be no more
than eight (8) Interest Periods outstanding at any time. In the event Borrower
fails to specify an Interest Period for
any Eurodollar Rate Loan in the applicable Funding Notice or
Conversion/Continuation Notice, Borrower shall be deemed to have selected an
Interest Period of one month. A soon as practicable after 10:00 A.M. (New York
City time) on each Interest Rate Determination Date, Administrative Agent shall
determine (which determination shall, absent manifest error, be final,
conclusive and binding upon all parties) the interest rate that shall apply to
the Eurodollar Rate Loans for which an interest rate is then being determined
for the applicable Interest Period and shall promptly give notice thereof (in
writing or by telephone confirmed in writing) to Borrower and each Lender.
(d) Interest payable pursuant to Section 2.5(a) shall be computed (i)
in the case of Base Rate Loans on the basis of a 365-day or 366-day year, as the
case may be, and (ii) in the case of Eurodollar Rate Loans, on the basis of a
360-day year, in each case for the actual number of days elapsed in the period
during which it accrues. In computing interest on any Loan, the date of the
making of such Loan or the first day of an Interest Period applicable to such
Loan or, with respect to a Base Rate Loan being converted from a Eurodollar Rate
Loan, the date of conversion of such Eurodollar Rate Loan to such Base Rate
Loan, as the case may be, shall be included, and the date of payment of such
Loan or the expiration date of an Interest Period applicable to such Loan or,
with respect to a Base Rate Loan being converted to a Eurodollar Rate Loan, the
date of conversion of such Base Rate Loan to such Eurodollar Rate Loan, as the
case may be, shall be excluded; provided, if a Loan is repaid on the same day on
which it is made, one day's interest shall be paid on that Loan.
(e) Except as otherwise set forth herein, interest on each Loan shall
be payable in arrears on and to (i) each Interest Payment Date applicable to
that Loan; (ii) any prepayment of that Loan, whether voluntary or mandatory, to
the extent accrued on the amount being prepaid; and (iii) at maturity, including
final maturity.
2.6. CONVERSION/CONTINUATION. (a) So long as no Default or Event of
Default shall have occurred and then be continuing, Borrower shall have the
option:
(i) to convert at any time all or any part of any Loan equal
to $5,000,000 and integral multiples of $1,000,000 in excess of that
amount from one Type of Loan to another Type of Loan; provided, a
Eurodollar Rate Loan may only be converted into a Base Rate Loan on the
expiration of the Interest Period applicable to such Eurodollar Rate
Loan if Borrower shall pay all amounts due under Section 2.16 in
connection with any such conversion; or
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<PAGE> 41
(ii) upon the expiration of any Interest Period applicable to
any Eurodollar Rate Loan, to continue all or any portion of such Loan
equal to $5,000,000 and integral multiples of $1,000,000 in excess of
that amount as a Eurodollar Rate Loan.
(b) The Borrower shall deliver a Conversion/Continuation Notice to
Administrative Agent no later than 10:00 A.M. (New York City time) at least one
Business Day in advance of the proposed conversion date (in the case of a
conversion to a Base Rate Loan) and at least three Business Days in advance of
the proposed conversion/continuation date (in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan). Except as otherwise provided herein, a
Conversion/Continuation Notice for conversion to, or continuation of, any
Eurodollar Rate Loans (or telephonic notice in lieu thereof) shall be
irrevocable on and after the related Interest Rate Determination Date, and
Borrower shall be bound to effect a conversion or continuation in accordance
therewith.
2.7. DEFAULT INTEREST. Upon the occurrence and during the continuance
of an Event of Default of the type specified in Section 8.1(a), the principal
amount of all Loans, and, to the extent permitted by applicable law, any
interest payments on the Loans or any fees or other amounts owed hereunder not
paid when due, in each case whether at stated maturity, by notice of prepayment,
by acceleration or otherwise, shall thereafter bear interest (including
post-petition interest in any proceeding under the Bankruptcy Code or other
applicable bankruptcy laws) payable on demand at a rate that is 2% per annum in
excess of the interest rate otherwise payable hereunder with respect to the
applicable Loans (or, in the case of any such fees and other amounts, at a rate
which is 2% per annum in excess of the interest rate otherwise payable hereunder
for Base Rate Loans); provided, in the case of Eurodollar Rate Loans, upon the
expiration of the Interest Period in effect at the time any such increase in
interest rate is effective such Eurodollar Rate Loans shall thereupon become
Base Rate Loans and shall thereafter bear interest payable upon demand at a rate
which is 2% per annum in excess of the interest rate otherwise payable hereunder
for Base Rate Loans. Payment or acceptance of the increased rates of interest
provided for in this Section 2.7 is not a permitted alternative to timely
payment and shall not constitute a waiver of any Event of Default or otherwise
prejudice or limit any rights or remedies of Administrative Agent or any Lender.
2.8. FEES. (a) Borrower agrees to pay to Lenders through Administrative
Agent a commitment fee equal to the average daily unused Commitment of such
Lender during the preceding quarter (or other period commencing with the date
upon which such Lender's Commitment was accepted) multiplied by the Applicable
Commitment Fee Percentage. All fees referred to in this Section 2.8(a) shall be
paid to Administrative Agent at its Principal Office and upon receipt,
Administrative Agent shall promptly distribute to each Lender its Pro Rata Share
thereof.
(b) All fees referred to in Section 2.8(a) shall be calculated on the
basis of a 360-day year and the actual number of days elapsed and shall be
payable quarterly in arrears on March 15, June 15, September 15 and December 15
of each year during the Commitment Period, commencing on the first such date to
occur after the Closing Date, and on the Commitment Termination Date.
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(c) In addition to the foregoing fees, Borrower agrees to pay to Agents
such other fees in the amounts and at the times separately agreed upon by
Borrower and such Agents thereby.
2.9. SCHEDULED PAYMENTS/REDUCTIONS.
(a) The total initial Commitments hereunder shall be permanently
reduced in the aggregate annual percentages set forth below in consecutive
quarterly installments (each, a "REDUCTION") on March 15, June 15, September 15
and December 15 of each year (each, a "REDUCTION DATE") occurring in each of the
Fiscal Years set forth below, commencing 2003, with 25% of each annual amount
being applied in reducing the Commitments in consecutive quarterly installments
(each, an "INSTALLMENT") on the last day of each Fiscal Quarter (each, an
"INSTALLMENT DATE"):
<TABLE>
<CAPTION>
================================================================================
Fiscal Year Commitment Reductions
- --------------------------------------------------------------------------------
<S> <C>
2003 20%
- --------------------------------------------------------------------------------
2004 30%
- --------------------------------------------------------------------------------
2005 50%
================================================================================
</TABLE>
Notwithstanding the foregoing, such Reductions shall be reduced in connection
with any voluntary or mandatory reductions of the Commitments in accordance with
Sections 2.10 and 2.11.
2.10. VOLUNTARY PREPAYMENTS/REDUCTIONS.
(a) Prepayments.
(i) Any time and from time to time Borrower may prepay any
Loans on any Business Day in whole or in part without premium (but
subject to Section 2.16) in any aggregate minimum amount of $5,000,000
and integral multiples of $1,000,000 in excess of that amount.
(ii) All such prepayments shall be made:
(1) upon not less than one Business Day's prior
written or telephonic notice, in the case of Base Rate Loans
and
(2) upon not less than three Business Days' prior
written or telephonic notice, in the case of Eurodollar Rate
Loans.
in each case given to Administrative Agent by 12:00 noon (New York City
time) on the date required and, if given by telephone, promptly
confirmed in writing to Administrative Agent (and Administrative Agent
will promptly transmit such telephonic or original notice by
telefacsimile or telephone to each Lender). Upon the giving of any such
notice, the principal
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<PAGE> 43
amount of the Loans specified in such notice shall become due and
payable on the prepayment date specified therein. Any such prepayment
made pursuant to this Section 2.10(a) shall not reduce the Commitments
unless Borrower has so requested in accordance with Section 2.10(b).
(b) Reductions.
(i) Borrower may, upon not less than three Business Days'
prior written or telephonic notice confirmed in writing to
Administrative Agent (which original written or telephonic notice
Administrative Agent will promptly transmit by telefacsimile or
telephone to each applicable Lender), at any time and from time to time
terminate in whole or permanently reduce in part, without premium or
penalty, the Commitments in an amount up to the amount by which the
Commitments exceed the Total Utilization of Commitments at the time of
such proposed termination or reduction plus the amount that Total
Utilization of Commitments is prepaid pursuant to clause (a) above;
provided, any such partial reduction of the Commitments shall be in an
aggregate minimum amount of $5,000,000 and integral multiples of
$1,000,000 in excess of that amount.
(ii) Borrower's notice to Administrative Agent shall designate
the date (which shall be a Business Day) of such termination or
reduction and the amount of any partial reduction, and such termination
or reduction of the Commitments shall be effective on the date
specified in Borrower's notice and shall reduce the Commitment of each
Lender proportionately to its Pro Rata Share thereof.
2.11. MANDATORY PREPAYMENTS/REDUCTIONS. (a) No later than the third
Business Day following the date of receipt by Company or any of its Subsidiaries
of any Net Asset Sale Proceeds, Borrower shall prepay the Loans and the
Commitments shall be permanently reduced in an aggregate amount equal to such
Net Asset Sale Proceeds; provided, so long as no Default or Event of Default
shall have occurred and be continuing, Company shall have the option, directly
or through one or more of its Subsidiaries, to invest such Net Asset Sale
Proceeds within two hundred seventy (270) days of receipt thereof in long term
productive assets of the general type used in the business of Company and its
Subsidiaries; provided further, pending any such investment all such Net Asset
Sale Proceeds shall be applied to prepay outstanding Loans (without a reduction
in Commitments).
(b) No later than the third Business Day following the date of receipt
by Company or any of its Subsidiaries, or Administrative Agent as loss payee, of
any Net Insurance/Condemnation Proceeds, Borrower shall prepay the Loans and the
Commitments shall be permanently reduced in an aggregate amount equal to such
Net Insurance/Condemnation Proceeds; provided, so long as no Default or Event of
Default shall have occurred and be continuing, Company shall have the option,
directly or through one or more of its Subsidiaries to invest such Net
Insurance/Condemnation Proceeds within two hundred seventy (270) days of receipt
thereof in long term productive assets of the general type used in the business
of Company and its Subsidiaries, which investment may include the repair,
restoration or replacement of the applicable assets of Company or its
Subsidiaries;
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<PAGE> 44
provided, further, pending any such investment all such Net
Insurance/Condemnation Proceeds, as the case may be, shall be applied to prepay
outstanding Loans (without a reduction in Commitments).
(c) In the event that there shall be Consolidated Excess Cash Flow for
any Fiscal Year (commencing with Fiscal Year 2003), Borrower shall, no later
than ninety (90) days after the end of such Fiscal Year, prepay the Loans and
the Commitments shall be permanently reduced in an aggregate amount equal to 75%
of such Consolidated Excess Cash Flow.
(d) Borrower shall from time to time prepay the Loans to the extent
necessary so that the Total Utilization of Commitments shall not at any time
exceed the lesser of the (i) Commitments then in effect and (ii) Loan
Availability.
(e) If at any time after the Initial Certified Conditions have been
previously satisfied but are no longer satisfied, Loan Availability shall be
immediately reduced to zero and all outstanding Loans shall be immediately
repaid, and if at any time after the Incremental Certified Conditions have been
previously satisfied but are no longer satisfied, outstanding Loans shall be
immediately repaid to the extent necessary such that Total Utilization of
Commitments shall not exceed Loan Availability.
(f) On the date of receipt by Company or any of its Subsidiaries of any
Cash proceeds from the incurrence of Subordinated Indebtedness (other than with
respect to any such Indebtedness permitted to be incurred pursuant to Section
6.1(c)(i)), the Commitments shall be permanently reduced in an aggregate amount
equal to 100% of such proceeds, net of underwriting discounts and commissions
and other reasonable costs and expenses associated therewith, including
reasonable legal fees and expenses.
(g) Concurrently with any prepayment of the Loans and/or reduction of
the Commitments pursuant to Sections 2.11(a) through 2.11(f), Borrower shall
deliver to Administrative Agent a certificate of an Authorized Officer
demonstrating the calculation of the amount of the applicable net proceeds or
Consolidated Excess Cash Flow, as the case may be. In the event that Borrower
shall subsequently determine that the actual amount received exceeded the amount
set forth in such certificate, Borrower shall promptly make an additional
prepayment of the Loans and/or the Commitments shall be permanently reduced) in
an amount equal to such excess, and Borrower shall concurrently therewith
deliver to Administrative Agent a certificate of an Authorized Officer
demonstrating the derivation such excess.
2.12. APPLICATION OF PREPAYMENTS/REDUCTIONS. Any prepayment of Loans
shall be applied first to Base Rate Loans to the full extent thereof before
application to Eurodollar Rate Loans, in each case in a manner which minimizes
the amount of any payments required to be made by Borrower pursuant to Section
2.16(c).
2.13. ALLOCATION OF CERTAIN PAYMENTS AND PROCEEDS. If an Event of
Default shall have occurred and not otherwise be waived, and the maturity of the
Obligations shall have been
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accelerated pursuant to Section 8.1, all payments or proceeds received by Agents
hereunder in respect of any of the Obligations, shall be applied by Agents in
the following order:
first, amounts due to the Agents pursuant to Section 10.2;
second, amounts due to Lenders, if any, pursuant to Sections
2.16, 2.17 or 2.18, to be applied for the ratable benefit of Lenders
without distinction or preference as among them;
third, amounts due to Lenders pursuant to Sections 2.8 and
10.2, to be applied for the ratable benefit of Lenders without
distinction or preference as among them;
fourth, amounts due to Agents pursuant to Section 2.8, to be
applied in accordance therewith;
fifth, payments of interest on Loans, without distinction or
preference as among them;
sixth, payments of principal on Loans, and all Obligations
then payable to any Lender Counterparty pursuant to a Hedge Agreement
permitted hereby, to be applied for the ratable benefit of Lenders and
such Lender Counterparties, without distinction or preference as among
them;
seventh, amounts due to Indemnitees pursuant to Section 10.3,
to be applied for the ratable benefit thereof;
eighth, payments of all other Obligations due under any of the
Credit Documents, if any, to be applied for the ratable benefit of
Lenders and Agents; and
ninth, any surplus remaining after application as provided for
herein, to Borrower or as otherwise may be required by applicable law.
2.14. GENERAL PROVISIONS REGARDING PAYMENTS. (a) All payments by
Borrower of principal, interest, fees and other Obligations shall be made in
Dollars in same day funds, without defense, setoff or counterclaim, free of any
restriction or condition, and delivered to Administrative Agent not later than
12:00 Noon (New York City time) on the date due at the Administrative Agent's
Principal Office for the account of Lenders; funds received by Administrative
Agent after that time on such due date shall be deemed to have been paid by
Borrower on the next succeeding Business Day.
(b) All payments in respect of the principal amount of any Loan shall
include payment of accrued interest on the principal amount being repaid or
prepaid, and all such payments (and, in any event, any payments in respect of
any Loan on a date when interest is due and payable with respect to such Loan)
shall be applied to the payment of interest before application to principal.
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(c) Administrative Agent shall promptly distribute to each Lender at
such address as such Lender shall indicate in writing, such Lender's applicable
Pro Rata Share of all payments and prepayments of principal and interest due
hereunder, together with all other amounts due thereto, including, without
limitation, all fees payable with respect thereto, to the extent received by
Administrative Agent.
(d) Notwithstanding the foregoing provisions hereof, if any
Conversion/Continuation Notice is withdrawn as to any Affected Lender or if any
Affected Lender makes Base Rate Loans in lieu of its Pro Rata Share of any
Eurodollar Rate Loans, Administrative Agent shall give effect thereto in
apportioning payments received thereafter.
(e) Subject to the provisos set forth in the definition of "INTEREST
PERIOD", whenever any payment to be made hereunder shall be stated to be due on
a day that is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest hereunder or of the Commitment fees
hereunder, as the case may be.
(f) Borrower hereby authorizes Administrative Agent to charge
Borrower's or Company's accounts with Administrative Agent in order to cause
timely payment to be made to Administrative Agent of all principal, interest,
fees and expenses due hereunder (subject to sufficient funds being available in
its accounts for that purpose).
(g) Administrative Agent shall deem any payment by or on behalf of
Borrower hereunder that is not made in same day funds prior to 12:00 noon (New
York City time) on or before the due date to be a non-conforming payment. Any
such payment shall not be deemed to have been received by Administrative Agent
until the later of (i) the time such funds become available funds, and (ii) the
applicable next Business Day. Administrative Agent shall give prompt telephonic
notice to Borrower and each applicable Lender (confirmed in writing) if any
payment is non-conforming. Any non-conforming payment may constitute or become a
Default or Event of Default in accordance with the terms of Section 8.1(a).
Interest shall continue to accrue on any principal as to which a non-conforming
payment is made until such funds become available funds (but in no event less
than the period from the date of such payment to the next succeeding applicable
Business Day) at the rate determined pursuant to Section 2.7 from the date such
amount was due and payable until the date such amount is paid in full.
2.15. RATABLE SHARING. Lenders hereby agree among themselves that if
any of them shall, whether by voluntary payment (other than a voluntary
prepayment of Loans made and applied in accordance with the terms hereof), by
realization upon security, through the exercise of any right of set-off or
banker's lien, by counterclaim or cross action or by the enforcement of any
right under the Credit Documents or otherwise, or as adequate protection of a
deposit treated as cash collateral under the Bankruptcy Code, receive payment or
reduction of a proportion of the aggregate amount of principal, interest, fees
and other amounts then due and owing to such Lender hereunder or under the other
Credit Documents (collectively, the "AGGREGATE AMOUNTS DUE" to such Lender)
which
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is greater than the proportion received by any other Lender in respect of the
Aggregate Amounts Due to such other Lender, then the Lender receiving such
proportionately greater payment shall (a) notify Administrative Agent and each
other Lender of the receipt of such payment and (b) apply a portion of such
payment to purchase participations (which it shall be deemed to have purchased
from each seller of a participation simultaneously upon the receipt by such
seller of its portion of such payment) in the Aggregate Amounts Due to the other
Lenders so that all such recoveries of Aggregate Amounts Due shall be shared by
all Lenders in proportion to the Aggregate Amounts Due to them; provided, if all
or part of such proportionately greater payment received by such purchasing
Lender is thereafter recovered from such Lender upon the bankruptcy or
reorganization of Borrower or otherwise, those purchases shall be rescinded and
the purchase prices paid for such participations shall be returned to such
purchasing Lender ratably to the extent of such recovery, but without interest.
Borrower expressly consents to the foregoing arrangement and agrees that any
holder of a participation so purchased may exercise any and all rights of
banker's lien, set-off or counterclaim with respect to any and all monies owing
by Borrower to that holder with respect thereto as fully as if that holder were
owed the amount of the participation held by that holder.
2.16. MAKING OR MAINTAINING EURODOLLAR RATE LOANS. (a) In the event
that Administrative Agent shall have determined (which determination shall be
final and conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any Eurodollar Rate Loans, that by reason of
circumstances affecting the London interbank market adequate and fair means do
not exist for ascertaining the interest rate applicable to such Loans on the
basis provided for in the definition of Adjusted Eurodollar Rate, Administrative
Agent shall on such date give notice (by telefacsimile or by telephone confirmed
in writing) to Borrower and each Lender of such determination, whereupon (i) no
Loans may be made as, or converted to, Eurodollar Rate Loans until such time as
Administrative Agent notifies Borrower and Lenders that the circumstances giving
rise to such notice no longer exist, and (ii) any Funding Notice or
Conversion/Continuation Notice given by Borrower with respect to the Loans in
respect of which such determination was made shall be deemed to be rescinded by
Borrower.
(b) In the event that on any date any Lender shall have determined
(which determination shall be final and conclusive and binding upon all parties
hereto but shall be made only after consultation with Borrower and
Administrative Agent) that the making, maintaining or continuation of its
Eurodollar Rate Loans (i) has become unlawful as a result of compliance by such
Lender in good faith with any law, treaty, governmental rule, regulation,
guideline or order (or would conflict with any such treaty, governmental rule,
regulation, guideline or order not having the force of law even though the
failure to comply therewith would not be unlawful), or (ii) has become
impracticable, as a result of contingencies occurring after the date hereof
which materially and adversely affect the London interbank market or the
position of such Lender in that market, then, and in any such event, such Lender
shall be an "AFFECTED LENDER" and it shall on that day give notice (by
telefacsimile or by telephone confirmed in writing) to Borrower and
Administrative Agent of such determination (which notice Administrative Agent
shall promptly transmit to each other Lender). Thereafter (1) the obligation of
the Affected Lender to make Loans as, or to convert Loans to, Eurodollar Rate
Loans shall be suspended until such notice shall be withdrawn by the Affected
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Lender, (2) to the extent such determination by the Affected Lender relates to a
Eurodollar Rate Loan then being requested by Borrower pursuant to a Funding
Notice or a Conversion/Continuation Notice, the Affected Lender shall make such
Loan as (or convert such Loan to, as the case may be) a Base Rate Loan, (3) the
Affected Lender's obligation to maintain its outstanding Eurodollar Rate Loans
(the "AFFECTED LOANS") shall be terminated at the earlier to occur of the
expiration of the Interest Period then in effect with respect to the Affected
Loans or when required by law, and (4) the Affected Loans shall automatically
convert into Base Rate Loans on the date of such termination. Notwithstanding
the foregoing, to the extent a determination by an Affected Lender as described
above relates to a Eurodollar Rate Loan then being requested by Borrower
pursuant to a Funding Notice or a Conversion/Continuation Notice, Borrower shall
have the option, subject to the provisions of Section 2.17(c), to rescind such
Funding Notice or Conversion/Continuation Notice as to all Lenders by giving
notice (by telefacsimile or by telephone confirmed in writing) to Administrative
Agent of such rescission on the date on which the Affected Lender gives notice
of its determination as described above (which notice of rescission
Administrative Agent shall promptly transmit to each other Lender). Except as
provided in the immediately preceding sentence, nothing in this Section 2.16(b)
shall affect the obligation of any Lender other than an Affected Lender to make
or maintain Loans as, or to convert Loans to, Eurodollar Rate Loans in
accordance with the terms hereof.
(c) Borrower shall compensate each Lender, upon written request by such
Lender (which request shall set forth the basis for requesting such amounts),
for all reasonable losses, expenses and liabilities (including any interest paid
by such Lender to lenders of funds borrowed by it to make or carry its
Eurodollar Rate Loans and any loss, expense or liability sustained by such
Lender in connection with the liquidation or re-employment of such funds but
excluding loss of anticipated profits) which such Lender may sustain: (i) if for
any reason (other than a default by such Lender) a borrowing of any Eurodollar
Rate Loan does not occur on a date specified therefor in a Funding Notice or a
telephonic request for borrowing, or a conversion to or continuation of any
Eurodollar Rate Loan does not occur on a date specified therefor in a
Conversion/Continuation Notice or a telephonic request for conversion or
continuation; (ii) if any prepayment or other principal payment or any
conversion of any of its Eurodollar Rate Loans occurs on a date prior to the
last day of an Interest Period applicable to that Loan; (iii) if any prepayment
of any of its Eurodollar Rate Loans is not made on any date specified in a
notice of prepayment given by Borrower; or (iv) as a consequence of any other
default by Borrower in the repayment of its Eurodollar Rate Loans when required
by the terms hereof.
(d) Any Lender may make, carry or transfer Eurodollar Rate Loans at,
to, or for the account of any of its branch offices or the office of an
Affiliate of such Lender.
(e) Calculation of all amounts payable to a Lender under this Section
2.16 and under Section 2.17 shall be made as though such Lender had actually
funded each of its relevant Eurodollar Rate Loans through the purchase of a
Eurodollar deposit bearing interest at the rate obtained pursuant to clause (i)
of the definition of Adjusted Eurodollar Rate in an amount equal to the amount
of such Eurodollar Rate Loan and having a maturity comparable to the relevant
Interest Period and through
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the transfer of such Eurodollar deposit from an offshore office of such Lender
to a domestic office of such Lender in the United States ; provided, each Lender
may fund each of its Eurodollar Rate Loans in any manner it sees fit and the
foregoing assumptions shall be utilized only for the purposes of calculating
amounts payable under this Section 2.16 and under Section 2.17.
2.17. INCREASED COSTS; CAPITAL ADEQUACY. (a) Subject to the provisions
of Section 2.18 (which shall be controlling with respect to the matters covered
thereby), in the event that any Lender shall determine (which determination
shall, absent manifest error, be final and conclusive and binding upon all
parties hereto) that any law, treaty or governmental rule, regulation or order,
or any change therein or in the interpretation, administration or application
thereof (including the introduction of any new law, treaty or governmental rule,
regulation or order), or any determination of a court or governmental authority,
in each case that becomes effective after the date hereof, or compliance by such
Lender with any guideline, request or directive issued or made after the date
hereof by any central bank or other governmental or quasi-governmental authority
(whether or not having the force of law): (i) subjects such Lender (or its
applicable lending office) to any additional Tax (other than any Tax on the
overall net income of such Lender) with respect to this Agreement or any of its
obligations hereunder or any payments to such Lender (or its applicable lending
office) of principal, interest, fees or any other amount payable hereunder; (ii)
imposes, modifies or holds applicable any reserve (including any marginal,
emergency, supplemental, special or other reserve), special deposit, compulsory
loan, FDIC insurance or similar requirement against assets held by, or deposits
or other liabilities in or for the account of, or advances or loans by, or other
credit extended by, or any other acquisition of funds by, any office of such
Lender (other than any such reserve or other requirements with respect to
Eurodollar Rate Loans that are reflected in the definition of Adjusted
Eurodollar Rate); or (iii) imposes any other condition (other than with respect
to a Tax matter) on or affecting such Lender (or its applicable lending office)
or its obligations hereunder or the London interbank market; and the result of
any of the foregoing is to increase the cost to such Lender of agreeing to make,
making or maintaining Loans hereunder or to reduce any amount received or
receivable by such Lender (or its applicable lending office) with respect
thereto; then, in any such case, Borrower shall pay to such Lender within 10
days upon receipt of the statement referred to in the next sentence, such
additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as may be necessary to compensate such Lender
for any such increased cost or reduction in amounts received or receivable
hereunder; provided that Borrower shall not be obligated to reimburse any Lender
for such increase or reduction for any period 180 days prior to such Lender
providing notice if such Lender was aware of the circumstances that existed
which would cause such increase or reduction during such 180 day period. Such
Lender shall deliver to Borrower (with a copy to Administrative Agent) a written
statement, setting forth in reasonable detail the basis for calculating the
additional amounts owed to such Lender under this Section 2.17(a), which
statement shall be conclusive and binding upon all parties hereto absent
manifest error.
(b) In the event that any Lender shall have determined that the
adoption, effectiveness, phase-in or applicability after the date hereof of any
law, rule or regulation (or any provision thereof) regarding capital adequacy,
or any change therein or in the interpretation or administration thereof
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by any governmental authority, central bank or comparable agency charged with
the interpretation or administration thereof, or compliance by any Lender (or
its applicable lending office) with any guideline, request or directive
regarding capital adequacy (whether or not having the force of law) of any such
governmental authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of, or with reference to,
such Lender's Loans or Commitments or other obligations hereunder with respect
to the Loans to a level below that which such Lender or such controlling
corporation could have achieved but for such adoption, effectiveness, phase-in,
applicability, change or compliance (taking into consideration the policies of
such Lender or such controlling corporation with regard to capital adequacy),
then from time to time, within 10 days after receipt by Borrower from such
Lender of the statement referred to in the next sentence, Borrower shall pay to
such Lender such additional amount or amounts as will compensate such Lender or
such controlling corporation on an after-tax basis for such reduction; provided
that Borrower shall not be obligated to reimburse any Lender for such increase
or reduction for any period 180 days prior to such Lender providing notice if
such Lender was aware of the circumstances that existed which would cause such
increase or reduction during such 180 day period. Such Lender shall deliver to
Borrower (with a copy to Administrative Agent) a written statement, setting
forth in reasonable detail the basis of the calculation of such additional
amounts, which statement shall be conclusive and binding upon all parties hereto
absent manifest error.
2.18. TAXES; WITHHOLDING, ETC. (a) All sums payable by any Credit Party
hereunder and the other Credit Documents shall (except to the extent required by
law) be paid free and clear of, and without any deduction or withholding on
account of, any Tax (other than a Tax on the overall net income of any Lender)
imposed, levied, collected, withheld or assessed by or within the United States
or any political subdivision in or of the United States or any other
jurisdiction from or to which a payment is made by or on behalf of any Credit
Party or by any federation or organization of which the United States or any
such jurisdiction is a member at the time of payment.
(b) If any Credit Party or any other Person is required by law to make
any deduction or withholding on account of any such Tax from any sum paid or
payable by any Credit Party to Administrative Agent or any Lender under any of
the Credit Documents: (i) Borrower shall notify Administrative Agent of any such
requirement or any change in any such requirement as soon as Borrower becomes
aware of it; (ii) Borrower shall pay any such Tax before the date on which
penalties attach thereto, such payment to be made (if the liability to pay is
imposed on any Credit Party) for its own account or (if that liability is
imposed on Administrative Agent or such Lender, as the case may be) on behalf of
and in the name of Administrative Agent or such Lender; (iii) the sum payable by
such Credit Party in respect of which the relevant deduction, withholding or
payment is required shall be increased to the extent necessary to ensure that,
after the making of that deduction, withholding or payment, Administrative Agent
or such Lender, as the case may be, receives on the due date a net sum equal to
what it would have received had no such deduction, withholding or payment been
required or made; and (iv) within thirty (30) days after paying any sum from
which it is required by law to make any deduction or withholding, and within
thirty (30) days after the due date of payment of any Tax which it is required
by clause (ii) above to pay, Borrower
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shall deliver to Administrative Agent evidence satisfactory to the other
affected parties of such deduction, withholding or payment and of the remittance
thereof to the relevant taxing or other authority; provided, no such additional
amount shall be required to be paid to any Lender under clause (iii) above
except to the extent that any change after the date hereof (in the case of each
Lender listed on the signature pages hereof on the Closing Date) or after the
effective date of the Assignment Agreement pursuant to which such Lender became
a Lender (in the case of each other Lender) in any such requirement for a
deduction, withholding or payment as is mentioned therein shall result in an
increase in the rate of such deduction, withholding or payment from that in
effect at the date hereof or at the date of such Assignment Agreement, as the
case may be, in respect of payments to such Lender.
(c) Each Lender that is organized under the laws of any jurisdiction
other than the United States or any state or other political subdivision thereof
(a "NON-US LENDER") shall deliver to Administrative Agent for transmission to
Borrower, on or prior to the Closing Date (in the case of each Lender listed on
the signature pages hereof on the Closing Date) or on or prior to the date of
the Assignment Agreement pursuant to which it becomes a Lender (in the case of
each other Lender), and at such other times as may be necessary in the
determination of Borrower or Administrative Agent (each in the reasonable
exercise of its discretion), (i) two original copies of Internal Revenue Service
Form 1001 or 4224 (or any successor forms, including Form W-8BEN or W-8ECI),
properly completed and duly executed by such Lender, together with any other
certificate or statement of exemption required under the Internal Revenue Code
or the regulations issued thereunder to establish that such Lender is not
subject to deduction or withholding of United States federal income tax with
respect to any payments to such Lender of principal, interest, fees or other
amounts payable under any of the Credit Documents, or (ii) if such Lender is not
a "bank" or other Person described in Section 881(c)(3) of the Internal Revenue
Code and cannot deliver either Internal Revenue Service Form 1001 or 4224
pursuant to clause (i) above, a Certificate re Non-Bank Status together with two
original copies of Internal Revenue Service Form W-8 (or any successor form),
properly completed and duly executed by such Lender, together with any other
certificate or statement of exemption required under the Internal Revenue Code
or the regulations issued thereunder to establish that such Lender is not
subject to deduction or withholding of United States federal income tax with
respect to any payments to such Lender of interest payable under any of the
Credit Documents. Each Lender required to deliver any forms, certificates or
other evidence with respect to United States federal income tax withholding
matters pursuant to this Section 2.18(c) hereby agrees, from time to time after
the initial delivery by such Lender of such forms, certificates or other
evidence, whenever a lapse in time or change in circumstances renders such
forms, certificates or other evidence obsolete or inaccurate in any material
respect, that such Lender shall promptly deliver to Administrative Agent for
transmission to Borrower two new original copies of Internal Revenue Service
Form 1001 or 4224, or a Certificate re Non-Bank Status and two original copies
of Internal Revenue Service Form W-8, as the case may be, properly completed and
duly executed by such Lender, together with any other certificate or statement
of exemption required in order to confirm or establish that such Lender is not
subject to deduction or withholding of United States federal income tax with
respect to payments to such Lender under the Credit Documents, or notify
Administrative Agent and Borrower of its inability to deliver any such forms,
certificates or other evidence. Borrower shall
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not be required to pay any additional amount under Section 2.18(b)(iii) if such
Lender shall have failed (1) to deliver the forms, certificates or other
evidence referred to in the second sentence of this Section 2.18(c), or to
notify Administrative Agent and Borrower of its inability to deliver any such
forms, certificates or other evidence, as the case may be; provided, if such
Lender shall have satisfied the requirements of the first sentence of this
Section 2.18(c) on the Closing Date or on the date of the Assignment Agreement
pursuant to which it became a Lender, as applicable, nothing in this last
sentence of Section 2.18(c) shall relieve Borrower of its obligation to pay any
additional amounts pursuant to Section 2.18(a) in the event that, as a result of
any change in any applicable law, treaty or governmental rule, regulation or
order, or any change in the interpretation, administration or application
thereof, such Lender is no longer properly entitled to deliver forms,
certificates or other evidence at a subsequent date establishing the fact that
such Lender is not subject to withholding as described herein.
(d) If any Tax is refunded to Administrative Agent, it will pay such
refund to Borrower to the extent Administrative Agent determines in its sole
discretion that such refund is attributable to any Tax paid by Borrower and to
the extent Borrower has previously indemnified the Administrative Agent therefor
pursuant to this Section 2.18, net of expenses and without interest except any
interest (net of taxes) included in such refund. Borrower shall return such
refund (together with any taxes, penalties or other charges) in the event any
Agent or any Lender is required to repay such refund. Notwithstanding the
foregoing, nothing in this Section 2.18 shall be construed to (i) entitle
Borrower or any other Persons to (A) any information determined by any Agent or
Lender, in each case, in its sole discretion, to be confidential or proprietary
information of such Agent or Lender, (B) any tax or financial information of
such Agent or Lender, or (C) inspect or review any books and records of any
Agent or Lender, or (ii) interfere with the rights of any Agent or Lender to
conduct its fiscal or tax affairs in such matter as it deems fit. A certificate
as to the amount of such payment or liability delivered to Borrower by
Administrative Agent on its own behalf or on behalf of any Lender or Agent shall
be conclusive absent manifest error.
2.19. OBLIGATION TO MITIGATE. Each Lender agrees that, as promptly as
practicable after the officer of such Lender responsible for administering its
Loans becomes aware of the occurrence of an event or the existence of a
condition that would cause such Lender to become an Affected Lender or that
would entitle such Lender to receive payments under Section 2.16, 2.17 or 2.18,
it will, to the extent not inconsistent with the internal policies of such
Lender and any applicable legal or regulatory restrictions, use reasonable
efforts (a) to make, issue, fund or maintain its Commitment or Loans, including
any Affected Loans, through another office of such Lender, or (b) take such
other measures as such Lender may deem reasonable, if as a result thereof the
circumstances which would cause such Lender to be an Affected Lender would cease
to exist or the additional amounts which would otherwise be required to be paid
to such Lender pursuant to Section 2.16, 2.17 or 2.18 would be materially
reduced and if, as determined by such Lender in its sole discretion, the making,
issuing, funding or maintaining of such Commitments or Loans through such other
office or in accordance with such other measures, as the case may be, would not
otherwise adversely affect such Commitments or Loans or the interests of such
Lender; provided, such Lender will not be obligated
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to utilize such other office pursuant to this Section 2.19 unless Borrower
agrees to pay all incremental expenses incurred by such Lender as a result of
utilizing such other office as described in clause (i) above. A certificate as
to the amount of any such expenses payable by Borrower pursuant to this Section
2.19 (setting forth in reasonable detail the basis for requesting such amount)
submitted by such Lender to Borrower (with a copy to Administrative Agent) shall
be conclusive absent manifest error.
2.20. DEFAULTING LENDERS. Anything contained herein to the contrary
notwithstanding, in the event that any Lender defaults (a "DEFAULTING LENDER")
in its obligation to fund (a "FUNDING DEFAULT") any Loan (a "DEFAULTED LOAN"),
then (a) during such period when such default is continuing with respect to such
Defaulting Lender (the "DEFAULT PERIOD"), such Defaulting Lender shall be deemed
not to be a "Lender" for purposes of voting on any matters (including the
granting of any consents or waivers) with respect to any of the Credit
Documents; (b) to the extent permitted by applicable law, until such time as
such unfunded amount with respect to such Defaulting Lender shall have been
reduced to zero, (i) any voluntary prepayment of the Loans shall, if Borrower so
directs at the time of making such voluntary prepayment, be applied to the Loans
of other Lenders as if such Defaulting Lender had no Loans outstanding and the
Credit Exposure of such Defaulting Lender were zero, and (ii) any mandatory
prepayment of the Loans shall, if Borrower so directs at the time of making such
mandatory prepayment, be applied to the Loans of other Lenders (but not to the
Loans of such Defaulting Lender) as if such Defaulting Lender had funded all
Defaulted Loans of such Defaulting Lender, it being understood and agreed that
Borrower shall be entitled to retain any portion of any mandatory prepayment of
the Loans that is not paid to such Defaulting Lender solely as a result of the
operation of the provisions of this clause (b); (c) such Defaulting Lender's
Commitment and outstanding Loans shall be excluded for purposes of calculating
the commitment fee payable to Lenders in respect of any day during any Default
Period with respect to such Defaulting Lender, and such Defaulting Lender shall
not be entitled to receive any commitment fee pursuant to Section 2.8 with
respect to such Defaulting Lender's Commitment in respect of any Default Period
with respect to such Defaulting Lender; and (d) the Total Utilization of
Commitments as at any date of determination shall be calculated as if such
Defaulting Lender had funded all Defaulted Loans of such Defaulting Lender. No
Commitment of any Lender shall be increased or otherwise affected, and, except
as otherwise expressly provided in this Section 2.20, performance by Borrower of
its obligations hereunder and the other Credit Documents shall not be excused or
otherwise modified as a result of any Funding Default or the operation of this
Section 2.20. The rights and remedies against a Defaulting Lender under this
Section 2.20 are in addition to other rights and remedies which Borrower may
have against such Defaulting Lender with respect to any Funding Default and
which Administrative Agent or any Lender may have against such Defaulting Lender
with respect to any Funding Default.
2.21. REMOVAL OR REPLACEMENT OF A LENDER. Anything contained herein to
the contrary notwithstanding, in the event that: (a) any Lender (an
"INCREASED-COST LENDER") shall give notice to Borrower that such Lender is an
Affected Lender or that such Lender is entitled to receive payments under
Section 2.16, 2.17 or 2.18, the circumstances which have caused such Lender to
be an Affected Lender or which entitle such Lender to receive such payments
shall remain in effect, and
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such Lender shall fail to withdraw such notice within five Business Days after
Borrower's request for such withdrawal; or (b) any Lender shall become a
Defaulting Lender, the Default Period for such Defaulting Lender shall remain in
effect, and such Defaulting Lender shall fail to cure the default as a result of
which it has become a Defaulting Lender within five Business Days after
Borrower's request that it cure such default; or (c) in connection with any
proposed amendment, modification, termination, waiver or consent with respect to
any of the provisions hereof as contemplated by Section 10.5(b), the consent of
Requisite Lenders shall have been obtained but the consent of one or more of
such other Lenders (each a "NON-CONSENTING LENDER") whose consent is required
shall not have been obtained, and the failure to obtain Non-Consenting Lenders'
consents does not result solely from the exercise of Non-Consenting Lenders'
rights (and the withholding of any required consents by Non-Consenting Lenders)
pursuant to the proviso to Section 10.5(c)(i); then, with respect to each such
Increased-Cost Lender, Defaulting Lender or Non-Consenting Lender (the
"TERMINATED LENDER"), Borrower may, by giving written notice to Administrative
Agent and any Terminated Lender of its election to do so, elect to:
(A) cause such Terminated Lender (and such Terminated Lender
hereby irrevocably agrees) to assign its outstanding Loans and its
Commitments, if any, in full to one or more Eligible Assignees (each a
"REPLACEMENT LENDER") in accordance with the provisions of Section 10.6
and Terminated Lender shall pay any fees payable thereunder in
connection with such assignment; provided, (1) on the date of such
assignment, Borrower shall pay any amounts payable to such Terminated
Lender pursuant to Section 2.16(c), 2.17 or 2.18 or otherwise as if it
were a prepayment, and shall pay the assignment fee specified in
Section 10.6(d) and (2) in the event such Terminated Lender is a
Non-Consenting Lender, each Replacement Lender shall consent, at the
time of such assignment, to each matter in respect of which such
Terminated Lender was a Non-Consenting Lender; provided, Borrower may
not make such election with respect to any Non-Consenting Lender unless
Borrower also makes such election with respect to each other Terminated
Lender which is a Non-Consenting Lender; and upon the prepayment of all
amounts due and owing to any Terminated Lender pursuant to Section
2.16(c), 2.17 and 2.18 and the assignment of such Terminated Lender's
Commitments, if any, and such Terminated Lender shall no longer
constitute a "Lender" for purposes hereof; provided, any rights of such
Terminated Lender to indemnification hereunder shall survive as to such
Terminated Lender; or
(B) (1) terminate the Commitment of such Terminated Lender
upon receipt by such Terminated Lender of such notice and (2) prepay on
the date of such termination any outstanding Loans, if any, made by
such Terminated Lender, together with accrued and unpaid interest
thereon and any other amounts payable to such Terminated Lender
hereunder pursuant to Section 2.16(c), 2.17 and 2.18 or otherwise;
provided that, in the event such Terminated Lender has any Loans
outstanding at the time of such termination, the written consent of
Administrative Agent and all Lenders (which consent shall not be
unreasonably withheld or delayed) shall be required in order for
Borrower to make such election; and provided further that Borrower may
not make such election with respect to any
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NonConsenting Lender unless Borrower also makes such election with
respect to each other Terminated Lender which is a Non-Consenting
Lender.
SECTION 3. CONDITIONS PRECEDENT
3.1. CLOSING DATE. Each of the following conditions must be satisfied
or waived in accordance with Section 10.5 on or before the Closing Date:
(a) CREDIT DOCUMENTS. Administrative Agent shall have received
sufficient copies of each Credit Document originally executed and delivered by
each applicable Credit Party for each Lender.
(b) ORGANIZATIONAL DOCUMENTS; INCUMBENCY. Administrative Agent shall
have received sufficient copies of each Organizational Document originally
executed and delivered by each Credit Party, as applicable, and, to the extent
applicable, certified as of a recent date by the appropriate governmental
official, for each Lender and its counsel, each dated the Closing Date or a
recent date prior thereto, together with signature and incumbency certificates
of the officers of such Person executing the Credit Documents to which it is a
party.
(c) ORGANIZATIONAL AND CAPITAL STRUCTURE. The organizational structure
and the capital structure of Company and its Subsidiaries shall be as set forth
on Schedule 4.1.
(d) CAPITALIZATION OF BORROWER. On or before the Closing Date, Company
shall have contributed to Borrower and other Subsidiaries of Company, as common
equity, all of the net proceeds received by Company from the sale of all equity
and bond offerings by Company and its Subsidiaries prior to such date.
(e) EXISTING INDENTURES. Syndication Agent and Administrative Agent
shall each have received a fully executed or conformed copy of each Existing
Indenture and any documents executed in connection therewith.
(f) GOVERNMENTAL AUTHORIZATIONS AND CONSENTS. Except as set forth on
Schedule 4.2 and 4.10(b), each Credit Party shall have obtained all Governmental
Authorizations and all consents of other Persons, in each case that are
necessary or advisable in connection with the transactions contemplated by the
Credit Documents and each of the foregoing shall be in full force and effect. No
action, request for stay, petition for review or rehearing, reconsideration, or
appeal with respect to any of the foregoing shall be pending, and the time for
any applicable agency to take action to set aside its consent on its own motion
shall have expired.
(g) PERSONAL AND MIXED PROPERTY COLLATERAL. In order to create in favor
of Administrative Agent, for the benefit of Lenders, a valid and, subject to any
filing and/or recording referred to herein, perfected First Priority security
interest in the Collateral, Administrative Agent shall have received:
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(i) certificates (which certificates shall be accompanied by
irrevocable undated stock powers, duly endorsed in blank and otherwise
satisfactory in form and substance to Administrative Agent)
representing all capital stock pledged pursuant to the Pledge and
Security Agreement, and Acknowledgments of Pledge from each applicable
issuer of Securities pledged pursuant to the Pledge and Security
Agreement;
(ii) (1) the results of a recent search, by a Person
satisfactory to Syndication Agent and Administrative Agent, of UCC
financing statements in all jurisdictions where each Credit Party is
located, together with copies of all such filings disclosed by such
search, and (2) UCC termination statements duly executed by all
applicable Persons for filing in all applicable jurisdictions as may be
necessary to terminate any effective UCC financing statements or
fixture filings disclosed in such search (other than any such financing
statements or fixture filings in respect of Permitted Liens);
(iii) UCC financing statements, duly executed by each
applicable Credit Party with respect to all personal and mixed property
Collateral of such Credit Party, for filing in all jurisdictions as may
be necessary or, in the opinion of Syndication Agent and Administrative
Agent, desirable to perfect the security interests created in such
Collateral pursuant to the Collateral Documents;
(iv) an opinion of counsel (which counsel shall be reasonably
satisfactory to Syndication Agent and Administrative Agent) with
respect to the creation and perfection of the security interests in
favor of Administrative Agent in such Collateral and such other matters
governed by the laws of each jurisdiction in which any Credit Party or
any personal or mixed property Collateral is located as Syndication
Agent and Administrative Agent may reasonably request, in each case in
form and substance reasonably satisfactory to Syndication Agent and
Administrative Agent; and
(v) evidence that each Credit Party shall have taken or caused
to be taken any other action, executed and delivered or caused to be
executed and delivered any other agreement, document and instrument,
and made or caused to be made any other filing and recording (other
than as set forth herein) reasonably required by Syndication Agent and
Administrative Agent.
(h) ENVIRONMENTAL REPORTS. Syndication Agent and Administrative Agent
shall have received reports and other information, in form, scope and substance
satisfactory to Syndication Agent and Administrative Agent, regarding
environmental matters relating to the Facilities.
(i) FINANCIAL STATEMENTS; PROJECTIONS. Lenders shall have received from
Company (i) the Historical Financial Statements, (ii) copies of all management
reports and management letters prepared for Company and its Subsidiaries by
Arthur Andersen LLP or other independent certified public accountants of
recognized national standing, (iii) a pro forma balance sheet as at December 31,
1998 and an income and cash flow statement for the twelve month period ending
December 31,
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1998, in each case for Company and its Subsidiaries, prepared in accordance with
GAAP on a consolidated basis and reflecting the transactions contemplated
hereby, and (iv) a financial forecast for Company and its Subsidiaries for the
period from Fiscal Year 1999 through and including Fiscal Year 2008 (with Fiscal
Years 1999 and 2000 detailed by Fiscal Quarter), together with an analysis of
Pre-Overhead EBITDA on a Geographic Market-by-Geographic Market basis through
June 30, 2001; and all of the foregoing financial statements and other
information will not be inconsistent, in any material respect, with any
information previously provided to Lenders.
(j) EVIDENCE OF INSURANCE. Syndication Agent and Administrative Agent
shall have received a certificate from Company's insurance broker or other
evidence satisfactory to it that all insurance required to be maintained
pursuant to Section 5.5 is in full force and effect and that Administrative
Agent on behalf of Lenders has been named as additional insured and/or loss
payee thereunder to the extent required under Section 5.5.
(k) OPINIONS OF COUNSEL TO CREDIT PARTIES. Lenders and their respective
counsel shall have received originally executed copies of the favorable written
opinions of Kirkland & Ellis, counsel for Credit Parties, in the form of Exhibit
D and as to such other matters as Administrative Agent or Syndication Agent may
reasonably request, and otherwise in form and substance reasonably satisfactory
to Administrative Agent and Syndication Agent and its counsel, dated the Closing
Date.
(l) OPINIONS OF COUNSEL TO SYNDICATION AGENT AND ADMINISTRATIVE AGENT.
Lenders shall have received originally executed copies of one or more favorable
written opinions of Skadden, Arps, Slate, Meagher & Flom LLP, counsel to
Syndication Agent and Administrative Agent, dated the Closing Date, in form and
substance reasonably satisfactory to Syndication Agent and Administrative Agent.
(m) FEES. Borrower shall have paid to Syndication Agent, Administrative
Agent and Documentation Agent, for distribution (as appropriate) to Syndication
Agent, Administrative Agent, Documentation Agent and Lenders, the fees payable
on the Closing Date referred to in Section 2.8.
(n) SOLVENCY LETTER. On the Closing Date, Syndication Agent,
Administrative Agent and Lenders shall have received a solvency certificate from
the chief financial officer of Company dated the Closing Date and addressed to
Syndication Agent, Administrative Agent and Lenders, in form and substance
satisfactory to Syndication Agent and Administrative Agent and with appropriate
attachments.
(o) COMPLETION OF PROCEEDINGS. All corporate and other proceedings
taken or to be taken in connection with the transactions contemplated hereby and
all documents incidental thereto not previously found acceptable by
Administrative Agent, acting on behalf of Lenders, or Syndication Agent and its
counsel shall be satisfactory in form and substance to Administrative Agent and
Syndication Agent and such counsel, and Administrative Agent, Syndication Agent
and such counsel shall have received all such counterpart originals or certified
copies of such documents as Administrative Agent or Syndication Agent may
reasonably request.
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(p) CLOSING DATE CERTIFICATE. Borrower shall have delivered to
Syndication Agent and Administrative Agent an originally executed Closing Date
Certificate, together with all attachments thereto.
3.2. CONDITIONS TO EACH LOAN. (a) The obligation of each Lender to make
any Loan on any Credit Date, including the Initial Funding Date, is subject to
the satisfaction, or waiver in accordance with Section 10.5, of the following
conditions precedent:
(i) Administrative Agent shall have received a fully executed
and delivered Funding Notice;
(ii) after making the Loans requested on such Credit Date, the
Total Utilization of Commitments shall not exceed the lesser of the (i)
Commitments then in effect and (ii) Loan Availability;
(iii) no injunction or other restraining order shall have been
issued and no hearing to cause an injunction or other restraining order
to be issued shall be pending or noticed with respect to any action,
suit or proceeding seeking to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief as a result
of, the transactions contemplated hereby or the making any Loan;
(iv) as of such Credit Date, the representations and
warranties contained herein and in the other Credit Documents shall be
true, correct and complete in all material respects on and as of that
Credit Date to the same extent as though made on and as of that date,
except to the extent such representations and warranties specifically
relate to an earlier date, in which case such representations and
warranties shall have been true, correct and complete in all material
respects on and as of such earlier date;
(v) as of such Credit Date, Company has received an order from
the Securities and Exchange Commission declaring that Company and its
Subsidiaries are exempt from the provisions of the Investment Company
Act, or if such order has expired by its terms or is otherwise no
longer effective, Lenders and their respective counsel shall have
received originally executed copies of the favorable written opinion of
Kirkland & Ellis, counsel for Credit Parties, in form and substance
satisfactory to Administrative Agent and its counsel, to the effect
that no Credit Party is required to be registered as an "investment
company" within the meaning of the Investment Company Act; and
(vi) as of such Credit Date, no event shall have occurred and
be continuing or would result from the consummation of the applicable
Loan that would constitute an Event of Default or a Default.
(b) Any Notice shall be executed by the chief executive officer, the
chief financial officer or the treasurer of Borrower or by the executive officer
thereof designated by the chief executive
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officer, the chief financial officer or the treasurer of Borrower in a writing
delivered to Administrative Agent. In lieu of delivering a Notice, Borrower may
give Administrative Agent telephonic notice by the required time of any proposed
borrowing or conversion/continuation, as the case may be; provided each such
notice shall be promptly confirmed in writing by delivery of the applicable
Notice to Administrative Agent on or before the applicable date of borrowing or,
continuation/conversion. Neither Administrative Agent nor any Lender shall incur
any liability to Borrower in acting upon any telephonic notice referred to above
that Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized on behalf of Borrower or for
otherwise acting in good faith.
SECTION 4. REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to make
each Loan to be made thereby, each Credit Party represents and warrants to each
Lender on the Closing Date and on each Credit Date, that the following
statements are true, correct and complete:
4.1. ORGANIZATION; POWERS; QUALIFICATION. Each of Company and its
Subsidiaries (a) is duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization as identified in Schedule 4.1, (b)
has all requisite power and authority to own and operate its properties, to
carry on its business as now conducted and as proposed to be conducted, to enter
into the Credit Documents to which it is a party and to carry out the
transactions contemplated thereby, and (c) is qualified to do business and in
good standing in every jurisdiction where its assets are located and wherever
necessary to carry out its business and operations, except in jurisdictions
where the failure to be so qualified or in good standing has not had, and could
not be reasonably expected to have, a Material Adverse Effect. Schedule 4.1, as
may be amended pursuant to Section 5.1(b) or (c), correctly sets forth the
ownership interest of Company and each of its Subsidiaries in their respective
Subsidiaries.
4.2. AUTHORIZATION OF CREDIT DOCUMENTS; NO CONFLICT. The execution,
delivery and performance of the Credit Documents have been duly authorized by
all necessary action on the part of each Credit Party that is a party thereto.
Except as set forth on Schedule 4.2, the execution, delivery and performance by
Credit Parties of the Credit Documents to which they are parties and the
consummation of the transactions contemplated by the Credit Documents do not and
will not (a) violate any provision of any law or any governmental rule or
regulation applicable to Company or any of its Subsidiaries, any of the
Organizational Documents of Company or any of its Subsidiaries, or any order,
judgment or decree of any court or other agency of government binding on Company
or any of its Subsidiaries; (b) conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any
Contractual Obligation of Company or any of its Subsidiaries; (c) result in or
require the creation or imposition of any Lien upon any of the properties or
assets of Company or any of its Subsidiaries (other than any Liens created under
any of the Credit Documents in favor of Administrative Agent on behalf of
Lenders); or (d) require any approval of stockholders or any approval or consent
of any Person under any Contractual Obligation of Company or any of its
Subsidiaries.
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4.3. GOVERNMENTAL CONSENTS. The execution, delivery and performance by
Credit Parties of the Credit Documents to which they are parties and the
consummation of the transactions contemplated by the Credit Documents do not and
will not require any registration with, consent or approval of, or notice to, or
other action to, with or by, any Governmental Authority except as otherwise set
forth on Schedule 4.3, and except for filings and recordings with respect to the
Collateral to be made, or otherwise delivered to Administrative Agent, as of the
Closing Date.
4.4. BINDING OBLIGATION. Each Credit Document has been duly executed
and delivered by each Credit Party that is a party thereto and is the legally
valid and binding obligation of such Credit Party, enforceable against such
Credit Party in accordance with its respective terms, except as may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws relating
to or limiting creditors' rights generally or by equitable principles relating
to enforceability.
4.5. HISTORICAL FINANCIAL STATEMENTS; PROJECTIONS. The Historical
Financial Statements were prepared in conformity with GAAP and fairly present,
in all material respects, the financial position, on a consolidated basis, of
the Persons described in such financial statements as at the respective dates
thereof and the results of operations and cash flows, on a consolidated basis,
of the entities described therein for each of the periods then ended, subject,
in the case of any such unaudited financial statements, to changes resulting
from audit and normal year-end adjustments. On the Closing Date, neither Company
nor any of its Subsidiaries has any contingent liability or liability for taxes,
long-term lease or unusual forward or long-term commitment that is not reflected
in the Historical Financial Statements or the notes thereto and which in
accordance with GAAP would be required to be shown thereon and which in any such
case is material in relation to the business, operations, properties, assets,
condition (financial or otherwise) or prospects of Company and any of its
Subsidiaries taken as a whole. On and as of the Closing Date, the financial
forecast of Company and its Subsidiaries delivered pursuant to Section 3.1(i)
(the "PROJECTIONS") are based on good faith estimates and assumptions made by
the management of Company; provided, the Projections are not to be viewed as
facts and that actual results during the period or periods covered by the
Projections may differ from such Projections and that the differences may be
material; provided further, as of the Closing Date, management of Company
believed that the Projections were reasonable and attainable.
4.6. NO MATERIAL ADVERSE CHANGE; NO RESTRICTED JUNIOR PAYMENTS. Since
December 31, 1998, no event or change has occurred that has caused or evidences,
either in any case or in the aggregate, a Material Adverse Effect, and neither
Company nor any of its Subsidiaries has directly or indirectly declared,
ordered, paid or made, or set apart any sum or property for, any Restricted
Junior Payment or agreed to do so except as permitted pursuant to Section 6.4.
4.7. ADVERSE PROCEEDINGS, ETC. Except as set forth on Schedule 4.7,
there are no Adverse Proceedings, individually or in the aggregate, that could
reasonably be expected to have a Material Adverse Effect. Neither Company nor
any of its Subsidiaries (a) is in violation of any applicable laws (including
Environmental Laws) that, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect, or (b) is subject to or in default
with respect to any final
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judgments, writs, injunctions, decrees, rules or regulations of any court or any
federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, that, individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect.
4.8. PAYMENT OF TAXES. Except as otherwise permitted under Section 5.3,
all tax returns and reports of Company and its Subsidiaries required to be filed
by any of them have been timely filed, and all taxes shown on such tax returns
to be due and payable and all assessments, fees and other governmental charges
upon Company and its Subsidiaries and upon their respective properties, assets,
income, businesses and franchises which are due and payable have been paid when
due and payable, except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect. Company knows of no proposed tax
assessment against Company or any of its Subsidiaries which is not being
actively contested by Company or such Subsidiary in good faith and by
appropriate proceedings; provided, such reserves or other appropriate
provisions, if any, as shall be required in conformity with GAAP shall have been
made or provided therefor.
4.9. TITLE TO PROPERTIES. (a) Company and its Subsidiaries have (i)
good, sufficient and legal title to (in the case of fee interests in real
property), (ii) valid leasehold interests in (in the case of leasehold interests
in real or personal property), or (iii) good title to (in the case of all other
personal property), all of their respective properties and assets reflected in
the Historical Financial Statements referred to in Section 4.5 and in the most
recent financial statements delivered pursuant to Section 5.1, in each case
except for (1) assets disposed of since the date of such financial statements in
the ordinary course of business or as otherwise permitted under Section 6.8 and
(2) minor defects in title that do not interfere with the ability of Company or
any of its Subsidiaries to conduct their business as currently conducted or to
utilize such properties for their intended purposes. Except as permitted by this
Agreement, all such properties and assets are free and clear of Liens.
(b) As of the Closing Date, Schedule 4.9(b) contains a true, accurate
and complete list of (i) all Real Estate Assets, and (ii) all leases, subleases
or assignments of leases (together with all amendments, modifications,
supplements, renewals or extensions of any thereof) affecting each Real Estate
Asset of any Credit Party, regardless of whether such Credit Party is the
landlord or tenant (whether directly or as an assignee or successor in interest)
under such lease, sublease or assignment. Except as specified in Schedule 4.9,
each agreement listed in clause (ii) of the immediately preceding sentence is in
full force and effect and Company does not have knowledge of any default that
has occurred and is continuing thereunder, and each such agreement constitutes
the legally valid and binding obligation of each applicable Credit Party,
enforceable against such Credit Party in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws relating to or limiting creditors' rights generally or by
equitable principles.
4.10. COLLATERAL. (a) The execution and delivery of the Collateral
Documents by the Credit Parties, together with the actions taken on or prior to
the date hereof pursuant to Sections 3.1(g), are effective to create in favor of
Administrative Agent for the benefit of Lenders, as security for their
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respective Obligations, a valid and perfected First Priority Lien on all of the
Collateral, and all filings and other actions necessary or desirable to perfect
and maintain the perfection and First Priority status of such Liens have been
duly made or taken and remain in full force and effect, other than the filing of
any UCC financing statements delivered to Administrative Agent for filing (but
not yet filed) and the periodic filing of UCC continuation statements in respect
of UCC financing statements filed by or on behalf of Administrative Agent.
(b) Except as set forth on Schedule 4.10(b), no authorization, approval
or other action by, and no notice to or filing with, any governmental authority
or regulatory body is required for either (i) the pledge or grant by any Credit
Party of the Liens purported to be created in favor of Administrative Agent
pursuant to any of the Collateral Documents or (ii) the exercise by
Administrative Agent of any rights or remedies in respect of any Collateral
(whether specifically granted or created pursuant to any of the Collateral
Documents or created or provided for by applicable law), except for filings or
recordings contemplated by Sections 3.1(g) and 3.1(h) and except as may be
required, in connection with the disposition of any Investment Property, by laws
generally affecting the offering and sale of securities.
(c) Except with respect to any Permitted Lien and as may have been
filed in favor of Administrative Agent as contemplated by Section 3.1(g), no
effective UCC financing statement, fixture filing or other instrument similar in
effect covering all or any part of the Collateral is on file in any filing or
recording office.
(d) All information supplied to Administrative Agent by or on behalf of
any Credit Party with respect to any of the Collateral (in each case taken as a
whole with respect to any particular Collateral) is accurate and complete in all
material respects.
4.11. ENVIRONMENTAL. No Credit Party nor any of its Subsidiaries nor
any of their respective Facilities or operations are subject to any outstanding
written order, consent decree or settlement agreement with any Person relating
to any Environmental Law, any Environmental Claim, or any Hazardous Materials
Activity that, individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect. No Credit Party nor any of its Subsidiaries has
received any letter or request for information under Section 104 of the
Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C.
ss. 9604) or any comparable state law. There are and, to each Credit Party's
knowledge, have been no conditions, occurrences, or Hazardous Materials
Activities which could reasonably be expected to form the basis of an
Environmental Claim against Company or any of its Subsidiaries that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect. Neither Company nor any of its Subsidiaries nor, to any
Credit Party's knowledge, any predecessor of Company or any of its Subsidiaries
has filed any notice under any Environmental Law indicating past or present
treatment of Hazardous Materials at any Facility, and none of Company's or any
of its Subsidiaries' operations involves the generation, transportation,
treatment, storage or disposal of hazardous waste, as defined under 40 C.F.R.
Parts 260-270 or any state equivalent. Compliance by Company and its
Subsidiaries with all current or reasonably foreseeable future requirements
pursuant to or under Environmental Laws could not be
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reasonably expected to have, individually or in the aggregate, a Material
Adverse Effect. No event or condition has occurred or is occurring with respect
to Company or any of its Subsidiaries relating to any Environmental Law, any
Release of Hazardous Materials, or any Hazardous Materials Activity which
individually or in the aggregate has had, or could reasonably be expected to
have, a Material Adverse Effect.
4.12. NO DEFAULTS; MATERIAL CONTRACTS. No Credit Party is in default in
the performance, observance or fulfillment of any of the obligations, covenants
or conditions contained in any of its Contractual Obligations, and no condition
exists that, with the giving of notice or the lapse of time or both, could
constitute such a default, except where the consequences, direct or indirect, of
such default or defaults, if any, could not reasonably be expected to have a
Material Adverse Effect. Schedule 4.12 contains a true, correct and complete
list of all the Material Contracts in effect on the Closing Date, and except as
described thereon, all such Material Contracts are in full force and effect and
no defaults currently exist thereunder by any Credit Party or, to the knowledge
of any Credit Party, by any other Person.
4.13. GOVERNMENTAL REGULATION. Neither Company nor any of its
Subsidiaries is subject to regulation under the Investment Company Act, Public
Utility Holding Company Act of 1935 or the Federal Power Act or under any other
federal or state statute or regulation which may limit its ability to incur
Indebtedness or which may otherwise render all or any portion of the Obligations
unenforceable; provided that with respect to the Investment Company Act, Company
has applied, as of the Closing Date, for an order pursuant to Section 6(c) of
the Investment Company Act declaring that Company and its Subsidiaries are
exempt from the provisions of the Investment Company Act; provided further that,
as of the Initial Funding Date and at all times thereafter that Loans are
outstanding, each Credit Party will be exempt from the provisions of the
Investment Company Act and will at no such time be required to be registered as
an "investment company" within the meaning of the Investment Company Act.
4.14. MARGIN STOCK. Neither Company nor any of its Subsidiaries is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying any Margin Stock. The
pledge of the Investment Property pursuant the Pledge and Security Agreement
does not violate Regulation T, U or X of the Board of Governors of the Federal
Reserve System.
4.15. EMPLOYEE MATTERS. There is no strike or work stoppage in
existence or threatened involving Company or any of its Subsidiaries that could
reasonably be expected to have a Material Adverse Effect.
4.16. EMPLOYEE BENEFIT PLANS. Company, each of its Subsidiaries and
each of their respective ERISA Affiliates are in compliance with all applicable
provisions and requirements of ERISA and the regulations and published
interpretations thereunder with respect to each Employee Benefit Plan, and have
performed all their obligations under each Employee Benefit Plan. Each Employee
Benefit Plan which is intended to qualify under Section 401(a) of the Internal
Revenue
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Code is so qualified. No ERISA Event has occurred or is reasonably expected to
occur. Except to the extent required under Section 4980B of the Internal Revenue
Code, no Employee Benefit Plan provides health or welfare benefits (through the
purchase of insurance or otherwise) for any retired or former employee of
Company, any of its Subsidiaries or any of their respective ERISA Affiliates. As
of the most recent valuation date for any Pension Plan, the amount of unfunded
benefit liabilities (as defined in Section 4001(a)(18) of ERISA), individually
or in the aggregate for all Pension Plans (excluding for purposes of such
computation any Pension Plans with respect to which assets exceed benefit
liabilities), does not exceed $5,000,000. As of the most recent valuation date
for each Multiemployer Plan for which the actuarial report is available, the
potential liability of Company, its Subsidiaries and their respective ERISA
Affiliates for a complete withdrawal from such Multiemployer Plan (within the
meaning of Section 4203 of ERISA), when aggregated with such potential liability
for a complete withdrawal from all Multiemployer Plans, based on information
available pursuant to Section 4221(e) of ERISA, does not exceed $5,000,000.
4.17. CERTAIN FEES. No broker's or finder's fee or commission will be
payable with respect hereto or any of the transactions contemplated hereby.
4.18. SOLVENCY. Each Credit Party is and, upon the incurrence of any
Obligation by such Credit Party on any date on which this representation and
warranty is made, will be, Solvent.
4.19. EXISTING INDENTURES. Borrower has delivered to Syndication Agent
and Administrative Agent complete and correct copies of each Existing Indenture
and of all exhibits and schedules thereto.
4.20. YEAR 2000 ISSUES. Company and its Subsidiaries have (a) engaged
in a process of assessment of the existence of any Year 2000 Issues reasonably
appropriate to the scope and complexity of their respective Systems; (b) adopted
and are successfully implementing a plan of correction ("PLAN OF CORRECTION")
which Company reasonably believes will result in a substantial elimination of
any Year 2000 Issues before any processing failure of a System or of Systems due
to Year 2000 Issues which might have a material effect on the business,
operations or financial performance of Company and, in the case of all Systems
critical to the business or operations of Company and its Subsidiaries, a
virtually complete elimination of Year 2000 Issues by September 30, 1999; (c)
adopted and are successfully implementing validation procedures reasonably
calculated to test on an ongoing basis the sufficiency of the Plan of
Correction, its implementation, and the correction of Year 2000 Issues in any
System; (d) adopted and are successfully implementing policies and procedures
requiring regular reports to, and monitoring by, senior management of Company
concerning the foregoing matters; and (e) provided Administrative Agent true and
correct copies of the written Plan of Correction, and related implementation
budgets, reviewed and approved by Company's Board of Directors; it being
understood with respect to the foregoing that no representation or warranty is
being made with respect to the Systems of Persons to whose networks Company and
its Subsidiaries are interconnected.
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4.21. DISCLOSURE. No representation or warranty of any Credit Party
contained in any Credit Document or in any other document, certificate or
written statement furnished to Lenders by or on behalf of Company or any of its
Subsidiaries (other than projections and pro forma financial information
contained in such materials) for use in connection with the transactions
contemplated hereby contains any untrue statement of a material fact or omits to
state a material fact (known to Borrower or Company, in the case of any document
not furnished by either of them) necessary in order to make the statements
contained herein or therein not misleading in light of the circumstances in
which the same were made. Any projections and pro forma financial information
contained in such materials are based upon good faith estimates and assumptions
believed by Company to be reasonable at the time made, it being recognized by
Lenders that such projections as to future events are not to be viewed as facts
and that actual results during the period or periods covered by any such
projections may differ from the projected results. There are no facts known (or
which should upon the reasonable exercise of diligence be known) to Company or
Borrower (excluding matters of a general economic nature or matters regarding
the telecommunications industry which are generally available to the public)
that, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect and that have not been disclosed herein or in such
other documents, certificates and statements furnished to Lenders for use in
connection with the transactions contemplated hereby.
4.22. NO BURDENSOME RESTRICTIONS. Neither Company nor any of its
Subsidiaries is a party to or bound by any Contractual Obligation which could
reasonably be expected to have a Material Adverse Effect.
SECTION 5. AFFIRMATIVE COVENANTS
Each Credit Party covenants and agrees that so long as any Commitment
is in effect and until payment in full of all Obligations (other than inchoate
indemnification obligations with respect to claims, losses or liabilities which
have not yet arisen and are not yet due and payable), each Credit Party shall
perform, and shall cause each of its Subsidiaries to perform, all covenants in
this Section 5.
5.1. FINANCIAL STATEMENTS AND OTHER REPORTS. Borrower will deliver to
Administrative Agent and Lenders:
(a) during Stage 1, as soon as available and in any event within thirty
(30) days after the end of each month ending after the Closing Date, the
consolidated balance sheet of Company and its Subsidiaries as at the end of such
month and the related consolidated statements of income, stockholders' equity
and cash flows of Company and its Subsidiaries for such month and for the period
from the beginning of the then current Fiscal Year to the end of such month,
setting forth in each case in comparative form the corresponding figures for the
corresponding periods of the previous Fiscal Year and the corresponding figures
from the Financial Plan for the current Fiscal Year, to the extent prepared on a
monthly basis, all in reasonable detail, together with a Financial Officer
Certification and a Narrative Report with respect thereto;
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(b) as soon as available and in any event within sixty (60) days after
the end of each of the first three Fiscal Quarters of each Fiscal Year, the
consolidated balance sheet of Company and its Subsidiaries as at the end of such
Fiscal Quarter and the related consolidated statements of income, stockholders'
equity and cash flows of Company 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, setting forth in each case in comparative form the
corresponding figures for the corresponding periods of the previous Fiscal Year
and the corresponding figures from the Financial Plan for the current Fiscal
Year, all in reasonable detail, together with (1) a Financial Officer
Certification, (2) a Narrative Report with respect thereto and (3) a revised
Schedule 4.1 (if necessary) reflecting all changes in the organizational
structure and capital structure of Company and its Subsidiaries since the
delivery of the last quarterly financial information, which revised Schedule 4.1
will be deemed to amend the then-existing Schedule 4.1 for all purposes under
this Agreement;
(c) as soon as available and in any event within ninety (90) days after
the end of each Fiscal Year, (i) the consolidated balance sheet of Company and
its Subsidiaries as at the end of such Fiscal Year and the related consolidated
statements of income, stockholders' equity and cash flows of Company and its
Subsidiaries for such Fiscal Year, setting forth in each case in comparative
form the corresponding figures for the previous Fiscal Year and the
corresponding figures from the Financial Plan for the Fiscal Year covered by
such financial statements, in reasonable detail, together with a Financial
Officer Certification and a Narrative Report with respect thereto; (ii) a report
thereon of Arthur Andersen LLP or other independent certified public accountants
of recognized national standing selected by Company and in form and substance
satisfactory to Administrative Agent, together with a written statement by such
independent certified public accountants stating (1) that their audit
examination has included a review of the terms of the Credit Documents, (2)
whether, in connection therewith, any condition or event that constitutes a
Default or an Event of Default has come to their attention and, if such a
condition or event has come to their attention, specifying the nature and period
of existence thereof, and (3) that nothing has come to their attention that
causes them to believe that the information contained in any Compliance
Certificate is not correct or that the matters set forth in such Compliance
Certificate are not stated in accordance with the terms hereof and (iii) a
revised Schedule 4.1 (if necessary) reflecting all changes in the organizational
structure and capital structure of Company and its Subsidiaries since the
delivery of the last quarterly financial information, which revised Schedule 4.1
will be deemed to amend the then-existing Schedule 4.1 for all purposes under
this Agreement;
(d) together with each delivery of financial statements of Company and
its Subsidiaries pursuant to Sections 5.1(b) and 5.1(c), a duly executed and
completed Compliance Certificate;
(e) if, as a result of any change in accounting principles and policies
from those used in the preparation of the Historical Financial Statements, the
consolidated financial statements of Company and its Subsidiaries delivered
pursuant to Section 5.1(a), 5.1(b) or 5.1(c) will differ in any material respect
from the consolidated financial statements that would have been delivered
pursuant to such subdivisions had no such change in accounting principles and
policies been made, then together with the first delivery of such financial
statements after such change one or more a
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statements of reconciliation for all such prior financial statements in form and
substance satisfactory to Administrative Agent;
(f) promptly upon their becoming available, copies of (i) all financial
statements, reports, notices and proxy statements sent or made available
generally by Company to its security holders acting in such capacity or by any
Subsidiary of Company to its security holders other than Company or another
Subsidiary of Company, (ii) all regular and periodic reports (but not including,
unless requested by Administrative Agent, routine reports regularly filed with
the FCC and state commissions with jurisdiction over telecommunications matters)
and all registration statements (other than on Form S-8 or a similar form) and
prospectuses, if any, filed by Company or any of its Subsidiaries with any
securities exchange or with the Securities and Exchange Commission or any
governmental or private regulatory authority, and (iii) all press releases and
other statements made available generally by Company or any of its Subsidiaries
to the public concerning material developments in the business of Company or any
of its Subsidiaries;
(g) promptly upon any officer of Borrower or Company obtaining
knowledge (i) of any condition or event that constitutes a Default or an Event
of Default or that notice has been given to Borrower or Company with respect
thereto; (ii) that any Person has given any notice to Company or any of its
Subsidiaries or taken any other action with respect to any event or condition
set forth in Section 8.1(b); (iii) of any condition or event of a type required
to be disclosed in a current report on Form 8-K of the Securities and Exchange
Commission; or (iv) of the occurrence of any event or change that has caused or
evidences, either in any case or in the aggregate, a Material Adverse Effect, a
certificate of an Authorized Officer specifying the nature and period of
existence of such condition, event or change, or specifying the notice given or
action taken by any such Person and the nature of such claimed Event of Default,
Default, default, event or condition, and what action Company has taken, is
taking and proposes to take with respect thereto;
(h) promptly upon any officer of Borrower or Company obtaining
knowledge of (i) the institution of, or non-frivolous threat of, any Adverse
Proceeding not previously disclosed in writing by Borrower or Company to
Lenders, or (ii) any material development in any Adverse Proceeding that, in the
case of either (i) or (ii) if adversely determined, could be reasonably expected
to have a Material Adverse Effect, or seeks to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief as a result of, the
transactions contemplated hereby, written notice thereof together with such
other information as may be reasonably available to Borrower or Company to
enable Lenders and their counsel to evaluate such matters;
(i) (i) promptly upon becoming aware of the occurrence of or
forthcoming occurrence of any ERISA Event, a written notice specifying the
nature thereof, what action Company, any of its Subsidiaries or any of their
respective ERISA Affiliates has taken, is taking or proposes to take with
respect thereto and, when known, any action taken or threatened by the Internal
Revenue Service, the Department of Labor or the PBGC with respect thereto; and
(ii) with reasonable promptness, copies of (1) each Schedule B (Actuarial
Information) to the annual report (Form 5500 Series) filed by Company, any of
its Subsidiaries or any of their respective ERISA Affiliates with
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the Internal Revenue Service with respect to each Pension Plan; (2) all notices
received by Company, any of its Subsidiaries or any of their respective ERISA
Affiliates from a Multiemployer Plan sponsor concerning an ERISA Event; and (3)
copies of such other documents or governmental reports or filings relating to
any Employee Benefit Plan as Administrative Agent shall reasonably request;
(j) as soon as practicable and in any event no later than 10 days prior
to the beginning of each Fiscal Year, a consolidated plan and financial forecast
for such Fiscal Year and the next three succeeding Fiscal Years (a "FINANCIAL
PLAN") in substantially the same level of detail as that set forth in the
business plan and forecast included in the Confidential Information Memorandum
dated March 1999 relating to the transactions contemplated hereby, including (i)
a forecasted consolidated balance sheet and forecasted consolidated statements
of income and cash flows of Company and its Subsidiaries for each such Fiscal
Year, together with pro forma Compliance Certificates for each such Fiscal Year
and an explanation of the assumptions on which such forecasts are based, (ii)
during Stage 1, forecasted consolidated statements of income and cash flows of
Company and its Subsidiaries for each month of the first such Fiscal Year
included in a Financial Plan, together with an explanation of the assumptions on
which such forecasts are based, and (iii) during Stage 1, forecasted
Pre-Overhead EBITDA on a Geographic Market-by-Geographic Market basis;
(k) as soon as practicable and in any event by the last day of each
Fiscal Year, a report in form and substance satisfactory to Administrative Agent
outlining all material insurance coverage maintained as of the date of such
report by Company and its Subsidiaries and all material insurance coverage
planned to be maintained by Company and its Subsidiaries in the immediately
succeeding Fiscal Year;
(l) with reasonable promptness, written notice of any change in the
Board of Directors of Company;
(m) promptly, and in any event within ten (10) Business Days after any
Material Contract of Company or any of its Subsidiaries is terminated prior to
its scheduled term or amended in a manner that is materially adverse to Company
or such Subsidiary, as the case may be, or any new Material Contract is entered
into, a written statement describing such event, with copies of such material
amendments or new contracts, delivered to Administrative Agent (to the extent
such delivery is permitted by the terms of any such Material Contract, provided,
no such prohibition on delivery shall be effective if it were bargained for by
Company or its applicable Subsidiary with the intent of avoiding compliance with
this Section 5.1(m)), and an explanation of any actions being taken with respect
thereto;
(n) as soon as available and in any event within forty five (45) days
after the end of each month ending after the Closing Date, a report, in
reasonable detail, calculating Initial Availability and Incremental
Availability, in each case, if any, for the preceding month; and
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(o) with reasonable promptness, such other information and data with
respect to Company or any of its Subsidiaries as from time to time may be
reasonably requested by any Lender.
5.2. EXISTENCE. Except as otherwise permitted under Section 6.8, each
Credit Party will, and will cause each of its Subsidiaries to, at all times
preserve and keep in full force and effect its existence and all rights and
franchises material to its business; provided, no Credit Party nor any of its
Subsidiaries shall be required to preserve any such existence, right or
franchise if such Person's Board of Directors (or similar governing body) shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of such Person, and that the loss thereof is not disadvantageous in
any material respect to such Person or Lenders.
5.3. PAYMENT OF TAXES AND CLAIMS. Each Credit Party will, and will
cause each of its Subsidiaries to, pay all taxes, assessments and other
governmental charges imposed upon it or any of its properties or assets or in
respect of any of its income, businesses or franchises before any penalty
accrues thereon, and all claims (including claims for labor, services, materials
and supplies) for sums that have become due and payable and that by law have or
may become a Lien upon any of its properties or assets, prior to the time when
any penalty or fine shall be incurred with respect thereto, except where the
failure to do so could not reasonably be expected to result in a Material
Adverse Effect, and provided, no such charge or claim need be paid if it is
being contested in good faith by appropriate proceedings promptly instituted and
diligently conducted, so long as (a) such reserve or other appropriate
provision, if any, as shall be required in conformity with GAAP shall have been
made therefor, and (b) in the case of a charge or claim which has or may become
a Lien against any of the Collateral, such contest proceedings conclusively
operate to stay the sale of any portion of the Collateral to satisfy such charge
or claim. Company will not, nor will it permit any of its Subsidiaries to, file
or consent to the filing of any consolidated income tax return with any Person
(other than Company or any of its Subsidiaries).
5.4. MAINTENANCE OF PROPERTIES. Each Credit Party will, and will cause
each of its Subsidiaries to, maintain or cause to be maintained in good repair,
working order and condition, ordinary wear and tear excepted, all material
properties used or useful in the business of Company and its Subsidiaries and
from time to time will make or cause to be made all appropriate repairs,
renewals and replacements thereof.
5.5. INSURANCE. Company will maintain or cause to be maintained, with
financially sound and reputable insurers, such public liability insurance, third
party property damage insurance, business interruption insurance and casualty
insurance with respect to liabilities, losses or damage in respect of the
assets, properties and businesses of Company and its Subsidiaries as may
customarily be carried or maintained under similar circumstances by Persons of
established reputation engaged in similar businesses, in each case in such
amounts (giving effect to self-insurance), with such deductibles, covering such
risks and otherwise on such terms and conditions as shall be customary for such
Persons. Without limiting the generality of the foregoing, Company will maintain
or cause to be maintained (a) flood insurance with respect to each Flood Hazard
Property that is located in a community that participates in the National Flood
Insurance Program,
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in each case in compliance with any applicable regulations of the Board of
Governors of the Federal Reserve System, and (b) replacement value casualty
insurance on the Collateral under such policies of insurance, with such
insurance companies, in such amounts, with such deductibles, and covering such
risks as are at all times carried or maintained under similar circumstances by
Persons of established reputation engaged in similar businesses. Each such
policy of insurance shall (i) name Administrative Agent for the benefit of
Lenders as an additional insured thereunder as its interests may appear and (ii)
in the case of each business interruption and casualty insurance policy, contain
a loss payable clause or endorsement, satisfactory in form and substance to
Administrative Agent, that names Administrative Agent for the benefit of Lenders
as the loss payee thereunder for any covered loss in excess of $1,000,000 and
provides for at least thirty (30) days prior written notice to Administrative
Agent of any modification adverse in any respect to Administrative Agent or
Lenders or cancellation of such policy.
5.6. BOOKS AND RECORDS; INSPECTIONS; LENDERS MEETINGS. Each Credit
Party will, and will cause each of its Subsidiaries to, keep proper books of
record and account in which full, true and correct entries are made of all
dealings and transactions in relation to its business and activities. Each
Credit Party will, and will cause each of its Subsidiaries to, permit any
authorized representatives designated by any Lender to visit and inspect any of
the Facilities of Company or of any of its Subsidiaries, to inspect, copy and
take extracts from its and their financial and accounting records, and to
discuss its and their affairs, finances and accounts with its and their officers
and independent public accountants, all upon reasonable notice and at such
reasonable times during normal business hours and as often as may reasonably be
requested. Borrower and Company will, upon the request of Administrative Agent
or Requisite Lenders, participate in a meeting of Administrative Agent and
Lenders once during each Fiscal Year to be held at Company's corporate offices
(or at such other location as may be agreed to by Borrower and Administrative
Agent) at such time as may be agreed to by Borrower and Administrative Agent.
5.7. COMPLIANCE WITH LAWS; CONTRACTUAL OBLIGATIONS.
(a) Each Credit Party will comply, and shall cause each of its
Subsidiaries and all other Persons, if any, on or occupying any Facilities to
comply, with the requirements of all Contractual Obligations and applicable
laws, rules, regulations and orders of any governmental authority (including all
Environmental Laws), noncompliance with which could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
(b) Company will use reasonable best efforts to obtain an order
pursuant to Section 6(c) of the Investment Company Act declaring that Company
and its Subsidiaries are exempt from the provisions of the Investment Company
Act, and as of the Initial Funding Date and at all times thereafter that Loans
are outstanding, will use such efforts to seek to maintain such exemption.
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5.8. ENVIRONMENTAL.
(a) Environmental Disclosure. Borrower will deliver to
Administrative Agent and Lenders:
(i) as soon as practicable following receipt thereof, copies
of all environmental audits, investigations, analyses and reports of
any kind or character, whether prepared by personnel of Company or any
of its Subsidiaries or by independent consultants, governmental
authorities or any other Persons, with respect to significant
environmental matters at any Facility or with respect to any
Environmental Claims;
(ii) promptly upon the occurrence thereof, written notice
describing in reasonable detail (1) any Release required to be reported
to any federal, state or local governmental or regulatory agency under
any applicable Environmental Laws, (2) any remedial action taken by
Company or any other Person in response to (A) any Hazardous Materials
Activities the existence of which has a reasonable possibility of
resulting in one or more Environmental Claims having, individually or
in the aggregate, a Material Adverse Effect, or (B) any Environmental
Claims that, individually or in the aggregate, have a reasonable
possibility of resulting in a Material Adverse Effect, and (3)
Company's discovery of any occurrence or condition on any real property
adjoining or in the vicinity of any Facility that could cause such
Facility or any part thereof to be subject to any material restrictions
on the ownership, occupancy, transferability or use thereof under any
Environmental Laws;
(iii) as soon as practicable following the sending or receipt
thereof by Company or any of its Subsidiaries, a copy of any and all
written communications with respect to (1) any Environmental Claims
that, individually or in the aggregate, have a reasonable possibility
of giving rise to a Material Adverse Effect, (2) any Release required
to be reported to any federal, state or local governmental or
regulatory agency, and (3) any request for information from any
governmental agency that suggests such agency is investigating whether
Company or any of its Subsidiaries may be potentially responsible for
any Hazardous Materials Activity;
(iv) prompt written notice describing in reasonable detail (1)
any proposed acquisition of stock, assets, or property by Company or
any of its Subsidiaries that could reasonably be expected to (A) expose
Company or any of its Subsidiaries to, or result in, Environmental
Claims that could reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect or (B) affect the ability of
Company or any of its Subsidiaries to maintain in full force and effect
all material Governmental Authorizations required under any
Environmental Laws for their respective operations and (2) any proposed
action to be taken by Company or any of its Subsidiaries to modify
current operations in a manner that could reasonably be expected to
subject Company or any of its Subsidiaries to any additional
obligations or requirements under any Environmental Laws; and
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(v) with reasonable promptness, such other documents and
information as from time to time may be reasonably requested by
Administrative Agent in relation to any matters disclosed pursuant to
this Section 5.8(a).
(b) Hazardous Materials Activities, Etc. Each Credit Party shall
promptly take, and shall cause each of its Subsidiaries promptly to take, any
and all actions necessary to (i) cure any violation of applicable Environmental
Laws by such Credit Party or its Subsidiaries that could reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect, and (ii)
make an appropriate response to any Environmental Claim against such Credit
Party or any of its Subsidiaries and discharge any obligations it may have to
any Person thereunder where failure to do so could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
5.9. SUBSIDIARIES. In the event that any Person becomes a Subsidiary of
Company, Company shall (i) promptly upon obtaining all necessary regulatory
approvals, if any, contribute 100% of the capital stock of such Subsidiary to
Borrower, such that after each such contribution, such Subsidiary is a
subsidiary of Borrower, and deliver to Administrative Agent certificates
(accompanied by irrevocable undated stock powers, duly endorsed in blank and
otherwise satisfactory in form and substance to Administrative Agent)
representing such capital stock, which shall be pledged pursuant to the Pledge
and Security Agreement, and shall deliver an Acknowledgment of Pledge from such
Subsidiary, and such other additional agreements or instruments, each in form
and substance to Administrative Agent, as may be necessary or desirable to
create in favor of Administrative Agent, for the benefit of Lenders, a valid and
perfected First Priority security interest in 100% of the capital stock of such
Subsidiary, (ii) promptly upon obtaining all necessary regulatory approvals, if
any, cause such Subsidiary to become a Guarantor hereunder and a Grantor under
the Pledge and Security Agreement by executing and delivering to Administrative
Agent a Counterpart Agreement, and (iii) take all such actions and execute and
deliver, or cause to be executed and delivered, all such documents, instruments,
agreements, and certificates similar to those described in Sections 3.1(b),
3.1(g), 3.1(h) and 3.1(k). With respect to each such Subsidiary, Borrower shall
promptly send to Administrative Agent written notice setting forth with respect
to such Person (i) the date on which such Person became a Subsidiary of Company,
and (ii) all of the data required to be set forth in Schedule 4.1 with respect
to all Subsidiaries of Company, and such written notice shall be deemed to
supplement Schedule 4.1 for all purposes hereof. Notwithstanding the foregoing,
if Company or any of its Subsidiaries acquires a Person and liquidates or
dissolves such Person within 30 days after the acquisition thereof in accordance
with the provisions hereof, this Section 5.9 shall not require that any action
be taken with respect to such Person
5.10. REAL ESTATE ASSETS. In the event that any Credit Party hereafter
acquires an interest in any Material Real Estate Asset and such interest has not
otherwise been made subject to the Lien of the Collateral Documents in favor of
Administrative Agent, for the benefit of Lenders, then such Credit Party,
contemporaneously with acquiring such Material Real Estate Asset, shall take all
such actions and execute and deliver, or cause to be executed and delivered, the
following:
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(i) fully executed and notarized Mortgages, in proper form for
recording in all appropriate places in all applicable jurisdictions,
encumbering each such Material Real Estate Asset (it being understood
that such Credit Party shall use reasonable best efforts to obtain any
Mortgage of a qualifying Leasehold Interest);
(ii) an opinion of counsel (which counsel shall be reasonably
satisfactory to Syndication Agent and Administrative Agent) in each
state in which such Material Real Estate Asset is located with respect
to the enforceability of the form(s) of Mortgages to be recorded in
such state and such other matters as Syndication Agent and
Administrative Agent may reasonably request, in each case in form and
substance reasonably satisfactory to Syndication Agent and
Administrative Agent;
(iii) from time to time, at the request of Administrative
Agent, appraisals as are required by law or regulation;
(iv) ALTA mortgagee title insurance policies or unconditional
commitments therefor issued by a title company with respect to each
such Material Real Estate Asset, together with a title report issued by
a title company with respect thereto, dated not more than thirty (30)
days prior to the effective date of such executed Mortgage and copies
of all recorded documents listed as exceptions to title or otherwise
referred to therein, each in form and substance reasonably satisfactory
to Syndication Agent and Administrative Agent;
(v) evidence of flood insurance with respect to each Flood
Hazard Property that is located in a community that participates in the
National Flood Insurance Program, in each case in compliance with any
applicable regulations of the Board of Governors of the Federal Reserve
System, in form and substance reasonably satisfactory to Syndication
Agent and Administrative Agent; and
(vi) ALTA surveys of all such properties which are not
Leasehold Properties, certified to Administrative Agent and dated not
more than thirty (30) days prior to the effective date of such executed
Mortgage.
5.11. YEAR 2000 ISSUES. Borrower shall periodically report to
Administrative Agent, in such form as Administrative Agent may reasonably
request, and Administrative Agent shall promptly forward each such report to
each Lender, on the progress of Company and its Subsidiaries in implementing the
Plan of Correction; the budget for, and actual financial performance with
respect to, implementation of the Plan of Correction; the assessment of Company,
any senior manager of Company or any Subsidiary, of the adequacy of the Plan of
Correction or the related implementation budget; the implementation of the Plan
of Correction, the related financial performance, and the conformity of actual
performance with related implementation budgets.
5.12. CERTAIN POST CLOSING MATTERS.
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(a) Within 30 days after the Closing Date, Company shall have
applied for all regulatory approvals which are necessary, appropriate or
advisable, including, without limitation, application to the FCC and each
relevant state commission with jurisdiction over telecommunications matters, to
(i) effect the contribution by Company of 100% of the capital stock of each of
its Subsidiaries requiring such approval to Borrower, such that after each such
contribution, each such Subsidiary is a subsidiary of Borrower, (ii) enable
Subsidiaries of Company which are not, as of the Closing Date, Guarantors
hereunder to become Guarantors hereunder and (iii) enable Subsidiaries of
Company which are not, as of the Closing Date, Grantors under the Pledge and
Security Agreement, to become Grantors thereunder. Company shall deliver to
Administrative Agent as soon as reasonably practicable (1) a copy of each such
application that is filed with the FCC, the relevant state commission, or any
other regulatory agency, (2) copies of each report, notice or other written
correspondence which it or any of its agents or advisers delivers to or receives
from the FCC, the relevant state commission, or any other regulatory agency with
respect to such application and (3) notice of the final determination of such
application. If any such application is not approved, Company will after
consultation with and at the request of Agents take all such further actions as
may be reasonably requested to appeal such decision and effect such
contribution.
(b) With respect to any Subsidiary for which such action as
specified in the foregoing clause (a) is required, within 10 days after Company
receives the necessary approval to (i) effect the contribution by Company of
100% of the capital stock of such Subsidiary to Borrower, (ii) enable such
Subsidiary to be a Guarantor hereunder and/or (iii) enable such Subsidiary to
become a Grantor under the Pledge and Security Agreement, Borrower will (1) in
the case of clause (i), in order to create in favor of Administrative Agent, for
the benefit of Lenders, a valid and perfected First Priority security interest
in 100% of the capital stock of such Subsidiary, deliver to Administrative Agent
certificates (accompanied by irrevocable undated stock powers, duly endorsed in
blank and otherwise satisfactory in form and substance to Administrative Agent)
representing all capital stock pledged pursuant to the Pledge and Security
Agreement, and take all such actions and execute and deliver, or cause to be
executed and delivered, all such documents, instruments, agreements, and
certificates similar to those described in Sections 3.1(b), 3.1(g) and 3.1(k),
(2) in the case of clause (ii), execute a Counterpart Agreement and take all
such actions and execute and deliver, or cause to be executed and delivered, all
such documents, instruments, agreements, and certificates similar to those
described in Sections 3.1(b), 3.1(g) and 3.1(k), and (3) in the case of clause
(iii), execute a Pledge Supplement substantially in the form of Exhibit A to the
Pledge and Security Agreement and take all such actions and execute and deliver,
or cause to be executed and delivered, all such documents, instruments,
agreements, and certificates similar to those described in Sections 3.1(b),
3.1(g) and 3.1(k).
(c) Within 30 days after the Closing Date, Company shall use
reasonable best efforts to obtain from each Person identified on Schedule
5.12(c) an acknowledgment letter in favor of Administrative Agent, for the
benefit of Lenders, in the form of Exhibit M with respect to each corresponding
agreement listed on such Schedule 5.12(c).
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<PAGE> 75
(d) Within 30 days after the Closing Date, Company shall use
reasonable best efforts to obtain from Lucent Technologies, Inc. ("LUCENT") a
consent to the collateral assignment to Administrative Agent and Lenders of
rights existing under the General Agreement between Company and Lucent dated as
of October 16, 1997, as amended, modified or otherwise supplemented from time to
time, such consent in form and substance reasonably satisfactory to
Administrative Agent.
(c) With respect to any Subsidiary for which no such action as
specified in the foregoing clause (a)(i) is required, within 10 days after the
Closing Date, Company shall effect the contribution of 100% of the capital stock
of each such Subsidiary to Borrower, and in order to create in favor of
Administrative Agent, for the benefit of Lenders, a valid and perfected First
Priority security interest in 100% of the capital stock of such Subsidiary,
shall deliver to Administrative Agent certificates (accompanied by irrevocable
undated stock powers, duly endorsed in blank and otherwise satisfactory in form
and substance to Administrative Agent) and take all such actions and execute and
deliver, or cause to be executed and delivered, all such documents, instruments,
agreements, and certificates similar to those described in Sections 3.1(b),
3.1(g) and 3.1(k).
SECTION 6. NEGATIVE COVENANTS
Each Credit Party covenants and agrees that, so long as any Commitment
is in effect and until payment in full of all Obligations (other than inchoate
indemnification obligations with respect to claims, losses or liabilities which
have not yet arisen and are not yet due and payable), such Credit Party shall
perform, and shall cause each of its Subsidiaries to perform, all covenants in
this Section 6 (it being understood that the covenants in Section 6.6 will be
measured during Stage 1 but shall not result in an Event of Default if any
Credit Party shall not be in compliance therewith so long as no Loans are
outstanding).
6.1. INDEBTEDNESS. No Credit Party shall, nor shall it permit any of
its Subsidiaries to, directly or indirectly, create, incur, assume or guaranty,
or otherwise become or remain directly or indirectly liable with respect to any
Indebtedness, except:
(a) the Obligations, including any Indebtedness under any Hedge
Agreement with any Lender Counterparty;
(b) Indebtedness of any Guarantor to Borrower or to any other
Guarantor, or of Borrower to any Guarantor; provided, (i) all such Indebtedness
shall be evidenced by promissory notes and all such notes shall be subject to a
First Priority Lien pursuant to the Pledge and Security Agreement, (ii) all such
Indebtedness owed by Company to any of its Subsidiaries shall be subordinated in
right of payment to the payment in full of the Obligations pursuant to the terms
of the applicable promissory notes, and (iii) any payment by any such Subsidiary
of Company under any guaranty of the Obligations shall result in a pro tanto
reduction of the amount of any Indebtedness owed by such Subsidiary to Company
or to any of its Subsidiaries for whose benefit such payment is made;
69
<PAGE> 76
(c) Subordinated Indebtedness (excluding for purposes of this clause
(c) Indebtedness under the Existing Indentures) in an aggregate amount not to
exceed (i) an amount equal to the net cash proceeds received by Company from the
issuance after the Closing Date of any Additional Equity Securities to the
extent such proceeds are invested in operations and expenses of the Borrower
multiplied by two and/or (ii) an amount equal to the aggregate amount that the
Commitment is permanently reduced pursuant to Section 2.11(f); provided that, in
any case, as of the date of the incurrence of such Subordinated Indebtedness, no
event shall have occurred and be continuing or would result from such incurrence
that would result in a Default or Event of Default;
(d) Indebtedness incurred by Company or any of its Subsidiaries arising
from agreements providing for indemnification, adjustment of purchase price or
similar obligations, or from guaranties or letters of credit, surety bonds or
performance bonds securing the performance of Company or any such Subsidiary
pursuant to such agreements, in connection with acquisitions or dispositions of
any business, assets or Subsidiary of Company or any of its Subsidiaries
pursuant to and in accordance with this Agreement;
(e) Indebtedness which may be deemed to exist pursuant to any
guaranties, performance, surety, statutory, appeal or similar obligations
obtained in the ordinary course of business;
(f) Indebtedness in respect of netting services, overdraft protections
and otherwise in connection with Deposit Accounts;
(g) guaranties in the ordinary course of business of the obligations of
suppliers, customers, franchisees and licensees of Company and its Subsidiaries;
(h) Indebtedness outstanding under the Existing Indentures;
(i) Indebtedness with respect to (A) Capital Leases for installed fiber
optic cable incurred in the ordinary course of business ("DARK FIBER LEASES") in
an aggregate amount not to exceed at any time $75,000,000 and (B) other Capital
Leases in an aggregate amount not to exceed at any time $10,000,000;
(j) Permitted Equipment Financings;
(k) Indebtedness incurred or assumed by Company or any of its
Subsidiaries in connection with any Permitted Acquisition;
(l) Indebtedness in the form of notes issued by Company or any of its
Subsidiaries in connection with the repurchase of Securities from any director,
officer, employee or consultant in an aggregate amount not to exceed $2,500,000;
(m) Indebtedness in the form of letters of credit for the account of
Company or any of its Subsidiaries in an aggregate face amount not to exceed
$2,000,000 at any time outstanding;
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<PAGE> 77
(n) Indebtedness not otherwise permitted under this Section 6.1 in an
aggregate amount not to exceed $2,000,000 at any time outstanding; and
(o) extensions, renewals and replacements of any such Indebtedness
listed in clauses (h), (j) and (k) above, that do not in any such case increase
the outstanding principal amount thereof.
6.2. LIENS. No Credit Party shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or permit to
exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of Company or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the UCC of any State or under any similar recording or notice
statute, except:
(a) Liens in favor of Administrative Agent for the benefit of Lenders
granted pursuant to any Credit Document;
(b) Liens for taxes, assessments or governmental charges or claims that
are not yet due or are being contested in good faith by appropriate proceedings,
so long as such reserves or other appropriate provisions, if any, as shall be
required by GAAP shall have been made for any such contested amounts;
(c) statutory Liens of landlords, carriers, warehousemen, mechanics,
repairmen, workmen and materialmen, and other Liens imposed by law, in each case
incurred in the ordinary course of business (i) for amounts not yet overdue or
(ii) for amounts that are overdue and that (in the case of any such amounts
overdue for a period in excess of five days) are being contested in good faith
by appropriate proceedings, so long as such reserves or other appropriate
provisions, if any, as shall be required by GAAP shall have been made for any
such contested amounts;
(d) Liens incurred or deposits made in the ordinary course of business
in connection with workers' compensation, unemployment insurance and other types
of social security, deposits made in the ordinary course of business with
utility companies, and Liens incurred or deposits made in the ordinary course of
business to secure the performance of tenders, statutory or regulatory
obligations, surety and appeal bonds, bids, leases, government contracts, trade
contracts, performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money), so long as no
foreclosure, sale or similar proceedings have been commenced with respect to any
portion of the Collateral on account thereof;
(e) easements, rights-of-way, restrictions, encroachments, and other
minor defects or irregularities in title, and other similar encumbrances in each
case which do not and will not interfere in any material respect with the
ordinary conduct of the business of Company or any of its Subsidiaries;
71
<PAGE> 78
(f) any interest or title of a lessor or sublessor under any lease
permitted hereunder;
(g) Liens solely on any cash earnest money deposits made by Company or
any of its Subsidiaries in connection with any letter of intent or purchase
agreement entered into by it;
(h) Liens incurred in connection with the purchase or shipping of goods
or assets on the related assets and proceeds thereof in favor of the seller or
shipper of such goods or assets;
(i) Liens arising from filing precautionary UCC financing statements
relating solely to leases entered into the ordinary course of business
(including Capital Leases permitted hereunder);
(j) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods;
(k) any zoning or similar law or right reserved to or vested in any
governmental office or agency to control or regulate the use of any real
property;
(l) licenses of patents, trademarks and other intellectual property
rights granted by Company or any of its Subsidiaries in the ordinary course of
business and not interfering in any respect with the ordinary conduct of the
business of Company or such Subsidiary;
(m) judgment liens not constituting an Event of Default pursuant to
Section 8.1(h);
(n) Liens described in Schedule 6.2 or on a title report delivered
pursuant to Section 5.12;
(o) Liens securing Indebtedness permitted pursuant to 6.1(j); provided,
any such Lien shall encumber only the assets acquired with the proceeds of such
Indebtedness;
(p) Liens existing on any property or assets acquired pursuant to a
Permitted Acquisition prior to the acquisition thereof by Borrower or any of its
Subsidiaries or existing on any property or asset of any Person that becomes a
Subsidiary after the date hereof prior to the time such Person becomes a
Subsidiary; provided that (i) such Lien is not created in contemplation of or in
connection with such acquisition or such Person becoming a Subsidiary, as the
case may be, (ii) such Lien shall not apply to any other property or assets of
Borrower or any of its Subsidiaries and (iii) such Lien shall secure only those
obligations which it secures on the date of such acquisition or the date such
Person becomes a Subsidiary, as the case may be, and extensions, renewals and
replacements thereof that do not increase the outstanding principal amount
thereof;
(q) Liens securing reimbursement obligations with respect to letters of
credit permitted pursuant to Section 6.1(m); and
(r) Liens that secure other obligations in an aggregate principal
amount not to exceed $2,000,000 at any time outstanding.
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<PAGE> 79
6.3. EQUITABLE LIEN; NO FURTHER NEGATIVE PLEDGES. If any Credit Party
or any of its Subsidiaries shall create or assume any Lien upon any of its
properties or assets, whether now owned or hereafter acquired, other than
Permitted Liens, it shall make or cause to be made effective provision whereby
the Obligations will be secured by such Lien equally and ratably with any and
all other Indebtedness secured thereby as long as any such Indebtedness shall be
so secured; provided, notwithstanding the foregoing, this covenant shall not be
construed as a consent by Requisite Lenders to the creation or assumption of any
such Lien not otherwise permitted hereby. Except with respect to (a) the
Existing Indentures, (b) specific property encumbered to secure payment of
particular Indebtedness or to be sold pursuant to an executed agreement with
respect to an Asset Sale or assets not constituting an Asset Sale, or (c) any
agreement prohibiting only the creation of Liens securing Subordinated
Indebtedness, no Credit Party nor any of its Subsidiaries shall enter into any
agreement prohibiting the creation or assumption of any Lien upon any of its
properties or assets, whether now owned or hereafter acquired.
6.4. RESTRICTED PAYMENTS; RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS. (a)
No Credit Party shall nor shall it permit any of its Subsidiaries to, directly
or indirectly, declare, order, pay, make or set apart any sum for any Restricted
Junior Payment except the following:
(i) Company may make regularly scheduled payments permitted to
be made to holders of the Subordinated Indebtedness and under, and only
to the extent required by, the Existing Indentures; and
(ii) so long as no Event of Default (A) of the type specified
in Section 8.1(a) has occurred or (B) has occurred as the result of a
breach of Section 6.7, Borrower may make Restricted Junior Payments to
Company at such times and in such amounts as are necessary to enable
Company to make the payments specified in clause (i) above.
(b) Except as provided herein, no Credit Party shall, nor shall it
permit any of its Subsidiaries to, create or otherwise cause or suffer to exist
or become effective any consensual encumbrance or restriction of any kind on the
ability of any Subsidiary of Company to (i) pay dividends or make any other
distributions on any of such Subsidiary's capital stock owned by Company or any
other Subsidiary of Company, (ii) repay or prepay any Indebtedness owed by such
Subsidiary to Company or any other Subsidiary of Company, (iii) make loans or
advances to Company or any other Subsidiary of Company, or (iv) transfer any of
its property or assets to Company or any other Subsidiary of Company.
6.5. INVESTMENTS. No Credit Party shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, make or own any Investment in any
Person, including any Joint Venture, except:
(a) Cash Equivalents;
(b) Investments by any Credit Party in any Subsidiary of Company
73
<PAGE> 80
* NOTE: CERTAIN MATERIAL HAS BEEN OMITTED FROM THIS DOCUMENT PURSUANT TO
A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH
THE SEC.
(c) the contribution by Company of 100% of the capital stock of each of
its Subsidiaries to Borrower, such that after each such contribution, each such
Subsidiary is a subsidiary of Borrower;
(d) Investments (i) in accounts receivable arising and trade credit
granted in the ordinary course of business and in any Securities received in
satisfaction or partial satisfaction thereof from financially troubled account
debtors and (ii) prepayments and other credits to suppliers made in the ordinary
course of business consistent with the past practices of Company and its
Subsidiaries;
(e) inter company loans to the extent permitted under Section 6.1(b);
(f) Consolidated Capital Expenditures permitted by Section 6.6(e) and
6.7(e);
(g) Permitted Acquisitions;
(h) Investments in the form of notes issued by Company or any of its
Subsidiaries in connection with the repurchase of Securities from any director,
officer, employee or consultant pursuant to Section 6.1(l);
(i) Investments in the form of Hedge Agreements;
(j) deposits permitted under Section 6.1(d); and
(k) other Investments in an aggregate amount not in excess of
$10,000,000 at any time outstanding.
6.6. STAGE 1 FINANCIAL COVENANTS. During Stage 1:
(a) MINIMUM REVENUES. Company shall not permit Revenues as of
the last day of any Fiscal Quarter, beginning with the Fiscal Quarter ending
June 30, 1999, to be less than the correlative amount indicated:
<TABLE>
<CAPTION>
================================================================================
Fiscal Minimum
Quarter Revenues
- --------------------------------------------------------------------------------
<S> <C>
2Q1999 $ *
- --------------------------------------------------------------------------------
3Q1999 $ *
- --------------------------------------------------------------------------------
4Q1999 $ *
- --------------------------------------------------------------------------------
1Q2000 $ *
- --------------------------------------------------------------------------------
2Q2000 $ *
- --------------------------------------------------------------------------------
3Q2000 $ *
- --------------------------------------------------------------------------------
4Q2000 $ *
- --------------------------------------------------------------------------------
1Q2001 $ *
- --------------------------------------------------------------------------------
2Q2001 $ *
================================================================================
</TABLE>
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<PAGE> 81
* NOTE: CERTAIN MATERIAL HAS BEEN OMITTED FROM THIS DOCUMENT PURSUANT TO
A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH
THE SEC.
(b) CONSOLIDATED EBITDA. Company shall not permit Consolidated
EBITDA as at the end of any Fiscal Quarter, beginning with the Fiscal Quarter
ending June 30, 1999, to be less than the correlative amount indicated:
<TABLE>
<CAPTION>
================================================================================
Fiscal Consolidated
Quarter EBITDA
- --------------------------------------------------------------------------------
<S> <C>
2Q1999 $ *
- --------------------------------------------------------------------------------
3Q1999 $ *
- --------------------------------------------------------------------------------
4Q1999 $ *
- --------------------------------------------------------------------------------
1Q2000 $ *
- --------------------------------------------------------------------------------
2Q2000 $ *
- --------------------------------------------------------------------------------
3Q2000 $ *
- --------------------------------------------------------------------------------
4Q2000 $ *
- --------------------------------------------------------------------------------
1Q2001 $ *
- --------------------------------------------------------------------------------
2Q2001 $ *
================================================================================
</TABLE>
provided that for (i) the Fiscal Quarter in which a Permitted Acquisition
occurs, all of the amounts in the table above will be increased by 80% of the
Consolidated EBITDA, if positive, or reduced by 120% of the Consolidated EBITDA,
if negative, and (ii) each subsequent Fiscal Quarter following that in which a
Permitted Acquisition occurs, all of the amounts in the table above will be
increased by 100% of the Consolidated EBITDA, if positive, or reduced by 100% of
the Consolidated EBITDA, if negative, in each case as calculated with respect to
the entity or assets being acquired using the historical financial statements of
such entity and the consolidated financial statements of Company and its
Subsidiaries which shall be reformulated as if such transaction, and any
Indebtedness incurred or repaid in connection therewith, had been consummated or
incurred or
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<PAGE> 82
repaid at the beginning of such period (and assuming that such Indebtedness
bears interest during any portion of the applicable measurement period prior to
the relevant acquisition at the weighted average of the interest rates
applicable to outstanding Loans incurred during such period, taking into account
all Hedge Agreements, if any, applicable thereto); and all such pro forma
adjustments shall be accompanied by a Financial Officer Certification.
(c) SENIOR SECURED DEBT TO TOTAL CAPITALIZATION. Company shall
not permit the ratio of Senior Secured Debt to Total Capitalization to exceed
15% at any time in 1999, or to exceed 20% at any time during Stage 1 thereafter.
(d) MAXIMUM CONSOLIDATED CAPITAL EXPENDITURES. Company shall
not, and shall not permit its Subsidiaries to, make or incur Consolidated
Capital Expenditures, in any Fiscal Year indicated below, in an aggregate amount
for Company and its Subsidiaries in excess of the corresponding amount set forth
below opposite such Fiscal Year; provided, 75% of any unutilized amount for any
Fiscal Year may be utilized in the next succeeding Fiscal Year; and provided,
further, that no more than 20% of Consolidated Capital Expenditures in any
Fiscal Year may be incurred for expenditures not related to Company's core CLEC
switched access business as conducted as of the Closing Date and similar or
related businesses:
<TABLE>
<CAPTION>
================================================================================
Consolidated
Fiscal Year Capital Expenditures
- --------------------------------------------------------------------------------
<S> <C>
1999 $310,000,000
- --------------------------------------------------------------------------------
2000 $225,000,000
================================================================================
</TABLE>
provided further that, so long as no event shall have occurred and be continuing
or would result from such expenditure that would result in a Default or Event of
Default, the amounts specified in the table above shall each be increased by an
amount equal to (i)(x) the net cash proceeds received by Company from the
issuance after the Closing Date of any Additional Equity Securities to the
extent such proceeds are contributed to Borrower and/or its Subsidiaries
multiplied by (y) one-half less (ii) the amount of additional Permitted
Acquisitions made pursuant to the final proviso in clause (iv) of the definition
of "Permitted Acquisitions".
(e) CERTAIN CALCULATIONS.
(i) With respect to any period during which a
Permitted Acquisition has occurred, for purposes of determining compliance with
the financial covenants set forth in this Section 6.6, Consolidated EBITDA shall
be calculated with respect to such period on a pro forma basis in the following
manner: Consolidated EBITDA will be increased by 100% of the Consolidated
EBITDA, if positive, or reduced by 100% of the Consolidated EBITDA, if negative,
in each case as calculated with respect to the entity or assets being acquired
using the historical financial statements of such entity and the consolidated
financial statements of Company and its
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<PAGE> 83
Subsidiaries which shall be reformulated as if such transaction, and any
Indebtedness incurred or repaid in connection therewith, had been consummated or
incurred or repaid at the beginning of such period (and assuming that such
Indebtedness bears interest during any portion of the applicable measurement
period prior to the relevant acquisition at the weighted average of the interest
rates applicable to outstanding Loans incurred during such period, taking into
account all Hedge Agreements, if any, applicable thereto); and all such pro
forma adjustments shall be accompanied by a Financial Officer Certification.
(ii) With respect to any period during which an Asset Sale has
occurred, for purposes of determining compliance with the financial covenants
set forth in this Section 6.6, Consolidated EBITDA shall be calculated with
respect to such period on a pro forma basis (without giving effect to
adjustments to increase Consolidated EBITDA to account for expected improvements
in operations) using the historical financial statements of any business sold or
to be sold and the consolidated financial statements of Company and its
Subsidiaries which shall be reformulated as if such transaction, and any
Indebtedness repaid in connection therewith, had been repaid at the beginning of
such period.
6.7. STAGE 2 FINANCIAL COVENANTS. During Stage 2:
(a) SENIOR LEVERAGE RATIO. Company shall not permit the Senior
Leverage Ratio as of the last day of any Fiscal Quarter, beginning with the
Fiscal Quarter ending September 30, 2001, to exceed 3.00:1.00.
(b) TOTAL LEVERAGE RATIO. Company shall not permit the Total
Leverage Ratio as of the last day of any Fiscal Quarter, beginning with the
Fiscal Quarter ending September 30, 2001, to exceed the correlative ratio
indicated:
<TABLE>
<CAPTION>
================================================================================
Total
Fiscal Leverage
Quarter Ratio
- --------------------------------------------------------------------------------
<S> <C>
3Q2001 6.00:1.00
- --------------------------------------------------------------------------------
4Q2001 6.00:1.00
- --------------------------------------------------------------------------------
1Q2002 5.00:1.00
- --------------------------------------------------------------------------------
2Q2002 5.00:1.00
- --------------------------------------------------------------------------------
3Q2002 4.00:1.00
and
thereafter
================================================================================
</TABLE>
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<PAGE> 84
(c) INTEREST COVERAGE RATIO. Company shall not permit the
Interest Coverage Ratio as of the last day of any Fiscal Quarter, beginning with
the Fiscal Quarter ending September 30, 2001, to be less than 3.00:1.00.
(d) PRO FORMA DEBT SERVICE COVERAGE RATIO. Company shall not
permit the Pro Forma Debt Service Coverage Ratio as of the last day of any
Fiscal Quarter, beginning with the Fiscal Quarter ending September 30, 2001, to
be less than the correlative ratio indicated:
<TABLE>
<CAPTION>
================================================================================
Pro Forma
Fiscal Debt Service
Quarter Coverage Ratio
- --------------------------------------------------------------------------------
<S> <C>
3Q2001 2.00:1.00
- --------------------------------------------------------------------------------
4Q2001 2.00:1.00
- --------------------------------------------------------------------------------
1Q2002 2.00:1.00
- --------------------------------------------------------------------------------
2Q2002 2.00:1.00
- --------------------------------------------------------------------------------
3Q2002 2.00:1.00
- --------------------------------------------------------------------------------
4Q2002 2.00:1.00
- --------------------------------------------------------------------------------
1Q2003 2.50:1.00
and
thereafter
================================================================================
</TABLE>
(e) MAXIMUM CONSOLIDATED CAPITAL EXPENDITURES. Company shall not, and
shall not permit its Subsidiaries to, make or incur Consolidated Capital
Expenditures, in any Fiscal Year indicated below, in an aggregate amount for
Company and its Subsidiaries in excess of the corresponding amount set forth
below opposite such Fiscal Year; provided, 50% of any unutilized amount for any
Fiscal Year may be utilized in the next succeeding Fiscal Year; and provided,
further, that no more than 20% of Consolidated Capital Expenditures in any
Fiscal Year may be incurred for expenditures not related to Company's core CLEC
switched access business as conducted as of the Closing Date and similar or
related businesses:
<TABLE>
<CAPTION>
================================================================================
Consolidated
Fiscal Year Capital Expenditures
- --------------------------------------------------------------------------------
<S> <C>
2001 $215,000,000
- --------------------------------------------------------------------------------
2002 $260,000,000
- --------------------------------------------------------------------------------
2003 $205,000,000
- --------------------------------------------------------------------------------
2004 $130,000,000
- --------------------------------------------------------------------------------
2005 $115,000,000
================================================================================
</TABLE>
78
<PAGE> 85
provided further that, so long as no event shall have occurred and be continuing
or would result from such expenditure that would result in a Default or Event of
Default, the amounts specified in the table above shall each be increased by an
amount equal to (i)(x) the net cash proceeds received by Company from the
issuance after the Closing Date of any Additional Equity Securities to the
extent such proceeds are contributed to Borrower and/or its Subsidiaries
multiplied by (y) one-half less (ii) the amount of additional Permitted
Acquisitions made pursuant to the final proviso in clause (iv) of the definition
of "Permitted Acquisitions".
(f) CERTAIN CALCULATIONS.
(i) With respect to any period during which a Permitted
Acquisition has occurred, for purposes of determining compliance with the
financial covenants set forth in this Section 6.7, Annualized Consolidated
EBITDA and the components of Pro Forma Consolidated Debt Service shall be
calculated with respect to such period on a pro forma basis in the following
manner: Consolidated EBITDA will be increased by 100% of the Consolidated
EBITDA, if positive, or reduced by 100% of the Consolidated EBITDA, if negative,
in each case as calculated with respect to the entity or assets being acquired
using the historical financial statements of such entity and the consolidated
financial statements of Company and its Subsidiaries which shall be reformulated
as if such transaction, and any Indebtedness incurred or repaid in connection
therewith, had been consummated or incurred or repaid at the beginning of such
period (and assuming that such Indebtedness bears interest during any portion of
the applicable measurement period prior to the relevant acquisition at the
weighted average of the interest rates applicable to outstanding Loans incurred
during such period, taking into account all Hedge Agreements, if any, applicable
thereto); and all such pro forma adjustments shall be accompanied by a Financial
Officer Certification.
(ii) With respect to any period during which an Asset Sale has
occurred, for purposes of determining compliance with the financial covenants
set forth in this Section 6.7, Annualized Consolidated EBITDA and the components
of Pro Forma Consolidated Debt Service shall be calculated with respect to such
period on a pro forma basis (without giving effect to adjustments to increase
Annualized Consolidated EBITDA and the components of Pro Forma Consolidated
Fixed Charges to account for expected improvements in operations) using the
historical financial statements of any business sold or to be sold and the
consolidated financial statements of Company and its Subsidiaries which shall be
reformulated as if such transaction, and any Indebtedness repaid in connection
therewith, had been repaid at the beginning of such period.
79
<PAGE> 86
6.8. FUNDAMENTAL CHANGES; DISPOSITION OF ASSETS; ACQUISITIONS. No
Credit Party shall, nor shall it permit, any of its Subsidiaries to, enter into
any transaction of merger or consolidation, or liquidate, wind-up or dissolve
itself (or suffer any liquidation or dissolution), or convey, sell, lease or
sub-lease (as lessor or sublessor), transfer or otherwise dispose of, in one
transaction or a series of transactions, all or any part of its business,
property or assets, whether now owned or hereafter acquired, or acquire by
purchase or otherwise (other than purchases or other acquisitions of inventory,
materials and equipment in the ordinary course of business) the business,
property or fixed assets of, or stock or other evidence of beneficial ownership
of, any Person or any division or line of business of any Person, except:
(a) subject to Section 6.13, any Subsidiary of Borrower may be merged
with or into Company or any other Subsidiary, or be liquidated, wound up or
dissolved, or all or any part of its business, property or assets may be
conveyed, sold, leased, transferred or otherwise disposed of, in one transaction
or a series of transactions, to Borrower or any of its Subsidiaries; provided,
in the case of such a merger, Company or such Subsidiary shall be the continuing
or surviving Person;
(b) sales of assets which do not constitute Asset Sales;
(c) leases or subleases to or from other Persons of assets by Company
or any of it Subsidiaries in the ordinary course of business;
(d) licenses to or from other Persons of Intellectual Property by
Company or any Subsidiary thereof in the ordinary course of business;
(e) Permitted Acquisitions;
(f) Investments made in accordance with Section 6.5; and
(g) Asset Sales, subject to Section 2.11(a).
6.9. DISPOSAL OF SUBSIDIARY INTERESTS. Except for any sale of 100% of
the equity Securities of any of its Subsidiaries in compliance with the
provisions of Section 6.8, no Credit Party shall (a) directly or indirectly
sell, assign, pledge or otherwise encumber or dispose of any equity Securities
of any of its Subsidiaries, except to qualify directors if required by
applicable law; or (b) permit any of its Subsidiaries directly or indirectly to
sell, assign, pledge or otherwise encumber or dispose of any equity Securities
of any of its Subsidiaries (including such Subsidiary), except to another Credit
Party (subject to the restrictions on such disposition otherwise imposed herein
under), or to qualify directors if required by applicable law.
6.10. SALES AND LEASE-BACKS. No Credit Party shall, nor shall it permit
any of its Subsidiaries to, directly or indirectly, become or remain liable as
lessee or as a guarantor or other surety with respect to any lease of any
property (whether real, personal or mixed), whether now owned or hereafter
acquired, which Company or any of its Subsidiaries (a) has sold or transferred
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or is to sell or to transfer to any other Person (other than Company or any of
its Subsidiaries), or (b) intends to use for substantially the same purpose as
any other property which has been or is to be sold or transferred by Company or
any of its Subsidiaries to any Person (other than Company or any of its
Subsidiaries) in connection with such lease.
6.11. SALE OR DISCOUNT OF RECEIVABLES. No Credit Party shall, nor shall
it permit any of its Subsidiaries to, directly or indirectly, sell with
recourse, or discount or otherwise sell for less than the face value thereof,
any of its notes or accounts receivable (it being understood that the
restrictions contained in this Section 6.11 shall not apply to any write-off of
bad debt in the ordinary course of business consistent with prior practice).
6.12. TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES. No Credit Party
shall, nor shall it permit any of its Subsidiaries to, directly or indirectly,
enter into or permit to exist any transaction (including the purchase, sale,
lease or exchange of any property or the rendering of any service) with any
holder of 5% or more of any class of equity Securities of Company or any of its
Subsidiaries or with any Affiliate of Company or of any such holder, on terms
that are less favorable to Company or that Subsidiary, as the case may be, than
those that might be obtained at the time from Persons who are not such a holder
or Affiliate; provided, the foregoing restriction shall not apply to (a) any
transaction between Company and any of its Subsidiaries or between any of the
Subsidiaries; (b) reasonable and customary fees and expenses paid to members of
the Boards of Directors of Company and its Subsidiaries; or (c) officer and
other employee of Company and its Subsidiaries compensation arrangements entered
into in the ordinary course of business.
6.13. CONDUCT OF BUSINESS. From and after the Closing Date, no Credit
Party shall, nor shall it permit any of its Subsidiaries to, engage in any
business other than (a) the businesses engaged in by such Credit Party on the
Closing Date and similar or related businesses and (b) such other lines of
business as may be consented to by Requisite Lenders. Company will not engage in
any business activities or own any assets or properties other than the capital
stock of its Subsidiaries and otherwise as incident to its existence as a
holding company.
6.14. AMENDMENTS OR WAIVERS OF EXISTING INDENTURES/SUBORDINATED
INDEBTEDNESS. No Credit Party shall, nor shall it permit any of its Subsidiaries
to, amend or otherwise change the terms of the Existing Indentures or any
Subordinated Indebtedness, or make any payment consistent with an amendment
thereof or change thereto, if the effect of such amendment or change is to
increase the interest rate on the Existing Indentures or such Subordinated
Indebtedness, change (to earlier dates) any dates upon which payments of
principal or interest are due thereon, change any event of default or condition
to an event of default with respect thereto (other than to eliminate any such
event of default or increase any grace period related thereto), change the
redemption, prepayment or defeasance provisions thereof, change the
subordination provisions of such Subordinated Indebtedness (or of any guaranty
thereof), or change any collateral therefor (other than to release such
collateral), or if the effect of such amendment or change, together with all
other amendments or changes made, is to increase materially the obligations of
the obligor thereunder or to confer any additional rights on the holders of
notes issued under the Existing Indentures or such Subordinated
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Indebtedness (or a trustee or other representative on their behalf) which would
be adverse to any Credit Party or Lenders.
6.15. FISCAL YEAR. No Credit Party shall, nor shall it permit any of
its subsidiaries to, change its Fiscal Year-end from December 31.
SECTION 7. GUARANTY
7.1. GUARANTY OF THE OBLIGATIONS. Subject to the provisions of Section
7.2, Guarantors jointly and severally hereby irrevocably and unconditionally
guaranty the due and punctual payment in full of all Obligations when the same
shall become due, whether at stated maturity, by required prepayment,
declaration, acceleration, demand or otherwise (including amounts that would
become due but for the operation of the automatic stay under Section 362(a) of
the Bankruptcy Code, 11 U.S.C. ss. 362(a)).
7.2. CONTRIBUTION BY GUARANTORS. Each Guarantor desires to allocate
among themselves (collectively, the "CONTRIBUTING GUARANTORS"), in a fair and
equitable manner, their obligations arising under this Guaranty. Accordingly, in
the event any payment or distribution is made on any date by a Guarantor under
this Guaranty (a "FUNDING GUARANTOR") that exceeds its Fair Share as of such
date, that Funding Guarantor shall be entitled to a contribution from each of
the other Contributing Guarantors in the amount of such other Contributing
Guarantor's Fair Share Shortfall as of such date, with the result that all such
contributions will cause each Contributing Guarantor's Aggregate Payments to
equal its Fair Share as of such date. "FAIR SHARE" means, with respect to a
Contributing Guarantor as of any date of determination, an amount equal to (a)
the ratio of (i) the Fair Share Contribution Amount with respect to such
Contributing Guarantor to (ii) the aggregate of the Fair Share Contribution
Amounts with respect to all Contributing Guarantors multiplied by (b) the
aggregate amount paid or distributed on or before such date by all Funding
Guarantors under this Guaranty in respect of the obligations guarantied. "FAIR
SHARE SHORTFALL" means, with respect to a Contributing Guarantor as of any date
of determination, the excess, if any, of the Fair Share of such Contributing
Guarantor over the Aggregate Payments of such Contributing Guarantor. "FAIR
SHARE CONTRIBUTION AMOUNT" means, with respect to a Contributing Guarantor as of
any date of determination, the maximum aggregate amount of the obligations of
such Contributing Guarantor under this Guaranty that would not render its
obligations hereunder or thereunder subject to avoidance as a fraudulent
transfer or conveyance under Section 548 of Title 11 of the United States Code
or any applicable provisions of comparable state law; provided, solely for
purposes of calculating the "FAIR SHARE CONTRIBUTION AMOUNT" with respect to any
Contributing Guarantor for purposes of this Section 7.2, any assets or
liabilities of such Contributing Guarantor arising by virtue of any rights to
subrogation, reimbursement or indemnification or any rights to or obligations of
contribution hereunder shall not be considered as assets or liabilities of such
Contributing Guarantor. "AGGREGATE PAYMENTS" means, with respect to a
Contributing Guarantor as of any date of determination, an amount equal to (1)
the aggregate amount of all payments and distributions made on or before such
date by such Contributing Guarantor in respect of this Guaranty (including,
without limitation, in respect of this Section 7.2), minus (2) the aggregate
amount of all payments
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received on or before such date by such Contributing Guarantor from the other
Contributing Guarantors as contributions under this Section 7.2. The amounts
payable as contributions hereunder shall be determined as of the date on which
the related payment or distribution is made by the applicable Funding Guarantor.
The allocation among Contributing Guarantors of their obligations as set forth
in this Section 7.2 shall not be construed in any way to limit the liability of
any Contributing Guarantor hereunder. Each Guarantor is a beneficiary to the
contribution agreement set forth in this Section 7.2.
7.3. PAYMENT BY GUARANTORS. Subject to Section 7.2, Guarantors hereby
jointly and severally agree, in furtherance of the foregoing and not in
limitation of any other right which any Beneficiary may have at law or in equity
against any Guarantor by virtue hereof, that upon the failure of Borrower to pay
any of the Obligations when and as the same shall become due, whether at stated
maturity, by required prepayment, declaration, acceleration, demand or otherwise
(including amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. ss. 362(a)),
Guarantors will upon demand pay, or cause to be paid, in cash, to Administrative
Agent for the ratable benefit of Beneficiaries, an amount equal to the sum of
the unpaid principal amount of all Obligations then due as aforesaid, accrued
and unpaid interest on such Obligations (including interest which, but for the
filing of a petition in bankruptcy with respect to Borrower, would have accrued
on such Obligations, whether or not a claim is allowed against Borrower for such
interest in the related bankruptcy proceeding) and all other Obligations then
owed to Beneficiaries as aforesaid.
7.4. LIABILITY OF GUARANTORS ABSOLUTE. Each Guarantor agrees that its
obligations hereunder are irrevocable, absolute, independent and unconditional
and shall not be affected by any circumstance which constitutes a legal or
equitable discharge of a guarantor or surety other than payment in full of the
Obligations. In furtherance of the foregoing and without limiting the generality
thereof, each Guarantor agrees as follows:
(a) this Guaranty is a guaranty of payment when due and not of
collectibility;
(b) Administrative Agent may enforce this Guaranty upon the occurrence
of an Event of Default notwithstanding the existence of any dispute between
Borrower and any Beneficiary with respect to the existence of such Event of
Default;
(c) the obligations of each Guarantor hereunder are independent of the
obligations of Borrower and the obligations of any other guarantor (including
any other Guarantor) of the obligations of Borrower, and a separate action or
actions may be brought and prosecuted against such Guarantor whether or not any
action is brought against Borrower or any of such other guarantors and whether
or not Borrower is joined in any such action or actions;
(d) payment by any Guarantor of a portion, but not all, of the
Obligations shall in no way limit, affect, modify or abridge any Guarantor's
liability for any portion of the Obligations which has not been paid. Without
limiting the generality of the foregoing, if Administrative Agent is awarded
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a judgment in any suit brought to enforce any Guarantor's covenant to pay a
portion of the Obligations, such judgment shall not be deemed to release such
Guarantor from its covenant to pay the portion of the Obligations that is not
the subject of such suit, and such judgment shall not, except to the extent
satisfied by such Guarantor, limit, affect, modify or abridge any other
Guarantor's liability hereunder in respect of the Obligations;
(e) any Beneficiary, upon such terms as it deems appropriate, without
notice or demand and without affecting the validity or enforceability hereof or
giving rise to any reduction, limitation, impairment, discharge or termination
of any Guarantor's liability hereunder, from time to time may (i) renew, extend,
accelerate, increase the rate of interest on, or otherwise change the time,
place, manner or terms of payment of the Obligations; (ii) settle, compromise,
release or discharge, or accept or refuse any offer of performance with respect
to, or substitutions for, the Obligations or any agreement relating thereto
and/or subordinate the payment of the same to the payment of any other
obligations; (iii) request and accept other guaranties of the Obligations and
take and hold security for the payment hereof or the Obligations; (iv) release,
surrender, exchange, substitute, compromise, settle, rescind, waive, alter,
subordinate or modify, with or without consideration, any security for payment
of the Obligations, any other guaranties of the Obligations, or any other
obligation of any Person (including any other Guarantor) with respect to the
Obligations; (v) enforce and apply any security now or hereafter held by or for
the benefit of such Beneficiary in respect hereof or the Obligations and direct
the order or manner of sale thereof, or exercise any other right or remedy that
such Beneficiary may have against any such security, in each case as such
Beneficiary in its discretion may determine consistent herewith and any
applicable security agreement or Hedge Agreement, including foreclosure on any
such security pursuant to one or more judicial or nonjudicial sales, whether or
not every aspect of any such sale is commercially reasonable, and even though
such action operates to impair or extinguish any right of reimbursement or
subrogation or other right or remedy of any Guarantor against Borrower or any
security for the Obligations; and (vi) exercise any other rights available to it
under the Credit Documents or the Hedge Agreements; and
(f) this Guaranty and the obligations of Guarantors hereunder shall be
valid and enforceable and shall not be subject to any reduction, limitation,
impairment, discharge or termination for any reason (other than payment in full
of the Obligations), including the occurrence of any of the following, whether
or not any Guarantor shall have had notice or knowledge of any of them: (i) any
failure or omission to assert or enforce or agreement or election not to assert
or enforce, or the stay or enjoining, by order of court, by operation of law or
otherwise, of the exercise or enforcement of, any claim or demand or any right,
power or remedy (whether arising under the Credit Documents or the Hedge
Agreements, at law, in equity or otherwise) with respect to the Obligations or
any agreement relating thereto, or with respect to any other guaranty of or
security for the payment of the Obligations; (ii) any rescission, waiver,
amendment or modification of, or any consent to departure from, any of the terms
or provisions (including provisions relating to events of default) hereof, any
of the other Credit Documents or the Hedge Agreements or any agreement or
instrument executed pursuant hereto or thereto, or of any other guaranty or
security for the Obligations, in each case whether or not in accordance with the
terms hereof or such Credit
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Document or Hedge Agreement or any agreement relating to such other guaranty or
security; (iii) the Obligations, or any agreement relating thereto, at any time
being found to be illegal, invalid or unenforceable in any respect; (iv) the
application of payments received from any source (other than payments received
pursuant to the other Credit Documents or any Hedge Agreement or from the
proceeds of any security for the Obligations, except to the extent such security
also serves as collateral for indebtedness other than the Obligations) to the
payment of indebtedness other than the Obligations, even though any Beneficiary
might have elected to apply such payment to any part or all of the Obligations;
(v) any Beneficiary's consent to the change, reorganization or termination of
the corporate structure or existence of Company or any of its Subsidiaries and
to any corresponding restructuring of the Obligations; (vi) any failure to
perfect or continue perfection of a security interest in any collateral which
secures any of the Obligations; (vii) any defenses, set-offs or counterclaims
which Borrower may allege or assert against any Beneficiary in respect of the
Obligations, including failure of consideration, breach of warranty, payment,
statute of frauds, statute of limitations, accord and satisfaction and usury;
and (viii) any other act or thing or omission, or delay to do any other act or
thing, which may or might in any manner or to any extent vary the risk of any
Guarantor as an obligor in respect of the Obligations.
7.5. WAIVERS BY GUARANTORS. Each Guarantor hereby waives, for the
benefit of Beneficiaries: (a) any right to require any Beneficiary, as a
condition of payment or performance by such Guarantor, to (i) proceed against
Borrower, any other guarantor (including any other Guarantor) of the Obligations
or any other Person, (ii) proceed against or exhaust any security held from
Borrower, any such other guarantor or any other Person, (iii) proceed against or
have resort to any balance of any deposit account or credit on the books of any
Beneficiary in favor of Borrower or any other Person, or (1) pursue any other
remedy in the power of any Beneficiary whatsoever; (b) any defense arising by
reason of the incapacity, lack of authority or any disability or other defense
of Borrower including any defense based on or arising out of the lack of
validity or the unenforceability of the Obligations or any agreement or
instrument relating thereto or by reason of the cessation of the liability of
Borrower from any cause other than payment in full of the Obligations; (c) any
defense based upon any statute or rule of law which provides that the obligation
of a surety must be neither larger in amount nor in other respects more
burdensome than that of the principal; (d) any defense based upon any
Beneficiary's errors or omissions in the administration of the Obligations,
except behavior which amounts to gross negligence, willful misconduct or bad
faith; (e) (i) any principles or provisions of law, statutory or otherwise,
which are or might be in conflict with the terms hereof and any legal or
equitable discharge of such Guarantor's obligations hereunder, (ii) the benefit
of any statute of limitations affecting such Guarantor's liability hereunder or
the enforcement hereof, (iii) any rights to set-offs, recoupments and
counterclaims, and (iv) promptness, diligence and any requirement that any
Beneficiary protect, secure, perfect or insure any security interest or lien or
any property subject thereto; (f) notices, demands, presentments, protests,
notices of protest, notices of dishonor and notices of any action or inaction,
including acceptance hereof, notices of default hereunder, the Hedge Agreements
or any agreement or instrument related hereto or thereto, notices of any
renewal, extension or modification of the Obligations or any agreement related
thereto, notices of any extension of credit to Borrower and notices of any of
the matters referred to in Section 7.4 and any right to consent to any thereof;
and (g) any defenses or benefits that may be
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derived from or afforded by law which limit the liability of or exonerate
guarantors or sureties, or which may conflict with the terms hereof.
7.6. GUARANTORS' RIGHTS OF SUBROGATION, CONTRIBUTION, ETC. Each
Guarantor hereby waives any claim, right or remedy, direct or indirect, that
such Guarantor now has or may hereafter have against Borrower or any of its
assets in connection with this Guaranty or the performance by such Guarantor of
its obligations hereunder for so long (but only for so long) as any Obligation
of any Credit Party remains outstanding, in each case whether such claim, right
or remedy arises in equity, under contract, by statute, under common law or
otherwise and including without limitation (a) any right of subrogation,
reimbursement or indemnification that such Guarantor now has or may hereafter
have against Borrower with respect to the Obligations, (b) any right to enforce,
or to participate in, any claim, right or remedy that any Beneficiary now has or
may hereafter have against Borrower, and (c) any benefit of, and any right to
participate in, any collateral or security now or hereafter held by any
Beneficiary. In addition, until the Obligations shall have been indefeasibly
paid in full and the Commitments shall have terminated each Guarantor shall
withhold exercise of any right of contribution such Guarantor may have against
any other guarantor (including any other Guarantor) of the Obligations,
including, without limitation, any such right of contribution as contemplated by
Section 7.2. Each Guarantor further agrees that, to the extent the waiver or
agreement to withhold the exercise of its rights of subrogation, reimbursement,
indemnification and contribution as set forth herein is found by a court of
competent jurisdiction to be void or voidable for any reason, any rights of
subrogation, reimbursement or indemnification such Guarantor may have against
Borrower or against any collateral or security, and any rights of contribution
such Guarantor may have against any such other guarantor, shall be junior and
subordinate to any rights any Beneficiary may have against Borrower, to all
right, title and interest any Beneficiary may have in any such collateral or
security, and to any right any Beneficiary may have against such other
guarantor. If any amount shall be paid to any Guarantor on account of any such
subrogation, reimbursement, indemnification or contribution rights at any time
when all Obligations shall not have been paid in full, such amount shall be held
in trust for guarantied party on behalf of Beneficiaries and shall forthwith be
paid over to guarantied party for the benefit of Beneficiaries to be credited
and applied against the Obligations, whether matured or unmatured, in accordance
with the terms hereof.
7.7. SUBORDINATION OF OTHER OBLIGATIONS. Any Indebtedness of Borrower
or any Guarantor now or hereafter held by any Guarantor (the "OBLIGEE
GUARANTOR") is hereby subordinated in right of payment to the Obligations, and
any such indebtedness collected or received by the Obligee Guarantor after an
Event of Default has occurred and is continuing shall be held in trust for
Administrative Agent on behalf of Beneficiaries and shall forthwith be paid over
to Administrative Agent for the benefit of Beneficiaries to be credited and
applied against the Obligations but without affecting, impairing or limiting in
any manner the liability of the Obligee Guarantor under any other provision
hereof.
7.8. CONTINUING GUARANTY. This Guaranty is a continuing guaranty and
shall remain in effect until all of the Obligations shall have been paid in full
and the Commitments shall have
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terminated. Each Guarantor hereby irrevocably waives any right to revoke this
Guaranty as to future transactions giving rise to any Obligations.
7.9. AUTHORITY OF GUARANTORS OR BORROWER. It is not necessary for any
Beneficiary to inquire into the capacity or powers of any Guarantor or Borrower
or the officers, directors or any agents acting or purporting to act on behalf
of any of them.
7.10. FINANCIAL CONDITION OF BORROWER. Any Loan may be granted to
Borrower or continued from time to time, and any Hedge Agreement may be entered
into from time to time, in each case without notice to or authorization from any
Guarantor regardless of the financial or other condition of Borrower at the time
of any such grant or continuation or at the time such Hedge Agreement is entered
into, as the case may be. No Beneficiary shall have any obligation to disclose
or discuss with any Guarantor its assessment, or any Guarantor's assessment, of
the financial condition of Borrower. Each Guarantor has adequate means to obtain
information from Borrower on a continuing basis concerning the financial
condition of Borrower and its ability to perform its obligations under the
Credit Documents and the Hedge Agreements, and each Guarantor assumes the
responsibility for being and keeping informed of the financial condition of
Borrower and of all circumstances bearing upon the risk of nonpayment of the
Obligations. Each Guarantor hereby waives and relinquishes any duty on the part
of any Beneficiary to disclose any matter, fact or thing relating to the
business, operations or conditions of Borrower now known or hereafter known by
any Beneficiary.
7.11. BANKRUPTCY, ETC. (a) So long as any Obligations remain
outstanding, no Guarantor shall, without the prior written consent of
Administrative Agent acting pursuant to the instructions of Requisite Lenders,
commence or join with any other Person in commencing any bankruptcy,
reorganization or insolvency proceedings of or against Borrower. The obligations
of Guarantors hereunder shall not be reduced, limited, impaired, discharged,
deferred, suspended or terminated by any proceeding, voluntary or involuntary,
involving the bankruptcy, insolvency, receivership, reorganization, liquidation
or arrangement of Borrower or by any defense which Borrower may have by reason
of the order, decree or decision of any court or administrative body resulting
from any such proceeding.
(b) Each Guarantor acknowledges and agrees that any interest on any
portion of the Obligations which accrues after the commencement of any
proceeding referred to in clause (a) above (or, if interest on any portion of
the Obligations ceases to accrue by operation of law by reason of the
commencement of said proceeding, such interest as would have accrued on such
portion of the Obligations if said proceedings had not been commenced) shall be
included in the Obligations because it is the intention of Guarantors and
Beneficiaries that the Obligations which are guarantied by Guarantors pursuant
hereto should be determined without regard to any rule of law or order which may
relieve Borrower of any portion of such Obligations. Guarantors will permit any
trustee in bankruptcy, receiver, debtor in possession, assignee for the benefit
of creditors or similar person to pay Administrative Agent, or allow the claim
of Administrative Agent in respect of, any such interest accruing after the date
on which such proceeding is commenced.
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(c) In the event that all or any portion of the Obligations are paid by
Borrower, the obligations of Guarantors hereunder shall continue and remain in
full force and effect or be reinstated, as the case may be, in the event that
all or any part of such payment(s) are rescinded or recovered directly or
indirectly from any Beneficiary as a preference, fraudulent transfer or
otherwise, and any such payments which are so rescinded or recovered shall
constitute Obligations for all purposes hereunder.
7.12. NOTICE OF EVENTS. As soon as any Guarantor obtains knowledge
thereof, such Guarantor shall give Administrative Agent written notice of any
condition or event which has resulted in (i) a material adverse change in the
financial condition of any Guarantor or Borrower or (ii) a breach of or
noncompliance with any term, condition or covenant contained herein, any other
Credit Document, any Hedge Agreement or any other document delivered pursuant
hereto or thereto.
7.13. DISCHARGE OF GUARANTY UPON SALE OF GUARANTOR. If all of the
equity Securities of any Guarantor or any of its successors in interest
hereunder shall be sold or otherwise disposed of (including by merger or
consolidation) in accordance with the terms and conditions hereof, the Guaranty
of such Guarantor or such successor in interest, as the case may be, hereunder
shall automatically be discharged and released without any further action by any
Beneficiary or any other Person effective as of the time of such Asset Sale;
provided, as a condition precedent to such discharge and release, Administrative
Agent shall have received evidence satisfactory to it that arrangements
satisfactory to it have been made for delivery to Administrative Agent of the
applicable Net Asset Sale Proceeds of such disposition pursuant to Section
2.13(a).
SECTION 8. EVENTS OF DEFAULT
8.1. Events of Default. If any one or more of the following conditions
or events shall occur:
(a) failure by Borrower to pay (i) when due any installment of
principal of any Loan when due, whether at stated maturity, by acceleration, by
notice of voluntary prepayment, by mandatory prepayment or otherwise; or (ii)
any interest on any Loan or any fee or any other amount due hereunder within
five (5) days after the date due; or
(b) (i) failure of any Credit Party to pay when due any principal of or
interest on or any other amount payable in respect of one or more items of
Indebtedness (other than Indebtedness referred to in Section 8.1(a)) in an
individual principal amount of $1,000,000 or more or with an aggregate principal
amount of $5,000,000 or more, in each case beyond the end of any grace period
provided therefor; or (ii) breach or default by any Credit Party with respect to
any other material term of (1) one or more items of Indebtedness in the
individual or aggregate principal amounts referred to in clause (i) above or (2)
any loan agreement, mortgage, indenture or other agreement relating to such
item(s) of Indebtedness, if the effect of such breach or default is to cause, or
to permit the holder or holders of that Indebtedness (or a trustee on behalf of
such holder or holders) to cause, that Indebtedness to become or be declared due
and payable prior to its stated maturity or the stated
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maturity of any underlying obligation, as the case may be (upon the giving or
receiving of notice, lapse of time, both, or otherwise); or
(c) failure of any Credit Party to perform or comply with any term or
condition contained in Section 2.3, 5.1(g), 5.2 or Section 6 (other than Section
6.6) hereof; or
(d) any representation, warranty, certification or other statement made
or deemed made by any Credit Party in any Credit Document or in any statement or
certificate at any time given by Company or any of its Subsidiaries in writing
pursuant hereto or thereto or in connection herewith or therewith shall be false
in any material respect as the date made or deemed made; or
(e) any Credit Party shall default in the performance of or compliance
with any term contained herein or any of the other Credit Documents, other than
any such term referred to in any other Section of this Section 8.1 and other
than Section 6.6, and such default shall not have been remedied or waived within
thirty (30) days after the earlier of (i) an officer of such Credit Party
becoming aware of such default or (ii) receipt by Borrower of notice from
Administrative Agent or any Lender of such default; or
(f) (i) a court having jurisdiction in the premises shall enter a
decree or order for relief in respect of any Credit Party in an involuntary case
under the Bankruptcy Code or under any other applicable bankruptcy, insolvency
or similar law now or hereafter in effect, which decree or order is not stayed;
or any other similar relief shall be granted under any applicable federal or
state law; or (ii) an involuntary case shall be commenced against any Credit
Party under the Bankruptcy Code or under any other applicable bankruptcy,
insolvency or similar law now or hereafter in effect; or a decree or order of a
court having jurisdiction in the premises for the appointment of a receiver,
liquidator, sequestrator, trustee, custodian or other officer having similar
powers over any Credit Party, or over all or a substantial part of its property,
shall have been entered; or there shall have occurred the involuntary
appointment of an interim receiver, trustee or other custodian of any Credit
Party for all or a substantial part of its property; or a warrant of attachment,
execution or similar process shall have been issued against any substantial part
of the property of any Credit Party, and any such event described in this clause
(ii) shall continue for sixty (60) days unless dismissed, bonded or discharged;
or
(g) (i) any Credit Party shall have an order for relief entered with
respect to it or commence a voluntary case under the Bankruptcy Code or under
any other applicable bankruptcy, insolvency or similar law now or hereafter in
effect, or shall consent to the entry of an order for relief in an involuntary
case, or to the conversion of an involuntary case to a voluntary case, under any
such law, or shall consent to the appointment of or taking possession by a
receiver, trustee or other custodian for all or a substantial part of its
property; or any Credit Party shall make any assignment for the benefit of
creditors; or (ii) any Credit Party shall be unable, or shall fail generally, or
shall admit in writing its inability, to pay its debts as such debts become due;
or the Board of Directors of any Credit Party (or any committee thereof) shall
adopt any resolution or otherwise authorize any action to approve any of the
actions referred to herein or in Section 8.1(f); or
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(h) any money judgment, writ or warrant of attachment or similar
process involving (i) in any individual case an amount in excess of $1,000,000
or (ii) in the aggregate at any time an amount in excess of $5,000,000 (in
either case not adequately covered by insurance as to which a solvent and
unaffiliated insurance company has acknowledged coverage) shall be entered or
filed against any Credit Party or any of their respective assets and shall
remain undischarged, unvacated, unbonded or unstayed for a period of sixty (60)
days (or in any event later than five days prior to the date of any proposed
sale thereunder); or
(i) any order, judgment or decree shall be entered against any Credit
Party decreeing the dissolution or split up of Company or that Subsidiary and
such order shall remain undischarged or unstayed for a period in excess of
thirty (30) days; or
(j) there shall occur one or more ERISA Events which individually or in
the aggregate results in or might reasonably be expected to result in liability
of Company, any of its Subsidiaries or any of their respective ERISA Affiliates
in excess of $5,000,000 during the term hereof; or there shall exist an amount
of unfunded benefit liabilities (as defined in Section 4001(a)(18) of ERISA),
individually or in the aggregate for all Pension Plans (excluding for purposes
of such computation any Pension Plans with respect to which assets exceed
benefit liabilities), which exceeds $5,000,000; or
(k) a Change of Control shall occur; or
(l) at any time after the execution and delivery thereof, (i) the
Guaranty for any reason, other than the satisfaction in full of all Obligations,
shall cease to be in full force and effect (other than in accordance with its
terms) or shall be declared to be null and void or any Guarantor shall repudiate
its obligations thereunder, (ii) this Agreement or any Collateral Document
ceases to be in full force and effect (other than by reason of a release of
Collateral in accordance with the terms hereof or thereof or the satisfaction in
full of the Obligations in accordance with the terms hereof) or shall be
declared null and void, or Administrative Agent shall not have or shall cease to
have a valid and perfected Lien in any Collateral purported to be covered
thereby and for which perfection is required thereunder, in each case for any
reason other than the failure of Administrative Agent or any Lender to take any
action within its control, or (iii) any Credit Party shall contest the validity
or enforceability of any Credit Document in writing or deny in writing that it
has any further liability, including with respect to future advances by Lenders,
under any Credit Document to which it is a party; or
(m) at any time after the Initial Funding Date that any Loans are
outstanding any Credit Party is an "investment company" as defined in, or is
subject to regulation under, the Investment Company Act;
THEN, (1) upon the occurrence of any Event of Default described in Section
8.1(f) or 8.1(g), automatically, and (2) upon the occurrence of any other Event
of Default, at the request of (or with the consent of) Requisite Lenders, upon
notice to Borrower by Administrative Agent, (A) the
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Commitments, if any, of each Lender having such Commitments shall terminate, and
(B) each of the following shall immediately become due and payable, in each case
without presentment, demand, protest or other requirements of any kind, all of
which are hereby expressly waived by each Credit Party: (I) the unpaid principal
amount of and accrued interest on the Loans, and (II) all other Obligations.
SECTION 9. AGENTS
9.1. APPOINTMENT OF AGENTS. GSCP and TDSI are hereby appointed Co-Lead
Arrangers, and GSCP is hereby appointed Syndication Agent hereunder, and each
Lender hereby authorizes Co-Lead Arrangers and Syndication Agent to act as its
agent in accordance with the terms hereof and the other Credit Documents. TD is
hereby appointed Administrative Agent hereunder and under the other Credit
Documents and each Lender hereby authorizes Administrative Agent to act as its
agent in accordance with the terms hereof and the other Credit Documents (except
with respect to the rights granted to it in the second sentence of Section 9.7).
MSSF is hereby appointed Documentation Agent hereunder, and each Lender hereby
authorizes Documentation Agent to act as its agent in accordance with the terms
hereof and the other Credit Documents. Each Agent hereby agrees to act upon the
express conditions contained herein and the other Credit Documents, as
applicable. The provisions of this Section 9 are solely for the benefit of
Agents and Lenders and no Credit Party shall have any rights as a third party
beneficiary of any of the provisions thereof. In performing its functions and
duties hereunder, each Agent shall act solely as an agent of Lenders and does
not assume and shall not be deemed to have assumed any obligation towards or
relationship of agency or trust with or for Company or any of its Subsidiaries.
Each of Syndication Agent and Documentation Agent, without consent of or notice
to any party hereto, may assign any and all of its rights or obligations
hereunder to any of its Affiliates. As of the Closing Date, all the respective
obligations of (i) GSCP, in its capacity as Co-Lead Arranger and Syndication
Agent, (ii) TDSI, as Co-Lead Arranger and (iii) MSSF, in its capacity as
Documentation Agent, shall terminate.
9.2. POWERS AND DUTIES. Each Lender irrevocably authorizes each Agent
to take such action on such Lender's behalf and to exercise such powers, rights
and remedies hereunder and under the other Credit Documents as are specifically
delegated or granted to such Agent by the terms hereof and thereof, together
with such powers, rights and remedies as are reasonably incidental thereto. Each
Agent shall have only those duties and responsibilities that are expressly
specified herein and the other Credit Documents. Each Agent may exercise such
powers, rights and remedies and perform such duties by or through its agents or
employees. No Agent shall have, by reason hereof or any of the other Credit
Documents, a fiduciary relationship in respect of any Lender; and nothing herein
or any of the other Credit Documents, expressed or implied, is intended to or
shall be so construed as to impose upon any Agent any obligations in respect
hereof or any of the other Credit Documents except as expressly set forth herein
or therein.
9.3. GENERAL IMMUNITY. (a) No Agent shall be responsible to any Lender
for the execution, effectiveness, genuineness, validity, enforceability,
collectibility or sufficiency hereof or any other Credit Document or for any
representations, warranties, recitals or statements made herein or therein
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or made in any written or oral statements or in any financial or other
statements, instruments, reports or certificates or any other documents
furnished or made by any of Agent to Lenders or by or on behalf of Borrower to
any Agent or any Lender in connection with the Credit Documents and the
transactions contemplated thereby or for the financial condition or business
affairs of any Credit Party or any other Person liable for the payment of any
Obligations, nor shall any Agent be required to ascertain or inquire as to the
performance or observance of any of the terms, conditions, provisions, covenants
or agreements contained in any of the Credit Documents or as to the use of the
proceeds of the Loans or as to the existence or possible existence of any Event
of Default or Default. Anything contained herein to the contrary
notwithstanding, Administrative Agent shall not have any liability arising from
confirmations of the amount of outstanding Loans.
(b) No Agent nor any of its officers, partners, directors, employees or
agents shall be liable to Lenders for any action taken or omitted by any Agent
under or in connection with any of the Credit Documents except to the extent
caused by such Agent's gross negligence or willful misconduct. Each Agent shall
be entitled to refrain from any act or the taking of any action (including the
failure to take an action) in connection herewith or any of the other Credit
Documents or from the exercise of any power, discretion or authority vested in
it hereunder or thereunder unless and until such Agent shall have received
instructions in respect thereof from Requisite Lenders (or such other Lenders as
may be required to give such instructions under Section 10.5) and, upon receipt
of such instructions from Requisite Lenders (or such other Lenders, as the case
may be), such Agent shall be entitled to act or (where so instructed) refrain
from acting, or to exercise such power, discretion or authority, in accordance
with such instructions. Without prejudice to the generality of the foregoing,
(i) each Agent shall be entitled to rely, and shall be fully protected in
relying, upon any communication, instrument or document believed by it to be
genuine and correct and to have been signed or sent by the proper person or
persons, and shall be entitled to rely and shall be protected in relying on
opinions and judgments of attorneys (who may be attorneys for Company and its
Subsidiaries), accountants, experts and other professional advisors selected by
it; and (ii) no Lender shall have any right of action whatsoever against any
Agent as a result of such Agent acting or (where so instructed) refraining from
acting hereunder or any of the other Credit Documents in accordance with the
instructions of Requisite Lenders (or such other Lenders as may be required to
give such instructions under Section 10.5).
9.4. AGENTS ENTITLED TO ACT AS LENDER. The agency hereby created shall
in no way impair or affect any of the rights and powers of, or impose any duties
or obligations upon, any Agent in its individual capacity as a Lender hereunder.
With respect to its participation in the Loans, each Agent shall have the same
rights and powers hereunder as any other Lender and may exercise the same as
though it were not performing the duties and functions delegated to it
hereunder, and the term "LENDER" shall, unless the context clearly otherwise
indicates, include each Agent in its individual capacity. Any Agent and its
Affiliates may accept deposits from, lend money to and generally engage in any
kind of banking, trust, financial advisory or other business with Borrower or
any of its Affiliates as if it were not performing the duties specified herein,
and may accept fees and other consideration from Borrower for services in
connection herewith and otherwise without having to account for the same to
Lenders.
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9.5. LENDERS' AGREEMENTS. Each Lender agrees that it has made its own
independent investigation of the financial condition and affairs of Company and
its Subsidiaries in connection with Loans hereunder and that it has made and
shall continue to make its own appraisal of the creditworthiness of Company and
its Subsidiaries. No Agent shall have any duty or responsibility, either
initially or on a continuing basis, to make any such investigation or any such
appraisal on behalf of Lenders or to provide any Lender with any credit or other
information with respect thereto, whether coming into its possession before the
making of the Loans or at any time or times thereafter, and no Agent shall have
any responsibility with respect to the accuracy of or the completeness of any
information provided to Lenders.
9.6. RIGHT TO INDEMNITY. Each Lender, in proportion to its Pro Rata
Share, severally agrees to indemnify each Agent, to the extent that such Agent
shall not have been reimbursed by Borrower, for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including counsel fees and disbursements) or disbursements of
any kind or nature whatsoever which may be imposed on, incurred by or asserted
against such Agent in exercising its powers, rights and remedies or performing
its duties hereunder or under the other Credit Documents or otherwise in its
capacity as such Agent in any way relating to or arising out hereof or the other
Credit Documents; provided, no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from such Agent's gross negligence or
willful misconduct. If any indemnity furnished to any Agent for any purpose
shall, in the opinion of such Agent, be insufficient or become impaired, such
Agent may call for additional indemnity and cease, or not commence, to do the
acts indemnified against until such additional indemnity is furnished; provided,
in no event shall this sentence require any Lender to indemnify any Agent
against any liability, obligation, loss, damage, penalty, action, judgment,
suit, cost, expense or disbursement in excess of such Lender's Pro Rata Share
thereof; and provided further, this sentence shall not be deemed to require any
Lender to indemnify any Agent against any liability, obligation, loss, damage,
penalty, action, judgment, suit, cost, expense or disbursement described in the
proviso in the immediately preceding sentence.
9.7. SUCCESSOR ADMINISTRATIVE AGENT. Administrative Agent may resign at
any time by giving thirty (30) days' prior written notice thereof to Lenders and
Borrower. Upon any such notice of resignation, Requisite Lenders shall have the
right, with the consent of Borrower (which shall not be unreasonably withheld or
delayed or required at any time an Event of Default shall have occurred and then
be continuing), to appoint a successor Administrative Agent. Upon the acceptance
of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Administrative Agent and the retiring Administrative Agent shall
be discharged from its duties and obligations hereunder. After any retiring
Administrative Agent's resignation hereunder as Administrative Agent, the
provisions of this Section 9 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent hereunder.
9.8. COLLATERAL DOCUMENTS AND GUARANTIES. (a) Each Lender hereby
further authorizes Administrative Agent, on behalf of and for the benefit of
Lenders, to be the agent for and
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representative of Lenders with respect to the Guaranty, the Collateral and the
Collateral Documents. Subject to Section 10.5, without further written consent
or authorization from Lenders, Administrative Agent may execute any documents or
instruments necessary to (i) release any Lien encumbering any item of Collateral
that is the subject of a sale or other disposition of assets permitted hereby or
to which Requisite Lenders (or such other Lenders as may be required to give
such consent under Section 10.5) have otherwise consented or (ii) release any
Guarantor from the Guaranty pursuant to Section 7.13 or with respect to which
Requisite Lenders (or such other Lenders as may be required to give such consent
under Section 10.5) have otherwise consented.
(b) Anything contained in any of the Credit Documents to the contrary
notwithstanding, each Credit Party, Administrative Agent and each Lender hereby
agree that (i) no Lender shall have any right individually to realize upon any
of the Collateral or to enforce the Guaranty, it being understood and agreed
that all powers, rights and remedies hereunder may be exercised solely by
Administrative Agent for the benefit of Lenders in accordance with the terms
hereof, and (ii) in the event of a foreclosure by Administrative Agent on any of
the Collateral pursuant to a public or private sale, Administrative Agent or any
Lender may be the purchaser of any or all of such Collateral at any such sale
and Administrative Agent, as agent for and representative of Lenders (but not
any Lender or Lenders in its or their respective individual capacities unless
Requisite Lenders shall otherwise agree in writing) shall be entitled, for the
purpose of bidding and making settlement or payment of the purchase price for
all or any portion of the Collateral sold at any such public sale, to use and
apply any of the Obligations as a credit on account of the purchase price for
any collateral payable by Administrative Agent at such sale.
(c) It is the purpose hereof and the other Credit Documents that there
shall be no violation of any law of any jurisdiction denying or restricting the
right of banking corporations or associations to transact business as agent or
trustee in such jurisdiction. It is recognized that in case of litigation
hereunder or any of the other Credit Documents, and in particular in case of the
enforcement of any of the Credit Documents, or in case Administrative Agent
deems that by reason of any present or future law of any jurisdiction it may not
exercise any of the rights, powers or remedies granted herein or in any of the
other Credit Documents or take any other action which may be desirable or
necessary in connection therewith, it may be necessary that Administrative Agent
appoint an additional individual or institution as a separate trustee,
co-trustee, collateral agent or collateral co-agent (a "SUPPLEMENTAL COLLATERAL
AGENT"). In the event that Administrative Agent appoints a Supplemental
Collateral Agent with respect to any Collateral, (i) each and every right,
power, privilege or duty expressed or intended hereby or any of the other Credit
Documents to be exercised by or vested in or conveyed to Administrative Agent
with respect to such Collateral shall be exercisable by and vest in such
Supplemental Collateral Agent to the extent, and only to the extent, necessary
to enable such Supplemental Collateral Agent to exercise such rights, powers and
privileges with respect to such Collateral and to perform such duties with
respect to such Collateral, and every covenant and obligation contained in the
Credit Documents and necessary to the exercise or performance thereof by such
Supplemental Collateral Agent shall run to and be enforceable by either Agent or
such Supplemental Collateral Agent, and (ii) the provisions of this Section 9
and of Sections 10.2 and 10.3 that refer to Administrative Agent shall inure to
the benefit of such
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Supplemental Collateral Agent and all references therein to Administrative Agent
shall be deemed to be references to Administrative Agent and/or such
Supplemental Collateral Agent, as the context may require. Should any instrument
in writing from Borrower or any other Credit Party be required by any
Supplemental Collateral Agent so appointed by Administrative Agent for more
fully and certainly vesting in and confirming to him or it such rights, powers,
privileges and duties, Borrower shall, or shall cause such Credit Party to,
execute, acknowledge and deliver any and all such instruments promptly upon
request by Administrative Agent. In case any Supplemental Collateral Agent, or a
successor thereto, shall die, become incapable of acting, resign or be removed,
all the rights, powers, privileges and duties of such Supplemental Collateral
Agent, to the extent permitted by law, shall vest in and be exercised by
Administrative Agent until the appointment of a new Supplemental Collateral
Agent.
SECTION 10. MISCELLANEOUS
10.1. NOTICES. Unless otherwise specifically provided herein, any
notice or other communication herein required or permitted to be given to a
Credit Party or any Agent, shall be sent to such Person's address as set forth
on Appendix B or in the other relevant Credit Document, and in the case of any
Lender, the address as indicated on Appendix B or otherwise indicated to
Administrative Agent in writing. Each notice hereunder shall be in writing and
may be personally served, telexed or sent by telefacsimile or United States mail
or courier service and shall be deemed to have been given when delivered in
person or by courier service and signed for against receipt thereof, upon
receipt of telefacsimile or telex, or three Business Days after depositing it in
the United States mail with postage prepaid and properly addressed; provided, no
notice to any Agent or Lender shall be effective until received by such Agent or
Lender.
10.2. EXPENSES. Whether or not the transactions contemplated hereby
shall be consummated, Borrower agrees to pay promptly (a) all the reasonable out
of pocket costs and expenses of each Agent associated with the syndication of
the credit facilities hereunder and the preparation, execution and delivery of
the Credit Documents and any consents, amendments, waivers or other
modifications thereto; (b) all reasonable costs of furnishing all opinions by
counsel for any Credit Party (including any opinions requested by Lenders as to
any legal matters arising hereunder) and of Borrower's and each Credit Party's
performance of and compliance with all agreements and conditions on its part to
be performed or complied with hereunder and the other Credit Documents including
with respect to confirming compliance with environmental, insurance and solvency
requirements; (c) the reasonable fees, expenses and disbursements of counsel to
Agents in connection with the negotiation, preparation, execution and
administration of the Credit Documents and any consents, amendments, waivers or
other modifications thereto and any other documents or matters requested by any
Credit Party; (d) all the reasonable out of pocket costs and expenses of
creating and perfecting Liens in favor of Administrative Agent on behalf of
Lenders pursuant hereto, including filing and recording fees, expenses and
taxes, stamp or documentary taxes, search fees, title insurance premiums and
reasonable fees, expenses and disbursements of counsel to each Agent and of
counsel providing any opinions that any Agent or Requisite Lenders may request
in respect of the Collateral or the Liens created pursuant the Collateral
Documents; (e) all the reasonable out
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of pocket costs and fees, expenses and disbursements of any auditors,
accountants, consultants or appraisers; (f) all the reasonable out of pocket
costs and expenses (including the reasonable fees, expenses and disbursements of
any appraisers, consultants, advisors and agents employed or retained by
Administrative Agent and its counsel) in connection with the custody or
preservation of any of the Collateral; (g) all other reasonable out of pocket
costs and expenses incurred by each Agent in connection with the syndication of
the Loans and Commitments and the negotiation, preparation and execution of the
Credit Documents and any consents, amendments, waivers or other modifications
thereto and the transactions contemplated thereby; and (h) after the occurrence
or an Event of Default, all costs and expenses, including reasonable attorneys'
fees and costs of settlement, incurred by any Agent and Lenders in enforcing any
Obligations of or in collecting any payments due from any Credit Party hereunder
or under the other Credit Documents by reason of such Event of Default
(including in connection with the sale of, collection from, or other realization
upon any of the Collateral or the enforcement of the Guaranty) or in connection
with any refinancing or restructuring of the credit arrangements provided
hereunder in the nature of a "work-out" or pursuant to any insolvency or
bankruptcy proceedings.
10.3. INDEMNITY. In addition to the payment of expenses pursuant to
Section 10.2, whether or not the transactions contemplated hereby shall be
consummated, each Credit Party agrees to defend (subject to Indemnitees'
selection of counsel), indemnify, pay and hold harmless, each Agent and Lender
and the officers, partners, directors, trustees, employees, agents and
Affiliates of each Agent and each Lender (each, an "INDEMNITEE"), from and
against any and all Indemnified Liabilities; provided, no Credit Party shall
have any obligation to any Indemnitee hereunder with respect to any Indemnified
Liabilities to the extent such Indemnified Liabilities arise from the gross
negligence, willful misconduct or bad faith of that Indemnitee as determined by
a final, non-appealable judgment of a court of competent jurisdiction. To the
extent that the undertakings to defend, indemnify, pay and hold harmless set
forth in this Section 10.3 may be unenforceable in whole or in part because they
are violative of any law or public policy, the applicable Credit Party shall
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified Liabilities
incurred by Indemnitees or any of them.
10.4. SET-OFF. In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence and during the continuance of any Event of Default each Lender is
hereby authorized by each Credit Party at any time or from time to time subject
to the consent of Administrative Agent (such consent not to be unreasonably
withheld or delayed), without notice to any Credit Party or to any other Person
(other than Administrative Agent), any such notice being hereby expressly
waived, to set off and to appropriate and to apply any and all deposits (general
or special, including Indebtedness evidenced by certificates of deposit, whether
matured or unmatured, but not including trust accounts) and any other
Indebtedness at any time held or owing by such Lender to or for the credit or
the account of any Credit Party against and on account of the obligations and
liabilities of any Credit Party due and payable to such Lender hereunder and the
other Credit Documents, including all claims of any nature or description
arising out of or connected herewith, or any other Credit Document, irrespective
of whether or not (a) such Lender shall have made any demand hereunder or (b)
the principal of or the interest on the Loans or
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any other amounts due hereunder shall have become due and payable pursuant to
Section 2 and although said obligations and liabilities, or any of them, may be
contingent or unmatured. Each Credit Party hereby further grants to
Administrative Agent and each Lender a security interest in all Deposit Accounts
maintained with Administrative Agent or such Lender as security for the
Obligations.
10.5. AMENDMENTS AND WAIVERS. (a) Subject to Section 10.5(b) and
10.5(c), no amendment, modification, termination or waiver of any provision of
the Credit Documents, or consent to any departure by any Credit Party therefrom,
shall in any event be effective without the written concurrence of the Requisite
Lenders.
(b) Without the written consent of each Lender that would be affected
thereby, no amendment, modification, termination, or consent shall be effective
if the effect thereof would:
(i) extend the scheduled final maturity of any Loan or Note;
(ii) waive, reduce or postpone any scheduled reduction;
(iii) reduce the rate of interest on any Loan (other than any
waiver of any increase in the interest rate applicable to any Loan
pursuant to Section 2.7) or any fee payable hereunder;
(iv) extend the time for payment of any such interest or fees;
(v) reduce the principal amount of any Loan;
(vi) amend, modify, terminate or waive any provision of this
Section 10.5(b);
(vii) amend the definition of "REQUISITE LENDERS" or "PRO RATA
SHARE";
(viii) release all or substantially all of the Collateral or
all or substantially all of the Guarantors from the Guaranty except as
expressly provided in the Credit Documents; or
(ix) consent to the assignment or transfer by any Credit Party
of any of its rights and obligations under any Credit Document.
(c) No amendment, modification, termination or waiver of any provision
of the Credit Documents, or consent to any departure by any Credit Party
therefrom, shall:
(i) increase any Commitment of any Lender over the amount
thereof then in effect without the consent of such Lender; provided, no
amendment, modification or waiver of any condition precedent, covenant,
Default or Event of Default shall constitute an increase in any
Commitment of any Lender; or
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(ii) amend, modify, terminate or waive any provision of
Section 9 as the same applies to any Agent, or any other provision
hereof as the same applies to the rights or obligations of any Agent,
in each case without the consent of such Agent.
(d) Administrative Agent may, but shall have no obligation to, with the
concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of such Lender. Any waiver or consent shall be effective only
in the specific instance and for the specific purpose for which it was given. No
notice to or demand on any Credit Party in any case shall entitle any Credit
Party to any other or further notice or demand in similar or other
circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this Section 10.5 shall be binding upon each Lender
at the time outstanding, each future Lender and, if signed by a Credit Party, on
such Credit Party.
10.6. SUCCESSORS AND ASSIGNS; PARTICIPATIONS. (a) This Agreement shall
be binding upon the parties hereto and their respective successors and assigns
and shall inure to the benefit of the parties hereto and the successors and
assigns of Lenders. No Credit Party's rights or obligations hereunder nor any
interest therein may be assigned or delegated by any Credit Party without the
prior written consent of all Lenders.
(b) Borrower, Administrative Agent and Lenders shall deem and treat the
Persons listed as Lenders in the Register as the holders and owners of the
corresponding Commitments and Loans listed therein for all purposes hereof, and
no assignment or transfer of any such Commitment or Loan shall be effective
unless and until an Assignment Agreement effecting the assignment or transfer
thereof shall have been delivered to Administrative Agent and recorded in the
Register. Prior to such recordation, all amounts owed with respect to the
applicable Commitment or Loan shall be owed to the Lender listed in the Register
as the owner thereof, and any request, authority or consent of any Person who,
at the time of making such request or giving such authority or consent, is
listed in the Register as a Lender shall be conclusive and binding on any
subsequent holder, assignee or transferee of the corresponding Commitments or
Loans.
(c) Each Lender shall have the right at any time to sell, assign or
transfer any Commitment, any Loan or any other Obligation:
(i) to any Person meeting the criteria of clause (i) of the
definition of the term of "ELIGIBLE ASSIGNEE" upon the giving of notice
to Borrower and Administrative Agent; and
(ii) to any Person meeting the criteria of clause (ii) of the
definition of the term of "Eligible Assignee" upon the consent of each
of Borrower and Administrative Agent (neither of which shall be
unreasonably withheld or delayed or shall be required at any time an
Event of Default shall have occurred and then be continuing); provided,
each such assignment pursuant to this Section 10.6(c)(ii) shall be in
an aggregate amount of not less than $5,000,000 and after giving effect
thereto the assigning Lender must have Commitments and Loans
aggregating at least $5,000,000 (or such lesser amount as may be agreed
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to by Borrower and Administrative Agent or as shall constitute the
aggregate amount of the Commitments, Loans and other Obligations of the
assigning Lender).
(d) The assigning Lender and the assignee thereof shall execute and
deliver to Administrative Agent an Assignment Agreement, together with (i) a
processing and recordation fee of $3,500 (which shall not be due in the case of
assignments to an Affiliate of the assigning Lender, and which shall be $750 in
the case of assignments by GSCP), and (ii) such forms, certificates or other
evidence, if any, with respect to United States federal income tax withholding
matters as the assignee under such Assignment Agreement may be required to
deliver to Administrative Agent and Borrower pursuant to Section 2.18(c).
(e) Upon its receipt of a duly executed and completed Assignment
Agreement, together with the processing and recordation fee referred to in
Section 10.6(d) (and any forms, certificates or other evidence required by this
Agreement in connection therewith), Administrative Agent shall record the
information contained in such Assignment Agreement in the Register, shall give
prompt notice thereof to Borrower and shall maintain a copy of such Assignment
Agreement.
(f) Each Lender, upon execution and delivery hereof or upon executing
and delivering an Assignment Agreement, as the case may be, represents and
warrants as of the Closing Date or as of the applicable Effective Date (as
defined in the applicable Assignment Agreement) that (i) it is an Eligible
Assignee; (ii) it has experience and expertise in the making of or investing in
commitments or loans such as the Commitments or Loans, as the case may be; and
(iii) it will make or invest in, as the case may be, its Commitments or Loans
for its own account in the ordinary course of its business and without a view to
distribution of such Commitments or Loans within the meaning of the Securities
Act or the Exchange Act or other federal securities laws (it being understood
that, subject to the provisions of this Section 10.6, the disposition of such
Commitments or Loans or any interests therein shall at all times remain within
its exclusive control).
(g) Subject to the terms and conditions of this Section 10.6, as of the
"Effective Date" specified in such Assignment Agreement: (i) the assignee
thereunder shall have the rights and obligations of a "Lender" hereunder to the
extent such rights and obligations hereunder have been assigned to it pursuant
to such Assignment Agreement and shall thereafter be a party hereto and a
"Lender" for all purposes hereof; (ii) the assigning Lender thereunder shall, to
the extent that rights and obligations hereunder have been assigned thereby
pursuant to such Assignment Agreement, relinquish its rights (other than any
rights which survive the termination hereof under Section 10.8) and be released
from its obligations hereunder (and, in the case of an Assignment Agreement
covering all or the remaining portion of an assigning Lender's rights and
obligations hereunder, such Lender shall cease to be a party hereto); (iii) the
Commitments shall be modified to reflect the Commitment of such assignee and any
remaining Commitment of such assigning Lender, if any; and (iv) if any such
assignment occurs after the issuance of any Note hereunder, the assigning Lender
shall, upon the effectiveness of such assignment or as promptly thereafter as
practicable, surrender its applicable Notes to Administrative Agent for
cancellation, and thereupon Borrower shall issue and deliver new Notes, if so
requested by the assignee and/or assigning Lender, to such assignee
99
<PAGE> 106
and/or to such assigning Lender, with appropriate insertions, to reflect the new
Commitments and/or outstanding Loans of the assignee and/or the assigning
Lender.
(h) Each Lender shall have the right at any time to sell one or more
participations to any Person in all or any part of its Commitments, Loans or in
any other Obligation. The holder of any such participation, other than an
Affiliate of the Lender granting such participation, shall not be entitled to
require such Lender to take or omit to take any action hereunder except with
respect to any amendment modification or waiver described in Section 10.5(b) or
10.5(c) to the extent directly affecting the Loan or Commitment relating to the
participation. All amounts payable by any Credit Party hereunder, including
amounts payable to such Lender pursuant to Section 2.16(c), 2.17 or 2.18, shall
be determined as if such Lender had not sold such participation. Each Credit
Party and each Lender hereby acknowledge and agree that, solely for purposes of
Sections 2.15 and 10.4, (1) any participation will give rise to a direct
obligation of each Credit Party to the participant and (2) the participant shall
be considered to be a "Lender".
(i) In addition to any other assignment permitted pursuant to this
Section 10.6, (i) any Lender may assign and pledge all or any portion of its
Loans, the other Obligations owed to such Lender, and its Notes to any Federal
Reserve Bank as collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any operating circular issued by
such Federal Reserve Bank, and (ii) with the consent of Borrower and
Administrative Agent any Lender which is an investment fund may pledge all or
any portion of its Notes or Loans to its trustee in support of its obligations
to such trustee; provided, no Lender, as between Borrower and such Lender, shall
be relieved of any of its obligations hereunder as a result of any such
assignment and pledge, and provided further, in no event shall the applicable
Federal Reserve Bank or trustee be considered to be a "Lender" or be entitled to
require the assigning Lender to take or omit to take any action hereunder.
10.7. INDEPENDENCE OF COVENANTS. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or would otherwise be within the limitations of, another covenant shall not
avoid the occurrence of a Default or an Event of Default if such action is taken
or condition exists.
10.8. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. All
representations, warranties and agreements made herein shall survive the
execution and delivery hereof and the making of any Loan. Notwithstanding
anything herein or implied by law to the contrary, the agreements of each Credit
Party set forth in Sections 2.16(c), 2.17, 2.18, 7.2, 10.2, 10.3 and 10.4 and
the agreements of Lenders set forth in Sections 2.15 and 9.6 shall survive the
payment of the Loans.
10.9. NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the part
of Administrative Agent or any Lender in the exercise of any power, right or
privilege hereunder or under any other Credit Document shall impair such power,
right or privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such power, right or
100
<PAGE> 107
privilege preclude other or further exercise thereof or of any other power,
right or privilege. The rights, powers and remedies given to each Agent and each
Lender hereby are cumulative and shall be in addition to and independent of all
rights, powers and remedies existing by virtue of any statute or rule of law or
in any of the other Credit Documents or any Hedge Agreement. Any forbearance or
failure to exercise, and any delay in exercising, any right, power or remedy
hereunder shall not impair any such right, power or remedy or be construed to be
a waiver thereof, nor shall it preclude the further exercise of any such right,
power or remedy.
10.10. MARSHALLING; PAYMENTS SET AIDE. Neither Administrative Agent nor
any Lender shall be under any obligation to marshal any assets in favor of any
Credit Party or any other Person or against or in payment of any or all of the
Obligations. To the extent that any Credit Party makes a payment or payments to
Administrative Agent or Lenders (or to Administrative Agent for the benefit of
Lenders), or Administrative Agent or Lenders enforce any security interests or
exercise their rights of setoff, and such payment or payments or the proceeds of
such enforcement or setoff or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law, any
other state or federal law, common law or any equitable cause, then, to the
extent of such recovery, the obligation or part thereof originally intended to
be satisfied, and all Liens, rights and remedies therefor or related thereto,
shall be revived and continued in full force and effect as if such payment or
payments had not been made or such enforcement or setoff had not occurred.
10.11. SEVERABILITY. In case any provision in or obligation hereunder
or any Note shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
10.12. OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS. The
obligations of Lenders hereunder are several and no Lender shall be responsible
for the obligations or Commitments of any other Lender hereunder. Nothing
contained herein or in any other Credit Document, and no action taken by Lenders
pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out hereof and it shall not be necessary for any other Lender to
be joined as an additional party in any proceeding for such purpose.
10.13. HEADINGS. Section headings herein are included herein for
convenience of reference only and shall not constitute a part hereof for any
other purpose or be given any substantive effect.
10.14. APPLICABLE LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401
OF THE GENERAL
101
<PAGE> 108
OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES THEREOF.
10.15. CONSENT TO JURISDICTION. ALL JUDICIAL PROCEEDINGS BROUGHT
AGAINST ANY CREDIT PARTY ARISING OUT OF OR RELATING HERETO OR ANY OTHER CREDIT
DOCUMENT, OR ANY OF THE OBLIGATIONS, MAY BE BROUGHT IN ANY STATE OR FEDERAL
COURT OF COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK. BY
EXECUTING AND DELIVERING THIS AGREEMENT, EACH CREDIT PARTY, FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (A) ACCEPTS GENERALLY AND
UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (B)
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (C) AGREES THAT SERVICE OF ALL
PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE APPLICABLE CREDIT PARTY AT ITS
ADDRESS PROVIDED IN ACCORDANCE WITH SECTION 10.1; (D) AGREES THAT SERVICE AS
PROVIDED IN CLAUSE (C) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER
THE APPLICABLE CREDIT PARTY IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND
OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND (E)
AGREES SUCH LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ANY CREDIT PARTY IN THE COURTS
OF ANY OTHER JURISDICTION.
10.16. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY AGREES
TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT HEREOF OR ANY OF THE OTHER CREDIT DOCUMENTS OR ANY
DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR
THE LENDER/ BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. THE SCOPE OF THIS
WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE
FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION,
INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER
COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER
IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS
ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH
WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH
PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER
WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
102
<PAGE> 109
ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY
REFERRING TO THIS SECTION 10.16 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND
THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS HERETO OR ANY OF THE OTHER CREDIT DOCUMENTS OR TO ANY OTHER
DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS MADE HEREUNDER. IN THE EVENT OF
LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.
10.17. CONFIDENTIALITY. Each Lender shall hold all non-public
information obtained pursuant to the requirements hereof in accordance with such
Lender's customary procedures for handling confidential information of this
nature and in accordance with prudent lending or investing practices, it being
understood and agreed by Company that in any event a Lender may make disclosures
to Affiliates of such Lender or disclosures reasonably required by any bona fide
or potential assignee, transferee or participant in connection with the
contemplated assignment, transfer or participation by such Lender of any Loans
or any participations therein or by any direct or indirect contractual
counterparties (or the professional advisors thereto) in swap agreements
(provided, such Affiliates, assignees, transferees, participants, swap
counterparties and advisors are advised of and agree to be bound by the
provisions of this Section 10.17) or disclosures required or requested by any
governmental agency or representative thereof or by the National Association of
Insurance Commissioners or pursuant to legal process; provided, unless
prohibited by applicable law or court order, each Lender shall notify Company of
any request by any governmental agency or representative thereof (other than any
such request in connection with any examination of the financial condition of
such Lender by such governmental agency) for disclosure of any such non-public
information prior to disclosure of such information; and provided further, in no
event shall any Lender be obligated or required to return any materials
furnished by Company or any of its Subsidiaries.
10.18. USURY SAVINGS CLAUSE. Notwithstanding any other provision
herein, the aggregate interest rate charged with respect to any of the
Obligations, including all charges or fees in connection therewith deemed in the
nature of interest under applicable law shall not exceed the Highest Lawful
Rate. If the rate of interest (determined without regard to the preceding
sentence) under this Agreement at any time exceeds the Highest Lawful Rate, the
outstanding amount of the Loans made hereunder shall bear interest at the
Highest Lawful Rate until the total amount of interest due hereunder equals the
amount of interest which would have been due hereunder if the stated rates of
interest set forth in this Agreement had at all times been in effect. In
addition, if when the Loans made hereunder are repaid in full the total interest
due hereunder (taking into account the increase provided for above) is less than
the total amount of interest which would have been due hereunder if the stated
rates of interest set forth in this Agreement had at all times been in effect,
then to the extent permitted by law, Borrower shall pay to Administrative Agent
an amount equal to the difference between the amount of interest paid and the
amount of interest which would have been paid if the Highest Lawful Rate had at
all times been in effect. Notwithstanding the foregoing, it is the intention of
Lenders and Borrower to conform strictly to any applicable usury laws.
Accordingly,
103
<PAGE> 110
if any Lender contracts for, charges, or receives any consideration which
constitutes interest in excess of the Highest Lawful Rate, then any such excess
shall be canceled automatically and, if previously paid, shall at such Lender's
option be applied to the outstanding amount of the Loans made hereunder or be
refunded to Borrower.
10.19. COUNTERPARTS; EFFECTIVENESS. This Agreement may be executed in
any number of counterparts, each of which when so executed and delivered shall
be deemed an original, but all such counterparts together shall constitute but
one and the same instrument. This Agreement shall become effective upon the
execution of a counterpart hereof by each of the parties hereto and receipt by
Borrower and Administrative Agent of written or telephonic notification of such
execution and authorization of delivery thereof.
[The remainder of this page is intentionally left blank.]
104
<PAGE> 111
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
ALLEGIANCE TELECOM, INC.
By: /s/ Mark Tresnowski
---------------------------------------------
Name: Mark Tresnowski
Title: Senior Vice President and Secretary
ALLEGIANCE FINANCE COMPANY, INC.
By: /s/ Mark Tresnowski
---------------------------------------------
Name: Mark Tresnowski
Title: Senior Vice President and Secretary
ALLEGIANCE TELECOM SERVICE
CORPORATION,
as a Guarantor
By: /s/ Mark Tresnowski
---------------------------------------------
Name: Mark Tresnowski
Title: Senior Vice President and Secretary
ALLEGIANCE TELECOM INTERNATIONAL,
INC.,
as a Guarantor
By: /s/ Mark Tresnowski
---------------------------------------------
Name: Mark Tresnowski
Title: Senior Vice President and Secretary
INTERNET ALLEGIANCE INC.,
as a Guarantor
By: /s/ Mark Tresnowski
---------------------------------------------
Name: Mark Tresnowski
S-1
<PAGE> 112
Title: Senior Vice President and Secretary
ALLEGIANCE TELECOM OF TEXAS, INC.,
as a Guarantor
By: /s/ Mark Tresnowski
---------------------------------------------
Name: Mark Tresnowski
Title: Senior Vice President and Secretary
ALLEGIANCE TELECOM OF ILLINOIS, INC.,
as a Guarantor
By: /s/ Mark Tresnowski
---------------------------------------------
Name: Mark Tresnowski
Title: Senior Vice President and Secretary
ALLEGIANCE TELECOM OF MICHIGAN,
INC., as a Guarantor
By: /s/ Mark Tresnowski
---------------------------------------------
Name: Mark Tresnowski
Title: Senior Vice President and Secretary
ALLEGIANCE TELECOM OF MARYLAND,
INC., as a Guarantor
By: /s/ Mark Tresnowski
---------------------------------------------
Name: Mark Tresnowski
Title: Senior Vice President and Secretary
ALLEGIANCE TELECOM OF THE DISTRICT
OF COLUMBIA, INC., as a Guarantor
By: /s/ Mark Tresnowski
---------------------------------------------
Name: Mark Tresnowski
Title: Senior Vice President and Secretary
S-2
<PAGE> 113
ALLEGIANCE TELECOM OF COLORADO,
INC., as a Guarantor
By: /s/ Mark Tresnowski
---------------------------------------------
Name: Mark Tresnowski
Title: Senior Vice President and Secretary
ALLEGIANCE TELECOM OF FLORIDA, INC.,
as a Guarantor
By: /s/ Mark Tresnowski
---------------------------------------------
Name: Mark Tresnowski
Title: Senior Vice President and Secretary
S-3
<PAGE> 114
GOLDMAN SACHS CREDIT PARTNERS L.P.,
as Syndication Agent, Co-Lead Arranger and a Lender
By:
---------------------------------------------
Authorized Signatory
TD SECURITIES (USA) INC.,
as Co-Lead Arranger
By:
---------------------------------------------
Name:
Title:
TORONTO DOMINION (TEXAS), INC.,
as Administrative Agent and a Lender
By: /s/ Diane Bailey
---------------------------------------------
Name: Diane Bailey
Title: Vice President
MORGAN STANLEY SENIOR FUNDING, INC.,
as Documentation Agent and a Lender
By: /s/ Michael T. McLaughlin
---------------------------------------------
Name: Michael T. McLaughlin
Title: Principal
BANKBOSTON, N.A.,
as Managing Agent and a Lender
By: /s/ Jeffrey A. Wellington
---------------------------------------------
Name: Jeffrey A. Wellington
Title: Director
S-4
<PAGE> 115
THE BANK OF NEW YORK,
as Managing Agent and a Lender
By: /s/ Debra L. McGary
---------------------------------------------
Name: Debra L. McGary
Title: Assistant Vice President
PNC BANK, NATIONAL ASSOCIATION,
as Managing Agent and a Lender
By: /s/ Jeffrey E. Hauser
---------------------------------------------
Name: Jeffrey E. Hauser
Title: Vice President
CREDIT LYONNAIS NEW YORK BRANCH,
as Managing Agent and a Lender
By: /s/ John P. Judge
---------------------------------------------
Name: John P. Judge
Title: Vice President
FIRST UNION NATIONAL BANK,
as Managing Agent and a Lender
By: /s/ Mark M. Harden
---------------------------------------------
Name: Mark M. Harden
Title: Senior Vice President
GENERAL ELECTRIC CAPITAL
CORPORATION,
as Managing Agent and a Lender
By: /s/ Molly S. Fergusson
---------------------------------------------
Name: Molly S. Fergusson
Title: Manager, Operations
S-5
<PAGE> 116
THE BANK OF NOVA SCOTIA,
as Co-Agent and a Lender
By: /s/ Vincent J. Fitzgerald, Jr
---------------------------------------------
Name: Vincent J. Fitzgerald, Jr.
Title: Authorized Signatory
DRESDNER BANK AG, NEW YORK AND
GRAND CAYMAN BRANCHES,
as Co-Agent and a Lender
By: /s/ Jane A. Majeski
---------------------------------------------
Name: Jane A. Majeski
Title: First Vice President
By: /s/ William E. Lambert
---------------------------------------------
Name: William E. Lambert
Title: Vice President
UNION BANK OF CALIFORNIA, N.A.
as Co-Agent and a Lender
By: /s/ Ryan D. Flanagan
---------------------------------------------
Name: Ryan D. Flanagan
Title: Assistant Vice President
NEWCOURT COMMERCIAL FINANCE
CORPORATION,
as Co-Agent and a Lender
By: /s/ Charles Brown
---------------------------------------------
Name: Charles Brown
Title: Vice President
THE CIT GROUP/
EQUIPMENT FINANCING, INC .,
as a Lender
APPENDIX A-6
<PAGE> 117
By: /s/ J. E. Palmer
---------------------------------------------
Name: J. E. Palmer
Title: Assistant Vice President
APPENDIX A-7
<PAGE> 118
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., "RABOBANK
NEDERLAND", NEW YORK BRANCH,
as a Lender
By: /s/ Michael V.M. Van Der Voort
---------------------------------------------
Name: Michael V.M. Van Der Voort
Title: Vice President
By: /s/ W. Pieter C. Kodde
---------------------------------------------
Name: W. Pieter C. Kodde
Title: Vice President
HELLER FINANCIAL, INC.,
as a Lender
By: /s/ K. Craig Gallehugh
---------------------------------------------
Name: K. Craig Gallehugh
Title: Vice President
APPENDIX A-8
<PAGE> 119
APPENDIX A
TO CREDIT AND GUARANTY AGREEMENT
<TABLE>
<CAPTION>
================================================================================
Pro
Commitment Rata
Lender Share
<S> <C> <C>
Toronto Dominion (Texas) Inc. $17,000,000 7.5%
Goldman Sachs Credit Partners L.P. $17,000,000 7.5%
Morgan Stanley Senior Funding, Inc. $17,000,000 7.5%
BankBoston, N.A. $15,500,000 6.9%
The Bank of New York $15,500,000 6.9%
Credit Lyonnais New York Branch $15,500,000 6.9%
First Union National Bank $15,500,000 6.9%
General Electric Capital Corporation $15,500,000 6.9%
PNC Bank, National Association $15,500,000 6.9%
Dresdner Bank AG, New York and $14,000,000 6.2%
Grand Cayman Branches
Union Bank of California, N.A. $14,000,000 6.2%
The Bank of Nova Scotia $14,000,000 6.2%
Newcourt Commercial Finance $14,000,000 6.2%
Corporation
Heller Financial, Inc. $10,000,000 4.4%
Cooperatieve Centrale Raiffeisen - $10,000,000 4.4%
Boerenleenbank B.A., "Rabobank
Nederland", New York Branch
The CIT Group/ $ 5,000,000 2.2%
Equipment Financing, Inc.
Total $225,000,000 100%
================================================================================
</TABLE>
APPENDIX A-9
<PAGE> 120
APPENDIX B
TO CREDIT AND GUARANTY AGREEMENT
NOTICE ADDRESSES
ALLEGIANCE TELECOM, INC.
Allegiance Telecom, Inc.
4 Westbrook Corporate Center, Suite 400
Westchester, Illinois 60154
Attention: Mark B. Tresnowski
Telephone: 708-836-5240
Fascimile: 708-836-5250
For each of the following:
ALLEGIANCE FINANCE COMPANY, INC.
ALLEGIANCE TELECOM SERVICE CORPORATION
ALLEGIANCE TELECOM INTERNATIONAL, INC.
INTERNET ALLEGIANCE, INC.
ALLEGIANCE TELECOM OF ILLINOIS, INC.
ALLEGIANCE TELECOM OF MICHIGAN, INC.
ALLEGIANCE TELECOM OF MARYLAND, INC.
ALLEGIANCE TELECOM OF THE DISTRICT OF COLUMBIA, INC.
ALLEGIANCE TELECOM OF COLORADO, INC.
ALLEGIANCE TELECOM OF FLORIDA, INC.
c/o Allegiance Telecom, Inc.
4 Westbrook Corporate Center, Suite 400
Westchester, Illinois 60154
Attention: Mark B. Tresnowski
Telephone: 708-836-5240
Fascimile: 708-836-5250
In each case, with a copy to:
Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
Attention: Andrew M. Kaufman
Telephone: 312-861-2313
Fascimile: 312-861-2200
APPENDIX B-1
<PAGE> 121
GOLDMAN SACHS CREDIT PARTNERS L.P.,
as Syndication Agent
Goldman Sachs Credit Partners L.P.
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Attention: Stephen King
Telephone: 212-902-8123
Facsimile: 212-902-1021
with a copy of all Notices to:
Goldman Sachs Credit Partners L.P.
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Attention: John Makrinos
Telephone: 212-902-5977
Facsimile: 212-357-4597
APPENDIX B-2
<PAGE> 122
TORONTO DOMINION (TEXAS), INC.,
as Administrative Agent
Administrative Agent's Principal Office:
Toronto Dominion Bank - Houston Agency
909 Fannin Street, Suite 1700
Houston, TX 77010
Attention: Diane Bailey or Kimberly Burleson
Telephone: 713-653-8241
Facsimile: 713-951-9921
APPENDIX B-3
<PAGE> 123
MORGAN STANLEY SENIOR FUNDING, INC.
as Documentation Agent
Documentation Agent's Principal Office:
1585 Broadway, 10th floor
New York, New York 10036
Attention: James Morgan
Telephone: 212-761-4866
Facsimile: 212-761-0592
In each case, with a copy to:
1221 Avenue of the Americas, 35th floor
New York, New York
Attention: Morgan Edwards
Telephone: 212-762-5814
Facsimile: 212-762-9181
APPENDIX B-4
<PAGE> 124
BANKBOSTON, N.A.
as a Lender
Lender's Principal Office:
BankBoston, N.A.
100 Federal Street
MS 01-08-04
Boston, MA 02110
Attention: Margie Hery, Loan Administrator
Telephone: 617-434-9725
Facsimile: 617-434-9820
In each case, with a copy to:
BankBoston, N.A.
100 Federal Street
MA 01-08-08
Boston, MA 02110
Attention: Jeffrey A. Wellington, Director
Telephone: 617-434-9959
Facsimile: 617-434-3401
APPENDIX B-5
<PAGE> 125
THE BANK OF NEW YORK
as a Lender
Lender's Principal Office:
The Bank of New York
One Wall Street
New York, NY 10286
Attention: Edgar Greaves
Telephone: 212-635-8728
Facsimile: 212-635-8679
In each case, with a copy to:
The Bank of New York
One Wall Street
New York, NY 10286
Attention: Debra McGarry
Telephone: 212-635-8748
Facsimile: 212-635-8595
APPENDIX B-6
<PAGE> 126
THE BANK OF NOVA SCOTIA
as a Lender
Lender's Principal Office:
The Bank of Nova Scotia
One Liberty Plaza
New York, NY 10006
Attention: Peter Colletta
Telephone: 212-225-5069
Facsimile: 212-225-5145
In each case, with a copy to:
The Bank of Nova Scotia
One Liberty Plaza
New York, NY 10006
Attention: Steve Levi
Telephone: 212-225-5039
Facsimile: 212-225-5090
APPENDIX B-7
<PAGE> 127
DRESDNER BANK AG, NEW YORK AND CAYMAN ISLAND BRANCHES
as a Lender
Lender's Principal Office:
Dresdner Bank AG, New York Branch
75 Wall Street
New York, NY 10005
Attention: Laura Lam, Vice President
Telephone: 212-429-2288
Facsimile: 212-429-2130
In each case, with a copy to:
Dresdner Bank AG, New York Branch
75 Wall Street
New York, NY 10005
Attention: Constance Loosemore, Assistant Vice President
Telephone: 212-429-3204
Facsimile: 212-429-4181
APPENDIX B-8
<PAGE> 128
THE CIT GROUP/EQUIPMENT FINANCING, INC.
as a Lender
Lender's Principal Office:
900 Ashwood Parkway
Suite 600
Atlanta, Georgia 30338
Attention: John Palmer, Assistant Vice President
Telephone: 770-551-7827
Facsimile: 770-206-9295
In each case, with a copy to:
900 Ashwood Parkway
Suite 600
Atlanta, Georgia 30338
Attention: Kathleen Oliver
Telephone: 770-551-7870
Facsimile: 770-399-9823
APPENDIX B-9
<PAGE> 129
COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A., "RABOBANK
NEDERLAND", NEW YORK BRANCH
as a Lender
Lender's Principal Office:
Corporate Services
10 Exchange Place
Jersey City, NJ 07302
Attention: Debra Rivers
Telephone: 201-499-5317
Facsimile: 201-499-5327
In each case, with a copy to:
300 South Wacker Drive
Suite 3500
Chicago, IL 60606
Attention: Alan McLintock, Vice President
Telephone: 312-408-8253
Facsimile: 312-786-0052
APPENDIX B-10
<PAGE> 130
CREDIT LYONNAIS, NEW YORK BRANCH
as a Lender
Lender's Principal Office:
1301 Avenue of the Americas
New York, New York 10019
Attention: Deborah Sachs
Telephone: 212-261-7837
Facsimile: 212-261-3318
In each case, with a copy to:
1301 Avenue of the Americas
New York, New York 10019
Attention: John Judge
Telephone: 212-261-7841
Facsimile: 212-261-3288
APPENDIX B-11
<PAGE> 131
FIRST UNION NATIONAL BANK
as a Lender
Lender's Principal Office:
First Union National Bank
301 S. College Street
Charlotte, NC 28288
Attention: Deanna Webster
Telephone: 704-383-0522
Facsimile: 704-383-7201
APPENDIX B-12
<PAGE> 132
GENERAL ELECTRIC CAPITAL CORPORATION
as a Lender
Lender's Principal Office:
Structured Finance Group
120 Longridge Road, 3rd Floor
Stamford, Connecticut 06927
Attention: Susan Cahill
Telephone: 203-961-2032
Facsimile: 203-425-9327
In each case, with a copy to:
Structured Finance Group
120 Longridge Road, 3rd Floor
Stamford, Connecticut 06927
Attention: Brian Jack
Telephone: 203-357-6859
Facsimile: 203-357-3962
APPENDIX B-13
<PAGE> 133
HELLER FINANCIAL, INC.
as a Lender
Lender's Principal Office:
500 W. Monroe
Chicago, IL 60661
Attention: Najee Ali
Telephone: 312-441-6898
Facsimile: 312-441-7367
In each case, with a copy to:
500 W. Monroe
Chicago, IL 60661
Attention: Craig Gallehway
Telephone: 312-441-7630
Facsimile: 312-441-7367
APPENDIX B-14
<PAGE> 134
PNC BANK, NATIONAL ASSOCIATION
as a Lender
Lender's Principal Office:
PNC Bank, N.A.
1600 Market Street
Philadelphia, PA 19103
Attention: Joanne Kane, Loan Originator
Telephone: 215-585-6809
Facsimile: 215-585-7485
In each case, with a copy to:
PNC Bank, N.A.
1600 Market Street
Philadelphia, PA 19103
Attention: Jeffrey E. Hauser
Telephone: 215-585-6468
Facsimile: 215-585-6680
APPENDIX B-15
<PAGE> 135
UNION BANK OF CALIFORNIA, N.A.
as a Lender
Lender's Principal Office:
1950 Saturn Street V03-251
Monterey Park, CA 91755
Attention: Gohar Karapetyan
Telephone: 213-720-2679
Facsimile: 323-720-2252
In each case, with a copy to:
445 So. Figueroa Street
Los Angeles, CA 90071
Attention: Craig Cappi
Telephone: 213-236-7517
Facsimile: 213-236-5747
APPENDIX B-16
<PAGE> 136
NEWCOURT COMMERCIAL FINANCE CORPORATION
as a Lender
Lender's Principal Office:
c/o Newcourt Capital Inc.
Two Gatehall Drive, 1st floor
Parsippany, New Jersey 07054
Attention: Vice President - Credit
Telephone: 973-355-7630
Facsimile: 973-355-7641
In each case, with a copy to:
c/o Newcourt Capital Inc.
Two Gatehall Drive, 1st floor
Parsippany, New Jersey 07054
Attention: Vice President - Legal
Telephone: 973-355-7609
Facsimile: 973-355-7645
APPENDIX B-17
<PAGE> 137
EXHIBIT A-1 TO
CREDIT AGREEMENT
FUNDING NOTICE
Reference is made to the Credit and Guaranty Agreement, dated as of
April __, 1999 (as it may be amended, supplemented or otherwise modified, the
"Credit Agreement"; the terms defined therein and not otherwise defined herein
being used herein as therein defined), by and among Allegiance Telecom, Inc.
("Company"), Allegiance Finance Company, Inc. ("Borrower"), the Subsidiaries of
Company (other than Borrower) party thereto, as Guarantors, Lenders, Goldman
Sachs Credit Partners L.P. ("GSCP"), as Syndication Agent, Toronto Dominion
(Texas), Inc., as Administrative Agent, Morgan Stanley Senior Funding, Inc., as
Documentation Agent, and GSCP and TD Securities (USA) Inc., as Co-Lead
Arrangers.
Pursuant to Section 2.1 of the Credit Agreement, Borrower desires that
Lenders make the following Loans to Borrower on _________________ (the "Credit
Date"):
1. Amount of Base Rate Loans: $________________
2. Amount of Eurodollar Rate Loans
with an initial Interest Period of
month(s): $________________
The undersigned officer of Borrower, to the best of his or her
knowledge, and Borrower certify that:
1. as of the Credit Date, the representations and warranties
contained in each of the Credit Documents are true, correct and complete in all
material respects on and as of such Credit Date to the same extent as though
made on and as of such date, except to the extent such representations and
warranties specifically relate to an earlier date, in which case such
representations and warranties shall have been true, correct and complete in all
material respects on and as of such earlier date;
2. as of the Credit Date, no injunction or other restraining
order has been issued and no hearing to cause an injunction or other restraining
order to be issued is pending or noticed with respect to any action, suit or
proceeding seeking to enjoin or otherwise prevent the
A-1-1
<PAGE> 138
consummation of, or to recover any damages or obtain relief as a result of,
the borrowing contemplated hereby; and
3. as of the such Credit Date, no event has occurred and be
continuing or would result from the consummation of the borrowing contemplated
hereby that would constitute an Event of Default or a Default.
Date: Allegiance Finance Company, Inc.
By:
-------------------------------------
Name:
-------------------------------
Title:
------------------------------
A-1-2
<PAGE> 139
EXHIBIT A-2 TO
CREDIT AGREEMENT
CONVERSION/CONTINUATION NOTICE
Reference is made to the Credit and Guaranty Agreement, dated as of
April __, 1999 (as it may be amended, supplemented or otherwise modified, the
"Credit Agreement"; the terms defined therein and not otherwise defined herein
being used herein as therein defined), by and among Allegiance Telecom, Inc.
("Company"), Allegiance Finance Company, Inc. ("Borrower"), the Subsidiaries of
Company (other than Borrower) party thereto, as Guarantors, Lenders, Goldman
Sachs Credit Partners L.P. ("GSCP"), as Syndication Agent, Toronto Dominion
(Texas), Inc., as Administrative Agent, Morgan Stanley Senior Funding, Inc., as
Documentation Agent, and GSCP and TD Securities (USA) Inc., as Co-Lead
Arrangers.
Pursuant to Section 2.6 of the Credit Agreement, Borrower desires to
convert or to continue the following Loans, each such conversion and/or
continuation to be effective as of ________________________:
1. Amount of Eurodollar Rate Loans
to be continued as Eurodollar Rate
Loans, with an initial Interest Period
of ________ month(s): $________________
2. Amount of Base Rate Loans to be
converted to Eurodollar Rate Loans,
with an initial Interest Period of
month(s): $_________________
3. Amount of Eurodollar Rate Loans
to be converted to Base Rate Loans: $_________________
In the case of a conversion to or continuation of a Eurodollar Rate
Loan, the undersigned officer, to the best of his or her knowledge, and Borrower
certify that (a) no Event of Default or Default has occurred and is continuing,
and (b) the conversion or continuation date thereof is the expiration date of
such Loan's Interest Period (or breakage fees in the amount of $_______ payable
pursuant to Section 2.16(c) will be paid on the date of conversion or
continuation).
Date: Allegiance Finance Company, Inc.
By:
-------------------------------------
Title:
------------------------------
A-2-1
<PAGE> 140
EXHIBIT B TO
CREDIT AGREEMENT
NOTE
$[1][__________] [2]__________, ____
FOR VALUE RECEIVED, Allegiance Finance Company, Inc., a Delaware
corporation ("Payor"), promises to pay, without set-off or counter claim, to the
order of [3]________________ ("Payee") or its registered assigns, on or before
[______ __, ____], the lesser of (a) [1][_________________] DOLLARS
($[1]_________) and (b) the unpaid principal amount of all advances made by
Payee to Payor as Loans under the Credit Agreement referred to below.
Payor also promises to pay interest on the unpaid principal amount
hereof, from the date hereof until paid in full, at the rates and at the times
which shall be determined in accordance with the provisions of that certain
Credit and Guaranty Agreement, dated as of April __, 1999 (as it may be amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
by and among Allegiance Telecom, Inc. ("Company"), Payor, the Subsidiaries of
Company (other than Borrower) party thereto, as Guarantors, Lenders, Goldman
Sachs Credit Partners L.P. ("GSCP"), as Syndication Agent, Toronto Dominion
(Texas), Inc., as Administrative Agent, Morgan Stanley Senior Funding, Inc., as
Documentation Agent, and GSCP and TD Securities (USA) Inc., as Co-Lead
Arrangers.
Payor shall make principal payments on this Note as set forth in
Section 2.14 of the Credit Agreement.
This Note is issued pursuant to and entitled to the benefits of the
Credit Agreement, to which reference is hereby made for a more complete
statement of the terms and conditions under which the Loans evidenced hereby
were made and are to be repaid.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
Administrative Agent's Principal Office or at such other place as shall be
designated in writing for such purpose in accordance with the terms of the
Credit Agreement. Unless and until an Assignment Agreement effecting the
assignment or transfer of this Note shall have been accepted by Administrative
Agent and
- --------
[1] Lender's Commitment
[2] Closing Date
[3] Name of Lender
B-1
<PAGE> 141
recorded in the Register, Payor and Administrative Agent shall be entitled to
deem and treat Payee as the owner and holder of this Note and the Loans
evidenced hereby. Payee hereby agrees, by its acceptance hereof, that before
disposing of this Note or any part hereof it will make a notation hereon of all
principal payments previously made hereunder and of the date to which interest
hereon has been paid; provided, the failure to make a notation of any payment
made on this Note shall not limit or otherwise affect the obligations of Payor
hereunder with respect to payments of principal of or interest on this Note.
This Note is subject to mandatory prepayment and to prepayment at the
option of Payor, each as provided in the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF PAYOR AND PAYEE HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND EN FORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES THEREOF.
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued and unpaid interest
thereon and premium, if any, may become, or may be declared to be, due and
payable in the manner, upon the conditions and with the effect provided in the
Credit Agreement.
The terms of this Note are subject to amendment only in the manner
provided in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment as
provided in the Credit Agreement.
Payor promises to pay all costs and expenses, including reasonable
attorneys' fees, all as provided in the Credit Agreement, incurred in the
collection and enforcement of this Note. Payor and any endorsers of this Note
hereby consent to renewals and extensions of time at or after the maturity
hereof, without notice, and hereby waive diligence, presentment, protest, demand
and notice of every kind and, to the full extent permitted by law, the right to
plead any statute of limitations as a defense to any demand hereunder.
All borrowings evidenced by this Note and all payments and prepayments
of the principal hereof and interest hereon and the respective dates and
maturity dates thereof shall be endorsed by the holder hereof on the schedule
attached hereto and made a part hereof or on a continuation thereof that shall
be attached hereto and made a part hereof, or otherwise recorded by such holder
in its internal records; provided, however, that the failure of the holder
hereof to make such a notation or any error in such a notation shall not affect
the obligations of the Borrower under this Note.
B-2
<PAGE> 142
IN WITNESS WHEREOF, Payor has caused this Note to be duly executed and
delivered by its officer thereunto duly authorized as of the date and at the
place first written above.
Allegiance Finance Company, Inc.
By:
-------------------------------------
Name:
-------------------------------
Title:
------------------------------
B-3
<PAGE> 143
TRANSACTIONS ON NOTE
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
Outstanding
Type of Amount of Amount of Principal
Loan Made Loan Made Principal Paid Balance Notation
Date This Date This Date This Date This Date Made By
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
</TABLE>
B-4
<PAGE> 144
EXHIBIT C TO
CREDIT AGREEMENT
COMPLIANCE CERTIFICATE
THE UNDERSIGNED HEREBY CERTIFIES TO ALL AGENTS AND LENDERS AS FOLLOWS:
1. I am the Chief Financial Officer of Allegiance Telecom, Inc., a
Delaware corporation ("Company").
2. I have reviewed the terms of that certain Credit and Guaranty
Agreement, dated as of April __, 1999 (as so amended, supplemented or otherwise
modified, the "Credit Agreement", the terms defined therein and not otherwise
defined in this Certificate, including the Attachment annexed hereto and made a
part hereof (the "Attachment"), being used in this Certificate as therein
defined), by and among Company, Allegiance Finance Company, Inc. ("Borrower"),
the Subsidiaries of Company (other than Borrower) party thereto, as Guarantors,
Lenders, Goldman Sachs Credit Partners L.P. ("GSCP"), as Syndication Agent,
Toronto Dominion (Texas), Inc., as Administrative Agent, Morgan Stanley Senior
Funding, Inc., as Documentation Agent, and GSCP and TD Securities (USA) Inc., as
Co-Lead Arrangers, and the terms of the other Credit Documents, and I have made,
or have caused to be made under my supervision, a review in reasonable detail of
the transactions and condition of Company and its Subsidiaries during the
accounting period covered by the attached financial statements.
3. The examination described in paragraph 2 above did not disclose, and
I have no knowledge of, the existence of any condition or event which
constitutes an Event of Default or Default during or at the end of the
accounting period covered by the attached financial statements or as of the date
of this Certificate, except as set forth in a separate attachment, if any, to
this Certificate, describing in detail, the nature of the condition or event,
the period during which it has existed and the action which Company has taken,
is taking, or proposes to take with respect to each such condition or event.
C-1
<PAGE> 145
The foregoing certifications, together with the computations set forth
in the Attachment and the financial statements delivered with this Certificate
in support hereof, are made and delivered this __________ day of ____________
pursuant to Section 5.1(d) of the Credit Agreement.
Allegiance Telecom, Inc.
By:
Name:
-------------------------------
Title: Chief Financial Officer
C-2
<PAGE> 146
ATTACHMENT TO
COMPLIANCE CERTIFICATE
FOR THE FISCAL [QUARTER] [YEAR] ENDING ____________________.
C-3
<PAGE> 147
EXHIBIT D TO
CREDIT AGREEMENT
OPINIONS OF COUNSEL
[to come]
D-1
<PAGE> 148
EXHIBIT E TO
CREDIT AGREEMENT
ASSIGNMENT AGREEMENT
This ASSIGNMENT AGREEMENT (this "Agreement"), dated as of the date set
forth on Schedule I hereto as the Effective Date (the "Effective Date"), by and
between the parties signatory hereto and designated as Assignor ("Assignor") and
Assignee ("Assignee").
RECITALS:
WHEREAS, Assignor is party to the Credit and Guaranty Agreement, dated
as of April __, 1999 (as it may be amended, supplemented or otherwise modified,
the "Credit Agreement"; the terms defined therein and not otherwise defined
herein being used herein as therein defined), by and among Allegiance Telecom,
Inc. ("Company"), Allegiance Finance Company, Inc. ("Borrower"), the
Subsidiaries of Company (other than Borrower) party thereto, as Guarantors,
Lenders, Goldman Sachs Credit Partners L.P. ("GSCP"), as Syndication Agent,
Toronto Dominion (Texas), Inc., as Administrative Agent, Morgan Stanley Senior
Funding, Inc., as Documentation Agent, and GSCP and TD Securities (USA) Inc., as
Co-Lead Arrangers; and
WHEREAS, Assignor desires to sell and assign to Assignee, and Assignee
desires to purchase and assume from Assignor, certain rights and obligations of
Assignor under the Credit Agreement.
NOW, THEREFORE, in consideration of the agreements and covenants herein
contained, the parties hereto agree as follows:
Section 1. Assignment and Assumption. Subject to the terms and
conditions hereof, as of the Effective Date, Assignor sells and assigns to
Assignee, without recourse, representation or warranty (except as expressly set
forth herein), and Assignee purchases and assumes from Assignor, the percentage
interest specified on Schedule I hereto in all of the rights and obligations
with respect to the Commitments and outstanding Loans of Lenders arising under
the Credit Agreement and the other Credit Documents (the "Assigned Share"). In
consideration of such assignment, Assignee hereby agrees to pay to Assignor, on
the date set forth on Schedule I hereto as the Settlement Date (the "Settlement
Date"), the principal amount of any outstanding loans included within the
Assigned Share (such principal amount referred to herein as the "Purchase
Price"), such payment to be made by wire transfer of immediately available
funds. Upon the occurrence of the Effective Date: (a) the Assignee shall have
the rights and obligations of a Lender to the extent of the Assigned Share and
shall thereafter be a party to the Credit Agreement and a Lender for all
purposes of the Credit Documents; (b) Assignor shall, to the extent of the
Assigned Share, relinquish its rights (other than any rights which survive the
E-1
<PAGE> 149
payment of the Loans under Section 10.8 thereof) and be released from its
obligations under the Credit Agreement; and (c) the Commitments shall be
modified to reflect the Commitment of Assignee and any remaining Commitment of
Assignor. From and after the Effective Date, Administrative Agent shall make
all payments under the Credit Agreement in respect of the Assigned Share (i) in
the case of any interest and fees that shall have accrued prior to the
Settlement Date, to Assignor, and (ii) in all other cases, to Assignee;
provided, Assignor and Assignee shall make payments directly to each other to
the extent necessary to effect any appropriate adjustments in any amounts
distributed to Assignor and/or Assignee by Administrative Agent under the Credit
Documents in respect of the Assigned Share in the event that, for any reason
whatsoever, the payment of consideration contemplated by this Section 1 occurs
on a date other than the Settlement Date.
Section 2. Effective Date. Notwithstanding anything herein to the
contrary, the Effective Date shall not be deemed to have occurred until each of
the following conditions are satisfied, as determined in the reasonable judgment
of each of Assignor, Assignee and Administrative Agent: (a) the execution of a
counterpart hereof by each of Assignor and Assignee; (b) the payment of the
Purchase Price on the Settlement Date; (c) the receipt by Administrative Agent
of the processing and recordation fee referred to in Section 10.6(d) of the
Credit Agreement; (d) in the event Assignee is a Non-US Lender, the delivery by
Assignee to Administrative Agent of such forms, certificates or other evidence
with respect to United States federal income tax withholding matters as Assignee
may be required to deliver to Administrative Agent pursuant to Section 2.18(c);
(e) the receipt by Administrative Agent of originals or telefacsimiles of
executed counterparts hereof; and (f) the recordation by Administrative Agent in
the Register of the pertinent information regarding this Assignment pursuant to
Section 10.6(e) of the Credit Agreement.
Section 3. Certain Representations, Warranties and Agreements. (a)
Assignor represents and warrants to Assignee that (i) Assignor is the legal and
beneficial owner of the Assigned Share, free and clear of any adverse claim; and
(ii) Schedule I hereto sets forth the aggregate amount of the Commitments and
the aggregate amount of the Loans, in each case as of the Effective Date.
(b) Assignee represents and warrants to Assignor that (i) it is an
Eligible Assignee and that it has experience and expertise in the making or
purchasing of loans and commitment such as the Loans and the Commitments; (ii)
it has acquired the Assigned Share for its own account in the ordinary course of
its business and without a view to distribution of the Loans within the meaning
of the Securities Act or the Exchange Act or other federal securities laws (it
being understood that, subject to the provisions of Section 10.6 of the Credit
Agreement, the disposition of the Assigned Share or any interests therein shall
at all times remain within its exclusive control); (iii) it has received,
reviewed and approved a copy of the Credit Agreement (including all Exhibits and
Schedules thereto); and (iv) it has received from Assignor such financial
information regarding Company and its Subsidiaries as is available to Assignor
and as Assignee has requested, that it has made its own independent
investigation of the financial
E-2
<PAGE> 150
condition and affairs of Company and its Subsidiaries in connection with the
assignment evidenced by this Agreement, and that it has made and shall continue
to make its own appraisal of the creditworthiness of Company and its
Subsidiaries. Assignor shall have no duty or responsibility, either initially or
on a continuing basis, to make any such investigation or any such appraisal on
behalf of Assignee or to provide Assignee with any other credit or other
information with respect thereto, whether coming into its possession before the
making of the initial Loans or at any time or times thereafter, and Assignor
shall not have any responsibility with respect to the accuracy of or the
completeness of any information provided to Assignee.
(c) Each party to this Agreement represents and warrants to the other
party hereto that it has full power and authority to enter into this Agreement
and to perform its obligations hereunder in accordance with the provisions
hereof, that this Agreement has been duly authorized, executed and delivered by
such party and that this Agreement constitutes a legal, valid and binding
obligation of such party, enforceable against such party in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally and by general principles of equity.
(d) Assignor shall not be responsible to Assignee for the execution,
effectiveness, genuineness, validity, enforceability, collectibility or
sufficiency of any of the Credit Documents or for any representations,
warranties, recitals or statements made therein or made in any written or oral
statements or in any financial or other statements, instruments, reports or
certificates or any other documents furnished or made by Assignor to Assignee or
by or on behalf of Company or any of its Subsidiaries to Assignor or Assignee in
connection with the Credit Documents and the transactions contemplated thereby
or for the financial condition or business affairs of Company or any other
Person liable for the payment of any Obligations, nor shall Assignor be required
to ascertain or inquire as to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained in any of the Credit
Documents or as to the use of the proceeds of the Loans or as to the existence
or possible existence of any Event of Default or Default.
Section 4. Miscellaneous. Assignor and Assignee each agrees from time
to time, upon request of such other party, to take such additional actions and
to execute and deliver such additional documents and instruments as such other
party may reasonably request to effect the transactions contemplated by, and to
carry out the intent of, this Agreement. Neither this Agreement nor any term
hereof may be changed, waived, discharged or terminated, except by an instrument
in writing signed by the party (including, if applicable, any party required to
evidence its consent to or acceptance of this Agreement) against whom
enforcement of such change, waiver, discharge or termination is sought. Any
notice or other communication herein required or permitted to be given shall be
given pursuant to Section 10.1 of the Credit Agreement, and all for purposes
thereof, the notice address of Assignee shall be the address as set forth on the
signature page hereof. In case any provision in or obligation under this
Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the
E-3
<PAGE> 151
remaining provisions or obligations, or of such provision or obligation in any
other jurisdiction, shall not in any way be affected or impaired thereby. This
Agreement shall be binding upon, and shall inure to the benefit of, the parties
hereto and their respective successors and assigns. This Agreement may be
executed in one or more counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND EN FORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES THEREOF.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the Effective Date by their respective
officers thereunto duly authorized.
[ASSIGNOR], as Assignor [ASSIGNEE], as Assignee
By: By:
Name: Name:
Title: Title:
[Consented to as of the Effective Date:] [Consented to and recorded as of]
, .
---------- ------
Allegiance Finance Company, Inc., Toronto Dominion (Texas), Inc.,
as Borrower as Administrative Agent
By: By:
Name: Name:
Title: Title:
E-4
<PAGE> 152
SCHEDULE I TO
ASSIGNMENT AGREEMENT
1. Effective Date: __________
2. Settlement Date: __________
3. Assigned Share:
<TABLE>
<CAPTION>
=================================================================================
Principal Percentage
Aggregate Amount of Facility
Facility Amount Assigned Assigned
=================================================================================
<S> <C> <C> <C>
Commitment $___________ $__________ _____%
Loans $___________ $__________ _____%
=================================================================================
</TABLE>
4. Payment Instructions:
ASSIGNOR: ASSIGNEE:
Attention: Attention:
5. Notice Instructions:
ASSIGNOR: ASSIGNEE:
Attention: Attention:
E-5
<PAGE> 153
EXHIBIT F TO
CREDIT AGREEMENT
CERTIFICATE RE NON-BANK STATUS
Reference is hereby made to that certain Credit and Guaranty Agreement,
dated as of April __, 1999 (said Credit and Guaranty Agreement, as amended,
supplemented or otherwise modified to the date hereof, being the "Credit
Agreement"), by and among Allegiance Telecom, Inc. ("Company"), Allegiance
Finance Company, Inc. ("Borrower"), the Subsidiaries of Company (other than
Borrower) party thereto, as Guarantors, Lenders, Goldman Sachs Credit Partners
L.P. ("GSCP"), as Syndication Agent, Toronto Dominion (Texas), Inc., as
Administrative Agent, Morgan Stanley Senior Funding, Inc., as Documentation
Agent, and GSCP and TD Securities (USA) Inc., as Co-Lead Arrangers. Pursuant to
Section 2.18(c) of the Credit Agreement, the undersigned hereby certifies that
it is not a "bank" or other Person described in Section 881(c)(3) of the
Internal Revenue Code of 1986, as amended.
[NAME OF LENDER]
By:
--------------------------------------
Name:
--------------------------------
Title:
-------------------------------
F-1
<PAGE> 154
EXHIBIT G TO
CREDIT AGREEMENT
CLOSING DATE CERTIFICATE
THE UNDERSIGNED HEREBY CERTIFY AS FOLLOWS:
1. We are, respectively, the chief executive officer and the chief
financial officer of Allegiance Finance Company, Inc., a Delaware corporation
("Borrower").
2. Pursuant to Section 3.1(q) of the Credit and Guaranty Agreement,
dated as of April __, 1999 (as amended, supplemented or otherwise modified to
the date hereof, the "Credit Agreement"; capitalized terms used herein but not
defined herein as therein defined), by and among Borrower, Allegiance Telecom,
Inc. ("Company"),the Subsidiaries of Company (other than Borrower) party
thereto, as Guarantors, Lenders, Goldman Sachs Credit Partners L.P. ("GSCP"), as
Syndication Agent, Toronto Dominion (Texas), Inc., as Administrative Agent,
Morgan Stanley Senior Funding, Inc., as Documentation Agent, and GSCP and TD
Securities (USA) Inc., as Co-Lead Arrangers, the undersigned do hereby certify
on behalf of Borrower that:
(a) We have reviewed the terms of Sections 3 and 4 of the Credit
Agreement and the definitions and provisions contained in such Credit Agreement
relating to such subsections, and in our opinion we have made, or have caused to
be made under our supervision, such examination or investigation as is necessary
to enable us to express an informed opinion as to the matters referred to
herein.
(b) Based upon our review and examination described in paragraph (a)
above, we certify that as of the date hereof: (i) the representations and
warranties in Section 4 of the Credit Agreement are true and correct in all
material respects on and as of the Closing Date, except to the extent such
representations and warranties specifically relate to an earlier date, in which
case such representations and warranties were true and correct in all material
respects on and as of such earlier date; (ii) no injunction or restraining order
has been issued and no hearing to cause an injunction or other restraining order
is pending or noticed with respect to any action, suit or proceeding seeking to
enjoin or otherwise prevent the consummation of, or to recover any damages or
obtain relief as a result of, the transactions contemplated by the Credit
Agreement; (iii) each Credit Party has performed all agreements and satisfied
all conditions which the Credit Agreement or the Credit Documents provide shall
be per formed or satisfied by it on or before the Closing Date; and (iv) no
event has occurred or is continuing as of the date hereof, that would constitute
an Event of Default or a Default.
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(c) Based upon our review and examination described in paragraph (a)
above, we certify that, as of the date hereof, each Credit Party is Solvent.
(d) Each Credit Party has requested Kirkland & Ellis, counsel to Credit
Parties, to deliver to Agents and Lenders on the Closing Date favorable written
opinions setting forth substantially the matters in the opinions designated in
Exhibit D annexed to the Credit Agreement, and as to such other matters as
Syndication Agent and Administrative Agent may reasonably request.
(e) Attached hereto as Annex B are true, complete and correct copies of
(i) the Historical Financial Statements, (ii) a pro forma balance sheet as at
December 31, 1998 and an income and cash flow statement for the twelve month
period ending December 31, 1998, in each case for Company and its Subsidiaries,
prepared in accordance with GAAP on a consolidated basis and reflecting the
transactions contemplated hereby, and (iii) a financial forecast for Company and
its Subsidiaries for the period from Fiscal Year 1999 through and including
Fiscal Year 2008 (with Fiscal Years 1999 and 2000 detailed by Fiscal Quarter),
together with an analysis of Pre-Overhead EBITDA on a Geographic
Market-by-Geographic Market basis through June 30, 2001; and all of the
foregoing financial statements and other information are not inconsistent, in
any material respect, with any information previously provided to Agents.
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The foregoing certifications are made and delivered as of April __,
1999.
By:
-------------------------------------
Name:
-------------------------------
Title: Chief Executive Officer
By:
-------------------------------------
Name:
-------------------------------
Title: Chief Financial Officer
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EXHIBIT H TO
CREDIT AGREEMENT
LOAN AVAILABILITY CERTIFICATE
1. I am the [insert name of position of Authorized Officer] of
Allegiance Telecom, Inc., a Delaware corporation ("Company").
2. I have reviewed the terms of Sections 3, 6.6 or 6.7, as applicable,
of that certain Credit and Guaranty Agreement, dated as of April __, 1999 (as so
amended, supplemented or otherwise modified, the "Credit Agreement", the terms
defined therein and not otherwise defined in this Certificate being used in this
Certificate as therein defined), by and among Company, Allegiance Finance
Company, Inc. ("Borrower"), the Subsidiaries of Company (other than Borrower)
party thereto, as Guarantors, Lenders, Goldman Sachs Credit Partners L.P.
("GSCP"), as Syndication Agent, Toronto Dominion (Texas), Inc., as
Administrative Agent, Morgan Stanley Senior Funding, Inc., as Documentation
Agent, and GSCP and TD Securities (USA) Inc., as Co-Lead Arrangers, and the
definitions and provisions contained in such Credit Agreement relating to such
Sections, and I have made, or have caused to be made under my supervision, such
examination or investigation as is necessary to enable me to express an informed
opinion as to the matters referred to herein.
[3. Based upon my review and examination described in paragraph 2
above, I certify to all Agents and Lenders that, as of the date hereof, the
following Initial Certified Conditions have been met:
(a) Company is in pro forma compliance with all (i) covenants contained
in Sections 6.6 or 6.7, as applicable, and (ii) conditions specified in Section
3;
(b) Company has invested a minimum of $250,000,000 in the operations of
the Borrower and/or its Subsidiaries (it being understood that for the purposes
of this clause (b), the term "invested" includes cash invested in operations and
expenses of the Borrower and/or its Subsidiaries and Capital Expenditures of
Borrower and/or its Subsidiaries); and
(c) [name of Geographic Market] (i) had Pre-Overhead EBITDA equal to
$___________ in [month] and (ii) projects positive Pre-Overhead EBITDA on a pro
forma basis from the date hereof through the Maturity Date.
(d) the Geographic Market specified in clause (c) is represented by
[name of Subsidiary], (i) whose stock has been pledged to the Administrative
Agent pursuant to Section
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5.12(b) of the Credit Agreement, (ii) which is a Guarantor under the Credit
Agreement and (iii) which is a Grantor under the Pledge and Security Agreement.
[4. Based upon my review and examination described in paragraph 2
above, I certify that, as of the date hereof, the following Incremental
Certified Conditions have been met:
(a) Company is in pro forma compliance with all (i) covenants contained
in Sections 6.6 or 6.7, as applicable, and (ii) conditions specified in Section
3; and
(b) [name of Geographic Market] (i) had Pre-Overhead EBITDA equal to
$___________ in [month] and (ii) projects positive Pre-Overhead EBITDA on a pro
forma basis from the date hereof through the Maturity Date.
[ (c) [name of Geographic Market] (i) had Pre-Overhead EBITDA equal to
$___________ in [month] and (ii) projects positive Pre-Overhead EBITDA on a pro
forma basis from the date hereof through the Maturity Date.
(d) the Geographic Markets specified in clauses (c) and (d) are
represented by [name of Subsidiaries], each of (i) whose stock has been pledged
to the Administrative Agent pursuant to Section 5.12(b) of the Credit Agreement,
(ii) which is a Guarantor under the Credit Agreement and (iii) which is a
Grantor under the Pledge and Security Agreement.
The foregoing certifications, together with the attached financial statements
delivered with this Certificate in support hereof, are made and delivered this
__________ day of ____________ .
Allegiance Telecom, Inc.
By:
Name:
---------------------------------
Title:
--------------------------------
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Supporting Financial Calculations
[to come]
H-3
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EXHIBIT I TO
CREDIT AGREEMENT
PLEDGE AND SECURITY AGREEMENT
This PLEDGE AND SECURITY AGREEMENT, dated as of April __, 1999 (this
"Agreement"), among ALLEGIANCE TELECOM, INC., a Delaware company ("Company
Grantor") and EACH OF THE UNDERSIGNED, whether as an original signatory hereto
or as an Additional Grantor (as herein defined) (each, a "Subsidiary Grantor",
and collectively with Company Grantor, the "Grantors"), and Toronto Dominion
(Texas), Inc., as agent (in such capacity, "Secured Party") for Lenders and
Lender Counterparties.
RECITALS:
WHEREAS, each Grantor is a party to the Credit and Guaranty Agreement,
of even date herewith (as it may be from time to time amended, supplemented or
otherwise modified, the "Credit Agreement"; the capitalized terms defined
therein and not otherwise defined herein being used herein as therein defined),
by and among Company Grantor, Allegiance Finance Company, Inc. ("Borrower"), the
Subsidiaries of Company Grantor party thereto, as Guarantors, Lenders, Goldman
Sachs Credit Partners L.P. ("GSCP"), as Syndication Agent, Toronto Dominion
(Texas), Inc., as Administrative Agent, Morgan Stanley Senior Funding, Inc., as
Documentation Agent, and GSCP and TD Securities (USA) Inc., as Co-Lead
Arrangers;
WHEREAS, subject to the terms and conditions of the Credit Agreement,
Company or any of its Subsidiaries may enter into one or more Hedge Agreements
with one or more Lender Counterparties; and
WHEREAS, in consideration of the extensions of credit and other
accommodations of Lenders and Lender Counterparties as set forth in the Credit
Agreement and the Hedge Agreements, respectively, each Grantor has agreed,
subject to the terms and conditions hereof and of each other Credit Document and
each of the Hedge Agreements to which each is a party thereto, to secure such
obligations as are set forth herein.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, each Grantor and Secured Party agree
as follows:
SECTION 1A. GRANT OF SECURITY BY COMPANY GRANTOR
Company Grantor hereby grants to Secured Party a security interest in
all of such Grantor's right, title and interest in and to all right, title and
interest of such Grantor, whether now owned or hereafter acquired, in all shares
of capital stock of Borrower owned by such Grantor, including without
limitation, all shares of capital stock described on Schedule 1(a), and the
certificates representing such shares and any interest of such Grantor in the
entries on the
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books of any financial intermediary pertaining to such shares, and all
dividends, cash, warrants, rights, instruments and other property or proceeds
from time to time received, receivable or otherwise distributed in respect of or
in exchange for any or all of such shares (all of the foregoing being referred
to herein collectively as the "Company Pledged Stock").
SECTION 1. GRANT OF SECURITY BY SUBSIDIARY GRANTORS
Each Subsidiary Grantor hereby grants to Secured Party a security
interest in all of such Grantor's right, title and interest in and to the
following, in each case whether now or hereafter existing or in which such
Grantor now has or hereafter acquires an interest and wherever the same may be
located (collectively with the Company Pledged Stock, the "Collateral"):
(a) all "Investment Property", which term means:
(i) all right, title and interest of such Grantor, whether now
owned or hereafter acquired, in all shares of capital stock owned by
such Grantor, including without limitation, all shares of capital stock
described on Schedule 1(a), and the certificates representing such
shares and any interest of such Grantor in the entries on the books of
any financial intermediary pertaining to such shares, and all
dividends, cash, warrants, rights, instruments and other property or
proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such shares
(all of the foregoing, together with the Company Pledged Stock, being
referred to herein collectively as the "Pledged Stock"); provided, only
the outstanding capital stock of a controlled foreign corporation
possessing up to but not exceeding 65% of the voting power of all
classes of capital stock of such controlled foreign corporation
entitled to vote shall be deemed to be pledged hereunder;
(ii) all right, title and interest of such Grantor, whether
now owned or hereafter acquired, of all Indebtedness owed to such
Grantor, including, without limitation, all Indebtedness described on
Schedule 1(a), issued by the obligors named therein, the instruments
evidencing such Indebtedness, and all interest, cash, instruments and
other property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of
such Indebtedness (all of the foregoing being referred to herein
collectively as the "Pledged Debt");
(iii) all of such Grantor's right, title and interest as a
limited and/or general partner in all partnerships, including, without
limitation, the partnerships described on Schedule 1(a) (the
"Partnerships"), whether now owned or hereafter acquired, including,
without limitation, all of such Grantor's right, title and interest
in, to and under the partnership agreements described on Schedule 1(a)
(as such agreements have heretofore been and may hereafter be amended,
restated,
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supplemented or otherwise modified from time to time, collectively, the
"Partnership Agreements") to which it is a party (including, if such
Grantor is a general partner of any Partnership, the right to vote with
respect to and to manage and administer the business of such
Partnership) together with all other rights, interests, claims and
other property of such Grantor in any manner arising out of or relating
to its limited and/or general partnership interest in the Partner
ships, whatever their respective kind or character, whether they are
tangible or intangible property, and wheresoever they may exist or be
located, and further including, without limitation, (1) all of the
rights of such Grantor as a limited and/or general partner: (A) (I) to
receive money due and to become due (including without limitation
dividends, distributions, interest, income from partnership properties
and operations, proceeds of sale of partnership assets and returns of
capital) under or pursuant to the Partnership Agreements, (II) to
receive payments upon termination of the Partnership Agreements, and
(III) to receive any other payments or distributions, whether cash or
noncash, in respect of such Grantor's limited and/or general
partnership interest evidenced by the Partnership Agreements; (B) in
and with respect to claims and causes of action rising out of or
relating to the Partnerships; and (C) to have the access to the
Partnerships' books and records and to other information concerning or
affecting the Partnerships; and (2) any "certificate of interest" or
"certificates of interest" (or other certificates or instruments
however designated or titled) issued by the Partnerships and evidencing
such Grantor's interest as a limited and/or general partner in the
Partnerships (collectively, the "Certificates" and any interest of such
Grantor in the entries on the books of any financial intermediary
pertaining to such Grantor's interest as a limited and/or general
partner in the Partnership (all of the foregoing being referred to
herein collectively as the "Partnership Interests");
(iv) all of such Grantor's right, title and interest as a
member of all limited liability companies (the "LLCs"), including,
without limitation, all of such Grantor's right, title and interest in,
to and under the limited liability company interests set forth on
Schedule 1(a), whether now owned or hereafter acquired, including,
without limitation, all of such Grantor's right, title and interest in,
to and under the operating agreements with respect to any such LLC (as
such agreements have heretofore been and may hereafter be amended,
restated, supplemented or otherwise modified from time to time,
collectively, each, an "LLC Agreement") to which it is a party,
regardless of whether such right, title and interest arises under such
LLC Agreement, including (1) all rights of such Grantor to receive
distributions of any kind, in cash or otherwise, due or to become due
under or pursuant to each such LLC Agreement or otherwise in respect of
such Person, (2) all rights of such Grantor to receive proceeds of any
insurance, indemnity, warranty or guaranty with respect to each such
Person, (3) all claims of such Grantor for damages arising out of, or
for the breach of, or for a default under, each such LLC Agreement,
(4) any certificated or uncertificated security
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evidencing any of the foregoing issued by such Person to such Grantor
and (5) to the extent not included in the foregoing, all proceeds of
any and all of the foregoing (all of the foregoing being referred to
herein collectively as the "LLC Interests"; the Pledged Stock, the
Pledged Debt, the Partnership Interests and the LLC Interests being
herein collectively referred to as the "Pledged Securities";
(v) all additional shares of, limited and/or general
partnership interests in and limited liability company interests in,
and all securities convertible into and warrants, options and other
rights to purchase or otherwise acquire, stock of any issuer of the
Pledged Stock, limited and/or general partnership interests in the
Partnerships, and limited liability company interests in the LLCs, from
time to time acquired by such Grantor in any manner (which shares or
interests shall be deemed to be part of the Pledged Securities), the
certificates or other instruments representing such additional shares
or interests, securities, warrants, options or other rights and any
interest of such Grantor in the entries on the books of any financial
intermediary pertaining to such additional shares or interests, and all
additional indebtedness from time to time owed to such Grantor by any
obligor on the Pledged Debt and the instruments evidencing such
indebtedness, and all interest, cash, instruments and other property or
proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such
indebtedness; (all of the foregoing being referred to herein
collectively as the "Additional Pledged Securities"), and all
dividends, distributions, cash, warrants, rights, instruments, payments
and other property or proceeds from time to time received, receivable
or otherwise distributed in respect of or in exchange for any or all of
such Additional Securities; and
(vi) all shares of, limited and/or general partnership
interests in, and limited liability company interests in, and all
securities convertible into and warrants, options and other rights to
purchase or otherwise acquire, stock of, limited and/or general
partnership interests in, or limited liability company interests in any
Person that, after the date of this Agreement, becomes, as a result of
any occurrence, a direct Subsidiary of such Grantor (which shares or
interests shall be deemed to be part of the Pledged Securities), the
certificates or other instruments representing such shares, interests,
securities, warrants, options or other rights and any interest of such
Grantor in the entries on the books of any financial intermediary
pertaining to such shares or interests and all dividends,
distributions, cash, warrants, rights, instruments and other property
or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such shares,
interests, securities, warrants, options or other rights, and all
Indebtedness from time to time owed to such Grantor by any Person that,
after the date of this Agreement, becomes, as a result of any
occurrence, a Subsidiary of such Grantor, and the instruments
evidencing such Indebtedness, and all interest, cash, instruments and
other property or proceeds from
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time to time received, receivable or otherwise distributed in respect
of or in exchange for any or all of such Indebtedness;
(b) all interest, cash, instruments, securities and other property from
time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the foregoing;
(c) all "Intellectual Property", which term means:
(i) all trademarks, service marks, designs, logos, indicia,
tradenames, corporate names, company names, business names, fictitious
business names, trade styles and/or other source and/or business
identifiers and applications pertaining thereto, owned or used by such
Grantor in its business, or hereafter adopted and used, including,
without limitation, the Trademarks specifically identified in Schedule
1(c) (all of the foregoing being referred to herein collectively as the
"Trademarks"), all registrations that have been or may hereafter be
issued or applied for thereon in the United States and any state
thereof and in all foreign countries, including, without limitation,
the registrations specifically identified in Schedule 1(c) (all of the
foregoing being referred to herein collectively as the "Trademark
Registrations"), all common law and other rights (but in no event any
of the obligations) in and to the Trademarks in the United States and
any state thereof and in all foreign countries (all of the foregoing
being referred to herein collectively as the "Trademark Rights"), and
all goodwill of such Grantor's business symbolized by the Trademarks
and associated therewith (all of the foregoing being referred to herein
collectively as the "Associated Goodwill"):
(ii) all patents and patent applications and rights and
interests in patents and patent applications under any domestic law
that are presently, or in the future may be, owned by such Grantor and
all patents and patent applications and rights and interests in patents
and patent applications under any domestic law that are presently, or
in the future may be, held or used by such Grantor in whole or in part,
including, without limitation, the patents and patent applications
listed in Schedule 1(c), all rights (but not obligations corresponding
thereto), including, without limitation, the right (but not the
obligation, and exercisable only upon the occurrence and continuation
of an Event of Default) to sue for past, present and future
infringements in the name of such Grantor or in the name of Secured
Party or Secured Parties, and all re-issues, divisions, continuations,
renewals, extensions and continuations-in-part thereof (all of the
foregoing being collectively referred to as the "Patents"); it being
understood that the rights and interest included herein hereby shall
include, without limitation, all rights and interests pursuant to
licensing or other contracts in favor of such Grantor pertaining to
patent applications and patents presently or in the future owned or
used by third parties but, in the case of third parties which are not
Affiliates of such Grantor, only to the extent
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permitted by such licensing or other contracts and, if not so
permitted, only with the consent of such third parties; and
(iii) all published and unpublished works of authorship
including, without limitation, computer programs, computer data bases,
other computer software, including without limitation, object code and
source code, mask works, semiconductor chips, masks, cell libraries,
layouts, trade secrets, trade secret rights, trade dress rights, ideas,
drawings, designs, schematics, algorithms, writings, techniques,
processes and formulas, including, without limitation, the works listed
on Schedule 1(c) (all of the foregoing being referred to herein
collectively as the "Copyrights"), all copyright registrations issued
to such Grantor and applications for copyright registration that have
been or may hereafter be issued or applied for thereon in the United
States and any state thereof and in all foreign countries, including,
without limitation, the registrations listed on Schedule 1(c) (all of
the foregoing being referred to herein collectively as the "Copyright
Registrations"), all common law and other rights in and to the
Copyrights in the United States and any state thereof and in all
foreign countries including all copyright licenses (but with respect to
such copyright licenses, only to the extent permitted by such licensing
arrangements) (all of the foregoing being referred to herein
collectively as the "Copyright Rights"), including, without limitation,
each of the Copyrights, rights, titles and interests in and to the
Copyrights and works protectable by copyright, which are presently, or
in the future may be, owned, created (as a work for hire for the
benefit of such Grantor), authored (as a work for hire for the benefit
of such Grantor), acquired or used (whether pursuant to a license or
otherwise but only to the extent permitted by agreements governing such
license or other use) by such Grantor, in whole or in part, and all
Copyright Rights with respect thereto and all Copyright Registrations
therefor, heretofore or hereafter granted or applied for, and all
renewals and extensions thereof, throughout the world, including all
proceeds thereof (such as, by way of example and not by limitation,
license royalties and proceeds of infringement suits), the right (but
not the obligation) to renew and extend such Copy rights, Registrations
and Copyright Rights and to register works protectable by copyright and
the right (but not the obligation and exercisable only upon the
occurrence and continuation of an Event of Default) to sue or bring
opposition or cancellation proceedings in the name of such Grantor or
in the name of Secured Party or Secured Parties for past, present and
future infringements of the Copyrights and Copyright Rights;
(d) all of such Grantor's right, title and interest in, to and under
any equipment in all of its forms, all accessions or additions thereto, all
parts thereof, whether or not at any time of determination incorporated or
installed therein or attached thereto, and all replacements therefor, wherever
located, now or hereafter existing (all of the foregoing being referred to
herein collectively as the "Equipment");
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(e) all of such Grantor's right, title and interest in, to and under
any inventory in all of its forms, including, but not limited to, (i) all goods
held by such Grantor for sale or lease or to be furnished under contracts of
service or so leased or furnished, (ii) all raw materials, work in process,
finished goods, and materials used or consumed in the manufacture, packing,
shipping, advertising, selling, leasing, furnishing or production of such
inventory or otherwise used or consumed in such Grantor's business, (iii) all
goods in which such Grantor has an interest in mass or a joint or other interest
or right of any kind, (iv) all goods which are returned to or repossessed by
such Grantor, and all accessions thereto and products thereof (all of the
foregoing being referred to herein collectively as the "Inventory"), and (v)
all negotiable and non-negotiable documents of title, including, without
limitation, warehouse receipts, dock receipts and bills of lading issued by any
Person covering any Inventory;
(f) all of such Grantor's right, title and interest in, to and under
any accounts, contract rights, chattel paper, documents, instruments, general
intangibles and other rights and obligations of any kind (all of the foregoing
being referred to herein collectively as the "Accounts") and all of such
Grantor's rights in, to and under all security agreements, leases and other
contracts securing or otherwise relating to any Accounts (all of the foregoing
being referred to herein collectively as the "Related Contracts");
(g) all of such Grantor's right, title and interest in, to and under
all agreements and contracts to which such Grantor is a party as of the date
hereof, including, without limitation, each Material Contract, or to which such
Grantor becomes a party after the date hereof, as each such agreement may be
amended, supplemented or otherwise modified from time to time (all of the
foregoing being referred to herein collectively as the "Assigned Agreements"),
including (i) all rights of such Grantor to receive moneys due or to become due
under or pursuant to the Assigned Agreements, (ii) all rights of such Grantor to
receive proceeds of any insurance, indemnity, warranty or guaranty with respect
to the Assigned Agreements, (iii) all claims of such Grantor for damages arising
out of any breach of or default under the Assigned Agreements, and (iv) all
rights of such Grantor to terminate, amend, supplement, modify or exercise
rights or options under the Assigned Agreements, to perform thereunder and to
compel performance and otherwise exercise all remedies thereunder;
(h) to the extent not otherwise included in any other paragraph of this
Section 1, all other general intangibles, including tax refunds, rights to
payment or performance, choses in action and judgments taken on any rights or
claims included in the Collateral;
(i) all books, records, ledger cards, files, correspondence, computer
programs, tapes, disks and related data processing software that at any time
evidence or contain information relating to any of the Collateral or are
otherwise necessary or helpful in the collection thereof or realization
thereupon; and
(j) to the extent not covered by Sections 1(a) through 1(i), all other
personal property of such Grantor, all proceeds, products, rents and profits of
or from any and all of the foregoing
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Collateral and, to the extent not otherwise included, all payments under
insurance (whether or not Secured Party is the loss payee thereof), or any
indemnity, warranty or guaranty, payable by reason of loss or damage to or
otherwise with respect to any of the foregoing Collateral. For purposes of this
Agreement, the term "proceeds" includes whatever is receivable or received when
Collateral or proceeds are sold, exchanged, collected or otherwise disposed of,
whether such disposition is voluntary or involuntary.
Notwithstanding anything herein to the contrary, in no event shall the
Collateral include, and no Grantor shall be deemed to have granted a security
interest in, any of such Grantor's rights or interests in any license, permit,
franchise, certification (including all regulatory certifications), contract or
agreement to which such Grantor is a party or a grantee or any of its rights or
interests thereunder to the extent, but only to the extent, that such a grant
would, under the terms of such license, permit, franchise, certification
(including all regulatory certifications), contract or agreement, applicable law
or regulation or otherwise, result in a breach of the terms of, or constitute a
default under any license, permit, franchise, certification (including all
regulatory certifications), contract or agreement to which such Grantor is a
party or under applicable law or regulation (other than to the extent that any
such term would be rendered ineffective pursuant to Section 9-318(4) of the
Uniform Commercial Code of any relevant jurisdiction or any other applicable law
(including the Bankruptcy Code) or principles of equity); provided, immediately
upon the ineffectiveness, lapse or termination of any such provision or law or
regulation, the Collateral shall include, and such Grantor shall be deemed to
have granted a security interest in, all such rights and interests as if such
provision or law or regulation had never been in effect.
SECTION 2. SECURITY FOR OBLIGATIONS; GRANTORS REMAIN LIABLE
This Agreement secures, and the Collateral is collateral security for,
the prompt payment or performance in full when due, whether at stated maturity,
by required prepayment, declaration, acceleration, demand or otherwise
(including the payment of amounts that would become due but for the operation of
the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C.
Section 362(a)), of in the case of Collateral in which a security interest is
granted by (i) Company Grantor, all Obligations of Borrower and (ii) each
Subsidiary Grantor, all Obligations of such Subsidiary Grantor and each other
Subsidiary Grantor which is a Subsidiary of such Subsidiary Grantor (clauses (i)
and (ii) collectively, the "Secured Obligations"). Anything contained herein to
the contrary notwithstanding, (a) each Grantor shall remain liable under any
Partnership Agreement, LLC Agreement or any other contracts and agreements
included in the Collateral, to the extent set forth therein, to perform all of
its duties and obligations thereunder to the same extent as if this Agreement
had not been executed; (b) the exercise by Secured Party of any of its rights
hereunder shall not release any Grantor from any of its duties or obligations
under the contracts and agreements included in the Collateral; and (c) Secured
Party shall not have any obligation or liability under any Partnership
Agreement, LLC Agreement or any other contracts and agreements included in the
Collateral by reason of this Agreement, nor shall Secured Party be obligated to
perform any of the obligations or duties of any Grantor thereunder or to take
any action to collect or enforce any claim for payment assigned hereunder.
Notwithstanding any of
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the foregoing, this Agreement shall not in any way be deemed to obligate Secured
Party, any Lender or any purchaser at a foreclosure sale under this Agreement to
assume any of any Grantor's obligations, duties, expenses or liabilities under
any LLC Agreement or Partnership Agreement (including any Grantor's obligations
as a general partner for the debts and obligations of a Partnership) and to
manage the business and affairs of any Partnership or any of such Grantor's
obligations for the debts and obligations of an LLC, or under any and all other
agreements now existing or hereafter drafted or executed (collectively, the
"Grantor Obligations") unless Secured Party, any Lender or any such purchaser
otherwise expressly agrees in writing to assume any or all of said Grantor
Obligations. In the event of foreclosure by Secured Party, each Grantor shall
remain bound and obligated to perform its Grantor Obligations arising during or
otherwise related to its ownership of the Collateral, and neither Secured Party
nor any Lender shall be deemed to have assumed any of such Grantor Obligations
except as provided in the preceding sentence. Without limiting the generality of
the foregoing, neither the grant of the security interest in the Collateral in
favor of Secured Party as provided herein nor the exercise by Secured Party of
any of its rights hereunder nor any action by the Secured Party in connection
with a foreclosure on the Collateral shall be deemed to constitute Secured Party
or any Lender a partner of any Partnership or a member of any LLC; provided, in
the event Secured Party or any purchaser of Collateral at a foreclosure sale
elects to become a substituted general partner of any Partnership or manager of
any LLC in place of any Grantor, Secured Party or such purchaser, as the case
may, shall adopt in writing the applicable Partnership Agreement or LLC
Agreement, as the case may be, and agree to be bound by the terms and provisions
thereof.
SECTION 3. REPRESENTATIONS AND WARRANTIES
3.1. Generally. Each Grantor represents and warrants that each of the
representations and warranties set forth in Section 4.10 of the Credit Agreement
is true and correct in all material respects with respect to each item of
Collateral applicable thereto owned by such Grantor as if fully set forth
herein.
3.2. Investment Property. In addition to any other representation made
thereby in any other Credit Document, each Grantor represents and warrants that
(a) all of the Pledged Stock has been duly authorized and validly issued and are
fully paid and non-assessable; (b) the Pledged Securities constitute all of the
issued and outstanding equity Securities of each issuer thereof that are owned
by such Grantor, and there are no outstanding warrants, options or other rights
to purchase, or other agreements outstanding with respect to, or property that
is now or hereafter convertible into, or that requires the issuance or sale of,
any of the Pledged Securities; (c) all of the Pledged Debt has been duly
authorized, authenticated or issued, and delivered and is the legal, valid and
binding obligation of the issuers thereof and constitutes all of the issued and
outstanding inter company Indebtedness evidenced by a promissory note of the
respective issuers thereof owing to such Grantor; (d) the security interest of
Secured Party hereunder has been registered on the books and records of any
issuer of "uncertificated securities" (as such term is defined in the UCC)
included in the Collateral; and (e) with respect to any Investment Property, no
consent of any Person, including any other limited or general partner of the
Partnerships, any
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other member of any LLC, or any creditor of any Grantor, and no authorization,
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required for either (i) the grant by any Grantor
of the security interests granted hereby, (ii) the execution, delivery or
performance of this Agreement by any Grantor, or (iii) the perfection of or the
exercise by Secured Party of its rights and remedies hereunder (except as may
have been taken by or at the direction of any Grantor) other than, with respect
to this clause (e) actions required to constitute the Secured Party as a
substituted partner under Partnerships or a member under any LLC.
3.3. Intellectual Property Collateral. In addition to any other
representation made thereby in any other Credit Document, each Grantor
represents and warrants that (a) a true and complete list of all Trademark
Registrations and Trademark applications owned, held (whether pursuant to a
license or otherwise) or used by such Grantor, in whole or in part, as of the
date of this Agreement is set forth in Schedule 1(c); (b) a true and complete
list of all Patents owned, held (whether pursuant to a license or otherwise) or
used by such Grantor, in whole or in part, as of the date of this Agreement is
set forth in Schedule 1(c); (c) a true and complete list of all Copyright
Registrations and applications for Copyright Registrations held (whether
pursuant to a license or otherwise) or used by such Grantor, in whole or in
part, as of the date of this Agreement is set forth in Schedule 1(c); (d) after
inquiry, Grantor is not aware of any pending or threatened claim by any third
party that any of the Intellectual Property owned, held or used by such Grantor
is invalid or unenforceable the loss of which could reasonably be expected to
result in a Material Adverse Effect; and (e) except as set forth on Schedule
3.3, no effective security interest or other Lien covering all or any part of
the Intellectual Property Collateral is on file in the United States Patent and
Trademark Office or the United States Copyright Office, other than (1) those in
favor of Secured Party and securing the Secured Obligations and (2) with respect
to Intellectual Property Collateral which is licensed to any Grantor, Liens
granted by the owners of such property.
3.4. Location of Equipment and Inventory. In addition to the
representations and warranties made thereby in any other Credit Document, each
Grantor represents and warrants that all of the Equipment and Inventory is, as
of the date hereof, located in the jurisdictions specified in Schedule 3.4.
3.5. Office Locations; Other Names. In addition to the representations
and warranties made thereby in any other Credit Document, each Grantor
represents and warrants that as of the date hereof the (i) chief place of
business, the chief executive office and the office where such Grantor keeps its
records regarding the Accounts and all originals of all chattel paper that
evidence Accounts is, and has been for the four month period preceding the date
hereof, located at the places indicated on Schedule 3.5, and (ii) no Grantor has
in the past twelve months, and does not now do, business under any other name
(including any trade-name or fictitious business name) except for those names
set forth on Schedule 3.5.
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SECTION 4. FURTHER ASSURANCES; ADDITIONAL GRANTORS
4.1. Generally. Each Grantor agrees that from time to time, at the
expense of Grantor, each Grantor will promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary or
desirable, or that Secured Party may reasonably request, in order to perfect and
protect any security interest granted or purported to be granted hereby or to
enable Secured Party to exercise and enforce its rights and remedies hereunder
with respect to any Collateral. Subject to the provisions of the Credit
Agreement, without limiting the generality of the foregoing, each Grantor will
(a) execute and file such financing or continuation statements, or amendments
thereto, and such other instruments or notices, as may be necessary, or as
Secured Party may reasonably request, in order to perfect and preserve the
security interests granted or purported to be granted hereby; (b) at any
reasonable time, upon request by Secured Party, exhibit the Collateral to and
allow inspection of the Collateral by Secured Party, or persons designated by
Secured Party; and (c) at Secured Party's request, appear in and defend any
action or proceeding that may affect Grantor's title to or Secured Party's
security interest in all or any part of the Collateral. Each Grantor hereby
authorizes Secured Party to file one or more financing or continuation
statements, and amendments thereto, relative to all or any part of the
Collateral without the signature of Grantor. Each Grantor agrees that a carbon,
photographic or other reproduction of this Agreement or of a financing statement
signed by Grantor shall be sufficient as a financing statement and may be filed
as a financing statement in any and all jurisdictions. Each Grantor will furnish
to Secured Party from time to time statements and schedules further identifying
and describing the Collateral and such other reports in connection with the
Collateral as Secured Party may reasonably request, all in reasonable detail.
4.2. Investment Property.
(a) Each Grantor agrees that it will, upon obtaining any additional
shares of stock or other securities required to be pledged hereunder, promptly
(and in any event within ten Business Days) deliver to Secured Party a Pledge
Supplement, duly executed by Grantor, in substantially the form of Exhibit A (a
"Pledge Supplement"), in respect of the additional Pledged Stock to be pledged
pursuant to this Agreement. Each Grantor hereby authorizes Secured Party to
attach each Pledge Supplement to this Agreement and agrees that all Pledged
Stock of Grantor listed on any Pledge Supplement shall for all purposes
hereunder be considered Collateral of Grantor; provided, the failure of any
Grantor to execute a Pledge Supplement with respect to any additional Pledged
Stock pledged pursuant to this Agreement shall not impair the security interest
of Secured Party therein or otherwise adversely affect the rights and remedies
of Secured Party hereunder with respect thereto.
(b) At the request of Secured Party, each Grantor shall cause, at
Grantor's expense, each Person which is an issuer of an uncertificated security
included in the Collateral to execute and deliver all instruments and documents,
and take all further action Secured Party may reasonably request, in order to
perfect and protect any security interest granted or purported to be granted in
such uncertificated securities, to establish "control" (as such term is defined
in the
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UCC) by Secured Party over such Collateral or to enable Secured Party to
exercise and enforce its rights and remedies hereunder with respect to such
Collateral, including, and as applicable, (i) register the security interest
granted hereby upon the books of such Person in accordance with Article 8 of the
UCC, and (ii) deliver to Secured Party an Acknowledgment of Pledge, duly
executed by such the issuer of the applicable uncertificated security, in
substantially the form of Exhibit B (an "Acknowledgment of Pledge").
4.3. Intellectual Property Collateral. On the last Business Day of each
Fiscal Quarter, each Subsidiary Grantor shall notify Administrative Agent of all
rights obtained by such Grantor to any new material Intellectual Property
Collateral during such Fiscal Quarter and also whether such Grantor became
entitled during such Fiscal Quarter to the benefit of (a) any patent application
or patent or any reissue, division, continuation, renewal, extension or
continuation-in-part of any Patent or any improvement of any Patent; or (b) any
Copyright Registration, application for Registration or renewals or extension of
any Copyright, and in any such case, upon the giving of such notice, the
provisions of this Agreement shall apply thereto. On the last Business Day of
each Fiscal Quarter, each Grantor shall notify Secured Party in writing of any
of the foregoing rights acquired by Grantor during such Fiscal Quarter and of
(i) any Trademark Registrations issued or applications for Trademark
Registration or applications for Patents made, and (ii) any Copyright
Registrations issued or applications for Copyright Registration made, in any
such case, during such Fiscal Quarter. On the last Business Day of each Fiscal
Quarter, with respect to the filing of an application, during such Fiscal
Quarter, for any (1) Trademark Registration; (2) Patent; and (3) Copyright
Registration, each Subsidiary Grantor shall execute and deliver to Secured Party
and record in all places where this Agreement is recorded a Pledge Supplement,
pursuant to which such Grantor shall grant to Secured Party a security interest
to the extent of its interest in such Intellectual Property Collateral;
provided, if, in the reasonable judgment of such Grantor, after due inquiry,
granting such interest would result in the grant of a Trademark Registration or
Copyright Registration in the name of Secured Party, in which event such Grantor
shall give written notice to Secured Party as soon as reasonably practicable and
the filing shall instead be undertaken as soon as practicable but in no case
later than immediately following the grant of the applicable Trademark
Registration or Copyright Registration, as the case may be. In addition to the
foregoing, each Grantor hereby authorizes Secured Party to modify this Agreement
without obtaining Grantor's approval of or signature to such modification by
amending Schedule 1(c), as applicable, to include reference to any right, title
or interest in any existing Intellectual Property Collateral or any Intellectual
Property Collateral acquired or developed by any Subsidiary Grantor after the
execution hereof or to delete any reference to any right, title or interest in
any Intellectual Property Collateral in which such Grantor no longer has or
claims any right, title or interest.
4.4. Accounts. At the reasonable request of Secured party, each
Subsidiary Grantor shall (a) mark conspicuously each item of chattel paper
included in the Accounts, each Related Contract and, at the reasonable request
of Secured Party, each of its records pertaining to the Collateral, with a
legend, in form and substance reasonably satisfactory to Secured Party,
indicating that such Collateral is subject to the security interest granted
hereby, and (b) at the
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reasonable request of Secured Party, deliver and pledge to Secured Party
hereunder all promissory notes and other instruments (excluding checks) and all
original counterparts of chattel paper constituting Collateral, duly endorsed
and accompanied by duly executed instruments of transfer or assignment, all in
form and substance reasonably satisfactory to Secured Party.
4.5. Equipment. Each Subsidiary Grantor shall (a) promptly after the
acquisition by such Grantor of any item of Equipment which is covered by a
certificate of title under a statute of any jurisdiction under the law of which
indication of a security interest on such certificate is required as a condition
of perfection thereof, upon the reasonable request of Secured Party, execute and
file with the registrar of motor vehicles or other appropriate authority in such
jurisdiction an application or other document requesting the notation or other
indication of the security interest created hereunder on such certificate of
title, and (b) upon the reasonable request of Secured Party, deliver to Secured
Party copies of all such applications or other documents filed during such
calendar quarter and copies of all such certificates of title issued during such
calendar quarter indicating the security interest created hereunder in the items
of Equipment covered thereby.
4.6. Additional Grantors. From time to time subsequent to the date
hereof, additional Persons may become parties hereto as additional Grantors
(each, an "Additional Grantor"), by executing a Pledge Supplement. Upon delivery
of any such Counterpart Agreement to Secured Party, notice of which is hereby
waived by Grantors, each Additional Grantor shall be a Grantor and shall be as
fully a party hereto as if Additional Grantor were an original signatory hereto.
Each Grantor expressly agrees that its obligations arising hereunder shall not
be affected or diminished by the addition or release of any other Grantor
hereunder, nor by any election of Administrative Agent not to cause any
Subsidiary of Company to become an Additional Grantor hereunder. This Agreement
shall be fully effective as to any Grantor that is or becomes a party hereto
regardless of whether any other Person becomes or fails to become or ceases to
be a Grantor hereunder.
SECTION 5. COVENANTS OF GRANTORS
5.1. Generally. Each Grantor shall (a) except for the security interest
created by this Agreement, not create or suffer to exist any Lien upon or with
respect to any of the Collateral, except Permitted Liens; (b) not use or permit
any Collateral to be used unlawfully or in violation of any provision of this
Agreement or any applicable statute, regulation or ordinance or any policy of
insurance covering the Collateral; (c) notify Secured Party of any change in
Grantor's name, identity or corporate structure within 15 days of such change
and take such action as Secured Party may reasonably request in order to protect
or perfect any security interest granted or purported to be granted hereby or to
enable Secured Party to exercise and enforce its rights and remedies hereunder;
(d) diligently keep reasonable records respecting the Intellectual Property
Collateral and at all times keep at least one complete set of its records
concerning such Collateral at its chief executive office or principal place of
business; (e) if Secured Party gives value to enable Grantor to acquire rights
in or the use of any Collateral, use such value for such
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purposes; (f) pay promptly when due all property and other taxes, assessments
and governmental charges or levies imposed upon, and all claims (including
claims for labor, materials and supplies) against, the Collateral, except to the
extent the validity thereof is being contested in good faith; provided, Grantor
shall in any event pay such taxes, assessments, charges, levies or claims not
later than five days prior to the date of any proposed sale under any judgement,
writ or warrant of attachment entered or filed against Grantor or any of the
Collateral as a result of the failure to make such payment; and (g) upon any
officer of such Grantor obtaining knowledge thereof, promptly notify Secured
Party in writing of any event that may materially and adversely affect the value
of the Collateral or any material portion thereof, the ability of Grantor or
Secured Party to dispose of the Collateral or any material portion thereof, or
the rights and remedies of Secured Party in relation thereto, including, without
limitation, the levy of any legal process against the Collateral or any material
portion thereof. No Grantor shall sell, transfer or assign (by operation of law
or otherwise) any Collateral except as permitted by Section 6 of the Credit
Agreement (a "Permitted Sale"). So long as (i) no Event of Default shall have
occurred and is then continuing or would occur after giving effect to a
Permitted Sale, and (ii) the Net Asset Sale Proceeds with respect to such
Permitted Sale are delivered to Secured Party contemporaneously with such
Permitted Sale, Secured Party shall release the Lien hereof encumbering the
Collateral that is the subject of such Permitted Sale. Secured Party shall
execute each and every appropriate filing statement and/or recording document
reasonably requested by and, at the expense of, any Grantor in connection with
the foregoing. Any reasonable expense or cost incurred by Secured Party in
connection with any such release shall be for the account of the applicable
Grantor.
5.2. Investment Property.
(a) Delivery.
(i) All certificates or instruments representing or evidencing
the Investment Property shall be delivered to and held by or on behalf
of Secured Party pursuant hereto and shall be in suitable form for
transfer by delivery or, as applicable, shall be accompanied by
Grantor's endorsement, where necessary, or duly executed instruments
of transfer or assignment in blank, all in form and substance
satisfactory to Secured Party. Upon the occurrence and during the
continuation of an Event of Default, Secured Party shall have the
right, without notice to any Grantor, to transfer to or to register in
the name of Secured Party or any of its nominees any or all of the
Investment Property, subject only to the revocable rights specified
herein. In addition, Secured Party shall have the right at any time to
exchange certificates or instruments representing or evidencing
Investment Property for certificates or instruments of smaller or
larger denominations.
(ii) Each Grantor hereby consents to the pledge of the
Partnership Interests by each other Grantor in each Partnership
pursuant to the terms hereof, and, subject to Section 7, to the
transfer of such Partnership Interests to Secured
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Party or its nominee and to the substitution of Secured Party or its
nominee as a substituted Partner of each such Partnership with all the
rights, powers and duties of a general partner or a limited partners,
as the case may be.
(iii) Each Grantor hereby consents to the pledge of the LLC
Interests by each other Grantor in each LLC pursuant to the terms
hereof, and, subject to Section 7, to the transfer of such LLC
Interests to Secured Party or its nominee and to the substitution of
Secured Party or its nominee as a substituted member of each such LLC
with all the rights, powers and duties of a member of such LLC in
question.
(b) Covenants. Subject to the provisions of the Credit Agreement, each
Grantor shall (i) not permit any issuer of Pledged Stock to merge or consolidate
unless all the outstanding capital stock of the surviving or resulting
corporation is, upon such merger or consolidation, pledged hereunder and no
cash, securities or other property is distributed in respect of the outstanding
shares of any other constituent corporation; provided, if the surviving or
resulting corporation upon any such merger or consolidation involving an issuer
of Pledged Stock which is a controlled foreign corporation is a controlled
foreign corporation, then such Grantor shall only be required to pledge
outstanding capital stock of such surviving or resulting corporation possessing
up to but not exceeding 65% of the voting power of all classes of capital stock
of such issuer entitled to vote; (ii) cause each issuer of Pledged Stock not to
issue any stock or other securities in addition to or in substitution for the
Pledged Stock issued by such issuer, except to Grantor; (iii) promptly deliver
to Secured Party notice of the conversion of any partnership interests in a
Partnership Agreement or any membership interests in a LLC to certificated form;
(iv) not (1) cancel or terminate any of the Partnership Agreements or LLC
Agreements or consent to or accept any cancellation or termination thereof, (2)
sell, assign (by operation of law or otherwise) or otherwise dispose of any part
of its limited or general partnership interest in any of the Partnerships or its
membership interest in any of the LLCs, (3) amend, supplement or otherwise
modify any of the Partnership Agreements or any of the LLC Agreements (as in
effect on the date hereof), (4) waive any default under or breach of any of the
Partnership Agreements or any of the LLC Agreements or waive, fail to enforce,
forgive or release any right, interest or entitlement of any kind, howsoever
arising, under or in respect of any of the Partnership Agreements or any of the
LLC Agreements or vary or agree to the variation in any respect of any of the
provisions of any of the Partnership Agreements or any of the LLC Agreements or
the performance of any other Person under any of the Partnership Agreements or
any of the LLC Agreements, or (5) petition, request or take any other legal or
administrative action which seeks, or may reasonably be expected, to rescind, to
terminate or to suspend any of the Partnership Agreements or any of the LLC
Agreements or to amend or modify any of the Partnership Agreements or any of the
LLC Agreements; (v) at its expense (1) perform and comply in all material
respects with all terms and provisions of the Partnership Agreements and the LLC
Agreements required to be performed or complied with by it, (2) maintain the
Partnership Agreements and the LLC Agreements to which it is a party in full
force and effect, and (3) enforce each of the Partnership Agreements and each of
the LLC Agreements to which it is a
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party in accordance with its terms; (vi) not vote to permit the Partnerships or
the LLCs to enter into any transaction of merger or consolidation, or liquidate,
wind up or dissolve itself (or suffer any liquidation or dissolution); and (vii)
pledge hereunder, immediately upon its acquisition (directly or indirectly)
thereof, any and all shares of stock of any Person that, after the date of this
Agreement, becomes, as a result of any occurrence, a direct Subsidiary of any
Grantor; provided, notwithstanding anything contained in this clause (vii) to
the contrary, such Grantor shall only be required to pledge the outstanding
capital stock of a controlled foreign corporation possessing up to but not
exceeding 65% of the voting power of all classes of capital stock of such
controlled foreign corporation entitled to vote.
(c) Voting and Distributions.
(i) Subject to the provisions of the Credit Agreement, so long
as no Event of Default shall have occurred and be continuing, (1) each
Grantor shall be entitled to exercise any and all voting and other
consensual rights pertaining to the Investment Property or any part
thereof for any purpose not inconsistent with the terms of this
Agreement or the Credit Agreement; provided, no Grantor shall exercise
or refrain from exercising any such right if Secured Party shall have
notified Grantor that, in Secured Party's reasonable judgment, such
action would have a material adverse effect on the value of the
Investment Property or any part thereof; and provided further, Grantor
shall give Secured Party at least two Business Days' prior written
notice of the manner in which it intends to exercise, or the reasons
for refraining from exercising, any such right. It is understood,
however, that neither (A) the voting by Grantor of any Pledged Stock
for or Grantor's consent to the election of directors at a regularly
scheduled annual or other meeting of stockholders or with respect to
incidental matters at any such meeting, nor (B) Grantor's consent to or
approval of any action otherwise permitted under this Agreement and the
Credit Agreement shall be deemed inconsistent with the terms of this
Agreement or the Credit Agreement within the meaning of this Section,
and no notice of any such voting or consent need be given to Secured
Party; (2) Grantor shall be entitled to receive and retain, and to
utilize free and clear of the lien of this Agreement, any and all
dividends and interest paid in respect of the Investment Property;
provided, any and all (A) dividends and interest paid or payable other
than in cash in respect of, and instruments and other property
received, receivable or otherwise distributed in respect of, or in
exchange for, any Investment Property, (B) dividends and other
distributions paid or payable in cash in respect of any Investment
Property in connection with a partial or total liquidation or
dissolution or in connection with a reduction of capital, capital
surplus or paid-in-surplus, and (C) cash paid, payable or otherwise
distributed in respect of principal or in redemption of or in exchange
for any Investment Property, shall be, and shall forthwith be delivered
to Secured Party to hold as, Investment Property and shall, if received
by Grantor, be received in trust for the benefit of Secured Party, be
segregated from the other property or funds of
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Grantor and be forthwith delivered to Secured Party as Investment
Property in the same form as so received (with all necessary
endorsements); and (3) Secured Party shall promptly execute and deliver
(or cause to be executed and delivered) to Grantor all such proxies,
dividend payment orders and other instruments as Grantor may from time
to time reasonably request for the purpose of enabling Grantor to
exercise the voting and other consensual rights when and to the extent
which it is entitled to exercise pursuant to clause (i) above and to
receive the dividends, principal or interest payments which it is
authorized to receive and retain pursuant to clause (2) above.
(ii) Upon the occurrence and during the continuation of an
Event of Default, (1) upon written notice from Secured Party to any
Grantor, all rights of Grantor to exercise the voting and other
consensual rights which it would otherwise be entitled to exercise
pursuant hereto shall cease, and all such rights shall thereupon become
vested in Secured Party who shall thereupon have the sole right to
exercise such voting and other consensual rights; (2) all rights of
Grantor to receive the dividends and interest payments which it would
otherwise be authorized to receive and retain pursuant hereto shall
cease, and all such rights shall thereupon become vested in Secured
Party who shall thereupon have the sole right to receive and hold as
Investment Property such dividends and interest payments; and (3) all
payments which are received by Grantor contrary to the provisions of
clause (2) above shall be received in trust for the benefit of Secured
Party, shall be segregated from other funds of Grantor and shall
forthwith be paid over to Secured Party as Investment Property in the
same form as so received (with any necessary endorsements); and (4) all
rights of such Grantor to receive any and all payments under or in
connection with the Partnership Agreements and/or the LLC Agreements,
including but not limited to the profits, dividends, and other
distributions which it would otherwise be authorized to receive and
retain pursuant hereto, shall cease, and all such rights shall
thereupon become vested in Secured Party who shall thereupon have the
sole right to receive and hold such payments as collateral.
(iii) IN ORDER TO PERMIT SECURED PARTY TO EXERCISE THE VOTING
AND OTHER CONSENSUAL RIGHTS WHICH IT MAY BE EN TITLED TO EXERCISE
PURSUANT HERETO AND TO RECEIVE ALL DIVIDENDS AND OTHER DISTRIBUTIONS
WHICH IT MAY BE ENTITLED TO RECEIVE HEREUNDER, (1) GRANTOR SHALL
PROMPTLY EXECUTE AND DELIVER (OR CAUSE TO BE EXECUTED AND DELIVERED) TO
SECURED PARTY ALL SUCH PROXIES, DIVIDEND PAYMENT ORDERS AND OTHER
INSTRUMENTS AS SECURED PARTY MAY FROM TIME TO TIME REASONABLY REQUEST,
AND (2) WITHOUT LIMITING THE EFFECT OF CLAUSE (1) ABOVE, GRANTOR HEREBY
GRANTS TO SECURED PARTY AN IRREVOCABLE PROXY TO VOTE THE PLEDGED
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STOCK AND TO EXERCISE ALL OTHER RIGHTS, POWERS, PRIVILEGES AND REMEDIES
TO WHICH A HOLDER OF THE PLEDGED STOCK WOULD BE ENTITLED (INCLUDING
GIVING OR WITHHOLDING WRITTEN CONSENTS OF SHAREHOLDERS, CALLING SPECIAL
MEETINGS OF SHAREHOLDERS AND VOTING AT SUCH MEETINGS), WHICH PROXY
SHALL BE EFFECTIVE, AUTOMATICALLY AND WITHOUT THE NECESSITY OF ANY
ACTION (INCLUDING ANY TRANSFER OF ANY PLEDGED STOCK ON THE RECORD BOOKS
OF THE ISSUER THEREOF) BY ANY OTHER PER SON (INCLUDING THE ISSUER OF
THE PLEDGED STOCK OR ANY OFFICER OR AGENT THEREOF), UPON THE
OCCURRENCE AND DURING THE CONTINUATION OF AN EVENT OF DEFAULT, AND
WHICH PROXY SHALL ONLY TERMINATE UPON THE PAYMENT IN FULL OF THE
SECURED OBLIGATIONS (OTHER THAN INCHOATE INDEMNIFICATION OBLIGATIONS
WITH RESPECT TO CLAIMS, LOSSES OR LIABILITIES WHICH HAVE NOT YET ARISEN
AND ARE NOT YET DUE AND PAY ABLE).
5.3. Intellectual Property Collateral.
(a) Covenants. Each Subsidiary Grantor shall (i) hereafter use
commercially reasonable efforts so as not to permit the inclusion in any
contract to which it hereafter becomes a party of any provision that could or
might in any way materially impair or prevent the creation of a security
interest in, or the assignment of, Grantor's rights and interests in any
property included within the definitions of any Intellectual Property Collateral
acquired under such contracts; (ii) take all steps reasonably necessary to
protect the secrecy of all trade secrets relating to the products and services
sold or delivered under or in connection with the Intellectual Property
Collateral, including, without limitation, entering into confidentiality
agreements with employees and labeling and restricting access to secret
information and documents; (iii) use proper statutory notice in connection with
its use of any of the Intellectual Property Collateral; (iv) use consistent
standards of high quality (which may be consistent with Grantor's past
practices) in the manufacture, sale and delivery of products and services sold
or delivered under or in connection with the Intellectual Property Collateral;
and (v) furnish to Secured Party on the last Business Day of each Fiscal Quarter
statements and schedules further identifying and describing any Intellectual
Property Collateral and such other reports in connection with such Collateral as
Secured Party may reasonably request, all in reasonable detail.
(b) Collections. Except as otherwise provided in this Section 5.3, each
Grantor shall continue to collect, at its own expense, all amounts due or to
become due to Grantor in respect of the Intellectual Property Collateral or any
portion thereof. In connection with such collections, each Grantor may take
(and, at Secured Party's reasonable direction, shall take) such action as
Grantor or Secured Party may deem reasonably necessary or advisable to enforce
collection of such amounts; provided, Secured Party shall have the right at any
time, upon the occurrence and during the continuation of an Event of Default
and upon written notice to Grantor of its intention
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to do so, to notify the obligors with respect to any such amounts of the
existence of the security interest created hereby and to direct such obligors to
make payment of all such amounts directly to Secured Party, and, upon such
notification and at the expense of Grantor, to enforce collection of any such
amounts and to adjust, settle or compromise the amount or payment thereof, in
the same manner and to the same extent as Grantor might have done. After receipt
by any Grantor of the notice from Secured Party referred to in the proviso to
the preceding sentence and during the continuation of any Event of Default, (i)
all amounts and proceeds (including checks and other instruments) received by
Grantor in respect of amounts due to Grantor in respect of the Collateral or any
portion thereof shall be received in trust for the benefit of Secured Party
hereunder, shall be segregated from other funds of Grantor and shall be
forthwith paid over or delivered to Secured Party in the same form as so
received (with any necessary endorsement) to be held as cash Collateral and
applied as provided by Section 7.5, and (ii) Grantor shall not adjust, settle or
compromise the amount or payment of any such amount or release wholly or partly
any obligor with respect thereto or allow any credit or discount thereon.
(c) Applications and Registrations. Each Subsidiary Grantor shall have
the duty diligently, through counsel reasonably acceptable to Secured Party, to
prosecute, file and/or make, unless and until such Grantor, in its commercially
reasonable judgment, decides otherwise, (i) any application relating to any of
the Intellectual Property Collateral owned, held or used by such Grantor and
identified on Schedule 1(c), that is pending as of the date of this Agreement,
(ii) any Registration on any existing or future unregistered but copyrightable
works (except for works of nominal commercial value or with respect to which
such Grantor has determined in the exercise of its commercially reasonable
judgment that it shall not seek registration), (iii) application on any existing
patent or future patentable but unpatented invention comprising Intellectual
Property Collateral, and (iv) any Trademark opposition and cancellation
proceedings, renew Trademark Registrations and Copyright Registrations and do
any and all acts which are necessary or desirable, as determined in such
Grantor's commercially reasonable judgment, to preserve and maintain all rights
in all Intellectual Property Collateral. Any expenses incurred in connection
therewith shall be borne solely by such Grantor. Subject to the foregoing,
Subsidiary Grantor shall give Secured Party prior written notice of any
abandonment of any material Intellectual Property Collateral or any right to
file a patent application or any pending patent application or any Patent.
(d) Litigation. Except as provided herein, each Grantor shall have the
right to commence and prosecute in its own name, as real party in interest, for
its own benefit and at its own expense, such suits, proceedings or other actions
for infringement, unfair competition, dilution, misappropriation or other
damage, or reexamination or reissue proceedings as are in its commercially
reasonable judgment necessary to protect the Intellectual Property Collateral.
Secured Party shall provide, at Grantor's expense, all reasonable and necessary
cooperation in connection with any such suit, proceeding or action including,
without limitation, joining as a necessary party. Each Grantor shall promptly,
following its becoming aware thereof, notify Secured Party of the institution
of, or of any adverse determination in, any proceeding (whether in the United
States Patent and Trademark Office, the United States Copyright Office or any
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federal, state, local or foreign court) or regarding Subsidiary Grantor's
ownership, right to use, or interest in any material Intellectual Property
Collateral. Grantor shall provide to Secured Party any information with respect
thereto reasonably requested by Secured Party.
(e) Certain Rights of Secured Party. In addition to, and not by way of
limitation of, the granting of a security interest in the Collateral pursuant
hereto, each Grantor, effective upon the occurrence and during the continuation
of an Event of Default and upon written notice from Secured Party, shall grant,
sell, convey, transfer, assign and set over to Secured Party, for its benefit
and the ratable benefit of Lenders, all of Subsidiary Grantor's right, title and
interest in and to the Intellectual Property Collateral to the extent necessary
to enable Secured Party to use, possess and realize on the Collateral and to
enable any successor or assign to enjoy the benefits of the Collateral. This
right and license shall inure to the benefit of all successors, assigns and
transferees of Secured Party and its successors, assigns and transferees,
whether by voluntary conveyance, operation of law, assignment, transfer,
foreclosure, deed in lieu of foreclosure or otherwise. Such right and license
shall be granted free of charge, without requirement that any monetary payment
whatsoever be made to such Grantor. Subject to the provisions of the Credit
Agreement, in addition, each Grantor hereby grants to Secured Party and its
employees, representatives and agents the right to visit Grantor's and any of
its Affiliate's or subcontractor's plants, facilities and other places of
business that are utilized in connection with the manufacture, production,
inspection, storage or sale of products and services sold or delivered under any
of the Intellectual Property Collateral (or which were so utilized during the
prior six month period), and to inspect the quality control and all other
records relating thereto upon reasonable advance written notice to Grantor and
at reasonable dates and times and as often as may be reasonably requested. If
and to the extent that any Subsidiary Grantor is permitted to license the
Intellectual Property Collateral, Secured Party shall promptly enter into a
non-disturbance agreement or other similar arrangement, at Grantor's request and
expense, with Grantor and any licensee of any Intellectual Property Collateral
permitted hereunder in form and substance reasonably satisfactory to Secured
Party pursuant to which (i) Secured Party shall agree not to disturb or
interfere with such licensee's rights under its license agreement with Grantor
so long as such licensee is not in default thereunder, and (ii) such licensee
shall acknowledge and agree that the Intellectual Property Collateral licensed
to it is subject to the security interest created in favor of Secured Party and
the other terms of this Agreement.
5.4. Equipment and Inventory. Each Subsidiary Grantor shall, with
respect to Equipment and Inventory included in the Collateral:
(a) keep the Equipment and Inventory in the jurisdictions specified on
Schedule 5.4 or upon 30 days' written notice to Secured Party, in such other
jurisdictions where all action that Secured Party may reasonably request, in
order to perfect and protect any security interest granted or purported to be
granted hereby, or to enable Secured Party to exercise and enforce its rights
and remedies hereunder, with respect to such Equipment and Inventory shall have
been taken;
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(b) keep correct and accurate records of the Inventory, itemizing and
describing the kind, type and quantity of Inventory, such Grantor's cost
therefor and (where applicable) the current list prices for the Inventory; and
(c) if any Inventory is in possession or control of any of such
Grantor's agents or processors, upon the occurrence and during the continuance
of an Event of Default, instruct such agent or processor to hold all such
Inventory for the account of Secured Party and subject to the instructions of
Secured Party.
5.5. Accounts and Related Contracts. Each Grantor shall:
(a) keep its chief place of business and chief executive office and the
office where it keeps its records concerning the Accounts and Related Contracts,
and all originals of all chattel paper that evidence Accounts, at the location
therefor specified on Schedule 5.5 or, upon 30 days' written notice to Secured
Party following any change in location, at such other location in a jurisdiction
where all action that Secured Party may request, in order to perfect and protect
any security interest granted or purported to be granted hereby, or to enable
Secured Party to exercise and enforce its rights and remedies hereunder, with
respect to such Accounts and Related Contracts shall have been taken. Promptly
upon the reasonable request of Secured Party, such Grantor shall deliver to
Secured Party complete and correct copies of each Related Contract;
(b) maintain (i) complete records of all Accounts, including records of
all payments received, credits granted and merchandise returned, and (ii) all
documentation relating thereto in accordance with prudent business practices;
(c) except as otherwise provided in this subsection (c), continue to
collect, at its own expense, all amounts due or to become due to such Grantor
under the Accounts and Related Con tracts, and in connection with such
collections, such Grantor shall take such action as such Grantor or Secured
Party may deem necessary or advisable to enforce collection of amounts due or to
become due under the Accounts and Related Contracts; provided, Secured Party
shall have the right at any time, upon the occurrence and during the
continuation of an Event of Default and upon written notice to such Grantor of
its intention to do so, to notify the account debtors or obligors under any
Accounts and Related Contracts of the assignment of such Accounts and Related
Contracts to Secured Party and to direct such account debtors or obligors to
make payment of all amounts due or to become due to such Grantor thereunder
directly to Secured Party, to notify each Person maintaining a lockbox or
similar arrangement to which account debtors or obligors under any Accounts and
Related Contracts have been directed to make payment to remit all amounts
representing collections on checks and other payment items from time to time
sent to or deposited in such lockbox or other arrangement directly to Secured
Party and, upon such notification and at the expense of such Grantor, to enforce
collection of any such Accounts and Related Contracts and to adjust, settle or
compromise the amount or payment thereof, in the same manner and to the same
extent as such Grantor might have done. After receipt by any Grantor of the
notice from Secured Party referred to in the proviso to the preced-
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ing sentence, (i) any payments of Accounts and Related Contracts, received by
such Grantor 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 Secured Party if required, in an account (the "Collateral
Account") maintained under the sole dominion and control of the Secured Party,
subject to withdrawal by the Secured Party for the account of the Secured
Parties as provided in Section 7.5, (ii) until so turned over in accordance with
the preceding subsection (i), all amounts and proceeds (including checks and
other instruments) received by such Grantor in respect of the Accounts and the
Related Contracts shall be received in trust for the benefit of Secured Party
hereunder and shall be segregated from other funds of such Grantor and (iii)
such Grantor shall not adjust, settle or compromise the amount or payment of any
Account and Related Contracts, or release wholly or partly any account debtor or
obligor thereof, or allow any credit or discount thereon.
SECTION 6. SECURED PARTY APPOINTED ATTORNEY-IN-FACT
Each Grantor hereby irrevocably appoints Secured Party as Grantor's
attorney-in-fact, with full authority in the place and stead of Grantor and in
the name of Grantor, Secured Party or otherwise, from time to time in Secured
Party's discretion to take any action and to execute any instrument that Secured
Party may deem reasonably necessary or advisable to accomplish the purposes of
this Agreement, including (a) to obtain and adjust insurance required to be
maintained by Grantor or paid to Secured Party pursuant to the Credit Agreement;
(b) upon the occurrence and during the continuation of any Event of Default, to
ask for, demand, collect, sue for, recover, compound, receive and give
acquittance and receipts for moneys due and to become due under or in respect of
any of the Collateral; (c) upon the occurrence and during the continuation of
any Event of Default, to receive, endorse and collect any drafts or other
instruments, documents and chattel paper in connection with clause (b) above;
(d) to file any claims or take any action or institute any proceedings that
Secured Party may deem necessary or desirable for the collection of any of the
Collateral or otherwise to enforce the rights of Secured Party with respect to
any of the Collateral; (e) to pay or discharge taxes or Liens (other than Liens
permitted under this Agreement or the Credit Agreement) levied or placed upon or
threatened against the Collateral, the legality or validity thereof and the
amounts necessary to discharge the same to be determined by Secured Party in its
sole discretion, any such payments made by Secured Party to become obligations
of Grantor to Secured Party, due and payable immediately without demand; and (f)
upon the occurrence and during the continuation of an Event of Default,
generally to sell, transfer, pledge, make any agreement with respect to or
otherwise deal with any of the Collateral as fully and completely as though
Secured Party were the absolute owner thereof for all purposes, and to do, at
Secured Party's option and Grantor's expense, at any time or from time to time,
all acts and things that Secured Party deems reasonably necessary to protect,
preserve or realize upon the Collateral and Secured Party's security interest
therein in order to effect the intent of this Agreement, all as fully and
effectively as Grantor might do.
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SECTION 7. REMEDIES
7.1. Generally. If any Event of Default shall have occurred and be
continuing, Secured Party may exercise in respect of the Collateral, in addition
to all other rights and remedies provided for herein or otherwise available to
it, all the rights and remedies of a secured party on default under the Uniform
Commercial Code as in effect in any relevant jurisdiction (the "Code") (whether
or not the Code applies to the affected Collateral), and also may (a) require
any Grantor to, and each Grantor hereby agrees that it will at its expense and
upon request of Secured Party forthwith, assemble all or part of the Collateral
as directed by Secured Party and make it available to Secured Party at a place
to be designated by Secured Party that is reasonably convenient to both parties;
(b) enter onto the property where any Collateral is located and take possession
thereof with or without judicial process; (c) prior to the disposition of the
Collateral, store, process, repair or recondition the Collateral or otherwise
prepare the Collateral for disposition in any manner to the extent Secured Party
deems appropriate; (d) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or private sale,
at any of Secured Party's offices or elsewhere, for cash, on credit or for
future delivery, at such time or times and at such price or prices and upon such
other terms as Secured Party may deem commercially reasonable; and (e) exercise
dominion and control over, and refuse to permit further withdrawals (whether of
money, securities, instruments or other property) from any deposit account
maintained with Secured Party constituting part of the Collateral. To the extent
permitted by applicable law, Secured Party or any Lender or Lender Counterparty
may be the purchaser of any or all of the Collateral at any such sale and
Secured Party, as agent for and representative of Lenders and Lender
Counterparties (but not any Lender or Lenders or Lender Counterparties in its or
their respective individual capacities unless Requisite Lenders shall otherwise
agree in writing), shall be entitled, for the purpose of bidding and making
settlement or payment of the purchase price for all or any portion of the
Collateral sold at any such public sale, to use and apply any of the Secured
Obligations as a credit on account of the purchase price for any Collateral
payable by Secured Party at such sale. Each purchaser at any such sale shall
hold the property sold absolutely free from any claim or right on the part of
any Grantor, and each Grantor hereby waives (to the extent permitted by
applicable law) all rights of redemption, stay and/or appraisal which it now has
or may at any time in the future have under any rule of law or statute now
existing or hereafter enacted. To the extent permitted by applicable law, each
Grantor agrees that, to the extent notice of sale shall be required by law, at
least ten days' notice to Grantor of the time and place of any public sale or
the time after which any private sale is to be made shall constitute reasonable
notification. Secured Party shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. Secured Party may
adjourn any public or private sale from time to time by announcement at the time
and place fixed therefor, and such sale may, without further notice, be made at
the time and place to which it was so adjourned. Each Grantor hereby waives any
claims against Secured Party arising by reason of the fact that the price at
which any Collateral may have been sold at such a private sale was less than the
price which might have been obtained at a public sale, even if Secured Party
accepts the first offer received and does not offer such Collateral to more than
one offeree. If the proceeds of any sale or other disposition of the
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Collateral are insufficient to pay all the Secured Obligations, Grantors shall
be liable for the deficiency and the fees of any attorneys employed by Secured
Party to collect such deficiency. Each Grantor further agrees that a breach of
any of the covenants contained in this Section will cause irreparable injury to
Secured Party, that Secured Party has no adequate remedy at law in respect of
such breach and, as a consequence, that each and every covenant contained in
this Section shall be specifically enforceable against Grantor, and Grantor
hereby waives and agrees not to assert any defenses against an action for
specific performance of such covenants except for a defense that no default has
occurred giving rise to the Secured Obligations (other than inchoate
indemnification obligations with respect to claims, losses or liabilities which
have not yet arisen and are not yet due and payable) becoming due and payable
prior to their stated maturities. Nothing in this Section shall in any way alter
the rights of Secured Party hereunder.
7.2. Investment Property. Each Grantor recognizes that, by reason of
certain prohibitions contained in the Securities Act of 1933, as amended, and
applicable state securities laws, Secured Party may be compelled, with respect
to any sale of all or any part of the Investment Property conducted without
prior registration or qualification of such Investment Property under the
Securities Act and/or such state securities laws, to limit purchasers to those
who will agree, among other things, to acquire the Investment Property for their
own account, for investment and not with a view to the distribution or resale
thereof. Each Grantor acknowledges that any such private sales may be at prices
and on terms less favorable than those obtainable through a public sale without
such restrictions (including a public offering made pursuant to a registration
statement under the Securities Act) and, notwithstanding such circumstances each
Grantor agrees that any such private sale shall be deemed to have been made in a
commercially reasonable manner and that Secured Party shall have no obligation
to engage in public sales and no obligation to delay the sale of any Investment
Property for the period of time necessary to permit the issuer thereof to
register it for a form of public sale requiring registration under the
Securities Act or under applicable state securities laws, even if such issuer
would, or should, agree to so register it. If Secured Party determines to
exercise its right to sell any or all of the Investment Property, upon written
request, each Grantor shall and shall cause each issuer of any Pledged Stock to
be sold hereunder, each Partnership and each LLC from time to time to furnish to
Secured Party all such information as Secured Party may request in order to
determine the number and nature of interest, shares or other instruments
included in the Investment Property which may be sold by Secured Party in exempt
transactions under the Securities Act and the rules and regulations of the
Securities and Exchange Commission thereunder, as the same are from time to time
in effect.
7.3. Intellectual Property Collateral.
(a) Anything contained herein to the contrary notwithstanding, upon the
occurrence and during the continuation of an Event of Default, (i) Secured Party
shall have the right (but not the obligation) to bring suit, in the name of any
Grantor, Secured Party or otherwise, to enforce any Intellectual Property
Collateral, in which event such Grantor shall, at the request of Secured Party,
do any and all lawful acts and execute any and all documents required by Secured
Party in
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aid of such enforcement and Grantor shall promptly, upon demand, reimburse and
indemnify Secured Party as provided in the Credit Agreement in connection with
the exercise of its rights under this Section, and, to the extent that Secured
Party shall elect not to bring suit to enforce any Intellectual Property
Collateral as provided in this Section, each Grantor agrees to use all
reasonable measures, whether by action, suit, proceeding or otherwise, to
prevent the infringement of any of the Intellectual Property Collateral by
others and for that purpose agrees to diligently maintain any action, suit or
proceeding against any Person so infringing necessary to prevent such
infringement; (ii) upon written demand from Secured Party, each Grantor shall
execute and deliver to Secured Party an assignment or assignments of the
Intellectual Property Collateral and such other documents as are necessary or
appropriate to carry out the intent and purposes of this Agreement; (iii) each
Grantor agrees that such an assignment and/or recording shall be applied to
reduce the Secured Obligations outstanding only to the extent that Secured Party
(or any Lender) receives cash proceeds in respect of the sale of, or other
realization upon, the Intellectual Property Collateral; and (iv) within five
Business Days after written notice from Secured Party, Grantor shall make
available to Secured Party, to the extent within Grantor's power and authority,
such personnel in Grantor's employ on the date of such Event of Default as
Secured Party may reasonably designate, by name, title or job responsibility, to
permit such Grantor to continue, directly or indirectly, to produce, advertise
and sell the products and services sold or delivered by such Grantor under or in
connection with the Trademarks, Trademark Registrations and Trademark Rights,
such persons to be available to perform their prior functions on Secured Party's
behalf and to be compensated by Secured Party at Grantor's expense on a per
diem, pro-rata basis consistent with the salary and benefit structure applicable
to each as of the date of such Event of Default.
(b) If (i) an Event of Default shall have occurred and, by reason of
cure, waiver, modification, amendment or otherwise, no longer be continuing,
(ii) no other Event of Default shall have occurred and be continuing, (iii) an
assignment to Secured Party of any rights, title and interests in and to the
Intellectual Property Collateral shall have been previously made and shall have
become absolute and effective, and (iv) the Secured Obligations shall not have
become immediately due and payable, upon the written request of Grantor, Secured
Party shall promptly execute and deliver to Grantor such assignments as may be
necessary to reassign to Grantor any such rights, title and interests as may
have been assigned to Secured Party as aforesaid, subject to any disposition
thereof that may have been made by Secured Party; provided, after giving effect
to such reassignment, Secured Party's security interest granted pursuant hereto,
as well as all other rights and remedies of Secured Party granted hereunder,
shall continue to be in full force and effect; and provided further, the rights,
title and interests so reassigned shall be free and clear of all Liens other
than Liens (if any) encumbering such rights, title and interest at the time of
their assignment to Secured Party and Permitted Liens.
7.4. Accounts. In addition to the rights of the Secured Party and the
Secured Parties specified in Section 8 with respect to payments of Accounts, if
an Event of Default shall occur and be continuing, upon request of the Secured
Party, 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
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Secured Party and the Secured Parties, segregated from other funds of such
Grantor, and shall, forthwith upon receipt by such Grantor, be turned over to
the Secured Party in the exact form received by such Grantor (duly indorsed by
such Grantor to the Secured Party, if required) and held by the Secured Party in
the Collateral Account. All proceeds while held by the Secured Party in the
Collateral Account (or by the Borrower in trust for the Secured Party and 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 7.5.
7.5. Application of Proceeds. Except as expressly provided elsewhere in
this Agreement, all proceeds received by Secured Party in respect of any sale
of, collection from, or other realization upon all or any part of the Collateral
shall be applied as provided in Section 2.13 of the Credit Agreement.
SECTION 8. SECURED PARTY AS AGENT
Secured Party has been appointed to act as Secured Party hereunder by
Lenders and, by their acceptance of the benefits hereof, Lender Counterparties.
Secured Party shall be obligated, and shall have the right hereunder, to make
demands, to give notices, to exercise or refrain from exercising any rights, and
to take or refrain from taking any action (including the release or substitution
of Collateral), solely in accordance with this Agreement and the Credit
Agreement; provided, Secured Party shall exercise, or refrain from exercising,
any remedies provided for herein in accordance with the instructions of (a)
Requisite Lenders or (b) after payment in full in cash of all Obligations under
the Credit Agreement and the other Credit Documents, the holders of a majority
of the aggregate notional amount (or, with respect to any Hedge Agreement that
has been terminated in accordance with its terms, the amount then due and
payable (exclusive of expenses and similar payments but including any early
termination payments then due) under such Hedge Agreement) under all Hedge
Agreements (Requisite Lenders or, if applicable, such holders being referred to
herein as "Requisite Obligees"). In furtherance of the foregoing provisions of
this Section, each Lender Counterparty, by its acceptance of the benefits
hereof, agrees that it shall have no right individually to realize upon any of
the Collateral hereunder, it being understood and agreed by such Lender
Counterparty that all rights and remedies hereunder may be exercised solely by
Secured Party for the benefit of Lenders and Lender Counterparties in accordance
with the terms of this Section. Secured Party shall at all times be the same
Person that is Administrative Agent under the Credit Agreement. Written notice
of resignation by Administrative Agent pursuant to terms of the Credit Agreement
shall also constitute notice of resignation as Secured Party under this
Agreement; removal of Administrative Agent pursuant to the terms of the Credit
Agreement shall also constitute removal as Secured Party under this Agreement;
and appointment of a successor Administrative Agent pursuant to the terms of the
Credit Agreement shall also constitute appointment of a successor Secured Party
under this Agreement. Upon the acceptance of any appointment as Administrative
Agent under the terms of the Credit Agreement by a successor Administrative
Agent, that successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring or
removed Secured Party under this Agreement, and the retiring or
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removed Secured Party under this Agreement shall promptly (i) transfer to such
successor Secured Party all sums, securities and other items of Collateral held
hereunder, together with all records and other documents necessary or
appropriate in connection with the performance of the duties of the successor
Secured Party under this Agreement, and (ii) execute and deliver to such
successor Secured Party such amendments to financing statements, and take such
other actions, as may be necessary or appropriate in connection with the
assignment to such successor Secured Party of the security interests created
hereunder, whereupon such retiring or removed Secured Party shall be discharged
from its duties and obligations under this Agreement. After any retiring or
removed Administrative Agent 's resignation or removal hereunder as Secured
Party, the provisions of this Agreement shall inure to its benefit as to any
actions taken or omitted to be taken by it under this Agreement while it was
Secured Party hereunder. No Grantor shall enter into any agreement with any
other Person relating to Investment Property pursuant to which such other Person
agrees to comply with entitlement orders (as defined in Section 8-102(a)(8) of
the New York UCC with respect to such Investment Property.
SECTION 9. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS
This Agreement shall create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until the payment in
full of the Secured Obligations (other than inchoate indemnification
obligations with respect to claims, losses or liabilities which have not yet
arisen and are not yet due and payable) and the cancellation or termination of
the Commitments, (b) be binding upon each Grantor, its successors and assigns,
and (c) inure, together with the rights and remedies of Secured Party hereunder,
to the benefit of Secured Party and its successors, transferees and assigns.
Without limiting the generality of the foregoing clause (c), but subject to the
terms of the Credit Agreement, any Lender may assign or otherwise transfer any
Loans held by it to any other Person, and such other Person shall thereupon
become vested with all the benefits in respect thereof granted to Lenders herein
or otherwise. Upon the payment in full of all Secured Obligations (other than
inchoate indemnification obligations with respect to claims, losses or
liabilities which have not yet arisen and are not yet due and payable) and the
cancellation or termination of the Commitments, the security interest granted
hereby shall terminate hereunder and of record and all rights to the Collateral
shall revert to Grantor. Upon any such termination Secured Party will, at
Grantors' expense, execute and deliver to Grantors such documents as Grantors
shall reasonably request to evidence such termination.
SECTION 10. STANDARD OF CARE; SECURED PARTY MAY PERFORM
The powers conferred on Secured Party hereunder are solely to protect
its interest in the Collateral and shall not impose any duty upon it to exercise
any such powers. Except for the exercise of reasonable care in the custody of
any Collateral in its possession and the accounting for moneys actually received
by it hereunder, Secured Party shall have no duty as to any Collateral or as to
the taking of any necessary steps to preserve rights against prior parties or
any other rights pertaining to any Collateral. Secured Party shall be deemed to
have exercised
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reasonable care in the custody and preservation of Collateral in its possession
if such Collateral is accorded treatment substantially equal to that which
Secured Party accords its own property. If any Grantor fails to perform any
agreement contained herein, Secured Party may itself perform, or cause
performance of, such agreement, and the expenses of Secured Party incurred in
connection therewith shall be payable by each Grantor under Section 10.2 of the
Credit Agreement.
SECTION 11. INDEMNITY AND EXPENSES
(a) Each Grantor agrees:
(i) to indemnify Secured Party and each Secured Party from and
against any and all claims, losses and liabilities in any way relating
to, growing out of or resulting from this Agreement and the
transactions contemplated hereby (including without limitation
enforcement of this Agreement) in accordance with the terms and
conditions of the Credit Agreement, except to the extent such claims,
losses or liabilities result from Secured Party's or such Secured
Party's gross negligence, bad faith, or willful misconduct as
determined by a court of competent jurisdiction; and
(ii) to pay to Secured Party promptly following written demand
the amount of any and all reasonable costs and reasonable expenses,
including the reasonable fees and expenses of its counsel and of any
experts and agents in accordance with the terms and conditions of the
Credit Agreement.
(b) The obligations of each Grantor in this Section 11 shall survive
the termination of this Agreement and the discharge of such Grantor's other
obligations under this Agreement, the Hedge Agreements, the Credit Agreement and
any other Credit Documents.
SECTION 12. MISCELLANEOUS
Any notice required or permitted to be given under this Agreement shall
be given in accordance with Section 10.1 of the Credit Agreement. No failure or
delay on the part of Secured Party in the exercise of any power, right or
privilege hereunder or under any other Credit Document shall impair such power,
right or privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other power,
right or privilege. All rights and remedies existing under this Agreement and
the other Credit Documents are cumulative to, and not exclusive of, any rights
or remedies otherwise available. In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby. All covenants hereunder shall be
given independent effect so that if a
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<PAGE> 188
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of a Default
or an Event of Default if such action is taken or condition exists. This
Agreement shall be binding upon and inure to the benefit of Secured Party and
Grantors and their respective successors and assigns. No Grantor shall, without
the prior written consent of Secured Party, assign any right, duty or obligation
hereunder. This Agreement and the other Credit Documents embody the entire
agreement and understanding between Grantors and Secured Party and supersede all
prior agreements and understandings between such parties relating to the subject
matter hereof and thereof. Accordingly, the Credit Documents may not be
contradicted by evidence of prior, contemporaneous or subsequent oral
agreements of the parties. There are no unwritten oral agreements between the
parties. This Agreement may be executed in one or more counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
THE PROVISIONS OF THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH
GRANTOR AND SECURED PARTY SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.
[The remainder of this page is intentionally left blank.]
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<PAGE> 189
IN WITNESS WHEREOF, each Grantor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
ALLEGIANCE TELECOM, INC.,
as Company Grantor
By:
--------------------------------------
Name:
Title:
Allegiance Finance Company, Inc.,
as a Grantor
By:
--------------------------------------
Name:
Title:
Allegiance Telecom International, Inc.,
as a Grantor
By:
--------------------------------------
Name:
Title:
INTERNET ALLEGIANCE INC.,
as a Grantor
By:
--------------------------------------
Name:
Title:
ALLEGIANCE TELECOM OF TEXAS, INC.,
as a Grantor
By:
--------------------------------------
Name:
Title:
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<PAGE> 190
ALLEGIANCE TELECOM OF ILLINOIS, INC.,
as a Grantor
By:
--------------------------------------
Name:
Title:
ALLEGIANCE TELECOM OF MICHIGAN, INC.,
as a Grantor
By:
--------------------------------------
Name:
Title:
ALLEGIANCE TELECOM OF MARYLAND, INC.,
as a Grantor
By:
--------------------------------------
Name:
Title:
ALLEGIANCE TELECOM OF THE DISTRICT OF
COLUMBIA, INC., as a Grantor
By:
--------------------------------------
Name:
Title:
ALLEGIANCE TELECOM OF COLORADO, INC.,
as a Grantor
By:
--------------------------------------
Name:
Title:
ALLEGIANCE TELECOM OF FLORIDA, INC.,
as a Grantor
By:
--------------------------------------
Name:
Title:
I-31
<PAGE> 191
TORONTO DOMINION (TEXAS), INC.,
as Secured Party
By:
--------------------------------------
Name:
Title:
I-32
<PAGE> 192
SCHEDULE 1(a) TO
PLEDGE AND SECURITY AGREEMENT
PLEDGED STOCK:
<TABLE>
<CAPTION>
====================================================================================================================
NUMBER PERCENTAGE OF
CLASS STOCK OF OUTSTANDING
OF CERTIFICATE PAR PLEDGED PLEDGED STOCK
STOCK ISSUER STOCK NOS. VALUE STOCK PLEDGED
====================================================================================================================
<S> <C> <C> <C> <C> <C>
====================================================================================================================
</TABLE>
INDEBTEDNESS:
PARTNERSHIP INTERESTS:
LLC INTERESTS:
<PAGE> 193
SCHEDULE 1(c) TO
PLEDGE AND SECURITY AGREEMENT
Trademarks:
Patents Issued:
Patents Pending:
U.S. Copyrights and Mask Works:
Foreign Copyright and Mask Works Registrations:
Pending U.S. Copyrights and Mask Works:
Pending Foreign Copyright and Mask Works:
<PAGE> 194
SCHEDULE 3.1 TO
PLEDGE AND SECURITY AGREEMENT
Filing Offices:
<PAGE> 195
SCHEDULE 5.4 TO
PLEDGE AND SECURITY AGREEMENT
Locations of Equipment and Inventory:
<PAGE> 196
SCHEDULE 5.5 TO
PLEDGE AND SECURITY AGREEMENT
Chief Place of Business
Chief Executive Office
Office where Records are Kept
Regarding the Accounts and all Originals
of all Chattel Paper that evidence Accounts
<PAGE> 197
EXHIBIT A TO
PLEDGE AND SECURITY AGREEMENT
PLEDGE SUPPLEMENT
This PLEDGE SUPPLEMENT, dated _______, is delivered pursuant to the
Pledge and Security Agreement, dated as of April __, 1999 (as it may be from
time to time amended, modified or supplemented, the "Security Agreement"), among
[Name of Grantor], as Grantor thereunder and hereunder, the other Grantors named
therein, and Toronto Dominion (Texas), Inc., as Secured Party. Capitalized terms
used herein not otherwise defined herein shall have the meanings ascribed
thereto in the Pledge and Security Agreement.
Subject to the terms and conditions of the Pledge and Security
Agreement, Grantor hereby grants to Secured Party a security interest in all of
Grantor's right, title and interest in and to [THE ASSETS LISTED ON SUPPLEMENTAL
SCHEDULE 1 ATTACHED HERETO] (the "Additional Collateral"), in each case whether
now or hereafter existing or in which Grantor now has or hereafter acquires an
interest and wherever the same may be located. The Additional Collateral shall
be deemed to be part of the Collateral and hereafter subject to each of the
terms and conditions of the Pledge and Security Agreement.
IN WITNESS WHEREOF, Grantor has caused this Supplement to be duly
executed and delivered by its duly authorized officer as of ______________.
[Name of Grantor]
By:
--------------------------------------
Name:
---------------------------------
Title:
--------------------------------
<PAGE> 198
EXHIBIT B TO
PLEDGE AND SECURITY AGREEMENT
ACKNOWLEDGMENT OF PLEDGE
This ACKNOWLEDGMENT OF PLEDGE, dated _______, is delivered to Toronto
Dominion (Texas), Inc., as Secured Party, pursuant to the Pledge and Security
Agreement, dated as of April __, 1999 (as it may be from time to time amended,
modified or supplemented, the "Pledge and Security Agreement"), among the
Grantors named therein and Secured Party. Capitalized terms used herein not
otherwise defined herein shall have the meanings ascribed thereto in the Pledge
and Security Agreement.
[NAME OF ISSUER], a _________________ ("Issuer"), hereby acknowledges
receipt of a conformed copy of the Pledge and Security Agreement and (a)
consents to the terms thereof, and (b) confirms that a pledge of all of [NAME OF
APPLICABLE GRANTOR]'s right, title and interest in, to and under the security
referred to below has been registered or otherwise duly noted in the books and
records of Issuer in the name of Secured Party as follows:
1. Security: [Describe Interest]
2. Number of Pledged Stock,
Units or other Interests Pledged: [______________]
3. Registered Owner: [Name of Grantor]
4. Registered Pledgee: Toronto Dominion (Texas),
Inc., as Secured Party
5. Date of Registration of Pledgee: [______________]
I-B-1
<PAGE> 199
IN WITNESS WHEREOF, Issuer has caused this Acknowledgment of Pledge to
be duly executed and delivered by its duly authorized officer as of the date
above first written.
[ISSUER]
By:
--------------------------------------
Name:
---------------------------------
Title:
--------------------------------
I-B-2
<PAGE> 200
EXHIBIT J TO
CREDIT AGREEMENT
MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF RENTS
AND LEASES AND FIXTURE FILING
([STATE])
by and from
------------------------,
"Mortgagor"
to
TORONTO DOMINION (TEXAS), INC.
as Administrative Agent,
"Mortgagee"
Dated as of
----------
Location:
Municipality:
County:
State:
THE SECURED PARTY (MORTGAGEE) DESIRES THIS FIXTURE FILING
TO BE INDEXED AGAINST THE RECORD OWNER OF THE REAL ESTATE
DESCRIBED HEREIN
PREPARED BY, RECORDING REQUESTED BY,
AND WHEN RECORDED MAIL TO:
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
Attention: ___________, Esq.
<PAGE> 201
MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF RENTS
AND LEASES AND FIXTURE FILING
This [LEASEHOLD] MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF RENTS AND
LEASES AND FIXTURE FILING, dated as of _________ (this "Mortgage"),by and from
_______________, a ______________ ("Mortgagor") to Toronto Dominion (Texas),
Inc., a __________________, as agent for Lenders and Lender Counterparties (in
such capacity as agent, "Mortgagee").
RECITALS:
WHEREAS, Mortgager is a party to the Credit and Guaranty Agreement,
dated as of April , 1999 (as it may be from time to time amended, supplemented
or otherwise modified, the "Credit Agreement"), by and among Allegiance Telecom,
Inc. ("Company"), Allegiance Finance Company, Inc. ("Borrower"), the
Subsidiaries of Company (other than Borrower) party thereto, as Guarantors,
Lenders, Goldman Sachs Credit Partners L.P. ("GSCP"), as Syndication Agent,
Toronto Dominion (Texas), Inc., as Administrative Agent, Morgan Stanley Senior
Funding, Inc., as Documentation Agent, and GSCP and TD Securities (USA) Inc., as
Co-Lead Arrangers;
WHEREAS, subject to the terms and conditions of the Credit Agreement,
Company or any of its Subsidiaries may enter into one or more Hedge Agreements
with one or more Lender Counterparties; and
WHEREAS, in consideration of the extensions of credit and other
accommodations of Lenders and Lender Counterparties as set forth in the Credit
Agreement and the Hedge Agreements, respectively, Mortgagor has agreed, subject
to the terms and conditions hereof and of each other Credit Document and each of
the Hedge Agreements, to secure such Mortgagor's obligations under the Credit
Documents and the Hedge Agreements party thereto as set forth herein.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Mortgagee and Mortgagor agree as
follows:
SECTION 1. DEFINITIONS
1.1. Definitions. Capitalized terms used herein (including the recitals
hereto) not otherwise defined herein shall have the meanings ascribed thereto in
the Credit Agreement. In addition, as used herein, the following terms shall
have the following meanings:
"Indebtedness" means (i) all obligations and liabilities of every
nature of Mortgagor and its Subsidiaries now or hereafter existing under or
arising out of or in connection with the Credit Agreement and the other Credit
Documents and any Hedge Agreement; and (ii) with respect to
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<PAGE> 202
any other Guarantor, all obligations and liabilities of every nature of such
Guarantor now or hereafter existing under or arising out of or in connection
with any other Credit Document party thereto, in each case together with all
extensions or renewals thereof, whether for principal, interest (including
interest that, but for the filing of a petition in bankruptcy with respect to
Borrower, would accrue on such obligations, whether or not a claim is allowed
against Borrower for such interest in the related bankruptcy proceeding),
payments for early termination of Hedge Agreements, fees, expenses, indemnities
or otherwise, whether voluntary or involuntary, direct or indirect, absolute or
contingent, liquidated or unliquidated, whether or not jointly owed with others,
and whether or not from time to time decreased or extinguished and later
increased, created or incurred, and all or any portion of such obligations or
liabilities that are paid, to the extent all or any part of such payment is
avoided or recovered directly or indirectly from Mortgagor, any Lender or Lender
Counterparty as a preference, fraudulent transfer or otherwise, and all
obligations of every nature of Mortgagor now or hereafter existing under this
Agreement. The Credit Agreement contains a revolving credit facility which
permits the Borrower to borrow certain principal amounts, repay all or a portion
of such principal amounts, and reborrow the amounts previously paid to the
Administrative Agent or Lenders, all upon satisfaction of certain conditions
stated in the Credit Agreement. This Mortgage secures [all advances and re-
advances under the revolving credit feature of the Credit Agreement][an amount
equal to the fair market value of the Mortgaged Property].
"Mortgaged Property" means all of Mortgagor's interest in (i) the real
property described in Exhibit A [created by the Subject Lease (as defined
below)], together with any greater estate therein as hereafter may be acquired
by Mortgagor (the "Land"); (ii) all improvements now owned or hereafter acquired
by Mortgagor, now or at any time situated, placed or constructed upon the Land
(the "Improvements"; the Land and Improvements are collectively referred to as
the "Premises"); (iii) all materials, supplies, equipment, apparatus and other
items of personal property now owned or hereafter acquired by Mortgagor and now
or hereafter attached to, installed in or used in connection with any of the
Improvements or the Land, and water, gas, electrical, telephone, storm and
sanitary sewer facilities and all other utilities whether or not situated in
easements (the "Fixtures"); (iv) all right, title and interest of Mortgagor in
and to all goods, accounts, general intangibles, instruments, documents, chattel
paper and all other personal property of any kind or character, including such
items of personal property as defined in the UCC (defined below), now owned or
hereafter acquired by Mortgagor and now or hereafter affixed to, placed upon,
used in connection with, arising from or otherwise related to the Premises (the
"Personalty"); (v) all deposit accounts maintained by Mortgagor with respect to
the Mortgaged Property (the "Deposit Accounts"); (vi) all leases, licenses,
concessions, occupancy agreements or other agreements (written or oral, now or
at any time in effect) which grant to any Person (other than Mortgagor) a
possessory interest in, or the right to use, all or any part of the Mortgaged
Property, together with all related security and other deposits (the "Leases");
(vii) all of the rents, revenues, royalties, income, proceeds, profits, security
and other types of deposits, and other benefits paid or payable by parties to
the Leases for using, leasing, licensing possessing, operating from, residing
in, selling or otherwise enjoying the Mortgaged Property (the "Rents"), (viii)
all other agreements, such as construction contracts, architects' agreements,
J-2
<PAGE> 203
engineers' contracts, utility contracts, maintenance agreements, management
agreements, service contracts, listing agreements, guaranties, warranties,
permits, licenses, certificates and entitlements in any way relating to the
construction, use, occupancy, operation, maintenance, enjoyment or ownership of
the Mortgaged Property (the "Property Agreements"); (ix) all rights, privileges,
tenements, hereditaments, rights-of-way, easements, appendages and appurtenances
appertaining to the foregoing; (x) all property tax refunds (the "Tax Refunds");
(xi) all accessions, replacements and substitutions for any of the foregoing and
all proceeds thereof (the "Proceeds"); (xii) all insurance policies, unearned
premiums therefor and proceeds from such policies covering any of the above
property now or hereafter acquired by Mortgagor (the "Insurance"); and (xiii)
all of Mortgagor's right, title and interest in and to any awards, damages,
remunerations, reimbursements, settlements or compensation heretofore made or
hereafter to be made by any governmental authority pertaining to the Land,
Improvements, Fixtures or Personalty (the "Condemnation Awards"). As used in
this Mortgage, the term "Mortgaged Property" shall mean all or, where the
context permit or requires, any portion of the above or any interest therein.
"Obligations" means all of the agreements, covenants, conditions,
warranties, representations and other obligations of Mortgagor (including,
without limitation, the obligation to repay the Indebtedness) under the Credit
Agreement, any other Credit Documents or any of the Hedge Agreements.
["Subject Lease" means that certain _______________ dated ______,
pursuant to which Mortgagor leases all or a portion of the Land from _________,
a memorandum of which was recorded with the County Clerk of _______, in
________, Page ______.]
"UCC" means the Uniform Commercial Code of New York or, if the
creation, perfection and enforcement of any security interest herein granted is
governed by the laws of a state other than New York, then, as to the matter in
question, the Uniform Commercial Code in effect in that state.
1.2. Interpretation. References to "Sections" shall be to Sections of
this Mortgage unless otherwise specifically provided. Section headings in this
Mortgage are included herein for convenience of reference only and shall not
constitute a part of this Mortgage for any other purpose or be given any
substantive effect. The rules of construction set forth in Section 1.3 of the
Credit Agreement shall be applicable to this Mortgage mutatis mutandis. If any
conflict or inconsistency exists between this Mortgage and the Credit Agreement,
the Credit Agreement shall govern.
SECTION 2. GRANT
To secure the full and timely payment of the Indebtedness and the full
and timely performance of the Obligations, Mortgagor MORTGAGES, GRANTS,
BARGAINS, ASSIGNS, SELLS and CONVEYS, to Mortgagee the Mortgaged Property,
subject, however, to the
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<PAGE> 204
Permitted Liens, TO HAVE AND TO HOLD the Mortgaged Property to Mortgagee, and
Mortgagor does hereby bind itself, its successors and assigns to WARRANT AND
FOREVER DEFEND the title to the Mortgaged Property unto Mortgagee.
SECTION 3. WARRANTIES, REPRESENTATIONS AND COVENANTS
3.1. Title. Mortgagor represents and warrants to Mortgagee that (i)
Mortgagor owns the Mortgaged Property free and clear of any liens, claims or
interests, except the Permitted Liens, and (ii) this Mortgage creates valid,
enforceable first priority liens and security interests against the Mortgaged
Property, subject to Permitted Liens.
3.2. First Lien Status. Subject to Permitted Liens, Mortgagor shall
preserve and protect the first lien and security interest status of this
Mortgage and the other Credit Documents. If any lien or security interest other
than a Permitted Lien is asserted against the Mortgaged Property, Mortgagor
shall promptly, and at its expense, (i) give Mortgagee a detailed written notice
of such lien or security interest (including origin, amount and other terms),
and (ii) at Mortgagor's election, pay the underlying claim in full or take such
other action so as to cause it to be released or contest the same in compliance
with the requirements of the Credit Agreement.
3.3. [Reserved.]
3.4. Replacement of Fixtures and Personalty. Mortgagor shall not,
without the prior written consent of Mortgagee and subject to the provisions of
the Credit Agreement, permit any of the Fixtures or Personalty to be removed at
any time from the Land or Improvements, unless the removed item is removed
temporarily for maintenance and repair or, if removed permanently, is obsolete
and is replaced by an article of equal or better suitability and value, owned by
Mortgagor subject to the liens and security interests of this Mortgage and the
other Credit Documents, and free and clear of any other lien or security
interest except such as may be permitted under the Credit Agreement or first
approved in writing by Mortgagee.
3.5. Inspection. Mortgagor shall permit Mortgagee, and Mortgagee's
agents, representatives and employees, upon reasonable prior notice to
Mortgagor, and in compliance with the Subject Lease and subject to the
provisions of the Credit Agreement, to inspect the Mortgaged Property and all
books and records of Mortgagor located thereon and, with respect to all non-
Leasehold Properties, to conduct such environmental and engineering studies as
Mortgagee may require; provided, such inspections and studies shall not
materially interfere with the use and operation of the Mortgaged Property.
3.6. Covenants Running with the Land. All Obligations contained in this
Mortgage are intended by Mortgagor and Mortgagee to be, and shall be construed
as, covenants running with the Mortgaged Property. As used herein, "Mortgagor"
shall refer to the party named in the first paragraph of this Mortgage and to
any subsequent owner of all or any portion of the Mortgaged Property. All
Persons who may have or acquire an interest in the Mortgaged Property
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<PAGE> 205
shall be deemed to have notice of, and be bound by, the terms of the Credit
Agreement and the other Credit Documents; however, no such party shall be
entitled to any rights thereunder without the prior written consent of
Mortgagee. In addition, all of the covenants of Mortgagor in any Credit Document
party thereto are incorporated herein by reference and, together with covenants
in this Section, shall be covenants running with the land.
3.7. Condemnation Awards and Insurance Proceeds. Subject to the
provisions of the Credit Agreement, Mortgagor (i) assigns all awards and
compensation to which it is entitled for any condemnation or other taking, or
any purchase in lieu thereof, to Mortgagee and authorizes Mortgagee to collect
and receive such awards and compensation and to give proper receipts and
acquittances therefor, subject to the terms of the Credit Agreement, (ii)
assigns to Mortgagee all proceeds of any insurance policies insuring against
loss or damage to the Mortgaged Property, (iii) authorizes Mortgagee to collect
and receive such proceeds and authorizes and directs the issuer of each of such
insurance policies to make payment for all such losses directly to Mortgagee,
instead of to Mortgagor and Mortgagee jointly.
[3.8. Certain Leasehold Representations, Warranties and Covenants.
(a) Mortgagor represents and warrants to Mortgagee that (i) the Subject
Lease is unmodified and in full force and effect, (ii) all rent and other
charges therein have been paid to the extent they are payable to the date
hereof, (iii) Mortgagor enjoys the quiet and peaceful possession of the property
demised thereby, (iv) to the best of its knowledge, Mortgagor is not in default
under any of the terms thereof and there are no circumstances which, with the
passage of time or the giving of notice or both, would constitute an event of
default thereunder, (v) to the best of Mortgagor's knowledge, the lessor
thereunder is not in default under any of the terms or provisions thereof on the
part of the lessor to be observed or performed. Mortgagor shall promptly pay,
when due and payable, the rent and other charges payable pursuant to the Subject
Lease, and will timely perform and observe all of the other terms, covenants and
conditions required to be performed and observed by Mortgagor as lessee under
the Subject Lease. Mortgagor shall notify Mortgagee in writing of any material
default by Mortgagor in the performance or observance of any terms, covenants or
conditions on the part of Mortgagor to be performed or observed under the
Subject Lease within five Business Days after Mortgagor knows of such default.
Mortgagor shall, immediately upon receipt thereof, deliver a copy of each
material notice given to Mortgagor by the lessor pursuant to the Subject Lease
and promptly notify Mortgagee in writing of any default by the lessor in the
performance or observance of any of the terms, covenants or conditions on the
part of the lessor to be performed or observed thereunder. Unless required under
the terms of the Subject Lease, Mortgagor shall not, without the prior written
consent of Mortgagee (which may be granted or withheld in Mortgagee's sole and
absolute discretion) terminate, modify or surrender the Subject Lease, and any
such attempted termination, modification or surrender without Mortgagee's
written consent shall be void; provided that renewal options may be exercised at
Mortgagor's option. Mortgagor shall, within twenty (20) days after written
request from Mortgagee, use its reasonable best efforts to obtain from the
lessor and deliver to Mortgagee a certificate setting forth the name of the
tenant
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<PAGE> 206
thereunder and stating that the Subject Lease is in full force and effect, is
unmodified or, if the Subject Lease has been modified, the date of each
modification (together with copies of each such modification), that no notice of
termination thereon has been served on Mortgagor, stating that no default or
event which with notice or lapse of time (or both) would become a default is
existing under the Subject Lease, stating the date to which rent has been paid,
and specifying the nature of any defaults, if any, and containing such other
statements and representations as may be requested by Mortgagee.
(b) So long as any of the Indebtedness or the Obligations remain unpaid
or unperformed, the fee title to and the leasehold estate in the premises
subject to each Subject Lease shall not merge but shall always be kept separate
and distinct notwithstanding the union of such estates in the lessor or
Mortgagor, or in a third party, by purchase or otherwise. If Mortgagor acquires
the fee title or any other estate, title or interest in the property demised by
the Subject Lease, or any part thereof, the lien of this Mortgage shall attach
to, cover and be a lien upon such acquired estate, title or interest and the
same shall thereupon be and become a part of the Mortgaged Property with the
same force and effect as if specifically encumbered herein. Mortgagor agrees to
execute all instruments and documents that Mortgagee may reasonably require to
ratify, confirm and further evidence the lien of this Mortgage on the acquired
estate, title or interest. Furthermore, Mortgagor hereby appoints Mortgagee as
its true and lawful attorney-in-fact to execute and deliver, following the
occurrence and during the continuance of an Event of Default, all such
instruments and documents in the name and on behalf of Mortgagor. This power,
being coupled with an interest, shall be irrevocable as long as any portion of
the Indebtedness remains unpaid.
(c) If the Subject Lease shall be terminated prior to the natural
expiration of its term due to default by Mortgagor or any tenant thereunder, and
if, pursuant to the provisions of the Subject Lease, Mortgagee or its designee
shall acquire from the lessor a new lease of the premises subject to the Subject
Lease, Mortgagor shall have no right, title or interest in or to such new lease
or the leasehold estate created thereby, or renewal privileges therein
contained.
(d) Notwithstanding anything to the contrary contained herein, this
Mortgage shall not constitute an assignment of any Subject Lease within the
meaning of any provision thereof prohibiting its assignment and Mortgagee shall
have no liability or obligation thereunder by reason of its acceptance of this
Mortgage. Mortgagee shall be liable for the obligations of the tenant arising
out of any Subject Lease for only that period of time for which Mortgagee is in
possession of the premises demised thereunder or has acquired, by foreclosure or
otherwise, and is holding all of Mortgagor's right, title and interest therein.]
SECTION 4. DEFAULT AND FORECLOSURE
4.1. Remedies. If an Event of Default exists, Mortgagee may at
Mortgagee's election, exercise any or all of the following rights, remedies and
recourses (which are in addition to all rights and remedies available under the
Credit Agreement and the Pledge and Security Agree-
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<PAGE> 207
ment): (i) enter the Mortgaged Property and take exclusive possession thereof
and of all books, records and accounts relating thereto or located thereon and
(ii) if Mortgagor remains in possession of the Mortgaged Property after an Event
of Default and without Mortgagee's prior written consent, Mortgagee may invoke
any legal remedies to dispossess Mortgagor; (iii) hold, lease, develop, manage,
operate or otherwise use the Mortgaged Property upon such terms and conditions
as Mortgagee may deem reasonable under the circumstances (making such repairs,
alternations, additions and improvements and taking other actions, from time to
time, as Mortgagee deems necessary or desirable), and apply all Rents and other
amounts collected by Mortgagee in connection therewith in accordance with the
provisions hereof; (iv) institute proceedings for the complete foreclosure of
this Mortgage, either by judicial action or by power of sale, in which case the
Mortgaged Property may be sold for cash or credit in one or more parcels. With
respect to any notices required or permitted under the UCC, Mortgagor agrees
that ten (10) days' prior written notice shall be deemed commercially
reasonable. At any such sale by virtue of any judicial proceedings, power of
sale, or any other legal right, remedy or recourse, the title to and right of
possession of any such property shall pass to the purchaser thereof, and to the
fullest extent permitted by law, Mortgagor shall be completely and irrevocably
divested of all of its right, title, interest, claim, equity, equity of
redemption, and demand whatsoever, either at law or in equity, in and to the
property sold and such sale shall be a perpetual bar both at law and in equity
against Mortgagor, and against all other Persons claiming or to claim the
property sold or any part thereof, by, through or under Mortgagor. Mortgagee may
be a purchaser at such sale and if Mortgagee is the highest bidder, Mortgagee
may credit the portion of the purchase price that would be distributed to
Mortgagee against the Indebtedness in lieu of paying cash. In the event this
Mortgage is foreclosed by judicial action, appraisement of the Mortgaged
Property is waived and Mortgagee may make application to a court of competent
jurisdiction for, and obtain from such court as a matter of strict right and
without notice to Mortgagor or regard to the adequacy of the Mortgaged Property
for the repayment of the Indebtedness, the appointment of a receiver of the
Mortgaged Property, and Mortgagor irrevocably consents to such appointment. Any
such receiver shall have all the usual powers and duties of receivers in similar
cases, including the full power to rent, maintain and otherwise operate the
Mortgaged Property upon such terms as may be approved by the court, and shall
apply such Rents in accordance with the provisions hereof; and/or exercise all
other rights, remedies and recourses granted under the Credit Documents or
otherwise available at law or in equity.
4.2. Separate Sales. The Mortgaged Property may be sold in one or more
parcels and in such manner and order as Mortgagee in its sole discretion may
elect; the right of sale arising out of any Event of Default shall not be
exhausted by any one or more sales.
4.3. Remedies Cumulative, Concurrent and Nonexclusive. Mortgagee shall
have all rights, remedies and recourses granted in the Credit Documents and
available at law or equity (including the UCC), which rights (i) shall be
cumulated and concurrent, (ii) may be pursued separately, successively or
concurrently against Mortgagor or others obligated under the Credit Documents,
or against the Mortgaged Property, or against any one or more of them, at the
sole discretion of Mortgagee, (iii) may be exercised as often as occasion
therefor shall arise, and the
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exercise or failure to exercise any of them shall not be construed as a waiver
or release thereof or of any other right, remedy or recourse, and (iv) are
intended to be, and shall be, nonexclusive. No action by Mortgagee in the
enforcement of any rights, remedies or recourses under the Credit Documents or
otherwise at law or equity shall be deemed to cure any Event of Default.
4.4. Release of and Resort to Collateral. Mortgagee may release,
regardless of consideration and without the necessity for any notice to or
consent by the holder of any subordinate lien on the Mortgaged Property, any
part of the Mortgaged Property without, as to the remainder, in any way
impairing, affecting, subordinating or releasing the lien or security interest
created in or evidenced by the Credit Documents or their status as a first and
prior lien and security interest in and to the Mortgaged Property. For payment
of the Indebtedness, Mortgagee may resort to any other security in such order
and manner as Mortgagee may elect.
4.5. Waiver of Redemption, Notice and Marshalling of Assets. To the
fullest extent permitted by law, Mortgagor hereby irrevocably and
unconditionally waives and releases (i) all benefit that might accrue to
Mortgagor by virtue of any present or future statute of limitations or law or
judicial decision exempting the Mortgaged Property from attachment, levy or sale
on execution or providing for any stay of execution, exemption from civil
process, redemption or extension of time for payment, (ii) all notices of any
Event of Default or of Mortgagee's election to exercise or the actual exercise
of any right, remedy or recourse provided for under the Credit Documents, and
(iii) any right to a marshalling of assets or a sale in inverse order of
alienation.
4.6. Discontinuance of Proceedings. If Mortgagee shall have proceeded
to invoke any right, remedy or recourse permitted under the Credit Documents and
shall thereafter elect to discontinue or abandon it for any reason, Mortgagee
shall have the unqualified right to do so and, in such an event, Mortgagor and
Mortgagee shall be restored to their former positions with respect to the
Indebtedness, the Obligations, the Credit Documents, the Mortgaged Property and
otherwise, and the rights, remedies, recourses and powers of Mortgagee shall
continue as if the right, remedy or recourse had never been invoked, but no such
discontinuance or abandonment shall waive any Event of Default which may then
exist or the right of Mortgagee thereafter to exercise any right, remedy or
recourse under the Credit Documents for such Event of Default.
4.7. Application of Proceeds. The proceeds of any sale of, and the
Rents and other amounts generated by the holding, leasing, management, operation
or other use of the Mortgaged Property, shall be applied by Mortgagee (or the
receiver, if one is appointed) in the following order unless otherwise required
by applicable law: first, to the payment of the actual out of pocket costs and
expenses of taking possession of the Mortgaged Property and of holding, using,
leasing, repairing, improving and selling the same, including, without
limitation (i) receiver's fees and expenses, including the repayment of the
amounts evidenced by any receiver's certificates, (ii) court costs, (iii)
reasonable attorneys' and accountants' fees and expenses, (iv) costs of
advertisement, and (v) the payment of all rent and other charges under the
Subject Lease; and second, as provided in Section 2.16 of the Credit Agreement.
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4.8. Occupancy After Foreclosure. Any sale of the Mortgaged Property or
any part thereof will divest all right, title and interest of Mortgagor in and
to the property sold. Subject to applicable law, any purchaser at a foreclosure
sale will receive immediate possession of the property purchased. If Mortgagor
retains possession of such property or any part thereof subsequent to such sale,
Mortgagor will be considered a tenant at sufferance of the purchaser, and will,
if Mortgagor remains in possession after demand to remove, be subject to
eviction and removal, forcible or otherwise, with or without process of law.
4.9. Additional Advances and Disbursements; Costs of Enforcement. If
any Event of Default exists, Mortgagee shall have the right, but not the
obligation, to cure such Event of Default in the name and on behalf of
Mortgagor. All sums advanced and expenses incurred at any time by Mortgagee
under this Section, or otherwise under this Mortgage or any of the other Credit
Documents or applicable law, shall bear interest from the date that such sum is
advanced or expense incurred, to and including the date of reimbursement,
computed at the rate or rates at which interest is then computed on the
Indebtedness, and all such sums, together with interest thereon, shall be
secured by this Mortgage. Mortgagor shall pay all reasonable out of pocket
expenses (including reasonable attorneys' fees and expenses) of or incidental to
the perfection and enforcement of this Mortgage and the other Credit Documents,
or the enforcement, compromise or settlement of the Indebtedness or any claim
under this Mortgage and the other Credit Documents, and for the curing thereof,
or for defending or asserting the rights and claims of Mortgagee in respect
thereof, by litigation or otherwise.
4.10. No Mortgagee in Possession. Neither the enforcement of any of the
remedies under this Section, the assignment of the Rents and Leases under
Section 5, the security interests under Section 6, nor any other remedies
afforded to Mortgagee under the Credit Documents, at law or in equity shall
cause Mortgagee to be deemed or construed to be a mortgagee in possession of the
Mortgaged Property, to obligate Mortgagee to lease the Mortgaged Property or
attempt to do so, or to take any action, incur any expense, or perform or
discharge any obligation, duty or liability whatsoever under any of the Leases
or otherwise.
4.11. Waiver of Stay, Moratorium and Similar Rights. Mortgagor agrees,
to the full extent that it may lawfully do so, that it will not at any time
insist upon or plead or in any way take advantage of any stay, marshalling of
assets, extension, redemption or moratorium law now or hereafter in force and
effect so as to prevent or hinder the enforcement of the provisions of this
Mortgage or the Indebtedness secured hereby, or any agreement between Mortgagor
and Mortgagee or any rights or remedies of Mortgagee.
SECTION 5. ASSIGNMENT OF RENTS AND LEASES
5.1. Assignment. In furtherance of and in addition to the assignment
made by Mortgagor herein, Mortgagor hereby absolutely and unconditionally
assigns, sells, transfers and conveys to Mortgagee all of its right, title and
interest in and to all Leases, whether now existing or hereafter entered into,
and all of its right, title and interest in and to all Rents. This assignment
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is an absolute assignment and not an assignment for additional security only. So
long as no Event of Default shall have occurred and be continuing, Mortgagor
shall have a revocable license from Mortgagee to exercise all rights extended to
the landlord under the Leases, including the right to receive and collect all
Rents and to hold the Rents in trust for use in the payment and performance of
the Obligations and to otherwise use the same. The foregoing license is granted
subject to the conditional limitation that no Event of Default shall have
occurred and be continuing. Upon the occurrence and during the continuance of an
Event of Default, whether or not legal proceedings have commenced, and without
regard to waste, adequacy of security for the Obligations or solvency of
Mortgagor, the license herein granted shall automatically expire and terminate,
without notice by Mortgagee (any such notice being hereby expressly waived by
Mortgagor).
5.2. Perfection Upon Recordation. Mortgagor acknowledges that Mortgagee
has taken all actions necessary to obtain, and that upon recordation of this
Mortgage Mortgagee shall have, to the extent permitted under applicable law and
subject to Permitted Liens, a valid and fully perfected, first priority, present
assignment of the Rents arising out of the Leases and all security for such
Leases. Mortgagor acknowledges and agrees that upon recordation of this Mortgage
Mortgagee's interest in the Rents shall be deemed to be fully perfected,
"choate" and enforced as to Mortgagor and all third parties, including, without
limitation, any subsequently appointed trustee in any case under Title 11 of the
United States Code (the "Bankruptcy Code"), without the necessity of commencing
a foreclosure action with respect to this Mortgage, making formal demand for the
Rents, obtaining the appointment of a receiver or taking any other affirmative
action.
5.3. Bankruptcy Provisions. Without limitation of the absolute nature
of the assignment of the Rents hereunder, Mortgagor and Mortgagee agree that (i)
this Mortgage shall constitute a "security agreement" for purposes of Section
552(b) of the Bankruptcy Code, (ii) the security interest created by this
Mortgage extends to property of Mortgagor acquired before the commencement of a
case in bankruptcy and to all amounts paid as Rents, and (iii) such security
interest shall extend to all Rents acquired by the estate after the commencement
of any case in bankruptcy.
5.4. No Merger of Estates. So long as any part of the Indebtedness or
the Obligations secured hereby remain unpaid and undischarged, the fee and
leasehold estates to the Mortgaged Property shall not merge, but shall remain
separate and distinct, notwithstanding the union of such estates either in
Mortgagor, Mortgagee, any tenant or any third party by purchase or otherwise.
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SECTION 6. SECURITY AGREEMENT
6.1. Security Interest. This Mortgage constitutes a "security
agreement" on personal property within the meaning of the UCC and other
applicable law and with respect to the Personalty, Fixtures, Leases, Rents,
Deposit Accounts, Property Agreements, Tax Refunds, Proceeds, Insurance and
Condemnation Awards. To this end, Mortgagor grants to Mortgagee a first and
prior security interest in the Personalty, Fixtures, Leases, Rents, Deposit
Accounts, Property Agreements, Tax Refunds, Proceeds, Insurance, Condemnation
Awards and all other Mortgaged Property which is personal property to secure the
payment of the Indebtedness and performance of the Obligations, and agrees that
Mortgagee shall have all the rights and remedies of a secured party under the
UCC with respect to such property. Any notice of sale, disposition or other
intended action by Mortgagee with respect to the Personalty, Fixtures, Leases,
Rents, Deposit Accounts, Property Agreements, Tax Refunds, Proceeds, Insurance
and Condemnation Awards sent to Mortgagor at least ten (10) days prior to any
action under the UCC shall constitute reasonable notice to Mortgagor.
6.2. Financing Statements. Mortgagor shall execute and deliver to
Mortgagee, in form and substance satisfactory to Mortgagee, such financing
statements and such further assurances as Mortgagee may, from time to time,
reasonably consider necessary to create, perfect and preserve Mortgagee's
security interest hereunder and Mortgagee may cause such statements and
assurances to be recorded and filed, at such times and places as may be required
or permitted by law to so create, perfect and preserve such security interest.
Mortgagor's chief executive office is at the address set forth in Appendix B of
the Credit Agreement.
6.3. Fixture Filing. This Mortgage shall also constitute a "fixture
filing" for the purposes of the UCC against all of the Mortgaged Property which
is or is to become fixtures. Information concerning the security interest herein
granted may be obtained at the addresses of Debtor (Mortgagor) and Secured Party
(Mortgagee) as set forth on the cover hereof.
SECTION 7. ATTORNEY-IN-FACT
Mortgagor hereby irrevocably appoints Mortgagee and its successors and
assigns, as its attorney-in-fact, which agency is coupled with an interest and
with full power of substitution, (i) to execute and/or record any notices of
completion, cessation of labor or any other notices that Mortgagee deems
appropriate to protect Mortgagee's interest, if Mortgagor shall fail to do so
within ten (10) days after written request by Mortgagee, (ii) upon the issuance
of a deed pursuant to the foreclosure of this Mortgage or the delivery of a deed
in lieu of foreclosure, to execute all instruments of assignment, conveyance or
further assurance with respect to the Leases, Rents, Deposit Accounts, Property
Agreements, Tax Refunds, Proceeds, Insurance and Condemnation Awards in favor of
the grantee of any such deed and as may be necessary or desirable for such
purpose, (iii) to prepare, execute and file or record financing statements,
continuation statements, applications for registration and like papers necessary
to create, perfect or preserve Mortgagee's security interests and rights in or
to any of the Mortgaged Property upon Mortgagor's failure to
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do so, and (iv) while any Event of Default exists, to perform any obligation of
Mortgagor hereunder; provided, (a) Mortgagee shall not under any circumstances
be obligated to perform any obligation of Mortgagor; (b) any sums advanced by
Mortgagee in such performance shall be added to and included in the Indebtedness
and shall bear interest at the rate or rates at which interest is then computed
on the Indebtedness; (c) Mortgagee as such attorney-in-fact shall only be
accountable for such funds as are actually received by Mortgagee; and (d)
Mortgagee shall not be liable to Mortgagor or any other person or entity for any
failure to take any action which it is empowered to take under this Section.
SECTION 8. MORTGAGEE AS AGENT
Mortgagee has been appointed to act as Mortgagee hereunder by Lenders
and, by their acceptance of the benefits hereof, Lender Counterparties.
Mortgagee shall be obligated, and shall have the right hereunder, to make
demands, to give notices, to exercise or refrain from exercising any rights, and
to take or refrain from taking any action (including the release or substitution
of Mortgaged Property), solely in accordance with this Mortgage and the Credit
Agreement; provided, Mortgagee shall exercise, or refrain from exercising, any
remedies provided for herein in accordance with the instructions of (i)
Requisite Lenders, or (ii) after payment in full of all Obligations under the
Credit Agreement and the other Credit Documents, the holders of a majority of
the aggregate notional amount (or, with respect to any Hedge Agreement that has
been terminated in accordance with its terms, the amount then due and payable
(exclusive of expenses and similar payments but including any early termination
payments then due) under such Hedge Agreement) under all Hedge Agreements
(Requisite Lenders or, if applicable, such holders being referred to herein as
"Requisite Obligees"). In furtherance of the foregoing provisions of this
Section, each Lender Counterparty, by its acceptance of the benefits hereof,
agrees that it shall have no right individually to realize upon any of the
Mortgaged Property, it being understood and agreed by such Lender Counterparty
that all rights and remedies hereunder may be exercised solely by Mortgagee for
the benefit of Lenders and Lender Counterparties in accordance with the terms of
this Section. Mortgagee shall at all times be the same Person that is
Administrative Agent under the Credit Agreement. Written notice of resignation
by Administrative Agent pursuant to terms of the Credit Agreement shall also
constitute notice of resignation as Mortgagee under this Agreement; removal of
Administrative Agent pursuant to the terms of the Credit Agreement shall also
constitute removal as Mortgagee under this Agreement; and appointment of a
successor Administrative Agent pursuant to the terms of the Credit Agreement
shall also constitute appointment of a successor Mortgagee under this Agreement.
Upon the acceptance of any appointment as Administrative Agent under the terms
of the Credit Agreement by a successor Administrative Agent, that successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring or removed Mortgagee under
this Agreement, and the retiring or removed Mortgagee under this Agreement shall
promptly (i) transfer to such successor Mortgagee all sums, securities and other
items of Mortgaged Property held hereunder, together with all records and other
documents necessary or appropriate in connection with the performance of the
duties of the successor Mortgagee under this Mortgage, and (ii) execute and
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deliver to such successor Mortgagee such amendments to financing statements, and
take such other actions, as may be necessary or appropriate in connection with
the assignment to such successor Mortgagee of the security interests created
hereunder, whereupon such retiring or removed Mortgagee shall be discharged from
its duties and obligations under this Mortgage. After any retiring or removed
Administrative Agent's resignation or removal hereunder as Mortgagee, the
provisions of this Mortgage shall inure to its benefit as to any actions taken
or omitted to be taken by it under this Mortgage while it was Mortgagee
hereunder.
SECTION 9. LOCAL LAW PROVISIONS
[To be provided, if any, by local counsel.]
SECTION 10. MISCELLANEOUS
Any notice required or permitted to be given under this Mortgage shall
be given in accordance with Section 10.1 of the Credit Agreement. No failure or
delay on the part of Mortgagee in the exercise of any power, right or privilege
hereunder or under any other Credit Document shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence therein,
nor shall any single or partial exercise of any such power, right or privilege
preclude other or further exercise thereof or of any other power, right or
privilege. All rights and remedies existing under this Mortgage and the other
Credit Documents are cumulative to, and not exclusive of, any rights or remedies
otherwise available. In case any provision in or obligation under this Mortgage
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby. Subject to the provisions of the Credit Agreement,
all covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of a Default
or an Event of Default if such action is taken or condition exists. This
Mortgage shall be binding upon and inure to the benefit of Mortgagee and
Mortgagor and their respective successors and assigns. Mortgagor shall not,
without the prior written consent of Mortgagee, assign any rights, duties or
obligations hereunder. Upon payment in full of the Indebtedness and performance
in full of the Obligations (other than inchoate indemnification obligations with
respect to claims, losses or liabilities which have not yet arisen and are not
yet due and payable), Mortgagee, at Mortgagor's expense, shall release the liens
and security interests created by this Mortgage or reconvey the Mortgaged
Property to Mortgagor. This Mortgage and the other Credit Documents embody the
entire agreement and understanding between Mortgagee and Mortgagor and supersede
all prior agreements and understandings between such parties relating to the
subject matter hereof and thereof. Accordingly, the Credit Documents may not be
contradicted by evidence of prior, contemporaneous or subsequent oral agreements
of the parties. There are no unwritten oral agreements between the parties.
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THE PROVISIONS OF THIS MORTGAGE REGARDING THE CREATION, PERFECTION AND
ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS HEREIN GRANTED SHALL BE GOVERNED
BY AND CONSTRUED UNDER THE LAWS OF THE STATE IN WHICH THE MORTGAGED PROPERTY IS
LOCATED. ALL OTHER PROVISIONS OF THIS MORTGAGE AND THE RIGHTS AND OBLIGATIONS OF
MORTGAGOR AND MORTGAGEE SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.
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<PAGE> 215
IN WITNESS WHEREOF, Mortgagor has on the date set forth in the
acknowledgment hereto, effective as of the date first above written, caused this
instrument to be duly executed and delivered by authority duly given.
[MORTGAGOR]
By:
Name:
Title:
[APPROPRIATE NOTARY BLOCK]
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<PAGE> 216
EXHIBIT A TO
MORTGAGE
Legal Description of Premises:
<PAGE> 217
EXHIBIT K TO
CREDIT AGREEMENT
COLLATERAL ACCESS AGREEMENT
RECORDING REQUESTED BY:
Skadden, Arps, Slate, Meagher & Flom LLP
AND WHEN RECORDED MAIL TO:
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
Attn: ________________
Re: [ALLEGIANCE TELECOM, INC].
[NAME OF SUBSIDIARY]
- --------------------------------------------------------------------------------
Space above this line for
recorder's use only
COLLATERAL ACCESS AGREEMENT
This COLLATERAL ACCESS AGREEMENT (this "Agreement") is dated
as of ___________ and entered into by __________________, a ___________
("Landlord"), to and for the benefit of TORONTO DOMINION TEXAS, INC., as
collateral agent (in such capacity, "Collateral Agent") for Lenders.
RECITALS:
WHEREAS, _______________, a ________________ ("Tenant"), has
possession of and occupies all or a portion of the property described on Exhibit
A annexed hereto (the "Premises");
WHEREAS, Tenant's interest in the Premises arises under the
lease agreement (the "Lease") more particularly described on Exhibit B annexed
hereto, pursuant to which Landlord has rights, upon the terms and conditions set
forth therein, to take possession of, and otherwise assert control over, the
Premises;
WHEREAS, reference is made to that certain Credit and Guaranty
Agreement, dated as of April __, 1999 (as it may be amended, supplemented or
otherwise modified, the "Credit Agreement"), by and among Allegiance Telecom,
Inc. ("Company"), Allegiance Finance Company, Inc. ("Borrower"), the
Subsidiaries of Company (other than Borrower) party thereto,
K-1
<PAGE> 218
as Guarantors, Lenders, Goldman Sachs Credit Partners L.P. ("GSCP"), as
Syndication Agent, Toronto Dominion (Texas), Inc., as Administrative Agent,
Morgan Stanley Senior Funding, Inc., as Documentation Agent, and GSCP and TD
Securities (USA) Inc., as Co-Lead Arrangers (capitalized terms used herein and
not otherwise defined herein shall have the meanings ascribed thereto in the
Credit Agreement or the Pledge and Security Agreement (as defined in the Credit
Agreement), as applicable), pursuant to which Tenant has executed a security
agreement, mortgages, deeds of trust, deeds to secure debt and assignments of
rents and leases, and other collateral documents in relation to the Credit
Agreement;
WHEREAS, Tenant's repayment of the extensions of credit made
by Lenders under the Credit Agreement will be secured, in part, by all Inventory
of Tenant (including all Inventory of Tenant now or hereafter located on the
Premises (the "Subject Inventory")) and all Equipment used in Tenant's business
(including all Equipment of Tenant now or hereafter located on the Premises (the
"Subject Equipment" and, together with the Subject Inventory, the
"Collateral")); and
WHEREAS, Collateral Agent has requested that Landlord execute
this Agreement as a condition to the extension of credit to Tenant under the
Credit Agreement.
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Landlord hereby covenants and agrees with Collateral Agent as
follows:
1. Landlord hereby (a) waives and releases unto Collateral
Agent and its successors and assigns any and all rights granted by or under any
present or future laws to levy or distraint for rent or any other charges which
may be due to Landlord against the Collateral, and any and all other claims,
liens and demands of every kind which it now has or may hereafter have against
the Collateral, and (b) agrees that any rights it may have in or to the
Collateral, no matter how arising (to the extent not effectively waived pursuant
to clause (a) of this paragraph 1), shall be second and subordinate to the
rights of Collateral Agent in respect thereof. Landlord acknowledges that the
Collateral is and will remain personal property and not fixtures even though it
may be affixed to or placed on the Premises.
2. Landlord certifies that (a) Landlord is the landlord under
the Lease, (b) the Lease is in full force and effect and has not been amended,
modified, or supplemented except as set forth on Exhibit B annexed hereto, (c)
to the knowledge of Landlord, there is no defense, offset, claim or counterclaim
by or in favor of Landlord against Tenant under the Lease or against the
obligations of Landlord under the Lease, (d) no notice of default has been given
under or in connection with the Lease which has not been cured, and Landlord has
no knowledge of the occurrence of any other default under or in connection with
the Lease, and (e) except as disclosed to Collateral Agent, no portion of the
Premises is encumbered in any way by any deed of trust or mortgage lien or
ground or superior lease.
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<PAGE> 219
3. Landlord consents to the installation or placement of the
Collateral on the Premises, and Landlord grants to Collateral Agent,
exerciseable upon the occurrence and during the continuance of an Event of
Default under the Credit Agreement, a license to enter upon and into the
Premises to do any or all of the following with respect to the Collateral:
assemble, have appraised, display, remove, maintain, prepare for sale or lease,
repair, transfer, or sell (at public or private sale). In entering upon or into
the Premises, Collateral Agent hereby agrees to indemnify, defend and hold
Landlord harmless from and against any and all claims, judgments, liabilities,
costs and expenses incurred by Landlord caused solely by Collateral Agent's
entering upon or into the Premises and taking any of the foregoing actions with
respect to the Collateral. Such costs shall include any damage to the Premises
made by Collateral Agent in severing and/or removing the Collateral therefrom.
4. Landlord agrees that it will not prevent Collateral Agent
or its designee from entering upon the Premises at all reasonable times to
inspect or remove the Collateral. In the event that Landlord has the right to,
and desires to, obtain possession of the Premises (either through expiration of
the Lease or termination thereof due to the default of Tenant thereunder),
Landlord will deliver notice (the "Landlord's Notice") to Collateral Agent to
that effect. Within the 45 day period after Collateral Agent receives the
Landlord's Notice, Collateral Agent shall have the right, provided that an Event
of Default is continuing, but not the obligation, to cause the Collateral to be
removed from the Premises. During such 45 day period, Landlord will not remove
the Collateral from the Premises nor interfere with Collateral Agent's actions
in removing the Collateral from the Premises or Collateral Agent's actions in
otherwise enforcing its security interest in the Collateral. Notwithstanding
anything to the contrary in this paragraph, Collateral Agent shall at no time
have any obligation to remove the Collateral from the Premises.
5. Landlord shall send to Collateral Agent a copy of any
notice of default under the Lease sent by Landlord to Tenant. In addition,
Landlord shall send to Collateral Agent a copy of any notice received by
Landlord of a breach or default under any other lease, mortgage, deed of trust,
security agreement or other instrument to which Landlord is a party which may
affect Landlord's rights in, or possession of, the Premises.
6. All notices to Collateral Agent under this Agreement shall
be in writing and sent to Collateral Agent at its address set forth on the
signature page hereof by telefacsimile, by United States mail, or by overnight
delivery service.
7. The provisions of this Agreement shall continue in effect
until Landlord shall have received Collateral Agent's written certification that
all amounts advanced under the Credit Agreement have been paid in full.
8. This Agreement and the rights and obligations of the
parties hereunder shall be governed by, and shall be construed and enforced in
accordance with, the internal laws of the State of New York, without regard to
conflicts of laws principles.
K-3
<PAGE> 220
IN WITNESS WHEREOF, the undersigned have caused this Agreement
to be duly executed and delivered as of the day and year first set forth above.
[NAME OF LANDLORD]
By:
--------------------------------------
Name:
Title:
Landlord's Address For Notices:
-----------------------------------------
-----------------------------------------
-----------------------------------------
-----------------------------------------
Fax: (___) ________
By its acceptance hereof, as of the day and year first set
forth above, Collateral Agent agrees to be bound by the provisions hereof.
TORONTO DOMINION (TEXAS), INC.,
as Collateral Agent
By:
--------------------------------------
Name:
Title:
Collateral Agent's Address For Notices:
-----------------------------------------
-----------------------------------------
-----------------------------------------
-----------------------------------------
Fax: (___) ________
[APPROPRIATE NOTARY BLOCK]
K-4
<PAGE> 221
EXHIBIT A TO
COLLATERAL ACCESS AGREEMENT
Legal Description of Premises:
K-5
<PAGE> 222
EXHIBIT B TO
COLLATERAL ACCESS AGREEMENT
Description of Lease:
K-6
<PAGE> 223
EXHIBIT L TO
CREDIT AGREEMENT
COUNTERPART AGREEMENT
This COUNTERPART AGREEMENT, dated ____________ , is delivered pursuant
to the Credit and Guaranty Agreement, dated as of April __, 1999 (as it may be
amended, supplemented or otherwise modified, the "Credit Agreement"; the terms
defined therein and not otherwise defined herein being used herein as therein
defined), by and among Allegiance Telecom, Inc. ("Company"), Allegiance Finance
Company, Inc. ("Borrower"), the Subsidiaries of Company (other than Borrower)
party thereto, as Guarantors, Lenders, Goldman Sachs Credit Partners L.P.
("GSCP"), as Syndication Agent, Toronto Dominion (Texas), Inc., as
Administrative Agent, Morgan Stanley Senior Funding, Inc., as Documentation
Agent, and GSCP and TD Securities (USA) Inc., as Co-Lead Arrangers.
Pursuant to Section 5.9 of the Credit Agreement, the undersigned
hereby:
(a) agrees that this Counterpart Agreement may be attached to the
Credit Agreement and that by the execution and delivery hereof, the undersigned
becomes a Guarantor under the Credit Agreement and agrees to be bound by all of
the terms thereof;
(b) represents and warrants that each of the representations and
warranties set forth in the Credit Agreement and each other Credit Document and
applicable to the undersigned are true, correct and complete in all material
respects on and as of the date hereof to the same extent as though made on and
as of the date hereof, except to the extent such representations and warranties
specifically relate to an earlier date, in which case such representations and
warranties shall have been true, correct and complete in all material respects
on and as of such earlier date;
(c) no event has occurred or is continuing as of the date hereof, or
will result from the transactions contemplated hereby on the date hereof, that
would constitute an Event of Default or a Default;
(d) agrees, subject to the provisions of Section 7.2 of the Credit
Agreement, to irrevocably and unconditionally guaranty the due and punctual
payment in full of all Obligations when the same shall become due, whether at
stated maturity, by required prepayment, declaration, acceleration, demand or
otherwise (including amounts that would become due but for the operation of the
automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section
362(a)) and in accordance with Section 7 of the Credit Agreement; and
(e) subject to the terms and conditions of the Pledge and Security
Agreement, Grantor hereby (i) agrees that this Counterpart Agreement may be
attached to the Pledge and Security Agreement, (ii) agrees that such Grantor
will comply with all the terms and conditions of the Pledge and Security
Agreement as if it were an original signatory thereto, and (iii) grants to
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<PAGE> 224
Secured Party a security interest in all of Grantor's right, title and interest
in and to [THE ASSETS LISTED ON SUPPLEMENTAL SCHEDULE 1 ATTACHED HERETO] (the
"Additional Collateral"), in each case whether now or hereafter existing or in
which Grantor now has or hereafter acquires an interest and wherever the same
may be located. The Additional Collateral shall be deemed to be part of the
Collateral and hereafter subject to each of the terms and conditions of the
Pledge and Security Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Counterpart
Agreement to be duly executed and delivered by its duly authorized officer as of
______________.
[NAME OF SUBSIDIARY]
By:
--------------------------------------
Name:
---------------------------------
Title:
--------------------------------
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<PAGE> 225
EXHIBIT M TO
CREDIT AGREEMENT
[Allegiance Letterhead]
[date]
[Local Telephone Company]
[address]
Reference is made to the Interconnection Agreement dated [ ] between
[Local Telephone Company] and [____________] (the "Agreement").
Pursuant to Section [ ] of the Agreement, Allegiance requests your
consents to the Assignment of the Agreement to Toronto Dominion (Texas), Inc.,
its successors and assigns ("TD"), as administrative agent on behalf of secured
lenders as collateral for a financing to be entered into on or about April 1,
1999. In the event of a default by Allegiance or any of its subsidiaries under
the financing, [Local Telephone Company] agrees that TD, as administrative agent
or its designees may exercise any of the rights and privileges of Allegiance
under the Agreement, including entering into [Local Telephone Company's]
premises, and may request an assignment of the Agreement to a third party. [As
provided in Section [ ] of the Agreement, your consent to such an assignment is
subject to the provision of reasonable evidence of the assignee's resources,
ability and authority to perform under the Agreement].
As you know, the FCC took action on March 18, 1999 to ensure local
competition and the reasonable cooperation of RBOCs in connection with
collocation arrangements. We therefore request your consent to the foregoing as
promptly as possible.
Very truly yours,
[ ]
----------------------
CONSENTED TO:
[Local Telephone Company]
- -------------------------
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