<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 23, 1999
Commission file number 333-64717
US XCHANGE, L.L.C.
(Exact name of registrant as specified in its charter)
MICHIGAN 38-33505418
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
20 MONROE AVENUE NW, SUITE 450, GRAND RAPIDS, MICHIGAN 49503
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (616) 493-7000
<PAGE> 2
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
C. Exhibits
4.2 Schedules to Loan and Security Agreement dated as of
April 29, 1999, among US Xchange Finance Company,
L.L.C., as Borrower, US Xchange, L.L.C. and certain
operating subsidiaries of US Xchange, L.L.C., as
Guarantors, and General Electric Capital Corporation,
as Administrative Agent and lender thereunder
2
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
US XCHANGE, L.L.C.
August 23, 1999 By: /s/ Richard Postma
--------------------------------------
Richard Postma, Co-Chairman and Chief Executive Officer
August 23, 1999 By: /s/ JJ Miglore
--------------------------------------
Joseph Miglore, Executive Vice President and
Chief Financial Officer (Principal Financial Officer and
Principal Accounting Officer)
3
<PAGE> 4
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------------ ------------------------------------------------------
4.2 Schedules to Loan and Security Agreement dated as of
April 29, 1999, among US Xchange Finance Company,
L.L.C., as Borrower, US Xchange, L.L.C. and certain
operating subsidiaries of US Xchange, L.L.C., as
Guarantors, and General Electric Capital Corporation,
as Administrative Agent and lender thereunder
4
<PAGE> 1
EXHIBIT. 4.2
SCHEDULE 1
LOAN PARTY INFORMATION AND CERTAIN DEFINED TERMS
<TABLE>
<CAPTION>
LOAN PARTY FEIN MEMBER(S)
<S> <C> <C>
US Xchange, L.L.C. ("Holdings") 38-33505418 Ronald H. VanderPol
Richard Postma
US Xchange Finance Company, L.L.C. ("Borrower") 36-4289909 Holdings
US Xchange of Wisconsin, L.L.C. 38-3342305 Borrower
US Xchange of Illinois, L.L.C. 38-3388717 Borrower
US Xchange of Indiana, L.L.C. 38-3377167 Borrower
US Xchange of Michigan, L.L.C. 38-3442002 Borrower
c/o US Xchange, L.L.C. With a copy to:
20 Monroe Avenue N.W., Suite 450 Bryan Cave LLP
Grand Rapids, MI 49503 211 North Broadway, Suite 3600
Attention: Vice President - Finance St. Louis, MO 63102
Telephone No.:(616) 493-7000 Attention: John P. Denneen, Esq.
Telecopy: (616) 493-7007 Telephone No.: (314) 259-2265
Telecopy: (314) 259-2020
</TABLE>
US XCHANGE, L.L.C., a Michigan limited liability company
- Articles of Organization filed August 5, 1996
- Operating Agreement dated as of August 1, 1996
US XCHANGE FINANCE COMPANY, L.L.C., a Delaware limited liability company
- Certificate of Formation filed April 13, 1999
- Limited Liability Company Agreement dated as of April 28, 1999
US XCHANGE OF WISCONSIN, L.L.C., a Delaware limited liability company
- Certificate of Formation filed March 14, 1997, as corrected on October
27, 1997 and May 4, 1998
- Limited Liability Company Agreement dated as of April 28, 1999
US XCHANGE OF ILLINOIS, L.L.C., a Delaware limited liability company
- Certificate of Formation filed November 13, 1996, as corrected on March
3, 1998
- Limited Liability Company Agreement dated as of April 28, 1999
US XCHANGE OF INDIANA, L.L.C., a Delaware limited liability company
- Certificate of Formation filed November 13, 1996, as corrected on October
27, 1997
- Limited Liability Company Agreement dated as of April 28, 1999
<PAGE> 2
US XCHANGE OF MICHIGAN, L.L.C., a Delaware limited liability company
- Certificate of Formation filed June 2, 1997, as corrected on October 9,
1998
- Limited Liability Company Agreement dated as of April 28, 1999
MARKETS
Wisconsin Indiana Michigan Illinois
- --------- ------- -------- --------
Appleton South Bend Grand Rapids Rockford
Neenah Elkhart Kalamazoo
Oshkosh Ft. Wayne Battle Creek
Green Bay Bloomington Muskegon
DePere Evansville Holland
Wausau Indianapolis Grand Haven
Milwaukee Muncie
Racine Lafayette
Kenosha Anderson
Madison Kokomo
Janesville Marion
Beloit
- - See Schedule 4.5 for list of all Regulatory Authorizations necessary to
provide telecommunications services by the Loan Parties
<PAGE> 3
SCHEDULE 2.5
LOAN AMORTIZATION
The aggregate outstanding amount of the Loan on the Commitment
Termination Date (the "Amortization Amount") shall be repayable in installments
according to the following schedule:
YEAR ENDED % OF AMORTIZATION AMOUNT
April 30, 2000 0%
April 30, 2001 0%
April 30, 2002 0%
April 30, 2003 10%
April 30, 2004 15%
April 30, 2005 20%
April 30, 2006 25%
April 30, 2007 30%
The amount due for each year shall be payable in equal quarterly installments on
the last day of January, April, July and October, commencing July 31, 2002.
Example: Thus, if $20,000,000 is outstanding on April 30, 2002, $500,000
would be payable on each of 7/31/02, 10/31/02, 1/31/03 and 4/30/03.
<PAGE> 4
SCHEDULE 2.15
COMMITMENT FEES
The Commitment Fee shall be payable quarterly in arrears on the last day
of July, October, January and April of each year, commencing July 31, 1999 and
ending on April 30, 2001, at the rate shown below:
Unused Commitment Rate
$33,333,333.33 or more 1.25%
Less than $33,333,333.33 but more
than $16,666,666.67 1.00%
$16,666,666.67 or less 0.75%
<PAGE> 5
SCHEDULE 4.4
REQUIRED CONSENTS OF GOVERNMENTAL AUTHORITIES
PUCS::
- ------
Indiana Utility Regulatory Commission - Local and interchange resale and
facilities based authorizations
CITY PERMITS:
- -------------
City of Menasha, WI - Joint Use Pole Attachment Agreement
City of Portage, WI - Telecommunications Permit
City of Green Bay, WI - Permit and License Agreement for Right of Way
City of Madison, WI - Right of Way Permit and License Agreement
City of Elkhart, IN - Interim Telecommunications Permit Agreement
City of Fort Wayne, IN - Interim Rights-of-Way Franchise Agreement
City of Mishakawa, IN - Interim Telecommunications Permit Agreement,
Joint Pole Use Attachment Agreement
City of South Bend, IN - Interim Telecommunications Permit Agreement
City of Battle Creek, MI - Interim Telecommunications Agreement
City of Grand Rapids, MI - Telecommunications Permit
City of Kalamazoo, MI - Telecommunications Permit
Pursuant to s. 253 of the Telecommunications Act of 1996,
no State or local statute or regulation or other State or local legal
requirement, may prohibit or have the effect of prohibiting the ability of any
entity to provide any interstate or intrastate telecommunications service.
s. 253 further provides that access to public rights of way must be made
available by local municipalities on a competitively neutral and
non-discriminatory basis. Accordingly, the foregoing municipal permits and
agreements should be obtainable by any interstate or intrastate
telecommunications provider, subject to payment of fair and reasonable
compensation to the applicable municipality and subject to requirements
necessary to protect the public safety and welfare.
<PAGE> 6
SCHEDULE 4.5
REGULATORY AUTHORIZATIONS
FCC
Interstate Access Tariff issued June 25, 1998, effective June 26, 1998, by
Holdings (US Xchange of Wisconsin, L.L.C., US Xchange of Illinois, L.L.C., US
Xchange of Indiana, L.L.C. and US Xchange of Michigan, L.L.C. concurred)
Section 214 Global Authority to Provide International Telecommunications
Services issued to Holdings, dated December 16, 1996
Interstate End User Tariff issued March 12, 1998, effective March 13, 1998, by
Holdings
<TABLE>
<CAPTION>
PUCS
<S> <C>
Public Service Commission of Local Exchange - May 22, 1997 (docket No. 6023-NC-100)
Wisconsin Interexchange - May 22, 1997 (docket No. 6023-NC-100)
Illinois Commerce Local Exchange - June 25, 1997 (docket No. 97-0106)
Commission Interexchange - June 25, 1997 (docket No. 97-0106)
Indiana Utility Regulatory Local Resale - May 8, 1997 (Cause No. 40779)
Commission Local Facilities Based - July 30, 1997 (Cause No. 40780)
Interexchange ReSale - May 8, 1997 (Cause No. 40778)
Interexchange - Facilities Based - March 18, 1998 (Cause No. 41102)
Michigan Public Service Local Exchange - November 7, 1997 (Docket No, U-11493)
Commission Interexchange - non-regulated
</TABLE>
CITY PERMITS
WISCONSIN:
Permit and License Agreement for the Use of City Rights-of-Way by and between US
Xchange of Wisconsin, L.L.C. and the City of Madison, Wisconsin.
Permit and License Agreement for the Use of City Rights-of-Way, dated as
November 26, 1997, between Holdings and the City of Green Bay, Wisconsin
(assigned to US Xchange of Wisconsin, L.L.C. by that certain Assignment and
Assumption Agreement dated as of April 29, 1999).*
Joint Use Pole Attachment Agreement, dated as of May 21, 1998, by and between
the City of Menasha, Wisconsin, acting by and through the Menasha Electric and
Water Utilities Commission and US Xchange of Wisconsin, L.L.C.
*Effectiveness of assignment is subject to first obtaining proper consents.
See Schedule 6.2.
<PAGE> 7
Conduit Occupancy License Agreement, executed November 11, 1998, by and between
the City of Milwaukee, Wisconsin and US Xchange of Wisconsin, L.L.C.
INDIANA:
Interim Telecommunications Permit Agreement, dated August 18, 1998, between US
Xchange of Indiana, L.L.C. and the City of Elkhart, Indiana.
Interim Rights-of-Way Franchise Agreement, dated February 23, 1997, by and
between US Xchange of Indiana, L.L.C. and the City of Fort Wayne, Indiana.
Interim Telecommunications Permit Agreement, dated March 17, 1998, by and
between US Xchange of Indiana, L.L.C. and the City of Mishawaka, Indiana.
Agreement for the Joint Use of Poles, dated as of February 23, 1998, between the
Board of Public Works and Safety of Mishawaka, Indiana for and on behalf of its
electric utility and US Xchange of Indiana, L.L.C.
Interim Telecommunications Permit Agreement made as of March 2, 1998 by and
between US Xchange of Indiana, L.L.C. and the City of South Bend, Indiana.
MICHIGAN:
Interim Telecommunications Agreement between Holdings and the City of Battle
Creek, Michigan (assigned to US Xchange of Michigan, L.L.C. by that certain
Assignment and Assumption Agreement, dated as of April 28, 1999).*
Telecommunications Permit between the City of Kalamazoo, Michigan and Holdings
executed as of October 6, 1998 (assigned to US Xchange of Michigan, L.L.C. by
that certain Assignment and Assumption Agreement, dated as of April 28, 1999).*
Telecommunications Permit for US Xchange, L.L.C. between US Xchange of Michigan,
L.L.C. and the City of Portage, Michigan, undated.
Telecommunications Provider's Permit granted to Holdings by the City of Grand
Rapids, Michigan, dated June 9, 1998 (assigned to US Xchange of Michigan, L.L.C.
by that certain Assignment and Assumption Agreement, dated as of April 28,
1999).*
STATE QUALIFICATIONS:
Qualification in Wisconsin as a foreign limited liability company by US Xchange
of Wisconsin, L.L.C., dated as of March 17, 1997.
*Effectiveness of assignment is subject to first obtaining proper consents.
See Schedule 6.2.
<PAGE> 8
Qualification in Illinois as a foreign limited liability company by US Xchange
of Illinois, L.L.C., filed as of December 26, 1996.
Authorization to Transact Business in the State of Indiana, issued on December
23, 1996, to US Xchange of Indiana, L.L.C. by the Office of the Secretary of
State of Indiana.
Certificate of Authority to Transact business in Michigan, issued to US Xchange
of Michigan, L.L.C. on June 19, 1997 by the Michigan Department of Consumer and
Industry Services.
Certificate of Authority to Transact business in Michigan, issued to US Xchange
Finance Company, L.L.C. on April 27, 1999 by the Michigan Department of Consumer
and Industry Services.
<PAGE> 9
SCHEDULE 4.6
AGREEMENTS AND OTHER DOCUMENTS
(a) Supply agreements and purchase agreements not terminable within 60 days
following written notice and involving a transaction in excess of $1 million per
year:
- Product Agreement between Holdings and Lucent Technologies Inc. (Contract
No. LNM970123CRUSX), first executed as of April 4, 1997 as amended by
Amendment Number One (executed as of August 13, 1997), Amendment Number Two
(executed as of January 11, 1999), and Amendment Number 3 (first executed
as of April 9, 1999) thereof.
(b) Any lease of:
- equipment
- furniture and fixtures
- switches
- towers
- electronics
- transmitting equipment
- Software
- fiber optic cables and other cabling
- hardware
- devices and components
- any and all additions, substitutions and replacement to or of any
of the foregoing, together with all attachments, components,
parts, improvements, upgrades and accessions installed thereon or
affixed thereto
having remaining a term of one year or longer and requiring aggregate rental and
other payments in excess of $500,000 per year:
1) Service Agreements between Holdings and Time Warner Communications, dated
as of December 15, 1997 and January 29, 1998.
- - See Schedule 4.31.
(c) All consents, licenses, notices, approvals, authorizations, filings, orders,
registrations and permits required by any Governmental Authority for the
construction or operation of a Network (excluding Regulatory Authorizations),
except those the absence of which in the aggregate would not have a material
adverse effect:
- - See City Permits on Schedule 4.5.
*Effectiveness of assignment is subject to first obtaining proper consents.
See Schedule 6.2.
<PAGE> 10
(d) Instruments or documents evidencing indebtedness and any security interest
granted by such Loan Party:
1) Indenture dated as of June 25, 1998 between Holdings and The Bank of
New York, as Trustee, with respect to $200 million 15% Senior Notes due
2008 and related Collateral Pledge and Security Agreement.
2) Loan Agreement dated August 28, 1997 between Holdings and Comerica Bank
and related Collateral Documents.
(e) Instruments and agreements evidencing the issuance of any equity securities,
warrants, rights or options to purchase equity securities of the Borrower or any
Restricted Subsidiary:
- - Limited Liability Company Agreements:
- US Xchange Finance Company, L.L.C. dated April 28, 1999
- US Xchange of Wisconsin, L.L.C. dated April 28, 1999
- US Xchange of Illinois, L.L.C. dated April 28, 1999
- US Xchange of Indiana, L.L.C. dated April 28, 1999
- US Xchange of Michigan, L.L.C. dated April 28, 1999
(f) Agreements and documents in connection with a Network or its acquisition,
construction or operation, including all management and maintenance agreements,
agreements for storage or warehousing of Collateral, Site Leases,
interconnection agreements and easements, use agreements, contracts, deeds,
collocation agreements, licenses, leases, agreements documents or means pursuant
to which any Loan Party acquires Right of Way:
US XCHANGE OF WISCONSIN, L.L.C.
1) Interconnection Agreement [Wisconsin], executed as of July 17, 1997, by
and between Ameritech Information Industry Services and Holdings.
(assigned to US Xchange of Wisconsin, L.L.C. by that certain Assignment
and Assumption Agreement dated as of April 29, 1999).*
2) Interconnection and Unbundling Agreement [Wisconsin], executed May 1,
1998, between GTE North Incorporated and Holdings (assigned to US
Xchange of Wisconsin, L.L.C. by that certain Assignment and Assumption
Agreement dated as of April 29, 1999).
3) Fiber Optic Exchange Agreement, dated as of September 25, 1998, by and
between Norlight Telecommunications, Inc. and Holdings (assigned to US
Xchange of Wisconsin, L.L.C. by that certain Assignment and Assumption
Agreement dated as of April 29, 1999).
4) Permit and License Agreement for the Use of City Rights-of-Way by and
between US Xchange of Wisconsin, L.L.C. and the City of Madison,
Wisconsin.
5) Permit and License Agreement for the Use of City Rights-of-Way, dated
as November 26, 1997, between Holdings and the City of Green Bay,
Wisconsin (assigned to US Xchange of Wisconsin, L.L.C. by that certain
Assignment and Assumption Agreement dated as of April 29, 1999).*
*Effectiveness of assignment is subject to first obtaining proper consents.
See Schedule 6.2.
<PAGE> 11
6) Licensing Agreement for Attachment of Fiber Optic Cable to Poles, dated
as of January 20, 1998, by and between Madison Gas and Electric and
Holdings (assigned to US Xchange of Wisconsin, L.L.C. by that certain
Assignment and Assumption Agreement dated as of April 29, 1999).*
7) Joint Use Agreement, dated December 15, 1997, between US Xchange of
Wisconsin, L.L.C. and Wisconsin Electric Power Company.
8) Joint Use Pole Attachment Agreement, dated as of May 21, 1998, by and
between the City of Menasha, Wisconsin, acting by and through the
Menasha Electric and Water Utilities Commission and US Xchange of
Wisconsin, L.L.C.
9) Pole Lease Agreement, executed as of January 27, 1999, between
Wisconsin Power and Light Company and US Xchange of Wisconsin, L.L.C.
10) Conduit Occupancy License Agreement, undated, between the City of
Milwaukee and US Xchange of Wisconsin, L.L.C.
11) Conduit Occupancy Agreement between US Xchange of Wisconsin, L.L.C. and
Time Warner Entertainment Company, L.P. through its Green Bay Division.
12) Wire Line Crossing Agreement, dated as of May 4, 1998, by and between
Union Pacific Railroad Company and US Xchange of Wisconsin, L.L.C.
13) Resale Agreement for the Provision of Paging Services, executed as of
February 16, 1998, by and between New-Cell, Inc. and its Managed
Properties and US Xchange of Wisconsin, L.L.C.
US XCHANGE OF INDIANA, L.L.C.
1) Interconnection Agreement [Indiana], executed as of July 17, 1997, by
and between Ameritech Information Industry Services and Holdings
(assigned to US Xchange of Indiana, L.L.C. by that certain Assignment
and Assumption Agreement dated as of April 29, 1999).*
2) Interconnection Agreement [Indiana], executed as of March 12, 1998, by
and between Contel of the South, Inc. d/b/a/ GTE Systems of the South
and GTE North Incorporated and Holdings (assigned to US Xchange of
Indiana, L.L.C. by that certain Assignment and Assumption Agreement
dated as of April 29, 1999).
3) Agreement for the Joint Use of Poles, dated as of February 23, 1998,
between the Board of Public Works and Safety of Mishawaka, Indiana for
and on behalf of its electric utility and US Xchange of Indiana, L.L.C.
4) Pole Attachment License Agreement, executed September 15, 1998, by and
between Southern Indiana Gas and Electric Company and US Xchange of
Indiana, L.L.C.
5) Request/Permit/Authorization to Attach to GTE Poles or Occupy GTE
Conduit [Elkhart, IN], dated as of August 11, 1998.
6) Agreement, effective as of November 16, 1998, by and between Northern
Indiana Public Service Company and US Xchange of Indiana, L.L.C.
7) Pole Attachment License Agreement, dated as of December 1, 1997,
between Indiana Michigan
*Effectiveness of assignment is subject to first obtaining proper consents.
See Schedule 6.2.
<PAGE> 12
Power Company and US Xchange of Indiana,L.L.C.
8) Telecommunications Pole Attachment Agreement, dated May 4, 1998,
between US Xchange of Indiana, L.L.C. and PSI Energy, Inc.
9) Underground Facilities Locating and Marking Service Agreement, dated as
of December 1, 1998, between SM&P Utility Resources, Inc. and US
Xchange of Indiana, L.L.C.
10) Interim Rights-of-Way Franchise Agreement, dated February 23, 1997, by
and between US Xchange of Indiana, L.L.C. and the City of Fort Wayne,
Indiana.
11) Wireline Crossing Agreement, dated as of September 1, 1998, by and
between CSX Transportation, Inc. and US Xchange of Indiana, L.L.C.
US XCHANGE OF ILLINOIS, L.L.C.
1) Interconnection Agreement [Illinois], dated as of July 17, 1997, by and
between Ameritech Information Industry Services and Holdings (assigned
to US Xchange of Illinois, L.L.C. by that certain Assignment and
Assumption Agreement dated as of April 29, 1999).*
2) Interconnection, Resale and Unbundling Agreement, executed as of
February 5, 1999, between GTE South Incorporated, GTE North
Incorporated and US Xchange of Illinois, L.L.C.
3) Agreement for Indefeasible Right to Use of Duct and Dark Fiber, dated
March 26, 1999, by and between Holdings and the Illinois State Toll
Highway Authority (assigned to US Xchange of Illinois, L.L.C. by that
certain Assignment and Assumption Agreement dated as of April 29,
1999).*
4) Fiber Installation Agreement, executed as of April 7, 1999, between
Holdings and MFS Network Technologies, Inc. (assigned to US Xchange of
Illinois, L.L.C. by that certain Assignment and Assumption Agreement
dated as of April 29, 1999).
US XCHANGE OF MICHIGAN, L.L.C.
1) Interconnection Agreement [Michigan], executed as of July 17, 1997, by
and between Ameritech Information Industry Services and Holdings
(assigned to US Xchange of Michigan, L.L.C. by that certain Assignment
and Assumption Agreement dated as of April 29, 1999).*
2) Pole Attachment Agreement, effective January 1, 1999, by and between
Consumers Energy Company and US Xchange of Michigan, L.L.C.
HOLDINGS
1) Carrier Agreement, executed as of September 15, 1997, between MCI
Telecommunications Corporation and Holdings.
2) Fiber Optic Joint Construction and Exchange Agreement, effective as of
November 12, 1998, by and between Holdings and McCleodUSA.
*Effectiveness of assignment is subject to first obtaining proper consents.
See Schedule 6.2.
<PAGE> 13
3) Fiber Optic Construction and Exchange Agreement, dated as of July 6,
1998, by and between Holdings and McCleodUSA.
4) Fiber Optic Construction Agreement and Grant of IRU, effective as of
March 11, 1999, by and between Norlight Telecommunications, Inc. and
Holdings.
5) Telecommunications Service Agreement, dated as of July 7, 1997, as
amended by Amendment No. 1, effective as of August 19, 1997, Amendment
No. 2, executed as of June 30, 1998 and Amendment No. 3, executed as of
March 17, 1999, by and between IXC Communications Services, Inc. (as
successor to IXC Long Distance Services, Inc.) and Holdings.
- See Schedule 4.6(a).
- Site and Site Leases - See Schedule 4.18.
- See Schedule 4.31.
(g) Change of Control Restrictions:
1) Joint Use Pole Attachment Agreement, dated as of May 21, 1998, by and
between the City of Menasha, Wisconsin, acting by and through the
Menasha Electric and Water Utilities Commission and US Xchange of
Wisconsin, L.L.C.
2) Pole Lease Agreement, executed as of January 27, 1999, between
Wisconsin Power and Light Company and US Xchange of Wisconsin, L.L.C.
3) Wireline Crossing Agreement, dated as of May 4, 1998, by and between
Union Pacific Railroad Company and US Xchange of Wisconsin, L.L.C.
4) Conduit Occupancy Agreement between US Xchange of Wisconsin, L.L.C. and
Time Warner Entertainment Company, L.P. through its Green Bay Division.
5) Joint Use Agreement, dated as of December 15, 1997, between US Xchange
of Wisconsin, L.L.C. and Wisconsin Electric Power Company.
6) Licensing Agreement for Attachment of Fiber Optic Cable to Poles, dated
as of January 20, 1998, by and between Madison Gas and Electric and
Holdings.
7) Wireline Crossing Agreement, dated as of September 1, 1998, by and
between CSX Transportation, Inc. and US Xchange of Indiana, L.L.C.
8) Carrier Agreement, executed as of September 15, 1997, between MCI
Telecommunications Corporation and Holdings.
(h) Restrictions on Assignment:
US XCHANGE OF WISCONSIN, L.L.C.
- See items listed under "US Xchange of Wisconsin, L.L.C." on Schedule
4.5.
- See items listed under "US Xchange of Wisconsin, L.L.C." on Schedule
4.6(f).
*Effectiveness of assignment is subject to first obtaining proper consents.
See Schedule 6.2.
<PAGE> 14
US XCHANGE OF INDIANA, L.L.C.
- See items listed under "US Xchange of Indiana, L.L.C." on Schedule 4.5.
- See items listed under "US Xchange of Indiana, L.L.C." Schedule 4.6(f).
US XCHANGE OF ILLINOIS, L.L.C.
- See items listed under "US Xchange of Illinois, L.L.C." on Schedule
4.6(f).
US XCHANGE OF MICHIGAN, L.L.C.
- See items listed under "US Xchange of Michigan, L.L.C." on Schedule
4.5.
- See items listed under "US Xchange of Michigan, L.L.C." on Schedule
4.6(f).
HOLDINGS
- See Schedule 4.6(a).
- See Schedule 4.6(b).
- See items 1-4 and bulleted items listed on Schedule 4.6(f)
*Effectiveness of assignment is subject to first obtaining proper consents.
See Schedule 6.2.
<PAGE> 15
SCHEDULE 4.8
RESTRICTIONS ON INDEBTEDNESS
- See Schedule 4.6(d)(1).
<PAGE> 16
SCHEDULE 4.9
GOVERNMENT CONTRACTS
None.
<PAGE> 17
SCHEDULE 4.10
FINANCIAL STATEMENTS
1) See attached Form 10-K for audited Financial Statements of Holdings as of
and for the year ended December 31, 1998.
2) See attached Business Plan and Projections.
<PAGE> 18
SCHEDULE 4.13
EXISTING INSURANCE
See Attached.
<PAGE> 19
SCHEDULE 4.16
LABOR MATTERS
1) Employment Agreement between Holdings and Lee Thibaudeau, dated as of March
3, 1997.
2) Employment Agreement between Holdings and Daniel Fabry, dated as of February
27, 1997.
3) Employment Agreement between Holdings and Ricky Pigeon, dated as of March 29,
1997.
<PAGE> 20
SCHEDULE 4.17
LITIGATION
None.
<PAGE> 21
SCHEDULE 4.18
SITE AND SITE LEASES; REAL PROPERTY; EQUIPMENT LOCATION
(I) SITE AND SITE LEASES:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
CITY LEASE TYPE LEASE ADDRESS
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Appleton, WI office Lease Agreement effective 3100 North Ballard Road
February 20, 1998 Appleton, WI 54911
by and between Wilfred and
Lorna Van Handel and US Xchange of
Wisconsin, L.L.C.
- ------------------------------------------------------------------------------------------------------------------
Appleton, WI switch Lease of Equipment and Office Space 10 W. College Ave. Suite 116 & 117
effective as of July 16, 1997, by Appleton, WI 54911
and between NAC Corp. and US
Xchange of Wisconsin, L.L.C.
- ------------------------------------------------------------------------------------------------------------------
Bloomington, IN office Lease executed February 23, 1998, 320 West Eighth St. Showers Plaza,
by and between CFC Inc. and US Ste. 216
Xchange of Indiana, L.L.C. Bloomington, IN 47404
- ------------------------------------------------------------------------------------------------------------------
Bloomington, IN switch Commercial Lease executed March 31, 2599 W. Vernal Pike, Suite C,
1998, by and between Tapp Road, LLC Bloomington, IN 47404
and US Xchange of Indiana, L.L.C.
- ------------------------------------------------------------------------------------------------------------------
Elkhart, IN switch Land Lease dated July, 1, 1998, by 621 S. Fourth Street
and between GFH, Inc. and Holdings. Elkhart, IN 46516
- ------------------------------------------------------------------------------------------------------------------
Evansville, IN office Lease Agreement executed June 18, 101 NW First Street, Suite 201
1998, by and between Mantis Evansville, IN 47708
Corporation and US Xchange of
Indiana, L.L.C.
- ------------------------------------------------------------------------------------------------------------------
Evansville, IN switch Lease executed as of April 15, 5727 Old Boonville Highway
1998, by and between Woodward, LLC Evansville, IN 47715
and US Xchange of Indiana, L.L.C.
- ------------------------------------------------------------------------------------------------------------------
Fort Wayne, IN office Office Lease dated April 27, 1998, 2990 E. Coliseum Blvd., Suite 100
by and between 3000 Coliseum Fort Wayne, IN 46805
Investors LLC and US Xchange of
Indiana, L.L.C.
- ------------------------------------------------------------------------------------------------------------------
Fort Wayne, IN switch Office Lease dated February 6, 2730 E. Coliseum Blvd., Suite 100
1998, by and between 3000 Coliseum Fort Wayne, IN 46805
Investors LLC and US Xchange of Indiana,
L.L.C.
- ------------------------------------------------------------------------------------------------------------------
Grand Rapids, MI corporate None. See Item 1 to Schedule 4.41. 20 Monroe Avenue NW, Suite 450
headquarters Grand Rapids, MI 49503
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 22
<TABLE>
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
Grand Rapids, MI office Lease dated May 8, 1997, by and 44 Grandville SW, Suite 400
between Market Square Group, L.L.C. Grand Rapids MI 49503
and Holdings, as amended by
Amendment No. 1, executed January
6, 1998.
- ------------------------------------------------------------------------------------------------------------------
Grand Rapids, MI switch Lease Agreement dated December 22, 400 76th St. SW, Suites 1 and 2
1998, by and between 76 Business Grand Rapids, MI 49509
Complex LLC and US Xchange of
Michigan, L.L.C.
- ------------------------------------------------------------------------------------------------------------------
Green Bay, WI switch Lease dated as of December 18, 1997 529 S. Jefferson St.
by and between Jadeite, Inc. and Green Bay, WI 54301
Holdings.
- ------------------------------------------------------------------------------------------------------------------
Green Bay, WI office Lease Agreement dated as of August 2150 Gross Avenue
1, 1997 by and between Focus Group Green Bay, WI 54304
LLP and US Xchange of Wisconsin, L.L.C.
- ------------------------------------------------------------------------------------------------------------------
Green Bay, WI office Lease Agreement dated March 1, 2150 Holmgrem Way
1998, by and between Focus Group Green Bay, WI 54304
LLP and US Xchange of Wisconsin, L.L.C.
- ------------------------------------------------------------------------------------------------------------------
Kalamazoo, MI switch Lease Agreement dated August 3, 4570 Commercial Drive, Suite G,
1998, by and between Holdings and Portage, MI 49002
Lageoc, Ltd.
- ------------------------------------------------------------------------------------------------------------------
Kalamazoo, MI switch Land Lease dated February 26, 1999, 131 US 131 S.
by and between Steve and Twilla White Pigeon, MI 49099
Bornman, d.b.a. White Pigeon Mini
Storage and US Xchange of Michigan,
L.L.C.
- ------------------------------------------------------------------------------------------------------------------
Kalamazoo, MI office Lease Agreement executed as of 259 E. Michigan Ave., Suite 407
February 4, 1999, by and between Kalamazoo, MI 49007
Main Street East, L.L.C. and US
Xchange of Michigan, L.L.C.
- ------------------------------------------------------------------------------------------------------------------
Layfayette, IN switch Commercial Lease Agreement dated 2304 Brothers Drive, Suite E & F
May, 20, 1998 by and between Lafayette, IN 47905
NOR-NIC Investments and US Xchange
of Indiana, L.L.C.
- ------------------------------------------------------------------------------------------------------------------
Layfayette, IN office Lease Agreement dated as of July 1, 8 North 3rd Street, Suite 302
1998, by and between Earl & Hatcher Lafayette, IN 47901
Block Partnership and US Xchange of
Indiana, L.L.C.
- ------------------------------------------------------------------------------------------------------------------
Madison, WI office Office Lease dated August, 1998, by One S. Pinckney Street, Suite 510
and between Firstar Bank Wisconsin Madison, WI 53701
and US Xchange of Wisconsin, L.L.C.
- ------------------------------------------------------------------------------------------------------------------
Madison, WI switch Lease Agreement dated November, 222 West Washington Bldg, Suite 1,
1997, by and between West Madison, WI 53704
Washington Associates LLC and US
Xchange of Wisconsin, L.L.C.
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 23
<TABLE>
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
Milwaukee, WI switch Office Space Lease dated April 16, 744 N 4th Street, Suite 255
1997 by and between Towne Realty, Milwaukee, WI 53203
Inc. and US Xchange L.L.C., amended
by First Amendment dated January 9,
1998.
- ------------------------------------------------------------------------------------------------------------------
Milwaukee, WI switch Office Space Lease dated November 324 E. Wisconsin Avenue, Suite 1006
4,1998 by and between Towne Realty, Milwaukee, WI 53202
Inc. and US Xchange of Wisconsin,
L.L.C., amended by First Amendment
dated November 16, 1998.
- ------------------------------------------------------------------------------------------------------------------
Milwaukee, WI office Service Center Lease dated April 10101 Innovation Drive, Suite 100
20, 1999, by and between Wood Lake Milwaukee, WI 53226
L.L.C. and US Xchange of Wisconsin,
L.L.C.
- ------------------------------------------------------------------------------------------------------------------
Oshkosh, WI switch Lease Agreement dated September 18, 321 Pearl Ave.
1997, by and between US Xchange and Oshkosh, WI 54901
Dumke & Associates, L.L.C.
- ------------------------------------------------------------------------------------------------------------------
Rockford, IL switch Business Center Lease dated April 9934 N. Alpine Road, Suite 107,
27, 1998, by and between Willow Machesney Park, IL 61115
Creek Developers L.L.C. and US
Xchange of Illinois, L.L.C.
- ------------------------------------------------------------------------------------------------------------------
Rockford, IL office Lease dated May 19, 1998, by and 124 North Water St., Suite 303,
between Bank One N.A. Rockford and Rockford, IL 61107
US Xchange of Illinois, L.L.C.
- ------------------------------------------------------------------------------------------------------------------
South Bend, IN Sales Office Office Building Lease dated First Bank Building
December 16, 1997, by and between 205 W. Jefferson Blvd. Suite 100
1st Source Bank and US Xchange of South Bend, IN 46601
Indiana, L.L.C.
- ------------------------------------------------------------------------------------------------------------------
South Bend, switch Lease Agreement dated February 6, 221 Red Coach Drive, Ste. A
Mishawaka 1998, by and between US Xchange of Cambridge Office Plaza
Switch, Office, Indiana, L.L.C. and James Z. and Mishawaka, IN 46545
IN Christine E. Sieradzki.
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
(ii) OWNED REAL PROPERTY:
None
(iii) EQUIPMENT LIST:
See Attached.
<PAGE> 24
SCHEDULE 4.31
INTELLECTUAL PROPERTY
1) PCR Standard Software License Agreement, executed as of April 1, 1998,
by and between Professional Computing Resources, Inc. and Holdings.
2) PCR Standard Software License Agreement, executed as of July 7, 1997,
by and between Professional Computing Resources, Inc. and Holdings.
3) Oracle Server- Enterprise Edition and Web Developer Suite and Technical
Support purchase order dated November 11, 1997, executed by Holdings.
4) Master Software License and Services Agreement, effective March 3,
1998, by and between MetaSolv Software, Inc. and Holdings, as amended
by addenda dated February 20, 1998 and March 2, 1998.
5) Software Agreement (No. S294058), executed as of June 18, 1998, by and
between DSET Corporation and Holdings.
6) Software License Agreement between IXC Long Distance, Inc. and US
Xchange of Michigan, L.L.C., dated as of July 7, 1997.
7) Product Agreement between Holdings and Lucent Technologies Inc.
(Contract No. LNM970123CRUSX), first executed as of April 4, 1997 as
amended by Amendment Number One (executed as of August 13, 1997),
Amendment Number Two (executed as of January 11, 1999), and Amendment
Number 3 (first executed as of April 9, 1999) thereof.
8) Number Portability Administration Center/Service Management System
("NPAC/SMS") User Agreement, executed June 25, 1998 between Holdings
and Lockheed Martin IMS.
<PAGE> 25
SCHEDULE 4.32
ENVIRONMENTAL ASSESSMENTS
- Phase I Environmental Assessment, dated as of June 1, 1998, prepared by
Alt & Witzig Engineering, Inc. Environmental Division- Elkhart, IN
<PAGE> 26
SCHEDULE 4.33
SECURITY INTERESTS - RECORDINGS AND FILINGS
All recordings and filings necessary to create a perfected first priority
security interest in all right, title, estate and interest of each Loan Party in
the Collateral which may be perfected by filing:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
LOAN PARTY FILING OFFICE
- ------------------------------------------------------------------------------------------------------------
<S> <C>
HOLDINGS Michigan Secretary of State (including Transmitting Utility
BORROWER Filing)
County of Kent (Grand Rapids)
- ------------------------------------------------------------------------------------------------------------
US XCHANGE OF WISCONSIN, L.L.C. Wisconsin Secretary of State (including Transmitting Utility
Filing)
Michigan Secretary of State (including Transmitting Utility
Filing)
County of Kent, Michigan (Grand Rapids)
WISCONSIN COUNTIES:
County of Outagamie (Appleton)
County of Brown (Green Bay)
County of Dane (Madison)
County of Milwaukee (Milwaukee)
County of Winnebago (Oshkosh)
County of Calumet
County of Washington
- ------------------------------------------------------------------------------------------------------------
US XCHANGE OF INDIANA, L.L.C. Indiana Secretary of State (including Transmitting Utility
Filing)
Michigan Secretary of State (including Transmitting Utility
Filing)
County of Kent, Michigan (Grand Rapids)
INDIANA COUNTIES:
County of Monroe (Bloomington)
County of Elkhart (Elkhart)
County of Vanderburgh (Evansville)
County of Allen (Fort Wayne)
County of Tippecanoe (Lafayette)
County of St. Joseph (South Bend and Mishawaka)
- ------------------------------------------------------------------------------------------------------------
US XCHANGE OF ILLINOIS, L.L.C. Illinois Secretary of State (including Transmitting Utility
Filing)
Michigan Secretary of State (including Transmitting Utility
Filing)
County of Kent, Michigan (Grand Rapids)
ILLINOIS COUNTIES:
</TABLE>
<PAGE> 27
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
LOAN PARTY FILING OFFICE
- ------------------------------------------------------------------------------------------------------------
<S> <C>
County of Winnebago (Rockford)
- ------------------------------------------------------------------------------------------------------------
US XCHANGE OF MICHIGAN, L.L.C. Michigan Secretary of State (including Transmitting Utility
filing)
MICHIGAN COUNTIES:
County of Kalamazoo (Kalamazoo)
County of Kent (Grand Rapids)
- -------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 28
SCHEDULE 4.34
PLACE OF BUSINESS
LOAN PARTY ADDRESS
HOLDINGS 20 Monroe Avenue, N.W., Suite 450
Grand Rapids, Michigan 49503 (1)
US XCHANGE FINANCE COMPANY, 20 Monroe Avenue, N.W., Suite 450
L.L.C. Grand Rapids, Michigan 49503 (1)
US XCHANGE OF ILLINOIS, L.L.C. 20 Monroe Avenue, N.W., Suite 450
Grand Rapids, Michigan 49503 (2)
124 North Water Street, Suite 303
Rockford, Illinois 61107 (3)
US XCHANGE OF INDIANA, L.L.C. 20 Monroe Avenue, N.W., Suite 450
Grand Rapids, Michigan 49503 (2)
2990 E. Coliseum Blvd., Suite 100
Fort Wayne, Indiana 46805 (3)
US XCHANGE OF MICHIGAN, L.L.C. 20 Monroe Avenue, N.W., Suite 450
Grand Rapids, Michigan 49503 (2)
44 Grandville SW, Suite 400
Grand Rapids, Michigan 49503 (3)
US XCHANGE OF WISCONSIN, 20 Monroe Avenue, N.W., Suite 450
L.L.C. Grand Rapids, Michigan 49503 (2)
2150 Holmgrem Way
Green Bay, Wisconsin 54304 (3)
- ----------------------------
(1) Chief executive office and principal place of business
(2) Chief executive office
(3) Principal place of business
<PAGE> 29
SCHEDULE 4.35
LOCATION OF COLLATERAL
See Schedule 4.18(iii).
<PAGE> 30
SCHEDULE 4.40
ASSUMED NAMES
None.
<PAGE> 31
SCHEDULE 4.41
TRANSACTIONS WITH AFFILIATES
1) See Item 13 to Holdings' Annual Report on Form 10-K for the fiscal year
ended December 31, 1998.
2) US Xchange Directories, L.L.C. is a limited liability company owned by
R.H. VanderPol, the sons of R.H. VanderPol and R. Postma. US Xchange
Directories, L.L.C. has been formed to publish and distribute telephone
directories in Milwaukee, Wisconsin. Holdings assigned the lease for
its sales office in Milwaukee, Wisconsin, located at 10201 Innovation
Drive, Suite 100, to US Xchange Directories, L.L.C.
<PAGE> 32
SCHEDULE 5.1
CLOSING CERTIFICATES
The Secretary of State of Illinois has not issued a
Certificate of Good Standing for US Xchange of Illinois, L.L.C. because the
records of the Secretary of State of Illinois do not reflect that US Xchange of
Illinois, L.L.C. has filed its 1998 limited liability company annual report with
the Illinois Secretary of State by its due date (December 1, 1998). We have been
informed by US Xchange of Illinois, L.L.C. that it filed the requisite annual
report on or about November 18, 1998, but that the office of the Illinois
Secretary of State has not as yet reflected its receipt of this report on its
records. Under Illinois law (805 ILCS 180/50-15), a limited liability company
which is not in good standing is potentially liable for fines in the amount of
$100, plus $50 for each month in which the company is not in good standing, as
well as limitations on the ability of the company to make filings with the
Illinois Secretary of State.
<PAGE> 33
SCHEDULE 6.2
POST-CLOSING ITEMS
1) US Xchange of Indiana, L.L.C. shall deliver to the Administrative Agent
all Regulatory Authorizations, legal opinions, financing statements and
other documents as reasonably requested by the Administrative Agent in
order for US Xchange of Indiana, L.L.C. to become a Subsidiary
Guarantor by August 31, 1999.
2) US Xchange of Illinois, L.L.C. shall deliver a Certificate of Good
Standing for the State of Illinois to the Administrative Agent by June
30, 1999.
3) The Loan Parties shall deliver a listing of all material assets of each
Loan Party as of the Closing Date as required by Section 5.3(i) to the
Administrative Agent by May 31, 1999.
4) The Loan Parties shall deliver substantially all of the Landlord
Consents to the Administrative Agent on or prior to June 30, 1999 from
the following:
SITE LEASES:
Wisconsin
West Washington Associates LLC (Madison)
Jadeite, Inc. (Green Bay)
Indiana
3000 Coliseum Investors LLC (Fort Wayne)
NOR-NIC Investments (Lafayette)
Illinois
Aspen Business Center One LLC (Rockford)
Michigan
76 Business Complex LLC (Grand Rapids)
OTHER LEASES:
Wisconsin
FirstStar Bank Wisconsin (Madison sales)
Wilfred and Lorna Van Handel (Appleton sales)
Indiana:
Earl & Hatcher Block Partnership (Lafayette sales)
<PAGE> 34
5) The Loan Parties shall effect the assignment of substantially all of the
following from Holdings to the respective operating subsidiaries on or
before July 31, 1999:
a) Interconnection Agreement [Wisconsin], executed as of July 17, 1997, by
and between Ameritech Information Industry Services and Holdings [to US
Xchange of Wisconsin, L.L.C.].
b) Permit and License Agreement for the Use of City Rights-of-Way, dated
as November 26, 1997, between Holdings and the City of Green Bay,
Wisconsin [to US Xchange of Wisconsin, L.L.C.].
c) Licensing Agreement for Attachment of Fiber Optic Cable to Poles, dated
as of January 20, 1998, by and between Madison Gas and Electric and
Holdings. [to US Xchange of Wisconsin, L.L.C.].
d) Office Space Lease dated April 16, 1997 by and between Towne Realty,
Inc. and Holdings, amended by First Amendment dated January 9, 1998 [to
US Xchange of Wisconsin, L.L.C.] [switch].
e) Lease Agreement dated September 18, 1997 by and between Holdings and
Dumke & Associates, L.L.C. [to US Xchange of Wisconsin, L.L.C.]
[switch].
f) Interconnection Agreement [Indiana], executed as of July 17, 1997, by
and between Ameritech Information Industry Services and Holdings.
g) Interconnection Agreement [Illinois], dated as of July 17, 1997, by and
between Ameritech Information Industry Services and Holdings.
h) Agreement for Indefeasible Right to Use of Duct and Dark Fiber, dated
March 25, 1999, by and between Holdings and the Illinois State Toll
Highway Authority [to US Xchange of Illinois, L.L.C.].
i) Interconnection Agreement [Michigan], executed as of July 17, 1997, by
and between Ameritech Information Industry Services and Holdings.
j) Interim Telecommunications Agreement between Holdings and the City of
Battle Creek, Michigan [to US Xchange of Michigan, L.L.C.].
k) Telecommunications Permit between the City of Kalamazoo, Michigan and
Holdings executed as of October 6, 1998 [to US Xchange of Michigan,
L.L.C.].
l) Telecommunications Provider's Permit granted to Holdings by the City of
Grand Rapids, Michigan, dated June 9, 1998 [to US Xchange of Michigan,
L.L.C.].
m) Lease Agreement dated August 3, 1998, by and between Holdings and
Lageoc, Ltd. [to US Xchange of Michigan, L.L.C.] [switch].
<PAGE> 35
SCHEDULE 7.7
REQUIRED INSURANCE
See Schedule 4.13.
<PAGE> 36
SCHEDULE 7.17
FINANCIAL COVENANTS
STAGE 1 FINANCIAL COVENANTS
TOTAL DEBT TO TOTAL CAPITALIZATION Not Greater Than 82.5%
SENIOR DEBT TO TOTAL CAPITALIZATION Not Greater Than 25%
<TABLE>
<CAPTION>
FOR THE QUARTER ENDED MINIMUM QUARTERLY REVENUES
- --------------------- --------------------------
<S> <C>
June 30, 1999 $8,000,000
September 30, 1999 $12,000,000
December 31, 1999 $16,900,000
March 31, 2000 $18,700,000
June 30, 2000 $20,800,000
September 30, 2000 $23,100,000
December 31, 2000 $25,700,000
March 31, 2001 $27,500,000
June 30, 2001 $29,400,000
September 30, 2001 $31,500,000
December 31, 2001 $33,700,000
March 31, 2002 $38,875,000
June 30, 2002 $38,875,000
September 30, 2002 $38,875,000
December 31, 2002 $38,875,000
March 31, 2003 $46,675,000
June 30, 2003 $46,675,000
September 30, 2003 $46,675,000
December 31, 2003 $46,675,000
March 31, 2004 $53,675,000
June 30, 2004 $53,675,000
September 30, 2004 $53,675,000
December 31, 2004 $53,675,000
March 31, 2005 $60,025,000
June 30, 2005 $60,025,000
September 30, 2005 $60,025,000
December 31, 2005 and each quarter $60,025,000
thereafter
</TABLE>
<PAGE> 37
<TABLE>
<CAPTION>
MINIMUM QUARTERLY EBITDA/
FOR THE QUARTER ENDED MAXIMUM QUARTERLY LOSSES
- --------------------- ------------------------
<S> <C>
June 30, 1999 ($12,200,000)
September 30, 1999 ($9,000,000)
December 31, 1999 ($4,800,000)
March 31, 2000 ($2,700,000)
June 30, 2000 ($1,000,000)
September 30, 2000 $2,000,000
December 31, 2000 $4,300,000
March 31, 2001 $5,400,000
June 30, 2001 $6,600,000
September 30, 2001 $8,000,000
December 31, 2001 $9,500,000
March 31, 2002 $13,025,000
June 30, 2002 $13,025,000
September 30, 2002 $13,025,000
December 31, 2002 $13,025,000
March 31, 2003 $18,075,000
June 30, 2003 $18,075,000
September 30, 2003 $18,075,000
December 31, 2003 $18,075,000
March 31, 2004 $22,450,000
June 30, 2004 $22,450,000
September 30, 2004 $22,450,000
December 31, 2004 $22,450,000
March 31, 2005 $25,900,000
June 30, 2005 $25,900,000
September 30, 2005 $25,900,000
December 31, 2005 and each quarter $25,900,000
thereafter
</TABLE>
<TABLE>
<CAPTION>
MAXIMUM CUMULATIVE
FOR THE FISCAL YEAR ENDED CAPITAL EXPENDITURES
- ------------------------- --------------------
<S> <C>
December 31, 1999 $36,300,000
December 31, 2000 $7,700,000
December 31, 2001 $9,800,000
December 31, 2002 $8,900,000
December 31, 2003 $9,400,000
December 31, 2004 $9,400,000
December 31, 2005 and thereafter $7,700,000
</TABLE>
<PAGE> 38
STAGE 2 FINANCIAL COVENANTS
TOTAL DEBT TO TOTAL CAPITALIZATION Not Greater Than 82.5%
<TABLE>
<CAPTION>
FOR THE QUARTER ENDED MAXIMUM TOTAL DEBT TO ANNUALIZED EBITDA
- --------------------- ---------------------------------------
<S> <C>
December 31, 2001 8.35 times
March 31, 2002 7.30 times
June 30, 2002 6.50 times
September 30, 2002 5.70 times
December 31, 2002 4.61 times
March 31, 2003 4.60 times
June 30, 2003 4.30 times
September 30, 2003 3.95 times
December 31, 2003 3.40 times
March 31, 2004 3.40 times
June 30, 2004 3.20 times
September 30, 2004 and each quarter 3.00 times
thereafter
<CAPTION>
FOR THE QUARTER ENDED MAXIMUM SENIOR DEBT TO ANNUALIZED EBITDA
- --------------------- ----------------------------------------
<S> <C>
December 31, 2001 1.53 times
March 31, 2002 1.45 times
June 30, 2002 1.30 times
September 30, 2002 1.10 times
December 31, 2002 and each quarter 1.00 times
thereafter
<CAPTION>
FOR THE QUARTER ENDED MINIMUM ANNUALIZED CASH INTEREST COVERAGE RATIO
- --------------------- -----------------------------------------------
<S> <C>
December 31, 2001 0.9 times
March 31, 2002 1.0 times
June 30, 2002 1.1 times
September 30, 2002 1.4 times
December 31, 2002 1.5 times
March 31, 2003 1.5 times
June 30, 2003 1.5 times
September 30, 2003 2.0 times
December 31, 2003 2.1 times
March 31, 2004 2.0 times
June 30, 2004 2.0 times
September 30, 2004 2.6 times
December 31, 2004 2.7 times
March 31, 2005 and each quarter 2.6 times
thereafter
</TABLE>
<PAGE> 39
<TABLE>
<CAPTION>
FOR THE QUARTER ENDED MINIMUM ANNUALIZED FIXED CHARGES COVERAGE RATIO
- --------------------- -----------------------------------------------
<S> <C>
December 31, 2001 0.55 times
March 31, 2002 0.60 times
June 30, 2002 1.10 times
September 30, 2002 1.15 times
December 31, 2002 1.05 times
March 31, 2003 1.15 times
June 30, 2003 1.20 times
September 30, 2003 1.25 times
December 31, 2003 and each quarter 1.40 times
thereafter
</TABLE>
<PAGE> 40
SCHEDULE 8.1
OTHER EXISTING INDEBTEDNESS
See Item (d)(2) of Schedule 4.6.
<PAGE> 41
SCHEDULE 8.2
LIENS
Liens securing indebtedness described in Item (d) of Schedule 4.6.
<PAGE> 42
SCHEDULE 8.3
CONTINGENT OBLIGATIONS
None.
<PAGE> 43
SCHEDULE 8.14
INVESTMENTS
1. See Note 2 to audited financial statements as of and for the period
ended December 31, 1998 (Schedule 4.10).
2. Other investments permitted by clauses (i) through (vii) of Section
8.14.
