<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------
FORM 10-Q
[x] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended June 30, 1996
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the Transition Period from to .
--------------- -----------------
Commission File No. 0-19494
PAGING NETWORK, INC.
(Exact name of the registrant as specified in charter)
DELAWARE 04-2740516
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
4965 PRESTON PARK BOULEVARD, SUITE 600
PLANO, TEXAS 75093
(Address of principal executive offices)
(214) 985-4100
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Title Shares Outstanding as of July 31, 1996
---------------------------- --------------------------------------
Common Stock, $.01 par value 102,534,887
The Company's Common Stock is publicly traded under the symbol "PAGE" through
the National Association of Securities Dealers Automated Quotation National
Market System.
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
Index to Financial Statements
<TABLE>
<CAPTION>
Page
----
<S> <C>
Paging Network, Inc. Consolidated Balance Sheets as of
June 30, 1996 and December 31, 1995 (Unaudited)........................ 3
Paging Network, Inc. Consolidated Statements of Operations
for the Three and Six Months Ended June 30, 1996 and 1995 (Unaudited).. 4
Paging Network, Inc. Consolidated Statements of Cash Flows
for the Six Months Ended June 30, 1996 and 1995 (Unaudited)............ 5
Paging Network, Inc. Notes to Consolidated Financial Statements........... 6
</TABLE>
2
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PAGING NETWORK, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share information)
(Unaudited)
<TABLE>
<CAPTION>
ASSETS
June 30, 1996 December 31, 1995
-------------- -----------------
<S> <C> <C>
Current assets:
Cash and cash equivalents........................... $ 34,333 $ 198,182
Accounts receivable, less allowance
for doubtful accounts............................. 43,716 41,335
Inventories......................................... 32,264 14,084
Prepaid expenses.................................... 7,452 5,495
---------- ----------
Total current assets.............................. 117,765 259,096
Property, equipment and leasehold improvements,
at cost............................................. 993,283 841,022
Less accumulated depreciation....................... (272,129) (225,413)
---------- ----------
Net property, equipment and
leasehold improvements.......................... 721,154 615,609
Other non-current assets:
PCS licenses........................................ 197,272 197,272
Other licenses, net................................. 54,351 48,625
Other intangible assets, net........................ 61,852 67,438
Other non-current assets, net....................... 65,628 40,298
---------- ----------
Total other non-current assets.................... 379,103 353,633
---------- ----------
$1,218,022 $1,228,338
========== ==========
<CAPTION>
LIABILITIES AND STOCKHOLDERS' DEFICIT
<S> <C> <C>
Current liabilities:
Accounts payable.................................... $ 42,901 $ 69,776
Accrued expenses.................................... 67,847 69,091
Customer deposits................................... 20,991 20,255
---------- ----------
Total current liabilities......................... 131,739 159,122
Long-term obligations................................. 1,195,516 1,150,000
Commitments and contingencies......................... - -
Stockholders' deficit:
Common Stock: $.01 par, 250,000,000 shares
authorized, 102,534,887 and 102,245,807 shares
issued and outstanding in 1996 and 1995,
respectively...................................... 1,025 1,022
Paid-in capital..................................... 123,887 121,701
Accumulated deficit................................. (234,145) (203,507)
---------- ----------
Total stockholders' deficit....................... (109,233) (80,784)
---------- ----------
$1,218,022 $1,228,338
========== ==========
</TABLE>
See accompanying notes
3
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PAGING NETWORK, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share information)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
----------------------- -------------------------
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Services, rent and maintenance revenues....... $167,036 $124,178 $325,811 $240,310
Product sales................................. 32,143 28,783 59,741 54,756
-------- -------- -------- --------
Total revenues.............................. 199,179 152,961 385,552 295,066
Cost of products sold......................... (27,124) (23,700) (50,476) (44,346)
-------- -------- -------- --------
172,055 129,261 335,076 250,720
Operating expenses:
Services, rent and maintenance.............. 35,910 25,246 69,561 48,727
Selling..................................... 20,570 16,718 39,081 31,938
General and administrative.................. 53,071 41,265 102,867 81,240
Depreciation and amortization............... 51,517 35,333 96,855 67,420
-------- -------- -------- --------
Total operating expenses.................. 161,068 118,562 308,364 229,325
-------- -------- -------- --------
Operating income.............................. 10,987 10,699 26,712 21,395
Other income (expense):
Interest expense............................ (30,038) (26,868) (59,888) (44,385)
Interest income............................. 519 - 2,538 -
-------- -------- -------- --------
Total other income (expense).............. (29,519) (26,868) (57,350) (44,385)
-------- -------- -------- --------
Net loss...................................... $(18,532) $(16,169) $(30,638) $(22,990)
======== ======== ======== ========
Net loss per share............................ $ (0.18) $ (0.16) $ (0.30) $ (0.23)
======== ======== ======== ========
</TABLE>
See accompanying notes
4
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PAGING NETWORK, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30,
-------------------------
1996 1995
---------- ----------
<S> <C> <C>
Operating activities:
Net loss....................................................... $ (30,638) $ (22,990)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Depreciation and amortization.............................. 96,855 67,420
Provision for doubtful accounts............................ 5,817 5,176
Debt issuance costs........................................ (3,432) (13,531)
Write off of debt issuance costs........................... - 6,641
Amortization of debt issuance costs........................ 2,573 1,978
Changes in operating assets and liabilities:
Accounts receivable........................................ (8,198) (5,774)
Inventories................................................ (18,180) (2,433)
Prepaid expenses........................................... (1,957) (216)
Accounts payable........................................... (26,875) (6,414)
Accrued expenses........................................... (1,244) 3,865
Customer deposits.......................................... 736 1,186
---------- ----------
Net cash provided by operating activities........................ 15,457 34,908
---------- ----------
Investing activities:
Capital expenditures........................................... (191,340) (120,400)
Payments for licenses.......................................... (7,683) (157,600)
Payments for business acquisitions and investments............. (5,276) (62,772)
Restricted cash invested in money market instruments........... (19,200) -
Other.......................................................... (3,464) (3,610)
---------- ----------
Net cash used in investing activities............................ (226,963) (344,382)
---------- ----------
Financing activities:
Borrowings under credit agreements............................. 45,516 556,850
Repayments of long-term obligations............................ - (250,000)
Proceeds from exercise of Common Stock options................. 2,149 1,749
Other.......................................................... (8) (776)
---------- ----------
Net cash provided by financing activities........................ 47,657 307,823
---------- ----------
Net decrease in cash and cash equivalents........................ (163,849) (1,651)
Cash and cash equivalents at beginning of period................. 198,182 2,451
---------- ----------
Cash and cash equivalents at end of period....................... $ 34,333 $ 800
========== ==========
</TABLE>
See accompanying notes
5
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PAGING NETWORK, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1996
(Unaudited)
1. THE COMPANY
Paging Network, Inc. (the Company) is a provider of paging and wireless
messaging services. The Company provides paging services in all 50
states, the District of Columbia, the U.S. Virgin Islands, Puerto Rico,
and Canada, including local paging service in virtually all of the largest
100 markets (in population) in the United States. The consolidated
financial statements include the accounts of all of its wholly and
majority owned subsidiaries. All intercompany transactions have been
eliminated.
2. UNAUDITED INTERIM FINANCIAL STATEMENTS
The interim consolidated financial information contained herein is
unaudited but, in the opinion of management, includes all adjustments, which
are of a normal recurring nature, necessary for a fair presentation of the
financial position, results of operations, and cash flows for the periods
presented. These financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial information
and the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. The balance sheet at December 31, 1995, has been derived from
the audited financial statements at that date. Results of operations for
the periods presented herein are not necessarily indicative of results of
operations for the entire year. These financial statements and related
notes should be read in conjunction with the financial statements and notes
included in the Company's Annual Report on Form 10-K for the year ended
December 31, 1995.
Certain 1995 amounts have been reclassified to conform with the 1996
presentation.
3. STATEMENT OF CASH FLOWS INFORMATION
Cash and cash equivalents include highly liquid debt instruments with an
original maturity of three months or less and investments in money market
instruments. Cash payments made for interest during the six months ended
June 30, 1996 and 1995 were approximately $59.4 million and $32.0 million,
respectively. There were no significant federal or state income taxes
paid or refunded for the six months ended June 30, 1996 and 1995.
4. LONG-TERM OBLIGATIONS
On June 5, 1996, the Company amended its credit agreement with its group
of lenders (the Credit Agreement). The Credit Agreement provides for a
$1.0 billion revolving loan. Under the Credit Agreement, the Company is
able to borrow, provided it meets certain financial covenants, the lesser
of $1.0 billion or an amount based upon a calculation which is reduced by
total outstanding indebtedness for borrowed monies (as defined) and
outstanding letters of credit. The amount available for borrowing is
equal to a specified multiple of annualized earnings before interest,
income taxes, depreciation and amortization based on the most recent three
calendar months. As of June 30, 1996, the Company had $274.3 million of
borrowings outstanding under its Credit Agreement and had approximately
$504.5 million available for additional borrowings. The Credit Agreement
expires on December 31, 2004. The maximum borrowings which may
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be outstanding under the revolving loan begin reducing on June 30, 2001.
In addition, the Company has $500.0 million available for potential future
offerings of public debt securities under shelf registration statements
filed with the Securities and Exchange Commission in 1995 and 1993.
On June 5, 1996, the Company's wholly-owned Canadian subsidiary, Paging
Network of Canada Inc. (PageNet Canada), along with its majority-owned
Canadian subsidiary, Madison Telecommunications Holdings, Inc. (MadTel
Holdings), established new credit facilities in Canada. The credit
facilities are denominated in Canadian dollars. The amounts reported
herein are the U.S. dollar equivalents as of June 30, 1996. The credit
agreements provide for borrowings in the amounts of $40.3 million and
$25.7 million, respectively. The Company is a guarantor of both credit
agreements to the extent of the cash collateral deposited with the lender.
Madison Venture Corp., the minority interest shareholder in MadTel
Holdings, is an additional guarantor of the MadTel Holdings credit
agreement. Other non-current assets include $19.2 million of cash
deposited with the lender to collateralize such borrowings. Under the
credit agreements, PageNet Canada and MadTel Holdings are able to borrow
$20.2 million and $16.5 million, respectively, provided these borrowings
are collateralized. The remaining amounts are available for borrowing
provided they are either collateralized or certain financial covenants are
met by the borrowers. As of June 30, 1996, PageNet Canada had $11.0
million and MadTel Holdings had $10.2 million of borrowings outstanding
under the credit facilities. The maximum borrowings which may be
outstanding under the credit facilities begin reducing on June 30, 1999.
Both credit agreements expire on June 30, 2003.
5. INCOME TAX PROVISION
No provision or benefit for income taxes has been made for the six months
ended June 30, 1996 and 1995 as the deferred benefit from operating
losses was offset by the increase in the valuation allowance.
6. COMMON STOCK AND NET LOSS PER SHARE
Net loss per share amounts are computed based on the weighted average
number of common shares outstanding. The number of shares used to
compute per share amounts for the six months ended June 30, 1996 and 1995
were 102.4 and 101.7 million, respectively.
The Company has 275.0 million authorized shares, of which 250.0 million
are Common Stock and 25.0 million are preferred stock. As of June 30, 1996
there were no preferred shares issued or outstanding.
Effective September 15, 1995, the Company effected a two-for-one stock
split recorded in the form of a 100.0% stock dividend paid September 29,
1995. Share and per share amounts for 1995 periods presented have been
restated to reflect the stock split.
On May 23, 1996, the Company's stockholders approved an employee stock
purchase plan of up to 2.0 million shares of the Company's Common Stock,
which the Company intends to implement on January 1, 1997.
7. ACQUISITIONS
During 1995, the Company acquired certain paging assets of Comtech, Inc.
- Paging Division; SNET Paging, Inc. and its wholly owned subsidiary, TNI
Associates, Inc.; two subsidiaries of PageAmerica Group, Inc.; Page
Florida; International Paging Corp.; and Celpage, Inc. - Atlanta Branch,
including various frequencies and approximately 343,000 pagers in
service. The cost of these purchases aggregated approximately $123.6
million, subject to increase or decrease based on post-closing events of
certain acquisitions.
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The following represents the unaudited pro forma results of operations as
if the above acquisitions had occurred as of January 1, 1995, after
giving effect to certain adjustments, including amortization of
intangibles resulting from the allocation of the purchase price and
interest expense on acquisition debt.
<TABLE>
<CAPTION>
Six Months Ended
June 30, 1995
---------------------
(In thousands, except
per share information)
<S> <C>
Total revenues $ 311,591
Net revenues 264,085
Operating income 17,127
Net loss (31,041)
Net loss per share (0.31)
</TABLE>
The pro forma results given above are not necessarily indicative of
what actually would have occurred if the acquisitions had been in effect
during the periods presented, and are not intended to be a projection of
future results or trends.
8
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995
The statements contained in this filing which are not historical facts, such as
future capital expenditures, future borrowings, international investments
expectations, and introduction of new products are forward-looking statements
that are subject to risks and uncertainties that could cause actual results to
differ materially from those set forth in the forward-looking statements.
Among the factors that could cause actual future results to differ materially
are competitive pressures, growth rates, new market opportunities, supplier
constraints, market conditions, timing and techniques used in marketing by
third-party distributors, and acceptance of the Company's services in the
marketplace.
RESULTS OF OPERATIONS
Throughout this section the Company makes reference to earnings before
interest, income taxes, depreciation and amortization (EBITDA). EBITDA is a
key performance measure used in the paging industry and is one of the financial
measures by which the Company's covenants are calculated under the agreements
governing its debt obligations. EBITDA is not a measure defined in generally
accepted accounting principles and should not be considered in isolation or as
a substitute for measures of performance in accordance with generally accepted
accounting principles.
The following table presents certain items in the Consolidated Statements of
Operations as a percentage of revenues from services, rent and maintenance plus
product sales less the cost of products sold (Net Revenues) for the three and
six months ended June 30, 1996 and 1995, respectively.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- ------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net Revenues .............................. 100.0% 100.0% 100.0% 100.0%
Operating expenses:
Services, rent and maintenance ......... 20.9 19.6 20.7 19.4
Selling ................................ 12.0 12.9 11.7 12.8
General and administrative ............. 30.8 31.9 30.7 32.4
Depreciation and amortization .......... 29.9 27.3 28.9 26.9
----- ----- ----- -----
Operating income .......................... 6.4 8.3 8.0 8.5
Net loss .................................. (10.8) (12.5) (9.1) ( 9.2)
EBITDA .................................... 36.3 35.6 36.9 35.4
EBITDA for domestic operations ............ 37.5 35.6 37.6 35.4
</TABLE>
Net Revenues for the three- and six-month periods ended June 30, 1996
increased 33.1% and 33.6%, respectively, over the comparable periods ended June
30, 1995. Revenues from services, rent and maintenance, which the Company
considers its primary business, increased 34.5% to $167.0 million for the
three months ended June 30, 1996 compared to $124.2 million for the three
months ended June 30, 1995. Services, rent and maintenance revenues for the
six months ended June 30, 1996 increased 35.6% to $325.8 million, compared to
$240.3 million for the six months ended June 30, 1995. These increases were
primarily due to continued growth in the number of pagers in
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service with subscribers of the Company. The number of pagers in service with
subscribers at June 30, 1996 was 7,881,764 compared to 5,415,269 pagers in
service with subscribers at June 30, 1995, an increase of 45.5%. Contributing
to the growth in the number of pagers in service with subscribers is the
Company's expanding local and national third-party reseller customer base,
which includes the impact of the Company's National Accounts Division. The
Company's National Accounts Division represents a new distribution strategy
which gives the Company an opportunity to reach into broader markets, including
consumers, by partnering with large companies that are regional or national in
scope and have large client bases. In addition, the Company's National
Accounts Division includes customer relationships with national resellers,
where it sells pagers to major third parties and provides paging service at
reduced rates. The resellers, in turn, lease or resell the pagers to their own
subscribers and resell the Company's paging service under marketing agreements.
As the Company increases reliance on distribution of pagers and paging
services through resellers and marketing affiliates, the Company may experience
increased variability in quarterly results relating to the net addition of
pagers.
Product sales, less cost of products sold, remained relatively flat for the
three month periods ended June 30, 1996 and 1995 ($5.0 million and $5.1
million, respectively) and for the six month periods ended June 30, 1996 and
1995 ($9.3 million and $10.4 million, respectively).
Services, rent and maintenance expenses increased 42.2% to $35.9 million (20.9%
of Net Revenues) for the three months ended June 30, 1996, compared to $25.2
million (19.6% of Net Revenues) for the three months ended June 30, 1995.
Services, rent and maintenance expenses increased 42.8% to $69.6 million (20.7%
of Net Revenues) for the six months ended June 30, 1996, compared to $48.7
million (19.4% of Net Revenues) for the six months ended June 30, 1995. These
increases in services, rent and maintenance expenses and the increases as a
percentage of Net Revenues were a result of growth in the number of pagers in
service with subscribers of the Company, expenses associated with an increase
in transmitter sites in order to ensure reliable transmission of enhanced
messaging services, and expansion of the nationwide transmission networks.
For the three months ended June 30, 1996, selling expenses increased 23.0% to
$20.6 million (12.0% of Net Revenues) from $16.7 million (12.9% of Net
Revenues) for the three months ended June 30, 1995. Selling expenses increased
22.4% to $39.1 million (11.7% of Net Revenues) for the six months ended June
30, 1996, compared to $31.9 million (12.8% of Net Revenues) for the six months
ended June 30, 1995. These increases resulted from the addition of sales
personnel to support continued growth in both Net Revenues and the number of
pagers in service with subscribers. The decline in selling expenses as a
percentage of Net Revenues for the three and six months ended June 30, 1996 was
primarily attributable to the expansion of local and national third-party
resellers, for which the Company incurred less selling costs on units placed in
service through this channel than through the direct channel. In addition,
since sales commissions are paid at the time a new unit is placed in service
and not in subsequent months when the unit continues to generate revenue, the
Company's continued growth in the number of pagers in service results in the
decline in selling expenses as a percentage of the Net Revenues.
General and administrative expenses increased 28.6% to $53.1 million (30.8% of
Net Revenues) for the second quarter of 1996, compared to $41.3 million (31.9%
of Net Revenues) for the corresponding period of 1995. General and
administrative expenses increased 26.6% to $102.9 million (30.7% of Net
Revenues) for the six months ended June 30, 1996, compared to $81.2 million
(32.4% of Net Revenues) for the six months ended June 30, 1995. The increases
in general and administrative expenses occurred to support the growth in the
number of pagers in service with subscribers of the Company. The decline in
general and administrative expenses as a percentage of Net Revenues was
primarily attributable to the improved revenue performance of operations opened
in 1992 through 1994. Historically, domestic start-up operations have
typically required three to four years to achieve results similar to the
Company's more mature operations.
Depreciation and amortization expenses increased for the second quarter of 1996
as compared to the corresponding period in the prior year by 45.8% from $35.3
million (27.3% of Net Revenues) to $51.5 million (29.9% of Net Revenues).
Depreciation and amortization expenses increased 43.7% to $96.9 million (28.9%
of Net Revenues) for the first six months of 1996 compared to $67.4 million
(26.9% of Net Revenues) for the first six months of 1995.
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The increases in depreciation and amortization expenses were primarily
attributable to the increase in the number of pagers owned by the Company and
leased to subscribers; the increase in other paging equipment, primarily in the
number of transmitters, to support the increase in the number of units in
service with subscribers; and the acquisitions discussed in Note 7 to the
consolidated financial statements.
Operating income increased from $10.7 million for the three months ended June
30, 1995, to $11.0 million for the three months ended June 30, 1996. Operating
income increased from $21.4 million for the six months ended June 30, 1995, to
$26.7 million for the six months ended June 30, 1996.
As a result of the above factors, EBITDA increased 35.8% to $62.5 million
(36.3 % of Net Revenues) for the second quarter of 1996 compared to $46.0
million (35.6% of Net Revenues) for the corresponding period in 1995. For the
six months ended June 30, 1996, EBITDA increased 39.1% to $123.6 million (36.9%
of Net Revenues) compared to $88.8 million (35.4% of Net Revenues) for the
corresponding period in 1995. EBITDA and the percent of Net Revenues were
negatively impacted by the start-up operations in the Company's international
operations. Domestically, EBITDA increased 40.3% to $64.6 million (37.5% of
Net Revenues) for the second quarter of 1996. For the six months ended June
30, 1996, domestic EBITDA increased 41.8% to $125.9 million (37.6% of Net
Revenues).
Interest expense increased $3.2 million and $15.5 million, respectively, from
the three and six month periods ended June 30, 1995, to the corresponding
periods in 1996, due to a higher average level of indebtedness outstanding in
1996. The average level of indebtedness outstanding during the three and six
months ended June 30, 1996 was approximately $1.2 billion compared to
approximately $770.6 million and approximately $721.5 million, respectively,
outstanding during the three and six months ended June 30, 1995.
Interest income for the three and six month periods ended June 30, 1996 was
$0.5 million and $2.5 million, respectively. The interest income was a result
of investing the net proceeds of the 10.125% Senior Subordinated Notes (10.125%
Notes) issued in July 1995.
LIQUIDITY AND CAPITAL RESOURCES
The Company's operations and expansion into new markets and product lines
require substantial capital investment for the development and installation of
wireless communications systems and for the procurement of pagers and paging
equipment. Capital expenditures were $191.3 million for the six months ended
June 30, 1996 and $120.4 million for the same period in 1995 (excluding
payments for licenses and acquisitions). For the first six months of 1996,
capital expenditures were funded from the remaining net proceeds of the 10.125%
Notes, net cash provided by operating activities ($15.5 million), and
borrowings. For the first six months of 1995, capital expenditures were funded
by net cash provided by operating activities ($34.9 million) and borrowings.
Inventories increased from $14.1 million at December 31, 1995 to $32.3 million
at June 30, 1996, largely due to purchases to support the Company's expanding
third-party reseller and marketing affiliate distribution channels. The
Company's National Accounts Division has opened a state-of-the-art distribution
facility in the Dallas area. The fully automated center will allow the Company
to enhance the distribution for its national accounts, resellers, and marketing
affiliates.
During April 1996, the Company concluded its participation in an auction
conducted by the Federal Communications Commission (FCC) of 900 MHz specialized
mobile radio major trading area based licenses. At the auction, the Company
was awarded the rights to 126 blocks of frequencies in 49 United States markets
for a total purchase price of $45.6 million, all of which had been paid on or
before July 8, 1996. Incumbent users currently hold certain frequencies for
which the Company is negotiating to secure exclusive use. The Company
currently estimates that payments to obtain certain of these frequencies may
aggregate in excess of $100.0 million. Although not currently estimable, these
expenditures may increase further if additional frequencies, which are deemed
to yield strategic
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benefits in major markets, can be obtained at prices consistent with historical
frequency acquisitions made by the Company.
As a result of an FCC auction in 1994, the Company was awarded three nationwide
narrowband personal communications services (PCS) frequencies for a total
purchase price of $197.0 million. The Company intends to employ these PCS
frequencies to build a two-way network over which it can deploy new products
such as its new voice messaging service, VoiceNow(R). The VoiceNow service
will allow a pocket-sized receiving device to store digitized voice messages
for replay at the subscriber's convenience. The Company has begun testing of
VoiceNow. Once technological and marketing tests are complete, the Company
intends to begin commercial deployment throughout the country. Based on the
current schedule from the Company's vendors, the Company anticipates its
product launch could begin as early as the fourth quarter of 1996. Also in
1996, the Company intends to begin technological testing of other services that
a two-way network makes possible. The Company currently estimates that the
capital expenditures to build the two-way network, exclusive of the costs of
acquiring other frequencies and of VoiceNow subscriber devices, may total
approximately $200.0 million over 1996 and 1997.
Through its subsidiary, Paging Network of Canada Inc., the Company began
offering paging services in Canada in April 1996. The Company is considering
other opportunities for international expansion. Paging market penetration in
many international markets is relatively low, and many such markets have only a
small number of existing paging providers. The Company believes that in these
markets its strategy of low cost, high quality service is likely to be
successful. The Company may structure its operations in other countries in a
variety of ways, both to comply with local laws and to limit the financial risk
of new ventures in other countries. The Company's goal is to create a
portfolio of international operations. The Company expects to invest
approximately $100.0 million in this endeavor during the next two years.
Additional investments will depend on such factors as growth rates, new market
opportunities and execution of financing plans that maximize value for the
Company's stockholders.
It is anticipated that in 1996, net cash provided by operating activities will
be insufficient to completely fund capital expenditures (including the costs to
build the two-way network, but excluding frequency purchases) and international
opportunities, which are expected to exceed $500.0 million. A portion of these
expenditures will be funded with existing cash and cash equivalents and
additional borrowings. These funds will be used to finance the development of
a new nationwide digital transmission network for the Company's new VoiceNow
service and the Company's ongoing paging operations, including greater market
share of existing markets and expansion of the Company's operations into new
markets, including international opportunities. The Company currently
estimates 1996 incremental borrowings may aggregate in excess of $250.0
million. As of June 30, 1996, the Company had approximately $504.5 million
available for additional borrowings under its Credit Agreement. In addition,
the Company has $500.0 million available for potential future offerings of
public debt securities under shelf registration statements filed with the
Securities and Exchange Commission in 1995 and 1993.
12
<PAGE> 13
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The Company is involved in various lawsuits arising in the normal course of
business. In management's opinion, the ultimate outcome of these lawsuits
will not have a material adverse effect on the Company's financial position
or results of operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
On May 23, 1996, the Company held its Annual Meeting of Stockholders. At
this meeting, Mr. Glenn W. Marschel was elected as a Class II Director for
a three year term to expire in 1999 (90,509,436 voting for and 2,188,230
withholding authority). Also, Mr. Carl D. Thoma was elected as a Class II
Director for a three year term to expire in 1999 (90,555,791 voting for and
2,141,875 withholding authority). The stockholders also approved the
adoption of the Paging Network, Inc. Employee Stock Purchase Plan
(90,471,827 voting for, 1,757,557 voting against and 468,282 abstaining or
not voting). As of the record date there were 102,450,127 shares of common
stock issued and outstanding and entitled for vote.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
The exhibits listed on the accompanying index to exhibits are
filed as part of this quarterly report.
(b) Reports on Form 8-K
None.
13
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Paging Network, Inc.
Date: August 7, 1996 /s/ Glenn W. Marschel
-----------------------------------------------
Glenn W. Marschel
President and Chief Executive Officer
(Principal Executive Officer)
Date: August 7, 1996 /s/ Kenneth W. Sanders
-----------------------------------------------
Kenneth W. Sanders
Senior Vice President- Finance, Treasurer,
Chief Financial Officer and Assistant Secretary
(Principal Financial Officer and Principal
Accounting Officer)
14
<PAGE> 15
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
4.1 Articles Sixth, Seventh, Eighth, Twelfth, and Thirteenth of the
Restated Certificate of Incorporation of the Registrant, as
amended (1)
4.2 Articles II, III, and VII and Section 1 of Article VIII of the
Registrant's By-laws, as amended (1)
4.3 Form of Indenture (2)
4.4 Article V, Sections I, VI, and VII of the Registrant's By-laws,
as amended (4)
10.1 1982 Incentive Stock Option Plan, as amended and restated (1)
10.2 Form of Stock Option Agreement executed by recipients of options
granted under the 1982 Incentive Stock Option Plan (1)
10.3 Form of Management Agreement executed by recipients of options
granted under the 1982 Incentive Stock Option Plan (1)
10.4 Form of Vesting Agreement executed by recipients of options
granted under the 1982 Incentive Stock Option Plan (1)
10.5 1991 Stock Option Plan (1)
10.6 Form of Stock Option Agreement executed by recipients of options
granted under the 1991 Stock Option Plan (1)
10.7 Form of Indemnification Agreement executed by recipients of
options granted under the 1991 Stock Option Plan (1)
10.8 Form of First Amendment to Vesting Agreement executed by
recipients of options granted under the 1982 Incentive Stock
Option Plan (1)
10.9 Form of First Amendment to Management Agreement executed by
recipients of options granted under the 1982 Incentive Stock
Option Plan (1)
10.10 1992 Stock Option Plan for Directors (3)
10.11 Amended and Restated Credit Agreement dated as of May 2, 1995
among the Registrant, NationsBank of Texas, N.A., Toronto
Dominion (Texas), Inc., The First National Bank of Boston, and
certain other lenders (4)
10.12 Amendment No. 1 dated as of December 12, 1995 to the Amended and
Restated Credit Agreement dated as of May 2, 1995 among the
Registrant, NationsBank of Texas, N.A., Toronto Dominion (Texas),
Inc., The First National Bank of Boston, and certain other
lenders (5)
15
<PAGE> 16
EXHIBIT NO. DESCRIPTION
10.13 Employment Agreement dated as of December 1, 1995 among the
Registrant and Glenn W. Marschel (5)
10.14 Second Amended and Restated Credit Agreement dated as of June
5, 1996, among the Registrant, NationsBank of Texas, N.A.,
Toronto Dominion (Texas), Inc., The First National Bank of
Boston, Chase Securities Inc, and certain other lenders (6)
10.15 Loan Agreement dated as of June 5, 1996 among Paging Network
of Canada Inc., The Toronto-Dominion Bank, and such other
financial institutions as become banks (6)
10.16 Loan Agreement dated as of June 5, 1996 among Madison
Telecommunications Holdings, Inc., The Toronto-Dominion Bank,
and such other financial institutions as become banks (6)
12 Ratio of Earnings to Fixed Charges for the three and six
months ended June 30, 1996 and 1995 (6)
27 Financial Data Schedule (6)
(1) Previously filed as an exhibit to Registration Statement No. 33-42253 on
Form S-1 and incorporated herein by reference.
(2) Previously filed as an exhibit to Registration Statement No. 33-46803 on
Form S-1 and incorporated herein by reference.
(3) Previously filed as an exhibit to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1991.
(4) Previously filed as an exhibit to the Registrant's Quarterly Report on
Form 10-Q for the quarterly period ended June 30, 1995.
(5) Previously filed as an exhibit to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1995.
(6) Filed herewith.
16
<PAGE> 1
EXHIBIT 10.14
$1,000,000,000
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
AMONG
PAGING NETWORK, INC.
CERTAIN OF THE SUBSIDIARIES OF PAGING NETWORK, INC.
NATIONSBANK OF TEXAS, N.A.
as Documentation Agent
TORONTO DOMINION (TEXAS), INC.
as Administrative Agent
and
THE FIRST NATIONAL BANK OF BOSTON
and
CHASE SECURITIES INC
as Co-Syndication Agents
BANK OF AMERICA, ILLINOIS
BARCLAYS BANK PLC
CIBC, INC.
COMPAGNIE FINANCIERE DE CIC ET DE L'UNION EUROPEENNE
CORESTATES BANK, N.A.
CREDIT LYONNAIS NEW YORK BRANCH
DRESDNER BANK AG, NEW YORK AND GRAND CAYMAN BRANCHES
FIRST STATE BANK OF TEXAS, N.A.
FLEET NATIONAL BANK
MELLON BANK, N.A.
PNC BANK, NATIONAL ASSOCIATION
ROYAL BANK OF CANADA
as Co-Agents and as Lenders
AND
BANK OF MONTREAL
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
MERCANTILE BANK OF ST. LOUIS NATIONAL ASSOCIATION
THE MITSUBISHI TRUST AND BANKING CORPORATION, CHICAGO BRANCH
SOCIETE GENERALE
as Lead Managers and as Lenders
DATED AS OF JUNE 5,1996
<PAGE> 2
$1,000,000,000
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
PAGING NETWORK, INC.
CERTAIN OF THE SUBSIDIARIES OF PAGING NETWORK, INC.
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND FINANCIAL TERMS
<TABLE>
<S> <C> <C>
1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2. Financial Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Article II
THE REDUCING REVOLVING CREDIT FACILITY
2.1. Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.2. Advances, Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.3. Borrowing Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.4. Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.5. Interest - Base Rate Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.6. Interest - LIBOR Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.7. Post-Default Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.8. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.9. Method of Calculating Interest and Fees . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.10. Interest Recapture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.11. Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.12. Voluntary Principal Payments and Prepayments . . . . . . . . . . . . . . . . . . . . . . . . 22
2.13. Mandatory Principal Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.14. Voluntary Reduction or Reduction of the Commitment to Zero . . . . . . . . . . . . . . . . . 24
2.15. Mandatory Reduction of Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.16. Offset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.17. Proration of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.18. Collateral and Collateral Call . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.19. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.20. Formation of New Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE III
LETTERS OF CREDIT
3.1. Issuance of Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
3.2. Letters of Credit Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
3.3. Reimbursement Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
3.4. Lenders' Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
3.5. NationsBank's Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
</TABLE>
<PAGE> 3
ARTICLE IV
CONDITIONS PRECEDENT
<TABLE>
<S> <C> <C>
4.1. Conditions Precedent to the Closing Date and the Making of the Initial
Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
4.2. Conditions Precedent to All Advances and the Issuance of each Letter of
Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE V
CHANGE IN CIRCUMSTANCES; YIELD PROTECTION
5.1. Increased Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
5.2. LIBOR Deposits Unavailable, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
5.3. Changes in Law Rendering LIBOR Advances Unlawful . . . . . . . . . . . . . . . . . . . . . . 36
5.4. Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
5.5. Discretion of Lenders as to Manner of Funding . . . . . . . . . . . . . . . . . . . . . . . 37
5.6. Eurocurrency Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.1. Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
6.2. Authorization and Validity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
6.3. No Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
6.4. Financial Statements; Material Adverse Change; Solvency . . . . . . . . . . . . . . . . . . 38
6.5. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6.6. Ownership of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6.7. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6.8. Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6.9. Compliance with Regulations G, T, U and X . . . . . . . . . . . . . . . . . . . . . . . . . 39
6.10. Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.11. Consents and Authorizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.12. Real Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.13. Licenses, Permits. Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.14. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.15. Accuracy of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
6.16. Subordinated Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
6.17. ERISA Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
6.18. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
6.19. Absence of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
6.20. Investment Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
6.21. Valid Issuance of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
6.22. Certain Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
6.23. Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
6.24. Patents, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
</TABLE>
<PAGE> 4
ARTICLE VII
GENERAL COVENANTS
<TABLE>
<S> <C> <C>
7.1. Access and Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
7.2. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
7.3. Repair . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
7.4. Taxes and Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
7.5. Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
7.6. Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
7.7. Existence and Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
7.8. Accounting Methods and Financial Records . . . . . . . . . . . . . . . . . . . . . . . . . . 46
7.9. Payment of Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
7.10. Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
7.11. Perfection of Security Interests, Expenses and Reimbursement . . . . . . . . . . . . . . . . 48
7.12. The Notification Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE VIII
INFORMATION COVENANTS
8.1. Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
8.2. Copies of Other Reports and Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
8.3. Notice of Litigation, Default and Other Matters . . . . . . . . . . . . . . . . . . . . . . 51
8.4. ERISA Reporting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE IX
NEGATIVE COVENANTS
9.1. Subordinated Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.2. Liquidation, Disposition, Merger and New Subsidiaries . . . . . . . . . . . . . . . . . . . 53
9.3. Total Leverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
9.4. Senior Debt to Annualized Operating Cash Flow . . . . . . . . . . . . . . . . . . . . . . . 54
9.5. Pro Forma Debt Service Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
9.6. Interest Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
9.7. Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
9.8. Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
9.9. Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
9.10. Paging Entities' and Subsidiaries' Stock . . . . . . . . . . . . . . . . . . . . . . . . . . 58
9.11. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
9.12. Loans, Advances, Investments and Guaranties . . . . . . . . . . . . . . . . . . . . . . . . 58
9.13. Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
9.14. Sale of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
9.15. Management Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
9.16. Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
9.17. Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
9.18. Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
9.19. Amendment and Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
</TABLE>
<PAGE> 5
<TABLE>
<S> <C> <C>
9.20. Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
9.21. Sale and Leaseback . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
ARTICLE X
EVENTS OF DEFAULT
10.1. Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
10.2. Other Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
10.3. Other Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
10.4. Debtor Relief Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
10.5. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
10.6. Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
10.7. Loan Documents; Collateral; Subordinated Indebtedness . . . . . . . . . . . . . . . . . . . 63
10.8. Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
10.9. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
10.10. Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
10.11. Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
10.12. Pledged Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
10.13. RICO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
ARTICLE XI
RELATIONSHIP AMONG LENDERS
11.1. Agreement Among Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
11.2. Lender Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
11.3. Benefits of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
ARTICLE XII
GENERAL
12.1. Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
12.2. Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
12.3. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
12.4. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
12.5. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
12.6. Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
12.7. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
12.8. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
12.9. Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
12.10. Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
12.11. Dissemination of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
12.12. Tax Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
12.13. Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
12.14. Application of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
12.15. Substitution of Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
12.16. Rate Provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
12.17. Determination by the Lenders Conclusive and Binding . . . . . . . . . . . . . . . . . . . . 81
</TABLE>
<PAGE> 6
<TABLE>
<S> <C> <C>
12.18. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
12.19. Exception to Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
12.20. ENTIRE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
12.21. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
12.22. WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
12.23. Survival of Representations and Warranties, etc . . . . . . . . . . . . . . . . . . . . . . 82
12.24. Appointment of Notification Agent, Joint and Several Obligations; Senior
Obligations of PageNet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
12.25. Amendment, Restatement, Extension, Renewal and Increase . . . . . . . . . . . . . . . . . . 83
</TABLE>
<PAGE> 7
TABLE OF SCHEDULES AND EXHIBITS
SCHEDULES
<TABLE>
<S> <C>
Schedule 1.1 Existing Letters of Credit
Schedule 6.5 Litigation
Schedule 6.6 Liens
Schedule 6.12 Real Estate Owned
Schedule 6.21 Subsidiaries and Capital Stock
Schedule 6.23 Material FCC Licenses
Schedule 9.9 Existing Indebtedness
EXHIBITS
Exhibit A Form of Application for Letter of Credit
Exhibit B Form of Assignment and Acceptance Agreement
Exhibit C Form of Revolving Loan Note
Exhibit D Form of Notice of Assignment
Exhibit E Form of Compliance Certificate
</TABLE>
<PAGE> 8
$1,000,000,000
PAGING NETWORK, INC.
CERTAIN OF THE SUBSIDIARIES OF PAGING NETWORK, INC.
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of June 5,
1996, is entered into among PAGING NETWORK, INC., a Delaware corporation
("PageNet"), the Companies (this and other capitalized terms not otherwise
defined shall have the respective meanings set forth in Article I hereof), the
Lenders, NATIONSBANK OF TEXAS, N.A., a national banking association (herein in
its individual capacity, together with its Affiliates, successors and assigns,
sometimes called "NationsBank"), as Documentation Agent, TORONTO DOMINION
(TEXAS), INC., a Georgia corporation (herein in its individual capacity,
together with its successors and assigns, sometimes called "Toronto Dominion"),
as Administrative Agent, THE FIRST NATIONAL BANK OF BOSTON and CHASE SECURITIES
INC, as Co-Syndication Agents; and BANK OF AMERICA, ILLINOIS, BARCLAYS BANK PLC,
CIBC, INC., COMPAGNIE FINANCIERE DE CIC ET DE L'UNION EUROPEENNE, CORESTATES
BANK, N.A., CREDIT LYONNAIS NEW YORK BRANCH, DRESDNER BANK AG, NEW YORK AND
GRAND CAYMAN BRANCHES, FIRST INTERSTATE BANK OF TEXAS, N.A., FLEET NATIONAL
BANK, MELLON BANK, N.A., PNC BANK, NATIONAL ASSOCIATION, ROYAL BANK OF CANADA,
as Co-Agents and as Lenders; and BANK OF MONTREAL, FIRST UNION NATIONAL BANK OF
NORTH CAROLINA, MERCANTILE BANK OF ST. LOUIS NATIONAL ASSOCIATION, THE
MITSUBISHI TRUST AND BANKING CORPORATION, CHICAGO BRANCH, SOCIETE GENERALE, as
Lead Managers and as Lenders.
WHEREAS, PageNet, the Companies and the Original Lenders entered into that
certain Amended and Restated Credit Agreement, dated as of May 2, 1995 (as
amended through the date hereof, the "Original Credit Agreement");
WHEREAS, the Paging Entities have requested that the Original Credit
Agreement be amended and restated to provide for a $1,000,000,000 credit
facility to the Companies from the Lenders, guaranteed by PageNet, the proceeds
of which will be used in part to refinance certain indebtedness owed by certain
of the Companies to the Original Lenders and for other purposes permitted
hereunder, and the Lenders have agreed to amend and restate the Original Credit
Agreement to make such loans pursuant to the terms and conditions of this
Agreement;
WHEREAS, the Paging Entities have requested the Lenders to extend credit
to the Companies to refinance the Companies' existing credit facilities and the
Lenders and the Managing Agents are willing to enter into this Second Amended
and Restated Credit Agreement.
NOW, THEREFORE, in consideration of the undertakings set forth herein and
other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:
<PAGE> 9
ARTICLE I
DEFINITIONS AND FINANCIAL TERMS
1.1. Definitions. In addition to the terms defined in the Preamble, the
Recitals and elsewhere in this Agreement, the following terms shall have the
meanings indicated for purposes of this Agreement (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Administrative Agent" means Toronto Dominion in its capacity as
administrative agent for the Lenders pursuant to Article XI hereof, and any
successor Administrative Agent appointed pursuant to Article XI hereof.
"Advance" means an advance made by a Lender to the Companies pursuant to
Article II hereof.
"Affected Lender" has the meaning assigned thereto in Section 12.15
hereof.
"Affiliate" of any Person means (i) any director (or Person holding the
equivalent position) or officer (or Person holding the equivalent position) of
such Person or of any Affiliate of such Person, and (ii) any other Person
which, directly or indirectly, controls or is controlled by or under common
control with such Person (excluding any trustee under, or any committee with
responsibility for administering, any Plan). A Person shall be deemed to be
(a) "controlled by" any other Person if such other Person
possesses, directly or indirectly, power (i) to vote 10% or more of the
securities having ordinary voting power, or if not having ordinary voting
power, having at the time voting power, for the election of directors of
such Person; or (ii) to direct or cause the direction of management and
policies of such Person whether by contract or otherwise; or
(b) "controlled by" or "under common control with" such other
Person if such other Person is a member of the immediate family of such
Person or is the executor, administrator or other personal representative
of such Person.
"Agents" means, collectively, the Administrative Agent and the
Documentation Agent.
"Agreement" means this Second Amended and Restated Credit Agreement, as it
may be amended or modified and in effect from time to time.
"Annualized Operating Cash Flow" means the product of Operating Cash Flow
for the most recently ended fiscal quarter multiplied by four.
"Applicable Environmental Laws" means Applicable Laws pertaining to health
or the environment, including without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended by
the Superfund Amendments and
2
<PAGE> 10
Reauthorization Act of 1986 (as amended from time to time, "CERCLA"), the
Resource Conservation and Recovery Act of 1976, as amended by the Used Oil
Recycling Act of 1980, the Solid Waste Disposal Act amendments of 1980, and the
Hazardous and Solid Waste Amendments of 1984 (as amended from time to time,
"RCRA"), the Texas Water Code, and the Texas Solid Waste Disposal Act.
"Applicable Law" means (i) in respect of any Person, all provisions of
constitutions, statutes, rules, regulations and orders of governmental bodies
or regulatory agencies applicable to such Person, and all orders and decrees of
all courts and arbitrators in proceedings or actions to which the Person in
question is a party and (ii) in respect of contracts made or performed in the
State of Texas, "Applicable Law" shall also mean the laws of the United States
of America, including, without limiting the foregoing, 12 USC Sections 85 and
86, as amended to the date hereof and as the same may be amended at any time
and from time to time hereafter, and any other statute of the United States of
America now or at any time hereafter prescribing the maximum rates of interest
on loans and extensions of credit, and the laws of the State of Texas,
including, without limitation, Articles 5069-1.04 and 5069-1.07(a), Title 79,
Revised Civil Statutes of Texas, 1925, as amended ("Art.1.04"), and any other
statute of the State of Texas now or at any time hereafter prescribing maximum
rates of interest on loans and extensions of credit, provided however, that
pursuant to Article 5069-15.10(b), Title 79, Revised Civil Statutes of Texas,
1925, as amended, the Companies and the Lenders agree that the provisions of
Chapter 15, Title 79, Revised Civil Statutes of Texas, 1925, as amended, shall
not apply to the Revolving Loan hereunder.
"Applicable Margin" means, (a) with respect to Base Rate Advances, 1.000%
per annum and (b) with respect to LIBOR Advances, 2.000% per annum, provided
that, if there exists no Event of Default, then the Applicable Margin will be
the following per annum percentages applicable in the following situations:
<TABLE>
<CAPTION>
Base Rate LIBOR
Applicability Percentage Percentage
------------- ---------- ----------
<S> <C> <C>
(i) If the Total 1.000% 2.000%
Leverage Ratio is greater
than or equal to 6.00 to 1.00
(ii) If the Total 0.750% 1.750%
Leverage Ratio is less
than 6.00 to 1.00
but is greater than or
equal to 5.00 to 1.00
</TABLE>
3
<PAGE> 11
<TABLE>
<S> <C> <C>
(iii) If the Total 0.500% 1.500%
Leverage Ratio is less
than 5.00 to 1.00
but is greater than or
equal to 4.00 to 1.00
(iv) If the Total 0.125% 1.125%
Leverage Ratio is less
than 4.00 to 1.00
but is greater than or
equal to 3.00 to 1.00
(v) If the Total 0.000% 0.625%
Leverage Ratio is less
than 3.00 to 1.00
</TABLE>
The Applicable Margin payable by the Companies on Advances made under the
Revolving Loan shall be subject to reduction or increase, as applicable and as
set forth in the table above, on a quarterly basis according to the performance
of the Paging Entities as tested by the Total Leverage Ratio. Except as set
forth in the last sentence hereof, any such increase or reduction in the
Applicable Margin provided for herein shall be effective three Business Days
after receipt by Administrative Agent of the applicable financial statements
and corresponding Compliance Certificate. If financial statements and
Compliance Certificate of the Paging Entities setting forth the Total Leverage
Ratio are not received by the Administrative Agent by the date required
pursuant to Sections 8.1(a) or 8.1(b) hereof, the Applicable Margin for
Advances made under the Revolving Loan shall be determined as if the Total
Leverage Ratio exceeds 6.00 to 1.00 until such time as such financial
statements and Compliance Certificate are received. For the final quarter of
any fiscal year of the Companies, the Companies may provide the unaudited
financial statements of the Paging Entities, subject only to year-end
adjustments, for the purpose of adjusting the Applicable Margin.
"Application" means an application for a Letter of Credit in the form of
Exhibit A hereto, as the same may be amended, modified, substituted or replaced
from time to time.
"Art. 1.04" has the meaning ascribed thereto in the definition of
Applicable Law.
"Assignment and Acceptance Agreement" means any agreement substantially in
the form of Exhibit B hereto, pursuant to which any Lender assigns any interest
in its rights and obligations hereunder (including the Obligations) in
accordance with the terms and provisions of Section 12.10 hereof.
"Authorized Officer" means the President of the Notification Agent, Senior
Vice President - Finance and Administration of the Notification Agent, Senior
Vice President Operations of the Notification Agent, Vice President - Finance
of the Notification Agent or the Controller of the Notification Agent.
4
<PAGE> 12
"Base Rate" means, at any time, a rate per annum (rounded upwards, if
necessary, to the next 1/100 of 1%) equal to the lesser of (a) the Highest
Lawful Rate and (b) the sum of the Applicable Margin plus the higher of (i) the
rate of interest of the Administrative Agent from time to time as its reference
rate in effect at such time for the determination of interest rates for loans
of varying maturities in Dollars to U.S. Persons, changing when and as such
reference rate changes (such rate may not be the lowest rate offered by the
Administrative Agent), and (ii) the Federal Funds Effective Rate in effect at
such time plus.50%. Each change in the interest rate on any Base Rate Advance
shall take effect on the effective date of any change in the Base Rate. If for
any reason the Administrative Agent shall have determined (which determination
shall be conclusive absent manifest error) that it is unable to ascertain the
Federal Funds Effective Rate for any reason, including, without limitation, the
inability or failure of the Administrative Agent to obtain sufficient bids or
publications in accordance with the terms hereof, the Base Rate shall be a rate
per annum equal to the lesser of (A) the Highest Lawful Rate and (B) the sum of
the Applicable Margin plus the rate of interest of the Administrative Agent
from time to time as its reference rate in effect at such time for the
determination of interest rates for loans of varying maturities in Dollars to
U.S. Persons, changing when and as such reference rate changes (such rate may
not be the lowest rate offered the Administrative Agent), until the
circumstances giving rise to such inability no longer exist. The Administrative
Agent shall furnish the Notification Agent with its calculation for any period
in which the Base Rate is not determined by reference to the rate of interest
set forth in clause (i) above, demonstrating that use of another rate to
calculate the Base Rate is appropriate, which demonstration shall be conclusive
absent manifest error.
"Base Rate Advance" means any borrowing which bears interest at a rate
determined with reference to the Base Rate.
"Business Day" means any day (other than Saturday) on which banks are open
for business in New York, New York, Boston, Massachusetts and Dallas, Texas
and, with respect to LIBOR Advances, on which dealings in foreign currencies
and exchange may be carried on by the Lenders in the London interbank
eurodollar market.
"Capital Expenditures" means the aggregate amount of all purchases or
acquisitions of items considered to be capital items under GAAP, and in any
event shall include the aggregate amount of items leased or acquired under
Capitalized Leases at the cost of the item, and the acquisition of realty,
tools, equipment, and fixed assets, and any deferred costs associated with any
of the foregoing (excluding deferred lease payments under Capitalized Leases).
Capital Expenditures are reduced by the net book value of pagers sold, which
had been reflected in prior periods' Capital Expenditures and recorded as
equipment on the balance sheet.
"Capitalized Lease" of a Person means any lease of property by such Person
as lessee which would be capitalized on a balance sheet of such Person,
prepared in accordance with GAAP.
5
<PAGE> 13
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person, prepared in accordance with GAAP.
"Capital Stock" means, as to any Person, the equity interests in such
Person, including, without limitation, the shares of each class of capital
stock of any Person that is a corporation and each class of partnership
interests (including without limitation, general, limited and preference units)
in any Person that is a partnership.
"Cash Equivalents" means Investments in (i) certificates of deposit and
other interest bearing deposits or accounts with U.S. and Canadian commercial
banks having a combined capital and surplus of at least $100,000,000, which
mature within one year from the date of Investment, (ii) deposits with U.S. and
Canadian commercial banks, which deposits are fully insured by the Federal
Deposit Insurance Corporation and mature within one year from the date of
Investment, (iii) obligations issued or unconditionally guaranteed by the U.S.
government, or issued by an agency thereof and backed by the full faith and
credit of the United States of America, which obligations mature within one
year from the date of Investment, (iv) direct obligations issued by any State
of the United States of America or political subdivision thereof, which mature
within one year from the date of Investment and have the highest rating
obtainable from Standard & Poor's Ratings Group, a Division of McGraw-Hill,
Inc. or Moody's Investors Service, Inc. on the date of Investment, or (v)
commercial paper (other than commercial paper issued by or on behalf of any
Paging Entity) which has the highest rating obtainable from Standard & Poor's
Ratings Group, a Division of McGraw-Hill, Inc. or Moody's Investors Service,
Inc. on the date of Investment.
"Change of Control" shall be deemed to have occurred (a) if such event has
occurred under any definition or provision (or similar definition or provision)
in any documentation relating to any Subordinated Indebtedness, or (b) in the
event that either (i) any Person or any Persons acting together which would
constitute a "group" (a "Group") for purposes of Section 13(d) of the
Securities Exchange Act Of 1934, as amended (the "Exchange Act"), or any
successor provision thereto, together with any Affiliates or Related Persons
thereof, shall beneficially own (as defined in Rule 13d-3 of the Exchange Act
or any successor provision thereto) at least 50% of the aggregate voting power
of all classes of Voting Stock of PageNet; or (ii) any Company shall be less
than 100% owned and controlled (directly or indirectly) by PageNet; or (iii)
any Person or Group, together with any Affiliates or Related Persons thereof,
shall succeed in having sufficient of its or their nominees elected to the
Board of Directors of PageNet such that such nominees, when added to any
existing director remaining on the Board of Directors of PageNet after such
election who is an Affiliate or Related Person of such Group, shall constitute
a majority of the Board of Directors of PageNet; provided, however, that clause
(iii) above shall not apply to any Person or Group, or Affiliates or Related
Persons thereof, who shall have succeeded on or prior to the Closing Date in
electing directors who constitute a majority of the Board of Directors of
PageNet.
"Chase" means Chase Securities Inc, a Delaware corporation.
6
<PAGE> 14
"Closing Date" means the date of this Agreement.
"Co-Agents" means Bank of America, Illinois, Barclays Bank PLC, CIBC,
INC., Compagnie Financiere de CIC et de L'Union Europeenne, CoreStates Bank,
N.A., Credit Lyonnais New York Branch, Dresdner Bank AG, New York and Grand
Cayman Branches, First Interstate Bank of Texas, N.A., Fleet National Bank,
Mellon Bank, N.A., PNC Bank, National Association, Royal Bank of Canada, as
Co-Agents and as Lenders.
"Co-Syndication Agents" means The First National Bank of Boston and Chase,
as Co-Syndication Agents.
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor statute.
"Collateral" means all Property on or in which a Lien is granted to the
Documentation Agent, for the benefit of the Managing Agents and the Lenders,
pursuant to this Agreement or any of the Security Documents or any other
instruments or documents provided for herein or delivered or to be delivered
hereunder or in connection herewith.
"Commitment" means, with respect to the Revolving Loan, $1,000,000,000
(which such amount includes the $25,000,000 Letter of Credit Commitment), or
such reduced amount as may be determined pursuant to Section 2.14 or Section
2.15 hereof.
"Communications Act" means, collectively, the Communications Act of 1934,
as amended, and the rules and regulations promulgated thereunder, as from time
to time in effect.
"Company" and "Companies" means Paging Network Finance Corp., Paging
Network Equipment Company, Inc., Paging Network of Alaska, Inc., Paging Network
of America, Inc., Paging Network of Arizona, Inc., Paging Network of Atlanta,
Inc., Paging Network of Colorado, Inc., Paging Network of Dallas/ Fort Worth,
Inc., Paging Network of Florida, Inc., Paging Network of Hartford/Springfield,
Inc., Paging Network of Hawaii, Inc., Paging Network of Illinois, Inc., Paging
Network of Kansas City, Inc., Paging Network of Las Vegas, Inc., Paging Network
of Los Angeles, Inc., Paging Network of Louisiana, Inc., Paging Network of
Massachusetts, Inc., Paging Network of Michigan, Inc., Paging Network of
Minnesota, Inc., Paging Network of New Jersey, Inc., Paging Network of New
Mexico, Inc., Paging Network of New York, Inc., Paging Network of North
Carolina, Inc., Paging Network of Northern California, Inc., Paging Network of
Ohio, Inc., Paging Network of Oklahoma, Inc., Paging Network of Omaha, Inc.,
Paging Network of Oregon, Inc., Paging Network of Orlando, Inc., Paging Network
of Philadelphia, Inc., Paging Network of San Antonio, Inc., Paging Network of
San Francisco, Inc., Paging Network Services, Inc., Paging Network of
Tennessee, Inc., Paging Network of Utah, Inc., Paging Network of Virginia, Inc.
(Delaware Corp.), Paging Network of Virginia, Inc. (Virginia Corp.), Paging
Network of Washington, Inc., Paging Network of Westchester, Inc., Paging
Network of West Texas, Inc., Paging Network - Atlantic Region, Inc., Paging
Network - Central Region, Inc., Paging Network - Northeastern Region, Inc.,
Paging Network - Northwestern Region, Inc., Paging Network - Southern Region,
Inc., Paging Network - Southeastern Region, Inc., Paging Network - Southwestern
Region, Inc.,
7
<PAGE> 15
Paging Network Satellite Company, Inc., and any other wholly-owned direct or
indirect Restricted Subsidiary of PageNet that becomes a party to this
Agreement in accordance with the terms of Section 2.20 hereof and Section
9.12(e) hereof
"Compliance Certificate" means a compliance certificate in the form of
Exhibit E hereto.
"Controlled Group" means, as to any Person on any date of determination,
all members of a controlled group of corporations and all trades or businesses
(whether or not incorporated) which are under common control with such Person
and which, together with such Person, are treated as a single employer under
Section 414(b), (c), (m) or (o) of the Code; provided, however, that the Paging
Entities shall be deemed to be members of the Companies' Controlled Group, and
Paging Entities and any other entities (whether incorporated or not
incorporated) which are under common control with the Paging Entities and
which, together with the Paging Entities are treated as a single employer under
Section 414(b), (c), (m) or (o) of the Code, shall be deemed to be members of
the Companies' Controlled Group on and after the Closing Date.
"Default" means an Event of Default and/or any of the events specified in
Article X hereof, regardless of whether there shall have occurred any passage
of time or giving of notice that would be necessary in order to constitute such
event an Event of Default.
"Documentation Agent" means NationsBank in its capacity as documentation
agent and collateral agent for the Lenders pursuant to Article XI hereof and not
in its individual capacity as a Lender, and any successor Documentation Agent
appointed pursuant to Article XI hereof.
"Dollar(s)" and the sign "$" means lawful money of the United States of
America.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any regulation promulgated thereunder.
"ERISA Event" means, with respect to the Paging Entities and each member
of their Controlled Group, (a) a Reportable Event (other than a Reportable
Event not subject to the provision for 30-day notice to the PBGC under
regulations issued under Section 4043 of ERISA), (b) the withdrawal of any such
Person or any member of its Controlled Group from a Plan during a plan year in
which it was a "substantial employer" as defined in Section 4001(a)(2) of
ERISA, (c) the filing of a notice of intent to terminate under Section 4041 of
ERISA, (d) the institution of proceedings to terminate a Plan by the PBGC, (e)
the failure to make required contributions which could result in the imposition
of a lien under Section 412 of the Code or Section 302 of ERISA, or (f) any
other event or condition which might reasonably be expected to constitute
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Plan or the imposition of any liability under
Title IV of ERISA other than PBGC premiums due but not delinquent under Section
4007 of ERISA.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D.
8
<PAGE> 16
"Eurocurrency Reserve Percentage" means, with respect to an Interest
Period, the reserve percentage applicable during such Interest Period (or if
more than one such percentage shall be so applicable, the daily average of such
percentages for those days in such Interest Period during which any such
percentage shall be so applicable) under Regulation D for determining the
actual reserve requirement incurred by any Lender (including, without
limitation, any emergency, supplemental or other marginal reserve requirement)
with respect to liabilities or assets consisting of or including Eurocurrency
Liabilities having a term equal to such Interest Period.
"Event of Default" means any of the events described in Article X hereof,
provided that any requirement for notice or lapse of time has been satisfied.
"FCC" means the Federal Communications Commission or any other regulatory
body which succeeds to the functions of the Federal Communications Commission.
"Federal Funds Effective Rate" means, for any period, a fluctuating
interest rate per annum equal, for each day during such period, to the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers, as published for
such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of Dallas, or, if such rate is not so
published for any day which is a Business Day, the average of the quotations
for such day on such transactions received by the Administrative Agent from
three Federal funds brokers of recognized standing selected by it.
"Fee Letters" means each of those certain letters from the Companies to
the Managing Agents (or any combination thereof), or to any of the other
Lenders (or any combination thereof), setting forth fees to be paid in
connection with the Revolving Loan and this Agreement, as each such fee letter
may be amended, substituted, restated, extended, renewed or increased.
"GAAP" means generally accepted accounting principles as in effect on
December 31, 1995 in the United States, which shall include the official
interpretations thereof by the Financial Accounting Standards Board, applied on
a basis consistent with that used in preparation of the financial statements of
the Paging Entities for the year ended December 31, 1995. The requisite that
such principles be applied on a consistent basis shall mean that the accounting
principles observed in a current period are comparable in all material respects
to those applied in a preceding period.
"Guarantors" means PageNet and any other Person executing a Guaranty of
the Obligations of the Companies to the Lenders.
"Guaranty" of a Person means any agreement by which such Person assumes,
guarantees, endorses, contingently agrees to purchase or provide funds for the
payment of, or otherwise becomes liable upon, the obligation of any other
Person, or agrees to maintain the net worth or working capital or other
financial condition of any other Person, or otherwise assures any creditor or
such other Person against loss, including, without limitation, any comfort
letter,
9
<PAGE> 17
operating agreement or take-or-pay contract and shall include without
limitation, the contingent liability of such Person in connection with any
application for a letter of credit.
"Highest Lawful Rate" means at the particular time in question the maximum
rate of interest which, under Applicable Law, any Lender is then permitted to
charge on the Obligations. If the maximum rate of interest which, under
Applicable Law, any Lender is permitted to charge on the Obligations shall
change after the date hereof, the Highest Lawful Rate shall be automatically
increased or decreased, as the case may be, from time to time as of the
effective time of each change in the Highest Lawful Rate without notice to the
Notification Agent or any Company. For purposes of determining the Highest
Lawful Rate under Applicable Law, the applicable rate ceiling shall be (i) the
indicated rate ceiling described in and computed in accordance with the
provisions of Section (a)(1) of Art. 1.04; or (ii) provided notice is given as
required in Section (h)(1) of Art. 1.04, either the annualized ceiling or
quarterly ceiling computed pursuant to Section (d) of Art. 1.04; provided,
however, that at any time the indicated rate ceiling, the annualized ceiling or
the quarterly ceiling, as applicable, shall be less than 18% per annum or more
than 24% per annum, the provisions of Sections (b) (1) and (2) of Art. 1.04
shall control for purposes of such determination, as applicable.
"Indebtedness" of a Person means such Person's (a) obligations for
borrowed money, and obligations to reimburse drawings under letters of credit,
(b) obligations representing the deferred purchase price of services or
property other than accounts payable arising in the ordinary course of such
Person's business payable on terms customary in the trade, (c) obligations,
whether or not assumed, secured by Liens (other than Liens imposed by law, such
as carriers', warehousemen's and mechanics' Liens and other similar Liens,
arising in the ordinary course of business which secure payment of obligations
not more than 60 days past due) or payable out of the proceeds or production
from property now or hereafter owned or acquired by such Person, (d)
obligations which are evidenced by notes, acceptances, or other similar
instruments, (e) Capitalized Lease Obligations, and (f) obligations pursuant to
any Guaranty, except for obligations of PageNet pursuant to Guaranties of its
Restricted Subsidiaries' Indebtedness or obligations (but only to the extent
duplicative) and obligations pursuant to performance bonds and surety bonds.
"Indemnified Matters" has the meaning ascribed thereto in Section 7.10
hereof.
"Indemnitees" has the meaning ascribed thereto in Section 7.10 hereof.
"Institutional Affiliate" means the holding company of any Lender, or any
wholly-owned direct or indirect subsidiary or branch of such holding company or
principal office of such Lender.
"Interbank Rate" means, with respect to a LIBOR Advance for the relevant
Interest Period, the average of the rates of interest per annum (rounded
upwards, if necessary, to the next 1/100 of 1%), as determined by the
Administrative Agent, at which Dollar deposits in immediately available funds
are offered by each Managing Agent two Business Days prior to the beginning of
such Interest Period to major banks in the London interbank eurodollar market
as
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at or about 11:00 a.m., London time, for delivery on the first day of such
Interest Period, for the number of days comprised therein and in an amount
equal to the amount of such Managing Agent's portion of the LIBOR Advance to be
outstanding during such Interest Period.
"Interest Hedge Agreement" means any and all agreements, devices or
arrangements designed to protect at least one of the parties thereto from the
fluctuations of interest rates, exchange rates or forward rates applicable to
such party's assets, liabilities or exchange transactions, including, but not
limited to, Dollar-denominated or cross- currency interest rate exchange
agreements, forward currency exchange agreements, interest rate cap or collar
protection agreements, forward rate currency or interest rate options, puts and
warrants, as the same may be amended or modified and in effect from time to
time, and any and all cancellations, buybacks, reversals, terminations or
assignments of any of the foregoing.
"Interest Period" means, with respect to any LIBOR Advance, a period of
one, two, three or six months (or nine or twelve months if each Lender deems
such Interest Period to be available), commencing on a Business Day selected by
the Notification Agent pursuant to Section 2.3 hereof. Such Interest Period
shall end on the day in the appropriate succeeding calendar month which
corresponds numerically to the beginning day of such Interest Period, provided,
however, that if there is no such numerically corresponding day in such
appropriate succeeding month, such Interest Period shall end on the last
Business Day of such succeeding month. If an Interest Period would otherwise
end on a day which is not a Business Day, such Interest Period shall end on the
next succeeding Business Day, provided, however, that if the next succeeding
Business Day falls in a new month, such Interest Period shall end on the
immediately preceding Business Day.
"Investment" of a Person means any loan, advance, extension of credit
(excluding accounts receivable arising in the ordinary course of business on
terms customary in the trade), deposit account or contribution of capital by
such Person to any other Person or any investment in, or purchase or other
acquisition of, the stock, notes, debentures or other securities of any other
Person made by such Person.
"Lead Managers" means Bank of Montreal, First Union National Bank of North
Carolina, Mercantile Bank of St. Louis National Association, The Mitsubishi
Trust and Banking Corporation, Chicago Branch, Societe Generale, as Lead
Managers and as Lenders.
"Lenders" means the institutions and entities not constituting a Paging
Entity listed on the signature pages of this Agreement and their respective
successors and assigns in accordance with Section 12.8 of this Agreement,
including, without limitation, the Administrative Agent, the Documentation
Agent, the Co-Syndication Agents, the Managing Agents, the Co-Agents and the
Lead Managers.
"Letters of Credit" means irrevocable standby letters of credit issued by
NationsBank and set forth on Schedule 1.01 hereto, or issued subsequent to the
Closing Date pursuant to Section 3.1 hereof, in form satisfactory to
NationsBank, and any amendments, modifications, substitutions, extensions,
renewals, or replacements thereof.
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"Letter of Credit Commitment" means $25,000,000, provided that, the Letter
of Credit Commitment may not at any time exceed the amount of the Commitment in
effect from time to time.
"LIBOR Advance" means any borrowing which bears interest at the LIBO Rate.
"LIBO Rate" means a rate per annum equal to the lesser of the (a) Highest
Lawful Rate and (b) the sum of the Interbank Rate plus the Applicable Margin.
"Lien" means any security interest, mortgage, pledge, lien, claim, charge,
encumbrance, title retention agreement, lessor's interest under a Capitalized
Lease or analogous instrument, in, of or on any Person's assets or properties
in favor of any other Person.
"Loan Documents" means this Agreement, the Notes, the Applications, the
Letters of Credit, any Assignment and Acceptance Agreement, the Security
Documents, documents relating to or evidencing the Collateral, all Fee Letters,
any Interest Hedge Agreement executed by any Paging Entity and any Lender or
any Institutional Affiliate, any other fee letter executed by any Paging Entity
in favor of any Lender or Institutional Affiliate, any certificates delivered
by any Paging Entity, any Restricted Subsidiary or any Guarantor or other
Person on behalf of any Paging Entity from time to time, and any other
documents, instruments and agreements executed or delivered from time to time
in connection herewith or therewith, and any and all amendments, restatements,
modifications, substitutions and extensions of any thereof.
"Majority Lenders" means the Lenders in the aggregate obligated hereunder
to make Advances under the Revolving Loan aggregating at least 66-2/3% of the
Commitment, or if the Commitment shall have been reduced to zero pursuant to
this Agreement, Lenders in the aggregate holding Total Outstandings evidencing
at least 66-2/3% of the aggregate outstanding principal amount of the aggregate
Total Outstandings. For purposes of this definition, each Lender shall be
deemed to hold an amount equal to its Revolving Loan Specified Percentage of
all outstanding Letters of Credit.
"Management Fee" means any fee paid or payable by any Paging Entity to any
Person that is not an employee or officer of such Paging Entity to compensate
such Person for the management services provided by such Person to any Paging
Entity (specifically excluding directors fees payable to members of the Board
of Directors of PageNet for sitting on the Board).
"Managing Agents" means Toronto Dominion, NationsBank, The First National
Bank of Boston and Chemical Bank, each in its capacity as one of the managing
agents under this Agreement and not in its individual capacity as a Lender, and
their respective successors.
"Material Adverse Effect" means any act or circumstance or event that (a)
causes a Default or Event of Default, (b) otherwise could reasonably be
expected to (i) be material and adverse to the continued operation of Paging
Entities taken as a whole, or (ii) reduce any fiscal year's net income or
increase any fiscal year's net loss of the Paging Entities by the greater of
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(A) 15% of Operating Cash Flow for the most recently completed fiscal year and
(B) $25,000,000 or (c) in any manner whatsoever does or could reasonably be
expected to materially and adversely affect the validity or enforceability of
any of the Loan Documents.
"Maturity Date" means the earlier of December 31, 2004, or any earlier
date the Revolving Loan becomes due and payable (whether by acceleration,
repayment, prepayment, scheduled reduction, installment payment, reduction of
the Commitment to zero or otherwise).
"Maximum Amount" means the maximum amount of interest which, under
Applicable Law, any Lender is permitted to charge on the Obligations.
"Multiemployer Plan" means, as to any Person, at any time, a
"multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA and to
which such Person or any member of its Controlled Group is making, or is
obligated to make, contributions or has made, or been obligated to make,
contributions.
"NationsBank" has the meaning set forth in the Preamble.
"Net Asset Sales Proceeds" means the gross proceeds received by any
Paging Entity in connection with or as a result of any disposition, transfer
or other conveyance of any Property of any Paging Entity, minus the sum
of (a) reasonable out-of-pocket costs and expenses incurred by any such Paging
Entity in connection with such disposition payable to Persons not constituting
an Affiliate of any Paging Entity plus (b) taxes estimated by an officer of
PageNet and approved by two Authorized Officers to be paid or payable by such
Paging Entity as a direct result of such disposition, taking into account all
net operating losses and other tax benefits available to the Paging Entities, if
any, provided, however, that if, after the payment of all taxes with respect to
such disposition, (x) the amount of estimated taxes, if any, exceeded the tax
amount actually paid in cash in respect of such disposition or (y) the amount
reserved, if any, exceeded the actual associated liabilities in respect of such
disposition, the aggregate amount of such excess shall be immediately payable,
pursuant to the terms of this Agreement, as Net Asset Sale Proceeds.
"Non-Affected Lender" has the meaning assigned thereto in Section 12.15
hereof.
"Notes" means the Companies' Revolving Loan Notes, with appropriate
insertions, and any amendments, modifications, substitutions, extensions,
renewals or replacements thereof.
"Notice of Assignment" has the meaning set forth in Section 12.10(b)
hereof.
"Notification Agent" means Paging Network Finance Corp., a Delaware
corporation, or other Paging Entity designated by each of the Companies to be
the Notification Agent upon notice to the Managing Agents and the Lenders in
accordance with the terms of Section 12.2 hereof.
"Obligations" means, as of any date of determination, (a) all obligations
of any nature (whether matured or unmatured, fixed or contingent) of the Paging
Entities to the Lenders and/or
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any Institutional Affiliates under the Loan Documents, as they may be amended,
increased, substituted or replaced from time to time (including, without
limitation, unpaid principal of, and accrued and unpaid interest on, the Notes
(including post-petition interest, whether or not it constitutes an allowed
claim), all outstanding reimbursement obligations of the Paging Entities in
respect of Letters of Credit, all contingent obligations of the Paging Entities
under all Letters of Credit, all accrued and unpaid fees, and all other
obligations (including but not limited to those under Sections 5.4, 7.10 and
12.3 hereof) of the Paging Entities to the Agents and the Lenders, or any of
them, arising under the Loan Documents), (b) all obligations of any nature of
the Paging Entities or any of them to any Lender or Institutional Affiliate in
connection with any Interest Hedge Agreement, and (c) all obligations of the
Paging Entities or any of them for losses, damages, expenses or any other
liabilities of any kind that any Lender may suffer by reason of a breach by any
Paging Entity of any obligation, covenant, or undertaking with respect to any
Loan Document.
"Operating Cash Flow" means, for any period of determination, the Paging
Entities' consolidated pre-tax net income or loss, plus depreciation expense,
amortization expense, Total Interest Expense, extraordinary loss and losses and
non-cash charges, if any, minus extraordinary income and gains and non-cash
income, if any.
"Original Credit Agreement" has the meaning ascribed thereto in the
Preamble hereof.
"Original Lenders" means NationsBank of Texas, N.A., The Toronto-Dominion
Bank, The First National Bank of Boston, Bank of Hawaii, Barclays Bank PLC,
CIBC,Inc., Compagnie Financiere de CIC et de L'Union Europeenne, CoreStates
Bank, N.A., Mellon Bank, N.A., PNC Bank, National Association, Royal Bank of
Canada, ABN AMRO Bank N.V., Bank of America, Illinois, Credit Lyonnais New York
Branch, Dresdner Bank AG, New York and Grand Cayman Branches, First Interstate
Bank of Texas, N.A., First Union National Bank of North Carolina, Natwest Bank
N.A., Shawmut Bank Connecticut, N.A., Societe Generale, The Bank of California,
N.A., Bank of Ireland - Grand Cayman Branch, Bank of Montreal, Banque Paribas,
Banque Francaise du Commerce Exterieur, The Daiwa Bank, Limited, First Hawaiian
Bank, The First National Bank of Maryland, The Fuji Bank, Limited, Hibernia
National Bank, Morgan Guaranty Trust Company of New York, The Long-Term Credit
Bank of Japan, Limited, New York Branch, The Mitsubishi Trust and Banking
Corporation, Chicago Branch, National Bank of Canada, Society National Bank,
The Sumitomo Bank, Ltd. (Houston Agency), Crescent\Mach I Partners, L.P.,
Senior Debt Portfolio, Massachusetts Mutual Life Insurance Co., Merrill Lynch
Senior Floating Rate Fund, Inc., Merrill Lynch Prime Rate Portfolio, Falcon 94,
Limited, Pearl Street, L.P. and CHL High Yield Loan Portfolio.
"PageNet" means Paging Network, Inc., a Delaware corporation.
"Paging Entities" means PageNet, the Companies, any Subsidiary of PageNet
or any Company, any Guarantor, and any other Person obligated under any Loan
Document from time to time, but specifically excluding all Unrestricted
Subsidiaries.
"Participant" has the meaning set forth in Section 12.9(a) hereof.
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<PAGE> 22
"Payment Date" means as to any Base Rate Advance, fees and any mandatory
Commitment reduction pursuant to Section 2.15 hereof, each Quarterly Date, and
as to any LIBOR Advance, the last Business Day of each Interest Period with
respect thereto and, if such Interest Period is in excess of three months, each
three month anniversary date thereafter occurring during each such Interest
Period; provided that, after the Maturity Date, "Payment Date" means the
earlier of each Quarterly Date or demand by the Administrative Agent or the
Documentation Agent.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Person" means any corporation or division thereof, natural person, firm,
joint venture, limited liability company, partnership, trust, unincorporated
organization, enterprise, entity, tribunal, government or any department or
agency of any government.
"Plan" means an employee pension benefit plan as defined in Section 3(2)
of ERISA (including a Multiemployer Plan) that is covered by Title IV of ERISA
or subject to the minimum funding standards under Section 412 of the Code and
is maintained for the employees of the Paging Entities or any member of their
Controlled Group.
"Pledge Agreement" has the meaning set forth in Section 2.18(a) of this
Agreement.
"Pledged Stock" means stock pledged by PageNet and the Companies from time
to time under the Pledge Agreements, or pledged by any Person from time to
time, constituting Collateral and securing any portion of the Obligations.
"Preferred Stock" means preferred stock to be issued by PageNet on terms
and conditions and subject to documentation reasonably acceptable to the
Majority Lenders.
"Pro Forma Debt Service" means, with respect to the Paging Entities, for
any period, the sum of (a) Total Interest Expense excluding amortization of
debt issuance costs, and (b) required principal payments on Indebtedness and
mandatory redemptions on Preferred Stock, provided that, the Paging Entities
and the Lenders agree to use the weighted average of the applicable interest
rates in effect on such date of determination for all Indebtedness subject to a
floating rate.
"Property" of a Person means any and all property, whether real, personal,
tangible, intangible, or mixed, of such Person, or other assets owned, leased
or operated by such Person.
"Purchaser" has the meaning set forth in Section 12.10(a) hereof.
"Quarterly Date" means the last Business Day of each March, June,
September and December, beginning with the first such date after the Closing
Date and ending on the date the Commitment has been reduced to zero and the
Total Outstandings and all Obligations have been paid in full.
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"RCCC" has the meaning set forth in Section 6.11 hereof.
"RCCS" has the meaning set forth in Section 6.11 hereof.
"Refinancing Advance" means an Advance that is used to pay the principal
amount of an existing Advance at the end of its Interest Period and which,
after giving effect to such application, does not result in an increase in the
aggregate amount of outstanding Advances.
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System (or any successor thereto), as in effect from time to time or
any successor thereto.
"Related Person" of any Person means, without limitation, any other Person
owning (a) 5% or more of the outstanding common stock of such Person or (b) 5%
or more of the Voting Stock of such Person.
"Reportable Event" has the meaning set forth in Title IV of ERISA.
"Restricted Payments" has the meaning set forth in Section 9.8 hereof.
"Restricted Subsidiary" means each Subsidiary of PageNet and the Companies
that is not an Unrestricted Subsidiary.
"Revolver Outstandings" means the sum of (a) the aggregate outstanding
Advances under the Revolving Loan, plus (b) all accrued and unpaid interest on
the aggregate outstanding Advances under the Revolving Loan, plus (c) the
aggregate face amount of all outstanding Letters of Credit, plus (d) (without
duplication) all outstanding reimbursement obligations of the Paging Entities
in respect of all Letters of Credit, and all accrued and unpaid interest
thereon.
"Revolving Loan" means that certain revolving credit loan described in
Section 2.1 hereof.
"Revolving Loan Notes" means those certain promissory notes evidencing
Advances under the Revolving Loan, executed by the Companies payable to each
Lender obligated to make Advances under the Revolving Loan, as such notes may
be amended, extended, replaced, modified, substituted or renewed from time to
time.
"Revolving Loan Specified Percentage" means, as to any Lender, the
percentage indicated beside its name on the signature pages hereof as its
Revolving Loan Specified Percentage, or as adjusted or specified in any
Assignment and Acceptance Agreement, or any amendment to this Agreement.
"SEC" means the Securities and Exchange Commission or any regulatory body
that succeeds to the functions of the Securities and Exchange Commission.
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"Security Documents" means the Pledge Agreement, guaranties executed by
the Guarantors, security agreements executed by the Paging Entities,
confirmation agreements, UCC-1 and UCC-3 financing statements and any other
documents executed or delivered in connection therewith, and any other
documents and instruments executed or delivered by any Person from time to time
securing the Obligations, as any and all such documents and instruments listed
above may be amended, restated, extended, substituted or replaced from time to
time.
" Senior Debt" means the Paging Entities' aggregate outstanding amount of
total Indebtedness outstanding from time to time, except amounts outstanding
with respect to Subordinated Indebtedness.
"Solvent" means, with respect to any Person, that on such date (a) the
fair value of the Property of such Person is greater than the total amount of
liabilities, including without limitation, contingent liabilities, of such
Person, (b) the present fair salable value of the assets of such Person is not
less than the amount that will be required to pay the probable liability of
such Person on its debts as they become absolute and matured, (c) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and liabilities
mature, and (d) such Person is not engaged or about to engage in a business for
which the remaining assets of the Person are unreasonably small in relation to
the business.
"Special Counsel" means Donohoe, Jameson & Carroll, P.C., or such other
law firm designated by the Documentation Agent.
"Subordinated Indebtedness" means (a) those certain 10.125% Senior
Subordinated Notes due August 1, 2007 of PageNet, in an aggregate principal
amount of $400,000,000, (b) the unsecured public debt of PageNet issued from
time to time which is subordinated to the Obligations as permitted under
Section 9.9(d) hereof, (c) those certain 8.875% Senior Subordinated Notes due
February 1, 2006 of PageNet, in an aggregate principal amount of $300,000,000,
(d) those certain 11.75% Senior Subordinated Notes due May 15, 2002 of PageNet,
in an aggregate principal amount of $200,000,000, and (e) other debt securities
from time to time issued in accordance with the terms of Section 9.9(d) hereof.
"Subsidiary" means any Person, more than 50% of the outstanding voting
securities of which shall at the time be owned or controlled, directly or
indirectly, by PageNet or by one or more of its Subsidiaries or by PageNet and
one or more of its Subsidiaries, or any voluntary association, joint stock
company, voting trust or similar organization which is so owned or controlled.
"Substantial Portion" means, with respect to the Property of the Paging
Entities, Property, the income from which produces more than 10% of the Paging
Entities' Operating Cash Flow, as would be shown in the most recent
consolidated financial statements of the Paging Entities furnished to the
Lenders in accordance with Section 8.1 hereof.
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"Super-Majority Lenders" means the Lenders in the aggregate having at least
90% of the Commitment or, if the Commitment shall have been terminated pursuant
to this Agreement, holding Total Outstandings evidencing at least 90% of the
aggregate outstanding principal amount of the Total Outstandings. For purposes
of this definition, each Lender shall be deemed to hold an amount equal to its
Revolving Loan Specified Percentage of all outstanding Letters of Credit.
"Toronto Dominion" has the meaning set forth in the Preamble.
"Total Debt" means the Paging Entities' aggregate outstanding amount of
total Indebtedness from time to time.
"Total Interest Expense" means, for the Paging Entities on a consolidated
basis (without duplication), for any period of determination, the aggregate
amount of the sum of (a) interest expense on Total Debt of the Paging Entities
during such period as determined in accordance with GAAP, plus (b) cash
dividends or other cash payments on Preferred Stock of PageNet during such
period as determined in accordance with GAAP, plus (c) amortized costs and
expenses of the Paging Entities in connection with interest rate caps or swaps
or other interest rate protection arrangements during such period plus (d) fees
paid by the Paging Entities in accordance with the provisions of Sections
2.8(a) and 3.2 of this Agreement during such period to the extent not already
included in interest expense.
"Total Leverage Ratio" means the ratio, for the most recent fiscal quarter
during the period of determination, of (a) Total Debt as of the end of such
period, to (b) Annualized Operating Cash Flow for such period.
"Total Outstandings" means the sum of (a) the Revolver Outstandings, plus
(b) (without duplication) all other unpaid Obligations owing to any Agent or
any Lender.
"Transferee" has the meaning set forth in Section 12.11 hereof.
"Unrestricted Subsidiaries" means Paging Network Canadian Holdings, Inc.,
Paging Network of Canada Inc., Paging Network International, Inc., Paging
Network International N.V., PageNet de Argentina, S.A., Paging Network (UK),
Limited, and (a) after prior written notice to each Managing Agent and the
Lenders, any Subsidiary (other than any Subsidiary that is a Company) acquired
or invested in by PageNet after the Closing Date in accordance with the terms
of Section 9.12(f) hereof and designated as an Unrestricted Subsidiary in such
notice, and (b) any Subsidiary of PageNet designated by PageNet as an
Unrestricted Subsidiary with the prior written consent of each Lender.
"Voting Stock" of any Person means Capital Stock of such Person which
ordinarily has voting power for the election of directors (or persons
performing similar functions) of such Person, whether at all times or only so
long as no senior class of securities has such voting power by reason of any
contingency.
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1.2. Financial Terms. Unless otherwise defined or the context otherwise
requires, all financial and accounting terms shall be defined under GAAP.
ARTICLE II
THE REDUCING REVOLVING CREDIT FACILITY
Subject to the terms and conditions of this Agreement, each Lender,
severally but not jointly, agrees:
2.1. Advances. Each Lender severally agrees, subject to the terms and
conditions hereinafter set forth, to make Advances under the Revolving Loan to
the Companies from the Closing Date until the Maturity Date in an aggregate
outstanding amount not to exceed, at any time outstanding such Lender's
Revolving Loan Specified Percentage of the Commitment. Each Advance under the
Revolving Loan shall be either a Base Rate Advance or a LIBOR Advance, as
specified in the related notice of conversion or request for Advance, as
applicable; provided that, after the occurrence and during the continuance of
any Event of Default, LIBOR Advances shall not be available to the Companies.
Subject to Sections 2.2 and 2.3 and the other terms and conditions of this
Agreement, the Companies may convert a Base Rate Advance made under the
Revolving Loan to a LIBOR Advance at any time after the Closing Date. All
Advances made under this Section 2.1 shall be made in accordance with Sections
2.2 and 2.3 below. Subject to Section 4.1 and Section 4.2 hereof, the Companies
may borrow, repay, and reborrow Advances under the Revolving Loan in accordance
with this Agreement. Notwithstanding anything herein to the contrary, at no
time shall the Advances outstanding under the Revolving Loan, together with all
outstanding Letters of Credit issued pursuant to Article III hereof exceed in
the aggregate an amount equal to the Commitment.
2.2. Advances, Generally. Base Rate Advances and LIBOR Advances are
available under the Revolving Loan, as selected by the Notification Agent in
accordance with the terms of Section 2.3 below. Base Rate Advances and LIBOR
Advances may be outstanding at the same time, but no more than 12 LIBOR
Advances may be outstanding under the Revolving Loan at any time. As to any
LIBOR Advances, each Lender may, if it so elects, fulfill its commitment by
causing a foreign branch or Affiliate to make such Advance, provided that in
such event such Advance shall be deemed for the purposes of this Agreement to
have been made by such Lender and the obligation of the Companies to repay such
Advance shall nevertheless be to such Lender and shall be deemed held by the
Lender, to the extent of such Advance, for the account of such branch or
Affiliate.
2.3. Borrowing Procedures.
(a) The Notification Agent on behalf of the Companies shall give the
Administrative Agent at least (i) three Business Days prior telephonic notice
(prior to 10:00 a.m., Dallas time, for any day to be counted as a Business Day)
(promptly confined by telecopy) of each Advance which is to be a LIBOR Advance,
or (ii) one Business Day prior telephonic notice (prior to 10:00 a.m. Dallas
time, for any day to be counted as a Business Day) (promptly confirmed by
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telecopy) of each Advance which is to be a Base Rate Advance, each specifying
(A) the borrowing date (which day shall be a Business Day), (B) the amount and
type of Advance, (C) whether such Advance is an Advance made under the
Revolving Loan or a Refinancing Advance made under the Revolving Loan, and (D)
if such Advance is to be a LIBOR Advance, the initial Interest Period for such
Advance, and the Administrative Agent shall promptly advise each Lender
thereof. Each Base Rate Advance shall be in a minimum aggregate amount of
$500,000 or an integral multiple of $250,000. Each LIBOR Advance shall be in a
minimum amount of $10,000,000 or a greater integral multiple of $100,000. No
Advance shall have an Interest Period which extends beyond the Maturity Date.
(b) Not later than 12:00 p.m., New York time, on the date of a
proposed borrowing of any Advance, each Lender shall provide the Administrative
Agent at its principal office in New York with immediately available funds
covering such Lender's Revolving Loan Specified Percentage of any borrowing
that is not a Refinancing Advance and the Administrative Agent shall pay over
such funds to the Notification Agent upon the Administrative Agent's receipt of
the documents required under Article IV hereof with respect to such Advance.
(c) If at least three Business Days prior to the end of an
Interest Period for an outstanding LIBOR Advance, the Notification Agent fails
to select a new loan option, then, subject to Section 2.13 hereof, such LIBOR
Advance shall be converted to a Base Rate Advance on and after the last day of
such Interest Period until paid or until the effective date of any new loan
option with respect thereto selected by the Notification Agent in accordance
with the terms of this Agreement. If at the end of an Interest Period for an
outstanding LIBOR Advance an Event of Default has occurred and is continuing,
then each such LIBOR Advance shall be converted to a Base Rate Advance for
LIBOR Advances under the Revolving Loan, on and after the last day of such
Interest Period until paid or until the effective date of any new loan option
with respect thereto selected by the Notification Agent in accordance with the
terms of this Agreement. So long as there exists no Event of Default or Default
at such time, an outstanding Base Rate Advance may be converted to a LIBOR
Advance at any time subject to the notice provisions of Section 2.3(a) hereof.
The Notification Agent shall select Interest Periods with respect to LIBOR
Advances so that it is not necessary to pay a LIBOR Advance prior to the last
day of the applicable Interest Period in order to make a mandatory principal
payment required to be made pursuant to Section 2.13 hereof. If any Interest
Period includes a Payment Date in respect of any mandatory Commitment reduction
pursuant to Section 2.15 hereof or repayment or prepayment pursuant to Section
2.12 and Section 2.13 hereof, (i) the principal amount of the Advances to be
repaid on such date shall have an Interest Period ending on such date (and the
Companies shall pay all costs associated therewith in accordance with the terms
of Section 5.4 hereof), and (ii) the remainder of any of the Advances shall
have an Interest Period as shall have been selected by the Notification Agent
pursuant to Section 2.3(a) above.
2.4. Notes. The Revolving Loan shall be evidenced by Notes in the form
of Exhibit C hereto, each of which shall be dated the date hereof and made
payable to the order of each Lender making any portion of the Revolving Loan.
All Advances made by the Lenders to the Companies pursuant to this Agreement and
all payments of principal shall be evidenced by each Lender in its records, or,
at such Lender's option, on the schedule attached to its respective
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<PAGE> 28
Notes, which records or schedule shall be rebuttable presumptive evidence of
the subject matter thereof.
2.5. Interest - Base Rate Advances. The unpaid principal amount of the
Base Rate Advances shall bear interest prior to maturity at a rate per annum
equal to the Base Rate. Interest on Base Rate Advances prior to maturity shall
be payable on each Payment Date commencing on the first such date to occur
after the Closing Date and continuing until the Total Outstandings and
Obligations have been paid in full and the Commitment has been reduced to zero.
2.6. Interest - LIBOR Advances. The unpaid principal amount of the LIBOR
Advances shall bear interest prior to maturity at a rate per annum equal to the
LIBO Rate in effect for each Interest Period as determined for such Interest
Period. Interest on LIBOR Advances prior to maturity shall be payable on each
Payment Date commencing on the first such date to occur after the Closing Date
and continuing until the Total Outstandings and Obligations have been paid in
full and the Commitment has been reduced to zero.
2.7. Post-Default Interest. Subject to Section 12.16 hereof, after the
occurrence and during the existence of an Event of Default, the Total
Outstandings shall accrue interest, and the Companies shall pay to the Lenders
interest on such amounts until the date of payment in full of Total
Outstandings, at a rate per annum which is equal to the lesser of the (a)
Highest Lawful Rate or (b) the greater of (i) 2% plus the rates otherwise
applicable to the Total Outstandings, or (ii) 3% plus the Base Rate from time
to time in effect, provided that, after the Maturity Date the interest rate
shall never be less than the lesser of the Highest Lawful Rate and 3% in excess
of the Base Rate in effect at maturity. Interest under this Section 2.7 shall
be payable on the earlier of each Payment Date and demand by the Lenders.
Interest after the Maturity Date shall be payable on demand.
2.8. Fees.
(a) Subject to Section 12.16 hereof, the Companies agree to pay
to the Administrative Agent on behalf of the Lenders, in accordance with
their Revolving Loan Specified Percentages, a commitment fee of 0.375%
per annum on the daily average of the unused amount of the Commitment
during the period commencing on the Closing Date and ending on the
Maturity Date, provided that, on such Quarterly Date as the Total Leverage
Ratio is less than 4.50 to 1.00, the commitment fee shall be reduced to
0.250% per annum. The commitment fee shall be due and payable as it
accrues on each Payment Date during the term of this Agreement, commencing
on the first such date to occur after the Closing Date and ending on the
Maturity Date. All accrued and unpaid fees shall be due and payable on the
Maturity Date. Subject to Section 12.16 hereof, once paid, all such fees
shall be non-refundable.
(b) Subject to Section 12.16 hereof, the Companies shall pay
such fees to the Managing Agents and the Lenders as are set forth in the
Fee Letters.
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<PAGE> 29
2.9. Method of Calculating Interest and Fees. Interest on Base Rate
Advances shall be computed for actual days elapsed on the basis of a year
consisting of 365, or when appropriate 366, days. Interest on LIBOR Advances,
any and all fees hereunder and the Federal Funds Effective Rate owed by any
Lender, subject to Section 12.16 hereof, shall be computed for actual days
elapsed on the basis of a year consisting of 360 days and paid for actual days
elapsed.
2.10. Interest Recapture. If at any time the applicable rate of interest
under this Agreement on any portion of the Obligations (the "Designated Rate")
exceeds the Highest Lawful Rate, the rate of interest on any Advance shall be
limited to the Highest Lawful Rate, but any subsequent reductions in the
Designated Rate shall not reduce the rate of interest thereon below the Highest
Lawful Rate until the total amount of interest paid and accrued thereon equals
the amount of interest which would have accrued thereon if the Designated Rate
had at all times been in effect. In the event that at maturity (stated or by
acceleration or otherwise), or at final payment of the Obligations, the total
amount of interest paid and accrued is less than the amount of interest which
would have accrued if the Designated Rate had at all times been in effect,
then, at such time and to the extent permitted by law, the Companies shall pay
to the Lenders an amount equal to the difference between (i) the lesser of the
amount of interest which would have accrued if the Designated Rate had at au
times been in effect and the amount of interest which would have accrued if the
Highest Lawful Rate had at all times been in effect, and (ii) the amount of
interest actually paid on the Obligations.
2.11. Place of Payment. All payments hereunder (including payments with
respect to the Notes, but subject to the provisions of Article III hereof)
shall be made without set-off or counterclaim and shall be made in immediately
available funds by the Notification Agent on behalf of the Companies to the
Administrative Agent, and, prior to an Event of Default and except as otherwise
specifically provided in this Agreement, for the account of the Lenders ratably
in accordance with each Lender's Revolving Loan Specified Percentage. All such
payments shall be made to the Administrative Agent, prior to 12:00 p.m., New
York time, at its offices or at such other place as may be designated by the
Administrative Agent to the Notification Agent in writing. The Administrative
Agent shall promptly remit in immediately available funds to each Lender its
share of all such payments received by the Administrative Agent for the account
of such Lender. Any payment received after 2:00 p.m., New York time, shall be
deemed received on the next Business Day. Whenever any payment to be made
hereunder or under any Note shall be stated to be due on a date other than a
Business Day, such payment may be made on the next succeeding Business Day, and
such extension of time shall be included in the computation of payment of
interest or any fees. The Companies hereby authorize the Administrative Agent
to credit the proceeds of each Advance to the depository account of the
Notification Agent as specified by the Notification Agent in writing from time
to time.
2.12. Voluntary Principal Payments and Prepayments. The Companies may
from time to time pay all outstanding Base Rate Advances, or, in a minimum
aggregate amount of $500,000 or any integral multiple thereof, any portion of
the outstanding Base Rate Advances, upon same day notice by 10:00 a.m., Dallas
time (telephonic notice to be followed by written
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<PAGE> 30
confirmation) to the Administrative Agent (and the Administrative Agent shall
promptly advise each Lender thereof) without penalty or premium. Subject to
Section 5.4 hereof, the Companies may from time to time pay all outstanding
LIBOR Advances, or, in a minimum aggregate amount of $500,000, or a greater
integral multiple of $100,000, any portion of the outstanding LIBOR Advances,
upon two Business Days notice by 10:00 a.m., Dallas time (telephonic notice to
be followed by written confirmation), to the Administrative Agent (and the
Administrative Agent shall promptly advise each Lender thereof), but in no
event shall the Companies pay any portion of any LIBOR Advance which would
result in such remaining outstanding LIBOR Advance being more than zero and
less than $10,000,000 in the aggregate. Unless otherwise designated by the
Notification Agent, all voluntary payments and prepayments shall be applied
first to Base Rate Advances outstanding under the Revolving Loan and then LIBOR
Advances outstanding under the Revolving Loan. Any amounts prepaid on the
Revolving Loan under this Section 2.12 shall reduce the Advances outstanding
under the Revolving Loan and, subject to compliance with all terms and
provisions of this Agreement (including without limitation, Article IV hereof)
may be reborrowed.
2.13. Mandatory Principal Payments.
(a) The Revolving Loan and Other Obligations. Subject to Section 5.4
hereof, on any date that the aggregate outstanding Advances under the Revolving
Loan, together with the face amounts of all Letters of Credit issued pursuant
to Article III hereof, exceed the Commitment (as reduced by any event described
in Sections 2.14 or 2.15 hereof), the Companies shall immediately make a
mandatory principal payment and pay or prepay the Revolving Loan Notes in the
amount necessary to reduce the aggregate outstandings Advances under the
Revolving Loan to an amount equal to or less than the Commitment as so reduced,
provided that, except as required pursuant to Section 2.13(b) and Section
2.13(c) below, no prepayment of an Advance or any portion of the Revolving Loan
shall be made other than on the last day of an Interest Period therefor, and
accrued commitment fees, all other fees, interest and amounts owed under
Section 5.4 hereof shall be due and payable concurrently therewith.
Notwithstanding any other provision in this Agreement or in the other Loan
Documents, the Commitment shall be reduced to zero on the Maturity Date and
all. Total Outstandings and other outstanding Obligations hereunder shall be
due and payable in full on the Maturity Date.
(b) Sale of Properties. If any Paging Entity sells or disposes of any
Property or assets (except sales and dispositions permitted in accordance with
the terms of Section 9.14(a), (b) and (c) hereof), then, to the extent the Net
Asset Sale Proceeds of all such sales in the aggregate over the term of this
Agreement exceed $5,000,000, the Companies shall, on the closing date of such
sale, make a mandatory prepayment on the Notes in an amount equal to 100% of
the Net Asset Sale Proceeds in excess of such amount from such disposition. All
mandatory prepayments shall be applied to Base Rate Advances outstanding under
the Revolving Loan and then LIBOR Advances outstanding under the Revolving
Loan.
(c) Change of Control. Not less than 20 Business Days prior to the
consummation of any transaction that would cause a Change in Control, the
Notification Agent shall notify (a "Change in Control Notice") the Agents and
each Lender of such expected transaction, including
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<PAGE> 31
within such Change in Control Notice the expected closing date of such
transaction. Unless an earlier date is otherwise agreed upon between the
Companies, the Agents and the Lenders, the Companies shall repay on the date of
the closing of the transaction, all of the Obligations (whereupon the Commitment
shall be terminated), and shall comply with the provisions of Section 3.3(b)
hereof with respect to outstanding Letters of Credit.
(d) Mandatory Payments and Prepayments, Generally. No payment or
prepayment under Sections 2.13(b) and (c) shall relieve or defer the obligation
of the Companies to repay the Obligations as a result of the mandatory
commitment reduction set forth in Section 2.15 hereof
2.14. Voluntary Reduction or Reduction of the Commitment to Zero. Subject
to the provisions of Section 2.15 hereof, the Companies may from time to time,
prior to the Maturity Date, upon at least three Business Days' prior written
notice received by the Agents (and the Administrative Agent shall promptly
advise each Lender thereof) permanently reduce the amount of the Commitment
(such reduction to be made among the Lenders according to their Revolving Loan
Specified Percentage of the Commitment). Any such reduction shall be in an
amount of $5,000,000 or an integral multiple thereof. No such voluntary
reduction will relieve the Companies of their obligations under Section 2.15
hereof, provided however that, each voluntary reduction in the Commitment made
in accordance with the terms of this Section 2.14 will reduce each quarterly
reduction in the Commitment required by Section 2.15(a) below on a pro rata
basis. The Companies may at any time on like notice from the Notification Agent
permanently and irrevocably reduce the Commitment to zero upon payment in full
of the outstanding Notes and other Obligations of the Companies hereunder.
2.15. Mandatory Reduction of Commitment.
(a) Scheduled Commitment Reductions. Commencing June 30, 2001, the
aggregate Commitment shall be automatically and permanently reduced (without
regard to any previous reductions or terminations thereof pursuant to Section
2.14 or other provisions of this Section 2.15, provided however, that any
voluntary reduction in the Commitment made in accordance with the terms of
Section 2.14 above will reduce the mandatory reductions in the Commitment
required by this Section 2.15(a) pro rata over the remaining dates of
reduction) by an amount equal to the amount set forth below opposite each such
Payment Date set forth below (such reduction to be applied pro rata among the
Lenders according to their respective Revolving Loan Specified Percentage of
the Commitment) until the Commitment is zero, provided that the Commitment
shall be reduced to zero on the Maturity Date:
<TABLE>
<CAPTION>
Payment Date Amount of Reduction
------------ -------------------
<S> <C>
June 30, 2001 $ 50,000,000.00
September 30, 2001 s 50,000,000.00
December 31, 2001 $ 50,000,000.00
</TABLE>
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<PAGE> 32
<TABLE>
<S> <C>
March 31, 2002 $ 50,000,000.00
June 30, 2002 $ 50,000,000.00
September 30, 2002 $ 50,000,000.00
December 31, 2002 $ 50,000,000.00
March 31, 2003 $ 62,500,000.00
June 30, 2003 $ 62,500,000.00
September 30, 2003 $ 62,500,000.00
December 31, 2003 $ 62,500,000.00
March 31, 2004 $100,000,000.00
June 30, 2004 $100,000,000.00
September 30, 2004 $100,000,000.00
December 31, 2004 $100,000,000.00 - the Commitment shall be zero.
</TABLE>
(b) Change of Control. Not less than 20 Business Days prior to the
consummation of any transaction that would cause a Change in Control, the
Notification Agent shall notify (a "Change in Control Notice") the Agents and
each Lender of such expected transaction, including within such Change in
Control Notice the expected closing date of such transaction. Unless an earlier
date is otherwise agreed upon between the Companies, the Agents and the
Lenders, the aggregate Commitment shall be reduced to zero simultaneously with
the closing of such transaction and the Companies shall repay at such time all
of the Obligations and shall comply with the provisions of Section 3.3(b)
hereof with respect to outstanding Letters of Credit.
2.16. Offset. In addition to and not in limitation of all rights of offset
that any Lender or other holder of any part of the Obligation may have under
Applicable Law, each Lender or other holder of any part of the Obligation
shall, upon the occurrence and during the existence of any Event of Default
described in Article X hereof (or Default under Section 10.4 hereof) and with
the consent of the Managing Agents, have the right to appropriate and apply to
the payment of such Obligations any and all balances, credits, deposits,
accounts or moneys of the Paging Entities then or thereafter with such Lender
or other holder.
2.17. Proration of Payments. If any Lender or other holder of any part of
the Obligation shall obtain any payment or other recovery (whether voluntary,
involuntary, by application of offset or otherwise) on account of any part of
the Obligation in excess of its ratable share (as determined in accordance with
Section 12.14 hereof) of payments and other recoveries obtained by all Lenders
or other holders on account of the Obligations then held by them, such Lender
or other holder shall purchase from the other Lenders or holders such
participation in the Obligations held by them as shall be necessary to cause
such purchasing Lender or other holder to share the excess payment or other
recovery ratably with each of them; provided, however, that if all or any
portion of the excess payment or other recovery is thereafter recovered from
such purchasing holder, such purchase shall be rescinded and the purchase price
restored to the extent of such recovery, but without interest. The Paging
Entities agree that any Lender so purchasing a participation from the other
Lenders under Section 12.9 hereof or this Section 2.17 may exercise all its
rights of payment, including the right of set-off,
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<PAGE> 33
with respect to such participation as fully as if such Lender were the direct
creditor of the Paging Entities in the amount of such participation.
2.18. Collateral and Collateral Call.
(a) Collateral. Payment of the Obligations is secured on a pari-passu
basis by (a) a first perfected security interest in all of the capital stock of
the Companies and each of their Restricted Subsidiaries, whether now existing
or hereafter acquired, pursuant to that certain Amended and Restated Pledge
Agreement, dated as of the date hereof, between PageNet, the Companies and the
Documentation Agent (as the same may be further amended or modified from time
to time, herein called the "Pledge Agreement"), (b) a first perfected security
interest in all of the tangible and intangible assets of PageNet, the Companies
and the Restricted Subsidiaries, whether now existing or hereafter acquired,
including, without limitation, the accounts, equipment, inventory and general
intangibles of PageNet, the Companies and the Restricted Subsidiaries of the
Companies, provided that real Property (both leasehold and fee owned), motor
vehicles, fixtures, intellectual property that does not constitute tradenames
and trademarks, deposit accounts, other bank accounts and chattel paper of
PageNet and the Companies shall not, on the Closing Date, be included in
Collateral, and (c) a Guaranty of the Obligations by PageNet, each Company and
each Restricted Subsidiary of the Companies, whether now existing or hereafter
acquired. PageNet and the Companies agree that they will execute and deliver,
or cause to be executed and delivered, such documents as the Documentation
Agent may from time to time request to create and perfect a first Lien for the
benefit of the Agents and the Lenders in the Collateral.
(b) Collateral Call. PageNet and the Companies agree, and agree to cause
any other Person owning any interest in any Company or any Restricted
Subsidiary now or hereafter from time to time to immediately pledge such
interest to secure the Obligation, pursuant to a pledge agreement substantially
in the form of the Pledge Agreement. PageNet and the Companies agree to, and
agree to cause the Restricted Subsidiaries from time to time to, grant the
Documentation Agent on behalf of the Agents and the Lenders from time to time
at the request of the Agents, or the Agents at the request of the Majority
Lenders, a Lien on any of the Property of PageNet and/or any Company or any
Restricted Subsidiary not already constituting Collateral. In that regard,
PageNet and the Companies shall, and shall cause the Restricted Subsidiaries
to, use best efforts to assist the Documentation Agent and the Lenders in
creating and perfecting a first Lien, for the benefit of Documentation Agent on
behalf of the Agents and the Lenders securing the Obligation in any such
Property of PageNet, the Companies and their Restricted Subsidiaries,
including, without limitation, providing the Documentation Agent with title
commitments, appraisals, surveys (with flood plain certification), mortgagee
title insurance, evidence of insurance including flood hazard insurance,
environmental audits, UCC-11 searches, Tax and Lien searches, recorded real
estate documents, intellectual property documentation and registration and
other similar types of documents, consents, authorizations, licenses
instruments and agreements relating to all Property of PageNet, the Companies
and the Restricted Subsidiaries as reasonably requested by the Documentation
Agent from time to time.
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<PAGE> 34
2.19. Taxes.
(a) Any and all payments by PageNet and/or the Companies hereunder shall
be made, in accordance with Section 2.11, free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges and withholdings, and all liabilities with respect thereto, excluding,
in the case of each Lender and the Administrative Agent and the Documentation
Agent, taxes imposed on its overall net income, and franchise taxes imposed on
it, by the jurisdiction under the laws of which such Lender or the
Administrative Agent or the Documentation Agent (as the case may be) is
organized or any political subdivision thereof (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If any Company shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder to any Lender
or the Administrative Agent or the Documentation Agent, (x) the sum payable
shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 2.19) such Lender or the Administrative Agent (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made, (y) the Companies shall make such deductions and (z) the
Companies shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with Applicable Law.
(b) In addition, the Companies agree to pay any and all stamp and
documentary taxes and any and all other excise and property taxes, charges and
similar levies that arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement or any other Loan Document (hereinafter referred to as "Other
Taxes").
(c) The Paging Entities will indemnify each Lender and the
Administrative Agent for the full amount of Taxes and Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed by any jurisdiction on
amounts payable under this Section 2.19) paid by such Lender or the
Administrative Agent or the Documentation Agent (as the case may be) and all
liabilities (including penalties, additions to tax, interest and reasonable
expenses) arising therefrom or with respect thereto whether or not such Taxes
or Other Taxes were correctly or legally asserted, other than penalties,
additions to tax, interest and expenses arising as a result of gross negligence
on the part of such Lender or the Administrative Agent or the Documentation
Agent, provided, however, that the Paging Entities shall have no obligation to
indemnify such Lender or the Administrative Agent unless and until such Lender
or the Administrative Agent shall have delivered to the Notification Agent a
certificate setting forth in reasonable detail the basis of the Paging
Entities' obligation to indemnify such Lender or the Administrative Agent
pursuant to this Section 2.19. This indemnification shall be made within 30
days from the date such Lender or the Administrative Agent (as the case may be)
makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes, the
Notification Agent on behalf of the Companies will furnish to the
Administrative Agent the original or a certified copy of a receipt evidencing
payment thereof. If no Taxes are payable in respect of any payment hereunder,
the Notification Agent on behalf of the Companies will furnish to the
Administrative
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<PAGE> 35
Agent a certificate from each appropriate taxing authority, or an opinion of
counsel acceptable to the Administrative Agent, in either case stating that
such payment is exempt from or not subject to Taxes, provided, however, that
such certificate or opinion need only be given if: (i) the Companies make any
payment from any account located outside the United States, or (ii) the payment
is made by a payor that is not a United States Person. For purposes of this
Section 2.19 the terms "United States" and "United States Person" shall have
the meanings set forth in Section 7701 of the Code.
(e) Without prejudice to the survival of any other agreement of the
Paging Entities hereunder, the agreements and obligations of the Paging
Entities contained in this Section 2.19 shall survive the payment in full of
the Obligations and the termination of this Agreement.
(f) Any Lender claiming any additional amounts payable pursuant to this
Section 2.19 shall use reasonable efforts (consistent with its internal policy
and legal and regulatory restrictions) to change the jurisdiction of its
lending office, if the making of such a change would avoid the need for, or
reduce the amount of, any such additional amounts which may thereafter accrue
and would not, in the sole judgment of such Lender, be otherwise
disadvantageous to such Lender.
(g) Each Lender (and the Administrative Agent and the Documentation
Agent with respect to payments to the Administrative Agent and the
Documentation Agent for their own account) agrees that (i) it will take all
reasonable actions by all usual means to maintain all exemptions, if any,
available to it from United States withholding taxes (whether available by
treaty, existing administrative waiver, by virtue of the location of any
Lender's lending office) and (ii) otherwise cooperate with the Companies to
minimize amounts payable by the Companies under this Section 2.19; provided,
however, the Lenders and the Administrative Agent and the Documentation Agent
shall not be obligated by reason of this Section 2.19(g) to contest the payment
of any Taxes or Other Taxes or to disclose any information regarding its tax
affairs or tax computations or reorder its tax or other affairs or tax or other
planning.
(h) If any Lender that has claimed any additional amounts payable
pursuant to this Section 2.19 shall, subsequent to the date thereof recover all
or any portion of such amount in the form of a refund, rebate or other tax
benefit, then such Lender shall refund to the Notification Agent any such
amount claimed hereunder and subsequently recovered.
2.20. Formation of New Companies. PageNet and each Company agree that upon
the formation or acquisition of any new Restricted Subsidiary of PageNet, to
(a) immediately pledge 100% of the Capital Stock of such new Restricted
Subsidiary of PageNet to the Documentation Agent on behalf of the Lenders to
secure the Obligations, and (b) immediately cause such new Restricted
Subsidiary of PageNet to (i) become a party to this Agreement as a "Company"
and become a party to all other Loan Documents pursuant to documentation deemed
appropriate by the Documentation Agent and the Managing Agents, and (ii) grant
a security interest and Lien on all assets and Properties of such new
Restricted Subsidiary to secure the Obligations pursuant to documentation
deemed appropriate by the Documentation Agent and the Managing Agents.
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<PAGE> 36
ARTICLE III
LETTERS OF CREDIT
3.1. Issuance of Letters of Credit. The Notification Agent shall give
the Administrative Agent and NationsBank not less than three Business Days
prior written notice of a request for the issuance of a Letter of Credit, and
the Administrative Agent shall promptly notify each Lender of such request.
Upon receipt of the Notification Agent's properly completed and duly executed
Applications and subject to the terms of such Applications and to the terms of
this Agreement, NationsBank agrees to issue Letters of Credit on behalf of the
Companies in an aggregate face amount not in excess of the Letter of Credit
Commitment at any one time outstanding. No Letter of Credit shall have a
maturity extending beyond the earliest of (a) the Maturity Date, or (b) one
year from the date of its issuance, or (c) such earlier date as may be required
to enable the Companies to satisfy their repayment obligations under Section
2.13 hereof. Subject to such maturity limitations and so long as no Default or
Event of Default has occurred and is continuing or would result from the
renewal of a Letter of Credit, the Letters of Credit may be renewed by
NationsBank in its discretion. The Lenders shall participate ratably in any
liability under the Letters of Credit and in any unpaid reimbursement
obligations of the Companies with respect to any Letter of Credit in their
Revolving Loan Specified Percentage. The amount of the Letters of Credit issued
and outstanding and the unpaid reimbursement obligations of the Companies for
such Letters of Credit shall reduce the amount of Commitment available, so that
at no time shall outstanding Advances under the Revolving Loan in the aggregate
exceed the Commitment, and at no time shall the sum of all Advances by any
Lender made under the Revolving Loan, plus its ratable share of amounts
available to be drawn under the Letters of Credit and the unpaid reimbursement
obligations of the Companies in respect of such Letters of Credit exceed its
Revolving Loan Specified Percentage of the Commitment.
3.2. Letters of Credit Fee. In consideration for the issuance of each
Letter of Credit, the Companies shall pay to the Administrative Agent for the
account of NationsBank and the Lenders, in accordance with their Revolving Loan
Specified Percentages, a letter of credit fee in an amount equal to a
percentage per annum of the face amount of such Letter of Credit equal to the
Applicable Margin for LIBOR Advances under the Revolving Loan in effect on the
date of issuance. The letter of credit fee shall accrue from the date of
issuance of each Letter of Credit and shall be payable in arrears on each
Payment Date and on the date of termination of such Letter of Credit, and upon
NationsBank's or Administrative Agent's demand pursuant to Section 3.3 hereof.
3.3. Reimbursement Obligations.
(a) The Companies hereby agree to reimburse NationsBank, immediately
upon demand by NationsBank or the Administrative Agent, and in immediately
available funds, for any payment or disbursement made by NationsBank under any
Letter of Credit. Payment shall be made by the Companies with interest on the
amount so paid or disbursed by NationsBank from and including the date payment
is made under any Letter of Credit to and including the date of
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<PAGE> 37
payment, at the Base Rate in effect from time to time plus three percent per
annum; provided, however, that if the Companies would be permitted under the
terms of Section 2.1, Section 2.2, Section 2.3 and Section 4.2 to borrow
Advances in amounts at least equal to their reimbursement obligation for a
drawing under any Letter of Credit, a Base Rate Advance by each Lender, in an
amount equal to such Lender's Revolving Loan Specified Percentage, shall
automatically be deemed made on the date of any such payment or disbursement
made by NationsBank in the amount of such obligation and subject to the terms
of this Agreement.
(b) The Companies hereby also agree to pay to NationsBank,
immediately upon demand by NationsBank or the Administrative Agent and in
immediately available funds, as security for their reimbursement obligations in
respect of the Letters of Credit under Section 3.3(a) hereof and any other
amounts payable hereunder and under the Notes, an amount equal to the aggregate
amount available to be drawn under Letters of Credit then outstanding,
irrespective of whether the Letters of Credit have been drawn upon, at the
occurrence of any of the following events: (i) upon an Event of Default, and
(ii) upon a Change of Control. Any such payments shall be deposited in a
separate account designated "PageNet Special Account" or such other designation
as NationsBank shall elect. All such amounts deposited with NationsBank shall be
and shall remain funds of the Companies on deposit with NationsBank and may be
invested by NationsBank as NationsBank shall determine. Such amounts may not be
used by NationsBank to pay the drawings under the Letters of Credit; however,
such amounts may be used by NationsBank as reimbursement for Letter of Credit
drawings which NationsBank has paid. If any amounts in the PageNet Special
Account shall have been deposited upon the occurrence of an Event of Default
only and such Event of Default shall have been subsequently cured or waived and
no other Event of Default exists, the Companies shall be relieved of their
obligations under this Section 3.3(b) until either of the two events specified
in subsections 3.3(b)(i) or (ii) shall occur again. During the existence of an
Event of Default but after the expiry of any Letter of Credit that was not
drawn upon, the Notification Agent may direct the Administrative Agent to use
any cash collateral for any such expired Letter of Credit, if any, to reduce
the amount of Total Outstandings. Any amounts remaining in the PageNet Special
Account, after the date of the expiry of all Letters of Credit and after all
Obligations have been paid in full, shall be repaid to the Notification Agent
promptly after such expiry and such payment in full.
(c) The obligations of the Companies under this Section 3.3
will continue until all Letters of Credit have expired and all reimbursement
obligations with respect thereto have been paid in full by the Companies and
until all other Obligations shall have been paid in full.
(d) The Companies shall be obligated to reimburse NationsBank
upon demand for all amounts paid under the Letters of Credit as set forth in
Section 3.3(a) hereof; provided, however, if the Companies for any reason fail
to reimburse NationsBank in full upon demand, whether by borrowing Advances to
pay such reimbursement obligations or otherwise, the Lenders shall reimburse
NationsBank in accordance with each Lender's Revolving Loan Specified
Percentage for amounts due and unpaid from the Companies as set forth in
Section 3.4 hereof; provided, however, that no such reimbursement made by the
Lenders shall discharge the Companies' obligations to reimburse NationsBank.
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(e) PageNet and the Companies shall indemnify and hold NationsBank or
any Lender, its officers, directors, representatives and employees harmless
from loss for any claim, demand or liability which may be asserted against
NationsBank or such indemnified party in connection with actions taken under
the Letters of Credit or in connection therewith (INCLUDING LOSSES RESULTING
FROM THE NEGLIGENCE OF NATIONSBANK OR SUCH INDEMNIFIED PARTY), and shall pay
NationsBank for reasonable fees of attorneys (who may be employees of
NationsBank) and legal costs paid or incurred by NationsBank in connection with
any matter related to the Letters of Credit, except for losses and liabilities
incurred as a direct result of the gross negligence or wilful misconduct of
NationsBank or such indemnified party. If the Companies and/or PageNet for any
reason fail to indemnify or pay NationsBank or such indemnified party as set
forth herein in full, the Lenders shall indemnify and pay NationsBank upon
demand, in accordance with each Lender's Revolving Loan Specified Percentage of
such amounts due and unpaid from the Companies. The provisions of this Section
3.3(e) shall survive the termination of this Agreement.
3.4. Lenders' Obligations. Each Lender severally agrees, unconditionally
and irrevocably to reimburse NationsBank (to the extent NationsBank is not
otherwise reimbursed by the Companies in accordance with Section 3.3(a) hereof)
on demand for such Lender's Revolving Loan Specified Percentage of each draw
paid by NationsBank under any Letter of Credit. All amounts payable by any
Lender under this subsection shall include interest thereon at the Federal
Funds Effective Rate, from the date of demand to the date of reimbursement by
such Lender. No Lender shall be liable for the performance or nonperformance of
the obligations of any other Lender under this Section. To the extent
NationsBank receives reimbursement from the Companies for any draw under any
Letter of Credit, or interest thereon, with respect to which any Lender shall
have previously reimbursed NationsBank, NationsBank shall be obligated to
promptly refund to any such Lender such duplicate amount received by
NationsBank. The obligations of the Lenders under this Section shall continue
after the Maturity Date and shall survive termination of any or all of the Loan
Documents.
3.5. NationsBank's Obligations.
(a) NationsBank makes no representation or warranty, and assumes no
responsibility with respect to the validity, legality, sufficiency or
enforceability of any Application or any document relative thereto or to the
collectibility thereunder. NationsBank assumes no responsibility for the
financial condition of the Paging Entities or for the performance of any
obligation of the Companies or any other Paging Entity. NationsBank may use its
discretion with respect to exercising or refraining from exercising any rights,
or taking or refraining from taking any action which may be vested in it or
which it may be entitled to take or assert with respect to any Letter of Credit
or any Application.
(b) Except as set forth in subsection (c) below, NationsBank shall be
under no liability to any Lender, with respect to anything NationsBank may do
or refrain from doing in the exercise of its judgment, the sole liability and
responsibility of NationsBank being to handle each Lender's share on as
favorable a basis as NationsBank handles its own share and to promptly remit to
each Lender its share of any sums received by NationsBank under any
Application.
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NationsBank shall have no duties or responsibilities except those expressly set
forth herein and those duties and liabilities shall be subject to the
limitations and qualifications set forth herein.
(c) Neither NationsBank nor any of its directors, officers, or employees
shall be liable for any action taken or omitted (whether or not such action
taken or omitted is expressly set forth herein) under or in connection herewith
or any other instrument or document in connection herewith, except for gross
negligence or willful misconduct, and, notwithstanding Section 3.4 above, no
Lender waives its right to institute legal action against NationsBank for
wrongful payment of any Letter of Credit due to NationsBank's gross negligence
or willful misconduct. NationsBank shall incur no liability to any Lender, any
Company or any other Paging Entity in acting upon any notice, document, order,
consent, certificate, warrant or other instrument reasonably believed by
NationsBank to be genuine or authentic and to be signed by the proper party.
ARTICLE IV
CONDITIONS PRECEDENT
4.1. Conditions Precedent to the Closing Date and the Making of the
Initial Advances. The obligation of each Lender to make its initial Advance
hereunder and of NationsBank to issue any Letter of Credit, is subject to the
satisfaction of the following conditions precedent, in addition to the
applicable conditions precedent set forth in Section 4.2 below:
(a) Payment of Principal, Interest and Fees. The Paging Entities shall
concurrently herewith have (i) refinanced in full principal, interest and fees
outstanding under the Original Credit Agreement with the proceeds of the
Revolving Loan made hereunder, (ii) terminated the Original Credit Agreement
and all related documentation except as provided in Section 12.25 hereof, and
(ii) paid all fees as set forth in Section 2.8(b) hereof and the Fee Letters.
The "Commitment" as defined in the Original Credit Agreement shall have been
permanently and irrevocably reduced to zero. Each of the Original Lenders by
execution and delivery of this Agreement consents to the execution of this
Agreement prior to the termination of the Original Credit Agreement.
(b) Documents. Each Paging Entity shall have delivered to each of the
Lenders:
(i) Resolutions, Etc. A copy, duly certified on or about the
date of the initial Advances by the secretary or assistant secretary of
each Paging Entity, as appropriate, of (A) the resolutions of each Paging
Entity's Board of Directors authorizing the borrowings hereunder and each
Paging Entity's Board of Directors authorizing the execution and delivery
of this Agreement, the Notes, the Security Documents, the other Loan
Documents and the Applications, as applicable, (B) all documents
evidencing other necessary corporate action and (C) all approvals or
consents, if any, with respect to this Agreement, the Notes, the Security
Documents, the other Loan Documents and the Applications.
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(ii) Notes. The duly executed Notes.
(iii) Loan Documents. Duly executed Loan Documents (including
amendments to Security Documents and all other related documentation)
together with all Collateral that is perfected by possession (original
stock certificates constituting Collateral being delivered to the
Documentation Agent only); including the shares of all stock pledged by
the Paging Entities together with stock powers duly executed in blank.
(iv) Incumbency. A certificate dated on or about the date of the
initial Advance of its secretary or assistant secretary certifying the
names of the officers of the Paging Entities authorized to sign this
Agreement, the Notes, the Applications, the Security Documents, the other
Loan Documents and all other documents or certificates to be delivered
thereunder, as appropriate, together with the true, signatures of such
officers.
(v) Opinion. An opinion of Bingham, Dana & Gould, counsel to
the Paging Entities, dated on or about the Closing Date to the effect that
(i) the Paging Entities are corporations duly organized, validly existing
and in good standing under the laws of the states of their respective
incorporation and, to the best of its knowledge and belief, are duly
qualified as foreign corporations authorized to do business in each state
where, because of the nature of their respective activities or properties,
such qualification is required; (ii) each of the Paging Entities has full
power to execute and deliver this Agreement, the Notes, the Security
Documents, the other Loan Documents and the Applications, and to perform
its obligations under this Agreement, the Notes, the Security Documents,
the other Loan Documents and the Applications, as applicable; (iii) such
actions have been duly authorized by all necessary corporate action, and
are not in conflict with any provision of law or of the charter or by-laws
of the Paging Entities, nor in conflict with any agreement binding upon
the Paging Entities or any of their Property of which such counsel has
knowledge; (iv) each of the Paging Entities has received all necessary
approvals of such governmental agencies (other than the FCC) which have
jurisdiction over the Paging Entities with respect to this Agreement, the
Notes, the Security Documents, the other Loan Documents, the Applications
and all documents required to be furnished herewith or therewith, as
applicable; (v) this Agreement, the Security Documents, the other Loan
Documents and the Notes are, and the Applications when executed and
delivered will be, the legal and binding obligations of the Paging
Entities, as applicable, enforceable in accordance with their respective
terms (except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws affecting creditors'
rights generally); and (vi) to the best of its knowledge, no litigation or
governmental proceedings are pending or threatened against any of the
Paging Entities, the results of which might have a Material Adverse
Effect, except as set forth in Schedule 6.5 to this Agreement.
(vi) Opinion of FCC Counsel. An opinion of Reed, Smith, Shaw &
McClay, special counsel for FCC matters to the Paging Entities, dated on
or about the Closing Date, in form and substance acceptable to the Agents
and the Lenders.
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(vii) Certificates. A duly executed and complete Compliance
Certificate.
(viii) No Default Certificate. A duly executed certificate of the
Paging Entities certifying as to the fact that there exists no Default or
Event of Default.
(ix) UCC Searches. Duly completed UCC searches in each
jurisdiction in which each of the Paging Entities is operating or has any
tangible Property, satisfactory in form and substance to the Lenders.
(x) Articles, By-Laws, Certificates. Copies of the articles of
organization for the Paging Entity certified by the Secretary of State of
the jurisdiction of each of the Paging Entities' organization, and a copy
of the By-Laws of each Paging Entity, certified by an officer of each
Paging Entity acceptable to the Agents as true, complete and accurate, and
a certificate of good standing and a certificate of existence for each
Paging Entity in each jurisdiction in which each Paging Entity is
operating.
(xi) Insurance. Copies of insurance binders or certificates
(including flood insurance) in form and substance satisfactory to the
Agents covering the assets of each Paging Entity, naming the Documentation
Agent and the Administrative Agent as Agents for the Lenders, as their
interests may appear, as loss payee or additional insured on such
policies, where appropriate.
(xii) Other. Such other documents as any Agent or any Lender, or
their respective counsel, may have reasonably requested.
(c) Texas Opinion. Fach of the Lender shall have received an opinion of
Donohoe, Jameson & Carroll, P.C. in form acceptable to the Managing Agents and
the Lenders.
4.2. Conditions Precedent to All Advances and the Issuance of each Letter
of Credit. The obligation of each Lender to make any Advance to, including its
initial Advance, or for NationsBank to issue any Letter of Credit for the
account of, the Companies is subject to the satisfaction of each of the
following conditions precedent:
(a) Default. Before and after giving effect to any such Advance or Letter
of Credit, no Default or Event of Default shall have occurred and be
continuing;
(b) Representations and Warranties. (i) Before and after giving effect
to any such Advance or Letters of Credit, the representations and warranties in
Article VI hereof shall be true and correct as though made on the date of such
Advance or on the date of issuance of such Letter of Credit, except as any
representation or warranty is modified in accordance with the provisions of
Section 12.23 of this Agreement, and (ii) no event or circumstance has occurred
and is continuing which could reasonably be expected to have a Material Adverse
Effect;
(c) Certification. Each request for an Advance pursuant to Section 2.3
hereof or for the issuance of a Letter of Credit pursuant to Section 3.1 hereof
shall constitute a representation
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and warranty by each Company that the conditions contained in Sections 4.2(a)
and (b) hereof have been satisfied; and
(d) Applications. In the case of each Letter of Credit, the Company
requesting the Letter of Credit shall have delivered to NationsBank a duly
executed and complete Application acceptable to NationsBank.
ARTICLE V
CHANGE IN CIRCUMSTANCES; YIELD PROTECTION
5.1. Increased Cost. If as a result of any existing law, rule, regulation
or guideline regarding capital adequacy or of the adoption of any law, rule,
regulation, guideline, treaty or directive after the Closing Date, or any
change therein, or in the interpretation or application thereof or compliance
by any Lender with any request or directive (whether or not having the force of
law) from any central bank, court or governmental authority, agency or
instrumentality:
(a) the basis of taxation of payments to any Lender in respect
of the Advances or the Letters of Credit or other amounts payable
hereunder (other than taxes imposed on the overall net income of such
Lender by the jurisdiction in which such Lender has its principal office)
is changed;
(b) any reserve, special deposit, special assessment or similar
requirements against assets of, deposits with or for the account of, or
credit extended by, any Lender are imposed, modified or deemed applicable;
or
(c) any other condition affecting this Agreement, the Advances,
the Revolving Loan or the Letters of Credit is imposed on any Lender or
the interbank eurodollar market;
and, in any of the foregoing circumstances, such Lender determines that, by
reason thereof, the cost to such Lender of making or maintaining its share
of the Commitment hereunder or making or continuing any Revolving Loan or
any of the Advances or issuing or participating in the Letters of Credit is
increased, or the amount of any sum receivable by such Lender hereunder in
respect of any of the Advances, the Revolving Loan or the Letters of Credit
or other amounts payable hereunder is reduced (including, without
limitation, any reduction in the rate of return on capital to an amount
below that which it could have achieved but for any of the foregoing);
then, the Companies shall pay to any such affected Lender upon demand
(which demand shall be accompanied by a statement setting forth the basis for
the calculation thereof but only to the extent not theretofore provided to the
Companies) such additional amount or amounts as will compensate such Lender for
such additional cost or reduction (provided such amount has not been
compensated for in the calculation of the Eurocurrency Reserve Percentage). For
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purposes of this Article V, the definition of "Lender" shall be deemed to
include any holding company of any Lender. Determinations by such Lender for
purposes of this Section of the additional amounts required to compensate such
Lender in respect of the foregoing shall be conclusive, absent manifest error;
it being understood, however, that all such determinations shall be done in a
reasonable manner and in good faith. In determining any additional amounts due
from the Companies under this Section 5.1, each Lender shall act reasonably and
in good faith and will, to the extent that the increased costs or reductions in
amounts received or receivable relate to such Lender's loans generally and are
not specifically attributable to the Revolving Loan hereunder, use averaging
and attribution methods which are reasonable and equitable and which cover all
loans similar to the Revolving Loan made by such Lender whether or not the loan
documentation for such other loans permits such Lender to receive increased
costs of the type described in this Section 5.1.
5.2. LIBOR Deposits Unavailable, Etc. If the Companies have any LIBOR
Advances outstanding, or have notified the Administrative Agent of their
intention to borrow LIBOR Advances as provided herein, then in the event that
prior to any Interest Period any Lender shall have determined (which
determination shall be conclusive and binding on the parties hereto) that
deposits of the necessary amount for the relevant Interest Period are not
available to such Lender in the interbank eurodollar market or that the
Interbank Rate does not accurately reflect the cost of making or maintaining a
LIBOR Advance for such Lender, the affected Lender shall promptly give notice
of such determination to the Notification Agent, the Agents and the other
Lenders, and any notice of new LIBOR Advances previously given by the
Notification Agent and not yet borrowed shall be deemed a notice to make a Base
Rate Advance, to the extent of the affected Lender's Revolving Loan Specified
Percentage of the proposed LIBOR Advance.
5.3. Changes in Law Rendering LIBOR Advances Unlawful. If at any time due
to any new law, treaty or regulation, or any interpretation thereof by any
governmental or other regulatory authority charged with the administration
thereof, or for any other reason arising subsequent to the date hereof, it
shall become unlawful for any Lender to fund any LIBOR Advance which it is
committed to make hereunder, the obligation of such Lender to provide LIBOR
Advances shall, upon the happening of such event, forthwith be suspended for
the duration of such illegality. If any such change shall make it unlawful for
any Lender to continue LIBOR Advances previously made by it hereunder, such
Lender shall, upon the happening of such event, notify the Agents, the
Notification Agent and the other Lenders thereof in writing stating the
reasons therefor, and the Companies shall, on the earlier of (a) the last day
of the then current Interest Period or (b) if required by such law, regulation
or interpretation, on such date as shall be specified in such notice, either
convert such unlawful Advances to Base Rate Advances or prepay all such LIBOR
Advances, without any penalty whatsoever (except as provided in Section 5.4),
to such Lender in full. Thereafter no LIBOR Advance shall be available from any
such Lender until such Lender notifies the Notification Agent and the Agents
that LIBOR Advances are once again available from such Lender.
5.4. Indemnity. In addition to Section 5.1 hereof, the Paging Entities
will indemnify each Lender against any loss or expense which such Lender may
sustain (a) as a consequence of any failure by any Company to make any payment
when due of any amount due hereunder
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in connection with a LIBOR Advance, (b) due to any failure of any Company to
borrow on a date specified therefor in any notice given by the Notification
Agent in accordance with Section 2.3 hereof or deemed notice given pursuant to
Section 2.3(c) hereof for any reason (including failure by the Companies to
satisfy any condition precedent to borrowing), or (c) (i) due to any payment or
prepayment of any LIBOR Advance on a date other than the last day of the
Interest Period for such Advance or (ii) due to any change in any designated
Interest Period as a result of the operation of Section 2.3(c)(i), provided,
however, that the indemnity provided under this Section 5.4 will exclude
indemnity for unaccrued loss of profit on the LIBOR Advances. The provisions of
this Section 5.4 shall survive the termination of this Agreement.
5.5. Discretion of Lenders as to Manner of Funding. Notwithstanding
any provision of this Agreement to the contrary, any Lender shall be entitled
to fund and maintain its funding of all or any part of its portion of any LIBOR
Advances in any manner it sees fit, it being understood, however, that for the
purposes of this Agreement all determinations hereunder shall be made as if
such Lender had actually funded and maintained its portion of each LIBOR
Advance during the Interest Period for such Advance through the purchase of
deposits having a maturity corresponding to the last day of such Interest
Period and bearing an interest rate equal to the Interbank Rate for such
Interest Period (whether or not such Lender shall have granted any
participations in its portion of such Advance).
5.6. Eurocurrency Reserves. If any Lender shall be required under
Regulation D to maintain reserves with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities, then (a) such Lender
shall, within 60 days after the end of any Interest Period with to any LIBOR
Advance during which such Lender was so required to maintain reserves, deliver
to the Notification Agent and the Administrative Agent a certificate stating
(i) that such Lender was required to maintain reserves and as a result such
Lender incurred additional costs in connection with making LIBOR Advances and
(ii) in reasonable detail, such Lender's computations of the amount of
additional interest payable by the Companies, pursuant to the provisions of
Section 5.6(b), and (b) the Companies shall, promptly upon receipt of any such
certificate, pay to the Administrative Agent, for the account of such Lender,
additional interest on the unpaid principal amount of each LIBOR Advance of
such Lender made to it outstanding during the Interest Period with respect to
which the above-referenced certificate was delivered to the Notification Agent
at a rate per annum equal to the difference obtained by subtracting (x) the
Interbank Rate for such Interest Period from (y) the rate obtained by dividing
such Interbank Rate by a percentage equal to 100% minus the Eurocurrency
Reserve Percentage of such Lender for such Interest Period. The amount of
interest payable by the Companies to any Lender as stated in any certificate
delivered to the Notification Agent and the Administrative Agent pursuant to
the provisions of this Section 5.6 shall be conclusive and binding for all
purposes, absent manifest error. The provisions of this Section 5.6 shall
survive the termination of this Agreement.
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES
To induce the Lenders to make the Revolving Loan and to induce
NationsBank to issue, and the Lenders to participate in, the Letters of Credit,
PageNet and each of the Companies represents and warrants, as to itself, that:
6.1. Corporate Existence. Each of the Paging Entities is a
corporation duly organized, validly existing and in good standing under the
laws of the state of its incorporation, and is duly qualified and in good
standing as a foreign corporation authorized to do business in each state where,
because of the nature of its respective activities or properties, such
qualification is required. Each of the Paging Entities has the corporate power
and authority to own its Properties and to carry on its businesses as now being
and hereafter proposed to be conducted.
6.2. Authorization and Validity. Each of the Paging Entities has
the corporate power and is duly authorized to execute and deliver this
Agreement, the Notes, the Applications, the Security Documents and the other
Loan Documents, as applicable, and is and will continue to be duly authorized
to borrow monies hereunder and to perform its obligations under this Agreement,
the Notes, the Applications, the Security Documents and the other Loan
Documents. The Loan Documents constitute legal, valid and binding obligations
of each of the Paging Entities, as applicable, enforceable against each of them
in accordance with their terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization or other similar laws
affecting creditors' rights generally and except that the availability of the
remedy of specific performance or injunctive relief in equity is subject to the
discretion of the court before which any proceeding therefor may be brought.
6.3. No Conflicts. The execution, delivery and performance by each
of the Paging Entities of this Agreement, the Notes, the Applications, the
Security Documents and the other Loan Documents, and the performance by each of
them of their obligations under this Agreement, the Notes, the Applications,
the Security Documents and the other Loan Documents, do not and will not (a)
conflict with, or result in a default or the imposition of any Lien under, any
provision of (i) any Applicable Law, (ii) the charter or by-laws of any of the
Paging Entities, or (iii) any license, consent, indenture, agreement or
instrument binding upon any of the Paging Entities or any of their Properties,
or (b) require any consent or approval not already obtained.
6.4. Financial Statements: Material Adverse Change: Solvency.
PageNet's audited consolidated financial statements as at December 31, 1995,
copies of which have been furnished to each Lender, have been prepared in
conformity with GAAP applied on a basis consistent with that of the preceding
fiscal year, and present fairly the financial condition of the Paging Entities
on a consolidated basis as at such date, and the results of their operations
for the year then ended, and since such date nothing has occurred that has
caused or could reasonably be expected to cause a Material Adverse Effect. On
the Closing Date after giving effect to the Advances made on such date, PageNet
and its Subsidiaries, on a consolidated basis, are Solvent.
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6.5. Litigation. No litigation or governmental proceedings are
pending, and to the best knowledge of the senior officers of any of the Paging
Entities after having made due inquiry, no litigation or governmental
proceedings are threatened, against any of the Paging Entities, the results of
which might reasonably be expected to have a Material Adverse Effect, except
those referred to in Schedule 6.5 hereto. Other than any liability incident to
such litigation or proceedings or provided for or disclosed in the financial
statements referred to in Section 6.4, no Paging Entity has any material
contingent liability.
6.6. Ownership of Properties. Except as set forth on Schedule 6.6
hereto, each of the Paging Entities has good title, free of all Liens, other
than (a) Liens securing the Obligations, (b) Liens for current taxes not
delinquent and (c) Liens permitted pursuant to Section 9.11 (d) hereof, to all
of the material Properties and assets reflected in the financial statements as
owned by them.
6.7. Subsidiaries. On the Closing Date, PageNet and the Companies
have no Subsidiaries except as listed on Schedule 6.21 hereto. PageNet and the
Companies own the percentage of each of their respective Subsidiaries as set
forth in Schedule 6.21.
6.8. Purpose. The proceeds of the Revolving Loan and the Letters of
Credit will be used by the Companies only (a) to refinance and restate the
existing loan facility of the Companies to certain of the Lenders, (b) for
Capital Expenditures permitted under Section 9.7 hereof, (c) working capital of
the Companies for paging and communications businesses that are incidental and
related to its existing business, (d) to fund acquisitions and Investments that
are permitted under Section 9.12 hereof, (e) for Restricted Payments to the
extent permitted by Section 9.8 hereof, (f) for acquisition and construction of
a corporate headquarters for the Companies in Texas (in an amount not to exceed
in the aggregate $50,000,000), so long as the Lenders receive a first lien deed
of trust on such property, together with title insurance and flood insurance,
survey, appraisal and environmental audit, each in form and substance
satisfactory to the Managing Agents, and (g) for general corporate purposes,
including the payment of costs and expenses incurred in connection with the
negotiation of this Agreement and the other Loan Documents.
6.9. Compliance with Regulations G, T, U and X. No Paging Entity
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
within the meaning of Regulations G, T, U and X of the Board of Governors of
the Federal Reserve System, and no part of the proceeds of the Revolving Loan
will be used to purchase or carry any margin stock or to extend credit to
others for the purpose of purchasing or carrying any margin stock. No assets of
the Paging Entities is margin stock, and none of the Pledged Stock is margin
stock. None of the Paging Entities, nor any agent acting on their behalf, has
taken or will knowingly take any action which might cause this Agreement or any
other Loan Document to violate any regulation of the Board of Governors of the
Federal Reserve System or to violate the Securities Exchange Act of 1934, in
each case as in effect now or as the same may hereafter be in effect.
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6.10. Compliance. Each of the Paging Entities is in material
compliance with all Applicable Law and statutes and governmental rules and
regulations applicable to it or any of them, including, without limitation (a)
applicable rules and regulations of the FCC and the political subdivisions,
governments and governmental agencies having jurisdiction over the activities
of it or any of them; and (b) applicable rules and regulations of the SEC
insofar as such rules and regulations apply to it or any of them. None of the
Paging Entities has received notice to the effect that its respective
operations are not in material compliance with any of the requirements of
Applicable Law or Applicable Environmental Law.
6.11. Consents and Authorizations. Except as disclosed on Schedule
6.23 hereto, no order, consent, approval, license, authorization, or validation
of, or filing, recording or registration with, or exemption by, any
governmental or public body or authority, or any subdivision thereof, is
required to authorize, or is required in connection with the execution,
delivery and performance of, or the legality, validity, binding effect or
enforceability of, any of the Loan Documents, except for those that each of the
Paging Entities has obtained or made. Each of the Paging Entities has received
all permits, licenses, consents, qualifications and authorizations necessary to
the lawful acquisition of radio common carrier systems ("RCCS") and to the
lawful operation of radio common carrier companies ("RCCC"). No order, consent,
approval, license, authorization, or validation of, or filing, recording or
registration with, or exemption by, any governmental or public body or
authority, or any subdivision thereof, necessary for the operation of the
business of any of the Paging Entities, is the subject of any pending or, to
the best of such Paging Entity's knowledge, threatened challenge or revocation.
6.12. Real Estate. On the Closing Date, none of the Paging Entities
has any interest in real estate (including without limitation as lessee) except
as described in the attached Schedule 6.12.
6.13. Licenses, Permits. Etc. Each of the Paging Entities possesses
adequate assets, permits (including without limitation those required under
Applicable Law and Applicable Environmental Law), licenses, authorizations, or
approvals to conduct its respective business as heretofore conducted by it. No
permits (including without limitation those required under Applicable Law and
Applicable Environmental Law), licenses, authorizations, or approvals to
conduct the business of any Substantial Portion of the Paging Entities is the
subject of any pending, or to the best of such Paging Entity's knowledge,
threatened challenge or revocation.
6.14. Taxes. Each of the Paging Entities has filed all tax returns
that are required to be filed by it, and has paid or provided adequate reserves
for the payment of all taxes and assessments payable by it that have become
due, except such taxes, if any, as are being diligently contested in good faith
and as to which adequate reserves have been set aside in the opinion of the
Paging Entities' management. Each of the Paging Entities has paid, or has
provided adequate reserves in the opinion of the Paging Entities' management
for the payment of, all taxes and assessments applicable for all prior fiscal
years and for the current fiscal year to the date of its most recent financial
statements. No tax Liens have been filed against any of the Paging Entities or
any of their respective Properties.
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6.15. Accuracy of Information. Neither this Agreement nor any other
document, certificate or statement which has been furnished to any Lender by or
on behalf of any Paging Entity in connection herewith contained any untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statement contained herein and therein not materially
misleading at the time it was furnished. There is no fact known to any Paging
Entity and not known to the public generally that could materially adversely
affect the assets or business of the Paging Entities, taken as a whole, or in
the future could (so far as such Paging Entity can now foresee) have a Material
Adverse Effect, which has not been set forth in this Agreement or in the
documents, certificates and statements furnished to the Lenders by or on behalf
of the Paging Entity prior to the date hereof in connection with the
transactions contemplated hereby.
6.16. Subordinated Indebtedness. The Obligations constitute senior
indebtedness which is entitled to the benefits of the subordination provisions
of all of the outstanding Subordinated Indebtedness.
6.17. ERISA Compliance. None of the Paging Entities nor its
Controlled Group maintains or contributes to any Plan other than those
disclosed to the Lenders in writing. Each such Plan is in compliance in all
material respects with the applicable provisions of ERISA, the Code, and any
other applicable Federal or state law, rule or regulation. With respect to the
Plan of each of the Paging Entities and each member of its Controlled Group
(other than a Multiemployer Plan), all reports required under ERISA or any
other Applicable Law to be filed with any governmental authority, the failure
of which to file could reasonably result in liability of each of the Paging
Entities or any member of its Controlled Group in excess of $100,000, have been
duly filed. All such reports are true and correct in all material respects as of
the date given. No such Plan of any Paging Entity or any member of its
Controlled Group has been terminated nor has any accumulated funding deficiency
(as defined in Section 412(a) of the Code) been incurred (without regard to any
waiver granted under Section 412 of the Code), nor has any funding waiver from
the Internal Revenue Service been received or requested. None of the Paging
Entities or any member of its Controlled Group has failed to make any
contribution or pay any amount due or owing as required by Section 412 of the
Code or Section 302 of ERISA or the terms of any such Plan prior to the due
date under Section 412 of the Code and Section 302 of ERISA. There has been no
ERISA Event or any event requiring disclosure under Section 4041(c)(3)(C),
4068(f), 4063(a) or 4043(b) of ERISA with respect to any Plan or trust of the
Paging Entities or any member of their Controlled Group since the effective
date of ERISA. The value of the assets of each Plan (other than a Multiemployer
Plan) of each Paging Entity and each member of its Controlled Group equaled or
exceeded the present value of the benefit liabilities, as defined in Title IV
of ERISA, of each such Plan as of the most recent valuation date using Plan
actuarial assumptions at such date. There are no pending or, to the best of
such Paging Entity's knowledge, threatened claims, lawsuits or actions (other
than routine claims for benefits in the ordinary course) asserted or instituted
against, and no Paging Entity nor any member of its Controlled Group has
knowledge of any threatened litigation or claims against, (i) the assets of any
Plan or trust or against any fiduciary of a Plan with respect to the operation
of such Plan, or (ii) the assets of any employee welfare benefit plan within
the meaning of Section 3(l) or ERISA, or against any fiduciary thereof with
respect to the operation
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of any such plan. None of the Paging Entities nor any member of their
Controlled Group has engaged in any prohibited transactions, within the meaning
of Section 406 of ERISA or Section 4975 of the Code, in connection with any
Plan. None of the Paging Entities nor any member of their Controlled Group has
withdrawn from any Multiemployer Plan, nor has incurred or reasonably expects
to incur (A) any liability under Title IV of ERISA (other than premiums due
under Section 4007 of ERISA to the PBGC), (B) any withdrawal liability (and no
event has occurred which with the giving of notice under Section 4219 of ERISA
would result in such liability) under Section 4201 of ERISA as a result of a
complete or partial withdrawal (within the meaning of Section 4203 or 4205 of
ERISA) from a Multiemployer Plan, or (C) any liability under Section 4062 of
ERISA to the PBGC or to a trustee appointed under Section 4042 of ERISA. None
of the Paging Entities nor any member of their Controlled Group, or any
organization to which a Paging Entity or any member of its Controlled Group is
a successor or parent corporation within the meaning of ERISA Section 4069(b),
has engaged in a transaction within the meaning of ERISA Section 4069. None of
the Paging Entities or any member of their Controlled Group maintains or has
established any welfare benefit plan within the meaning of Section 3(l) of
ERISA which provides for continuing benefits or coverage for any participant or
any beneficiary of any participant after such participant's termination of
employment except as may be required by the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended ("COBRA") and the regulations
thereunder, or under applicable state insurance laws. Each of the Paging
Entities and each member of their Controlled Group which maintains a welfare
benefit plan within the meaning of Section 3(l) of ERISA has complied in all
material respects with any applicable notice and continuation requirements of
COBRA and the regulations thereunder.
6.18. Environmental Matters. None of the Paging Entities has any
actual knowledge or reason to believe that any substance deemed hazardous by
any Applicable Environmental Law has been installed on any real property now
owned by any Paging Entity. Each of the Paging Entities is not in violation of
or subject to any existing, pending or, to the best of such Person's knowledge,
threatened investigation or inquiry by any governmental authority or to any
material remedial obligations under any Applicable Environmental Laws, and this
representation and warranty would continue to be true and correct following
disclosure to the applicable governmental authorities of all relevant facts,
conditions and circumstances, if any, pertaining to any real property of such
Paging Entity. None of the Paging Entities has obtained or are required to
obtain any permits, licenses or similar authorizations to construct, occupy,
operate or use any buildings, improvements, fixtures, and equipment forming a
part of any real property of such Paging Entity by reason of any Applicable
Environmental Laws. The Paging Entities undertook, at the time of acquisition
of any real property, reasonable inquiry into the previous ownership and uses
of such real property consistent with good commercial or customary practice.
Each of the Paging Entities has taken all reasonable steps to determine, and
none of the Paging Entities has any actual knowledge or reason to believe,
after reasonable investigation, that any hazardous substances or solid wastes
have been disposed of or otherwise released on or to the real property of the
Paging Entities, within the meaning of the Applicable Environmental Laws.
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6.19. Absence of Default. The Paging Entities are in compliance in
all respects with all of the provisions of their articles of incorporation, and
the Paging Entities are in compliance in all material respects with all of the
provisions of their by-laws, and no event has occurred or failed to occur,
which has not been remedied or waived, the occurrence or non-occurrence of
which constitutes, (i) a Default or an Event of Default or (ii) a default by
the Paging Entities under any material indenture, agreement or other
instrument, or any documentation relating to any Indebtedness, including any
Subordinated Indebtedness, or any judgment, decree or order to which any Paging
Entity is a party or by which it or any of its material Properties is bound.
6.20. Investment Company Act. No Paging Entity is an "investment
company" within the meaning of, and no Paging Entity is otherwise required to
register under the provisions of, the Investment Company Act of 1940, as
amended. Neither the entering into or performance by any Paging Entity of this
Agreement nor the issuance of the Notes violates any provision of such act or
requires any consent, approval, or authorization of, or registration with, the
Securities and Exchange Commission or any other governmental or public body of
authority pursuant to any provisions of such act.
6.21. Valid Issuance of Securities. All Pledged Stock has been duly
authorized and validly issued, and is fully paid and nonassessable. The capital
stock described on Schedule 6.21 hereto on the Closing Date constitutes all the
issued and outstanding capital stock of (a) PageNet and the Subsidiaries of
PageNet, (b) the Subsidiaries of the Companies and (c) the Subsidiaries of
another Subsidiary. No Person has any options to purchase any Pledged Stock or
conversion rights with respect to, or any subscription rights, calls,
commitments or claims of any character for, or any repurchase or redemption
options relating to, the Pledged Stock. The Pledged Stock, when issued or sold,
was either (i) registered or qualified under applicable federal or state
securities laws, or (ii) exempt therefrom.
6.22. Certain Fees. No broker's, finder's or other fee or commission
will be payable by any Paging Entity (other than to the Lenders hereunder) with
respect to the making of a commitment to make the Revolving Loan hereunder.
Each Paging Entity agrees to indemnify and hold harmless the Administrative
Agent, the Documentation Agent and each Lender from and against any claims,
demand, liability, proceedings, costs or expenses asserted with respect to
or arising in connection with any such fees or commissions. The provisions of
this Section 6.22 shall survive any termination of this Agreement.
6.23. Compliance. Attached as Schedule 6.23 hereto is a complete
list of all material FCC licenses of each Paging Entity as of the Closing Date.
All such licenses, and all other consents, permits and authorizations of the
Paging Entities constitute all that are necessary, appropriate or advisable for
each of the Paging Entities to operate its business and own its properties, and
are in full force and effect. No event has occurred which permits (or with the
passage of time would permit) the revocation or termination of any such
license, consent, permit or authorization, or which could result in the
imposition of any restriction thereon of such a nature that could have a
Material Adverse Effect.
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6.24. Patents, Etc. Each of the Paging Entities has obtained all
patents, trademarks, service-marks, trade names, copyrights, licenses and other
rights, free from burdensome restrictions, that are necessary for the operation
of its business as presently conducted and as proposed to be conducted. Nothing
has come to the attention of any Paging Entity to the effect that (i) any
process, method, part or other material presently contemplated to be employed
by such Paging Entity may infringe any patent, trademark, service-mark, trade
name, copyright, license or other right owned by any other Person, or (ii)
there is pending or overtly threatened any claim or litigation against or
affecting such Paging Entity contesting its right to sell or use any such
process, method, part or other material.
ARTICLE VII
GENERAL COVENANTS
From the date of this Agreement and thereafter until the Commitment
has been finally and irrevocably reduced to zero and the Notes and all other
Obligations hereunder are paid in full and the Letters of Credit have been
terminated, PageNet and each Company agree that:
7.1. Access and Inspection. PageNet and each Company shall, and
shall cause each other Paging Entity to, promptly permit representatives of the
Agents or any Lender from time to time to (a) visit and inspect the properties
of each Paging Entity as often as the Agents or any Lender shall deem desirable
upon reasonable notice under the circumstances, (b) inspect and make extracts
from and copies of each Paging Entity's books and records, and (c) discuss with
each Paging Entity's directors, officers, employees and auditors its business,
assets, liabilities, financial positions, results of operations and business
prospects.
7.2. Insurance. PageNet and each Company shall maintain, and shall
cause each other Paging Entity to maintain, insurance to such extent and
against such hazards and liabilities as is commonly maintained by companies
similarly situated or as the Majority Lenders may reasonably request from time
to time. Each insurance policy shall provide for at least 30 days' prior notice
to the Administrative Agent and the Documentation Agent of any proposed
termination or cancellation of such policy, whether on account of default or
otherwise.
7.3. Repair. PageNet and each Company shall maintain, preserve, and
keep their, and shall cause each other Paging Entity to maintain, preserve and
keep its, Properties in good repair, working order and condition, and from time
to time make, and cause each of the Paging Entities to make, all appropriate
repairs, renewals, replacements, additions, betterments and improvements
thereto so that at all times the performance standards and capabilities of each
RCCC and RCCS owned or operated by it, and any of them, shall be fully
preserved and maintained.
7.4. Taxes and Claims. PageNet and each Company shall, and shall
cause each other Paging Entity to, pay and discharge all taxes, assessments and
governmental charges or levies imposed upon it or its income or properties
prior to the date on which penalties attach thereto,
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and all lawful material claims for labor, materials and supplies which, if
unpaid, might become a Lien upon any of its Properties; except that no such
tax, assessment, charge, levy or claim need be paid which is being diligently
contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP shall have been set aside on the appropriate
books, but only so long as no Lien shall attach with respect thereto and no
foreclosure, distraint, sale or similar proceedings shall have been commenced.
PageNet and each Company shall, and shall cause each other Paging Entity to,
timely file all information returns required by federal, state or local tax
authorities.
7.5. Compliance.
(a) PageNet and each Company shall comply, and shall cause each
other Paging Entity to comply, in all material respects, with all Applicable
Laws, all Applicable Environmental Laws and all statutes and governmental rules
and regulations applicable to it, or any of them, including without limitation:
(i) applicable rules and regulations of the FCC and other governmental
agencies, and any government, political subdivision or other entity having
jurisdiction over each RCCC; (ii) applicable rules and regulations of the SEC
insofar as such rules and regulations apply to it or any of them; and (iii)
applicable provisions of ERISA insofar as such Act applies to it or any of
them. PageNet and each Company shall not, and shall not permit any other Paging
Entity to, permit any condition to exist in connection with any Plan which
would constitute grounds for the PBGC to institute proceedings to have such
Plan terminated or a trustee appointed to administer such Plan; and not engage
in, or permit to exist or occur, or permit any Paging Entity to engage in, or
permit to exist or occur, any other condition, event or transaction with
respect to any such Plan which would result in the incurrence by such Paging
Entity of any material liability, fine or penalty.
(b) PageNet and each Company shall maintain, and shall cause each
other Paging Entity to maintain, in full force and effect, existence in each
jurisdiction in which it is operating as of the Closing Date and its respective
licenses and permits granted by the FCC and other governmental entities as may
be necessary for such Paging Entity and each RCCC to conduct their business
without material adverse change, and cause the FCC's and other governmental
entities' approvals of each of the Paging Entities' ownerships in each RCCC to
remain in full force and effect; and give prompt written notice thereof to each
of the Agents and the Lenders after obtaining knowledge of: (i) the receipt by
the FCC or any other governmental agency, or any government, political
subdivision or other entity, of any protest or complaint which would be
materially threatening to the maintenance of any of the licenses or permits of
each Paging Entity, or (ii) the report by the FCC or any other governmental
agency, or any government, political subdivision or other entity of any notice,
correspondence, hearing, proceeding or order regarding or affecting the Paging
Entity which would be materially threatening to the operation of each RCCC.
(c) The use which each Paging Entity intends to make of any real
property owned by it will not result in the disposal or other release of any
hazardous substance or solid waste on or to such real property, and neither
PageNet nor any Company shall cause, permit or suffer to exist, nor shall they
permit any other Paging Entity to cause, permit or suffer to exist the
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disposal or other release of any hazardous substance or solid waste on or to
such real property. As used herein, the terms "hazardous substance" and
"release" as used in this Section shall have the meanings specified in CERCLA
(as defined in the definition of Applicable Environmental Laws), and the terms
"solid waste" and "disposal" shall have the meanings specified in RCRA (as
defined in the definition of Applicable Environmental Laws); provided, however,
that if CERCLA or RCRA is amended so as to broaden the meaning of any term
defined thereby, such broader meaning shall apply subsequent to the effective
date of such amendment; and provided further, to the extent that any other law
applicable to any Paging Entity or any of their Properties establishes a
meaning for "hazardous substance," "release," "solid waste," or "disposal"
which is broader than that specified in either CERCLA or RCRA, such broader
meaning shall apply.
7.6. Purpose. Each Company will, and will cause each other Paging
Entity to, use the proceeds of the Revolving Loan and the Letters of Credit
only (a) to refinance and restate the existing loan facility of the Companies
to certain of the Lenders, (b) for Capital Expenditures permitted under Section
9.7 hereof, (c) working capital of the Companies for paging and communications
businesses that are incidental and related to its existing business, (d) to
fund acquisitions and investments that are permitted under Section 9.12 hereof,
(e) for Restricted Payments to the extent permitted by Section 9.8 hereof, (f)
for acquisition and construction of a corporate headquarters for the Companies
on a tract of real property in Collin County, Texas (in an amount not to exceed
in the aggregate $50,000,000), so long as the Lenders receive a first lien deed
of trust on such property, together with title insurance and flood insurance,
survey, appraisal and environmental audit, each in form and substance
satisfactory to the Managing Agents, and (g) for general corporate purposes,
including the payment of costs and expenses incurred in connection with the
negotiation of this Agreement and the other Loan Documents. No Company will,
nor will it permit any other Paging Entity to, use any of the proceeds of the
Revolving Loan or the Letters of Credit to purchase or carry any margin stock
as defined in Regulation U of the Board of Governors of the Federal Reserve
System.
7.7. Existence and Business. PageNet and each Company shall, and
shall cause each other Paging Entity to (a) subject to Section 9.2 hereof,
maintain its corporate existence and qualification to do business in each
jurisdiction in which the nature of its business requires it to be so
qualified, and (b) engage substantially in the operation of paging systems and
communications businesses that are incidental and related to its existing
business.
7.8. Accounting Methods and Financial Records. PageNet and each
Company shall, and shall cause each other Paging Entity to, maintain a system
of accounting established and administered in accordance with GAAP, keep
adequate records and books of account in which complete entries will be made
and all transactions reflected in accordance with GAAP, and keep accurate and
complete records of its respective assets. PageNet and each Company shall, and
shall cause each other Paging Entity, to maintain a fiscal year ending on
December 31.
7.9. Payment of Indebtedness. Subject to the terms and provisions
of this Agreement, PageNet and each Company shall, and shall cause each other
Paging Entity to, pay its Indebtedness when and as the same becomes due and
perform all obligations required by any
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instruments or documents related to any such Indebtedness, except for amounts
(other than the Obligations) duly and diligently disputed in good faith.
7.10. INDEMNITY.
(A) PAGENET AND EACH COMPANY AGREE, AND SHALL CAUSE EACH OTHER
PAGING ENTITY, TO DEFEND, PROTECT, INDEMNIFY AND HOLD HARMLESS THE
ADMINISTRATIVE AGENT AND DOCUMENTATION AGENT, EACH LENDER, EACH OF THEIR
RESPECTIVE AFFILIATES, AND EACH OF THEIR RESPECTIVE (INCLUDING SUCH
AFFILIATES') OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ATTORNEYS, SHAREHOLDERS
AND CONSULTANTS (INCLUDING, WITHOUT LIMITATION, THOSE RETAINED IN CONNECTION
WITH THE SATISFACTION OR ATTEMPTED SATISFACTION OF ANY OF THE CONDITIONS SET
FORTH HEREIN) OF EACH OF THE FOREGOING (COLLECTIVELY, "INDEMNITEES") FROM AND
AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES,
ACTIONS, JUDGMENTS, SUITS, CLAIMS, COSTS, EXPENSES AND DISBURSEMENTS OF ANY
KIND OR NATURE WHATSOEVER (INCLUDING, WITHOUT LIMITATION, THE FEES AND
DISBURSEMENTS OF COUNSEL FOR SUCH INDEMNITEES IN CONNECTION WITH ANY
INVESTIGATIVE, ADMINISTRATIVE OR JUDICIAL PROCEEDING, WHETHER OR NOT SUCH
INDEMNITEES SHALL BE DESIGNATED A PARTY THERETO), IMPOSED ON, INCURRED BY, OR
ASSERTED AGAINST SUCH INDEMNITEES (WHETHER DIRECT, INDIRECT OR CONSEQUENTIAL
AND WHETHER BASED ON ANY FEDERAL, STATE, OR LOCAL LAWS AND REGULATIONS, UNDER
COMMON LAW OR AT EQUITABLE CAUSE, OR ON CONTRACT, TORT OR OTHERWISE) ARISING
FROM OR CONNECTED WITH (I) THE PAST, PRESENT OR FUTURE OPERATIONS OF ANY PAGING
ENTITY, OR ANY OF THEIR PREDECESSORS IN INTEREST, (II) THE FAILURE OF ANY
PAGING ENTITY TO PERFORM ANY OBLIGATION HEREUNDER REGARDING ASBESTOS OR
APPLICABLE ENVIRONMENTAL LAWS, (III) ANY VIOLATION OF ANY APPLICABLE
ENVIRONMENTAL LAW IN EFFECT, (IV) ANY ACT, OMISSION, EVENT OR CIRCUMSTANCE
EXISTING OR OCCURRING (INCLUDING WITHOUT LIMITATION THE PRESENCE ON SUCH REAL
PROPERTY OR RELEASE FROM SUCH REAL PROPERTY OF HAZARDOUS SUBSTANCES OR SOLID
WASTES DISPOSED OF OR OTHERWISE RELEASED), RESULTING FROM OR IN CONNECTION WITH
THE OWNERSHIP OF THE REAL PROPERTY, REGARDLESS OF WHETHER THE ACT, OMISSION,
EVENT OR CIRCUMSTANCE CONSTITUTED A VIOLATION OF ANY APPLICABLE ENVIRONMENTAL
LAW AT THE TIME OF ITS EXISTENCE OR OCCURRENCE, OR WHETHER THE ACT, OMISSION,
EVENT OR CIRCUMSTANCE IS CAUSED BY OR RELATES TO THE NEGLIGENCE OF ANY
INDEMNITEE) OR (V) IN ANY MANNER RELATING TO OR ARISING OUT OF THIS AGREEMENT,
THE OTHER LOAN DOCUMENTS, OR ANY ACT, EVENT OR TRANSACTION OR ALLEGED ACT,
EVENT OR TRANSACTION RELATING OR ATTENDANT THERETO, THE MAKING OF ANY
PARTICIPATIONS IN THE REVOLVING LOAN AND THE MANAGEMENT OF THE REVOLVING LOAN,
INCLUDING IN CONNECTION WITH, OR AS A RESULT, IN WHOLE OR IN PART, OF ANY
NEGLIGENCE OF THE ADMINISTRATIVE AGENT, DOCUMENTATION AGENT OR ANY LENDER
(OTHER THAN THOSE MATTERS RAISED EXCLUSIVELY BY A PARTICIPANT AGAINST THE
ADMINISTRATIVE AGENT AND DOCUMENTATION AGENT OR ANY LENDER AND NOT THE PAGING
ENTITIES), OR THE USE OR INTENDED USE OF THE PROCEEDS OF THE REVOLVING LOAN
HEREUNDER, OR IN CONNECTION WITH ANY INVESTIGATION OF ANY POTENTIAL MATTER
COVERED HEREBY, BUT EXCLUDING AS TO ANY INDEMNITEE ANY CLAIM OR LIABILITY THAT
ARISES AS THE RESULT OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH
INDEMNITEE, AS FINALLY JUDICIALLY DETERMINED BY A COURT OF COMPETENT
JURISDICTION, AND EXCLUDING MATTERS RAISED BY ONE LENDER AGAINST ANOTHER LENDER
OR BY ANY SHAREHOLDERS OF A LENDER AGAINST A LENDER OR ITS MANAGEMENT
(COLLECTIVELY, "INDEMNIFIED MATTERS"); PROVIDED HOWEVER, THAT SO LONG AS NO
EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE
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CONTINUING, THERE SHALL BE NO SETTLEMENT BY THE INDEMNITEES OR ANY OF THEM WITH
RESPECT TO ANY INDEMNIFIED MATTER WITHOUT PRIOR CONSULTATION WITH THE PAGING
ENTITY.
(B) IN ADDITION, EACH PAGING ENTITY SHALL PERIODICALLY, UPON
REQUEST, REIMBURSE EACH INDEMNITEE FOR ITS REASONABLE LEGAL AND OTHER ACTUAL
EXPENSES (INCLUDING THE COST OF ANY INVESTIGATION AND PREPARATION) INCURRED IN
CONNECTION WITH ANY INDEMNIFIED MATTER. IF FOR ANY REASON THE FOREGOING
INDEMNIFICATION IS UNAVAILABLE TO ANY INDEMNITEE OR INSUFFICIENT TO HOLD ANY
INDEMNITEE HARMLESS WITH RESPECT TO INDEMNIFIED MATTERS, THEN EACH PAGING
ENTITY SHALL CONTRIBUTE TO THE AMOUNT PAID OR PAYABLE BY SUCH INDEMNITEE AS A
RESULT OF SUCH LOSS, CLAIM, DAMAGE OR LIABILITY IN SUCH PROPORTION AS IS
APPROPRIATE TO REFLECT NOT ONLY THE RELATIVE BENEFITS RECEIVED BY SUCH PAGING
ENTITY AND ITS STOCKHOLDERS ON THE ONE HAND AND SUCH INDEMNITEE ON THE OTHER
HAND BUT ALSO THE RELATIVE FAULT OF SUCH PAGING ENTITY AND SUCH INDEMNITEE, AS
WELL AS ANY OTHER RELEVANT EQUITABLE CONSIDERATIONS.
(C) THE REIMBURSEMENT, INDEMNITY AND CONTRIBUTION OBLIGATIONS
UNDER THIS SECTION SHALL BE IN ADDITION TO ANY LIABILITY WHICH EACH PAGING
ENTITY MAY OTHERWISE HAVE, SHALL EXTEND UPON THE SAME TERMS AND CONDITIONS TO
EACH INDEMNITEE, AND SHALL BE BINDING UPON AND INURE TO THE BENEFIT OF ANY
SUCCESSORS, ASSIGNS, HEIRS AND PERSONAL REPRESENTATIVES OF EACH PAGING ENTITY,
THE ADMINISTRATIVE AGENT AND DOCUMENTATION AGENT, THE LENDERS AND ALL OTHER
INDEMNITEES. THIS SECTION SHALL SURVIVE ANY TERMINATION OF THIS AGREEMENT AND
PAYMENT OF THE OBLIGATIONS.
7.11. Perfection of Security Interests, Expenses and Reimbursement.
At such time as the Majority Lenders in their sole discretion deem it
appropriate for any reason, PageNet and each Company shall, and shall cause
each other Paging Entity to, immediately assist the Documentation Agent or any
Managing Agent in perfecting the security interests or Liens of the Lenders in
the assets of each Paging Entity located in any state in the United States of
America, and shall pay all costs and expenses incurred by any Managing Agent or
due and owing to any state or regulatory agency in the United States of America
(or shall reimburse any Managing Agent therefor) in connection therewith as
permitted by Applicable Law. The Managing Agents and the Lenders hereby
expressly reserve the right to file any UCC-1, UCC-3 or other financing
statement at any time, and PageNet and each Company covenant and agree, and
agree to cause each other Paging Entity to covenant and agree, to pay all such
amounts due and owing in connection with any such filings as permitted by
Applicable Law.
7.12. The Notification Agent. PageNet and each Company agree that it
will cause (a) the Notification Agent to remain a 100% wholly-owned Restricted
Subsidiary of PageNet, without assets or liabilities, except related to the
receipt and transfer of Advances made hereunder and payments made by the
Companies on the Obligations and (b) the Notification Agent to not conduct any
business, incur trade payables, suffer to exist any Indebtedness, Liens or
otherwise participate in any transaction, except as is necessary to perform the
Notification Agent's functions under the terms of this Agreement and the other
Loan Documents.
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ARTICLE VIII
INFORMATION COVENANTS
From the Closing Date and thereafter until the Commitment has been
finally and irrevocably reduced to zero, the Letters of Credit have been
terminated and the Notes and all other Obligations have been paid in full,
PageNet and each Company agree that they will:
8.1. Financial Statements. Furnish to each of the Lenders:
(a) Within 90 days after each fiscal year end of PageNet, (i) a
copy of the Form 10-K of PageNet and the audited consolidated annual financial
statements, of PageNet and its Subsidiaries as at the end of such fiscal year,
certified and opined upon by independent certified public accountants
acceptable to the Lenders, which opinion shall state that the financial
statements present fairly, in all material respects, the financial position,
results of operations and cash flows in conformity with GAAP and shall be
unqualified as to going concern and scope of audit, and (ii) a copy of the
unaudited consolidating financial statements of the Paging Entities as at the
end of such fiscal year, prepared in conformity with GAAP, provided that, in
the event that 15% or more of the cash flow of PageNet is attributable to
Unrestricted Subsidiaries, then the audited consolidated financial statements
required to be delivered pursuant to (a)(i) above shall be delivered for
PageNet and its Restricted Subsidiaries;
(b) within 45 days after each quarter of each fiscal year of
PageNet, a copy of the Form 10-Q of PageNet or its unaudited quarterly
financial statements prepared on a consolidated basis, and including as
supplementary information consolidating financial statements, prepared in
conformity with GAAP;
(c) together with the financial statements furnished by PageNet
under the preceding clauses (a) and (b), a Compliance Certificate detailing
that no Default or Event of Default has occurred and is continuing (or, if a
Default or Event of Default exists, detailing such Default or Event of
Default), and compliance with the financial tests set forth in Article IX
hereof (including a comparison of budgeted and actual Capital Expenditures and
budgeted and actual pagers in service);
(d) on the twentieth day of each month, a comparison of budgeted
and actual revenues and Operating Cash Flow for the preceding month;
(e) within twenty days after the execution and delivery of any
document pursuant to which any Paging Entity obtains an interest in any
facility which houses a paging terminal, a description of such interest in such
detail as the Lenders may request;
(f) not earlier than 15 days after the Closing Date and not later
than 60 days after the Closing Date, provide the Agents and each Lender with a
copy of a post Closing Date UCC Lien search in each jurisdiction in which any
Paging Entity is operating, in form and substance satisfactory to Majority
Lenders;
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(g) within 20 days after PageNet has completed and finalized each
year's consolidated budget (summarized by the Companies and any other
Restricted Subsidiaries, and by region) (but in no event later than 60 days
after PageNet's fiscal year end prior to such year), provide the Agents and
each Lender with a copy of such budget; and
(h) from time to time, such other information as any of the Agents
or any of the Lenders may reasonably request.
8.2. Copies of Other Reports and Notices. Furnish to each of the
Lenders:
(a) Promptly upon their becoming available, a copy of (i) all
material reports or letters submitted to any Paging Entity by accountants in
connection with any annual, interim or special audit, including without
limitation any report prepared in connection with the annual audit referred to
in Section 8.1 hereof, and any other comment letter submitted to management in
connection with any such audit, (ii) each financial statement, report, notice
or proxy statement sent by each Paging Entity to stockholders generally, (iii)
each regular or periodic report and any registration statement (other than
statements on Form S-8) or prospectus (or material written communication in
respect of any thereof) filed by any Paging Entity with any securities
exchange, with the SEC or any successor agency, and (iv) all press releases
concerning material financial aspects of any Paging Entity;
(b) Promptly upon becoming aware that (i) the holder(s) of any
note(s) or other evidence of Indebtedness or other security of any Paging
Entity in excess of $1,000,000 in the aggregate has given notice or taken any
action with respect to a breach, failure to perform, claimed default or event
of default thereunder, (ii) any party to any Capitalized Lease Obligation has
given notice or taken any action with respect to a breach, failure to perform,
claimed default or event of default thereunder, (iii) any occurrence or
non-occurrence of any event which constitutes or which with the passage of time
or giving of notice or both could constitute a material breach by any Paging
Entity under any material agreement or instrument other than this Agreement to
which any Paging Entity is a party or by which any of their properties may be
bound, or (iv) any event, circumstance or condition which could have a Material
Adverse Effect, a written notice specifying the details thereof (or the nature
of any claimed default or event of default) and what action is being taken or
is proposed to be taken with respect thereto;
(c) Promptly upon receipt thereof, information with respect to and
copies of any notices received from the FCC or any other federal, state or
local regulatory agencies or any tribunal relating to any order, ruling, law,
information or policy that relates to a material breach of or noncompliance
with the Communications Act, or might result in the payment of money by any
Paging Entity in an amount of $500,000 or more in the aggregate, or otherwise
have a Material Adverse Effect, or result in the loss or suspension of any
material license or consent; provided, however, no information shall be
required to be delivered hereunder if, in the opinion of counsel to such Paging
Entity, there is no reasonable possibility of an adverse determination with
respect to such notice;
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(d) Promptly upon receipt from any governmental agency, or any
government, political subdivision or other entity, any material notice,
correspondence, hearing, proceeding or order regarding or affecting any Paging
Entity, or any of their Properties or businesses; and
(e) From time to time and promptly upon each request, such data,
certificates, reports, statements, opinions of counsel, documents or further
information regarding the assets, business, liabilities, financial position,
projections, results of operations or business prospects of any Paging Entity,
as the Administrative Agent, Documentation Agent or any Lender may reasonably
request.
8.3. Notice of Litigation, Default and Other Matters. Furnish to
each of the Lenders prompt notice of the following events after any Paging
Entity has knowledge or notice thereof:
(a) The commencement of all material proceedings and
investigations by or before the FCC or any other governmental body, and all
actions and proceedings in any court or before any arbitrator involving claims
for damages (including punitive damages) in excess of $2,000,000 in the
aggregate (after deducting the amount with respect to which any Paging Entity
is insured and as to which the insurance company has acknowledged coverage),
against or in any other way relating directly to any Paging Entity, or any of
their Properties or businesses;
(b) Promptly upon the happening of any condition or event which
constitutes a Default or Event of Default, a written notice specifying the
nature and period of existence thereof and what action is being taken or is
proposed to be taken with respect thereto; and
(c) Any material adverse change with respect to the business,
assets, liabilities, financial position, results of operations or prospective
business of any Paging Entity, on a consolidated basis, other than changes in
the ordinary course of business which have not had and are not likely to have a
Material Adverse Effect.
8.4. ERISA Reporting Requirements. Furnish to each of the Lenders:
(a) Promptly and in any event (i) within 30 days after any Paging
Entity or any member of its Controlled Group knows or has reason to know that
any ERISA Event described in clause (a) of the definition of ERISA Event or any
event described in Section 4063(a) of ERISA with respect to any Plan of such
Paging Entity or any member of its Controlled Group has occurred, and (ii)
within 10 days after such Paging Entity or any member of its Controlled Group
knows or has reason to know that any other ERISA Event with respect to any Plan
of such Paging Entity or any member of its Controlled Group has occurred or a
request for a minimum funding waiver under Section 412 of the Code with respect
to any Plan of any Paging Entity or any member of its Controlled Group, a
written notice describing such event and describing what action is being taken
or is proposed to be taken with respect thereto, together with a copy of any
notice of event that is given to the PBGC;
(b) Promptly and in any event within two Business Days after
receipt thereof by any Paging Entity or any member of its Controlled Group from
the PBGC, copies of each notice
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received by such Paging Entity or any member of its Controlled Group of the
PBGC's intention to terminate any Plan or to have a trustee appointed to
administer any Plan;
(c) Promptly and in any event within 30 days after the filing
thereof by any Paging Entity or any member of its Controlled Group with the
United States Department of Labor, the Internal Revenue Service or the PBGC,
copies of each annual and other report (including Schedule B thereto) with
respect to each Plan;
(d) Promptly and in any event within 30 days after receipt
thereof, a copy of any notice, determination letter, ruling or opinion any
Paging Entity or any member of its Controlled Group receives from the PBGC, the
United States Department of Labor or the Internal Revenue Service with respect
to any Plan;
(e) Promptly, and in any event within 10 Business Days after
receipt thereof, a copy of any correspondence any Paging Entity or any member
of its Controlled Group receives from the Plan Sponsor (as defined by Section
4001(a)(10) of ERISA) of any Plan concerning potential withdrawal liability
pursuant to Section 4219 or 4202 of ERISA, and a statement from the chief
financial officer of any Paging Entity or such member of its Controlled Group
setting forth details as to the events giving rise to such potential withdrawal
liability and the action which such Paging Entity or such member of its
Controlled Group is taking or proposes to take with respect thereto;
(f) Notification within 30 days of any material increases in the
benefits of any existing Plan which is not a Multiemployer Plan, or the
establishment of any new Plans, or the commencement of contributions to any
Plan to which any Paging Entity or any member of its Controlled Group was not
previously contributing;
(g) Notification within three Business Days after any Paging
Entity or any member of its Controlled Group knows or has reason to know that
such Paging Entity or any such member of its Controlled Group has or intends to
file a notice of intent to terminate any Plan under a distress termination
within the meaning of Section 4041(c) of ERISA and a copy of such notice; and
(h) Promptly after receipt of written notice of commencement
thereof, notice of all actions, suits and proceedings before any court or
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, affecting a Paging Entity or any member of its Controlled
Group with respect to any Plan, except those which, in the aggregate, if
adversely determined could not have a Material Adverse Effect.
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ARTICLE IX
NEGATIVE COVENANTS
From the date of this Agreement and thereafter until the Commitment
has been finally and irrevocably reduced to zero, the Letters of Credit have
been terminated, the Notes and all other Obligations hereunder are paid in
full, PageNet and each Company agree that they will:
9.1. Subordinated Indebtedness. Not, and will not permit any Paging
Entity to, amend or change (or take any action or fail to take any action the
result of which is an effective amendment or change) or accept any waiver or
consent with respect to, any indenture or any other document or instrument that
would result in (a) a change in any principal, interest, fees, or other amounts
payable under any Subordinated Indebtedness (including without limitation a
waiver or action that results in the waiver of any payment default under any
Subordinated Indebtedness), (b) a change in any date fixed for any payment of
principal, interest, fees, or other amounts payable under any Subordinated
Indebtedness (including, without limitation, as a result of any redemption),
(c) a change in any percentage of holders of any of the Subordinated
Indebtedness required under the terms of any indenture, respectively, to take
(or refrain from taking) any action, (d) a change in any financial covenant in
any indenture, (e) a change in any remedy or right of the holders of any of the
Subordinated Indebtedness or any of the subordination provisions, (f) a change
in the definition of "Change of Control" or similar definition in any indenture
for any Subordinated Indebtedness, (g) a change in any covenant, term or
provision in any indenture for any Subordinated Indebtedness, which would
result in such term or provision being more restrictive than the terms of this
Agreement and the other Loan Documents, (h) a change in the definition of
"Senior Debt" or any similar term, or (i) a change in any term or provision of
any document or instrument related to any Subordinated Indebtedness, or other
document or instrument in connection therewith that could have, in any material
respect, an adverse effect on the interests of the Lenders.
9.2. Liquidation, Disposition, Merger and New Subsidiaries. Not,
and will not permit any other Paging Entity to, at any time:
(a) liquidate or dissolve itself (or suffer any liquidation or
dissolution) or otherwise wind up, or sell, lease, abandon, transfer or
otherwise dispose of all or any part of its assets, properties or business,
other than (i) as permitted under Section 9.14 hereof, and (ii) so long as
there shall exist no Default or Event of Default prior to or after giving
effect to a proposed transaction, any Paging Entity (other than PageNet and the
Notification Agent) may transfer, sell, or lease all or any part of its assets,
Properties or business to another direct or indirect wholly-owned Paging
Entity (other than the Notification Agent), and, so long as there are no assets
remaining in any such Company, thereafter wind up or dissolve itself;
(b) enter into any merger or consolidation, provided that, so long
as a Paging Entity notifies the Lenders and so long as there exists no Default
or Event of Default and none shall be caused thereby, (i) any Company or
wholly-owned direct or indirect Restricted Subsidiary of a Paging Entity
(whether newly acquired pursuant to Section 9.12 hereof or previously
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existing, but excluding the Notification Agent) may merge or consolidate into
any other Company or wholly-owned direct or indirect Restricted Subsidiary of a
Paging Entity, and (ii) any acquisition consummated in accordance with the
terms of Section 9.12 hereof may be accomplished by a merger so long as the
surviving entity is a Restricted Subsidiary that is a Company; or
(c) create or acquire any Subsidiary, except as permitted
by Section 9.12 hereof.
9.3. Total Leverage Ratio. At any time during the term of this
Agreement, not permit the Total Leverage Ratio for the most recent fiscal
quarter to be greater than (a) 6.50 to 1.00, for the period beginning on the
Closing Date and ending on June 30, 2000, and (b) 5.50 to 1.00 for the period
beginning on July 1, 2000 and continuing thereafter until the Obligations have
been paid in full and the Commitment has been terminated. For purposes of this
Section 9.3, the definition of "Operating Cash Flow" used herein shall (a)
exclude from Operating Cash Flow any such amounts or charges attributable to
Properties of any Paging Entity sold during such period as if such sale
occurred on the first day of such period and (b) include in Operating Cash Flow
any such amounts or charges attributable to Properties of any Paging Entity
purchased during such period as if such purchase occurred on the first day of
such period.
9.4. Senior Debt to Annualized Operating Cash Flow. At any time
during the term of this Agreement, not permit the ratio of (a) Senior Debt as
of the last day of the period for which Annualized Operating Cash Flow is being
determined to (b) Annualized Operating Cash Flow for the fiscal quarters during
the specified time periods below to be greater than the ratio set forth below
opposite such time period:
Period Ratio
------ -----
Closing Date through December 31, 1996 4.50 to 1.00
January 1, 1997 through December 31, 1997 4.00 to 1.00
January 1, 1998 through December 31, 1998 3.50 to 1.00
January 1, 1999 through December 31, 1999 3.00 to 1.00
January 1, 2000 and thereafter 2.50 to 1.00
For purposes of this Section 9.4, the definition of "Annualized Operating Cash
Flow" used herein shall (a) exclude from Annualized Operating Cash Flow any
such amounts or charges attributable to Properties of any Paging Entity sold
during such period as if such sale occurred on the first day of such period and
(b) include in Annualized Operating Cash Flow any such amounts or charges
attributable to Properties of any Paging Entity purchased during such period as
if such purchase occurred on the first day of such period.
9.5. Pro Forma Debt Service Ratio. At any time during the term of
this Agreement, not permit the ratio of (a) Annualized Operating Cash Flow on
such date of determination to (b) Pro Forma Debt Service for the succeeding 12
months beginning on the date following the date of determination to be less
than or equal to 1.50 to 1.00.
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9.6. Interest Coverage. At any time during the term of this
Agreement, not permit the ratio of (a) Operating Cash Flow for the most
recently completed fiscal quarter during any of the time periods set forth
below to (b) Total Interest Expense for such period, to be less than the amount
set forth below opposite such time period:
Period Ratio
------ -----
Closing Date through December 31, 1997 1.50 to 1.00
January 1, 1998 and thereafter 2.00 to 1.00
For purposes of this Section 9.6, the definition of "Operating Cash Flow" used
herein shall (a) exclude from Operating Cash Flow any such amounts or charges
attributable to Properties of any Paging Entity sold during such period as if
such sale occurred on the first day of such period and (b) include in Operating
Cash Flow any such amounts or charges attributable to Properties of any Paging
Entity purchased during such period as if such purchase occurred on the first
day of such period.
9.7. Capital Expenditures. At any time during the term of this
Agreement, not permit Capital Expenditures (excluding acquisitions and
investments made by any Paging Entity in accordance with the terms of Section
9.12(e) and Section 9.12(f) hereof) for any fiscal year set forth below to be
more than the following amounts set forth opposite each such fiscal year below:
Period Amounts
------ -------
1996 $500,000,000
1997 $700,000,000
1998 $600,000,000
1999 and $650,000,000
Each Fiscal
Year Thereafter
provided however, that if no Default or Event of Default exists or would result
therefrom, the Paging Entities may use during the fiscal year 1996 only, any
amounts actually received by the Companies from the issuance by PageNet of
$400,000,000 Senior Subordinated Notes in July of 1995, and any such Capital
Expenditures made from such source shall not be included in any calculation of
compliance with the preceding provisions of this Section; and provided further
that, beginning in 1997, the Paging Entities shall be entitled to make
additional Capital Expenditures in the following fiscal year only and not on a
cumulative basis, in an amount equal in the aggregate to the lesser of (a) 15%
of the amount permitted to be expended for the preceding fiscal year (which for
fiscal year 1997 only, shall include any amounts actually received by the
Companies from the issuance by PageNet of $400,000,000 Senior Subordinated
Notes in July of 1995) or (b) the amount permitted to be expended which was not
used for such fiscal year.
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9.8. Restricted Payments. Not, and will not permit any other Paging
Entity to, purchase any shares of its respective stock, redeem any shares of
stock, declare or pay any dividends on any shares of stock (other than stock
dividends), make any distributions to pay, or pay, principal, interest or fees
on any Indebtedness (except the Obligations), including without limitation,
management fees, or any other kinds of distributions, or set aside any funds
for any such purpose (each of the foregoing actions being herein called a
"Restricted Payment"); provided, however, that (a) any Restricted Subsidiary
may declare and pay dividends or make distributions (i) on the Capital Stock
held by PageNet in such Restricted Subsidiary or in order to make scheduled
payments of principal and accrued interest on "Debt" (as defined in the
documentation relating to the Subordinated Indebtedness) owed by the Restricted
Subsidiary to PageNet or (ii) to a Company or to a wholly-owned Restricted
Subsidiary of a Company; and (b) so long as PageNet can certify that there
exists no Default or Event of Default and none shall result from the Restricted
Payment and shall have delivered to the Agents a certificate, substantially in
the form of Exhibit E hereto, of the chief financial officer or the corporate
controller of PageNet demonstrating compliance with the financial ratios set
out in such certificate after giving effect thereto, PageNet may (i) purchase
or redeem shares of its common Capital Stock in an aggregate amount not
exceeding $5,000,000 during the term of this Agreement, (ii) redeem those
certain Senior Subordinated Notes due May 15, 2002, of PageNet, in an aggregate
principal amount of $200,000,000, issued pursuant to that certain Indenture,
between PageNet and Shawmut Bank, N.A., as Trustee, dated as of May 15, 1992,
as amended, (iii) make payments of accrued interest on its Subordinated
Indebtedness permitted under Section 9.9 hereof and (iv) make dividend payments
on any of its Preferred Stock.
9.9. Indebtedness. Not, and will not permit any other Paging Entity
to, permit to exist any Indebtedness of any Paging Entity except:
(a) each Paging Entity may permit to exist the Revolving Loan and
other Obligations owing under the Loan Documents;
(b) the Companies may incur Indebtedness related to the Letters
of Credit and any reimbursement obligations with respect thereto (and PageNet
may Guaranty such Obligations);
(c) each Paging Entity may permit to exist Indebtedness existing
on the Closing Date as set forth on Schedule 9.9 hereto (and not any increase
thereof), except that the Notification Agent may not incur any Debt;
(d) so long as (i) no Default or Event of Default shall exist or
result therefrom and (ii) PageNet shall have delivered to the Agents a
Compliance Certificate of the Chief Financial Officer, Vice President-Finance
or the corporate controller of PageNet demonstrating compliance with the
financial ratios set out in such certificate after giving effect thereto,
Indebtedness of PageNet only constituting unsecured public notes, provided that
such public notes (A) have a maturity date at least one year after the
scheduled Maturity Date, (B) are unsecured, (C) have terms and conditions
substantially similar to any existing Subordinated Indebtedness of a Paging
Entity or have terms and conditions otherwise acceptable to Managing Agents and
Majority Lenders (provided that subordination terms must also comply with (E)
below), as evidenced by
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their prior written approval thereof, and are subject to documentation
reasonably acceptable to the Majority Lenders and Managing Agents, but in any
event such terms shall not be more stringent than the terms of the Loan
Documents, (D) provide for an agent acting on behalf of the public note holders
with the power to take any action at the direction of 51% of such note holders
and (E) are subordinated to the Obligations, on terms and conditions no less
advantageous to the Lenders than the subordination terms and provisions of the
8.875% Senior Subordinated Notes of PageNet due February 1, 2006 in the
aggregate principal amount of $300,000,000 issued pursuant to the Indenture
dated as of January 15, 1994;
(e) Guaranties by PageNet of Indebtedness of wholly-owned
Restricted Subsidiaries (which such indebtedness the Restricted Subsidiaries
must be permitted to incur by the terms of this Agreement);
(f) PageNet may permit to exist the Subordinated Indebtedness of
PageNet outstanding on the Closing Date;
(g) so long as no Default or Event of Default shall exist or
result therefrom and PageNet shall have delivered to the Agents a Compliance
Certificate of the chief financial officer or the corporate controller of
PageNet demonstrating compliance with the financial ratios set out in such
certificate after giving effect thereto, PageNet may incur and permit to exist
Indebtedness in the form of Capital Leases in an amount in the aggregate over
the term of this Agreement not to exceed $35,000,000;
(h) Companies may permit to exist inter-company indebtedness
permitted by Section 9.12(a) hereof, provided that the Notification Agent may
not incur any such inter-company indebtedness;
(i) so long as there exists no Default or Event of Default and
none shall result therefrom and so long as the Paging Entities are otherwise in
compliance with Section 9.7 hereof, Indebtedness (with an amortization schedule
of not greater than five years) not to exceed $75,000,000 in the aggregate
throughout the term of this Agreement, incurred by the Companies in connection
with purchases of frequencies licensed by the FCC and the assets of the Person
from which such frequencies are purchased;
(j) so long as no Default or Event of Default shall exist or
result therefrom, the Companies may incur Indebtedness of an amount not in
excess of $50,000,000 for the purpose of repaying Advances made hereunder, the
proceeds of which were used for the acquisition and construction of a corporate
headquarters for the Companies in Texas, so long as the terms and provisions of
the documentation relating to such Indebtedness are satisfactory to the
Managing Agents in their sole discretion; and
(k) so long as no Default or Event of Default shall exist or
result therefrom, limited Guarantees by PageNet as permitted by Section 9.12(f)
hereof.
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9.10. Paging Entities' and Subsidiaries' Stock. Not permit any
Paging Entity to purchase or otherwise acquire any shares of the capital stock
of any Paging Entity; and not take any action, or permit any other Paging
Entity to take any action, which will result in a decrease in any Paging
Entity's 100% direct or indirect ownership interest in any Restricted
Subsidiary, whether or now existing or hereafter acquired.
9.11. Liens. Not create or permit to exist, and will not permit any
other Paging Entity to create or permit to exist (or covenant or agree, or
permit any other Paging Entity to covenant or agree, with any Person other than
the Lenders that any Paging Entity shall not create or permit to exist), any
Lien with respect to any assets now owned or hereafter acquired by such Paging
Entity except, so long as no Default or Event of Default shall result
therefrom:
(a) Liens for current taxes not delinquent or for taxes being
diligently contested in good faith by appropriate proceedings and for which
adequate reserves have been made in accordance with GAAP;
(b) Liens as listed on Schedule 6.6 hereto (limited to the
Property subject to such Lien on the Closing Date, such amount secured by such
Lien not to be increased);
(c) Liens made for the benefit of the Agents and the Lenders to
secure the Obligations;
(d) Liens imposed by law, such as landlord's Liens, carriers',
warehousemen's, materialmen's and mechanics' Liens and other similar Liens
arising in the ordinary course of business which secure payment of obligations
not more than 60 days past due, or are being diligently contested in good faith
and by appropriate proceedings;
(e) Liens on Property acquired in connection with an acquisition
permitted by Section 9.12(e) hereof, provided that such Liens are either
released within 60 days after such acquisition or secured Indebtedness
aggregating less than $5,000,000 outstanding at any one time; and
(f) Liens to secure Indebtedness described in Section 9.9(i) and
(j) hereof, but solely on the assets acquired with the proceeds of such
Indebtedness.
9.12. Loans, Advances, Investments and Guaranties. Not, and will not
permit any other Paging Entity to make Investments in, or acquisitions of all
or substantially all of the assets of, any Person or any operating unit or
division of any Person, or become or be a guarantor or surety of, or otherwise
become or be responsible in any manner with respect to any undertaking of,
another, except:
(a) loans and advances made between wholly-owned Paging Entities
(except the Notification Agent);
(b) existing Investments by PageNet and the Companies in existing
Unrestricted Subsidiaries and Restricted Subsidiaries as described on Schedule
6.21;
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(c) so long as there exists no Default or Event of Default and
none shall result therefrom, purchases exclusively by a Paging Entity of
frequencies licensed by the FCC and the assets of the Person from which such
frequencies are purchased as Capital Expenditures, so long as the Paging
Entities are in compliance with Section 9.7 hereof and such frequencies and
assets are pledged as Collateral for the Obligations hereunder;
(d) so long as there exists no Default or Event of Default and
none shall result therefrom, purchases by any Paging Entity of inventory of
another Person in the ordinary course of business;
(e) so long as there exists no Default or Event of Default and none
shall result therefrom, purchases by any Paging Entity of Capital Stock or
assets of any Person or Persons for an aggregate purchase price not to exceed
$15,000,000 (except for closing adjustments) throughout the term of this
Agreement unless otherwise agreed to in writing by the Majority Lenders;
provided however, that, in each case the Lenders shall have received written
notice at least 30 days prior to the date of such purchase and at least 10
Business Days prior to the date of such purchase a Compliance Certificate
setting forth the covenant calculations described therein both prior to and
after giving effect to the proposed purchase, such acquisition shall be
pursuant to documentation reasonably acceptable to the Majority Lenders, such
Capital Stock, assets, property or business shall relate to a Person involved
in the operation of wireless messaging and related communications systems, the
Companies and PageNet shall have complied in all respects with Section 2.20
hereof, and the Lenders shall have each received copies of all documents,
instruments, opinions and other information relating to the seller and assets
or Capital Stock to be acquired as any Lender may reasonably request;
(f) so long as there exists no Default or Event of Default both
before and after giving effect to such Investment and limited Guaranty,
Investments and limited Guarantees by PageNet in Unrestricted Subsidiaries or
Investments in Restricted Subsidiaries or other strategic communications
ventures of any type not otherwise prohibited under the terms of this
Agreement, in a maximum aggregate amount of $250,000,000 throughout the term of
this Agreement; provided, however, that PageNet shall not be entitled to invest
or guarantee more than $200,000,000 in the aggregate throughout the term of
this Agreement for all Investments and Guarantees in Unrestricted Subsidiaries
over the term of this Agreement;
(g) for the purpose of making advances to its employees for
relocation and corporate travel expenses, the aggregate amount outstanding for
the Paging Entities of which at any time shall not exceed $750,000 without the
prior written consent of each of the Lenders;
(h) Guaranties by PageNet of the Obligations; and
(i) Investments in Cash Equivalents.
9.13. Leases. Not enter into or permit to exist, and will not permit
any other Paging Entity to enter into or permit to exist, any arrangement for
the leasing by it as lessee of any real or personal property (or any interest
therein) which provides for the amortization of rent such
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that there is a substantial balloon payment at the end of the term of any such
lease arrangement or pursuant to which rental payments thereunder deviate
significantly from standard market practices.
9.14. Sale of Assets. Not, and will not permit any other Paging
Entity to lease, sell or otherwise dispose of its Property, to any other
Person, except for (a) sales of pagers and product in the ordinary course of
business, (b) sales in connection with the replacement of obsolete equipment in
the ordinary course of business, (c) so long as no Default or Event of Default
exists at such time and none results from such sale, sales of other assets not
to exceed in the aggregate $30,000,000 over the term of this Agreement, (d) so
long as no Default or Event of Default exists at such time and none results
from such transfer, transfers of assets between the Companies, and (e) so long
as no Default or Event of Default exists at such time and none results from
such sale, sales consented to by each Lender. Notwithstanding anything to the
contrary herein, PageNet and the Companies will not, and will not permit any
other Paging Entity to, sell or otherwise dispose of any notes receivable or
accounts receivable, with or without recourse, provided that nothing in this
Section 9.14 shall prohibit the Paging Entities from settling disputes relating
to receivables in the ordinary course of its business.
9.15. Management Fee. Not pay to any Person, and will not permit any
other Paging Entity to pay to any Person, any Management Fee.
9.16. Conduct of Business. Not, and will not permit any other Paging
Entity to, engage in any type of business except the businesses in which it is
currently engaged, and communications businesses incidental and related
thereto.
9.17. Transactions with Affiliates. Not, and will not permit any
other Paging Entity to, enter into any transaction (including, without
limitation, the purchase or sale of any property or service, but other than any
transactions between Paging Entities) with, or make any payment or transfer to,
any Affiliate except, to the extent there exists no Default or Event of Default
and none shall result therefrom, in the ordinary course of business and
pursuant to the reasonable requirements of a Paging Entity's business and upon
fair and reasonable terms no less favorable to such Paging Entity than such
Paging Entity would obtain in a comparable arms-length transaction.
9.18. Compliance with ERISA. Not, and will not permit any other
Paging Entity to, directly or indirectly, or permit any member of its
Controlled Group to directly or indirectly, (a) terminate any Plan so as to
result in any material (in the opinion of the Majority Lenders) liability to
any Paging Entity or any member of its Controlled Group, (b) permit to exist
any ERISA Event, or any other event or condition which presents the risk of a
material (in the opinion of the Majority Lenders) liability of any Paging
Entity or any member of its Controlled Group, (c) make a complete or partial
withdrawal (within the meaning of Section 4201 of ERISA) from any Multiemployer
Plan so as to result in any material (in the opinion of the Majority Lenders)
liability to a Paging Entity or any member of its Controlled Group, (d) enter
into any new Plan or modify any existing Plan so as to increase its obligations
thereunder (except in the ordinary course of business consistent with past
practice) which could result in any
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material (in the opinion of the Majority Lenders) liability to a Paging Entity
or any member of its Controlled Group, or (e) permit the present value of all
benefit liabilities, as defined in Title IV of ERISA, under each Plan of a
Paging Entity or any member of its Controlled Group (using the actuarial
assumptions utilized by the PBGC upon termination of a plan) to materially (in
the opinion of the Majority Lenders) exceed the fair market value of Plan
assets allocable to such benefits all determined as of the most recent
valuation date for each such Plan.
9.19. Amendment and Waiver. Not, and will not permit any other
Paging Entity to, enter into any material amendment of any material term or
provision of its articles of incorporation or by-laws. In addition, PageNet and
each Company agree not to, nor shall they permit any other Paging Entity to,
enter into any material amendment of, or agree to or accept any material waiver
of any of the provisions of, any material license, agreement or consent
necessary, in the aggregate, for the operation of any Substantial Portion of
its business unless (a) such agreement is not adverse to the interests of the
Lenders, (b) the Majority Lenders consent to such amendment and (c) the Lenders
are provided with 10 days' written notice prior to the execution or
effectiveness of the proposed amendment or waiver.
9.20. Capital Stock. Not, and will not permit any other Paging
Entity to, make or permit any issuance, transfer, assignment, distribution,
mortgage, pledge or gift of any shares of Pledged Stock, except in accordance
with the provisions of Section 9.2 hereof. PageNet shall not issue any Capital
Stock which is preferred stock, except the Preferred Stock.
9.21. Sale and Leaseback. Not, and will not permit any other Paging
Entity to, enter into any arrangement whereby it sells or transfers any of its
assets, and thereafter rents or leases such assets (or other assets used for
substantially the same purposes).
ARTICLE X
EVENTS OF DEFAULT
If one or more of the following events of default occur:
10.1. Payment. Default by any Paging Entity in the payment of
principal of any Note, or in the payment of any reimbursement obligation with
respect to any Letter of Credit when due, or default, and the continuance
thereof for five days, in the payment of interest on any Note when due, or in
the payment of any fee hereunder or any other portion of the Obligation; or any
Guarantor shall fail to pay any amount under any Guaranty of all or any portion
of the Obligations;
10.2. Other Covenants. Default by any Paging Entity in the
performance or observance of any covenant or agreement set forth in Article IX
hereof, or in Sections 8.3 (a) and (b) hereof;
10.3. Other Indebtedness. Failure of any Paging Entity to make any
payment when due, or within any applicable grace period, in respect of any of
its (a) Indebtedness (other than the
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Obligations) or (b) debt constituting trade debt that is more than 120 days
past due (excluding any such trade debt such Paging Entity disputes in good
faith), in each case in excess, in the aggregate, of $1,000,000; or the default
by any Paging Entity in the performance of any term, provision or condition
contained in any agreement under which any such Indebtedness was created or is
governed, the effect of which is to cause, or to permit the holder or holders
of such Indebtedness to cause (i) such Indebtedness to become due prior to its
stated maturity or (ii) to require such Paging Entity or Paging Entities to
purchase such Indebtedness from such holder or holders; or any such
Indebtedness of any Paging Entity shall be declared to be due and payable or
required to be prepaid (other than by a regularly scheduled payment) prior to
the stated maturity thereof;
10.4. Debtor Relief Actions.
(a) Any petition or application for the appointment of a trustee,
receiver, or liquidator of any Paging Entity, or of any substantial part of the
assets of any Paging Entity, shall be filed, or any proceedings under
bankruptcy, reorganization, moratorium, or similar laws, or principles of
equity affecting the enforcement of creditors' rights generally, whether now or
hereafter in effect, shall be commenced, against any Paging Entity and any such
petition or application shall be consented to by such Paging Entity, or
continue unstayed or undismissed and in effect for a period of 30 consecutive
days; or there shall be entered a decree or order by a court having
jurisdiction in the premises constituting an order for relief in respect of any
Paging Entity under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other applicable Federal or state bankruptcy law or
other similar law, or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or similar official of any Paging Entity, or of any
substantial part of their respective properties, or ordering the winding-up or
liquidation of the affairs of any Paging Entity;
(b) Any Paging Entity shall file a petition, answer or consent
seeking relief under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other applicable Federal or state bankruptcy law or
other similar law, or any Paging Entity shall consent to the institution of
proceedings thereunder or to the filing of any such petition or to the
appointment or taking of possession of a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of any Paging Entity
or of any substantial part of their respective Properties, or any Paging Entity
shall fail generally to pay its debts as they become due, or any Paging Entity
shall take any action in furtherance of any such action; or
(c) Any Substantial Portion of the Property of any Paging Entity
shall be subject to attachment, levy or replenishment, unless such attachment,
levy or replenishment shall be stayed, or bonded in an amount substantially
equal to the fair market value of such Property and only for so long as such
stay or bond exists;
10.5. ERISA. With respect to any Plan of the Paging Entities or any
member of their Controlled Group: (i) any Paging Entity, any such member, or
any other party-in-interest or disqualified person shall engage in transactions
which in the aggregate would reasonably result in a direct or indirect
liability to the Paging Entities or any member of their Controlled Group
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in excess of $250,000 under Section 409 or 502 of ERISA or Section 4975 of the
Code; (ii) the Paging Entities or any member of their Controlled Group shall
incur any accumulated funding deficiency, as defined in Section 412 of the
Code, in the aggregate in excess of $250,000, or request a funding waiver from
the Internal Revenue Service for contributions in the aggregate in excess of
$250,000; (iii) the Paging Entities or any member of their Controlled Group
shall incur any withdrawal liability in the aggregate in excess of $250,000 as
a result of a complete or partial withdrawal within the meaning of Section 4203
or 4205 of ERISA; (iv) the Paging Entities or any member of their Controlled
Group shall fail to make a required contribution by the due date under Section
412 of the Code or Section 302 of ERISA which would result in the imposition of
a lien under Section 412 of the Code or Section 302 of ERISA; (v) the Paging
Entities or any member of their Controlled Group or any Plan sponsor shall
notify the PBGC of an intent to terminate, or the PBGC shall institute
proceedings to terminate, or the PBGC shall institute proceedings to terminate,
any Plan; (vi) a Reportable Event shall occur with respect to a Plan, and
within 15 days after the reporting of such Reportable Event to the
Administrative Agent and Documentation Agent, the Administrative Agent shall
have notified the Notification Agent in writing that the Majority Lenders have
made a determination that, on the basis of such Reportable Event, there are
reasonable grounds for the termination of such Plan by the PBGC or for the
appointment by the appropriate United States District Court of a trustee to
administer such Plan and as a result thereof an Event of Default shall have
occurred hereunder; (vii) a trustee shall be appointed by a court of competent
jurisdiction to administer any Plan or the assets thereof; (viii) the benefits
of any Plan shall be increased, or the Paging Entities or any member of their
Controlled Group shall begin to maintain, or begin to contribute to, any Plan,
without the prior written consent of the Majority Lenders; or (ix) any ERISA
Event with respect to a Plan shall have occurred, and 30 days thereafter (A)
such ERISA Event, other than such event described in clause (vi) of the
definition of ERISA Event herein, (if correctable) shall not have been
corrected and (B) the then present value of such Plan's benefit liabilities, as
defined in Title IV of ERISA, shall exceed the then current value of assets
accumulated in such Plan; provided, however, that the events listed in
subsections (v) through (ix) shall constitute Events of Default only if, as of
the date thereof or any subsequent date, the maximum amount of liability that
the Paging Entities or any member of their Controlled Group could incur in the
aggregate under Section 4062, 4063, 4064, 4219 or 4023 of ERISA or any other
provision of law with respect to all such Plans, computed by the actuary of the
Plan taking into account any applicable rules and regulations of the PBGC at
such time, and based on the actuarial assumptions used by the Plan, resulting
from or otherwise associated with such event exceeds $250,000;
10.6. Agreements. Default by any Paging Entity in the performance of
any of the Paging Entities' agreements set forth herein or in any of the Notes,
the Applications, the Security Documents or the other Loan Documents (and not
constituting an Event of Default under any other subsection of this Article X)
and continuance of such default for 30 days after the earlier of (a) notice
thereof to the Notification Agent from the Documentation Agent or any Under or
(b) actual knowledge thereof by any officer of any Paging Entity;
10.7. Loan Documents; Collateral; Subordinated Indebtedness. Any
provision of any Loan Document shall for any reason cease to be valid and
binding on or enforceable against any
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party to it (other than the Agents and the Lenders) in all material respects,
or any such party shall so state or claim in writing; or any Paging Entity or
any Person shall disavow any obligations under any Loan Document; or any
Security Document shall for any reason fail to create a valid and perfected
first priority security interest in any collateral purported to be covered
thereby (except as specifically permitted by the terms of this Agreement and
the other Loan Documents); or any indenture, note or other agreement evidencing
or governing the Subordinated Indebtedness shall fail to remain in full force
or effect; or there shall occur any event under the terms of any indenture,
note or other documentation relating to Subordinated Indebtedness that has the
effect of causing such Subordinated Indebtedness to be (or to be required to
be) prepaid, redeemed, purchased or defeased, or to cause an offer to purchase
or defease such Subordinated Indebtedness by any Paging Entity to be required
to be made; or any action shall be taken to discontinue or to assert the
invalidity or unenforceability of any Security Document or other Loan Document,
or any indenture, note or other agreement evidencing or governing the
Obligations or the Subordinated Indebtedness; or any Person shall contest,
challenge, disavow its obligations thereunder or breach the subordination
provisions of the Subordinated Indebtedness, or all or any material portion of
the Collateral or the Loan Documents shall be the subject of any proceeding
instituted by any Person other than a Lender (except in connection with any
Lender's exercise of any remedies under the Loan Documents); or there shall
exist any litigation or threatened litigation with respect to all or any
material portion of the Collateral or the Loan Documents; or any Person shall
challenge in any manner whatsoever or disavow the validity or enforceability of
all or any portion of the Loan Documents or the Collateral;
10.8. Representations and Warranties. Any representation or warranty
made by any Paging Entity, as applicable, herein or in any of the Security
Documents or other Loan Documents, is untrue in any material respect, or any
schedule, statement, report, notice or writing furnished by any Paging Entity
to any of the Agents or the Lenders is untrue in any material respect on the
date as of which the facts set forth are stated or certified;
10.9. Litigation. 120 days after notice is given to the Notification
Agent by the Documentation Agent that, in the reasonable opinion of the
Super-Majority Lenders after receiving advice from independent counsel, any
litigation or governmental proceeding which has been instituted against any
Paging Entity could reasonably be expected to have a Material Adverse Effect;
10.10. Licenses. Any Paging Entity shall fail to comply in any
respect with the Communications Act, or any rule or regulation promulgated by
the FCC, and such failure could reasonably be expected to cause a Material
Adverse Effect, or notice is given to the Notification Agent by the
Documentation Agent that, in the opinion of the Majority Lenders, any license
of any Paging Entity which has expired or shall expire without having been
renewed or shall be canceled, unpaired or jeopardized and shall not have been
substituted for in a manner satisfactory to the Majority Lenders could
reasonably be expected to have a Material Adverse Effect, or any material
license for any RCCC or RCCCs in the aggregate affecting a Substantial Portion
of the Property of the Paging Entities have not been renewed prior to 20 days
before its expiration or has been terminated or transferred;
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10.11. Judgments. A final judgment or judgments shall be entered by
any court against any Paging Entity for the payment of money which exceeds
$1,000,000 in the aggregate, or a warrant of attachment or execution or similar
process shall be issued or levied against Property of the Paging Entities
which, together with all other such Property of the Paging Entities subject to
other such process, exceeds in value $1,000,000 in the aggregate, and if such
judgment or award is not insured (by an insurance company which has
acknowledged coverage) or, within 30 days after the entry, issue or levy
thereof, such judgment, warrant or process shall not have been paid or
discharged or stayed pending appeal, or if, after the expiration of any such
stay, such judgment, warrant or process shall not have been paid or discharged;
10.12. Pledged Stock. All of the issued and outstanding Capital Stock
of the Companies shall not be owned directly or indirectly by PageNet; or all
of the issued and outstanding Capital Stock of the Restricted Subsidiaries
shall not be owned by the Paging Entities; or
10.13. RICO. Any civil action, suit or proceeding shall be commenced
against any Paging Entity under any federal or state racketeering statute
(including, without limitation, the Racketeer Influenced and Corrupt
Organization Act of 1970 ("RICO")) and such suit shall be adversely determined
by a court of applicable jurisdiction and forfeiture shall commence against
assets in the aggregate having fair market value of $5,000,000 or more, or any
criminal action or proceeding shall be commenced against any Paging Entity
under any federal or state racketeering statute (including, without limitation,
RICO);
then, if any such event shall be continuing, LIBOR Advances shall not
be available to the Companies, and the Documentation Agent, upon request of the
Majority Lenders, shall declare (i) the Commitment to be fifty and irrevocably
reduced to zero with the Lenders thereafter having no obligation to make any
Advance under the Revolving Loan, and/or (ii) all Obligations to be due and
payable, whereupon the Commitment shall immediately, finally and irrevocably be
reduced to zero, and all outstanding Notes and all other Obligations shall
become immediately due and payable, all without notice of any kind, and without
presentment, demand, or protest all of which is expressly waived by the Paging
Entities, (except that if an event described in Section 10.4 hereof occurs, the
Commitment shall be automatically, immediately finally and irrevocably reduced
to zero and the outstanding Notes and all other Obligations shall become
automatically due and payable without declaration or notice of any kind, and
without presentment, demand, or protest all of which is expressly waived by the
Paging Entities). The Documentation Agent, upon the request of NationsBank, may
also demand and the Paging Entities shall pay to NationsBank, immediately upon
demand and hi immediately available funds, the amount equal to the aggregate
amount of the Letters of Credit then outstanding, irrespective of whether such
Letters of Credit have been drawn upon, all as set forth and in accordance with
the terms of provisions of Article III hereof. The Documentation Agent shall
promptly advise the Notification Agent of any such declaration or demand but
failure to do so shall not impair the effect of such declaration or demand. The
Administrative Agent, the Documentation Agent and the Lenders may exercise all
of the post-default rights granted to them under the Loan Documents or under
applicable law. The rights and remedies of the Administrative Agent, the
Documentation Agent and the Lenders hereunder shall be cumulative, and not
exclusive.
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ARTICLE XI
RELATIONSHIP AMONG LENDERS
11.1. Agreement Among Lenders. The Lenders agree among themselves
that:
(a) Administrative Agent and Documentation Agent. NationsBank is
hereby appointed as documentation agent hereunder and as collateral agent under
each Security Document, and each of the Lenders irrevocably authorizes the
Documentation Agent to act as the documentation agent and collateral agent of
such Lender, including without limitation, the authority to execute in
accordance with the terms of this Agreement on behalf of the Lenders all Loan
Documents executed as amendments in connection with this Agreement. The
Documentation Agent agrees to act as such upon the express conditions contained
in this Article XI and in the Security Documents. Toronto Dominion is hereby
appointed as Administrative Agent hereunder, and each of the Lenders
irrevocably authorizes the Administrative Agent to act as the administrative
agent of such Lender. The Administrative Agent agrees to act as such upon the
express conditions contained in this Article XI. None of the Agents shall have
a fiduciary relationship in respect of any Lender by reason of this Agreement.
All provisions set forth in this Article XI with respect to the rights, duties
and powers of the Agents under the Security Documents shall remain in full
force and effect so long as the obligation of the Lenders to make Advances
under the Revolving Loan is outstanding or any Obligations are owing to the
Lenders or any obligations owing to the Lenders or any Lender under or in
connection with any Interest Hedge Agreement shall remain outstanding and
unpaid notwithstanding the termination of this Agreement. Each Lender hereby
authorizes, consents to, and directs the Companies and the Notification Agent
to deal with the Agents as the true and lawful agents of such Lender to the
extent set forth herein. Each Lender hereby appoints the Administrative Agent
and Documentation Agent as its nominee in its name and on its behalf, to act as
nominee for and on behalf of all Lenders under the Loan Documents, to take such
action as may be requested by Majority Lenders (or, where this Agreement or the
other Loan Documents require, the SuperMajority Lenders or all the Lenders, as
the case may be), provided that, unless and until the Administrative Agent and
Documentation Agent shall have received such requests, the Administrative Agent
or Documentation Agent may take such administrative action, or refrain from
taking such administrative action, as it may deem advisable and in the best
interests of the Lenders.
(b) Replacement of Managing Agents. Should any Managing Agent or
any successor Managing Agent ever cease to be a Lender hereunder, or should any
Managing Agent or any successor Managing Agent ever resign as Managing Agent,
or should any Managing Agent or any successor Managing Agent ever be removed
with or without cause by the Majority Lenders, then the Lender appointed by the
Majority Lenders (and, so long as there exists no Event of Default at such
time, such replacement shall be reasonably acceptable to the Notification
Agent) shall forthwith become such Managing Agent, as applicable, and the
Paging Entities and the Lenders shall execute such documents as any Lender may
reasonably request to reflect such change. Any resignation or removal of any
Managing Agent or any successor Managing Agent shall become effective upon the
appointment by the Majority Lenders of a successor Managing
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Agent; provided, however, that if the Lenders fail for any reason to appoint a
successor within 60 days after such removal or resignation, the Managing Agent
or any successor Managing Agent (as the case may be) shall thereafter have no
obligation to act as Managing Agent, as applicable, hereunder. The provisions
of this Article XI shall continue to inure to the benefit of any Managing Agent
that is no longer acting in such capacity, and shall survive the termination of
this Agreement and the extinguishment of any such Agent's Revolving Loan
Specified Percentage of the Commitment.
(c) Expenses. Each Lender (including the Agents in their capacity
as a Lender) shall pay its pro rata share, based on its Revolving Loan
Specified Percentage of any costs, expenses and disbursements paid or incurred
by the Administrative Agent and/or Documentation Agent (including in-house
legal counsel costs) in connection with any of the Loan Documents to the
Administrative Agent or the Documentation Agent if the Companies are obligated
to pay such amounts and fail to pay such Agent (excluding, however, any
facility fees owed by the Companies to any Managing Agent). Any amount so paid
by the Lenders to the Administrative Agent or the Documentation Agent shall be
returned by the Administrative Agent or the Documentation Agent, as applicable,
pro rata to each paying Lender to the extent later paid by the Companies or any
other Person on the Companies' behalf to the Administrative Agent or the
Documentation Agent.
(d) Delegation of Duties. The Administrative Agent and
Documentation Agent may execute any of their duties hereunder by or through
officers, directors, employees, attorneys or agents, and shall be entitled to
(and shall be protected in relying upon) advice of counsel concerning all
matters pertaining to their duties hereunder.
(e) Reliance by Administrative Agent and Documentation Agent. The
Administrative Agent and Documentation Agent and its officers, directors,
employees, attorneys and agents shall be entitled to rely and shall be fully
protected in relying on any writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telex or teletype message, statement,
order, or other document or conversation believed by it or them to be genuine
and correct and to have been signed or made by the proper Person and, with
respect to legal matters, upon opinions and advice of counsel selected by the
Administrative Agent or the Documentation Agent. The Administrative Agent and
Documentation Agent may deem and treat the payee of any Note as the owner
thereof for all purposes hereof.
(f) Limitation of Administrative Agent's and Documentation Agent's
Liability.
(i) No Agent shall have any duties or responsibilities
except those expressly set forth in this Agreement and those duties,
and liabilities shall be subject to the limitations and qualifications
set forth in this Article XI. The duties of each Agent shall be
mechanical and administrative in nature. Neither the Administrative
Agent nor the Documentation Agent nor any of their officers,
directors, employees, attorneys or agents shall be liable for any
action taken or omitted to be taken by it or them hereunder in good
faith and reasonably believed by it or them to be within the
discretion or power conferred to it or them by the Loan Documents or
be responsible for the consequences
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of any error of judgment, except for its or their own gross negligence
or wilful misconduct. Except as aforesaid, the Administrative Agent
and Documentation Agent shall be under no duty to enforce any rights
with respect to any of the Advances, the Revolving Loan, or any
security therefor. The Administrative Agent and Documentation Agent
shall not be compelled to do any act hereunder or to take any action
towards the execution or enforcement of the powers hereby created or
to prosecute or defend any suit in respect hereof, unless indemnified
to its satisfaction against loss, cost, liability and expense. The
Administrative Agent and Documentation Agent shall not be responsible
in any manner to any Lender for the effectiveness, enforceability,
genuineness, validity or due execution of any of the Loan Documents,
or for any representation, warranty, document, certificate, report or
statement made herein or furnished in connection with any Loan
Documents, or be under any obligation to any Lender to ascertain or to
inquire as to the performance or observation of any of the terms,
covenants or conditions of any Loan Documents on the part of the
Paging Entities. To the extent not reimbursed by the Companies, each
Lender hereby severally (and not jointly) indemnifies and holds
harmless the Administrative Agent and the Documentation Agent, pro
rata according to its Revolving Loan Specified Percentage, from and
against any and all liabilities, obligations, losses (other than
credit losses and facility fees), damages, penalties, actions,
judgments, suits, costs, expenses and/or disbursements of any kind or
nature whatsoever which may be imposed on, asserted against, or
incurred by the Administrative Agent and Documentation Agent in any
way with respect to any Loan Documents or any action taken or omitted
by the Administrative Agent and Documentation Agent under the Loan
Documents (including any negligent action of the Administrative Agent
and Documentation Agent), except to the extent the same result from
gross negligence or wilful misconduct by the Administrative Agent and
Documentation Agent. The provisions of this Section 11.1(f) shall
survive the termination of this Agreement.
(ii) Unless the Notification Agent or a Lender, as the
case may be, notifies the Administrative Agent prior to the date on
which it is scheduled to make payment to the Administrative Agent of
(a) in the case of a Lender, the proceeds of an Advance, or (b) in the
case of the Notification Agent, a payment of principal, interest or
fees to the Administrative Agent for the account of the Lenders, that
it does not intend to make such payment, the Administrative Agent may
assume that such payment has been made. The Administrative Agent may,
but shall not be obligated to, make the amount of such payment
available to the intended recipient, in reliance on such assumption.
If such Lender or the Companies, as the case may be, has not in fact
made such payment to the Administrative Agent, the recipient of such
payment shall, on demand by the Administrative Agent, repay to the
Administrative Agent the amount so made available together with
interest thereon in respect of each day during the period commencing
on the date such amount was so made available by the Administrative
Agent until the date the Administrative Agent recovers such amount at
a rate per annum equal to (a) in the case of payment by a Lender, the
Federal Funds Effective Rate for three Business Days, and thereafter,
at the rate set forth in clause (a)(i) of the defined term "Base
Rate", or (b) in the case of payment by the Companies, the interest
rate applicable to the relevant Advance. The failure of any Lender to
make the Advance to be made by it as part of
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any borrowing shall not relieve any other Lender of its obligation, if
any, hereunder to make its Advance on the date of such borrowing, but
no Lender shall be responsible for any such failure of any other
Lender.
(g) Co-Syndication Agents; Co-Agents; Lead Managers. None of the
Lenders identified on the facing page or signature pages of this Agreement as a
"co-agent" or "lead manager" shall have any right, power, obligation,
liability, responsibility or duty under this Agreement other than those
applicable to all Lenders as such. Without limiting the foregoing, none of the
Lenders so identified as a "co-syndication agent", "co-agent" or "lead manager"
shall have or be deemed to have any fiduciary relationship with any Lender.
Each Lender acknowledges that it has not relied, and will not rely, on any of
the Lenders so identified in deciding to enter into this Agreement or in taking
or not taking action hereunder.
(h) Liability Among Lenders. No Lender shall incur any liability
(other than the sharing of expenses and other matters specifically set forth
herein and in the other Loan Documents) to any other Lender, except for acts or
omissions in bad faith.
(i) Rights as Lender. With respect to its commitment hereunder,
the portion of the Revolving Loan made by it and Note issued to it, each of the
Administrative Agent and Documentation Agent shall have the same rights and
obligations as a Lender and may exercise the same as though it were not the
Administrative Agent or Documentation Agent, as the case may be, and the term
"Lender" or "Lenders" shall, unless the context otherwise indicates, include
the Administrative Agent and Documentation Agent in their individual capacity.
The Administrative Agent, the Documentation Agent or any Lender may accept
deposits from, act as trustee under indentures of, and generally engage in any
kind of business with, the Paging Entities and any of its Affiliates, and any
Person who may do business with or own securities of the Paging Entities or any
of its Affiliates, all as if the Administrative Agent and Documentation Agent
were not the Administrative Agent and Documentation Agent hereunder and without
any duty to account therefor to the Lenders.
11.2. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent and
Documentation Agent or any other Lender and based upon the financial statements
referred to in Sections 8.1 and 6.4 hereof, and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative Agent or the
Documentation Agent or any other Lender and based upon such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement and the
other Loan Documents. The Agents shall not be required to keep informed as to
the performance or observance by the Paging Entities of this Agreement or any
other document referred to or provided for herein or to inspect the Properties
or books of the Paging Entities. Except for notices, reports and other
documents and information expressly required to be furnished to the Lenders by
the Agents hereunder, the Agents shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the
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affairs, financial condition or business of any of the Paging Entities (or any
of its related companies) which may come into any of the Agents' possession.
11.3. Benefits of Article. None of the provisions of this Article
shall inure to the benefit of any Person other than Lenders; consequently, no
Person other than a Lender shall be entitled to rely upon, or to raise as a
defense, in any manner whatsoever, the failure of the Administrative Agent or
the Documentation Agent or any Lender to comply with such provisions.
ARTICLE XII
GENERAL
12.1. Waivers. The rights and remedies of the Lenders under this
Agreement and the other Loan Documents shall be cumulative and not exclusive of
any rights or remedies which they would otherwise have. No failure or delay by
the Administrative Agent, the Documentation Agent or any Lender in exercising
any right shall operate as a waiver of such right. The Lenders expressly
reserve the right to require strict compliance with the terms of this Agreement
in connection with any funding of a request for a Advance. In the event that
any Lender decides to fund an Advance at a time when the Paging Entities are
not in strict compliance with the terms of this Agreement, such decision by
such Lender shall not be deemed to constitute an undertaking by such Lender to
fund any further requests for Advances or preclude the Lenders from exercising
any rights available under the Loan Documents or at law or equity. Any waiver
or indulgence granted by the Lenders shall not constitute a modification of
this Agreement, except to the extent expressly provided in such waiver or
indulgence, or constitute a course of dealing by the Lenders at variance with
the terms of the Agreement such as to require further notice by the Lenders of
the Lenders' intent to require strict adherence to the terms of the Agreement
in the future. Any such actions shall not in any way affect the ability of the
Administrative Agent, the Documentation Agent or the Lenders, in their
discretion, to exercise any rights available to them under this Agreement or
under any other agreement, whether or not the Administrative Agent, the
Documentation Agent or any of the Lenders are a party thereto, relating to the
Paging Entities.
12.2. Notice. Except as otherwise provided herein, any notice
hereunder to any Company or any other Paging Entity shall be directed to the
Notification Agent. Any notice to the Notification Agent, any Agent or any
Lender shall be in writing and may be, and shall be deemed, given, if mailed,
three Business Days after the date when sent by registered or certified mail
postage prepaid, or if by telecopy, when confirmed as transmitted to such
Person (with a certified copy mailed to such Person), charges prepaid,
addressed to (a) the Notification Agent as set forth below, (b) such Agent as
set forth below or (c) such Lender at its address set forth on the signature
pages hereto, or at such other address as the Notification Agent, such Agent or
such Lender may, by written notice, designate as its address for purposes of
notice hereunder. Notwithstanding the foregoing, each Agent in its sole
discretion may receive, accept and act upon telephonic or other instructions of
the Notification Agent for making Advances to any
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account designated to the Managing Agents by the Notification Agent in writing.
The Paging Entities hereby agree to indemnify and hold each Agent harmless from
any loss or expense which may arise or be created by the acceptance of
telephonic or other instructions for making Advances to any account designated
to the Managing Agents by the Notification Agent in writing, excluding any loss
or expense that arises as the result of the gross negligence or willful
misconduct of such Agent, as finally judicially determined by a court of
competent jurisdiction. Copies of any notice sent to the Notification Agent
shall be sent to the Notification Agent's attorney at the address stated below,
provided that the failure by any of the Agents or the Lenders to provide copies
of notice to the Notification Agent's attorney shall not constitute lack of
notice or insufficient notice to the Notification Agent. The provisions of this
Section 12.2 shall survive the termination of this Agreement.
Documentation Agent or NationsBank:
901 Main Street
64th Floor
Dallas, Texas 75202
Attention: Mr. Anthony M. Cacheria
Vice President
Telephone: (214) 508-0157
Telecopy: (214) 508-9390
With a copy to:
Donohoe, Jameson & Carroll, P.C.
3400 Renaissance Tower
1201 Elm Street
Dallas, Texas 75270
Attention: Melissa Ruman Stewart, Esq.
Telephone: (214) 698-3814
Telecopy: (214) 744-0231
Administrative Agent or Toronto Dominion:
Toronto Dominion (Texas), Inc.
909 Fannin, Suite 1700
Houston, Texas 77010
Attention: Ms. Sophia D. Sgarbi
Telephone: (713) 653-8235
Telecopy: (713) 951-9921
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With a copy to:
The Toronto-Dominion Bank
31 West 52nd Street
New York, New York 10019-6101
Attention: Mr. Brian O'Reilly, Managing Director
Communications Finance
Telephone: (212) 468-0729
Telecopy: (212) 262-1928
Other Managing Agents:
First National Bank of Boston
100 Federal Street, 01-08-08
Boston, Massachusetts 02110
Attention: Mr. Shepard D. Rainie
Director
Telephone: (617) 434-7037
Telecopy: (617) 434-3401
Chemical Bank
2200 Ross Avenue
3rd Floor, Corporate Division
Dallas, Texas 75201
Attention: J. Kevin Kelty
Senior Vice President
Telephone: (214) 965-4020
Telecopy: (214) 965-2990
Notification Agent:
4965 Preston Park Boulevard, Suite 500
Plano, Texas 75093
Attention: Mr. Kenneth W. Sanders
Senior Vice President - Finance
Telephone: (214) 985-4100
Telecopy: (214) 985-6551
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With a copy to:
Bingham, Dana & Gould
150 Federal Street
Boston, Massachusetts 02110
Attention: Roger D. Feldman, Esq.
Telephone: (617) 951-8414
Telecopy: (617) 951-8736
12.3. Expenses. Subject to Section 12.16 hereof,
(a) Without limiting their indemnity or payment
obligations under Section 7.10 hereof and other provisions of the Loan
Documents, the Companies agree to pay on demand (i) all reasonable costs and
expenses of the Documentation Agent in connection with the preparation,
negotiation, and administration of any Loan Documents, including without
limitation the reasonable fees and out-of-pocket expenses of Special Counsel,
(ii) all reasonable costs and expenses (including reasonable attorneys' fees
and expenses) of the Managing Agents in connection with administration
(including, without limitation, the cost of performing post Closing Date UCC-11
searches), interpretation, modification, amendment, waiver, or release of any
Loan Documents, (iii) all reasonable costs and expenses (including reasonable
attorneys' fees and expenses) of the Managing Agents and their Institutional
Affiliates in connection with or related to the syndication of this credit
facility, (iv) all reasonable costs and expenses (including reasonable
attorneys' fees and expenses) of the Managing Agents in connection with any
restructuring, refinancing, work-out, or collection of any portion of the
Obligations or the enforcement of any Loan Documents, and after the occurrence
of an Event of Default, all reasonable costs and expenses (including reasonable
attorneys' fees and expenses) of each Lender in connection with any
restructuring, refinancing, work-out, or collection of any portion of the
Obligations or the enforcement of any Loan Documents.
(b) The obligations of the Companies under this Section
12.3 shall survive the execution of this Agreement and/or the extinguishment of
the Commitment, repayment of the Obligation and termination of the Agreement.
12.4. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining portions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
12.5. Counterparts. This Agreement may be executed in as many
counterparts as may be deemed necessary or convenient, and by the different
parties hereto on separate counterparts, each of which, when so executed, shall
be deemed an original but all such counterparts shall constitute but one and
the same instrument.
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12.6. Investment. Each Lender represents and warrants that (a) it is
acquiring any Note to be issued to it hereunder for its own account as a result
of making or investing in a loan in the ordinary course of its commercial
banking or investment business and not with a view to the public distribution
or sale thereof, but subject, nevertheless, to any legal or administrative
requirement that the disposition of such Lender's property at all times be
within its control, and (b) in good faith it has not and will not rely upon any
margin stock (as such term is defined in Regulation U of the Board of Governors
of the Federal Reserve System) as collateral in the making and maintaining of
the Revolving Loan.
12.7. Confidentiality. Each Lender agrees to hold any confidential
information which it has received and may receive from the Paging Entities
pursuant to this Agreement which the Paging Entities have marked "Confidential"
and is not otherwise publicly available, in confidence, except for disclosure
(a) to other Lenders, (b) to legal counsel, accountants, and other professional
advisors to that Lender, (c) to regulatory officials, (d) in connection with or
in response to compliance with any law, order, rule, regulation, policy,
investigation, or legal process, (e) in connection with any legal proceeding to
which that Lender is a party, and (f) permitted by Section 12.11 hereof. Each
Lender agrees to endeavor to notify the Notification Agent of any dissemination
of confidential information under this Section 12.7 by such Lender (unless
prohibited by Applicable Law) in connection with any criminal process or
pursuant to any subpoena or discovery request in connection with a court
proceeding, however, failure of any Lender to so notify the Notification Agent
shall not be deemed a breach of this Agreement and shall not relieve the Paging
Entities from any of their obligations hereunder.
12.8. Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Companies and
the Lenders and their respective successors and assigns, except that (a) none
of the Paging Entities shall have the right to assign its rights under the Loan
Documents, and (b) any assignment by any Lender must be made pursuant to an
Assignment and Acceptance Agreement and in compliance with Section 12.10
hereof. Notwithstanding clause (b) of this Section, any Lender may at any
time, without the consent of the Notification Agent, assign or pledge all or
any portion of its rights under the Loan Documents to a Federal Reserve Bank;
provided, however, that no such assignment shall release the transferor Lender
from its obligations hereunder. The Agents may treat the payee of any Note as
the owner thereof for all purposes hereof unless and until the payee complies
with Section 12.10 hereof in the case of an assignment and, in the case of any
other transfer, a written notice of transfer is filed with the Agents. Any
assignee or transferee of a Note or any other part of the Obligation of the
Paging Entities agrees by acceptance thereof to be bound by all the terms and
provisions of the Loan Documents. Any request, authority or consent of any
Person, who at the time of making such request or giving such authority or
consent is the holder of any Note or any other part of the Obligations of the
Companies, shall be conclusive and binding on any subsequent holder, transferee
or assignee of such Note or of any Note or Notes issued in exchange therefor or
for any other part of the Obligations of the Companies.
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12.9. Participation.
(a) Permitted Participants: Effect. Any Lender may, in
the ordinary course of its investment business or commercial banking business
and in accordance with applicable law, at any time sell to one or more banks or
other financial institutions ("Participants") participating pro rata interests
in any portion of the Revolving Loan owing to such Lender, any Note held by
such Lender or any commitment to make any Advance under the Revolving Loan of
such Lender, provided that, in no event shall any participation be sold in an
amount less than $10,000,000, unless such participation is for the entire
remaining amount of any such Lender's commitment to make any Advance under the
Revolving Loan. In the event of any such sale by a Lender of participating
interests to a Participant, such Lender's obligations under the Loan Documents
shall remain unchanged, such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations, such Lender shall
remain the holder of any Note or other part of the Obligations for all purposes
under the Loan Documents, and the Companies and the Agents shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under the Loan Documents.
(b) Voting Rights. Each Lender shall retain the sole
right to approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents and any agreement
pursuant to which any Lender may grant such a participating interest shall
provide that such Lender shall retain such sole right of approval, provided,
that such participation agreement may provide that such Lender will not agree
to any amendment, modification or waiver with respect to the Revolving Loan or
Letter of Credit in which such Participant has an interest which forgives
principal or reimbursement obligations or interest or fees or reduces the
interest rate payable with respect to the Revolving Loan or Letter of Credit,
postpones any date fixed for any regularly-scheduled payment of principal or
reimbursement obligations of, or interest or fees on, any Advances under the
Revolving Loan or Letter of Credit, releases any guarantor of any portion of
the Revolving Loan or Letter of Credit, or releases any Collateral, if any,
securing any portion of the Revolving Loan or Letter of Credit, other than as
specifically permitted by the terms of this Agreement and as otherwise
permitted to be accomplished by an amendment, waiver or consent of the Majority
Lenders.
(c) Benefit of Offset and Indemnities. The Paging
Entities agree that each Participant shall be deemed to have the right of
offset provided in Section 2.16 hereof in respect of its participating interest
in amounts owing under the Loan Documents to the same extent as if the amount
of its participating interest were owing directly to it as a Lender under the
Loan Documents, provided that each Lender shall retain the right of offset
provided in Section 2.16 hereof with respect to the amount of participating
interests sold to each Participant. The Lenders agree to share with each
Participant, and each Participant, by exercising the right of offset provided
in Section 2.16 hereof, agrees to share with each Lender, any amount received
pursuant to the exercise of its right of offset, in accordance with Section
2.17 hereof as if each Participant was a Lender. The Paging Entities also agree
that each Participant shall be entitled to the benefits of
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Article V and Sections 7.10 and 12.3 hereof with respect to its participation
in the commitments to make Advances under the Revolving Loan outstanding from
time to time; provided, that no Participant shall be entitled to receive any
greater amount pursuant to such Sections than the transferor Lender would have
been entitled to receive in respect of the amount of the participation
transferred-by such transferor Lender to such Participant had no such transfer
occurred. The provisions of this Section 12.9 shall survive the termination of
this Agreement.
12.10. Assignments.
(a) Permitted Assignments. Any Lender may, with the prior written
consent of each Agent (requested not later than five Business Days prior to the
date of the proposed assignment) and only in the ordinary course of its
investment business or commercial banking business in accordance with
applicable law and pursuant to an Assignment and Acceptance Agreement, at any
time assign to one or more banks or other financial institutions ("Purchasers")
all or any pro rata part of its rights and obligations under the Loan
Documents, provided that each Lender and its Institutional Affiliates that do
not assign the entire amount of their rights and obligations under the Loan
Documents shall hold at least $10,000,000 in the aggregate of the commitment to
make Advances under the Revolving Loan (unless any Lender and its Institutional
Affiliates has a commitment to make Advances under the Revolving Loan which are
less than $10,000,000 in the aggregate on the day after the Closing Date in
which case such Lender and its Institutional Affiliates shall hold such
amount). Assignments with respect to any interest under any of the Loan
Documents shall be in minimum amounts of $10,000,000, unless (i) such
assignments are for the entire remaining amount of the sum of any such Lender's
and such Lender's Institutional Affiliates commitment to make Advances under
the Revolving Loan, or (ii) such assignments are to an existing Lender. Unless
an Event of Default has occurred and is continuing, the consent of the
Notification Agent shall be required prior to an assignment becoming effective
with respect to a Purchaser (not constituting a Lender or an Institutional
Affiliate) purchasing any interest under any of the Loan Documents. Such
consent shall be substantially in the form attached to Exhibit D hereto and
shall not be unreasonably withheld.
(b) Effect: Closing Date. With respect to assignments of any
interest under any of the Loan Documents other than the Applications and the
Letters of Credit, upon (i) delivery to the Agents of a notice of assignment,
substantially in the form of Exhibit D hereto (a "Notice of Assignment"),
together with a copy of the Assignment and Acceptance Agreement, any consents
required by Section 12. 10(a), and (ii) payment of a $3,500 fee to the
Administrative Agent for processing such assignment, such assignment shall
become effective on the effective date specified in such Notice of Assignment.
On and after the effective date of such assignment, such Purchaser shall for
all purposes be a Lender party to this Agreement and any other Loan Document
executed by the Lenders and shall have all the rights and obligations of a
Lender under the Loan Documents, to the same extent as if it were an original
party hereto, and no further consent or action by the Companies, the Lenders or
the Agents shall be required
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to release the transferor Lender with respect to the percentage of the
commitment to make Advances under the Revolving Loan assigned to such
Purchaser. Upon the consummation of any assignment to a Purchaser
pursuant to this Section 12.10(b), the transferor Lender, the Agents
and the Companies shall make appropriate arrangements so that
replacement Notes are issued to such transferor Lender and new Notes
or, as appropriate, replacement Notes, are issued to such Purchaser,
in each case in principal amounts reflecting their Revolving Loan
Specified Percentages of the Commitment, as adjusted pursuant to such
assignment.
12.11. Dissemination of Information. The Companies and each other
Paging Entity authorize each Lender to disclose to any Participant or Purchaser
or any other Person acquiring an interest in the Loan Documents by operation of
law or otherwise (each a "Transferee") and any prospective Transferee any and
all information in such Lender's possession concerning the creditworthiness of
the Paging Entities; provided that each Transferee agrees to be bound by
Section 12.7 of this Agreement.
12.12. Tax Treatment. If any interest in any Loan Document is held as
of the Closing Date or is transferred to any Lender or Transferee:
(a) that is not incorporated or organized under the laws of the
United States of America or a state thereof any such Lender and Transferee
shall:
(i) in the case of a Lender or a Transferee that
is a "bank" under Section 881(c)(3)(A) of the Code:
(A) on or before the date it becomes a
party to this Agreement (or, in the case of a
Participant, on or before the date such Participant
becomes a Participant hereunder) and on or before the
date, if any, such Lender (or Transferee) changes its
applicable lending office by designating a different
lending office (a "New Lending Office") deliver to
the Notification Agent and the Agents, (y) two
properly completed and duly executed copies of United
States Internal Revenue Service Form 1001 or 4224, or
successor applicable form, as the case may be, and
(z) an Internal Revenue Service Form W-8 or W-9, or
successor applicable form, as the case may be;
(B) deliver to the Notification Agent
and the Agents two further properly completed and
duly executed copies of any such form or
certification on or before the date that any such
form or certification expires or becomes obsolete and
after the occurrence of any event requiring a change
in the most recent form previously delivered by it to
the Notification Agents or upon the request of the
Notification Agent or the Agents; and
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(C) obtain such extension of time for
filing and completing such forms or
certifications as may reasonably be requested
by the Notification Agent and shall, promptly
upon the request of the Notification Agent on
behalf of the Companies to that effect,
deliver to the Notification Agent such other
forms or similar documentation as may be
required from time to time by any applicable
law, treaty, rule or regulation in order to
establish such Lender's tax status for
withholding purposes;
(ii) in the case of a Lender or a Transferee that is not a
"bank" under Section 881(c)(3)(A) of the Code:
(A) on or before the date it becomes a
party to this Agreement (or, in the case of a
Participant, on or the date such Participant
becomes a Participant hereunder) deliver to
the Notification Agent and the Agents (I) a
statement under penalty of perjury that such
Lender (x) is not a "bank" under Section
881(c)(3)(A) of the Code, is not subject to
regulatory or other legal requirements as a
bank in any jurisdiction, and has not been
treated as a bank for purposes of any tax,
securities law or other filing or submission
made to any Governmental Authority, any
application made to a rating agency or
qualification for any exemption from tax,
securities law or other legal requirements,
(y) is not a 10-percent shareholder within
the meaning of Section 881(c)(3)(B) of the
Code and (z) is not a controlled foreign
corporation receiving interest from a related
person within the meaning of Section
881(c)(3)(C) of the Code and (II) a properly
completed and duly executed Internal Revenue
Service Form W-8 or applicable successor
form;
(B) deliver to the Notification Agent
and the Agents two further properly completed
and duly executed copies of said Form W-8, or
any successor applicable form on or before
the date that any such Form W-8 expires or
becomes obsolete or after the occurrence of
any event requiring a change in the most
recent form previously delivered by it to the
Notification Agent or upon the request of the
Notification Agent; and
(C) obtain such extensions of time for
filing and completing such forms or
certifications as may be reasonably requested
by the Notification Agent or the Agents and
shall, promptly upon the request of the
Notification Agent on behalf of the Companies
to that effect, deliver to the Notification
Agent such other forms or similar
documentation as may be required from time to
time by any applicable law, treaty, rule or
regulation in order to establish such
Lender's tax status for withholding purposes;
unless in any such case any change in law or regulation has occurred subsequent
to the date such Lender (or Transferee) became a party to this Agreement (or in
the case of a Participant, the
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date such Participant became a Participant hereunder) which renders all such
forms inapplicable or which would prevent such Lender from properly completing
and executing any such form with respect to it and such Lender so advises the
Notification Agent and the Agents in writing no later than 15 calendar days
before any payment hereunder or under any Note is due. Each such Lender (and
each Transferee) shall certify (i) in the case of a Form 1001 or 4224, that it
is entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes and (ii) in the case of a
Form W-8 or W-9 delivered pursuant to subsection 12.12(a)(i), that it is
entitled to an exemption from United States backup withholding tax.
12.13. Amendments. Except as set forth in the last sentence of this
Section 12.13, no amendment or waiver of any provision of this Agreement, the
Notes, the Applications, the other Loan Documents or the Letters of Credit, nor
consent to any departure therefrom by any Paging Entity, shall be effective
unless the same shall be in writing and signed by the Companies and the
Majority Lenders, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given; provided,
however, that no amendment, waiver or consent shall, unless in writing and
signed by all the Lenders, do (or take action or inaction resulting in) any of
the following: (a) increase the amounts or extend the terms of the Lenders'
commitments or subject the Lenders to any additional obligations, (b) reduce
the principal of, or interest on, the Notes or any fees hereunder or any
reimbursement obligations of the Companies with respect to any Letter of
Credit, or change the application of the proceeds of any mandatory prepayment
or mandatory commitment reduction or any date fixed for such prepayment, (c)
postpone any date fixed for any payment of principal of, or interest on, the
Notes or any fees hereunder or any reimbursement obligations of the Companies
with respect to any Letter of Credit, (d) change the percentage share of the
Commitment or of the aggregate unpaid principal amount of the Notes, or the
definition of Revolving Loan Specified Percentage, (e) change the definitions
of Majority Lenders or Super-Majority Lenders, (f) change any of the
subordination provisions in any agreement relating to any Subordinated
Indebtedness or (g) change any provisions of this Section 12.13 or Section
12.14 hereof; provided, further, that the Documentation Agent shall not release
any Collateral for or guaranty of the Obligations or subordinate any security
interest in any of the Property constituting Collateral without the prior
written consent of all of the Lenders (except, with the consent of the Managing
Agents, Property subject to a Lien securing Indebtedness permitted under
Section 9.9(j) hereof may be released by the Managing Agents in their sole
discretion and, with the consent of the Majority Lenders, Property (i) which
is, as of the Closing Date, specifically permitted to be released or
subordinated under the terms of Section 9.14 hereof, any other provision of
this Agreement or any provision of any other Loan Document, or (ii) the income
from which produces less than 5% of the Paging Entities' Operating Cash Flow
as would be shown in the most recent consolidated financial statements of the
Paging Entities furnished to the Lenders in accordance with Section 8.1 hereof
over the term of this Agreement); and provided, further, that no amendment,
waiver or consent to Article XI hereof shall be effective unless signed by each
of the Agents. Notwithstanding any of the preceding terms of this Section
12.13, the Managing Agents and the Notification Agent may, without the consent
of any of the other Lenders, from time to time, waive or consent to any
deviation from the $10,000,000 minimum requirement in Sections 12.9 and 12.10
hereof.
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12.14. Application of Proceeds. Notwithstanding any other provision
of this Agreement or of any of the Security Documents, the Paging Entities, the
Lenders and the Agents agree as follows:
(a) Payment of all of the Obligations and of all
obligations of the Paging Entities arising under Interest Hedge
Agreements owing to the Lenders or any Institutional Affiliate is
secured by the Documentation Agent's security interest, for the
benefit of the Agents and the Lenders, in the Collateral; and
(b) After the occurrence, and during the continuation, of
an Event of Default, any proceeds of any collection or disposition by
the Documentation Agent of the Collateral shall be applied, first, to
the payment of all expenses incurred in connection with the collection
or disposition of the Collateral (including fees of attorneys, who may
be employees of the Documentation Agent, and legal expenses), second,
to the payment of the Obligations ratably to each Lender in accordance
with each Lender's pro rata share of the sum of (i) Total Outstandings
plus (ii) obligations due and owing to any Lender or Institutional
Affiliate under any Interest Hedge Agreement, and third, to the
Notification Agent or as a court of competent jurisdiction may direct.
12.15. Substitution of Lenders. In the event that any Lender (the
"Affected Lender") has demanded compensation under Section 5.1 hereof or under
the indemnity provisions of Section 7.10 hereof and so long as no Default or
Event of Default exists, the Companies shall have the right (a) to request each
remaining Lender (the "Non-Affected Lender") to assume its ratable share of
such Affected Lender's share of the Commitment and all amounts owing to such
Affected Lender in respect of the Revolving Loan under this Agreement and to
purchase its ratable share of the Notes and Obligations of such Affected
Lender; provided, however, that any such assumption and purchase by a
Non-Affected Lender shall be in the sole discretion of such Non-Affected
Lender, and (b) with the consent of the Agents (which such consent shall not be
unreasonably withheld) to designate another financial institution as a
substitute for such Affected Lender to purchase the Notes and Obligations of
such Affected Lender and assume such Affected Lender's share of the Commitment
and all amounts owing to such Affected Lender in respect of the Revolving Loan
under this Agreement; provided, however that, notwithstanding the foregoing,
the substitution of an Affected Lender pursuant to this Section shall not
relieve the Companies of their obligations to such Affected Lender under
Sections 5.1, 5.6, 7.10 and 12.3 hereof.
12.16. Rate Provision. It is not the intention of any party to any
Loan Documents to make an agreement violative of the laws of any applicable
jurisdiction relating to usury. Regardless of any provision in any of the Loan
Documents, no Lender shall ever be entitled to receive, collect or apply, as
interest on the Obligations, any amount in excess of the Maximum Amount. If any
Lender ever receives, collects or applies, as interest, any such excess, such
amount which would be excessive interest shall be deemed a partial repayment of
principal and treated hereunder as such; and if principal is paid in full, any
remaining excess shall be paid to the Notification Agent. In determining
whether or not the interest paid or payable, under any specific contingency,
exceeds the Maximum Amount, the Paging Entities and the Lenders shall,
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to the maximum extent permitted under Applicable Laws, (i) characterize any
nonprincipal payment as an expense, fee or premium rather than as interest,
(ii) exclude voluntary prepayments and the effect thereof, and (iii) amortize,
prorate, allocate and spread in equal parts the total amount of interest
throughout the entire contemplated term of the Obligations so that the interest
rate is uniform throughout the entire term that the Obligations remain unpaid;
provided that if the Obligations are paid and performed in full prior to the
end of the full contemplated term thereof, and if the interest received for the
actual period of existence thereof exceeds the Maximum Amount, the Lenders
shall refund to the Notification Agent the amount of such excess or credit the
amount of such excess against the total principal amount owing, and, in such
event, no Lender shall be subject to any penalties provided by any laws for
contracting for, charging or receiving interest in excess of the Maximum
Amount. This Section 12.16 shall control every other provision of all
agreements among the parties to this Agreement pertaining to the transactions
contemplated by or contained in the Loan Documents.
12.17. Determination by the Lenders Conclusive and Binding. Any
material determination required or expressly permitted to be made by the
Administrative Agent, the Documentation Agent or any Lender under this
Agreement shall be made in its reasonable judgment and in good faith, and shall
when made, absent manifest error, be conclusive and binding on all parties.
12.18. Headings. Headings used in this Agreement are for convenience
only and shall not be used in connection with the interpretation of any
provision hereof.
12.19. Exception to Covenants. No Paging Entity shall be deemed to be
permitted to take any action or fail to take any action which is permitted as
an exception to any of the covenants contained herein or which is within the
permissible limits of any of the covenants contained herein if such action or
omission would result in the breach of any other covenant contained herein.
12.20. ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FIANL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENT OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
12.21. GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE
OF TEXAS; PROVIDED, HOWEVER, THAT PURSUANT TO ARTICLE 5069-15.10(b), TITLE 79,
REVISED CIVIL STATUTES OF TEXAS, 1925, AS AMENDED, IT IS AGREED THAT THE
PROVISIONS OF CHAPTER 15, TITLE 79, REVISED CIVIL STATUTES OF TEXAS, 1925, AS
AMENDED, SHALL NOT APPLY TO THE REVOLVING LOAN AND OBLIGATIONS, THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS. WITHOUT EXCLUDING ANY OTHER JURISDICTION, THE
PAGING ENTITIES AGREE THAT THE STATE AND FEDERAL COURTS OF TEXAS LOCATED IN
DALLAS, TEXAS SHALL HAVE JURISDICTION
81
<PAGE> 89
OVER PROCEEDINGS IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
12.22. WAIVER OF JURY TRIAL. EACH OF THE PAGING ENTITIES, THE
ADMINISTRATIVE AGENT, THE DOCUMENTATION AGENT, THE MANAGING AGENTS AND THE
LENDERS HEREBY KNOWINGLY VOLUNTARILY, IRREVOCABLY AND INTENTIONALLY WAIVE, TO
THE MAXIMUM EXTENT PERMITTED BY LAW, ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR CLAIM ARISING OUT OF OR RELATED TO ANY OF THE LOAN DOCUMENTS OR
THE TRANSACTIONS CONTEMPLATED THEREBY. THIS PROVISION IS A MATERIAL INDUCEMENT
TO EACH LENDER ENTERING INTO THIS AGREEMENT AND MAKING ITS PORTION OF THE
REVOLVING LOAN HEREUNDER.
12.23. Survival of Representations and Warranties, etc. All
representations and warranties made under Article VI of this Agreement and in
the other Loan Documents shall be deemed to be made at and as of the Closing
Date and at and as of the date of each Advance, and each shall be true and
correct when made, except to the extent (a) previously fulfilled in accordance
with the terms hereof, (b) applicable to a specific date or otherwise
subsequently inapplicable, (c) previously waived in writing by the Majority
Lenders with respect to any particular factual circumstance, or (d) deviations
therefrom are specifically permitted by the terms of the Loan Documents. All
such representations and warranties shall survive, and not be waived by, the
execution hereof by any Lender, any investigation or inquiry by any Lender, or
by the making of any portion of its Revolving Loan or Advance under this
Agreement.
12.24. Appointment of Notification Agent, Joint and Several
Obligations; Senior Obligations of PageNet.
(a) Each Company and each other Paging Entity appoints the
Notification Agent as its true and lawful agent, to give and receive notices
from the Agents and the Lenders hereunder and under the other Loan Documents,
and authorizes the Managing Agents and the Lenders to give and receive notices
to and from the Notification Agent on behalf of each Paging Entity.
(b) All obligations and liabilities of each Company and each other
Paging Entity hereunder and under the other Loan Documents shall be joint and
several in nature. All obligations and liabilities of PageNet and the Companies
hereunder and under the Loan Papers shall be senior in nature to all other
indebtedness for borrowed money of PageNet and the Companies, and all
documentation of each other indebtedness for borrowed money (including, without
limitation, all indebtedness for borrowed money of PageNet) shall be subject to
subordination terms and conditions, and subject to documentation, satisfactory
to the Managing Agents.
(c) Each Company and each other Paging Entity hereby waives any
right by which it might be entitled to require suit on an accrued right of
action in respect of any of the Obligation or require suit against the Paging
Entities or any other Person, whether arising
82
<PAGE> 90
pursuant to Section 34.02 of the Texas Business and Commerce Code, as amended,
Section 17.001 of the Texas Civil Practice and Remedies Code, as amended, Rule
31 of the Texas Rules of Civil Procedure, as amended, or otherwise.
12.25. Amendment, Restatement, Extension, Renewal and Increase. This
Agreement is a renewal, extension, amendment, increase and restatement of the
Original Credit Agreement and, as such, except for the "Obligation" as defined
in the Original Credit Agreement (which shall survive, be renewed, extended,
increased and restated by the terms of this Agreement), all other terms and
provisions supersede in their entirety the Original Credit Agreement. All
subordination agreements, security agreements, pledge agreements, mortgages,
and deeds of trust executed and delivered in connection with this Agreement are
hereby ratified by each Paging Entity for and on behalf of the Lenders, and
each such document or agreement shall supersede the subordination agreements,
security agreements, pledge agreements, mortgages, and deeds of trust executed
and delivered in connection with the Original Credit Agreement (the "Original
Security Documents"), except for the Liens created under the Original Security
Documents which shall remain valid, binding and enforceable Liens against each
Paging Entity and each of the other Persons which granted such Liens as
security for the Obligations hereunder.
REMAINDER OF PAGE LEFT BLANK INTENTIONALLY
83
<PAGE> 91
EXHIBIT A
NATIONSBANK(r)
NationsBank of Texas, N.A.
STANDBY LETTER OF CREDIT
APPLICATION AND AGREEMENT
- --------------------------------------------------------------------------------
NATIONSBANK OF TEXAS, N.A.
- -----------------------------------
- ----------------------------------- Date -----------------------
- -----------------------------------
- -----------------------------------
(Herein called "Bank")
PLEASE ISSUE ON OUR BEHALF YOUR IRREVOCABLE LETTER OF CREDIT ("CREDIT") AND
DELIVER VIA:
/ / Airmail / / Full Cable / / Airmail with Pre-Advice Cable / / Courier
/ /
- ---------------------------------------
<TABLE>
<S> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
To Be Transmitted Through (Name and address of advising bank, if any) For The Account of (Name and address of applicant)
(If not advising bank indicated, through any of Bank's correspondents or
direct to Beneficiary) (Herein called "Obligor")
- ---------------------------------------------------------------------------------------------------------------------------------
In Favor of (Name and address of Beneficiary) Aggregate Amount of Credit
U.S. $
----------------------------------------------------
Expiration Date
(Latest date drafts are to be presented at counters
(Herein called "Beneficiary") of Bank)
- ---------------------------------------------------------------------------------------------------------------------------------
Available by the Beneficiary's Draft(s) Drawn on Bank at Sight and Accompanied by the Following:
- ---------------------------------------------------------------------------------------------------------------------------------
Special Instructions
1. Partial drawings are / / allowed. / / prohibited.
2.
- ---------------------------------------------------------------------------------------------------------------------------------
Fees and Terms of Reimbursement
1. Commission is % of the amount of the Credit or $ / / per annum. / / flat fee.
--------- ---------------------
2. Charge amounts due under this Agreement to Obligor's account # .
-------------------
3. Maturity Date is the day Bank pays a draft under this Agreement or as provided below.
4. Annual Rate of Interest is the highest rate Bank may lawfully charge or as provided below.
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
For purposes of this Standby Letter of Credit Application and Agreement, the
terms have the meanings indicated in the boxes above and in the definitions
below. In consideration of Bank's issuing on behalf of Obligor a Letter of
Credit ("Credit") substantially conforming with this Standby Letter of Credit
Application and Agreement ("Agreement"), Obligor hereby agrees as follows:
1. REIMBURSEMENT AND OTHER PAYMENTS. On demand, or if prior demand is not made
on Maturity Date, Obligor promises to pay to the order of Bank at Bank's address
shown above an amount equal to (i) the face amount of each draft drawn or
purporting to be drawn under the Credit in United States currency, and (ii) the
equivalent in United States currency of the face amount of each draft drawn or
purporting to be drawn under the Credit in a currency other than that of the
United States, such equivalent to be calculated on the basis of Bank's selling
rate of exchange in effect (for the date on which Bank pays such draft or
reimburses any of its correspondents which paid such draft) for cable transfers
to the place where and in the currency in which such draft is payable; in United
States currency (a) the amount of drafts drawn or purporting to be drawn under
the Credit and (b) interest on any such amount from the date paid by Bank until
the earlier of repayment by Obligor or Maturity Date at the Annual Rate of
Interest calculated on the basis of a year of 360 days. Customer shall comply
with any and all governmental exchange regulations now or hereafter applicable
to any foreign exchange provided Bank pursuant to this Section 1, and shall
indemnify and hold Bank harmless from any failure so to comply. If for any cause
whatsoever, there exists at the time in question no rate of exchange generally
current at Bank for effective cable transfer of the sort above provided for,
Obligor agrees to pay Bank on demand an amount in United States dollars
equivalent to the actual cost of settlement of Bank's obligation to the payor of
the draft or acceptance or any holder thereof, as the case may be, and however
and whenever such settlement may be made by Bank, including interest on the
amount of dollars payable by Obligor from the date of payment of such draft or
acceptance to the date of Obligor's payment to Bank at the rate customarily
charged by Bank in like circumstances. Obligor further promises to pay
commission, processing fees, and all costs and expenses incurred by Bank in
connection with the Credit. In addition, and without limiting the generality of
the foregoing, if any law, regulation or the interpretation thereof by any court
or administrative or governmental authority shall either impose, modify or deem
applicable any capital, reserve, insurance premium or similar requirement
against letters of credit issued by Bank and the result thereof shall be to
increase the cost to Bank of issuing or maintaining any letter of credit; then,
on demand by Bank, Obligor further promises to pay to Bank, from time to time,
additional amounts which shall be sufficient to compensate Bank for the portion
of such increased costs allocable to the Credit. A written advice(s) setting
forth in reasonable detail such costs incurred by Bank, submitted by Bank to
Obligor from time to time, shall be conclusive, absent manifest error, as to the
amount thereof.
Unpaid and past due amounts owed under the Agreement, including interest, shall
bear interest at the highest rate Bank may lawfully charge. The maximum lawful
interest rate determined under Texas law shall be the indicated rate ceiling as
specified in TEX.REV.CIV.STAT.ANN., art 5069-1.04. If any other lawful rate
exceeds said indicated rate ceiling, then the higher rate shall apply. The
amount of interest payable shall in no event exceed the maximum amount Bank may
lawfully charge on the Agreement. If the Annual Rate of Interest is stated in
terms of Bank's Prime Rate, Prime Rate shall mean the Prime Interest Rate
charged by Bank as announced or published by Bank from time to time and may not
be the lowest interest rate charged by Bank. The Annual Rate of Interest shall
change with each change in the Prime Rate as of the date of any such change
without notice. In any contingency whatsoever, if Bank shall receive anything
of value deemed interest under applicable law, the excessive interest shall be
applied to the reduction of the unpaid amount which is due or refunded to
Obligor.
<PAGE> 92
2. ATTORNEY'S FEES. Obligor promises to pay, in addition to all other amounts
due hereunder, all expenses incurred by Bank in connection with the Credit
including but not limited to reasonable attorney's fees and court costs.
Reasonable attorney's fees shall be ten per cent (10%) of the unpaid amount due,
including interest, on the Agreement, unless either party shall plead and prove
otherwise. If Bank is enjoined or restrained from payment of the Credit or from
other action related to the Credit, Obligor also promises to pay reasonable
attorney's fees and court costs related to such injunction or restraint.
3. ADDITIONAL TERMS. Obligor agrees that: (a) if partial drawings are permitted
in the Agreement, Bank may honor the drafts without inquiry; (b) if Obligor
requests or consents to any extension of the maturity or time for negotiation
or presentation of drafts or documents, to any increase in the Aggregate Amount
of Credit, or to any other modification of the terms of the Credit, then the
Agreement shall be binding on Obligor as to such extension, increase, or other
modification; (c) Bank may accept or pay any draft dated on or before the
expiration of any time limit expressed in the Credit regardless of when drawn
and when or whether negotiated, provided the other required documents are dated
prior to, the Expiration Date of the Credit; (d) if Obligor, at any time prior
to Expiration Date, shall pledge, assign, encumber or grant to any party other
than Bank any of its property or assets as collateral security for existing
indebtedness, Obligor shall grant to Bank a perfected security interest in such
property or assets to the extent of the ratio that the Aggregate Amount of the
Credit bears to the amount of such indebtedness; and (e) if at any time and
from time to time Bank requires collateral (or additional collateral), Obligor
will, on demand, assign and deliver to Bank as security for any and all
obligations of Obligor now or hereafter existing under this Agreement,
collateral of a type and value satisfactory to Bank or make such cash payment
as Bank may require.
4. OTHER CONDITIONS. Obligor agrees that Bank shall not be responsible for (a)
the validity, sufficiency or genuineness of documents or of any endorsements
thereon even if such documents should in fact prove to be in any respect
invalid, insufficient, fraudulent or forged; (b) failure of any draft to bear
any reference or adequate reference to the Credit, or failure of documents to
accompany any draft at negotiation, or failure of any person to note the amount
of any draft on the reverse side of the Credit or to surrender or take up the
Credit or to send forward documents apart from drafts as required by the terms
of the Credit, each of which provisions, if contained in the Credit itself, it
is agreed may be waived by Bank; (c) errors, omissions, interruptions or delays
in transmission or delivery of any message by mail, cable, telegram, wireless
or otherwise, whether or not they be in cipher; or (d) errors in translation or
errors in interpretation of technical terms. Bank shall not be responsible for
any act, error, neglect, default, omission, insolvency or failure in business
of any correspondent or for any consequences arising from causes beyond Bank's
control. Obligor further agrees that any action taken or omitted by Bank in
connection with the Credit, if done in good faith, shall be binding on Obligor
and shall not put Bank under any resulting liability to Obligor.
Bank shall not be liable for any failure by Bank or any one else to pay or
accept any draft under the Credit, or for any loss or damage resulting from any
declared or undeclared war, censorship, law, control or restriction rightfully
or wrongfully exercised by any de facto or de jure domestic or foreign
government or agency thereof, or from any other cause beyond Bank's control;
and Obligor agrees to indemnify and hold Bank harmless from any claim, loss,
liability or expense arising by reason thereof. If Obligor has included any
language describing events or conditions in this Agreement that would not be
possible for Bank to verify from the documents required to be presented under
the credit, we understand that Bank is in no position to make any verification
of such events or conditions and is therefore not responsible for verifying the
compliance with such requirements. Bank will make payment under the credit
provided all other conditions are met. Furthermore, if the term "Beneficiary"
includes any successor of the named Beneficiary by operation of law or
otherwise, Bank shall have no responsibility to determine that one who draws
under the credit and represents himself to be a successor to the named
Beneficiary is in fact a duly authorized successor.
5. EVENTS OF DEFAULT. If Obligor fails to pay, perform or discharge any
obligation set forth in the Agreement or in any other agreement delivered by the
Obligor to Bank, or if Obligor is in default in any manner under the terms and
conditions of any other financial obligation, or upon the happening with respect
to Obligor, an endorser or guarantor, of any of the following: the commencement
of any proceeding, suit, or action for reorganization, dissolution, liquidation,
suspension of Obligor's usual business; insolvency; the filing of a petition
under any of the provisions of the Bankruptcy Act or amendment thereto;
application for or appointment of a conservator, rehabilitator or receiver of
Obligor or Obligor's property; death; issuance of an injunction or a warrant of
attachment; entry of a judgment; making of any tax assessment by the United
States or any state; the calling of a meeting of creditors; appointment of a
committee of creditors or liquidating agent; offering a composition or extension
to creditors; execution of any assignment for benefit of creditors; making or
sending notice of an intended bulk sale; financial responsibility of any of them
shall become impaired or unsatisfactory to Bank, then in any of such events the
amounts owed or that could be owed under the Agreement, although contingent or
not yet due, shall, without notice or demand, forthwith become and be
immediately due and payable, notwithstanding any time or credit otherwise
allowed thereunder, and Bank may at any time thereafter exercise its right of
offset against any amounts which it may then be obliged to pay to Obligor.
6. NOTICES AND WAIVERS. Any notice to or demand on Obligor shall be deemed
effective, if not first otherwise given or made, when forwarded by mail,
telegraph, cable, radio, telephone or otherwise to the last address or telephone
number of Obligor appearing in Bank's records with the same effect as if the
same were actually delivered to and received by Obligor in person. Bank shall
not by any act, delay, omission or otherwise be deemed to have waived any of its
rights or remedies hereunder, and no waiver whatever shall be valid unless in
writing, signed by Bank, and then only to the extent therein set forth. A waiver
by Bank of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which Bank would otherwise have on any
future occasion.
7. MODIFICATION. No term or provision of the Agreement can be changed orally,
and no executory agreement shall be effective to modify or to discharge the
Agreement unless such executory agreement is in writing and signed by Bank. All
Bank's rights and remedies hereunder shall be cumulative and may be exercised
singly or concurrently.
8. PRESENTATION OF DOCUMENTS WITHOUT DRAFTS. If the Credit issued by Bank will
provide that the Credit will be available by presentation to Bank of the
document described in the Agreement, unaccompanied by drafts, Obligor agrees
that all reference herein to drafts, documents relative to drafts, and the
presentation, acceptance for payment or payment of drafts shall refer to
documents presented for payment without drafts, the presentation and acceptance
thereof, and payment upon such presentation and that Obligor's obligations and
Bank's rights, privileges and remedies hereunder shall be the same as though
payments had been made upon presentation of drafts drawn under the Credit
accompanied by the said documents.
9. GOVERNING LAW. The Credit shall be subject to the Uniform Customs and
Practice for Documentary Credits, as published by the International Chamber of
Commerce, and as revised from time to time ("UCPDC"). The Agreement shall be
governed by the laws of the State of Texas.
10. RENEWAL PROVISION. In the case of Bank's issuance on behalf of Obligor of a
Credit which renews automatically, Obligor hereby agrees that in the event it
does not want such Credit to be renewed, it will request Bank in writing not to
renew such Credit at least thirty (30) days prior to the notification period
specified in the Credit. Obligor acknowledges that its failure to make a timely
request for the non-renewal of such Credit may result in such Credit renewing
automatically and hereby agrees that in such event Obligor shall have no claim
or cause of action against Bank, or defense against payment under the Agreement,
for Bank's renewal of such Credit.
11. OTHER PROVISIONS. If the Agreement is executed by two or more Obligors, it
shall be the joint and several agreement of such Obligors. The Agreement shall
bind Obligor and Obligor's heirs, executors, administrators, and successors; the
Agreement shall inure to the benefit of Bank's successors and assigns.
The unenforceability or invalidity, as determined by a court of competent
jurisdiction, of any provision of the Agreement shall not render unenforceable
or invalid any other provision. The heading of sections herein are for
convenience only and are not to be construed as part of the text of the
Agreement.
THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN OBLIGOR AND BANK
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS BETWEEN OBLIGOR AND BANK. THERE ARE NO UNWRITTEN
ORAL AGREEMENTS BETWEEN OBLIGOR AND BANK.
<TABLE>
<S> <C>
- ----------------------------------------------------------- -----------------------------------------------------------
(Name of Obligor, or signature if Obligor is individual) (Name of Obligor, or signature if Obligor is individual)
By: By:
-------------------------------------------------------- --------------------------------------------------------
(Authorized Signature) (Authorized Signature)
- ----------------------------------------------------------- -----------------------------------------------------------
(Title) (Title)
- -------------------------------------------------------------------------------------------------------------------------------
Describe Underlying Transaction (For Bank Use Only)
- -------------------------------------------------------------------------------------------------------------------------------
Account Officer Bank Counsel (When over $50,000):
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 93
EXHIBIT B
ASSIGNMENT AND ACCEPTANCE
Dated ______________
Reference is made to the Second Amended and Restated Credit Agreement
dated as of ____________________, 1996 (as amended, restated, or otherwise
modified from time to time, the "Credit Agreement") among Paging Network, Inc.,
a Delaware corporation ("PageNet"), certain Subsidiaries of PageNet, the Lenders
parties thereto, NationsBank of Texas, N.A., as Documentation Agent and as a
Lender (the "Documentation Agent"), The First National Bank of Boston and Chase
Securities Inc, as Co-Syndication Agents and as Lenders, and Toronto Dominion
(Texas), Inc., as the Administrative Agent and as a Lender (the "Administrative
Agent"). Terms defined in the Credit Agreement are used herein with the same
meaning.
____________________ ("Assignor") and __________________ ("Assignee")
agree as follows:
1. Assignor hereby sells and assigns to Assignee without recourse
or warranty, and Assignee hereby purchases and assumes from Assignor, a
_________% interest in and to all of Assignor's rights and obligations under
the Credit Agreement as of the Effective Date (as defined below), [with respect
to such percentage interest in Assignor's portion of the Commitment as in
effect on the Effective Date], and the Notes held by Assignor, subject to the
terms and conditions of this Assignment and Acceptance.
2. Assignor (a) represents and warrants that (i) as of the date
hereof [the aggregate amount of its portion of the Commitment (without giving
effect to assignments thereof which have not yet become effective) is
$_________], [as of the date hereof, the outstanding principal amount of
Advances owing to it (without giving effect to assignments thereof which have
not yet become effective) is $_________,] and (ii) it is the legal and
beneficial owner of the interest being assigned by it hereunder; (b) makes no
representation or warranty and assumes no responsibility with respect to (i)
any statements, warranties, or representations made in or in connection with
the Credit Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency, or value of the Credit Agreement, the Loan Documents,
or any other instrument or document furnished pursuant thereto or (ii) the
financial condition of the Company or the performance or observance by the
Company of any of its obligations under the Credit Agreement, the Loan
Documents, or any other instrument or document furnished pursuant thereto; and
(c) attaches the Notes referred to in Paragraph 1 above to exchange such Notes
for new Notes as follows: _____________________________________.
3. Assignee (a) confirms that it has received a copy of the
Credit Agreement and the other Loan Documents, together with copies of the
financial statements referred to in Section 8.1 of the Credit Agreement and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into this Assignment and Acceptance;
(b) agrees that it will, independently and without reliance upon the
Documentation Agent, the Administrative Agent, Assignor, or any other Lender,
and based on such documents
<PAGE> 94
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under the Credit Agreement
and the other Loan Documents; (c) appoints and authorizes the Administrative
Agent to take such action as agent on its behalf and to exercise such powers
under the Credit Agreement, the other Loan Documents, and this Assignment and
Acceptance as are delegated to the Administrative Agent by the terms thereof
and hereof, together with such powers as are reasonably incidental thereto and
hereto; (d) agrees that it will perform in accordance with its terms all of the
obligations which by the terms of the Credit Agreement, the other Loan
Documents, and this Assignment and Acceptance are required to be performed by
it as a Lender; (e) specifies the addresses set forth in Schedule I attached
hereto as its address for the receipt of notices; and (f) if it is not a United
States Person, attaches the forms prescribed by the Internal Revenue Service
certifying as to Assignee's status for purposes of determining exception from
United States withholding taxes with respect to all payments to be made to
Assignee under the Credit Agreement, the other Loan Documents, and this
Assignment and Acceptance or such other documents as are necessary to indicate
that all such payments are subject to such taxes at a rate reduced by an
applicable tax treaty.
4. The effective date for this Assignment and Acceptance shall be
(the "Effective Date").
5. Upon remittance of the $3,500 processing fee to the
Administrative Agent and the Effective Date, (a) Assignee shall be a party to
the Credit Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Lender thereunder and (b)
Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Credit
Agreement.
6. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND THE UNITED
STATES OF AMERICA. WITHOUT EXCLUDING ANY OTHER JURISDICTION, ASSIGNEE AGREES
THAT THE COURTS OF TEXAS WIN HAVE JURISDICTION OVER PROCEEDINGS IN CONNECTION
HEREWITH.
7. Assignee's Revolving Loan Specified Percentage shall be
__________%. As of the Effective Date, Assignor's Revolving Loan Specified
Percentage shall be __________%.
-2-
<PAGE> 95
8. This Assignment and Acceptance may be executed in any number
of counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute but one and the same
instrument.
[ASSIGNOR]
By:
-----------------------------
-----------------------------
-----------------------------
[ASSIGNEE]
By:
-----------------------------
Its:
-----------------------------
-----------------------------
-3-
<PAGE> 96
Accepted this ___ day of ________
NATIONSBANK OF TEXAS, N.A.,
as Documentation Agent and
as a Lender
By:
---------------------
Its:
---------------------
TORONTO DOMINION (TEXAS), INC.,
as Administrative Agent and
as Lender
By:
---------------------
Its:
---------------------
-4-
<PAGE> 97
Schedule I
ASSIGNEE'S ADDRESS
1. Address for the Advances and Receipt of Notices
2. Initial LABOR Lending Office
-5-
<PAGE> 98
EXHIBIT C
PROMISSORY NOTE
______________ Dallas, Texas: June ___, 1996
ON OR BEFORE December 31, 2004, the undersigned, for value received,
hereby promises to pay jointly and severally to the order of
_______________________________ (the "Lender") the lesser of the principal sum
of _________________________ DOLLARS (________________) or the aggregate unpaid
principal amount of all Loans made by the Lender to the undersigned pursuant to
Section 2.1 of the Credit Agreement hereinafter referred to (as amended,
modified or restated from time to time, the "Agreement"), in immediately
available funds at the main office of TORONTO DOMINION (TEXAS), INC., as
Administrative Agent, in Houston, Texas, together with interest on the unpaid
principal amount hereof at rates and on the dates set forth in the Agreement.
The undersigned shall make payments of principal and interest as are required
to be made under the terms of the Agreement.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date and amount of each Loan and the date and amount of each principal
payment hereunder.
This note is one of the Revolving Loan Notes issued pursuant to, and
is entitled to the benefits of, the Second Amended and Restated Credit
Agreement dated as of June _, 1996 among Paging Network, Inc., the undersigned,
NationsBank of Texas, N.A., as Documentation Agent and as a Lender, Toronto
Dominion (Texas), Inc., as an Administrative Agent and as a Lender, The First
National Bank of Boston and Chase Securities Inc, as Co-Syndication Agents and
each as a Lender, and the Lenders named therein, to which Agreement, reference
is hereby made for a statement of the terms and conditions under which this
Note may be prepaid or its maturity date accelerated. This Note is secured
pursuant to certain Security Documents, all as more fully described in the
Agreement, and reference is made thereto for a statement of the terms and
provisions thereof. Capitalized terms used herein and not otherwise defined
herein are used with the meanings attributed to them in the Agreement.
PAGING NETWORK FINANCE CORP.
PAGING NETWORK EQUIPMENT COMPANY, INC.
PAGING NETWORK OF ALASKA, INC.
PAGING NETWORK OF AMERICA, INC.
PAGING NETWORK OF ARIZONA, INC.
PAGING NETWORK OF ATLANTA, INC.
PAGING NETWORK OF COLORADO, INC.
PAGING NETWORK OF DALLAS/FORT WORTH, INC.
<PAGE> 99
PAGING NETWORK OF FLORIDA, INC.
PAGING NETWORK OF HARTFORD/SPRINGFIELD, INC.
PAGING NETWORK OF HAWAII, INC.
PAGING NETWORK OF ILLINOIS, INC.
PAGING NETWORK OF KANSAS CITY, INC.
PAGING NETWORK OF LAS VEGAS, INC.
PAGING NETWORK OF LOS ANGELES, INC.
PAGING NETWORK OF LOUISIANA, INC.
PAGING NETWORK OF MASSACHUSETTS, INC.
PAGING NETWORK OF MICHIGAN, INC.
PAGING NETWORK OF MINNESOTA, INC.
PAGING NETWORK OF NEW JERSEY, INC.
PAGING NETWORK OF NEW MEXICO, INC.
PAGING NETWORK OF NEW YORK, INC.
PAGING NETWORK OF NORTH CAROLINA, INC.
PAGING NETWORK OF NORTHERN CALIFORNIA, INC.
PAGING NETWORK OF OHIO, INC.
PAGING NETWORK OF OKLAHOMA, INC.
PAGING NETWORK OF OMAHA, INC.
PAGING NETWORK OF OREGON, INC.
PAGING NETWORK OF ORLANDO, INC.
PAGING NETWORK OF PHILADELPHIA, INC.
PAGING NETWORK OF SAN ANTONIO, INC.
PAGING NETWORK OF SAN FRANCISCO, INC.
PAGING NETWORK SERVICES, INC.
PAGING NETWORK OF TENNESSEE, INC.
PAGING NETWORK OF UTAH, INC.
PAGING NETWORK OF VIRGINIA, INC. (DELAWARE
CORP.)
PAGING NETWORK OF VIRGINIA, INC. (VIRGINIA
CORP.)
PAGING NETWORK OF WASHINGTON, INC.
PAGING NETWORK OF WESTCHESTER, INC.
PAGING NETWORK OF WEST TEXAS, INC.
PAGING NETWORK - ATLANTIC REGION, INC.
PAGING NETWORK - CENTRAL REGION, INC.
PAGING NETWORK - NORTHEASTERN REGION, INC.
PAGING NETWORK - NORTHWESTERN REGION, INC.
PAGING NETWORK - SOUTHERN REGION, INC.
-2-
<PAGE> 100
PAGING NETWORK SOUTHEASTERN REGION, INC.
PAGING NETWORK SOUTHWESTERN REGION, INC.
PAGING NETWORK SATELLITE COMPANY, INC.
----------------------------------------------
By: Kenneth W. Sanders
Their: Senior Vice President - Finance
-3-
<PAGE> 101
Schedule attached to Promissory Note dated as of June __, 1996
LOANS AND PAYMENTS OF PRINCIPAL
<TABLE>
<CAPTION>
Principal Maturity Amount of Unpaid
Amount of Interest Principal Principal Notation
Date of Loan Period Paid/Prepaid Balance Made By
<S> <C> <C> <C> <C> <C>
</TABLE>
<PAGE> 102
EXHIBIT D
NOTICE
OF ASSIGNMENT
To: PAGING NETWORK FINANCE CORP.
4965 Preston Park Boulevard, Suite 500
Plano, Texas 75093
Attention: ________________
NATIONSBANK OF TEXAS, N.A.,
as Documentation Agent
and Lender
901 Main Street, 64th Floor
Dallas, Texas 75202
TORONTO DOMINION (TEXAS), INC.,
as Administrative Agent
and Lender
909 Fannin, Suite 1700
Houston, Texas 77010
Attention: Sophia D. Sgarbi, Manager
From: [NAME OF ASSIGNOR]
[NAME OF ASSIGNEE]
__________________, 19______
1. We refer to the Second Amended and Restated Credit
Agreement, dated as of ______________________, 1996 (which, as it may be
amended, modified, or restated from time to time, is herein called the "Credit
Agreement") among Paging Network, Inc. ("PageNet"), certain Subsidiaries of
PageNet party thereto (the "Companies"), certain banks party thereto (each a
"Lender"), including __________________ (the "Assignor"), Toronto Dominion
(Texas), Inc., as Administrative Agent and a Lender, NationsBank of Texas,
N.A., as Documentation Agent and a Lender, The First National Bank of Boston
and Chase Securities Inc as Co-Syndication Agents and as Lenders. Capitalized
terms used herein and not otherwise defined herein shall have the meanings
attributed to them in the Credit Agreement.
2. This Notice of Assignment (this "Notice") is given
and delivered to the Company and the Agents pursuant to Section 12.10 of the
Credit Agreement.
<PAGE> 103
3. The Assignor and ___________________________________
(the "Assignee") have entered into an Assignment Agreement, dated as of
____________________________, 19 _______, pursuant to which, among other
things, the Assignor has sold, assigned, delegated and transferred to the
Assignee, and the Assignee has purchased, accepted and assumed from the
Assignor, an undivided interest in and to all of the Assignor's rights and
obligations under the Credit Agreement such that Assignee's percentage of the
Commitment shall equal __________% The Effective Date (the "Effective Date")
shall be the later of ___________________________, 19______ or two Business
Days (or such shorter period agreed to by the Agents) after receipt of this
Notice of Assignment and any consents and fees required by the Credit Agreement
have been delivered to the Agents, provided that the Effective Date shall not
occur if any condition precedent agreed to by the Assignor and the Assignee has
not been satisfied.
4. As of this date, the Revolving Loan Specified
Percentage of the Assignor is __________%. As of the Effective Date, the
Revolving Loan Specified Percentage of the Assignor will be ____________% (as
such percentage may be reduced or increased by assignments which become
effective prior to the assignment to the Assignee becoming effective).
5. The Assignor and the Assignee hereby give to Paging
Network Finance Corp. or other Paging Entity designated by each of the
Companies to be the Notification Agent pursuant to the Credit Agreement and the
Agents notice of the assignment and delegation referred to herein. The Assignor
will confer with the Agents before __________________, 19 _______ to determine
if the Assignment Agreement will become effective on such date pursuant to
Section 3 hereof, and will confer with the Agents to determine the Effective
Date pursuant to Section 3 hereof if it occurs thereafter. The Assignor shall
notify the Agents if the Assignment Agreement does not become effective on any
proposed Effective Date as a result of the failure to satisfy the conditions
precedent agreed to by the Assignor and the Assignee. At the request of the
Agents, the Assignor will give the Agents written confirmation of the
occurrence of the Effective Date.
6. The Assignee hereby accepts and assumes the
assignment and delegation referred to herein and agrees as of the Effective
Date (i) to perform fully all of the obligations under the Credit Agreement and
Loan Documents which it has hereby assumed and (ii) to be bound by the terms
and conditions of the Credit Agreement as if it were a "Lender".
7. The Assignor and the Assignee request and agree that
any payments to be made by the Agents to the Assignor on and after the
Effective Date shall, to the extent of the assignment referred to herein, be
made entirely to the Assignee, it being understood that the Assignor and the
Assignee shall make between themselves any desired allocations.
8. The Assignor or the Assignee shall pay to the
Administrative Agent, on or before the Effective Date the processing fee of
$3,500 required by Section 12.10(b) of the Credit Agreement.
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<PAGE> 104
9. The Assignor and the Assignee request and direct that
the Documentation Agent prepare and cause the Company to execute and deliver
(i) to the Assignor, ***[a]*** replacement Note***[s]*** payable to the
Assignor and (ii) to the Assignee, ***[a] [new] [replacement]*** Note***[s]***
payable to the Assignee. The Assignor ***[and the Assignee each]***
agree***[s]*** to deliver to the Documentation Agent the original Note received
by it from the Company upon its receipt of ***[a]*** new Note***[s]***.
10. The Assignee advises the Agents that the address
listed below is its address for notices under the Credit Agreement:
-------------------------
-------------------------
-------------------------
ASSIGNOR ASSIGNEE
By: By:
------------------------- -------------------------
Title: Title:
------------------------- -------------------------
[applicable only if no Event of Default has occurred and is continuing, and
only with respect to a Purchaser (which is not a Lender or an Affiliate) of any
interest under the Loan Documents other than with respect to an assignment of
an interest with respect to any of the Letters of Credit or Applications:]
Consented and Agreed
as of _____ day of
PAGING NETWORK FINANCE CORP.
By:
--------------------------
Title:
-----------------------
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<PAGE> 105
EXHIBIT E
COMPLIANCE CERTIFICATE
DATE: _________________
TO: Each of the Lenders signatory to the Credit Agreement described below
This Certificate is furnished pursuant to and in satisfaction of the
requirements of Section 8.l(c) of the Second Amended and Restated Credit
Agreement, dated as of June _, 1996 (as amended and modified from time to time,
the "Credit Agreement"), among Paging Network, Inc. ("PageNet"), certain
Subsidiaries of PageNet (the "Companies"), the Lenders party thereto, Toronto
Dominion (Texas), Inc., as the Administrative Agent and as a Lender,
NationsBank of Texas, N.A., as Documentation Agent and as a Lender, The First
National Bank of Boston, and Chase Securities as Co- Syndication Agents and as
Lenders. AR capitalized terms used herein and not otherwise defined herein are
defined in the Credit Agreement. For purposes hereof, section references herein
related to sections of the Credit Agreement, and bracketed amounts or ratios
refer to the maximum or minimum amounts or ratios required under the relevant
sections of the Credit Agreement.
1. Covenant Calculations. The undersigned chief financial officer
or corporate controller of PageNet hereby certifies that the following
computations are true, complete and correct:
9.3 Total Leverage Ratio
(a) Total Debt
1) obligations for borrowed money $_________
2) letter of credit reimbursement
obligations $_________
3) obligations representing the deferred
purchase price of services or property $_________
4) obligations, whether or not assumed,
secured by Liens $_________
5) obligations which are evidenced by
notes, acceptances, or other similar
instruments $_________
6) Capitalized Lease Obligations $_________
7) obligations pursuant to a Guaranty $_________
Total Debt
(a) (1) + (2) + (3) + (4) + (5) + (6) + (7) $________
<PAGE> 106
(b) Annualized Operating Cash Flow
1) consolidated pre-tax net income or
loss $_________
2) depreciation expense $_________
3) amortization expense $_________
4) interest expense $_________
5) cash dividends or cash payments on
Preferred Stock $_________
6) amortized costs and expenses in
connection with interest rate caps or
swaps $_________
7) fees paid not already included in
interest expense $_________
8) non cash charges $_________
9) extraordinary losses $_________
10) extraordinary gains $_________
Annualized Operative Cash Flow
(b)(1) + (2) + (3) + (4) + (5) + (6) + (7) + (8) +
(9)-(10)x4 $_________
Total Leverage Ratio
(a) to (b) _____ to 1
Required
Closing Date through June 30, 2000 6.50 to 1.00
July 1, 2000 and thereafter 5.50 to 1.00
9.4 Senior Debt to Annualized Cash Flow
(a) Senior Debt
1) (See 9.3 (a)(1)+(2)+(3)+(4)+
(5) +(6) +(7) $_________
2) Subordinated Indebtedness $_________
Senior Debt
(a)(1)-(2) $_________
(b) Annualized Operating Cash Flow (See 9.3(b)
above) $_________
Senior Debt to Annualized Cash Flow
(a) to (b) _____ to 1
2
<PAGE> 107
Required
Closing Date through December 31, 1996
January 1, 1997 through December 30, 1997 4.50 to 1.00
January 1, 1998 through December 31, 1998
January 1, 1999 through December 31, 1999 4.00 to 1.00
January 1, 2000 and thereafter
3.50 to 1.00
3.00 to 1.00
2.50 to 1.00
9.5 Pro Forma Debt Service Ratio
(a) Annualized Operating Cash Flow (see 9.3(b)
above) $_________
(b) Pro Forma Debt Service
1) interest expense on Total Debt for the
succeeding 12 months (excluding
amortization of debt issuance costs)
$_________
2) cash dividends or cash payments on
Preferred Stock for the succeeding 12
months
$_________
3) amortized costs and expenses in
connection with interest rate caps or
swaps
$_________
4) fees paid not already included in
interest expense
$_________
5) principal payments on Indebtedness
and mandatory redemptions on
Preferred Stock for the succeeding 12
months
$_________
Pro Forma Debt Service
(1)+(2)+(3)+(4)+(5) $_________
3
<PAGE> 108
Annualized Cash Flow to Pro Forma Debt Service
Coverage Ratio
(a) to (b) _____ to 1
Required
1.50 to 1
9.6 Interest Coverage
(a) Operating Cash Flow $_________
1) [See
9.3(b)(1)+(2)+(3)+(4)+(5)+(6)+(7)
+(8)+(9)+(10)]
TOTAL
(b) Interest Expense For the Most Recently
Completed Three Month Period
1) interest expense on Total Debt
$_________
2) cash dividends or cash payments on
Preferred Stock $_________
3) amortization costs and expenses in
connection with interest rate caps and
swaps $_________
4) fees paid not already included in
interest expense $_________
5) principal payments on indebtedness
and mandatory redemptions of
Preferred Stock $_________
Interest Coverage
(a) to (b)(l)+(2)+(3)+(4)+(5) _____ to 1
$_________
Required
Closing Date through December 31, 1997 1.50 to 1.00
January 1, 1998 and thereafter 2.00 to 1.00
4
<PAGE> 109
9.7 Capital Expenditures $_________
Permitted
1996 $500,000,000
1997 $700,000,000
1998 $600,000,000
1999 $650,000,000
thereafter
[plus in fiscal year 1996 only, the amounts actually
received by the Companies from the issuance by
Page Net of $400,000,000 Senior Subordinated
Notes in July of 1995.
$_________
[plus beginning in 1997 the lesser of 15% of the
amount permitted to be expended (which for fiscal
year 1997 only, shall include any unused amounts
actually received by the Companies from the
issuance by PageNet of $400,000,000 Senior
Subordinated Notes on July of 1995)
$_________
2. The undersigned chief financial officer or corporate
controller certifies to you as follows:
(a) I am, and at all times mentioned herein have been, the duly
elected chief financial officer or corporate controller.
(b) I have reviewed the provisions of the Credit Agreement and the
other Loan Documents, and a review of the activities of
PageNet and the Companies during the period from
__________________, 19 _____ to _______________, 19 _____ (the
"Reporting Period") has been made under my supervision with a
view toward determining whether, during the Reporting Period,
each of PageNet and the Companies has kept, observed,
performed and fulfilled all its obligations under the Credit
Agreement and such Loan Documents.
(c) The representations and warranties made in the Loan Documents
are true and correct in all material respects as of the date
hereof as though made at and as of the date hereof, except for
such representations and warranties which relate to a
particular date, and no Default or Event of Default has
occurred or is continuing or is imminent. [Or, if this
statement cannot be made, a statement describing why this
statement cannot be made.]
5
<PAGE> 110
This Compliance Certificate is executed and delivered on the
_____________ day of ________________________, 19___.
By:
---------------------------------
----------------, ---------------
(Print Name) (Print Title)
6
<PAGE> 1
EXHIBIT 10.15
C $55,000,000
CREDIT FACILITY FOR
PAGING NETWORK OF CANADA INC.
(THE "BORROWER")
PROVIDED BY
THE TORONTO-DOMINION BANK
AND SUCH OTHER FINANCIAL INSTITUTIONS AS BECOME BANKS
(THE "BANKS")
THE TORONTO-DOMINION BANK AS ADMINISTRATIVE AGENT
(THE "ADMINISTRATIVE AGENT")
CLOSING DATE: JUNE 5, 1996
A. Loan Agreement
1. Loan Agreement, together with Exhibits and Schedules
EXHIBITS
Exhibit A Form of Draft Bankers' Acceptance
Exhibit B Form of Drawing Notice
Exhibit C Form of Request for Advance
Exhibit D Form of Use of Proceeds Letter
Exhibit E Form of Acceptance
Exhibit F Form of Borrower's Loan Certificate
Exhibit G Form of Subsidiary Loan Certificate
Exhibit H Form of Performance Certificate
Exhibit I Form of Assignment and Assumption Agreement
SCHEDULES
Schedule 1 Licenses
Schedule 2 Security Documents
Schedule 3 Subsidiaries
Schedule 4 Agreement with Affiliates
<PAGE> 2
B. Collateral Documentation
2. Demand Debenture (Hypothec) executed by the Borrower
3. Debenture Pledge Agreement executed by the Borrower
4. General Assignment of Book Debts executed by the Borrower
5. Securities Pledge Agreement executed by PNCHI
6. Guarantee executed by PNCHI
7. Guarantee executed by PNI
8. Deposit Agreement executed by PNI
9. Section 427 Bank Act Security Documents
10. Locally Filed Security Documents
C. Legal Opinions
11. McCarthy Tetrault, Canadian counsel to the Borrower
12. Opinions of local Canadian counsel to the Borrower with respect to
the Canadian Security
13. Bingham, Dana & Gould, general corporate counsel to PNI
14. Powell, Goldstein, Frazer & Murphy, special New York counsel
to Administrative Agent
D. Certificates, Diligence Items, and Other Conditions Precedent to the
Closing and Funding
15. Borrower's Loan Certificate
Exhibit A - Certificate of Incorporation
Exhibit B - By-Laws
Exhibit C - Authorizing Resolutions
Exhibit D - Certificates of Status, Compliance or Good Standing
Exhibit E - Shareholders' Agreement or Voting Trust Agreement
-2-
<PAGE> 3
16. Copies of Insurance Binders/Certificates with respect to the Assets
of the Borrower
KEY:
PNCHI - Paging Network Canadian Holdings, Inc.
PNI - Paging Network, Inc.
-3-
<PAGE> 4
LOAN AGREEMENT
AMONG
PAGING NETWORK OF CANADA INC.(THE "BORROWER");
THE TORONTO-DOMINION BANK AND
SUCH OTHER FINANCIAL INSTITUTIONS AS BECOME
"BANKS" HEREUNDER (COLLECTIVELY, THE "BANKS"); AND
THE TORONTO-DOMINION BANK, AS ADMINISTRATIVE AGENT
FOR THE BANKS (THE "ADMINISTRATIVE AGENT")
INDEX
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE 1 Definitions.............................................. 1
ARTICLE 2 Credit Facility.......................................... 23
Section 2.1 Commitment.................................... 23
Section 2.2 Uncollateralized Advances..................... 23
Section 2.3 Collateralized Advances....................... 25
Section 2.4 Notification of Banks; Disbursement........... 28
Section 2.5 Bankers' Acceptances.......................... 29
Section 2.6 Interest; Fees................................ 33
Section 2.7 Fees.......................................... 35
Section 2.8 Mandatory Commitment Reductions............... 35
Section 2.9 Optional Prepayments; Commitment Reductions... 36
Section 2.10 Mandatory Repayments.......................... 36
Section 2.11 Evidence of Obligations; Accommodation
Accounts...................................... 37
Section 2.12 Manner of Payment............................. 37
Section 2.13 Reimbursement................................. 38
Section 2.14 Pro Rata Treatment............................ 39
ARTICLE 3 Conditions Precedent..................................... 40
Section 3.1 Conditions Precedent to Agreement.............. 40
Section 3.2 Conditions Precedent to All Accommodations..... 43
ARTICLE 4 Representations and Warranties........................... 44
Section 4.1 Representations and Warranties................. 44
Section 4.2 Survival of Representations and Warranties,
etc............................................ 52
Section 4.3 No Representations by Banks.................... 52
ARTICLE 5 General Covenants........................................ 52
Section 5.1 Preservation of Existence and Similar
Matters........................................ 53
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Section 5.2 Business; Compliance with Applicable Law........ 53
Section 5.3 Maintenance of Properties....................... 53
Section 5.4 Accounting Methods and Financial Records........ 53
Section 5.5 Insurance....................................... 53
Section 5.6 Payment of Taxes and Claims..................... 54
Section 5.7 Compliance with ERISA........................... 54
Section 5.8 Visits and Inspections.......................... 56
Section 5.9 Payment of Indebtedness; Accommodations......... 56
Section 5.10 Use of Proceeds................................. 57
Section 5.11 Protect Security Interests...................... 57
Section 5.12 Environmental Audits............................ 57
Section 5.13 Further Assurances.............................. 58
ARTICLE 6 Information Covenants..................................... 58
Section 6.1 Quarterly Financial Statements and
Information..................................... 58
Section 6.2 Annual Financial Statements and Information .... 58
Section 6.3 Performance Certificates........................ 59
Section 6.4 Copies of Other Reports......................... 59
Section 6.5 Notice of Litigation and Other Matters.......... 60
Section 6.6 Environmental Reporting......................... 61
ARTICLE 7 Negative Covenants........................................ 61
Section 7.1 Indebtedness of the Borrower and its
Subsidiaries.................................... 62
Section 7.2 Limitation on Liens............................. 62
Section 7.3 Amendment and Waiver............................ 62
Section 7.4 Liquidation, Merger, or Disposition of
Assets.......................................... 63
Section 7.5 Limitation on Guaranties........................ 63
Section 7.6 Investments and Acquisitions.................... 63
Section 7.7 Restricted Payments and Purchases............... 63
Section 7.8 Leverage Ratio.................................. 64
Section 7.9 Annualized Operating Cash Flow to Pro Forma
Debt Service.................................... 64
Section 7.10 Total Debt Per Subscriber....................... 64
Section 7.11 Capital Expenditures............................ 64
Section 7.12 Minimum Revenue Test............................ 65
Section 7.13 Minimum Units in Service........................ 65
Section 7.14 Affiliate Transactions.......................... 66
Section 7.15 Real Estate..................................... 66
Section 7.16 ERISA Liabilities............................... 66
</TABLE>
-ii-
<PAGE> 6
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE 8 Default.................................................. 66
Section 8.1 Events of Default.............................. 66
Section 8.2 Remedies....................................... 70
ARTICLE 9 The Administrative Agent................................. 71
Section 9.1 Appointment and Authorization.................. 71
Section 9.2 Interest Holders............................... 71
Section 9.3 Consultation with Counsel...................... 71
Section 9.4 Documents...................................... 72
Section 9.5 Administrative Agent and Affiliates............ 72
Section 9.6 Responsibility of the Administrative Agent..... 72
Section 9.7 Security Documents............................. 72
Section 9.8 Action by the Administrative Agent............. 73
Section 9.9 Notice of Default or Event of Default.......... 73
Section 9.10 Responsibility Disclaimed...................... 74
Section 9.11 Indemnification................................ 74
Section 9.12 Credit Decision................................ 75
Section 9.13 Successor Administrative Agent................. 75
Section 9.14 Delegation of Duties........................... 76
Section 9.15 Determination by Administrative Agent
Conclusive and Binding......................... 76
ARTICLE 10 Computations and Indemnities............................... 76
Section 10.1 Indemnity for Change in Circumstances.......... 76
Section 10.2 Indemnity for Transactional and
Environmental Liability........................ 77
Section 10.3 Taxation on Payments........................... 79
Section 10.4 Judgment Currency.............................. 80
Section 10.5 Claims for Increased Costs and Taxes........... 81
ARTICLE 11 Miscellaneous............................................... 81
Section 11.1 Notices........................................ 81
Section 11.2 Expenses....................................... 84
Section 11.3 Waivers........................................ 84
Section 11.4 Right to Combine and Set-Off................... 85
Section 11.5 Assignment..................................... 85
Section 11.6 Accounting Principles.......................... 87
Section 11.7 Counterparts................................... 87
Section 11.8 Governing Law.................................. 87
Section 11.9 Severability................................... 87
Section 11.10 Interest....................................... 87
</TABLE>
-iii-
<PAGE> 7
<TABLE>
<CAPTION>
PAGE
<S> <C>
Section 11.11 Table of Contents and Headings................. 88
Section 11.12 Amendment and Waiver........................... 88
Section 11.13 Non-Merger..................................... 89
Section 11.14 Other Relationships............................ 89
Section 11.15 Directly or Indirectly......................... 90
Section 11.16 Reliance on and Survival of Various
Provisions..................................... 90
Section 11.17 Senior Debt.................................... 90
Section 11.18 Obligations Several............................ 90
Section 11.19 Confidentiality................................ 90
Section 11.20 Time of the Essence............................ 91
Section 11.21 Third Party Beneficiaries...................... 91
Section 11.22 Enurement...................................... 91
</TABLE>
iv-
<PAGE> 8
EXHIBITS
<TABLE>
<S> <C>
Exhibit A - Form of Draft Bankers' Acceptance
Exhibit B - Form of Drawing Notice
Exhibit C - Form of Request for Advance
Exhibit D - Form of Acceptance
Exhibit E - Form of Borrower's Loan Certificate
Exhibit F - Form of Subsidiary Loan Certificate
Exhibit G - Form of Performance Certificate
Exhibit H - Form of Assignment and Assumption Agreement
SCHEDULES
Schedule 1 - Licenses
Schedule 2 - Security Documents
Schedule 3 - Subsidiaries
Schedule 4 - Agreements with Affiliates
</TABLE>
-V-
<PAGE> 9
LOAN AGREEMENT
PAGING NETWORK OF CANADA INC. (THE "BORROWER");
THE TORONTO-DOMINION BANK AND
SUCH OTHER FINANCIAL INSTITUTIONS AS BECOME
"BANKS" HEREUNDER (COLLECTIVELY, THE "BANKS"); AND
THE TORONTO-DOMINION BANK, AS ADMINISTRATIVE AGENT
FOR THE BANKS (THE "ADMINISTRATIVE AGENT")
agree as follows as of the 5th day of June, 1996:
ARTICLE 1
Definitions
For the purposes of this Agreement:
"Accommodation" shall mean (i) an Advance made by the Banks or any one
or more of them on the occasion of any Borrowing; and (ii) a Bankers'
Acceptance created by any Bank on the occasion of any Drawing.
"Accommodation Notice" shall mean a Request for Advance or a Drawing
Notice.
"Administrative Agent" shall mean The Toronto-Dominion Bank, in its
capacity as Administrative Agent for the Banks or any successor Administrative
Agent appointed pursuant to Section 9.13 of this Agreement.
"Administrative Agent's Office" shall mean the office of the
Administrative Agent located at 8th Floor, Toronto Dominion Tower, Toronto
Dominion Centre, Toronto, Ontario M5K 1A2, or such other office as may be
designated pursuant to the provisions of Section 11.1 of this Agreement.
"Advance" shall mean amounts advanced by the Banks to the Borrower
pursuant to Section 2.2 and Section 2.3 hereof on the occasion of any Borrowing
and shall include, as designated by the Borrower in accordance with the terms
of this Agreement, a Collateralized Advance and an Uncollateralized Advance;
and "Advances" shall mean more than one Advance.
"Affiliate" shall mean, with respect to a Person, any other Person
directly or indirectly controlling, controlled by, or under common control
with, such first Person. For purposes of this definition, "control" when used
with respect to any Person includes, without limitation, the direct or indirect
beneficial ownership of more than ten percent (10%) of the voting securities
<PAGE> 10
or voting equity of such Person or the power to direct or cause the direction
of the management and policies of such Person whether by contract or otherwise.
"Agreement" shall mean this Loan Agreement, together with all Exhibits
and Schedules hereto.
"Agreement Date" shall mean June 5, 1996.
"Annualized Operating Cash Flow" shall mean, as of any date, the
product of (a) the aggregate Operating Cash Flow for the Borrower Group on a
combined basis for the fiscal quarter end being tested or the most recently
completed fiscal quarter, as the case may be, times (b) four (4).
"Applicable Law" shall mean, in respect of any Person, all provisions
of constitutions, statutes, codes, ordinances, rules, regulations, municipal
by-laws, judicial, arbitral, administrative, ministerial, departmental or
regulatory judgments, orders, decisions, rulings or awards, policies and
guidelines of any Governmental Entity, or any provisions of the foregoing,
including general principles of common and civil law and equity, applicable to
such Person, including, without limiting the foregoing, the Licenses, and all
orders, decisions, judgments and decrees of all courts and arbitrators in
proceedings or actions to which the Person in question is a party or by which
it is bound.
"Applicable Margin" shall mean the interest rate or fee margin
applicable to Advances and Bankers' Acceptances, as the case may be, in each
case determined in accordance with Section 2.6(d) hereof.
"Assets" means, with respect to any Person, all property and assets of
such Person, both real and personal, of every kind and wheresoever situate,
whether now owned or hereafter acquired.
"Authorized Signatory" shall mean such senior personnel of a Person as
may be duly authorized and designated in writing by such Person to execute
documents, agreements and instruments on behalf of such Person.
"Available Commitment" shall mean, as of any date, the greater of (a)
the Equivalent Canadian Dollar Amount of the aggregate amount of Permitted
Collateral held on such date by the Administrative Agent pursuant to the
Deposit Agreement; (b) $41,250,000, but only to the extent that (i) the Minimum
Permitted Collateral Amount is held on such date by the Administrative Agent
pursuant to the Deposit Agreement and (ii) as of the end of the most recently
completed fiscal quarter for
- 2 -
<PAGE> 11
which financial statements have been delivered pursuant to Sections 6.1 or 6.2,
as applicable, hereof either (A) the Leverage Ratio is less than 7.0 to 1 or
(B) (i) the aggregate number of Units in Service is greater than or equal to
45,000 and (ii) Gross Revenue for the Borrower Group on a combined basis is
greater than or equal to $1,875,000; and (c) $55,000,000, but only to the
extent that (i) the Minimum Permitted Collateral Amount is held on such date by
the Administrative Agent pursuant to the Deposit Agreement and (ii) as of the
end of the most recently completed fiscal quarter for which financial
statements have been delivered pursuant to Sections 6.1 or 6.2, as applicable,
hereof either (A) the Leverage Ratio is less than 5.0 to 1, or (B) (i) the
aggregate number of Units in Service is greater than or equal to 100,000 and
(ii) Gross Revenue for the Borrower Group on a combined basis is greater than
or equal to $3,750,000; provided, however, that the Available Commitment shall
not at anytime exceed (1) the Commitment on such date and (2) the product of
(x) the Equivalent Canadian Dollar Amount of the aggregate amount of
Permitted Collateral held on such date by the Administrative Agent pursuant to
the Deposit Agreement times (y) two (2); and provided, further, however,
that from and after the date of any event which, with respect to the Licenses,
results in a violation of the Canadian ownership and control rules promulgated
under the Radiocommunication Act (Canada), the Telecommmunications Act (Canada)
and any replacement act or any regulations made under any such act, the
Available Commitment shall be as set forth in clause (a) of this definition.
"Bankers' Acceptance" shall have the meaning set forth in Section 2.5
hereof and shall include, as designated by the Borrower in accordance with the
terms of this Agreement, a Collateralized Bankers' Acceptance and an
Uncollateralized Bankers' Acceptance.
"Bankers' Acceptance Fee Rate" shall mean the Applicable Margin for
Bankers' Acceptances as determined in accordance with Section 2.6(d) hereof.
"Bankers' Acceptance Permitted Collateral Rate" shall mean, with
respect to any Bankers' Acceptance, the sum of (a) the rate of interest per
annum which is equivalent to the rate quoted to the Borrower by the
Administrative Agent as the Administrative Agent's Canadian Dollar bankers'
acceptance rate for bankers' acceptances having the same term to maturity as
such Bankers' Acceptance, plus (b) 0.500%.
"Banks" shall mean those financial institutions whose names appear as
"Banks" on the signature pages to this Agreement, together with any assignees
thereof pursuant to Section 11.5 hereof; and "Bank" shall mean any one of the
foregoing Banks.
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<PAGE> 12
"Borrower" shall mean Paging Network of Canada Inc., a Canada
corporation.
"Borrower Group" shall mean, collectively, the Borrower and its
Subsidiaries and MadTel Holdings and its Subsidiaries.
"Borrowing" shall mean a borrowing consisting of one or more Advances.
"Business" shall have the meaning specified in Section 4.1(e) hereof.
"Business Day" shall mean a day on which banks and foreign exchange
markets are open for the transaction of business required for this Agreement in
Toronto, Canada, as relevant to the determination to be made or the action to
be taken.
"Capital Expenditures" shall mean, for any Person for any period,
expenditures for the purchase of assets of long-term use which would be
required to be capitalized on the balance sheet of such Person in accordance
with GAAP; provided, however, that Capital Expenditures for any period shall be
reduced by the net book value of Units in Service sold during such period,
which had been reflected in the determination of Capital Expenditures for any
prior periods' Capital Expenditures.
"Capital Stock" shall mean, as applied to any Person, any capital
stock of such Person, regardless of class or designation, and all warrants,
options, purchase rights, conversion or exchange rights, voting rights, calls
or claims of any character with respect thereto.
"Capitalized Lease Obligation" shall mean that portion of any
obligation of a Person as lessee under a lease which at the time would be
required to be capitalized on the balance sheet of such Person in accordance
with GAAP.
"Change Event" shall mean the occurrence of any of the following
events or the existence of any of the following conditions: (i) Paging Network,
Inc. shall cease to own, directly or indirectly, 100% of the Capital Stock of
the Borrower; or (ii) the Borrower shall fail to own, directly or indirectly
through one or more wholly-owned Subsidiaries all of the issued and outstanding
capital Stock of each of its Subsidiaries.
"Claim" shall mean any claim of any nature whatsoever, including any
demand, liability (whether accrued or accruing, actual or contingent),
obligation, debt, cause of action, suit, proceeding, judgment, award,
assessment and reassessment.
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<PAGE> 13
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral" shall mean any property of any kind constituting or
intended to constitute collateral for the obligations under any of the Loan
Documents and shall include, without limitation, the Permitted Collateral.
"Collateralized Advance" shall mean a Collateralized Prime Rate
Advance and a Cost of Funds Rate Advance; provided, however, that the Borrower
may not request a Collateralized Advance (and no Collateralized Advance shall
be made) if on the date of such Collateralized Advance the Equivalent Canadian
Dollar Amount of the Permitted Collateral held under the Deposit Agreement does
not equal or exceed the sum of the principal amount of all Collateralized
Advances and the Face Amount of all Collateralized Bankers' Acceptances then
outstanding plus the principal amount of the Collateralized Advance so
requested.
"Collateralized Bankers' Acceptance" shall mean a Drawing which the
Borrower requests to be made as a Collateralized Bankers' Acceptance or is
continued as or converted into a Collateralized Bankers' Acceptance in
accordance with the provisions of Section 2.5 hereof; provided, however, that
the Borrower may not request a Collateralized Bankers' Acceptance (and no such
Bankers' Acceptance shall be issued) if on the date of such Drawing the
aggregate amount of the Equivalent Canadian Dollar Amount of the Permitted
Collateral held pursuant to the Deposit Agreement does not equal or exceed the
sum of the principal amount of all Collateralized Advances and the Face Amount
of all Collateralized Bankers' Acceptances outstanding on such date plus the
amount of the Face Amount of all Collateralized Bankers' Acceptance so
requested.
"Collateralized Prime Rate Advance" shall mean a Collateralized
Advance which bears interest at the Prime Rate Basis and which the Borrower
requests to be made as a Collateralized Prime Rate Advance or is continued as
or converted into a Collateralized Prime Rate Advance, in accordance with the
provisions of this Agreement, and which shall be in a principal amount of at
least $500,000 and in an integral multiple of $500,000.
"Commitment" shall mean the several obligations of the Banks to make
Accommodations to the Borrower pro rata, in accordance with their respective
Commitment Ratios, in an aggregate amount of up to $55,000,000 pursuant to the
terms hereof, as such obligations may be reduced from time to time pursuant to
the terms hereof.
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<PAGE> 14
"Commitment Ratio" shall mean, with respect to any Bank, the
percentage equivalent of the ratio which such Bank's pro rata portion of the
total Commitment bears to the aggregate amount of the Commitment (as each may
be adjusted from time to time as provided herein); and "Commitment Ratios"
shall mean the Commitment Ratios of all of the Banks with respect to the
Commitment. As of the Agreement Date the Commitment Ratio of the only Bank
party to this Agreement, The Toronto-Dominion Bank, is 100%.
"Cost of Funds Rate" shall mean, for each Interest Period for each
Collateralized Advance which bears interest at the Cost of Funds Rate, the per
annum rate of interest equal to the rate of interest per annum, calculated on
the basis of a year of 365 days or 366 days (in the case of a leap year), equal
to the rate of interest per annum quoted by The Toronto-Dominion Bank at
approximately 10:00 a.m. (Toronto time) on the first day of such Interest
Period, as the rate that would be payable by The Toronto-Dominion Bank if it
were to issue in the Canadian money market its deposit liability instruments in
an aggregate principal amount approximately equal to the principal amount of,
and for a length of time approximately equal to the Interest Period for, such
Collateralized Advance, whether or not The Toronto-Dominion Bank shall actually
issue such deposit liability instruments on the date on which such quotation is
given, plus one-half of one percent (0.5%). The Cost of Funds Rate shall apply
to Interest Periods of one (1), two (2), three (3) or six (6) months (nine (9)
or twelve (12) months subject to availability) and, once determined, shall
remain unchanged during such Interest Period.
"Cost of Funds Rate Advance" shall mean a Collateralized Advance which
bears interest at the Cost of Funds Rate and which the Borrower requests to be
made as a Cost of Funds Rate Advance or is continued as or converted into a
Cost of Funds Rate Advance, in accordance with the provisions of this
Agreement, and which shall be in a principal amount of at least $500,000 and in
an integral multiple of $500,000.
"Default" shall mean any Event of Default, and any of the events
specified in Section 8.1 hereof, regardless of whether there shall have
occurred any passage of time or giving of notice, or both, that would be
necessary in order to constitute such event an Event of Default.
"Default Rate" shall mean a simple per annum interest rate equal to
the sum of (a) the Prime Rate, plus (b) the Applicable Margin for
Uncollateralized Prime Rate Advances, plus (c) two percent (2%).
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<PAGE> 15
"Deposit Agreement" shall mean that certain Deposit Agreement of even
date herewith between PageNet and the Administrative Agent for the benefit of
the Banks.
"Dollar" or "$" shall mean (except where specifically designated
otherwise) lawful money of Canada.
"Draft" shall mean, at any time, a blank bill of exchange within the
meaning of the Bills of Exchange Act (Canada) in substantially the form set out
in Exhibit A hereto drawn by the Borrower on a Bank and bearing such
distinguishing letters and numbers as such Bank may determine, but which at
such time, except as otherwise provided herein, has not been completed or
accepted by such Bank.
"Drawing" shall mean the creation of a Bankers' Acceptance by a Bank.
"Drawing Date" shall have the meaning ascribed to such term in the
definition of "Drawing Notice" set forth herein.
"Drawing Fee" shall mean, with respect to each Draft drawn by the
Borrower hereunder and accepted by a Bank on any Drawing Date, an amount equal
to the Bankers' Acceptance Fee Rate multiplied by the aggregate Face Amount of
such Draft, calculated daily on the basis of the term to maturity of such Draft
and a year of 365 days or 366 days (in the case of a leap year).
"Drawing Notice" shall mean a certificate designated as a "Drawing
Notice," signed by an Authorized Signatory of the Borrower requesting a Drawing
hereunder, which shall be in substantially the form of Exhibit B and shall,
among other things, specify: (a) the requested date for such Drawing (the
"Drawing Date"); (b) the aggregate Face Amount of Drafts to be accepted in
Canadian Dollars; (c) the Interest Period for such Drafts; and (d) whether the
requested Drawing is to be a Collateralized Bankers' Acceptance or an
Uncollateralized Bankers' Acceptance.
"Employee Pension Plan" shall mean any Plan subject to the minimum
funding requirement of Section 302 of ERISA or Section 412 of the Code.
"Environmental Auditor" shall mean a qualified environmental auditor
at arm's length from the Borrower and acceptable to the Administrative Agent.
"Environmental Laws" shall mean all Applicable Laws in force from time
to time relating to the environment, Hazardous Substances, pollution or
protection of the environment, including
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<PAGE> 16
Laws relating to: (i) on site or off-site contamination; (ii) occupational
health and safety; (iii) chemical substances or products; (iv) Releases of
pollutants, contaminants, chemicals or other industrial, toxic or radioactive
substances or Hazardous Substances into the environment; and (v) the
manufacture, processing, distribution, use, treatment, storage, transport or
handling of Hazardous Substances.
"Environmental Liabilities and Costs" shall mean all Losses and
Claims, whether known or unknown, current or potential, past, present or
future, imposed by, under or pursuant to Environmental Laws, including all
Losses and Claims related to Remedial Actions and all reasonable fees,
disbursements and expenses of counsel, experts, personnel and consultants,
where such Losses and Claims are based on, arise out of or are otherwise in
respect of: (i) the ownership or operation of the Business or any Assets
related to the Business; (ii) the conditions on, under, above or about any real
property, assets, equipment or facilities currently or previously owned, leased
or operated by the Borrower or its Subsidiaries; (iii) expenditures necessary
to cause the operations of the Business or Assets either related to the
Business or owned, leased or operated by the Borrower or its Subsidiaries to
comply materially with any and all requirements, including expenditures
necessary to effect the closure, decommissioning or rehabilitation of any of
the operations of the business or Assets either related to the Business or
owned, leased or operated by the Borrower or its Subsidiaries; (iv) the use,
generation, manufacture, refining, treatment, transportation, storage,
handling, recycling, disposal, depositing, transferring, producing or
processing of Hazardous Substances; (v) liability for personal injury or
property damage, including damages assessed for the maintenance of a public or
private nuisance; and (vi) any other matter affecting the Real Estate or other
Assets within the jurisdiction of any Governmental Entity administering any
Environmental Law.
"Environmental Notice" shall mean any written claim, citation,
directive, request for information, statement of claim, notice of
investigation, letter or other communication from any Person given pursuant to
Environmental Laws.
"Environmental Permits" shall mean all permits, certificates,
approvals, registrations and licenses issued by any Governmental Entity to the
Borrower, its Subsidiaries or to the Business pursuant to Environmental Laws
and relating to or required for the operation of the Business or the use of the
Real Estate or other Assets of the Borrower or its Subsidiaries.
"Equivalent Canadian Dollar Amount" shall mean, on any day (a) with
respect to Permitted Collateral denominated in Dollars,
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<PAGE> 17
the principal or face amount of such Permitted Collateral, and (b) with respect
to Permitted Collateral denominated in U.S. Dollars, the equivalent amount of
Dollars determined using the quoted spot rate at which the Administrative
Agent's principal office in Toronto offers to provide Dollars in exchange for
U.S. Dollars in Toronto at 12:00 noon (Toronto time) on such day.
"Equivalent U.S. Dollar Amount" shall mean, on any day, with respect to
any amount of Dollars, the equivalent amount of U.S. Dollars determined by
using the quoted spot rate at which the Administrative Agent's principal office
in Toronto offers to provide U.S. Dollars in exchange for Dollars in Toronto at
12:00 noon (Toronto time) on such day.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as in effect from time to time.
"ERISA Affiliate" shall mean any Person, including a Subsidiary or an
Affiliate of the Borrower, that is treated as a single employer with the
Borrower pursuant to Section 414(b), (c), (m) or (o) of the Code.
"Event of Default" shall mean any of the events specified in Section
8.1 hereof, provided that any requirement for notice or lapse of time has been
satisfied.
"Face Amount" shall mean, in respect of a Bankers' Acceptance, the
amount payable to the holder thereof on its maturity.
"GAAP" shall mean accounting principles generally accepted in Canada
as recommended in the Handbook of the Canadian Institute of Chartered
Accountants as in effect on the Agreement Date.
"Government List" shall mean a list maintained by any Governmental
Entity of sites identified for investigation or clean-up pursuant to any
Environmental Law.
"Governmental Entity" shall mean any: (i) multinational, federal,
provincial, state, municipal, local or other government, governmental or public
department, central bank, court, commission, board, bureau, agency or
instrumentality, domestic or foreign; (ii) any subdivision, agent, commission,
board, or authority of any of the foregoing; or (iii) any quasi-governmental or
private body exercising any regulatory, expropriation or taxing authority under
or for the account of any of the foregoing.
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<PAGE> 18
"Gross Revenue" shall mean, with respect to any Person and its
Subsidiaries on a consolidated basis, for the most recently completed fiscal
quarter, gross revenues determined in accordance with GAAP.
"Guaranty" or "Guaranteed," as applied to an obligation, shall mean
and include (a) a guaranty, direct or indirect, in any manner, of all or any
part of such obligation, and (b) any agreement, direct or indirect, contingent
or otherwise, the practical effect of which is to assure in any way the payment
or performance (or payment of damages in the event of non-performance) of all
or any part of such obligation, including, without limiting the foregoing, any
reimbursement obligations with respect to outstanding letters of credit or
capital call requirements.
"Hazardous Substance" shall mean any Substance which is or is deemed
to be, alone or in any combination, hazardous, hazardous waste, toxic, a
pollutant, a deleterious substance, a contaminant or a source of pollution or
contamination under any Environmental Law, whether or not such Substance is
defined as hazardous under the Environmental Law.
"Immaterial Site Specific Licenses" shall mean, at any time, the
aggregate Site Specific Licenses, the termination or cancellation of which,
without contemporaneous replacement, would not reasonably be expected to have a
Materially Adverse Effect.
"Indebtedness" shall mean, with respect to any Person, and without
duplication, (a) all items which in accordance with GAAP would be included in
determining total liabilities as shown on the liability side of a balance sheet
of such Person, except (i) items of shareholders' and partners' equity or
capital stock, (ii) items of surplus or general contingency or deferred tax
reserves incurred in the ordinary course of business, (iii) accounts incurred
and payable in the ordinary course of business, (iv) dividends payable, or (v)
deferred pension costs, (b) all direct or indirect obligations of any other
Person secured by any Lien to which any property or asset owned by such Person
is subject, whether or not the obligation secured thereby shall have been
assumed, (c) all Capitalized Lease Obligations of such Person and all
obligations of such Person with respect to leases constituting part of a sale
and lease-back arrangement, (d) all reimbursement obligations with respect to
outstanding letters of credit, bankers' acceptances or similar instruments, (e)
all obligations, contingent or otherwise, arising under Guaranties issued by
such Person, and (f) all obligations of such Person under Interest Rate Hedge
Agreements.
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<PAGE> 19
"Indebtedness for Money Borrowed" shall mean, with respect to any
Person, Indebtedness for money borrowed and Indebtedness represented by notes
payable and drafts accepted representing extensions of credit, all obligations
evidenced by bonds, debentures, notes or other similar instruments, all
Indebtedness upon which interest charges are customarily paid, all Capitalized
Lease Obligations, all reimbursement obligations with respect to outstanding
letters of credit, bankers' acceptances or similar instruments, all
Indebtedness issued or assumed as full or partial payment for property or
services, whether or not any such notes, drafts, obligations or Indebtedness
represent Indebtedness for money borrowed, and, without duplication, Guaranties
of any of the foregoing. For purposes of this definition, interest which is
accrued but not paid on the scheduled due date for such interest shall be
deemed Indebtedness for Money Borrowed.
"Interest Expense" shall mean, for any Person for any period, all
interest expense (including imputed interest with respect to Capitalized Lease
Obligations) with respect to any Indebtedness for Money Borrowed of such Person
during such period pursuant to the terms of such Indebtedness for Money
Borrowed, together with all fees paid in respect of such Indebtedness for Money
Borrowed to the extent not already included in cash interest paid, all as
calculated in accordance with GAAP.
"Interest Period" shall mean (a) in connection with any Prime Rate
Advance, the period beginning on the date such Advance is made and ending on
the last day of the calendar month in which such Advance is made, provided,
however, that if a Prime Rate Advance is made on the last day of any calendar
month, it shall have an Interest Period ending on, and its Payment Date shall
be, the last day of the following calendar month, (b) in connection with any
Collateralized Advance which bears interest at the Cost of Funds Rate, the term
of such Advance selected by the Borrower or otherwise determined in accordance
with this Agreement; provided, however, (i) any applicable Interest Period
which would otherwise end on a day which is not a Business Day shall be
extended to the next succeeding Business Day unless such Business Day falls in
another calendar month, in which case such Interest Period shall end on the
next preceding Business Day and (ii) any applicable Interest Period which
begins on a day for which there is no numerically corresponding day in the
calendar month during which such Interest Period is to end shall (subject to
clause (i) above) end on the last day of such calendar month and (c) in
connection with any Bankers' Acceptance, the term of such Bankers' Acceptance
selected by the Borrower or otherwise determined in accordance with this
Agreement.
"Interest Rate Hedge Agreements" shall mean the obligations of any
Person pursuant to any arrangement with any other Person
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<PAGE> 20
whereby, directly or indirectly, such Person is entitled to receive from time
to time periodic payments calculated by applying either a floating or a fixed
rate of interest on a stated notional amount in exchange for periodic payments
made by such Person calculated by applying a fixed or a floating rate of
interest on the same notional amount and shall include, without limitation,
interest rate swaps, caps, floors, collars and similar arrangements.
"known to the Borrower" or "to the knowledge of the Borrower" shall
mean known by the executive officers of the Borrower or any Subsidiary (which
shall mean the chairman/president, the chief executive officer, the chief
financial officer, the chief operating officer, the treasurer, and any in-house
general counsel or other Persons performing like functions) or, based upon the
reasonable inquiry that an executive officer would make, should have been known
by such executive officer.
"Leasehold Real Estate" shall mean the land and premises of the
Borrower and its Subsidiaries held under agreement to lease or other right of
occupation.
"Leverage Ratio" shall mean, as of any date, the ratio of
(a) Total Debt for the Borrower Group on a combined basis to
(b) Annualized Operating Cash Flow.
"Licenses" shall mean any radio, telephone, microwave, wireless
messaging or other license (excluding Immaterial Site Specific Licenses),
authorization, certificate of compliance or convenience, franchise, approval or
permit, granted or issued by any Governmental Entity and held by the Borrower,
MadTel Holdings or any of their Subsidiaries, all of which (other than Site
Specific Licenses) are listed as of the Agreement Date on Schedule 1 hereto.
"Lien" shall mean, with respect to any property, any mortgage, lien,
pledge, negative pledge or other agreement not to pledge, assignment, charge,
security interest, title retention agreement, levy, execution, seizure,
attachment, garnishment or other encumbrance of any kind in respect of such
property, whether created by statute, contract, the common law or otherwise,
and whether or not choate, vested or perfected.
"Loan Documents" shall mean this Agreement, the Security Documents,
all subordination agreements entered into by creditors of the Borrower or any
of its Subsidiaries with respect to Indebtedness for Money Borrowed of the
Borrower or any of its Subsidiaries, all legal opinions or reliance letters
issued by counsel to the Borrower or any of its Subsidiaries, all fee
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<PAGE> 21
letters, all Requests for Advance, all Interest Rate Hedge Agreements between
the Borrower, on the one hand, and the Administrative Agent and the Banks, or
any of them, on the other hand, and all other documents and agreements executed
or delivered in connection with or contemplated by this Agreement.
"Loss" means any loss whatsoever, whether direct or indirect,
including expenses, costs, damages, judgments, penalties, fines, charges,
claims, demands, liabilities, loss of profits, debts, interest, any and all
legal fees and disbursements, on a solicitor and own client basis.
"MadTel Holdings" shall mean Madison Telecommunications Holdings Inc.,
a Canada corporation.
"MadTel Holdings Agreement" shall mean that certain Loan Agreement
dated as of even date herewith by and among MadTel Holdings, the Banks and the
Administrative Agent.
"Majority Banks" shall mean (i) at any time that no Accommodations are
outstanding hereunder, Banks the total of whose Commitment Ratios equals or
exceeds sixty-six and two-thirds percent (66-2/3%) of the aggregate Commitment
Ratios of all Banks entitled to vote hereunder, or (ii) at any time that there
are Accommodations outstanding hereunder, Banks the total of whose
Accommodations outstanding equals or exceeds sixty-six and two-thirds percent
(66-2/3%) of the total principal amount of the Accommodations then outstanding
of all Banks hereunder (excluding from such calculation the Accommodations of
any Banks who fail to provide Accommodations as provided in Section 2.4(b)
hereof).
"Materially Adverse Effect" shall mean (a) any material adverse effect
upon the business, assets, liabilities, financial condition, results of
operations, properties, or business of the Borrower and its Subsidiaries on a
consolidated basis, or (b) except as a result of the action or inaction of the
Administrative Agent or any Bank, a material adverse effect upon the validity
or enforceability of this Agreement or any of the Loan Documents, or upon the
ability of the Borrower or any of its Subsidiaries to perform the payment
obligations or other obligations under this Agreement or any other Loan
Document, or upon the value of the Collateral or upon the rights, benefits or
interests of the Banks in and to the Accommodations or the rights of the
Administrative Agent and the Banks in the Collateral; in either case, whether
resulting from any single act, omission, situation, status, event or
undertaking, or taken together with other such acts, omissions, situations,
statuses, events or undertakings.
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<PAGE> 22
"Maturity Date" shall mean June 30, 2003, or as the case may be, such
earlier date as payment of the Obligations shall be due (whether by
acceleration, reduction of the Commitment to zero or otherwise).
"Minimum Permitted Collateral Amount" shall mean, as of any date, (a)
prior to June 30, 1999, $27,500,000 (or the Equivalent U.S. Dollar Amount),
and (b) thereafter, the lesser of (i) $27,500,000 (or the Equivalent U.S.
Dollar Amount) and (ii) the product of (A) 50% times (B) the Commitment as
of such date.
"Multiemployer Plan" shall mean an Employee Pension Plan which is a
"multiemployer plan" within the meaning set forth in Section 4001(a)(3) of
ERISA.
"Necessary Authorizations" shall mean all approvals and licenses from,
and all filings and registrations with, any Governmental Entity or other
regulatory authority, including, without limiting the foregoing, the Licenses
and all approvals, licenses, filings and registrations under Applicable Law,
necessary in order to enable the Borrower and its Subsidiaries to own,
construct, maintain, and operate wireless messaging systems currently being
constructed, maintained or operated and to invest in other Persons who own,
construct, maintain, and operate wireless messaging systems.
"Net Income" shall mean, for any Person and its Subsidiaries on a
consolidated basis, for any period, net income determined in accordance with
GAAP for such Person and its Subsidiaries.
"Network and Equipment Agreement" shall mean that certain Network
Coordination and Equipment Supply Agreement dated as of October 28, 1994
between PageNet and Madison Telecommunications Inc., as amended by Amendment
No. 1 dated as of October 26, 1995.
"Obligations" shall mean all payment and performance obligations of
every kind, nature and description of the Borrower, its Subsidiaries, and any
other obligors to the Banks or the Administrative Agent, or any of them, under
this Agreement and the other Loan Documents (including any interest, fees and
other charges on the Accommodations or otherwise under the Loan Documents that
would accrue but for the filing of a bankruptcy action with respect to the
Borrower or any of its Subsidiaries, whether or not such claim is allowed in
such bankruptcy action and including obligations to the Administrative Agent or
any of the Banks under any Interest Rate Hedge Agreements) as they may be
amended, restated or supplemented from time to time and all extensions or
renewals, or as a result of making the Accommodations, whether such obligations
are direct or indirect,
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<PAGE> 23
absolute or contingent, due or not due, contractual or tortious, liquidated or
unliquidated, arising by operation of Applicable Law or otherwise, now existing
or hereafter arising.
"Operating Cash Flow" shall mean, with respect to any Person and its
Subsidiaries, on a consolidated basis, at the end of the most recently
completed fiscal quarter, as determined in accordance with GAAP, the sum of (a)
Net Income for such period (after eliminating any extraordinary gains and
losses, including gains and losses from the sale of assets), plus (b) to the
extent deducted in determining Net Income, the sum of the following for such
period: (i) depreciation and amortization expense, (ii) Interest Expense and
(iii) income tax expense and (iv) all other non-cash items which will not
require cash payment in the future. Operating Cash Flow attributable to any
acquisition will be included in the determination of Operating Cash Flow as if
the Assets so acquired had been acquired on the first day of such fiscal
period, and the operating results of any acquired Assets for that portion of
any fiscal period in which they were not owned by the Borrower or any of its
Subsidiaries shall be determined by reference to financial information prepared
by the prior owners thereof, subject to such adjustments as the Administrative
Agent may reasonably require.
"PageNet" shall mean Paging Network, Inc. , a Delaware corporation.
"PageNet Guaranty" shall mean that certain Guaranty in favor of the
Administrative Agent for the benefit of the Banks, given by PageNet of even
date herewith.
"Payment Date" shall mean the last day of any Interest Period.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
successor thereto.
"Permitted Asset Sale" shall mean the sale by the Borrower or any of
its Subsidiaries of all or any part of its Assets as permitted under Section
7.4 hereof.
"Permitted Collateral" shall mean (a) U.S. Dollars, (b) marketable,
direct obligations of the United States of America maturing within ninety (90)
days of the date of purchase, or (c) other collateral acceptable to the Banks
at any time and from time to time held by or on deposit with the Administrative
Agent pursuant to the Deposit Agreement as collateral for the PageNet Guaranty.
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<PAGE> 24
"Permitted Investments" shall mean: (a) negotiable instruments or
securities in bearer or registered form which are not held for more than 30
days and which evidence: (i) obligations of or guaranteed by the Government of
Canada so long as they have the Permitted Rating; (ii) obligations of or
guaranteed by a province or municipality of Canada so long as they have the
Permitted Rating; (iii) deposits or bankers' acceptances issued or accepted by
any Schedule I Canadian chartered bank so long as they have the Permitted
Rating; (iv) commercial paper of Canadian corporations or other Canadian
issuers so long as it has the Permitted Rating; (v) other similar negotiable
instruments or securities which are issued or guaranteed by Persons which have
the Permitted Rating; or (b) demand deposits in any Schedule I Canadian
chartered bank so long as they have the Permitted Rating or (c) investments in
any wholly-owned Subsidiary of the Borrower so long as the corresponding debt
instruments, if any, are pledged to the Administrative Agent as security for
the obligations.
"Permitted Liens" shall mean, as applied to any Person:
(a) Any Lien in favor of the Administrative Agent or any
Bank given to secure the Obligations;
(b) (i) Liens on real estate or other property for taxes,
assessments, governmental charges or levies not yet delinquent and (ii) Liens
for taxes, assessments, judgments, governmental charges or levies or claims the
non-payment of which is being diligently contested in good faith by appropriate
proceedings and for which adequate reserves have been set aside on such
Person's books, but only so long as no foreclosure, distraint, sale or similar
proceedings have been commenced with respect thereto;
(c) Liens of carriers, warehousemen, mechanics, laborers
and materialmen incurred in the ordinary course of business for sums not yet
more than sixty (60) days past due or being diligently contested in good faith,
if adequate reserves shall have been set aside on such Person's books, but only
so long as no foreclosure, distraint, sale or similar proceedings have been
commenced with respect thereto;
(d) Liens incurred in the ordinary course of business in
connection with worker's compensation and unemployment insurance;
(e) Restrictions on the transfer of the Licenses or
assets of the Borrower or its Subsidiaries imposed by any of the Licenses as
presently in effect;
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(f) Easements, rights-of-way, and other similar
encumbrances on the use of real property which do not materially interfere with
the ordinary conduct of the business of such Person or the use of such
property;
(g) The reservations, limitations, provisos and
conditions, if any, expressed in any original grants of real property from the
Crown;
(h) Purchase money security interests to the extent
incurred in connection with the acquisition of any property or assets by the
Borrower or any of its subsidiaries permitted hereunder; provided, that
(1) such Lien shall attach only to the property
or asset acquired in such transaction and shall not extend to or cover
any other assets or properties of the Borrower or any of its
Subsidiaries;
(2) the Indebtedness secured or covered by such
Lien shall not exceed the cost of the asset or property acquired and
shall not be increased; and
(3) all such Indebtedness secured or covered by
such Liens shall not exceed $500,000 in the aggregate at anytime
outstanding;
(i) Undetermined and inchoate Liens, rights of distress
and charges incurred in the ordinary course of business which have not been
filed or exercised or which relate to obligations not due or payable, or if due
or payable, the validity of which is being contested diligently and in good
faith by appropriate proceedings, but only so long as no foreclosure,
distraint, sale or similar proceedings have been commenced with respect
thereto;
(j) Title defects or irregularities in respect of real
property which are of a minor nature and which in the aggregate do not
materially impair the use of such property for the purpose for which it is used
or the conduct of the business of such Person;
(k) The rights reserved to or vested in any Governmental
Entity by the terms of any lease, License, franchise, grant or permit or by any
statutory provision, to terminate any such lease, license, franchise, grant or
permit, or to require annual or other payments as a condition to the
continuance thereof; and
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(1) Any Liens resulting from the deposit of cash or securities
in connection with contracts, tenders or expropriation proceedings, or to secure
surety or appeal bonds, costs of litigation when required by law and public,
statutory and other like obligations incurred in the ordinary course of
business.
"Permitted Rating" shall mean, with respect to any Permitted
Investment, a rating for short-term indebtedness of R-1 (Middle) or better from
Dominion Bond Rating Service Limited or A-l+ from CBRS Inc. or a rating for
long-term indebtedness of A (High) or better from Dominion Bond Rating Service
Limited or A (High) from CBRS Inc.
"Person" shall mean an individual, corporation, limited liability
company, association, partnership, joint venture, trust or estate, an
unincorporated organization, any Governmental Entity or any other entity.
"Plan" shall mean an employee benefit plan within the meaning of
Section 3(3) of ERISA.
"Prime Rate" shall mean, for any particular day, a per annum interest
rate equal to the higher of (a) the variable rate of interest per annum,
calculated on the basis of a year of 365 days or 366 days (in the case of a
leap year), equal to the rate of interest per annum established and reported by
The Toronto-Dominion Bank to the Bank of Canada for such day as the variable
rate of interest per annum for determination of interest rates that The
Toronto-Dominion Bank charges to its customers of varying degrees of
creditworthiness in Canada for Canadian Dollar loans made by it in Canada, and
(b) the sum of the simple average of the rates per annum for Canadian Dollar
bankers' acceptances having a term of 30 days that appears on the Reuters
Screen CDOR Page as of 10:00 a.m. (Toronto time) for such day plus one percent
(1%). The Prime Rate is not necessarily the lowest rate of interest charged to
customers of The Toronto-Dominion Bank.
"Prime Rate Advance" shall mean a Collateralized Prime Rate Advance or
an Uncollateralized Prime Rate Advance.
"Prime Rate Basis" shall mean a simple interest rate equal to the sum
of (i) the Prime Rate and (ii) the Applicable Margin for Prime Rate Advances
which are Collateralized Advances or Uncollateralized Advances, as the case may
be. The Prime Rate Basis shall be adjusted automatically as of the opening of
business on the effective date of each change in the Prime Rate to account for
such change, and shall also be changed to reflect changes in the Applicable
Margin for Prime Rate Advances in accordance with Section 2.6(d).
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"Pro Forma Debt Service" shall mean, as of any date with respect of
any Person and its Subsidiaries, on a consolidated basis, with respect to the
next succeeding complete twelve (12) month period following the calculation
date, and after giving effect to any Interest Rate Hedge Agreements and taking
into account Bankers' Acceptances, the sum of the aggregate of all principal,
interest expense, fees and other payments payable by such Persons during such
next succeeding twelve (12) month period with respect to Indebtedness for Money
Borrowed of such Persons. For purposes of this definition, where interest
payments for the twelve (12) month period immediately succeeding the
calculation date are not fixed by way of Interest Rate Hedge Agreements,
Bankers' Acceptances or otherwise for the entire period, interest shall be
calculated on such Indebtedness for Money Borrowed for periods for which
interest payments are not so fixed at the Bankers' Acceptance Permitted
Collateral Rate for a Bankers' Acceptance having an Interest Period of twelve
(12) months as determined on the date of calculation; provided, however, that
if such Bankers' Acceptance Permitted Collateral Rate cannot be determined in
the reasonable opinion of the Administrative Agent, such interest shall be
calculated using the Prime Rate Basis as then in effect.
"Real Estate" shall mean the real estate of the Borrower and its
Subsidiaries held in fee simple (or an interest analogous to a fee simple
interest as it relates to real estate situate in the Province of Quebec).
"Release" when used as a verb includes release, spill, leak, emit,
deposit, discharge, leach, migrate or dispose into the environment and
"Release" when used as a noun has a correlative meaning.
"Remedial Action" shall mean any action, whether voluntary or
compelled, that is reasonably necessary to: (i) clean up, remove, treat or in
any other way deal with Hazardous Substances in the environment; (ii) prevent
any Release of Hazardous Substances where such Release would violate any
Environmental Laws or would endanger or threaten to endanger public health or
welfare or the environment; or (iii) perform remedial studies, investigations,
restoration and post-remedial studies, investigations and monitoring on, about
or in connection with the business or any of the Real Estate or other Assets
(including the Collateral).
"Reportable Event" shall mean, with respect to any Employee Pension
Plan subject to Title IV of ERISA, an event described in Section 4043(b) of
ERISA as to which the requirement of advance notice has not been waived or an
event described in Sections
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2615.11, 2615.12, 2615.13, 2615.15 or 2615.19 of PBGC regulations.
"Request for Advance" shall mean a certificate designated as a
"Request for Advance," signed by an Authorized Signatory of the Borrower
requesting an Advance hereunder, which shall be in substantially the form of
Exhibit C attached hereto, and shall, among other things, (a) specify the date
of the Advance, which shall be a Business Day, the amount of the Advance, the
type of Advance (Collateralized or Uncollateralized) and, with respect to
Collateralized Advances (if appropriate), the Interest Period selected by the
Borrower and (b) state that there shall not exist a Default as of the date of
such Advance and after giving effect thereto.
"Restricted Payment" shall mean (a) any direct or indirect
distribution, dividend or other payment to any Person (other than to the
Borrower or any wholly-owned Subsidiary of the Borrower) on account of any
general or limited partnership interest in, or shares of Capital Stock or other
securities of, the Borrower or any of its Subsidiaries (other than dividends
payable solely in the Capital Stock of such Person and stock splits),
including, without limitation, any direct or indirect distribution, dividend or
other payment to any Person (other than to the Borrower or any wholly-owned
Subsidiary of the Borrower) on account of any warrants or other rights or
options to acquire shares of Capital Stock of the Borrower or any of its
Subsidiaries; (b) any payment of principal of, or interest on, or payment into
a sinking fund for the retirement of, or any defeasance of subordinated debt;
and (c) any management, consulting or similar fees, or any interest thereon,
payable by the Borrower or any of its Subsidiaries to any partner, shareholder
or Affiliate of any such Person.
"Restricted Purchase" shall mean any payment (including, without
limitation, any sinking fund payment, prepayment or installment payment) on
account of the purchase, redemption or other acquisition or retirement of any
general or limited partnership interest in, or shares of Capital Stock of or
other securities or subordinated debt of the Borrower or any of the Borrower's
Subsidiaries (other than to the Borrower or any wholly-owned Subsidiary of the
Borrower), including, without limitation, any warrants or other rights or
options to acquire shares of Capital Stock of the Borrower or of any of the
Borrower's Subsidiaries or any loan, advance, release or forgiveness of
Indebtedness by the Borrower or any of its Subsidiaries to any partner,
shareholder or Affiliate of any such Person.
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"Sales and Distribution Agreement" shall mean that certain Sales and
Distribution Agreement dated as of October 28, 1994 between the Borrower and
Madison Telecommunications Inc. as amended by Amendment No. 1 dated as of
October 26, 1995.
"Security Documents" means those agreements and other documents in
favor of the Administrative Agent for the benefit of itself and the Banks
described in Schedule 2, as such documents may be amended or supplemented from
time to time, and any other agreement or instrument which may from time to time
be held by the Administrative Agent for the benefit of itself and the Banks as
security for all or any portion of the Obligations.
"Security interest" shall mean all Liens in favor of the
Administrative Agent, for the benefit of itself and the Banks, created or
intended to be created hereunder or under any of the Security Documents to
secure the Obligations.
"Site Specific Licenses" shall mean all licenses or other
authorizations granted in respect of the use of specific transmitter locations
pursuant to the Licenses listed on Schedule 1.
"Subsidiary" shall mean, as applied to any Person, (a) any corporation
of which more than fifty percent (50%) of the outstanding stock (other than
directors' qualifying shares) having ordinary voting power to elect a majority
of its board of directors, regardless of the existence at the time of a right
of the holders of any class or classes of securities of such corporation to
exercise such voting power by reason of the happening of any contingency, or
any partnership of which more than fifty percent (50%) of the outstanding
partnership interests, is at the time owned directly or indirectly by such
Person, or by one or more Subsidiaries of such Person, or by such Person and
one or more Subsidiaries of such Person, or (b) any other entity which is
directly or indirectly controlled or capable under the current facts of being
controlled by such Person, or by one or more Subsidiaries of such Person, or by
such Person and one or more Subsidiaries of such Person. The Subsidiaries of
the Borrower as of the Agreement Date are set forth on Schedule 3 attached
hereto.
"Substance" shall mean any substance, waste, liquid, gaseous or solid
matter, fuel, micro-organism, sound, vibration, ray, heat, odor, radiation,
energy vector, plasma, and organic or inorganic matter.
"Taxes" shall mean all taxes imposed by any Governmental Entity,
including income, profits, real property, personal property, goods and
services, sales, transfer, purchase,
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stumpage, registration, capital, excise, payroll, unemployment, disability,
employee's income withholding, social security or withholding.
"Total Debt" shall mean, as of any date with respect of any Person and
its Subsidiaries on a consolidated basis, the difference between (a) the
aggregate amount of Indebtedness for Money Borrowed, determined in accordance
with GAAP, minus (b) the aggregate principal amount of Collateralized Advances
and Face Amount of Collateralized Bankers' Acceptances outstanding on such
date.
"Total Subscribers" shall mean, as of any date, the aggregate number
of subscribers for the wireless messaging services of the Borrower Group on a
combined basis.
"Transponder Lease Agreement" shall mean any agreement by and between
the Borrower or any of its Subsidiaries and any other Person for the license,
lease or other agreement to use telecommunications satellites in the operation
of the business of the Borrower or such Subsidiaries and any other agreement
related thereto.
"U.S. Dollars" and "U.S. $" shall mean lawful money of the United
States of America.
"Uncollateralized Advance" shall mean an Uncollateralized Prime Rate
Advance.
"Uncollateralized Bankers' Acceptance" shall mean a Drawing which the
Borrower requests to be made as an Uncollateralized Bankers' Acceptance or is
continued as or converted into an Uncollateralized Bankers' Acceptance in
accordance with the provisions of Section 2.5 hereof.
"Uncollateralized Prime Rate Advance" shall mean an Uncollateralized
Advance which bears interest at the Prime Rate Basis and which the Borrower
requests to be made as an Uncollateralized Prime Rate Advance or is continued
or converted as an Uncollateralized Prime Rate Advance, in accordance with the
provisions of this Agreement, and which shall be in a principal amount of at
least $500,000 and in an integral multiple of $500,000.
"Units in Service" shall mean, as of any date, for the Borrower Group
on a combined basis, the aggregate number of wireless messaging units that are
operating pursuant to valid and binding agreements with customers, where the
customer is delinquent less than sixty (60) days (unless the amount for such
customer which is delinquent sixty (60) days or more constitutes
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less than thirty-five (35) percent of such customer's current monthly billing),
except for governmental or corporate customers delinquent less than ninety (90)
days that (a) have been serviced by such Person for at least six (6) months and
have a consistent prior payment history and in which the customer has made a
payment within the last forty-five (45) days equal to or greater than the
amount of the current monthly billing for such customer, or (b) have a regular
history of paying on their accounts amounts equal to or greater than the amount
of the current monthly billing for such customer and whose total account
receivable is (i) no older and (ii) no greater in dollar amount, than such
account receivable was on the date ninety (90) days prior.
Each definition of an agreement in this Article 1 shall include such
agreement as modified, amended or supplemented from time to time in accordance
herewith.
ARTICLE 2
Credit Facility
Section 2.1 Commitment. The Banks agree, severally, in accordance with
their respective Commitment Ratios and not jointly, upon the terms and subject
to the conditions of this Agreement, to make available to the Borrower such
Accommodations as may be requested by the Borrower, prior to the Maturity Date,
in an amount not at any one time outstanding to exceed, in the aggregate, the
Available Commitment. Each of the Banks shall, on the terms and conditions of
this Agreement, make its pro rata share of Advances, and Bankers' Acceptances
on the occasion of any Borrowing or Drawing, as applicable, available to the
Borrower under the Commitment. All Advances and Bankers' Acceptances requested
hereunder shall be made available to the Borrower in accordance with Sections
2.2, 2.3 and 2.5 hereof, respectively. Any notice given to the Administrative
Agent in connection with a requested Accommodation hereunder shall be given to
the Administrative Agent prior to 12:00 noon (Toronto time) in the case of
Advances and 1:00 p.m. (Toronto time) in the case of Bankers' Acceptances in
order for such Business Day to count toward the minimum number of Business Days
required.
Section 2.2 Uncollateralized Advances.
(a) Choice of Interest Rate, Etc. Any Uncollateralized Advance
shall be made as an Uncollateralized Prime Rate Advance.
(b) Manner of Borrowing.
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(i) Uncollateralized Advances. The Borrower shall give the
Administrative Agent irrevocable prior written notice prior to 12:00 noon
(Toronto time) at least one (1) Business Day prior to the date of any requested
Uncollateralized Prime Rate Advance in the form of a Request for Advance, or
telephonic notice followed immediately by a Request for Advance; provided,
however, that the Borrower's failure to confirm any telephonic notice with a
Request for Advance shall not invalidate any notice so given if acted upon by
the Administrative Agent. Upon receipt of such notice from the Borrower, the
Administrative Agent shall promptly notify each Bank by telephone of the
contents thereof.
(ii) Conversions of Uncollateralized Prime Rate Advances. At least
two (2) Business Days prior to the Payment Date for each Uncollateralized Prime
Rate Advance, the Borrower shall give the Administrative Agent written notice
specifying whether all or a portion of such Uncollateralized Prime Rate Advance
is to be converted, in whole or in part, to Uncollateralized Bankers'
Acceptances, Collateralized Prime Rate Advances, Cost of Funds Rate Advances or
Collateralized Bankers' Acceptances. The Borrower may, subject to the
provisions of this Agreement, convert the outstanding principal amount of an
Uncollateralized Prime Rate Advance, in whole or in part, to (A) Bankers'
Acceptances, by giving a Drawing Notice in accordance with Section 2.5 hereof
(including in accordance with the period for notice set forth in Section 2.5(b)
hereof), (B) Cost of Funds Rate Advances by giving a Request for Advance in
accordance with Section 2.3(c) hereof (including in accordance with the period
for notice set forth in Section 2.3(c)(ii) hereof), and (C) Collateralized
Prime Rate Advances by giving the Request for Advance in accordance with
Section 2.3(b) hereof (including in accordance with the period for notice set
forth in Section 2.3(b) hereof). The Borrower may convert the Uncollateralized
Prime Rate Advance on any Business Day. If the Uncollateralized Prime Rate
Advance to be converted cannot be converted to an aggregate Face Amount of
Bankers' Acceptances in an amount which may be drawn as Bankers' Acceptances
under this Agreement, then the amount which cannot be so converted shall,
subject to the other terms and conditions of this Agreement, thereafter
continue to be outstanding as an Uncollateralized Prime Rate Advance. When any
Uncollateralized Prime Rate Advances are to be converted, in whole or in part,
to Bankers' Acceptances, the Borrower shall repay and there shall become due
and payable on the Drawing Date, the principal amount of such Uncollateralized
Prime Rate Advances which are to be so
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converted. Upon such Payment Date such Uncollateralized Prime Rate
Advance will, subject to the provisions hereof, be so repaid and, as
applicable, reborrowed.
Section 2.3 Collateralized Advances.
(a) Choice of Interest Rate, Etc. Any Collateralized Advance
shall, at the option of the Borrower, be made as a Collateralized Prime Rate
Advance or as a Cost of Funds Rate Advance.
(b) Collateralized Prime Rate Advances.
(i) Advances. The Borrower shall give the
Administrative Agent irrevocable prior written notice prior to 12:00 noon
(Toronto time) at least one (1) Business Day prior to the date of any requested
Collateralized Prime Rate Advance in the form of a Request for Advance, or
telephonic notice followed immediately by a Request for Advance; provided,
however, that the Borrower's failure to confirm any telephonic notice with a
Request for Advance shall not invalidate any notice so given if acted upon by
the Administrative Agent. Upon receipt of such notice from the Borrower, the
Administrative Agent shall promptly notify each Bank by telephone of the
contents thereof.
(ii) Conversions of Collateralized Prime Rate
Advances. At least two (2) Business Days prior to the Payment Date for each
Collateralized Prime Rate Advance, the Borrower shall give the Administrative
Agent written notice specifying whether all or a portion of such Collateralized
Prime Rate Advance is to be converted, in whole or in part, to Collateralized
Bankers' Acceptances, Cost of Funds Rate Advances, Uncollateralized Prime Rate
Advances or Uncollateralized Bankers' Acceptances. The Borrower may, subject to
the provisions of this Agreement, convert the outstanding principal amount of a
Collateralized Prime Rate Advance, in whole or in part, to (A) Bankers'
Acceptances, by giving a Drawing Notice in accordance with Section 2.5 hereof
(including in accordance with the period for notice set forth in Section 2.5(b)
hereof), (B) Cost of Funds Rate Advances by giving a Request for Advance in
accordance with Section 2.3(c) hereof (including in accordance with the period
for notice set forth in Section 2.3(c)(ii) hereof), and (C) Uncollateralized
Prime Rate Advances by giving the Request for Advance in accordance with
Section 2.2 (b) hereof (including in accordance with the period for notice
set forth in Section 2.2(b) hereof). In the case of any such conversion, the
Borrower shall notify the Administrative Agent of the amount of any
Collateralized Prime Rate Advance to be converted. The Borrower may convert
a Collateralized Prime Rate Advance on any Business Day. If the Collateralized
Prime Rate Advance to be converted to
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Bankers' Acceptances cannot be converted to an aggregate Face Amount of
Bankers' Acceptances in an amount which may be drawn as Bankers' Acceptances
under this Agreement, then the amount which cannot be so converted shall,
subject to the other terms and conditions of this Agreement, thereafter
continue to be outstanding as a Collateralized Prime Rate Advance. When any
Collateralized Prime Rate Advances are to be converted, in whole or in part, to
Bankers' Acceptances the Borrower shall repay and there shall become due and
payable on the Drawing Date, the principal amount of such Collateralized Prime
Rate Advances which are to be so converted. Upon such Payment Date such
Collateralized Prime Rate Advance will, subject to the provisions hereof, be so
repaid and, as applicable, reborrowed.
(c) Cost of Funds Rate Advances.
(i) Advances. The Borrower shall give the
Administrative Agent irrevocable prior written notice prior to 12:00 noon
(Toronto time) at least one (1) Business Day prior to the date of any requested
Cost of Funds Rate Advance in the form of a Request for Advance, or telephonic
notice followed immediately by a Request for Advance; provided, however, that
the Borrower's failure to confirm any telephonic notice with a Request for
Advance shall not invalidate any notice so given if acted upon by the
Administrative Agent. Upon receipt of such notice from the Borrower, the
Administrative Agent shall promptly notify each Bank by telephone of the
contents thereof.
(ii) Conversions and Continuations of Cost of
Funds Rate Advances. At least two (2) Business Days prior to the Payment Date
for each Cost of Funds Rate Advance, the Borrower shall give the Administrative
Agent written notice specifying whether all or a portion of such Cost of Funds
Rate Advance is to be converted or continued, in whole or in part, to
Collateralized Bankers' Acceptances, Collateralized Prime Rate Advances,
Uncollateralized Prime Rate Advances, Uncollateralized Bankers' Acceptances, or
Cost of Funds Rate Advances. The Borrower may, subject to the provisions of
this Agreement, convert or continue the outstanding principal amount of a Cost
of Funds Rate Advance, in whole or in part, to (A) Bankers' Acceptances, by
giving a Drawing Notice in accordance with Section 2.5 hereof (including in
accordance with the period for notice set forth in Section 2.5(b) hereof), (B)
Collateralized Prime Rate Advances by giving a Request for Advance in
accordance with Section 2.3(b) hereof (including in accordance with the notice
provisions set forth in Section 2.3(b) hereof), (C) Uncollateralized Prime Rate
Advances by giving the Request for Advance in accordance with Section 2.2(b)
hereof (including in accordance with the notice provisions set forth in Section
2.2(b) hereof), and (D) Cost of Funds Rate Advances by giving a Request for
Advance in accordance with
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<PAGE> 35
Section 2.3(c)(i) hereof (including in accordance with the notice provisions
set forth in Section 2.3(c)(ii) hereof). In the case of any such conversion,
the Borrower shall notify the Administrative Agent of the amount of any Cost of
Funds Rate Advance to be converted. The Borrower may convert a Cost of Funds
Rate Advance on the Payment Date for such Advance. If the Cost of Funds Rate
Advance to be converted to Bankers' Acceptances cannot be converted to an
aggregate Face Amount of Bankers' Acceptances in an amount which may be drawn
as Bankers' Acceptances under this Agreement, then the amount which cannot be
so converted shall, subject to the other terms and conditions of this
Agreement, thereafter be converted to a Collateralized Prime Rate Advance. When
any Cost of Funds Rate Advances are to be converted or continued, in whole or
in part, to Bankers' Acceptances or Cost of Funds Rate Advances, as the case
may be, the Borrower shall repay and there shall become due and payable on the
Drawing Date or the date of the Advance, as the case may be, the principal
amount of such Cost of Funds Rate Advances which are to be so converted or
continued. Upon such Payment Date such Cost of Funds Rate Advance will,
subject to the provisions hereof, be so repaid and, as applicable, reborrowed.
(iii) Interest if no Notice of Selection of Interest Rate
Given. If the Borrower fails to give the Administrative Agent timely notice of
a continuation or conversion of a Cost of Funds Rate Advance, such Cost of
Funds Rate Advance shall, on its Payment Date, automatically be converted to a
Collateralized Prime Rate Advance (or, if subsection (d) of this Section 2.3 is
applicable, an Uncollateralized Prime Rate Advance).
(d) Automatic Conversion of Collateralized Advances and
Collateralized Bankers' Acceptances. If, on any date, the sum of the principal
amount of Collateralized Advances and the Face Amount of Collateralized
Bankers' Acceptances then outstanding exceeds the Equivalent Canadian Dollar
Amount of the amount of Permitted Collateral held by the Administrative Agent
pursuant to the Deposit Agreement on such date, (i) an amount of Collateralized
Advances up to the amount of such excess (beginning with Collateralized Prime
Rate Advances, then Cost of Funds Rate Advances) shall automatically (A) if
such Advance is a Collateralized Prime Rate Advance, be converted to an
Uncollateralized Prime Rate Advance, and (B) if such Advance is a Cost of Funds
Rate Advance, bear interest at the Prime Rate Basis for Uncollateralized
Advances from such date until the Payment Date for such Advance, and (ii) if
after such conversions of, or adjustments to, all Collateralized Advances there
remains an excess, the Borrower shall on such date pay to the Administrative
Agent for the benefit of the Banks an amount equal to the increased Drawing Fee
which would be payable for Uncollateralized
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Bankers' Acceptances from such date until the Payment Date for the Face Amount
of Collateralized Bankers' Acceptances equal to such excess.
Section 2.4 Notification of Banks; Disbursement.
(a) Notification of Banks. Upon receipt of a Request for
Advance, or a notice from the Borrower with respect to any outstanding Advance
prior to the Payment Date for such Advance, the Administrative Agent shall
promptly notify each Bank by telephone or telecopy of the contents thereof and
the amount of such Bank's pro rata portion of the Advance. Each Bank shall, not
later than 11:00 a.m. (Toronto time) on the date of borrowing specified in such
notice, make available to the Administrative Agent at the Administrative
Agent's Office, or at such account as the Administrative Agent shall designate,
the amount of its pro rata portion of any Advance which represents an
additional borrowing hereunder in immediately available funds.
(b) Disbursement.
(i) Prior to 2:00 p.m. (Toronto time) on the date
of an Advance hereunder, the Administrative Agent shall, subject to
the satisfaction of the conditions set forth in Article 3 hereof,
disburse the amounts made available to the Administrative Agent by the
Banks in like funds by (a) transferring the amounts so made available
by wire transfer pursuant to the Borrower's instructions, or (b) in
the absence of such instructions, crediting the amounts so made
available to the account of the Borrower maintained with the
Administrative Agent.
(ii) Unless the Administrative Agent shall have
received notice from a Bank prior to 11:00 a.m. (Toronto time) on the
date of any Advance that such Bank will not make available to the
Administrative Agent such Bank's pro rata portion of such Advance, the
Administrative Agent may assume that such Bank has made or will make
such pro rata portion available to the Administrative Agent on the
date of such Advance and the Administrative Agent may in its sole
discretion and in reliance upon such assumption, make available to the
Borrower on such date a corresponding amount. If and to the extent the
Bank does not make such pro rata portion available to the
Administrative Agent, such Bank agrees to repay to the Administrative
Agent on demand such corresponding amount together with interest
thereon, for each day from the date such amount is made available to
the Borrower until the date such amount is repaid to the
Administrative Agent, at the Prime Rate.
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(iii) If such Bank shall repay to the
Administrative Agent such corresponding amount, such amount so repaid
shall constitute such Bank's pro rata portion of the applicable
Advance for purposes of this Agreement. If such Bank does not repay
such corresponding amount immediately upon the Administrative Agent's
demand therefor, the Administrative Agent shall notify the Borrower
and the Borrower shall immediately pay such corresponding amount to
the Administrative Agent, with interest at the Prime Rate. The failure
of any Bank to fund its pro rata portion of any Advance shall not
relieve any other Bank of its obligation, if any, hereunder to fund
its respective pro rata portion of the Advance on the date of such
borrowing, but no Bank shall be responsible for any such failure of
any other Bank.
(iv) In the event that, at any time when the
Borrower is not in Default and has otherwise satisfied each of the
conditions in Article 3 hereof, a Bank for any reason fails or refuses
to fund its pro rata portion of such Advance, then, until such time as
such Bank has funded its pro rata portion of such Advance (which late
funding shall not absolve such Bank from any liability it may have to
the Borrower), or all other Banks have received payment in full from
the Borrower (whether by repayment or prepayment) or otherwise of the
principal and interest due in respect of such Advance, such
non-funding Bank shall not have the right (A) to vote regarding any
issue on which voting is required or advisable under this Agreement or
any other Loan Document, and such Bank's pro rata portion of the
Accommodations shall not be counted as outstanding for purposes of
determining "Majority Banks" hereunder, or (B) to receive payments of
principal, interest or fees from the Borrower, the Administrative
Agent or the other Banks in respect of its pro rata portion of the
Accommodations.
Section 2.5 Bankers' Acceptances.
(a) Acceptances and Drafts. The Banks agree subject to
the terms and conditions of this Agreement to create acceptances ("Bankers'
Acceptances") by accepting Drafts of the Borrower under the Available
Commitment from time to time, on any Business Day prior to the Maturity Date,
which Drafts have an aggregate Face Amount equal to such Bank's pro rata share
of the total Accommodations being made by way of Bankers' Acceptances. Bankers'
Acceptances shall be created by Banks acceptance of Drafts. Each Drawing shall
be in an aggregate amount of not less than $1,000,000 and in an integral amount
of $100,000.
(b) Procedure for Drawing. The Borrower shall give the
Administrative Agent irrevocable prior written notice prior
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to 1:00 p.m. (Toronto time) at least two (2) Business Days prior to the date of
the proposed Drawing in the form of a Drawing Notice, or telephonic notice
followed immediately by a Drawing Notice; provided, however, that the
Borrower's failure to confirm any telephonic notice with a Drawing Notice shall
not invalidate any notice so given if acted upon by the Administrative Agent.
Upon receipt of a Drawing Notice, the Administrative Agent shall be responsible
for making all necessary arrangements with each of the Banks with respect to
the stamping of Bankers' Acceptances in the manner contemplated in this Section
2.5. The Borrower shall not in any Drawing Notice select an Interest Period for
a Draft which ends after the Maturity Date or which conflicts with the
repayments provided for in Sections 2.8 or 2.10(b) hereof.
(c) Form of Drafts. Each Draft presented by the Borrower
for acceptance by a Bank: (i) shall be in a Face Amount of not less than
$1,000,000 and in an integral multiple of $100,000; (ii) shall be dated the
date of the Drawing; (iii) shall mature and be payable by the Borrower on a
Business Day which occurs one (1), two (2), three (3) or six (6) months (nine
(9) or twelve (12) months subject to availability) after the Drawing Date; and
(iv) be substantially in the form of Exhibit A hereto. The acceptance endorsed
by a Bank on any Draft shall be substantially in the form of Exhibit D hereto.
The Borrower hereby renounces, and shall not claim, any days of grace for the
payment of any Bankers' Acceptances.
(d) Acceptance of Drafts. Not later than 12:00 noon
(Toronto time) on the Drawing Date specified for a relevant Drawing, a Bank:
(i) shall complete one or more Drafts dated the date of such Drawing in an
aggregate Face Amount equal to such Bank's pro rata portion of the amount of
such Drawing and with the Interest Period specified by the Borrower in its
Drawing Notice; (ii) shall accept the Drafts; and (iii) shall purchase the
Bankers' Acceptance thereby created in the manner provided in Section 2.5(e)
hereof.
(e) Purchase of Bankers' Acceptances. The Borrower shall
request a quotation from the Administrative Agent of the purchase price of all
Bankers' Acceptances created hereunder on the Drawing Date for such Bankers'
Acceptances. The Administrative Agent, after consultation with the Banks, shall
notify the Borrower of the purchase price for the Bankers' Acceptance in the
Face Amount and for the Interest Period specified by the Borrower. The purchase
price shall be calculated by reference to a discount rate which is an
arithmatic average (rounded up to the nearest 0.01%) of the discount rates of
the Banks determined in accordance with normal market practice at or about
10:00 a.m. (Toronto time) on the applicable Drawing Date for Bankers'
Acceptances of each Bank having a comparable
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Face Amount and comparable maturity date as such Bankers' Acceptances. Each
Bank shall purchase all Bankers' Acceptances created by such Bank hereunder at
the purchase price quoted by the Administrative Agent to such Bank and such
purchase price shall be paid and satisfied by such Bank making payment to the
Administrative Agent in the amount of such purchase price less the applicable
Drawing Fee. The Administrative Agent shall disburse the amounts made available
to the Administrative Agent by the Banks in like funds by (a) transferring the
amounts so made available by wire transfer pursuant to the Borrower's
instructions, or (b) in the absence of such instructions, crediting the amounts
so made available to the account of the Borrower maintained with the
Administrative Agent. Bankers' Acceptances purchased by a Bank hereunder may be
held by it for its own account until maturity or sold by it at any time prior
thereto in the relevant market therefor in Canada, in the Bank's sole
discretion.
(f) Reimbursement at Payment Date. Subject to Section
2.5(g) hereof, the Borrower shall pay to the Administrative Agent on behalf of a
Bank in same day funds, and there shall become due and payable at 11:00 a.m.
(Toronto time) on the Payment Date for each Bankers' Acceptance, an amount in
Canadian Dollars equal to the Face Amount of such Bankers' Acceptance accepted
by such Bank. The Borrower shall make each payment hereunder in respect of
Bankers' Acceptances by deposit of the required funds in accordance with Section
2.12 hereof. If the Borrower fails to pay the Bank pursuant to this Section 2.5
(f), or to convert or renew the Face Amount of such Bankers' Acceptance pursuant
to Section 2.5(g) hereof, the unpaid amount due and payable to such Bank in
respect of such Bankers' Acceptance shall automatically be converted to a Prime
Rate Advance on the Payment Date, and shall bear interest: (i) for the first
three (3) days from the date on which such amount is converted, or until such
earlier date as a Request for Advance is given in accordance with Section 2.2 or
2.3 hereof, as the case may be, at a per annum rate of interest equal to 115% of
the Prime Rate Basis; and (ii) thereafter, at a rate per annum equal to the
Prime Rate Basis, in each case, until such amount is paid in full.
(g) Renewal or Conversion of Bankers' Acceptances. For
effect on the Payment Date of a Bankers' Acceptance, the Borrower may elect:
(i) to renew all or a portion of the Face Amount of such Bankers' Acceptance by
giving a Drawing Notice in accordance with this Section 2.5 (including in
accordance with the period for notice set forth in Section 2.5(b) hereof); or
(ii) to have all or a portion of the Face Amount of such Bankers' Acceptance
converted to an Advance, by giving a Request for Advance in accordance with
Section 2.2 or 2.3 hereof (including in accordance with the period for notice
set forth in Section 2.2
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or 2.3 hereof, as the case may be). If the Bankers' Acceptance to be converted
cannot be converted into an Advance in an amount which may be outstanding as an
Advance under this Agreement, then the amount which cannot be so converted
shall be repaid to the Administrative Agent on behalf of a Bank on the date of
such conversion in accordance with Section 2.5(f) hereof.
(h) Prepayments. Except as required by Section 2.9 or
2.10 hereof, no repayment of Bankers' Acceptances shall be made by the
Borrower to a Bank prior to the Payment Dates of such Bankers' Acceptances as
have been created by the Borrower. If the Borrower shall prepay any Bankers'
Acceptances accepted by a Bank as required by Section 2.9 or 2.10 hereof then
(unless such prepayment has been rescinded or otherwise is required to be
returned by such Bank for any reason), as between the Borrower and such Bank,
such Bank shall thereafter be solely responsible for the payment of the Face
Amount of such Bankers' Acceptances as have been created by the Borrower to the
holder or holders thereof in accordance with the terms thereof.
(i) Circumstances Making Bankers' Acceptances
Unavailable. If the Banks or any one or more of them determine in good faith
that by reason of circumstances affecting the money market there is no market
for Bankers' Acceptances and advises the Administrative Agent and the Borrower
to such effect, in writing, then the right of the Borrower to request a Drawing
shall be suspended until the Banks determine that the circumstances causing
such suspension no longer exist and the Administrative Agent so notifies the
Borrower. Any Drawing Notice which is outstanding at the time of such notice by
the Banks or any one or more of them shall be deemed to be a Request for
Advance requesting a Prime Rate Advance in the principal amount equal to the
requested Face Amount in such Drawing Notice.
(j) Presigned Draft Forms. To enable the Banks to create
Bankers' Acceptances or complete Drafts in the manner specified in this Section
2.5, the Borrower shall supply the Banks with such number of Drafts as the
Banks may reasonably request, duly endorsed and executed on behalf of the
Borrower by any one or more Authorized Signatories in accordance with the
Borrower's required signing authorities as evidenced by the then current
borrowing by-law and resolution, certified copies of which have been delivered
to the Bank. Each Bank shall exercise such care in the custody and safekeeping
of Drafts as it would exercise in the custody and safekeeping of similar
property owned by it. The signatures of such Authorized Signatories may be
mechanically reproduced in facsimile and Drafts and Bankers' Acceptances
bearing such facsimile signatures shall be binding upon the Borrower as if they
had been manually signed by such Authorized Signatories. Notwithstanding that
any of the
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Authorized Signatories whose manual or facsimile signature appears on any Draft
as one of such Authorized Signatories may no longer hold office at the date
thereof or at the date of its acceptance by a Bank hereunder or at any time
thereafter, any Draft or Bankers' Acceptance so signed shall be valid and
binding upon the Borrower. A Bank shall not be liable for its failure to accept
a Bankers' Acceptance as required hereunder if the cause of such failure is, in
whole or in part, due to the failure of the Borrower to provide Drafts, duly
endorsed and executed on behalf of the Borrower, on a timely basis.
Section 2.6 Interest; Fees.
(a) Interest on Uncollateralized Prime Rate Advances.
Interest on each Uncollateralized Prime Rate Advance shall be computed daily
and shall be payable at the Prime Rate Basis for such Advance, in arrears on
the applicable Payment Date. Interest on Uncollateralized Prime Rate Advances
then outstanding shall also be due and payable on the Maturity Date.
(b) Interest on Collateralized Advances.
(i) Cost of Funds Rate. Interest on each Cost of
Funds Rate Advance shall be computed daily and shall be payable at the Cost of
Funds Rate for such Advance, in arrears on the applicable Payment Date, and, in
addition, if the Interest Period for a Cost of Funds Rate Advance exceeds one
(1) month, interest on such Cost of Funds Rate Advance shall also be due and
payable in arrears on every one (1) month anniversary of the beginning of such
Interest Period. Interest on Cost of Funds Rate Advances then outstanding shall
also be due and payable on the Maturity Date.
(ii) Collateralized Prime Rate Advances. Interest
on each Collateralized Prime Rate Advance shall be computed daily and shall be
payable at the Prime Rate Basis for such Advance, in arrears on the applicable
Payment Date. Interest on Collateralized Prime Rate Advances then outstanding
shall also be due and payable on the Maturity Date.
(c) Interest Upon Default. Immediately upon the
occurrence and during the continuance of an Event of Default under (1) Section
8.1(b) hereof, or (2) resulting from a failure to comply with any provision of
Article 7 hereof, the outstanding Obligations (to the extent permitted by
Applicable Law) shall bear interest at the Default Rate. Such interest shall
be payable on demand by the Majority Banks and shall accrue until the earlier
of (i) waiver or cure of the applicable Event of Default, (ii) agreement by the
Majority Banks (or, if applicable to the underlying Event of Default, all of
the Banks) to rescind
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the charging of interest at the Default Rate, or (iii) payment in full of the
Obligations.
(d) Applicable Margin. With respect to any Accommodation,
the Applicable Margin shall be determined by the Administrative Agent based
upon the Leverage Ratio as of the end of the fiscal quarter most recently
ended, effective as of the fifth (5th) Business Day after the financial
statements referred to in Section 6.1 or 6.2 hereof, as the case may be, are
furnished to the Administrative Agent and each Bank for such fiscal quarter, as
follows:
<TABLE>
<CAPTION>
Collateral-
ized Collateral- Uncollateralized
Bankers' ized Prime Rate Uncollateralized
Acceptances Advances Advance Bankers'
Applicable Applicable Applicable Acceptance
Leverage Ratio Margin Margin Margin Applicable Margin
- -------------- ------ ------ ------ -----------------
<S> <C> <C> <C> <C> <C>
A. Greater than
6.00:1 0.500% 0.00% 2.000% 3.000%
B. Greater than
5.00:1, but
less than or
equal to
6.00:1 0.500% 0.00% 1.750% 2.750%
C. Greater than
4.00:1, but
less than or
equal to
5.00:1 0.500% 0.00% 1.500% 2.500%
D. Greater than
3.00:1, but
less than or
equal to
4.00:1 0.500% 0.00% 1.000% 2.000%
E. Less than or
equal to
3.00:1 0.500% 0.00% 0.500% 1.500%
</TABLE>
Notwithstanding the foregoing, if the Borrower shall fail
timely to deliver to the Administrative Agent the financial statements
required for the calculation of the Leverage Ratio for any fiscal
quarter, then commencing with the fifth (5th) Business Day after the
date such financial statements were due and continuing through the
fifth (5th) Business Day following the date of delivery thereof, the
Leverage Ratio for such period shall be conclusively presumed to be,
and the Applicable Margin shall be calculated based upon, the Leverage
Ratio which is one level greater than the Leverage Ratio in effect for
the immediately preceding fiscal quarter for which financial
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statements were delivered or were due to be delivered. If, for any
reason, the Leverage Ratio cannot be calculated or determined, the
Applicable Margin shall be based upon the Leverage Ratio set forth for
level A above.
Section 2.7 Fees.
(a) Commitment Fees. The Borrower agrees to pay each of
the Banks, in accordance with their respective Commitment Ratios, commitment
fees as follows: (i) a commitment fee on the aggregate unborrowed available
balance of the Commitment, for each day from June 19, 1996 until the Maturity
Date at the rate of five-tenths of one percent (0.500%) per annum and (ii) a
commitment fee on the aggregate unborrowed unavailable balance of the
Commitment, for each day from June 19, 1996 until the Maturity Date at the rate
of three-eighths of one percent (0.375%) per annum. Such commitment fees shall
be computed daily on the basis of a year of 365 or 366 days (in the case of a
leap year), shall be payable quarterly in arrears on the last day of each
quarter, and shall be fully earned when due and non-refundable when paid. A
final payment of all commitment fees then payable shall also be due and payable
on the Maturity Date.
(b) Drawing Fees. Drawing Fees for Bankers' Acceptances
hereunder shall be payable in advance on the date of its respective Drawing,
and shall be fully earned when due and non-refundable when paid.
Section 2.8 Mandatory Commitment Reductions. Commencing June 30,
1999 and at the end of each fiscal quarter thereafter, an amount equal to fifty
percent (50%) of the Commitment as in effect on June 29, 1999, shall be
automatically and permanently reduced by the percentages set forth below:
<TABLE>
<CAPTION>
Quarterly Percentage
Reduction of an Amount
Equal to fifty percent
(50%) of Commitment In
Dates of Commitment Reduction Effect On June 29, 1999
----------------------------- -----------------------
<S> <C>
June 30, 1999, September 30, 1999
December 31, 1999 and March 31, 2000 2.000%
June 30, 2000, September 30, 2000
December 31, 2000 and March 31, 2001 6.750%
June 30, 2001, September 30, 2001
December 31, 2001 and March 31, 2002 9.500%
June 30, 2002, September 30, 2002
December 31, 2002 and March 31, 2003 6.750%
</TABLE>
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The Borrower shall make a repayment of the Accommodations outstanding under the
Commitment, together with accrued interest thereon, on or before the effective
date of each reduction in the Commitment under this Section 2.8, such that the
aggregate principal amount of the Accommodations outstanding at no time exceeds
the Commitment as so reduced. In addition, any remaining unpaid principal and
interest under the Commitment shall be due and payable in full on the Maturity
Date.
Section 2.9 Optional Prepayments; Commitment Reductions.
(a) Prepayment of Accommodations. The Borrower may
without penalty (but subject to Section 2.13 hereof) at any time prepay in full
or in part the principal amount of any Advance prior to the Payment Date for
such Advance, upon three (3) Business Days' prior written notice to the
Administrative Agent of such prepayment. Partial prepayments shall be in a
principal amount of not less than $1,000,000.00, and in an integral multiple of
$500,000.00.
(b) Commitment Reduction. The Borrower may without
penalty (but subject to Section 2.13 hereof) at any time terminate or
permanently reduce all or any part of the Commitment by giving the
Administrative Agent and the Banks at least three (3) Business Days' prior
written notice thereof; provided, however, that any reduction shall reduce the
Commitment in a principal amount of at least $3,500,000.00 and in an integral
multiple of $500,000.00, and provided, further, that no such reduction shall be
permitted if it would require a prepayment of a Bankers' Acceptance. The
Borrower shall make any required repayment or prepayment of Accommodations
outstanding under the Commitment, plus accrued interest on such portion of the
Accommodations and any accrued fees in respect thereof, on or before the
effective date of the reduction of the Commitment, so that the principal amount
of the Accommodations outstanding after such repayment or prepayment does not
exceed the Commitment as so reduced. The Borrower shall not have any right to
rescind any termination or reduction pursuant to this Section 2.9(b).
Reductions in the Commitment after June 30, 1999 pursuant to this Section
2.9(b) shall be applied pro rata over the Commitment reduction schedule set
forth in Section 2.8 hereof.
Section 2.10 Mandatory Repayments. In addition to the scheduled
Commitment reductions provided for in Section 2.8 hereof, the Borrower shall
repay the obligations as follows:
(a) Accommodations in Excess of Available Commitment. If,
at any time, the amount of the Accommodations then outstanding under the
Commitment shall exceed the Available
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Commitment, the Borrower shall, on such date and subject to Section 2.13
hereof, make a repayment of the principal amount of the Accommodations in an
amount equal to such excess, together with any accrued interest and fees with
respect thereto. If any such repayment results in a prepayment of any Bankers'
Acceptance, the Borrower shall make a deposit with the Administrative Agent in
the Face Amount of such Bankers' Acceptances and hereby irrevocably authorizes
and directs the Administrative Agent to apply such payment to the Borrower's
reimbursement obligations in respect of such Drawing on the Payment Date
therefor.
(b) Maturity Date. In addition to the foregoing, a final
payment of all Obligations then outstanding shall be due and payable on the
Maturity Date.
Section 2.11 Evidence of Obligations; Accommodation Accounts.
(a) The indebtedness of the Borrower in respect of all
Obligations (other than Accommodations and interest) hereunder shall be prima
facie evidenced by the account records maintained by the Administrative Agent.
The failure of the Administrative Agent to correctly record any amount or date
shall not, however, affect the obligation of the Borrower to pay amounts due
hereunder to the Administrative Agent or any of the Banks in accordance with
this Agreement.
(b) Each Bank may open and maintain on its books in the
name of the Borrower a loan account with respect to its pro rata portion of the
Accommodations and interest thereon. Each Bank which opens such a loan account
shall debit such loan account for the principal amount of its pro rata
portion of each Advance made by it and accrued interest thereon, and shall
credit such loan account for each payment on account of principal of or
interest on its Accommodations. The records of a Bank with respect to the loan
account maintained by it shall be prima facie evidence of its pro rata portion
of the Accommodations and accrued interest thereon absent manifest error, but
the failure of any Bank to make any such notations or any error or mistake in
such notations shall not affect the Borrower's repayment obligations with
respect to such Accommodations.
Section 2.12 Manner of Payment.
(a) Each payment (including any prepayment) by the
Borrower on account of the principal of or interest on the Accommodations,
commitment fees and any other amount owed to the Banks or the Administrative
Agent or any of them under this Agreement or the other Loan Documents shall be
made not later
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<PAGE> 46
than 1:00 p.m. (Toronto time) on the date specified for payment under this
Agreement to the Administrative Agent at the Administrative Agent's Office, for
the account of the Banks or the Administrative Agent, as the case may be, in
lawful Canadian currency in immediately available funds. Any payment received
by the Administrative Agent after 1:00 p.m. (Toronto time) shall be deemed
received on the next Business Day. Receipt by the Administrative Agent of any
payment intended for any Bank or Banks hereunder prior to 1:00 p.m. (Toronto
time) on any Business Day shall be deemed to constitute receipt by such Bank or
Banks on such Business Day. In the case of a payment for the account of a Bank,
the Administrative Agent will promptly thereafter distribute the amount so
received in like funds to such Bank. If the Administrative Agent shall not have
received any payment from the Borrower as and when due, the Administrative
Agent will promptly notify the Banks accordingly.
(b) Prior to the declaration of an Event of Default under
Section 8.2 hereof, if some but less than all amounts due from the Borrower are
received by the Administrative Agent with respect to the obligations, the
Administrative Agent shall distribute such amounts in the following order of
priority, all on a pro rata basis to the Banks: (i) to the payment on a pro
rata basis of any fees or expenses then due and payable to the Administrative
Agent and the Banks, or any of them; (ii) to the payment of interest then due
and payable on the Accommodations; (iii) to the payment of all other amounts
not otherwise referred to in this Section 2.12(b) then due and payable to the
Administrative Agent and the Banks, or any of them, hereunder or under any
other Loan Document; and (iv) to the payment of principal then due and payable
on the Accommodations.
(c) Subject to any contrary provisions in the definition
of Interest Period, if any payment under this Agreement or any of the other
Loan Documents is specified to be made on a day which is not a Business Day, it
shall be made on the next Business Day, and such extension of time shall in
such case be included in computing interest and fees, if any, in connection
with such payment.
Section 2.13 Reimbursement.
(a) Upon the earlier of demand or the Maturity Date, the
Borrower shall pay to the Administrative Agent or the Banks such amount or
amounts as will compensate the Administrative Agent or the Banks for any loss,
cost or expense incurred by them: (i) as a result of (A) failure by the
Borrower to borrow any Cost of Funds Rate Advance after having given notice of
its intention to borrow in accordance with Section 2.3 hereof (whether by
reason of the Borrower's election not to proceed or
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<PAGE> 47
the non-fulfillment of any of the conditions set forth in Article 3 hereof), or
(B) prepayment (or failure to prepay after giving notice thereof) of any Cost
of Funds Rate Advance in whole or in part prior to its Payment Date; or (ii)
with respect to any Bankers' Acceptance arising from any Claim, including legal
fees and disbursements, respecting the collection of amounts owing by the
Borrower hereunder in respect of such Bankers' Acceptance or the enforcement of
the Administrative Agent's or Banks' rights hereunder in respect of such
Bankers' Acceptance, including legal proceedings attempting to restrain the
Administrative Agent or the Banks from paying any amount under such Bankers'
Acceptance, except for any loss, cost or expense resulting from the gross
negligence or willful misconduct of the Administrative Agent or such Bank, as
applicable, as determined by a final, nonappealable judicial order of a court
of competent jurisdiction. Such Bank's good faith determination of the amount
of such losses or out-of-pocket expenses, as set forth in writing and
accompanied by calculations in reasonable detail demonstrating the basis for
its demand, shall be prima facie evidence of such losses or expenses absent
manifest error.
(b) Losses subject to reimbursement hereunder shall
include, without limiting the generality of the foregoing, expenses incurred by
any Bank or any participant of such Bank permitted hereunder in connection with
the re-employment of funds prepaid, paid, repaid, not borrowed, or not paid,
as the case may be, and will be payable as a result of acceleration of the
obligations.
Section 2.14 Pro Rata Treatment.
(a) Advances. Each Advance from the Banks hereunder shall
be made pro rata on the basis of the respective Commitment Ratios of the Banks.
(b) Payments Prior to Declaration of Event of Default.
Except as provided in Section 2.5(f) hereof and Article 10 hereof, each payment
and prepayment of principal of the Accommodations and each payment of interest
on the Accommodations, shall be made to the Banks pro rata on the basis of
their respective unpaid principal amounts outstanding hereunder immediately
prior to such payment or prepayment. If any Bank shall obtain any payment
(whether involuntary, through the exercise of any right of set-off, or
otherwise) on account of the Accommodations in excess of its pro rata share of
the Accommodations under its Commitment Ratio, such Bank shall forthwith
purchase from the other Banks such participations in the portion of the
Accommodations made by them as shall be necessary to cause such purchasing Bank
to share the excess payment ratably with each of them; provided, however, that
if all
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<PAGE> 48
or any portion of such excess payment is thereafter recovered from such
purchasing Bank, such purchase from each Bank shall be rescinded and such Bank
shall repay to the purchasing Bank the purchase price to the extent of such
recovery. The Borrower agrees that any Bank so purchasing a participation from
another Bank pursuant to this Section 2.14(b) may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right of
set-off) with respect to such participation as fully as if such Bank were the
direct creditor of the Borrower in the amount of such participation.
(c) Payments Subsequent to Declaration of Event of
Default. Subsequent to the acceleration of the Accommodations under Section 8.2
hereof, payments and prepayments made to the Administrative Agent or the Banks
or otherwise received by any of them (from realization on Collateral for the
Obligations or otherwise) on account of the Accommodations shall be distributed
as follows: first, to the Administrative Agent's reasonable costs and expenses,
if any, incurred in connection with the collection of such payment or
prepayment, including, without limitation, any reasonable costs incurred in
connection with the sale or disposition of any Collateral for the Obligations;
second, to the payment of fees then due and payable to the Administrative Agent
and the Banks and any reasonable costs and expenses, if any, incurred by any of
the Banks under Section 11.2 hereof, pro rata on the basis of the amount of
such Obligations; third, to any unpaid interest which may have accrued on the
Obligations, pro rata on the basis of the amount of such obligations; fourth,
to any unpaid principal or the Face Amount of the Obligations and Obligations
under Interest Rate Hedge Agreements, pro rata on the basis of the amount of
such obligations; fifth, to damages incurred by the Administrative Agent or any
Bank by reason of any breach hereof or of any other Loan Document, pro rata on
the basis of the amount of such Obligations; and sixth, upon satisfaction in
full of all remaining Obligations, to the Borrower or as otherwise required by
Applicable Law.
ARTICLE 3
Conditions Precedent
Section 3.1 Conditions Precedent to Agreement. The obligation of
the Banks to undertake the Commitment and the effectiveness of this Agreement
are subject to the prior or contemporaneous fulfillment of each of the
following conditions:
(a) The Administrative Agent and the Banks shall have
received each of the following:
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<PAGE> 49
(i) the loan certificate of the Borrower dated as
of the Agreement Date, in substantially the form attached hereto as
Exhibit E, including a certificate of incumbency with respect to each
Authorized Signatory of such Person, together with the following
items: (A) a true, complete and correct copy of the Certificate and
Articles of Incorporation and By-laws of the Borrower as in effect on
the Agreement Date, (B) certificates of status, compliance or good
standing for the Borrower issued by the appropriate government
officials of the jurisdiction of incorporation of the Borrower and for
each jurisdiction in which the Borrower carries on business, (C) a
true, complete and correct copy of the corporate resolutions of the
Borrower authorizing the Borrower to execute, deliver and perform this
Agreement and the other Loan Documents to which it is a party and the
transactions contemplated hereby and thereby, and (D) a true, complete
and correct copy of any shareholders' agreements or voting trust
agreements in effect with respect to the Capital Stock of the
Borrower;
(ii) a loan certificate of each Subsidiary of the
Borrower dated as of the Agreement Date, in substantially the form
attached hereto as Exhibit F, including a certificate of incumbency
with respect to each Authorized Signatory of such Person, together
with the following items: (A) a true, complete and correct copy of the
Certificate and Articles of Incorporation or Certificate of
Partnership, as applicable, of such Person as in effect on the
Agreement Date, (B) a true, complete and correct copy of the By-laws
or Partnership Agreement, as applicable, of such Person as in effect
on the Agreement Date, (C) certificates of status, compliance or good
standing for such Person issued by the appropriate government
officials of the jurisdiction of incorporation or formation, as
applicable, of such Person and for each jurisdiction in which such
Person is required to qualify to do business, (D) a true, complete and
correct copy of the corporate resolutions of such Person (or another
appropriate Person) authorizing such Person to execute, deliver and
perform the Loan Documents to which it is party and the transactions
contemplated thereby, and (E) a true, complete and correct copy of any
shareholders' agreements or voting trust agreements in effect with
respect to the Capital Stock of such Person;
(iii) duly executed Security Documents;
(iv) evidence of the registration and perfection
of the Security Documents in all offices where such registration,
filing or recording is necessary or desirable to
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protect any rights or remedies of the Administrative Agent and the
Banks thereunder;
(v) copies of insurance binders or certificates
covering the assets of the Borrower and its Subsidiaries, and
otherwise meeting the requirements of Section 5.5 hereof, together
with copies of the underlying insurance policies;
(vi) legal opinions of (a) McCarthy Tetrault,
Canadian counsel to the Borrower and its Subsidiaries; (b) local
counsel opinions for each of the Canadian provinces, each as counsel
to the Borrower and its Subsidiaries, and (c) Bingham, Dana & Gould,
counsel to PageNet and Paging Network Canadian Holdings, Inc., each
addressed to each Bank and the Administrative Agent, and dated as of
the Agreement Date;
(vii) unaudited financial information of the
Borrower and its Subsidiaries on a consolidated basis through the
fiscal quarter ending March 31, 1996 and the month ending April 30,
1996 and certified by the chief financial officer or the chief
executive officer of the Borrower;
(viii) lien search results with respect to the
Borrower and its Subsidiaries from appropriate jurisdictions; and
(ix) all such other documents as the
Administrative Agent or any Bank may reasonably request, certified by
an appropriate governmental official or an Authorized Signatory
if so requested.
(b) The Administrative Agent and the Banks shall have
received evidence satisfactory to them that all Necessary Authorizations,
including any consent or authorization of Industry Canada and all other
necessary consents to the closing of this Agreement and the other Loan
Documents, have been obtained or made, are in full force and effect and are not
subject to any pending or, to the knowledge of the Borrower, threatened
reversal or cancellation, and the Administrative Agent and the Banks shall have
received a certificate of an Authorized Signatory so stating.
(c) The Borrower shall certify to the Administrative
Agent and the Banks that each of the representations and warranties in Article
4 hereof are true and correct as of the Agreement Date and that no Default or
Event of Default then exists or is continuing.
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(d) There shall not exist as of the Agreement Date any
action, suit, proceeding or investigation pending against, or, to the knowledge
of the Borrower, threatened against or in any manner relating adversely to, the
Borrower, any of its Subsidiaries, any of their respective properties, which,
in the judgment of the Administrative Agent, could be expected to have a
Materially Adverse Effect.
(e) No event shall have occurred and no condition shall
exist which, in the judgment of the Administrative Agent, has had or could be
expected to have a Materially Adverse Effect.
(f) The Administrative Agent and the Banks shall have
received evidence satisfactory to them of the simultaneous closing of the
MadTel Holdings Agreement dated as of even date hereof.
(g) The Administrative Agent and the Banks shall have
received all agreements entered into, in connection with the Business, by
Paging Network, Inc. and Madison Venture Corporation and their respective
Subsidiaries, which agreements shall be in form and substance satisfactory to
the Administrative Agent and the Banks and shall each be collaterally assigned
to the Administrative Agent for the benefit of the Banks.
(h) The Administrative Agent and the Banks and their
counsel shall have received payment of all fees due and payable on the
Agreement Date.
Section 3.2 Conditions Precedent to All Accommodations. The
obligation of the Banks to make any Accommodation hereunder is subject to the
fulfillment of each of the following conditions immediately prior to or
contemporaneously with such Accommodation satisfactory to the Majority Banks:
(a) All of the representations and warranties of the
Borrower under this Agreement and the other Loan Documents (including, without
limitation, all representations and warranties with respect to the Borrower's
Subsidiaries), which, pursuant to Section 4.2 hereof or otherwise, are made at
and as of the time of such Accommodation, shall be true and correct at such
time in all material respects, both before and after giving effect to the
application of the proceeds of such Accommodation, and after giving effect to
any updates to information provided to the Banks in accordance with the terms
of such representations and warranties, and no Default hereunder shall then
exist or be caused thereby;
(b) With respect to Advances which, if funded, would
increase the aggregate principal amount of Accommodations
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outstanding hereunder, the Administrative Agent shall have received a duly
executed Request for Advance;
(c) Each of the Administrative Agent and the Banks shall
have received all such other certificates, reports, statements, opinions of
counsel (if such Advance is in connection with an acquisition) or other
documents as the Administrative Agent or any Bank may reasonably request;
(d) No event shall have occurred and no condition shall
exist which has had or which could reasonably be expected to have a Materially
Adverse Effect; and
(e) No Applicable Law, proposed Applicable Law, change in
any Applicable Law, or the interpretation or enforcement of any Applicable Law
shall have been enacted (including the enactment of any Applicable Law
respecting Taxes or environmental matters or any change therein or in the
interpretation or enforcement thereof), the effect of which will be to prohibit
the Administrative Agent or any of the Banks from making such Accommodation or
to increase materially the cost thereof to the Banks.
ARTICLE 4
Representations and Warranties
Section 4.1 Representations and Warranties. To induce the
Administrative Agent and each of the Banks to make Accommodations available
hereunder, the Borrower hereby agrees, represents and warrants, upon the
Agreement Date, and at all times thereafter as required pursuant to Sections
3.2 and 4.2 hereof, in favor of the Administrative Agent and each Bank that:
(a) Organization; Ownership; Power; Qualification. The
Borrower is a corporation duly incorporated or amalgamated, as the case may be,
and organized, validly subsisting and in good standing under the laws of its
jurisdiction of incorporation. The Borrower has the corporate power and
authority to own its properties and to carry on its business as now being and
as proposed hereafter to be conducted and to borrow monies and to enter into
agreements therefor. Each Subsidiary of the Borrower is a corporation or
partnership duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation or formation, as the case may be, and
has the corporate or partnership power, as the case may be, and authority to
own its properties and to carry on its business as now being and as proposed
hereafter to be conducted. The Borrower and each of its Subsidiaries are duly
qualified, licensed or registered to
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carry on business as an extra-provincial corporation in the jurisdictions in
which the nature of its properties or the business carried on by it make such
qualification necessary.
(b) Authorization; Enforceability. The Borrower has the
corporate power and has taken all necessary corporate action to authorize it to
obtain Accommodations hereunder, to execute, deliver and perform this Agreement
and each of the other Loan Documents to which it is a party in accordance with
their respective terms, and to consummate the transactions contemplated hereby
and thereby. This Agreement has been duly executed and delivered by the
Borrower and is, and each of the other Loan Documents to which the Borrower is
party is, a legal, valid and binding obligation of the Borrower enforceable
against the Borrower in accordance with its terms, subject only to their
enforceability against the other parties thereto and to any limitation under
Applicable Laws relating to: (i) bankruptcy, insolvency, reorganization,
moratorium or creditors' rights generally; and (ii) the discretion that a court
may exercise in the granting of equitable remedies (insofar as any such law
relates to the bankruptcy, insolvency or similar event of the Borrower).
(c) Subsidiaries: Authorization; Enforceability. The
Borrower's Subsidiaries and the Borrower's direct and indirect ownership
thereof as of the Agreement Date are as set forth on Schedule 3 attached
hereto, and to the extent such Subsidiaries are corporations, the Borrower has
the unrestricted right to vote the issued and outstanding shares of the
Subsidiaries shown thereon and such shares of such Subsidiaries have been duly
authorized and issued and are fully paid and nonassessable. Each Subsidiary of
the Borrower has the corporate or partnership power and has taken all necessary
corporate or partnership action to authorize it to execute, deliver and perform
each of the Loan Documents to which it is a party in accordance with their
respective terms and to consummate the transactions contemplated by this
Agreement and by such Loan Documents. Each of the Loan Documents to which any
Subsidiary of the Borrower is party is a legal, valid and binding obligation of
such Subsidiary enforceable against such Subsidiary in accordance with its
terms, subject only to their enforceability against the other parties thereto
and to any limitation under Applicable Laws relating to: (i) bankruptcy,
insolvency, reorganization, moratorium or creditors' rights generally; and (ii)
the discretion that a court may exercise in the granting of equitable remedies
(insofar as any such law relates to the bankruptcy, insolvency or similar event
of any such Subsidiary). The Borrower's ownership interest in each of its
Subsidiaries represents a direct or indirect controlling interest of such
Subsidiary for purposes of directing
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or causing the direction of the management and policies of each Subsidiary.
(d) Compliance with Other Loan Documents and Contemplated
Transactions. The execution, delivery and performance, in accordance with their
respective terms, by the Borrower of this Agreement, and by the Borrower and
its Subsidiaries of each of the other Loan Documents to which they are
respectively party, and the consummation of the transactions contemplated
hereby and thereby, do not and will not (i) require any consent or approval,
governmental or otherwise, not already obtained, (ii) violate any Applicable
Law respecting the Borrower or any Subsidiary of the Borrower, (iii) conflict
with, result in a breach of, or constitute a default under the certificate of
incorporation, constating documents or by-laws or partnership agreements, as
the case may be, as amended, of the Borrower or of any Subsidiary of the
Borrower, or under any indenture, agreement, or other instrument, including
without limitation the Licenses, to which the Borrower or any of its
Subsidiaries is a party or by which any of them or their respective properties
may be bound, or (iv) result in or require the creation or imposition of any
Lien upon or with respect to any property now owned or hereafter acquired by
the Borrower or any of its Subsidiaries, except for Permitted Liens.
(e) Business. The Borrower, together with its
Subsidiaries, is engaged solely in the business of owning, managing, operating,
investing in, the marketing and distribution of wireless messaging services and
communications businesses incidental or directly relating thereto.
(f) Licenses, etc. The Licenses have been duly issued and
are in full force and effect. The Borrower and its Subsidiaries are in
compliance in all material respects with all of the provisions thereof. The
Borrower and its Subsidiaries have secured all Necessary Authorizations and all
such Necessary Authorizations are in full force and effect. Neither any License
nor any Necessary Authorization is the subject of any pending or, to the best
of the Borrower's knowledge, threatened revocation.
(g) Compliance with Law. The Borrower and its
Subsidiaries are in compliance in all material respects with all material
Applicable Law, including, without limitation, all Environmental Laws.
(h) Title to Assets. Each of the Borrower and its
Subsidiaries is the sole beneficial owner of, and has a good and marketable
title to, and will be lawfully possessed of its Assets, including the
Collateral, free and clear of all Liens, except Permitted Liens, and each of
the Borrower and the
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Subsidiaries has full legal right to mortgage, pledge, charge and assign to the
Administrative Agent for the benefit of itself and the Banks the Collateral to
the Administrative Agent pursuant to the Security Documents as contemplated
herein. No Person has any written or oral agreement, option, understanding or
commitment, or any right or privilege capable of becoming any agreement,
option, understanding or commitment, for the purchase from the Borrower or the
Subsidiaries of any of the Collateral.
(i) Litigation. There is no action, suit, proceeding or
investigation pending against, or, to the knowledge of the Borrower, threatened
against or in any other manner relating adversely to, the Borrower or any of
its Subsidiaries or any of their respective properties, including without
limitation the Licenses, in any court or before any arbitrator of any kind or
before or by any Governmental Entity in Canada or elsewhere, nor is there any
such material action, suit or proceeding which would prevent the Borrower from
proceeding with any Accommodations. None of the Borrower or any of its
Subsidiaries is in default with respect to any judgment, order, writ,
injunction, decree or award of any court or Governmental Entity or any
arbitrator or board in Canada or elsewhere, nor is there any judgment, order,
writ, injunction, decree or award which would prevent the Borrower from
proceeding with any Accommodations. No such action, suit, proceeding or
investigation (i) calls into question the validity of this Agreement or any
other Loan Document, or (ii) individually or collectively involves the
possibility of any judgment or liability not fully covered by insurance which,
if determined adversely to the Borrower or any of its Subsidiaries, would have
a Materially Adverse Effect.
(j) Taxes. Each of the Borrower and its Subsidiaries has
in a timely manner filed all tax returns, elections, filings and reports with
respect to Taxes required by, and in accordance with, Applicable Law to be
filed by it. Each of the Borrower and its subsidiaries has paid, or reserved in
the financial statements, all Taxes which are due and payable, and has paid all
assessments and reassessments and all other Taxes, governmental charges
penalties, interest and fines due and payable by it on or before the date
hereof. Each of the Borrower and its Subsidiaries has no liability, contingent
or otherwise, for Taxes, except Taxes not now due and payable with respect to
ordinary operations during the current fiscal period adequate provision for the
payment of which has been made. Each of the Borrower and its Subsidiaries has
paid as and when due all applicable Taxes and remitted as required by
Applicable Law all applicable Taxes and deductions and any interest or
penalties related thereto, except any such taxes (i) the payment of which the
Borrower or any Subsidiary is diligently contesting in good faith by
appropriate proceedings, (ii) for which adequate
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reserves to the extent required by GAAP have been provided on the books of the
Borrower or the Subsidiary involved, and (iii) as to which no Lien other than a
Permitted Lien has attached and no foreclosure, distraint, sale or similar
proceedings have been commenced.
(k) Financial Statements. The Borrower has furnished or
caused to be furnished to the Administrative Agent and the Banks financial
information for the Borrower and its Subsidiaries, all of which, together with
other financial statements furnished to the Banks subsequent to the Agreement
Date have been prepared in accordance with GAAP and present fairly in all
material respects the financial position of the Borrower and its Subsidiaries
on a consolidated and consolidating (unconsolidated) basis, as the case may be,
on and as at such dates and the results of operations for the periods then
ended (subject, in the case of unaudited financial statements, to normal
year-end and audit adjustments). Neither the Borrower nor any of its
Subsidiaries has any material liabilities, contingent or otherwise, other than
as disclosed in the financial statements referred to in the preceding sentence
or as set forth or referred to in this Agreement.
(l) No Material Adverse Change Since December 31, 1995,
there has occurred no event which has had or which could reasonably be expected
to have a Materially Adverse Effect.
(m) ERISA. The Borrower and each ERISA Affiliate of the
Borrower and each of their respective Plans are in compliance with ERISA and
the Code (except for instances of non-compliance which, individually and in the
aggregate, would not have a Materially Adverse Effect) and neither the Borrower
nor any of its ERISA Affiliates has incurred any accumulated funding deficiency
with respect to any such Employee Pension Plan within the meaning of ERISA or
the Code. The Borrower and each other ERISA Affiliate have complied with all
requirements of COBRA (except for instances of non-compliance which,
individually and in the aggregate, would not have a Materially Adverse Effect).
Neither the Borrower nor any of its ERISA Affiliates has made any promises of
retirement or other benefits to employees, except as set forth in the Plans, in
written agreements with such employees, or in the Borrower's employee handbook
and memoranda to employees except for promises which, individually or in the
aggregate, would not have a Materially Adverse Effect. Neither the Borrower nor
any of its ERISA Affiliates has incurred any material liability to PBGC in
connection with any Plan. The assets of each Plan of the Borrower and its ERISA
Affiliates which is subject to Title IV of ERISA are sufficient to provide the
benefits under such Plan, the payment of which PBGC would guarantee if such
Plan were terminated, and such assets are also
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sufficient to provide all other "benefit liabilities" (within the meaning of
Section 4041 of ERISA) due under the Plan upon termination. No Reportable Event
has occurred and is continuing with respect to any Plan. No Plan or trust
created thereunder, or party in interest (as defined in Section 3(14) of
ERISA), or any fiduciary (as defined in Section 3(21) of ERISA), has engaged in
a nonexempt "prohibited transaction" (as such term is defined in Section 406 of
ERISA or Section 4975 of the Code) which would subject the Borrower or any of
its ERISA Affiliates to the tax or penalty on "prohibited transactions" imposed
by Section 502 of ERISA or Section 4975 of the Code, which tax or penalty,
individually or in the aggregate, would have a Materially Adverse Effect.
Neither the Borrower nor any of its ERISA Affiliates is obligated to make any
contribution to a Multiemployer Plan.
(n) No Margin Stock. The Borrower and its Subsidiaries do
not own or have any present intention of acquiring any "margin stock" as
defined in Regulation U (12 CFR Part 221, as amended) of the Board of Governors
of the Federal Reserve System (herein called "Margin Stock"). None of the
proceeds of any Accommodation will be used, directly or indirectly, for the
purpose of purchasing or carrying any Margin Stock or maintaining, reducing or
retiring any indebtedness which was originally incurred to purchase or carry
any Margin Stock, or to extend credit to others for the purpose of purchasing
or carrying any Margin Stock, or for any other purpose which might constitute
this transaction a "purpose credit" within the meaning of such Regulation (12
CFR Part 207, as amended). Neither the Borrower nor any agent acting on its
behalf has taken or will take any action which might cause this Agreement or
any of the Loan Documents to violate, or be inconsistent with, Regulation G,
Regulation U or Regulation X (12 CFR Part 224, as amended) or any other
regulation of the Board of Governors of the Federal Reserve System or to
violate, or be inconsistent with, the Securities Exchange Act of 1934, as
amended, in each case as in effect now or as the same may hereafter be in
effect.
(o) Governmental Regulation. Neither the Borrower nor any
of its Subsidiaries is required to obtain any consent, approval, authorization,
permit or license (excluding Immaterial Site Specific Licenses) which has not
already been obtained from, or effect any filing or registration which has not
already been effected with, any Governmental Entity in connection with the
execution and delivery of this Agreement or any other Loan Document. Neither
the Borrower nor any of its Subsidiaries is required to obtain any consent,
approval, authorization, permit or license (excluding Immaterial Site Specific
Licenses) which has not already been obtained from, or effect any filing
or registration which has not already been effected with, any Governmental
Entity in connection with the performance, in
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accordance with their respective terms, of this Agreement or any other Loan
Document.
(p) Absence of Default, Etc. Neither the Borrower nor any
of its Subsidiaries is subject to, or a party to, any charter or by-law
restriction, any Applicable Law, any Claim, any contract or instrument, a Lien
or any other restriction of any kind or character which would prevent the
consummation of the transactions contemplated by this Agreement or compliance
by the Borrower or such Subsidiary with the terms, conditions and provisions
hereof or of any Loan Document to which it is a party or the continued
operation of the business on or after the date hereof on substantially the same
basis as operated to the date hereof in each case. Neither the Borrower nor any
of its Subsidiaries is a party to or bound by any contract or agreement
continuing after the Agreement Date, or bound by any Applicable Law, the
performance of which or the compliance with which, as applicable, could have a
Materially Adverse Effect or result in the loss of any License.
(q) Accuracy and Completeness of Information. None of:
(i) this Agreement, (ii) any of the Loan Documents, or (iii) any certificate or
statement in writing which has been supplied by or on behalf of the Borrower or
its Subsidiaries or by any of the directors, officers or employees of the
Borrower or its Subsidiaries in connection with the transactions contemplated
hereby or by any of the Loan Documents contained any untrue statement of a
material fact, or omitted any statement of a material fact, necessary in order
to make the statements contained herein or therein not materially misleading at
the time it was furnished. There is no material fact known to the Borrower or
its Subsidiaries or any of their directors, officers or employees which the
Borrower has not disclosed to the Administrative Agent in writing and which
could be expected to have a Materially Adverse Effect.
(r) Agreements with Affiliates. Except for (1) agreements
or arrangements set forth on Schedule 4 and (2) agreements or arrangements with
Affiliates wherein the Borrower or one or more of its Subsidiaries provides
services to such Affiliates on terms no less advantageous to the Borrower or
such Subsidiary than would be the case if such transaction had been effected
with a non-Affiliate, neither the Borrower nor any of its Subsidiaries has (i)
any agreements or arrangements of any kind with any Affiliate or (ii) any
management or consulting agreements of any kind with any Affiliate.
(s) Priority. Except as a result of the action or
inaction of the Administrative Agent or any Bank, the Security Interest is a
valid and perfected first priority security
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interest in the Collateral in favor of the Administrative Agent, for the
benefit of itself and the Banks, securing, in accordance with the terms of the
Security Documents, the Obligations, and the Collateral is subject to no Liens
other than Permitted Liens. The Liens created by the Security Documents are
enforceable as security for the obligations in accordance with their terms with
respect to the Collateral subject, as to enforcement of remedies, to the
following qualifications: (i) an order of specific performance and an
injunction are discretionary remedies and, in particular, may not be available
where damages are considered an adequate remedy at law, and (ii) enforcement
may be limited by bankruptcy, insolvency, liquidation, reorganization,
reconstruction and other similar laws affecting enforcement of creditors'
rights generally (insofar as any such law relates to the bankruptcy, insolvency
or similar event of the Borrower or any of its Subsidiaries, as the case may
be).
(t) Indebtedness. Neither the Borrower nor any of its
Subsidiaries has outstanding, as of the Agreement Date, and after giving effect
to the initial Accommodations hereunder on the Agreement Date, any Indebtedness
for Money Borrowed other than the obligations hereunder.
(u) Solvency. As of the Agreement Date after the closing
of the MadTel Holdings Agreement, and after giving effect to the transactions
contemplated by the Loan Documents, the Borrower and its Subsidiaries were and
continue to be able to pay their liabilities as they become due.
(v) Books and Records. All books and records of the
Borrower and its Subsidiaries have been fully, properly and accurately kept and
completed in accordance with GAAP and there are no material inaccuracies or
discrepancies of any kind contained or reflected therein.
(w) Environmental Liabilities. Neither the Borrower nor
any of its Subsidiaries has incurred or is incurring any material liability
pursuant to any Environmental Law, including any material Environmental
Liabilities and Costs. To the best knowledge of the Borrower, there is no past
or present fact, condition or circumstance relating to the Business, or the
Real Estate, the Leasehold Real Estate and the Assets currently or formerly
owned or leased by or under the charge, management or control of the Borrower
or any of its Subsidiaries (the "Affected Properties") that could reasonably be
expected to result in any material liability or material potential liability
under any Environmental Laws. Neither the Borrower nor any of its Subsidiaries
has received an Environmental Notice pursuant to, or raising concerns in
respect of, any material liability pursuant to any Environmental Laws and to
the best of the knowledge of the
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Borrower, there are no reasonable grounds which would give rise to the issuance
of any Environmental Notice concerning material liability pursuant to any
Environmental Law. To the best knowledge of the Borrower, there are no
Hazardous Substances at, in, or under the Affected Properties at levels or
concentrations in excess of levels or concentrations set out in Environmental
Laws. Neither the Borrower nor, to the best of the knowledge of the Borrower,
any of its directors or officers has ever: (i) been convicted of any offense
for non-compliance with any Environmental Laws; (ii) been fined or otherwise
penalized for non-compliance with Environmental Laws; or (iii) settled any
prosecution in respect thereof short of conviction.
(x) The Transponder Lease Agreement, the Network and
Equipment Agreement and the Sales and Distribution Agreement represent the only
material agreements of the Borrower and its Subsidiaries.
Section 4.2 Survival of Representations and Warranties, etc. All
representations and warranties made under this Agreement and any other Loan
Document shall be deemed to be made, and shall be true and correct, at and as
of the Agreement Date and on the date of each Accommodation except to the
extent previously fulfilled in accordance with the terms hereof and to the
extent relating specifically to the Agreement Date. All representations and
warranties made under this Agreement and the other Loan Documents shall
survive, and not be waived by, the execution hereof by the Banks and the
Administrative Agent, any investigation or inquiry by any Bank or the
Administrative Agent, or the making of any Advance under this Agreement.
Section 4.3 No Representations by Banks. No representation,
warranty or other statement made by the Administrative Agent or any one or more
of the Banks in respect of the Commitment or any Accommodation made hereunder
shall be binding on such Person unless made by it in writing.
ARTICLE 5
General Covenants
So long as any of the obligations is outstanding and unpaid or the
Banks have any Commitment hereunder (whether or not the conditions to borrowing
have been or can be fulfilled), and unless the Majority Banks, or such greater
number of Banks as may be expressly provided herein, shall otherwise consent in
writing:
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Section 5.1 Preservation of Existence and Similar Matters. The
Borrower will, and will cause each of its Subsidiaries to:
(a) preserve and maintain its existence, and its material
rights, franchises, licenses and privileges in the jurisdiction of its
incorporation, including, without limiting the foregoing, the Licenses and all
other Necessary Authorizations; and
(b) qualify and remain qualified and authorized to do
business in each jurisdiction in which the character of its properties or the
nature of its business requires such qualification or authorization.
Section 5.2 Business; Compliance with Applicable Law. The
Borrower will, and will cause each of its Subsidiaries to, (a) comply in all
material respects with the requirements of all material Applicable Law,
including, without limitation, all Environmental Laws, and (b) engage solely in
the Business.
Section 5.3 Maintenance of Properties. The Borrower will, and
will cause each of its Subsidiaries to, maintain or cause to be maintained in
the ordinary course of business in good repair, working order and condition
(reasonable wear and tear excepted) all properties used in their respective
businesses (whether owned or held under lease), other than obsolete equipment
or unused assets, and from time to time make or cause to be made all needed and
appropriate repairs, renewals, replacements, additions, betterments and
improvements thereto.
Section 5.4 Accounting Methods and Financial Records. The
Borrower will, and will cause each of its Subsidiaries on a consolidated and
consolidating basis to, maintain a system of accounting established and
administered in accordance with GAAP, keep adequate records and books of
account in which complete entries will be made in accordance with GAAP and
reflecting all transactions required to be reflected by GAAP, and keep accurate
and complete records of their respective properties and assets. The Borrower
and its Subsidiaries will maintain a fiscal year ending on December 31.
Section 5.5 Insurance. The Borrower will, and will cause each of
its Subsidiaries to:
(a) Maintain in respect of itself, and each of its
Subsidiaries, or cause each of its Subsidiaries to maintain directly: (i) in
respect of the Collateral, adequate insurance coverage at all times with
financially sound and reputable insurers in such forms and amounts and against
such risks
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acceptable to the Administrative Agent, showing the Administrative Agent as an
additional named insured and loss payee; and (ii) in respect of itself and its
Assets (other than the Collateral), adequate insurance coverage at all times
with financially sound and reputable insurers in such forms and amounts and
against such risks as are reasonable for the business operations that are
carried on by it from time to time.
(b) Require that each insurance policy provide for at
least thirty (30) days' prior written notice to the Administrative Agent of any
termination of or proposed cancellation or nonrenewal of such policy.
Section 5.6 Payment of Taxes and Claims. The Borrower will, and
will cause each of its Subsidiaries to, pay and discharge, before the same
shall become delinquent: (i) all Taxes, assessments and governmental charges or
levies or Claims imposed upon it or upon any of its Assets; and (ii) all lawful
Claims which, if unpaid, might by Applicable Law become a Lien upon its Assets,
in each case except for any such Tax, assessment, charge, levy or Claim which
would result in a Lien which is a Permitted Lien. The Borrower will, and will
cause each of its Subsidiaries to, timely file all information returns required
by any Governmental Entity.
Section 5.7 Compliance with ERISA.
(a) The Borrower shall, and shall cause its Subsidiaries
to avoid any "accumulated funding deficiency" within the meaning of Section
412(a) of the Code with respect to any Employee Pension Plan, whether or not
waived, and will otherwise comply in all material respects with the
requirements of the Code and ERISA with respect to the operation of all Plans.
(b) The Borrower shall furnish to the Administrative
Agent and the Banks (i) within thirty (30) days after any officer of the
Borrower obtains knowledge that a "prohibited transaction" (within the meaning
of Section 406 of ERISA or Section 4975 of the Code) has occurred with respect
to any Plan of the Borrower or its ERISA Affiliates, including its
Subsidiaries, which could subject the Borrower or any of its ERISA Affiliates
to the tax or penalty on "prohibited transactions" imposed by Section 502 of
ERISA or Section 4975 of the Code which tax or penalty, individually or in the
aggregate, would have a Materially Adverse Effect, that any Reportable Event
has occurred with respect to any Employee Pension Plan of the Borrower or any
of its ERISA Affiliates or that PBGC has instituted or will institute
proceedings under Title IV of ERISA to terminate any Employee Pension Plan of
the Borrower or any of its ERISA Affiliates or to appoint a trustee to
administer any Employee Pension Plan of the
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Borrower or any of its ERISA Affiliates, a statement setting forth the details
as to such prohibited transaction, Reportable Event or termination or
appointment proceedings and the action which it (or any other Employee Pension
Plan sponsor if other than the Borrower) proposes to take with respect thereto,
together with a copy of the notice of such Reportable Event given to PBGC if a
copy of such notice is available to the Borrower, any of its Subsidiaries or
any of its ERISA Affiliates, (ii) promptly after receipt thereof, a copy of any
notice the Borrower, any of its Subsidiaries or any of its ERISA Affiliates or
the sponsor of any Plan receives from PBGC, or the Internal Revenue Service or
the Department of Labor which sets forth or proposes any action or
determination with respect to such Plan which could have a Materially Adverse
Effect, (iii) promptly upon the Administrative Agent's request therefor, any
annual report filed pursuant to ERISA in connection with each Employee Pension
Plan maintained by the Borrower or any of its ERISA Affiliates, including the
Subsidiaries, and (iv) promptly upon the Administrative Agent's request
therefor, such additional information concerning any such Employee Pension Plan
as may be reasonably requested by the Administrative Agent or any Bank.
(c) The Borrower will promptly notify the Administrative
Agent and the Banks of any excise taxes which have been assessed or which the
Borrower, any of its Subsidiaries or any of its ERISA Affiliates has reason to
believe may be assessed against the Borrower, any of its Subsidiaries or any of
its ERISA Affiliates by the Internal Revenue Service or the Department of Labor
with respect to any Plan of the Borrower or its ERISA Affiliates, including its
Subsidiaries which, individually or in the aggregate, could have a Materially
Adverse Effect.
(d) Within the time required for notice to the PBGC under
Section 302(f)(4)(A) of ERISA, the Borrower will notify the Administrative
Agent and the Banks of any lien arising under Section 302(f) of ERISA in favor
of any Plan of the Borrower or its ERISA Affiliates, including its
Subsidiaries.
(e) The Borrower will not, and will not permit any of its
Subsidiaries or any of its ERISA Affiliates to take any of the following
actions or permit any of the following events to occur if such action or event
together with all other such actions or events would subject the Borrower, any
of its Subsidiaries, or any of its ERISA Affiliates to any tax, penalty, or
other liabilities which would have a Materially Adverse Effect:
(i) engage in any transaction in connection with
which the Borrower or any of its Subsidiaries would be subject to
either a civil penalty assessed pursuant to
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Section 502(i) of ERISA or a tax imposed by Section 4975 of the Code;
(ii) terminate any Employee Pension Plan in a
manner, or take any other action, which would result in any liability
of the Borrower, any of its Subsidiaries or any ERISA Affiliate to the
PBGC, other than for payment of PBGC premiums;
(iii) fail to make full payment when due of all
amounts which, under the provisions of any Employee Pension Plan, the
Borrower, any of its Subsidiaries or any ERISA Affiliate is required
to pay as contributions thereto, or permit to exist any accumulated
funding deficiency within the meaning of Section 412(a) of the Code,
whether or not waived, with respect to any Employee Pension Plan; or
(iv) permit the present value of all benefit
liabilities under all Employee Pension Plans which are subject to
Title IV of ERISA to exceed the present value of the assets of such
Plans allocable to such benefit liabilities (within the meaning of
Section 4041 of ERISA), except as may be permitted under actuarial
funding standards adopted in accordance with Section 412 of the Code.
Section 5.8 Visits and Inspections. The Borrower will, and will
cause each of its Subsidiaries to, permit representatives of the Administrative
Agent and any of the Banks, upon reasonable notice, to (i) visit and inspect
the properties of the Borrower or any of its Subsidiaries during business
hours, (ii) inspect and make extracts from and copies of their respective books
and records, and (iii) discuss with their respective principal officers their
respective businesses, assets, liabilities, financial positions, results of
operations and business prospects. The Borrower and each of its Subsidiaries
will also permit representatives of the Administrative Agent and any of the
Banks to discuss with their respective accountants the Borrower's and the
Borrower's Subsidiaries' businesses, assets, liabilities, financial positions,
results of operations and business prospects.
Section 5.9 Payment of Indebtedness; Accommodations. Subject to
any provisions herein or in any other Loan Document, the Borrower will, and
will cause each of its Subsidiaries to, pay any and all of their respective
Indebtedness prior to its becoming delinquent or having any late fees assessed
or to the extent of trade payables of such Persons otherwise in accordance
with-ordinary business practices customary for the wireless messaging industry,
other than amounts diligently disputed in
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good faith and for which adequate reserves have been set aside in accordance
with GAAP.
Section 5.10 Use of Proceeds. The Borrower will use the aggregate
proceeds of all Advances under the Accommodations directly or indirectly:
(a) to fund Capital Expenditures associated with the
Business and the ongoing need for wireless messaging units for its Canadian
wireless messaging system;
(b) for working capital needs and other general corporate
purposes of the Borrower which do not otherwise conflict with this Section 5.10
(including, without limitation, the payment of fees and expenses incurred in
connection with the execution and delivery of this Agreement and the other Loan
Documents and payments permitted under Section 7.7 hereof).
No proceeds of Advances hereunder shall be used for the purchase or carrying or
the extension of credit for the purpose of purchasing or carrying, any Margin
Stock.
Section 5.11 Protect Security Interests. Except for the filing of
renewal statements and the making of other filings by the Administrative Agent
as a secured party or assignee, at all times take all action and supply the
Administrative Agent with all information necessary to maintain the Liens
provided for under the Security Documents and confer upon the Administrative
Agent the security interests intended to be created thereby.
Section 5.12 Environmental Audits. Promptly if requested by the
Administrative Agent: (i) if a Default has occurred and is continuing or the
Administrative Agent or the Majority Banks have a reasonable good faith
commercial concern as to the financial condition of the Borrower, conduct
environmental audits having a scope acceptable to the Administrative Agent with
respect to the potential liability under applicable Environmental Laws of the
Borrower and its Subsidiaries, their respective Real Estate or other Assets,
and the Business, such environmental audits to be conducted by the
Environmental Auditor, and provide copies of such environmental audits to the
Administrative Agent; (ii) if the Administrative Agent or the Majority Banks
have a good faith concern that there is a material non-compliance by the
Borrower or any of its Subsidiaries with Environmental Laws, conduct such
environmental audit concerning alleged material non-compliance as the
Administrative Agent or such Majority Banks may require, such audits to be
conducted by the Environmental Auditor, and provide copies of such
environmental audits to the Administrative Agent; and (iii) diligently remedy
any material non-compliance with Environmental Laws revealed by any such audit.
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<PAGE> 66
Section 5.13 Further Assurances. At its cost and expense, upon
request of the Administrative Agent, the Borrower will duly execute and deliver
or cause to be duly executed and delivered to the Administrative Agent such
further instruments and do and cause to be done such further acts as may be
necessary or proper in the reasonable opinion of the Administrative Agent to
carry out more effectively the provisions and purposes of the Loan Documents.
ARTICLE 6
Information Covenants
So long as any of the Obligations is outstanding and unpaid or the
Banks have any Commitment hereunder (whether or not the conditions to borrowing
have been or can be fulfilled) and unless the Majority Banks shall otherwise
consent in writing, the Borrower will furnish or cause to be furnished to each
Bank and the Administrative Agent, at their respective offices:
Section 6.1 Quarterly Financial Statements and Information.
Within forty-five (45) days after the last day of each of the first three (3)
fiscal quarters of the Borrower during any fiscal year, a copy of the balance
sheets of the Borrower on a consolidated and consolidating (unconsolidated)
basis with its Subsidiaries as at the end of such quarter and as of the end of
the preceding fiscal year, and the related statements of operations and the
related statements of cash flows of the Borrower on a consolidated basis with
its Subsidiaries for such quarter and for the elapsed portion of the year ended
with the last day of such quarter, which shall set forth in comparative form
such figures as at the end of and for such quarter and appropriate prior
period, shall provide consolidated and consolidating (unconsolidated) figures
with respect to any acquisitions consummated during such quarter, and shall be
certified by the chief financial officer of the Borrower to have been prepared
in accordance with GAAP and to present fairly in all material respects the
financial position of the Borrower on a consolidated and consolidating
(unconsolidated) basis with its Subsidiaries as at the end of such quarter and
the results of operations for such quarter, and for the elapsed portion of the
year ended with the last day of such quarter, subject only to normal year-end
and audit adjustments and the absence of footnotes.
Section 6.2 Annual Financial Statements and Information. Within
ninety (90) days after the end of each fiscal year of the Borrower, a copy of
the audited consolidated and consolidating (unconsolidated) balance sheets of
the Borrower and its
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Subsidiaries as of the end of such fiscal year and the related audited
unconsolidated statements of operations for such fiscal year and for the
previous fiscal year, the related audited consolidated and consolidating
(unconsolidated) statements of cash flow and stockholders' equity for such
fiscal year and for the previous fiscal year, which shall be accompanied by an
opinion of Ernst & Young or such other independent auditor acceptable to the
Administrative Agent, certified to have been prepared in accordance with GAAP
and to present fairly in all material respects the financial position of the
Borrower on a consolidated and consolidating (unconsolidated) basis with its
Subsidiaries as at the end of such fiscal year.
Section 6.3 Performance Certificates. At the time the financial
statements are furnished pursuant to Sections 6.1 and 6.2, a certificate of the
president or chief financial officer of the Borrower as to its financial
performance, in substantially the form of Exhibit G hereto:
(a) setting forth as and at the end of such quarter or
fiscal year, as the case may be, the arithmetical calculations required to
establish (i) any adjustment to the Applicable Margins, as provided for in
Section 2.6(d) hereof, and (ii) whether or not the Borrower was in compliance
with the requirements of Sections 7.8, 7.9, 7.10, 7.11, 7.12 and 7.13 hereof;
and
(b) stating that no Default has occurred as at the end of
such quarter or fiscal year, as the case may be, or, if a Default has occurred,
disclosing each such Default and its nature, when it occurred, whether it is
continuing and the steps being taken by the Borrower with respect to such
Default.
Section 6.4 Copies of Other Reports.
(a) Promptly upon receipt thereof, copies of all material
reports, if any, submitted to the Borrower by the Borrower's independent
auditors regarding the Borrower, including, without limitation, any management
report prepared in connection with the annual audit referred to in Section 6.2
hereof.
(b) Promptly upon receipt thereof, copies of any material
adverse notice or report regarding any License from any Governmental Entity.
(c) From time to time and promptly upon each request,
such data, certificates, reports, statements, documents or further information
regarding the business, assets, liabilities, financial position, projections,
results of operations or
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business prospects of the Borrower or any of its Subsidiaries, as the
Administrative Agent or any Bank may reasonably request.
(d) Promptly upon request but not more frequently than
annually, certificates of insurance indicating that the requirements of Section
5.5 hereof remain satisfied for such fiscal year, together with copies of any
new or replacement insurance policies obtained during such year.
(e) Within sixty (60) days after each fiscal year end,
the annual budget for the Borrower and its Subsidiaries, including forecasts of
the income statement and a cash flow statement for such fiscal year, on a
quarter by quarter basis.
(f) Promptly after the sending thereof, copies of all
statements, reports and other information which the Borrower or any of its
subsidiaries sends to security holders of the Borrower generally or files with
the Ontario Securities Commission or any other securities commission or stock
exchange.
Section 6.5 Notice of Litigation and Other Matters. Notice
specifying the nature and status of any of the following events, promptly, but
in any event not later than fifteen (15) days after the occurrence of any of
the following events becomes known to the Borrower:
(i) the commencement of all material proceedings and
investigations by or before any Governmental Entity particular to the
Borrower and/or any of its Subsidiaries and all actions and
proceedings in any court or before any arbitrator against, or to the
extent known to the Borrower, in any other way relating materially
adversely to the Borrower or any Subsidiary of the Borrower, or any of
their respective properties, assets or businesses or any License;
(ii) any material adverse change with respect to the
business, assets, liabilities, financial position, results of
operations or business prospects of the Borrower or any Subsidiary of
the Borrower other than changes in the ordinary course of business
which have not had and would not reasonably be expected to have a
Materially Adverse Effect;
(iii) any material amendment or change to the financial
projections or annual budget provided to the Banks by the Borrower;
(iv) any Default or the occurrence or non-occurrence of
any event (A) which constitutes, or which with the passage of time or
giving of notice or both would constitute a default by the Borrower or
any Subsidiary of
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the Borrower under any material agreement other than this Agreement
and the other Loan Documents to which the Borrower or any Subsidiary
of the Borrower is party or by which any of their respective
properties may be bound, or (B) which could have a Materially Adverse
Effect, giving in each case the details thereof and specifying the
action proposed to be taken with respect thereto; and
(v) the occurrence of any Reportable Event or a
"prohibited transaction" (as such term is defined in Section 406 of
ERISA or Section 4975 of the Code) with respect to any Plan of the
Borrower or any of its ERISA Affiliates or the institution or
threatened institution by PBGC of proceedings under ERISA to terminate
or to partially terminate any such Plan or the commencement or
threatened commencement of any litigation regarding any such Plan or
naming it or the trustee of any such Plan with respect to such Plan or
any action taken by the Borrower, any Subsidiary of the Borrower or
any ERISA Affiliate of the Borrower to withdraw or partially withdraw
from any Plan or to terminate any Plan, to the extent any of the
foregoing would have, individually or in the aggregate, a Materially
Adverse Effect.
Section 6.6 Environmental Reporting. Promptly, and in any event
within fifteen (15) days of becoming aware of its existence, notify the
Administrative Agent in writing of any notice or other state of affairs
(providing details of any actions taken by the Borrower in response) which
could reasonably be expected to give rise to: (i) Environmental Liabilities and
Costs of $500,000 or more; or (ii) any violation of Environmental Laws
involving the possible imposition of a fine of $500,000 or MORE or the shutting
down of any facility forming part of the Business for a period in excess of 24
hours; and (iii) any facts or circumstances which could reasonably be expected
to give rise to (x) Environmental Liabilities and Costs of $500,000 or more, or
(y) any violation of Environmental Laws involving the possible imposition of a
fine of $500,000 or more or the shutting down of any facility forming part of
the Assets for a period in excess of 24 hours.
ARTICLE 7
Negative Covenants
So long as any of the obligations is outstanding and unpaid or the
Banks have any Commitment hereunder (whether or not the conditions to borrowing
have been or can be fulfilled) and unless the Majority Banks, or such greater
number of Banks as may be
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expressly provided herein, shall otherwise give their prior consent in writing:
Section 7.1 Indebtedness of the Borrower and its Subsidiaries.
The Borrower shall not, and shall not permit any of its Subsidiaries to,
create, assume, incur or otherwise become or remain obligated in respect of, or
permit to be outstanding, any Indebtedness except:
(a) the Obligations (other than the obligations described
in Section 7.1(c) below);
(b) Indebtedness secured by Permitted Liens;
(c) obligations under Interest Rate Hedge Agreements
having a notional principal amount of not more than fifty percent (50%) of the
Accommodations in the aggregate outstanding at any time;
(d) Indebtedness of the Borrower or any of its
wholly-owned Subsidiaries to any other wholly-owned Subsidiary of the Borrower
so long as the corresponding debt instruments are pledged to the Administrative
Agent as security for the Obligations;
(e) Indebtedness of any of wholly-owned Subsidiaries of
the Borrower to the Borrower so long as the corresponding debt instruments are
pledged to the Administrative Agent as security for the Obligations; and
(f) Capitalized Lease Obligations in an aggregate amount
not to exceed $500,000 at any time outstanding.
Section 7.2 Limitation on Liens. The Borrower shall not, and
shall not permit any of its Subsidiaries to, create,, assume, incur or permit
to exist or to be created, assumed, incurred or permitted to exist, directly or
indirectly, any Lien on any of its properties or assets, whether now owned or
hereafter acquired, except for Permitted Liens.
Section 7.3 Amendment and Waiver. The Borrower shall not, and
shall not permit any of its Subsidiaries to, enter into any amendment of, or
agree to or accept or consent to any waiver of any of the provisions of its
articles or certificate of incorporation or partnership agreement or by-laws,
as appropriate (other than immaterial amendments relating to corporate
governance which could not reasonably be expected to have an adverse effect on
the Administrative Agent or any Bank or any of their rights or claims under any
of the Loan Documents).
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Section 7.4 Liquidation, Merger, or Disposition of Assets.
(a) Disposition of Assets. The Borrower shall not, and
shall not permit any of its Subsidiaries to, at any time sell, exchange, lease,
abandon, or otherwise dispose of any Assets (other than Assets disposed of in
the ordinary course of business) without the prior written consent of all the
Banks.
(b) Liquidation or Merger. The Borrower shall not, and
shall not permit any of its Subsidiaries to, at any time liquidate or dissolve
itself (or suffer any liquidation or dissolution) or otherwise wind up, or
enter into any merger, other than (i) a merger or consolidation among the
Borrower and one or more of its Subsidiaries, provided the Borrower is the
surviving corporation, or (ii) a merger between or among two or more
Subsidiaries of the Borrower, or (iii) in connection with an acquisition
permitted hereunder effected by a merger in which the Borrower or, in a merger
in which the Borrower is not a party, a Subsidiary of the Borrower is the
surviving corporation.
Section 7.5 Limitation on Guaranties. The Borrower shall not, and
shall not permit any of its Subsidiaries to, at any time Guaranty, assume, be
obligated with respect to, or permit to be outstanding any Guaranty of, any
obligation of any other Person other than (a) a guaranty by endorsement of
negotiable instruments for collection in the ordinary course of business, (b)
obligations under agreements of the Borrower or any of its Subsidiaries entered
into in connection with leases of real property or the acquisition of services,
supplies and equipment in the ordinary course of business of the Borrower or
any of its Subsidiaries, or (c) Guaranties of Indebtedness incurred as
permitted pursuant to Section 7.1 hereof.
Section 7.6 Investments and Acquisitions. The Borrower shall not,
and shall not permit any of its Subsidiaries to, directly or indirectly, (a)
make any loan or advance, or otherwise acquire for consideration evidences of
Indebtedness, Capital Stock or other securities of any Person or other assets
or property other than (i) assets or property in the ordinary course of
business or (ii) Permitted Investments; or (b) except with the consent of the
Majority Banks, make any acquisition.
Section 7.7 Restricted Payments and Purchases. The Borrower shall
not, and shall not permit any of its Subsidiaries to, directly or indirectly
declare or make any Restricted Payment or Restricted Purchase, except that so
long as no Default hereunder then exists or would be caused thereby the
Borrower may make (a) payments to Paging Network, Inc. for reimbursement of
start-up expenses in an aggregate amount of not more than U.S.
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Dollars $8,900,000, and (b) distributions to Paging Network International N.V.
so long as the Leverage Ratio is below 4.00 to 1 (both before and after giving
effect to such distribution).
Section 7.8 Leverage Ratio. Commencing April 1, 1998, the
Borrower shall not permit the Leverage Ratio to exceed the ratios set forth
below during the periods indicated:
<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
April 1, 1998 through
June 30, 1998 6.00:1
July 1, 1998 through
September 30, 1998 5.00:1
October 1, 1998 through
December 31, 1998 4.00:1
January 1, 1999 through
March 31, 1999 3.00:1
April 1, 1999 and thereafter 2.50:1.
</TABLE>
Section 7.9 Annualized Operating Cash Flow to Pro Forma Debt
Service. Commencing October 1, 1998, the Borrower shall not permit the ratio of
Annualized Operating Cash Flow to Pro Forma Debt Service for the Borrower Group
on a combined basis to be less than the ratios set forth below for the periods
indicated:
<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
October 1, 1998 through
September 30, 2001 1.25:1
October 1, 2001 and
thereafter 1.50:1
</TABLE>
Section 7.10 Total Debt Per Subscriber. The Borrower shall not at
any time permit the Total Debt for the Borrower Group on a combined basis
divided by Total Subscribers to be greater than or equal to $275.00.
Section 7.11 Capital Expenditures. Commencing with the year in
which the Available Commitment exceeds the Minimum Permitted Collateral Amount,
the Borrower shall not permit the aggregate Capital Expenditures for the
Borrower Group on a
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combined basis to exceed the following for the fiscal years indicated:
<TABLE>
<CAPTION>
Total
Capital
Period Expenditures
------ ------------
<S> <C>
At December 31, 1996 $45,000,000.00
At December 31, 1997 $20,000,000.00
At December 31, 1998
and thereafter $17,500,000.00
</TABLE>
To the extent not used in 1996, an amount equal to the unused Total Capital
Expenditure availability may be carried forward to 1997. Thereafter, to the
extent not used in any fiscal year, an amount equal to the lesser of (a) the
unused Total Capital Expenditure availability (exclusive of any carry forwards
from prior periods) for such fiscal year and (b) 10% of the Total Capital
Expenditure availability shown above (exclusive of any carry forwards from
prior periods) for such fiscal year, may be carried forward to the next
succeeding fiscal year.
Section 7.12 Minimum Revenue Test. Commencing December 31, 1996
and continuing for each fiscal quarter through the fiscal quarter ending June
30, 1998, the Borrower shall not permit the aggregate Gross Revenue for the
Borrower Group on a combined basis to be less than the following for the fiscal
quarters indicated:
<TABLE>
<CAPTION>
Quarter Ending Minimum Revenue
-------------- ---------------
<S> <C>
12/31/96 $1,770,000
03/31/97 $2,800,000
06/30/97 $3,860,000
09/30/97 $4,960,000
12/31/97 $6,100,000
03/31/98 $7,270,000
06/30/98 $8,490,000
</TABLE>
Section 7.13 Minimum Units in Service. Commencing December 31,
1996 and continuing for each fiscal quarter through the fiscal quarter ending
June 30, 1998, the Borrower shall not
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permit the minimum number of Units in Service to be less than the following for
the fiscal quarters indicated:
<TABLE>
<CAPTION>
Minimum Pagers
Quarter Ending In Service
-------------- --------------
<S> <C>
12/31/96 42,200
03/31/97 63,800
06/30/97 86,400
09/30/97 110,200
12/31/97 135,200
03/31/98 161,400
06/30/98 188,900
</TABLE>
Section 7.14 Affiliate Transactions. Except for those agreements
described in Schedule 4 hereto, the Borrower shall not, and shall not permit
any of its Subsidiaries to, at any time engage in any transaction with an
Affiliate, or make an assignment or other transfer of any of its properties or
assets to any Affiliate, on terms less advantageous to the Borrower or such
Subsidiary than would be the case if such transaction had been effected with a
non-Affiliate.
Section 7.15 Real Estate. Neither the Borrower nor any of its
Subsidiaries shall purchase any Real Estate or enter into any sale/leaseback
transaction.
Section 7.16 ERISA Liabilities. The Borrower shall not, and shall
cause each of its ERISA Affiliates not to enter into any Multiemployer Plan.
ARTICLE 8
Default
Section 8.1 Events of Default. Each of the following shall
constitute an Event of Default, whatever the reason for such event and whether
it shall be voluntary or involuntary or be effected by operation of Applicable
Law or pursuant to any judgment or order of any court or any order, rule or
regulation of any Person.
(a) Any representation or warranty made under this
Agreement or any other Loan Document shall prove incorrect or misleading in any
material respect when made or deemed to be made pursuant to Section 4.2 hereof;
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(b) The Borrower shall default in the payment of: (i) any
interest under any of the Loan Documents or fees or other amounts payable to
the Banks and the Administrative Agent under any of the Loan Documents, or any
of them, when due and such default is not cured within three (3) Business Days
after the occurrence thereof; or (ii) any principal under any of the Loan
Documents when due;
(c) The Borrower shall default in the performance or
observance of any agreement or covenant contained in Sections 5.2 or 5.10 or in
Articles 6 or 7 hereof; provided however, that on any date on which the
aggregate of Accommodations outstanding hereunder is less than the aggregate
amount of the Equivalent Canadian Dollar Amount of the Permitted Collateral
held by the Administrative Agent pursuant to the Deposit Agreement, the failure
to comply with Section 7.12 or 7.13 hereof shall not constitute a default
hereunder until any such failure has continued for a period of two (2)
consecutive complete calendar quarters;
(d) The Borrower shall default in the performance or
observance of any other agreement or covenant contained in this Agreement not
specifically referred to elsewhere in this Section 8.1 or there shall occur any
default in the performance or observance of any agreement or covenant contained
in any of the Loan Documents (other than this Agreement or as otherwise
provided in Section 8.1 of this Agreement) by the Borrower, any of its
Subsidiaries, or any other obligor thereunder, and such default shall not be
cured within a period of thirty (30) days from the date on which the Borrower
becomes aware of or receives notice of default;
(e) The Borrower or any of its Subsidiaries shall: (i)
become insolvent or generally not pay its debts as such debts become due; (ii)
admit in writing its inability to pay its debts generally or shall make a
general assignment for the benefit of creditors; (iii) file a notice of
intention to file a proposal under any Applicable Law relating to bankruptcy,
insolvency or reorganization or relief of debtors; (iv) have instituted against
it any proceeding, which proceeding continues undismissed or unstayed for a
period of sixty (60) consecutive days or any of the actions sought in such
proceeding (including the entry of an order for relief against it or the
appointment of a receiver, trustee, custodian or other similar official for it
or for any substantial part of its Assets) shall occur, or institute any
proceeding seeking: (A) to adjudicate it a bankrupt or insolvent; (B) any
liquidation, winding-up, reorganization, arrangement, adjustment, protection,
relief or composition of it or its debts
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under any Applicable Law relating to bankruptcy, insolvency or reorganization
or relief of debtors; or (C) the entry of an order for relief or the
appointment of a receiver, trustee or other similar official for it or for any
substantial part of its Assets; or (v) take any corporate action to authorize
any of the foregoing actions;
(f) A notice is sent to or received by the Borrower or
any of its Subsidiaries from any creditor with respect to the intention of such
creditor to enforce security on: (i) any of the Collateral; or (ii) any Assets
of the Borrower or any of its Subsidiaries (other than the Collateral) unless
such notice is being contested in good faith by appropriate legal proceedings
and such notice does not involve any immediate danger of the sale,, forfeiture
or loss of any of the Assets of the Borrower or any of its Subsidiaries (other
than the Collateral) that are the subject of such notice;
(g) A judgment or order for the payment of money not
covered by insurance shall be entered by any court against the Borrower or any
of the Borrower's Subsidiaries for the payment of money which exceeds singly or
in the aggregate with other such judgments, $500,000, or a warrant of
attachment or execution or similar process shall be issued or levied against
property of the Borrower or any of the Borrower's Subsidiaries which, together
with all other such property of the Borrower or any of the Borrower's
Subsidiaries subject to other such process, exceeds in value $500,000 in the
aggregate, and if, within thirty (30) days after the entry, issue or levy
thereof, such judgment, warrant or process shall not have been paid or
discharged or stayed pending appeal or removed to bond, or if, commenced and
not stayed, after the expiration of any such stay, such judgment, warrant or
process shall not have been paid or discharged or removed to bond;
(h) There shall be at any time any "accumulated funding
deficiency," as defined in ERISA or in Section 412 of the Code, with respect to
any Plan maintained by the Borrower or any ERISA Affiliate, or to which the
Borrower or any ERISA Affiliate has any liabilities, or any trust created
thereunder; or a trustee shall be appointed by a United States District Court
to administer any Employee Pension Plan; or PBGC shall institute proceedings to
terminate any Employee Pension Plan; or the Borrower or any ERISA Affiliate
shall incur any liability to PBGC in connection with the termination of any
Employee Pension Plan; or any Plan or trust created under any Plan of the
Borrower or any ERISA Affiliate shall engage in a "prohibited transaction" (as
such term is defined in Section 406 of ERISA or Section 4975
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of the Code) which would subject the Borrower or any Subsidiary to any tax or
penalty on "prohibited transactions" imposed by Section 502 of ERISA or Section
4975 of the Code;
(i) There shall occur (i) any default which entitles the
holders to accelerate the maturity thereof under any document, instrument or
agreement relating to any Indebtedness of any member of the Borrower Group
having an aggregate principal amount exceeding $1,000,000; or (ii) any default
which entitles the holders to terminate any Interest Rate Hedge Agreement
having a notional principal amount of $1,000,000 or more;
(j) One or more Licenses shall be terminated or revoked,
substantially adversely modified or no longer available such that the Borrower
and its Subsidiaries are no longer able to operate the related wireless
messaging system or portions thereof and retain the revenue received therefrom,
if any, or any such License shall fail to be renewed at the stated expiration
thereof such that the Borrower and its Subsidiaries are no longer able to
operate the related wireless messaging system or portions thereof and retain
the revenue received therefrom, if any, and, in either case, there shall be a
loss of revenue of the Borrower or any of its Subsidiaries as a direct or
indirect result thereof which loss of revenues could reasonably be expected to
have a Materially Adverse Effect;
(k) Any Loan Document or any material provision thereof,
shall at any time and for any reason be declared by a court of competent
jurisdiction to be null and void, or a proceeding shall be commenced by the
Borrower or any of the Borrower's Subsidiaries or any shareholder, or by any
governmental authority having jurisdiction over the Borrower or any of the
Borrower's Subsidiaries or any shareholder, seeking to establish the invalidity
or unenforceability thereof (exclusive of questions of interpretation of any
provision thereof), or the Borrower or any of the Borrower's Subsidiaries shall
deny that it has any liability or obligation for the payment of principal or
interest purported to be created under any Loan Document;
(l) Subject only to Permitted Liens, any Security
Document shall for any reason (other than as a result of the action or inaction
of the Administrative Agent or any Bank), fail or cease to create a valid and
perfected and first-priority Lien on or Security Interest in any portion of the
Collateral purported to be covered thereby;
(m) Any Change Event shall occur or exist; or
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(n) There shall occur any default by the Borrower or any
Subsidiary of the Borrower under or a cancellation of, in any case without
contemporaneous replacement, any Transponder Lease Agreement, the Network and
Equipment Agreement or the Sales and Distribution Agreement which default is
not cured within any applicable cure period and which default would be
reasonably likely to have a Materially Adverse Effect.
Section 8.2 Remedies.
(a) If an Event of Default specified in Section 8.1
hereof (other than an Event of Default under Section 8.1(e) hereof) shall have
occurred and shall be continuing, the Administrative Agent, at the request of
the Majority Banks subject to Section 9.8(a) hereof, shall (i) terminate the
Commitment, and/or (ii) declare the principal of and interest on the
Accommodations and all other amounts owed to the Banks and the Administrative
Agent under this Agreement and any other Loan Documents to be forthwith due and
payable without presentment, demand, protest or other notice of any kind, all
of which are hereby expressly waived, anything in this Agreement or any other
Loan Document to the contrary notwithstanding, and the Commitment shall
thereupon forthwith terminate, and/or (iii) the security constituted by the
Security Documents and any other security now or hereafter held by the
Administrative Agent shall become and be enforceable.
(b) Upon the occurrence and continuance of an Event of
Default specified in Section 8.1(e) hereof, all principal, interest and other
amounts due hereunder and under the Loan Documents, and all other Obligations,
shall thereupon and concurrently therewith become due and payable and the
Commitment shall forthwith terminate and the principal amount of the
Accommodations outstanding hereunder shall bear interest at the Default Rate,
all without any action by the Administrative Agent or the Banks, or the
Majority Banks, or any of them, and without presentment, demand, protest or
other notice of any kind, all of which are expressly waived, anything in this
Agreement or in the other Loan Documents to the contrary notwithstanding.
(c) Upon acceleration of the Obligations, as provided in
subsection (a) or (b) of this Section 8.2, the Administrative Agent and the
Banks shall have all of the post-default rights granted to them, or any of
them, as applicable, under the Loan Documents and under Applicable Law.
(d) Upon acceleration of the Obligations, as provided in
subsection (a) or (b) of this Section 8.2, the Administrative
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Agent, upon request of the Majority Banks, shall have the right to the
appointment of a receiver for the properties and assets of the Borrower and its
Subsidiaries, and the Borrower, for itself and on behalf of its Subsidiaries,
hereby consents to such rights and such appointment and hereby waives any
objection the Borrower or any Subsidiary may have thereto or the right to have
a bond or other security posted by the Administrative Agent on behalf of the
Banks, in connection therewith.
(e) The rights and remedies of the Administrative Agent
and the Banks hereunder shall be cumulative, and not exclusive.
ARTICLE 9
The Administrative Agent
Section 9.1 Appointment and Authorization. Each Bank hereby
irrevocably appoints and authorizes, and hereby agrees that it will require any
transferee of any of its interest in its pro rata portion of the Accommodations
irrevocably to appoint and authorize, the Administrative Agent to take such
actions as its agent on its behalf and to exercise such powers hereunder and
under the other Loan Documents as are delegated by the terms hereof and
thereof, together with such powers as are reasonably incidental thereto.
Neither the Administrative Agent nor any of its directors, officers, employees,
agents or counsel, shall be liable to the Banks for any action taken or omitted
to be taken by it or them hereunder or in connection herewith, except for its
or their own gross negligence or willful misconduct as determined by a final,
non-appealable judicial order of a court of competent jurisdiction.
Section 9.2 Interest Holders. The Administrative Agent may treat
each Bank, or the Person designated in the last notice filed with the
Administrative Agent, as the holder of all of the interests of such Bank in its
pro rata portion of the Accommodations until written notice of transfer, signed
by such Bank (or the Person designated in the last notice filed with the
Administrative Agent) and by the Person designated in such written notice of
transfer, in form and substance satisfactory to the Administrative Agent, shall
have been filed with the Administrative Agent.
Section 9.3 Consultation with Counsel. The Administrative Agent
may consult with legal counsel selected by it and shall not be liable to the
Banks for any action taken or
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suffered by it in good faith in consultation with such counsel and in
reasonable reliance on such consultations.
Section 9.4 Documents. The Administrative Agent shall be under no
duty to examine, inquire into, or pass upon the validity, effectiveness or
genuineness of this Agreement, any other Loan Document, or any instrument,
document or communication furnished pursuant hereto or in connection herewith,
and the Administrative Agent shall be entitled to assume that they are valid,
effective and genuine, have been signed or sent by the proper parties and are
what they purport to be.
Section 9.5 Administrative Agent and Affiliates. With respect to
the Commitment and the Accommodations, the Bank which is the Administrative
Agent shall have the same rights and powers hereunder as any other Bank and the
Administrative Agent and Affiliates of the Administrative Agent may accept
deposits from, lend money to and generally engage in any kind of business with
the Borrower, any of its Subsidiaries or any Affiliates of, or Persons doing
business with, the Borrower, as if they were not affiliated with the
Administrative Agent and without any obligation to account therefor.
Section 9.6 Responsibility of the Administrative Agent. The
duties and obligations of the Administrative Agent under this Agreement are
only those expressly set forth in this Agreement. The Administrative Agent
shall be entitled to assume that no Default or Event of Default has occurred
and is continuing unless it has actual knowledge, or has been notified in
writing by the Borrower, of such fact, or has been notified by a Bank in
writing that such Bank considers that a Default or an Event of Default has
occurred and is continuing, and such Bank shall specify in detail the nature
thereof in writing. The Administrative Agent shall not be liable hereunder for
any action taken or omitted to be taken except for its own gross negligence or
willful misconduct as determined by a final, non-appealable judicial order of a
court of competent jurisdiction. The Administrative Agent shall provide each
Bank with copies of such documents received from the Borrower as such Bank may
reasonably request.
Section 9.7 Security Documents. The Administrative Agent is
hereby authorized to act on behalf of the Banks, in its own capacity and
through other agents and sub-agents appointed by it, under the Security
Documents, provided that the Administrative Agent shall not agree to the
release of any Collateral, or any property encumbered by any mortgage, pledge
or security interest, except in compliance with Section 11.12 hereof.
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Section 9.8 Action by the Administrative Agent.
(a) The Administrative Agent shall be entitled to use its
discretion with respect to exercising or refraining from exercising any rights
which may be vested in it by, and with respect to taking or refraining from
taking any action or actions which it may be able to take under or in respect
of, this Agreement or any other Loan Document, unless the Administrative Agent
shall have been instructed by the Majority Banks (or, where expressly required,
all the Banks) to exercise or refrain from exercising such rights or to take or
refrain from taking such action; provided that the Administrative Agent shall
not exercise any rights under Section 8.2(a) of this Agreement without the
request of the Majority Banks (or, where expressly required, all the Banks)
unless time is of the essence. The Administrative Agent shall incur no
liability to the Banks under or in respect of this Agreement with respect to
anything which it may do or refrain from doing in the reasonable exercise of
its judgment or which may seem to it to be necessary or desirable in the
circumstances, except for its gross negligence or willful misconduct as
determined by a final, non-appealable judicial order of a court of competent
jurisdiction.
(b) The Administrative Agent shall not be liable to the
Banks or to any Bank or the Borrower or any of its subsidiaries in acting or
refraining from acting under this Agreement or any other Loan Document in
accordance with the instructions of the Majority Banks (or, where expressly
required, all the Banks), and any action taken or failure to act pursuant to
such instructions shall be binding on all Banks. The Administrative Agent shall
not be obligated to take any action which is contrary to Applicable Law or
which would in the Administrative Agent's reasonable opinion subject the
Administrative Agent to liability.
Section 9.9 Notice of Default or Event of Default. In the event
that the Administrative Agent or any Bank shall acquire actual knowledge, or
shall have been notified, of any Default or Event of Default, the
Administrative Agent or such Bank shall promptly notify the Banks and the
Administrative Agent, as applicable (provided failure to give such notice shall
not result in any liability on the part of such Bank or the Administrative
Agent), and the Administrative Agent shall take such action and assert such
rights under this Agreement and the other Loan Documents as the Majority Banks
shall request in writing, and the Administrative Agent shall not be subject to
any liability by reason of its acting pursuant to any such request. If the
Majority Banks (or, where expressly required, all the Banks)
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shall fail to request the Administrative Agent to take action or to assert
rights under this Agreement or any other Loan Documents in respect of any
Default or Event of Default within ten (10) days after their receipt of the
notice of any Default or Event of Default from the Administrative Agent or any
Bank, the Administrative Agent may, but shall not be required to, take such
action and assert such rights (other than rights under Sections 8.2(a) or
11.12 of this Agreement) as it deems in its discretion to be advisable for the
protection of the Banks, except that, if the Majority Banks have instructed the
Administrative Agent not to take such action or assert such right, in no event
shall the Administrative Agent act contrary to such instructions.
Section 9.10 Responsibility Disclaimed. The Administrative Agent
shall not be under any liability or responsibility whatsoever as Administrative
Agent:
(a) To the Borrower or any other Person as a consequence
of any failure or delay in performance by or any breach by, any Bank or Banks
of any of its or their obligations under this Agreement or any of the other
Loan Documents;
(b) To any Bank or Banks, as a consequence of any failure
or delay in performance by, or any breach by, (i) the Borrower of any of its
obligations under this Agreement or any other Loan Document, or (ii) the
Borrower, any Subsidiary of the Borrower or any other obligor under any other
Loan Document;
(c) To any Bank or Banks, for any statements,
representations or warranties in this Agreement or any other Loan document, or
any information provided pursuant to this Agreement or any other Loan Document,
or for the validity, effectiveness, enforceability or sufficiency of this
Agreement or any other Loan Document; or
(d) To any Person for any act or omission other than that
arising from gross negligence or willful misconduct of the Administrative Agent
as determined by a final, non-appealable judicial order of a court of competent
jurisdiction.
Section 9.11 Indemnification. The Banks agree to indemnify the
Administrative Agent (to the extent not reimbursed by the Borrower) pro rata
according to their respective Commitment Ratios, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses (including fees and expenses of experts, agents,
consultants and counsel), or disbursements of any kind or nature whatsoever
which may be imposed on, incurred by or
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asserted against the Administrative Agent in any way relating to or arising out
of this Agreement or any other Loan Document or any action taken or omitted by
the Administrative Agent under this Agreement or any other Loan Document,
except that no Bank shall be liable to the Administrative Agent for any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses, or disbursements resulting from the gross
negligence or willful misconduct of the Administrative Agent as determined by a
final, non-appealable judicial order of a court of competent jurisdiction.
Section 9.12 Credit Decision. Each Bank represents and warrants to
each other and to the Administrative Agent that:
(a) In making its decision to enter into this Agreement
and to make its pro rata portion of the Accommodations it has independently
taken whatever steps it considers necessary to evaluate the financial condition
and affairs of the Borrower and that it has made an independent credit
judgment, and that it has not relied upon the Administrative Agent or
information provided by the Administrative Agent (other than information
provided to the Administrative Agent by the Borrower and forwarded by the
Administrative Agent to the Banks); and
(b) So long as any portion of the Accommodations remains
outstanding or such Bank has an obligation to make its pro rata portion of
Advances hereunder, it will continue to make its own independent evaluation of
the Collateral and of the financial condition and affairs of the Borrower.
Section 9.13 Successor Administrative Agent. Subject to the
appointment and acceptance of a successor Administrative Agent as provided
below, the Administrative Agent may resign at any time by giving fifteen (15)
days prior written notice thereof to the Banks and the Borrower and may be
removed at any time for cause by the Majority Banks. Upon any such resignation
or removal, the Majority Banks, and prior to the occurrence of a Default with
the consent of the Borrower not to be unreasonably withheld, shall have the
right to appoint a successor Administrative Agent. If no successor
Administrative Agent shall have been so appointed by the Majority Banks and
shall have accepted such appointment within thirty (30) days after the retiring
Administrative Agent gave notice of resignation or the Majority Banks' removal
of the retiring Administrative Agent, then the retiring Administrative Agent
may, on behalf of the Banks, appoint a successor Administrative Agent which
shall be any Person organized under the laws of Canada which has combined
capital and reserves in excess of $250,000,000. Upon the
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acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges, duties
and obligations of the retiring Administrative Agent and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder and under the other Loan Documents. After any retiring Administrative
Agent's resignation or removal hereunder as Administrative Agent the provisions
of this Article shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as the
Administrative Agent.
Section 9.14 Delegation of Duties. The Administrative Agent may
execute any of its duties under the Loan Documents by or through agents or
attorneys selected by it using reasonable care, and shall be entitled to rely
upon advice of counsel concerning all matters pertaining to such duties.
Section 9.15 Determination by Administrative Agent Conclusive and
Binding. Any determination to be made by the Administrative Agent on behalf of
or with the approval of the Banks or the Majority Banks under this Agreement
shall be made by the Administrative Agent in good faith and, if so made, shall
be binding on the Banks, absent manifest error.
ARTICLE 10
Computations and Indemnities
Section 10.1 Indemnity for Change in Circumstances. If with
respect to the Banks: (a) any change in Applicable Law, or any change in the
interpretation or application by any Governmental Entity of any Applicable Law
occurring or becoming effective after the date hereof; or (b) any compliance by
the Administrative Agent or any of the Banks with any direction, request or
requirement (whether or not having the force of Applicable Law) of any
Governmental Entity made or becoming effective after the date hereof, in either
case shall have the effect of causing Loss to the Administrative Agent or any
of the Banks by:
(i) increasing the cost to the Administrative Agent or any of the
Banks of performing its obligations under this Agreement or in
respect of any Advance or Bankers' Acceptance (including the
costs of maintaining any
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capital, reserve or special deposit requirements in connection
therewith);
(ii) requiring the Administrative Agent or any of the Banks to
maintain or allocate any capital or additional capital or
affecting its allocation of capital in respect of its
obligations under this Agreement or in respect of any Advances
or Bankers' Acceptances;
(iii) reducing any amount payable to the Administrative Agent or any
of the Banks under this Agreement or in respect of any Advance
or Bankers' Acceptance by any amount it deems material (other
than a reduction resulting from a higher rate of income tax or
other special tax relating to the Administrative Agent's or
any Bank's income in general); or
(iv) causing the Administrative Agent or any of the Banks to make
any payment or to forgo any return on, or calculated by
reference to, any amount received or receivable by the
Administrative Agent or any of the Banks under this Agreement
in respect of any Advance or Bankers' Acceptance;
then the Administrative Agent may give notice to the Borrower specifying the
nature of the event giving rise to such Loss and the Borrower shall, within
thirty (30) days or, if earlier, on the Maturity Date, pay such amounts as the
Administrative Agent may specify to be necessary to compensate the
Administrative Agent or any of the Banks for any such Loss incurred after the
date of such notice. The Administrative Agent or any Bank claiming compensation
under this Section 10.1 shall provide the Borrower with a written certificate
setting forth the additional amount or amounts to be paid to it hereunder and
calculations therefor in reasonable detail. Such certificate shall be
presumptively correct absent manifest error. In determining such amount, such
Person may use any reasonable averaging and attribution methods which are
consistently applied to similarly situated borrowers of such Person.
Section 10.2 Indemnity for Transactional and Environmental
Liability. (a) The Borrower hereby agrees to indemnify, exonerate and hold the
Administrative Agent and each Bank and each of their respective officers,
directors, employees, agents and other representatives (collectively, the
"Indemnified Parties") free and harmless from and against any and all claims,
demands, actions, causes of action, suits, losses, costs (including all
documentary, recording, filing, mortgage or stamp
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taxes or duties), charges, liabilities and damages, and expenses in connection
therewith (irrespective of whether such Indemnified Party is a party to the
action for which such indemnification hereunder is sought), and including
reasonable legal fees and disbursements (collectively, in this Section 10.2(a),
the "Indemnified Liabilities") paid, incurred or suffered by, or asserted
against, the Indemnified Parties or any of them or, with respect to, or as a
direct or indirect result of: (i) any transaction financed or to be financed in
whole or in part, directly or indirectly, with the proceeds of any
Accommodation obtained hereunder; or (ii) the execution, delivery, performance
or enforcement of this Agreement or any other Loan Document, except for such
Indemnified Liabilities that a court of competent jurisdiction determines by a
final non-appealable order are on account of the relevant Indemnified Party's
gross negligence or wilful misconduct.
(b) Without limiting the generality of the indemnity set
out in Section 10.2(a) hereof, the Borrower hereby further agrees to indemnify,
exonerate and hold the Indemnified Parties free and harmless from and against
any and all claims, demands, actions, causes of action, suits, losses, costs,
charges, liabilities and damages, and expenses in connection therewith,
including reasonable legal fees and disbursements (collectively, in this
Section 10.2(b), the "Indemnified Liabilities") paid, incurred or suffered by,
or asserted against, the Indemnified Parties or any of them for, with respect
to, or as a direct or indirect result of any Environmental Liabilities and
Costs.
(c) All obligations provided for in this Section 10.2
shall not be reduced or impaired by any investigation made by or on behalf of
the Administrative Agent or any of the Banks.
(d) The Borrower hereby agrees that, for the purposes of
effectively allocating the risk of loss placed on the Borrower by this Section
10.2, the Administrative Agent and each of the Banks shall be deemed to be
acting as the agent or trustee on behalf of and for the benefit of its
officers, directors and agents.
(e) If, for any reason, the obligations of the Borrower
pursuant to this Section 10.2 shall be unenforceable, the Borrower agrees to
make the maximum contribution to the payment and satisfaction of each
obligation that is permissible under Applicable Law, except to the extent that
a court of competent jurisdiction determines by a final non-appealable order
such obligations arose on account of the gross negligence or wilful misconduct
of any Indemnified Party.
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Section 10.3 Taxation on Payments. The Borrower hereby agrees:
(a) that any and all payments made by the Borrower under
or pursuant to any of the Loan Documents shall be made without set-off or
counterclaim and free and clear of, and without deduction for, any and all
present or future Taxes, levies, imposts, deductions, charges, fees, duties or
withholding or other charges of any nature imposed by any taxing authority, and
all liabilities with respect thereto, imposed by any jurisdiction as a
consequence or result of any action taken by the Borrower, including the making
of any payment under or pursuant to any of the Loan Documents, excluding, in
the case of the Administrative Agent, or any Bank, taxes imposed on its income
or capital taxes or receipts and franchise taxes. If the Borrower shall be
required by Law to deduct any Taxes from or in respect of any sum payable to
the Administrative Agent or any Bank hereunder or pursuant to any of the Loan
Documents, the sum payable to the Administrative Agent or such Bank, as the
case may be, shall be increased as may be necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 10.3) the Administrative Agent or such Bank, as the case may
be, receives an amount equal to the sum it would have received had no such
deductions been made. If a Tax credit is received by the Administrative Agent
or such Bank for any Taxes deducted or withheld by the Borrower in accordance
with this Section 10.3(a) and in respect of which additional amounts have been
paid by the Borrower under this Section 10.3(a), then, to the extent such Tax
credit is reasonably identified by the Administrative Agent or such Bank as
being related to the additional amounts paid by the Borrower under this Section
10.3(a) and has been received and utilized by the Administrative Agent or such
Bank, the Administrative Agent or such Bank shall pay to the Borrower an amount
equal to such Tax credit; provided that such amount shall not exceed the
additional amounts paid by the Borrower to the Administrative Agent or such
Bank under this Section 10.3(a); and
(b) to indemnify and hold harmless the Administrative
Agent and each Bank for the full amount of Taxes (excluding, in the case of the
Administrative Agent, or any Bank, taxes imposed on its income or capital taxes
or receipts and franchise taxes) and for any incremental Taxes due to the
Borrower's failure to remit to the Administrative Agent and the Banks the
required receipts or other required documentary evidence of payment of
such Taxes or due to the Borrower's failure to pay any Taxes (excluding, in the
case of the Administrative Agent, or any Bank, taxes imposed on its income or
capital taxes or receipts and
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franchise taxes) when due to the appropriate taxing authority (including any
Taxes imposed by any taxing authority on amounts payable under this Section
10.3) paid by the Administrative Agent or any Bank and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes were correctly or legally assessed. The
Administrative Agent or any Bank shall promptly notify the Borrower of such
payment and, if such payment was made pursuant to an incorrect or illegal
assessment, shall reasonably cooperate with the Borrower, at the expense of the
Borrower, in any dispute of such assessment. The Administrative Agent or any
Bank claiming compensation under this Section 10.3 shall provide the Borrower
with a written certificate setting forth the additional amount or amounts to be
paid to it hereunder and calculations therefor in reasonable detail. Such
certificate shall be presumptively correct absent manifest error. Payment
pursuant to this indemnification shall be made within thirty (30) days from the
date the Administrative Agent or such Bank makes written demand therefor or if
earlier, on the Maturity Date.
Section 10.4 Judgment Currency. If, for the purposes of obtaining
judgment in any court, it is necessary to convert any sum due, or owing
hereunder or under any other Loan Document to the Administrative Agent or any
one or more of the Banks in any currency (the "Original Currency") into another
currency (the "Other Currency"), the parties hereto agree, to the fullest
extent that they may effectively do so, that the rate of exchange used shall be
that at which in accordance with normal banking procedures the Administrative
Agent could purchase the Original Currency with the Other Currency on the
Business Day preceding that on which final judgment is granted.
The obligations of the Borrower in respect of any sum due in
the Original Currency from it to the Administrative Agent or any one or more of
the Banks under any of the Loan Documents shall, notwithstanding any judgement
in any Other Currency, be discharged only to the extent that on the Business
Day following receipt by the Administrative Agent of any sum adjudged to be so
due or owing in such Other Currency, the Administrative Agent may in accordance
with normal banking procedures purchase the Original Currency with such Other
Currency. If the amount of the Original Currency so purchased is less than the
sum originally due or owing to the Administrative Agent or any one or more of
the Banks in the Original Currency, the Borrower shall, as a separate
obligation and notwithstanding any such judgement, indemnify the Administrative
Agent or such Bank against such Loss, and if the amount of the Original
Currency so purchased exceeds the sum originally due or owing to the
Administrative
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Agent or such Bank in the Original Currency, the Administrative Agent or such
Bank shall remit such excess to the Borrower.
Section 10.5 Claims for Increased Costs and Taxes. Prior to the
occurrence of a Default in the event that any Bank shall have notified the
Borrower that it is entitled to claim compensation pursuant to Section 10.01 or
10.3 hereof (each such Bank being an "Affected Bank"), the Borrower may
designate a replacement Canadian chartered bank reasonably acceptable to the
Administrative Agent (a "Replacement Bank") to assume the Commitment and the
obligations of any such Affected Bank hereunder, and to purchase the
outstanding Accommodations of such Affected Bank and such Affected Bank's
rights hereunder and with respect thereto, without recourse upon, or warranty
by, or expense to, such Affected Bank, for a purchase price equal to the
outstanding principal amount of the Accommodations of such Affected Bank plus
all interest accrued and unpaid thereon and all other amounts owing to such
Affected Bank hereunder and upon such assumption and purchase by the
Replacement Bank, such Replacement Bank shall be deemed to be a "Bank" for
purposes of this Agreement and such Affected Bank shall cease to be a "Bank"
for purposes of this Agreement and shall no longer have any obligations or
rights hereunder (other than any obligations or rights which according to this
Agreement shall survive the termination of the Commitment).
Article II
Miscellaneous
Section 11.1 Notices.
(a) Except as otherwise expressly provided herein, all
notices and other communications under this Agreement and the other Loan
Documents (unless otherwise specifically stated therein) shall be in writing
and shall be personally delivered to an officer or other responsible employee
of the addressee or sent by facsimile, charges prepaid, at or to the applicable
addresses or facsimile numbers, as the case may be, set forth in this Section
11.1. Any communication which is personally delivered as aforesaid shall be
deemed to have been validly and effectively given on the date of such delivery
if such date is a Business Day and such delivery was made during normal
business hours of the recipient; otherwise, it shall be deemed to have been
validly and effectively given on the Business Day next following such date of
delivery. Any communication which is transmitted by facsimile as aforesaid
shall be deemed to have been validly and effectively
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given on the date of transmission if such date is a Business Day and such
transmission was made during normal business hours of the recipient; otherwise,
it shall be deemed to have been validly and effectively given on the Business
Day next following such date of transmission. All notices and other
communications under this Agreement shall be given to the parties hereto at the
following addresses:
(i) If to the Borrower, to it at:
Paging Network of Canada Inc.
c/o Paging Network, Inc.
4965 Preston Park Boulevard
Suite 500
Plano, Texas 75093
Attn: Mr. Robert Thompson
Telecopy No.: (214) 985-6551
with a copy to:
Paging Network of Canada Inc.
3250 Bloor Street, West
Suite 700
Toronto, Ontario M8X 2X9
Attn: President
Telecopy No.: (416) 207-4321
Madison Telecommunications Holdings, Inc.
c/o Madison Ventures Corporation
1970 Alberta Street
Vancouver, British Columbia
V5Y 3X4
Attn: Mr. Bruce W. Aunger
Telecopy No.: (604) 879-1483
Roger Feldman, Esq.
Bingham, Dana & Gould
150 Federal Street
Boston, Massachusetts 02110
Telecopy No.: (617) 951-8736
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McCarthy Tetrault
275 Sparks Street
Suite 1000
Ottawa Ontario
K1R 7X9 Canada
Attn: Anthony H.A. Keenleyside, Esq.
Telecopy No.: (613) 563-9386
Blake, Cassels & Graydon
1700-1030 West George Street
Vancouver, BC V6E2Y3
Attn: Anne M. Stewart, Q.C.
Telecopy No.: (604) 631-3309
(ii) If to the Administrative Agent, to
it at:
Toronto Dominion Tower, 8th Floor
Toronto Dominion Centre
Toronto, Ontario M5K 1A2
Attn: Manager, Agency
Telecopy No.: (416) 982-5535
with a copy to:
The Toronto-Dominion Bank
Communications Finance
31 West 52nd Street
New York, New York 10019-6101
Attn: Mr. David E. Oliver
Telecopy No.: (212) 262-1928
(iii) If to the Banks, to them at the addresses set forth beside
their names on the signature pages hereof.
(b) Each Accommodation Notice and any notice of a prepayment shall
be irrevocable and binding on the Borrower. With respect to any Accommodation
Notice, the Administrative Agent may act upon the basis of telephonic notice
believed by it reasonably and in good faith to be from the Borrower prior to
receipt of an Accommodation Notice. In the event of conflict between the
Administrative Agent's record of the applicable terms of any Accommodation and
such Accommodation Notice, the Administrative Agent's record shall prevail.
(c) Any party hereto may change the address to which notices shall
be directed under this Section 11.1 by giving five
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(5) days' prior written notice of such change to the other parties.
Section 11.2 Expenses. The Borrower will promptly pay, or
reimburse:
(a) all reasonable and customary out-of-pocket expenses
of the Administrative Agent in connection with the preparation, negotiation,
execution and delivery of this Agreement and the other Loan Documents, and the
transactions contemplated hereunder and thereunder and the making of the
initial Advance hereunder (whether or not such Advance is made), including, but
not limited to, the reasonable fees and disbursements of counsel for the
Administrative Agent;
(b) all reasonable and customary out-of-pocket expenses
of the Administrative Agent in connection with the restructuring and "work out"
of the transactions contemplated in this Agreement or the other Loan Documents,
and the preparation, negotiation, execution and delivery of any waiver,
amendment or consent by the Administrative Agent and the Banks, or any of them,
relating to this Agreement or the other Loan Documents, including, but not
limited to, the fees and disbursements of any experts, agents or consultants
and of counsel for the Administrative Agent; and
(c) all reasonable and customary out-of-pocket costs and
expenses of obtaining performance under this Agreement or the other Loan
Documents and all out-of-pocket costs and expenses of collection if an Event of
Default occurs in the payment of the Obligations, which in each case shall
include reasonable fees and out-of-pocket expenses of counsel for the
Administrative Agent and the Banks.
Section 11.3 Waivers. The rights and remedies of the
Administrative Agent and the Banks under this Agreement and the other Loan
Documents shall be cumulative and not exclusive of any rights or remedies which
they would otherwise have. No failure or delay by the Administrative Agent, the
Majority Banks, or the Banks, or any of them, in exercising any right, shall
operate as a waiver of such right. The Administrative Agent and the Banks
expressly reserve the right to require strict compliance with the terms of this
Agreement and the other Loan Documents in connection with any future funding of
a Request for Advance. In the event the Banks decide to fund a Request for
Advance at a time when the Borrower is not in strict compliance with the terms
of this Agreement and the other Loan Documents, such decision by the Banks
shall not be deemed to constitute an undertaking by the
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Banks to fund any further Request for Advance or preclude the Banks or the
Administrative Agent from exercising any rights available under the Loan
Documents or at law or equity. Any waiver or indulgence granted by the
Administrative Agent, the Banks, or the Majority Banks, or any of them, shall
not constitute a modification of this Agreement or any other Loan Document,
except to the extent expressly provided in such waiver or indulgence, or
constitute a course of dealing at variance with the terms of this Agreement or
any other Loan Document such as to require further notice of their intent to
require strict adherence to the terms of this Agreement or any other Loan
Document in the future.
Section 11.4 Right to Combine and Set-Off. Upon the occurrence and
during the continuance of any Event of Default, the Administrative Agent or any
one or more of the Banks is hereby authorized at any time and from time to
time, to the fullest extent permitted by Applicable Law, to combine, set-off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by the
Administrative Agent or such Bank to or for the credit or the account of the
Borrower with or against any and all of the obligations of the Borrower now or
hereafter existing under any of the Loan Documents, irrespective of whether or
not the Administrative Agent shall have made any demand under any of the Loan
Documents and although such Obligations may be unmatured. The Administrative
Agent or such Bank agrees promptly to notify the Borrower after any such
combination or set-off and application made by the Administrative Agent or such
Bank provided that the failure to give such notice shall not affect the
validity of such combination or set-off and application. The rights of the
Administrative Agent and the Banks under this Section are in addition to other
rights and remedies (including, without limitation, other rights of combination
and set-off) which the Administrative Agent or the Banks may have.
Section 11.5 Assignment.
(a) The Borrower may not assign or transfer any of its
rights or obligations hereunder or under any other Loan Document without the
prior written consent of each Bank and the Administrative Agent.
(b) Any Bank may, without the consent of the Borrower
grant participations in all or any part of the Commitment to one or more
Persons (each a "Participant"). Any Bank may, with the consent of the
Administrative Agent, and, prior to the occurrence
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and continuance of a Default, with the consent of the Borrower (which consent
is not to be unreasonably withheld or delayed), assign all or any part of its
respective interest in the Commitment to one or more Persons; provided that
prior to the occurrence and continuance of a Default (i) such Person is a
resident of Canada for the purpose of the Income Tax Act (Canada) or (ii) such
assignment will not cause the Borrower to incur any increased costs pursuant to
Section 10.3 hereof (each an "Assignee").
(c) The Administrative Agent or any Bank may deliver a
copy of any financial statement or any other information relating to the
prospects, business, Assets or condition (financial or otherwise) of the
Borrower or any of its Subsidiaries which may be furnished to it under this
Agreement or otherwise to any Participant or Assignee or any prospective
Participant or Assignee; provided that each such delivery is made on the
understanding that the information contained therein is confidential in nature.
(d) Without limitation of its obligations hereunder, the
Borrower shall, at its sole cost and expense, give such certificates,
acknowledgments and other further assurances in respect, of this Agreement and
the Commitment as any Bank may reasonably require in connection with any
participation or assignment pursuant to this Section.
(e) Except in the case of an Assignee which has delivered
an Assignment and Assumption Agreement substantially in the form of Exhibit H
hereto, prior to the occurrence of a Default or an Event of Default, a Bank
granting a participation or making an assignment shall act on behalf of all of
its Participants and Assignees in all dealings with the Borrower in respect
hereof.
(f) Any Bank shall deliver to the Borrower an agreement
substantially in the form of Exhibit H hereto by which any Assignee of such
Bank assumes the obligations and agrees to be bound by all the terms and
conditions of this Agreement, all as if such Assignee had been an original
party hereto. Upon any such assignment and such assumption of the obligations
of a Bank by an Assignee, the assigning Bank and the Borrower shall be mutually
released from their respective obligations to each other hereunder to the
extent of such assignment and assumption and shall thenceforth have no
liability or obligations to each other to such extent, except in respect of
matters which shall have arisen prior to such assignment.
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(g) An administrative fee of $5,000 shall be payable to
the Administrative Agent by the assigning Bank at the time of any assignment
hereunder.
Section 11.6 Accounting Principles. All accounting terms used
herein without definition shall be used as defined under GAAP. GAAP shall be
applied on a basis consistent with prior fiscal years of the Borrower.
Section 11.7 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but
all such separate counterparts shall together constitute but one and the same
instrument.
Section 11.8 Governing Law. This Agreement and all Loan Documents
shall be governed by and interpreted in accordance with the Applicable Laws of
the Province of Ontario and the Applicable Laws of Canada applicable therein
which apply to contracts made and to be performed entirely in Ontario; provided
that any Loan Document stated to be governed by and interpreted in accordance
with the laws of any other jurisdiction shall be governed by and interpreted in
accordance with the laws of such jurisdiction. The parties hereby irrevocably
attorn and submit to the non-exclusive jurisdiction of the courts of Ontario
with respect to any matter arising under or related to this Agreement or any
Loan Document; provided that, with respect to any other Loan Document stated to
be governed by the laws of any other jurisdiction, the parties agree to attorn
and submit to the non-exclusive jurisdiction of the courts of such other
jurisdiction. The Borrower agrees that final judgment in such suit, action or
proceeding shall be conclusive and may be enforced in any other jurisdiction by
suit on the judgment or in any other manner provided by Applicable Law.
Section 11.9 Severability. If any provision of this Agreement or
any Loan Document is, or becomes, illegal, invalid or unenforceable, such
provision shall be severed from this Agreement or such Loan Document and be
ineffective to the extent of such illegality, invalidity or unenforceability.
The remaining provisions hereof or thereof shall be unaffected by such
provision and shall continue to be valid and enforceable.
Section 11.10 Interest.
(a) For purposes of the Interest Act (Canada): (i)
Whenever any interest or fee under this Agreement is calculated using a rate
based on a year of 360 days, such rate determined pursuant to such calculation,
when expressed as an
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annual rate, is equivalent to (x) the applicable rate based on a year of 360
days, (y) multiplied by the actual number of days in the calendar year in which
the period for which such interest or fee is calculated ends, and (z) divided
by 360; (ii) the principle of deemed reinvestment of interest shall not apply
to any interest calculation under this Agreement; and (iii) the rates of
interest stipulated in this Agreement are intended to be nominal rates and not
effective rates or yields.
(b) Notwithstanding any provision to the contrary
contained in this Agreement, in no event shall the aggregate "interest" (as
defined in Section 347 of the Criminal Code, Revised Statutes of Canada, 1985,
c.46 as the same may be amended, replaced or re-enacted from time to time)
payable under this Agreement exceed the maximum amount of interest on the
"Credit advanced" (as defined in that section) under this Agreement lawfully
permitted under that section and, if any payment, collection or demand pursuant
to this Agreement in respect of "interest" (as defined in that section) is
determined to be contrary to the provisions of that section, such payment,
collection or demand shall be deemed to have been made by mutual mistake of the
Borrower and the Administrative Agent and the Banks and the amount of such
payment or collection shall be refunded to the Borrower. For purposes of this
Agreement, the effective annual rate of interest shall be determined in
accordance with generally accepted actuarial practices and principles over the
term of the Credit Facilities are outstanding on the basis of annual
compounding of the lawfully permitted rate of interest and, in the event of
dispute, a certificate of a Fellow of the Canadian Institute of Actuaries
appointed by the Administrative Agent will be conclusive for the purposes of
such determination absent manifest error.
Section 11.11 Table of Contents and Headings. The Table of Contents
and the headings of the various subdivisions used in this Agreement are for
convenience only and shall not in any way modify or amend any of the terms or
provisions hereof, nor be used in connection with the interpretation of any
provision hereof.
Section 11.12 Amendment and Waiver. Neither this Agreement nor any
other Loan Document nor any term hereof or thereof may be amended orally, nor
may any provision hereof be waived orally but only by an instrument in writing
signed by the Majority Banks and the Administrative Agent and, in the case of
an amendment, by the Borrower, except that in the event of (a) any increase in
the amount of the Commitment, (b) any delay or extension in the terms of
repayment of the Accommodations or any mandatory reductions in
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the Commitment provided in Sections 2.6 or 2.8 hereof or amend the provisions
of this Agreement dealing with the types of Accommodations available hereunder,
(c) any reduction in principal, interest or fees due hereunder (without a
corresponding payment by the Borrower in the amount of such reduction) or
postponement or subordination of the payment thereof without a corresponding
payment by the Borrower, (d) any release of any portion of the Collateral for
the Accommodations, except in connection with a merger, sale or other
disposition otherwise permitted hereunder (in which case such release shall
require no further approval by the Banks), (e) any waiver of any Default due to
the failure by the Borrower to pay any sum due to any of the Banks hereunder,
(f) any release or amendment of any Security Document except in connection with
a merger, sale or other disposition otherwise permitted hereunder (in which
case, such release or amendment shall require no further approval by the
Banks), or (g) any amendment of this Section 11.12, or the definitions of
Majority Banks or Permitted Collateral, or of any Section herein to the extent
that such Section requires action by all Banks, any amendment or waiver or
consent may be made only by an instrument in writing signed by each of the
Banks and the Administrative Agent and, in the case of an amendment, by the
Borrower. Any amendment to any provision hereunder governing the rights,
obligations, or liabilities of the Administrative Agent solely to any of the
Banks may be made only by an instrument in writing signed by the Administrative
Agent and by each of the Banks.
Section 11.13 Non-Merger. Except as otherwise expressly provided in
this Agreement, the covenants, representations and warranties of the parties
contained in this Agreement and the other Loan Documents shall not merge on and
shall survive the Agreement Date and the making of any Accommodation, and
notwithstanding such closing or Accommodation, or any investigation made by or
on behalf of any party, shall continue in full force and effect. Neither the
Agreement Date nor the making of any Accommodation shall prejudice any right of
one party against any other party in respect of anything done or omitted
hereunder or under any of the other Loan Documents or in respect of any right
to damages or other remedies.
Section 11.14 Other Relationships. No relationship created
hereunder or under any other Loan Document shall in any way affect the ability
of the Administrative Agent and each Bank to enter into or maintain business
relationships with the Borrower or any of its Affiliates beyond the
relationships specifically contemplated by this Agreement and the other Loan
Documents.
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Section 11.15 Directly or Indirectly. If any provision in this
Agreement refers to any action taken or to be taken by any Person, or which
such Person is prohibited from taking, such provision shall be applicable
whether such action is taken directly or indirectly by such Person, whether or
not expressly specified in such provision.
Section 11.16 Reliance on and Survival of Various Provisions. All
covenants, agreements, statements, representations and warranties made herein
or in any certificate delivered pursuant hereto (i) shall be deemed to have
been relied upon by the Administrative Agent and each of the Banks
notwithstanding any investigation heretofore or hereafter made by them, and
(ii) shall survive the execution and delivery of this Agreement and shall
continue in full force and effect so long as any obligation is outstanding and
unpaid. Any right to indemnification hereunder, including, without limitation,
rights pursuant to Sections 2.13, 10.1, 10.2, 10.3 and 11.2 hereof, shall
survive the termination of this Agreement and the payment and performance of
all Obligations for a period of three (3) years thereafter.
Section 11.17 Senior Debt. The Obligations are secured by the
Security Documents and are intended by the parties hereto to be senior in right
of payment to all other Indebtedness of the Borrower.
Section 11.18 Obligations Several. The obligations of the
Administrative Agent and each of the Banks hereunder are several, not joint.
Section 11.19 Confidentiality. The Banks shall hold all non-public,
proprietary or confidential information (which has been identified as such by
the Borrower) obtained pursuant to the requirements of this Agreement in
accordance with their customary procedures for handling confidential
information of this nature and in accordance with safe and sound banking
practices; provided, however, the Banks may make disclosure of any such
information to such of their examiners, Affiliates, outside auditors, counsel,
consultants, appraisers and other professional advisors as may be reasonably
necessary in connection with this Agreement or as reasonably required by any
proposed participant or assignee or as required or requested by any
Governmental Entity or representative thereof or in connection with the
enforcement hereof or of any other Loan Document or related document or
pursuant to legal process or with respect to any litigation between or among
the Borrower and any of the Banks; provided, however, that, as a condition to
receipt of any such
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information, each such Affiliate, auditor, counsel, consultant, appraiser,
professional advisor, proposed participant or assignee shall agree in writing
to treat all such information as confidential; and provided, further, that
prior to any such disclosure to any unrelated entity outside the ordinary
course of business or pursuant to legal process, the disclosing Bank shall give
notice of such disclosure to the Borrower and cooperate with the Borrower in
any efforts to limit or restrict such disclosure. In no event shall any Bank be
obligated or required to return any materials furnished to it by the Borrower.
The foregoing provisions shall not apply to a Bank with respect to information
that (i) is or becomes generally available to the public (other than through
such Bank), (ii) is already in the possession of such Bank on a nonconfidential
basis, or (iii) comes into the possession of such Bank in a manner not known to
such Bank to involve a breach of a duty of confidentiality owing to the
Borrower.
Section 11.20 Time of the Essence. Time shall be of the essence of
this Agreement.
Section 11.21 Third Party Beneficiaries. Each party hereto intends
that this Agreement shall not benefit or create any right or cause of action in
or on behalf of any Person, other than the parties hereto and the Persons
contemplated in Section 10.2 hereof, and no Person, other than the parties
hereto and the Persons contemplated in Section 10.2 hereof, shall be entitled
to rely on the provisions hereof in any action, suit, proceeding, hearing or
other forum.
Section 11.22 Enurement. This Agreement shall enure to the benefit
of and be binding upon the parties hereto and any Person becoming a party to
this Agreement through the procedure set out in Section 11.5 hereof. This
Agreement shall be binding upon any assigns and enure to the benefit of any
permitted assigns.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
caused it to be executed under seal by their duly authorized officers, all as
of the day and year first above written.
<TABLE>
<S> <C>
BORROWER: PAGING NETWORK OF CANADA INC., a
Canada corporation
By: /s/ G. FITZGERALD
--------------------------------------
G. FITZGERALD
Its: President
------------------------------
ADMINISTRATIVE AGENT: THE TORONTO-DOMINION BANK
By: [ILLEGIBLE]
--------------------------------------
Its: Manager-Agency
------------------------------
BANK:
ADDRESS: THE TORONTO-DOMINION BANK
8th Floor By: [ILLEGIBLE]
Toronto Dominion Tower --------------------------------------
Toronto Dominion Centre Its: Manager-Communications Finance
Toronto, Ontario M5K 1A2 ------------------------------
PAGING NETWORK OF CANADA INC.
LOAN AGREEMENT
SIGNATURE PAGE 1
</TABLE>
<PAGE> 101
EXHIBIT A
FORM OF DRAFT BANKERS' ACCEPTANCE
<PAGE> 102
EXHIBIT A
FORM OF DRAFT BANKERS' ACCEPTANCE
B.A.:
-----------------
DUE DATE:
-------------
- ------------- ------------------ ----------------
TERM IN DAYS BRANCH DOMICILE ISSUE DATE
ON _________________ WITHOUT GRACE, FOR VALUE RECEIVED, PAY TO THE ORDER OF THE
UNDERSIGNED, THE SUM OF $______ DOLLARS
--
--
--
TO: [INSERT NAME OF PURCHASER]
- ----------------------------- --------------------------
Signature
- ----------------------------- --------------------------
Signature
<PAGE> 103
EXHIBIT B
FORM OF DRAWING NOTICE
<PAGE> 104
EXHIBIT B
FORM OF DRAWING NOTICE
The undersigned, Paging Network of Canada Inc., a Canada corporation
(the "Borrower"), acting by and through, _______________________ the duly
elected and qualified ____________________ of the Borrower, in connection with
that certain Loan Agreement (as in effect on the date hereof, the "Loan
Agreement"), dated as of June 5, 1996, among the various financial institutions
which are party thereto (the "Banks"), The Toronto-Dominion Bank, as
administrative agent (the "Administrative Agent"), and the Borrower, hereby
certifies to the Administrative Agent and the Banks that:
1. The Borrower, pursuant to Section 2.5(b) of the Loan
Agreement, hereby requests a Drawing under the Loan Agreement, and in that
connection sets forth below the information relating to such Drawing (the
"Proposed Drawing") as required by Section 2.5(b) of the Loan Agreement:
(i) The Business Day of Proposed Drawing is _____________,
19_____.
(ii) The aggregate Face Amount of Drafts to be accepted is
[insert amount in Canadian dollars].
(iii) The contract maturity date for such Drafts is
________ days).
(iv) The Proposed Drawing shall be a
(Collateralized/Uncollateralized] Bankers' Acceptance.
After giving effect to the Proposed Drawing, $_______________ which is the
Equivalent Canadian Dollar Amount of the Permitted Collateral, and which
represents the Minimum Permitted Collateral Amount is on deposit with the
Administrative Agent pursuant to the Deposit Agreement. After giving effect to
the Proposed Drawing, the Applicable Margin for such Drawing shall be:
______________________. The proceeds of the Proposed Drawing should be wired as
set forth on Schedule 1 attached hereto. The foregoing instructions shall be
irrevocable.
2. All of the representations and warranties of the Borrower made
under the Loan Agreement (including, without limitation, all representations
and warranties with respect to the Borrower's Subsidiaries) and the other Loan
Documents, which, pursuant to Section 4.2 of the Loan Agreement or otherwise,
are made on the date hereof, are as of the date hereof, and will be as of the
date of such Proposed Drawing, true and correct in all material respects both
before and after giving effect to the application of the proceeds of the
Proposed Drawing in connection
<PAGE> 105
with which this Drawing Notice is given, and after giving effect to any updates
to information provided to the Banks in accordance with the terms of such
representations and warranties.
3. There does not exist, as of this date, and there will not
exist after giving effect to the Proposed Drawing requested in this Drawing
Notice, any Default under the Loan Agreement.
4. All Necessary Authorizations have been obtained or made, are
in full force and effect and are not subject to any pending or threatened
reversal or cancellation.
5. There has occurred no event having, or which could be
reasonably expected to have, a Materially Adverse Effect since December 31,
1995.
6. All other conditions precedent to the Proposed Drawing
requested hereby set forth in Section 3.2 of the Loan Agreement have been
satisfied.
Capitalized terms used in this Drawing Notice and not otherwise
defined are used as defined in the Loan Agreement.
IN WITNESS WHEREOF, the Borrower, acting through an Authorized
Signatory, has signed this Drawing Notice, as of the _______ day of
______________, _______.
PAGING NETWORK OF CANADA INC., a Canada
corporation
By:
--------------------------------------
Its:
-------------------------------------
Schedule 1 - Wiring Instructions
Schedule 2 - Compliance Calculations
B-2
<PAGE> 106
EXHIBIT C
FORM OF REQUEST FOR ADVANCE
<PAGE> 107
EXHIBIT C
FORM OF REQUEST FOR ADVANCE
Paging Network of Canada Inc., a Canada corporation (the "Borrower"),
acting by and through , the duly elected and qualified
of the Borrower, in connection with that certain Loan Agreement (as in effect on
the date hereof, the "Loan Agreement"), dated as of June 5, 1996, among the
various financial institutions which are party thereto (the "Banks"), The
Toronto-Dominion Bank, as administrative agent (the "Administrative Agent"), and
the Borrower, hereby certifies to the Administrative Agent and the Banks that:
1. The Borrower, pursuant to Section [2.2(b)/2.3(b)/2.3(c)] of
the Loan Agreement, hereby requests a [Collateralized/Uncollateralized Prime
Rate Advance] [Cost of Funds Rate Advance] (the "Proposed Advance") in the
amount of $ to be made on , , under the Commitment.
After giving effect to the Proposed Advance, $ which is the Equivalent
Canadian Dollar Amount of the Permitted Collateral, and which represents the
Minimum Permitted Collateral Amount, is on deposit with the Administrative Agent
pursuant to the Deposit Agreement. After giving effect to the Proposed Advance,
the Applicable Margin for such Advance shall be: . The proceeds of
the Proposed Advance should be wired as set forth on Schedule 1 attached hereto.
[The Interest Period for the Proposed Advance shall be month(s).] The
foregoing instructions shall be irrevocable.
2. All of the representations and warranties of the Borrower made
under the Loan Agreement (including, without limitation, all representations
and warranties with respect to the Borrower's Subsidiaries) and the other Loan
Documents, which, pursuant to Section 4.2 of the Loan Agreement or otherwise,
are made on the date hereof, are as of the date hereof, and will be as of the
date of such Advance, true and correct in all material respects both before and
after giving effect to the application of the proceeds of the Advance in
connection with which this Request for Advance is given, and after giving
effect to any updates to information provided to the Banks in accordance with
the terms of the representations and warranties.
3. There does not exist, as of this date, and there will not
exist after giving effect to the Advance requested in this Request for Advance,
any Default under the Loan Agreement.
4. All Necessary Authorizations have been obtained or made, are
in full force and effect and are not subject to any pending or threatened
reversal or cancellation.
<PAGE> 108
5. There has occurred no event having, or which could be
reasonably expected to have, a Materially Adverse Effect since December 31,
1995.
6. All other conditions precedent to the Advance requested hereby
set forth in Section 3.2 of the Loan Agreement have been satisfied.
Capitalized terms used in this Request for Advance and not otherwise
defined are used as defined in the Loan Agreement.
IN WITNESS WHEREOF, the Borrower, acting through an Authorized
Signatory, has signed this Request for Advance, as of the day of
, .
PAGING NETWORK OF CANADA INC., a
Canada corporation
By:
Its:
Schedule 1 - Wiring Instructions
Schedule 2 - Compliance Calculations
C-2
<PAGE> 109
EXHIBIT D
FORM OF ACCEPTANCE
<PAGE> 110
EXHIBIT D
FORM OF ACCEPTANCE
FOR: [INSERT NAME OF BANK]
BRANCH
MANAGER
OFFICER IN CHARGE OF OPERATIONS
<PAGE> 111
EXHIBIT E
FORM OF BORROWER'S LOAN CERTIFICATE
<PAGE> 112
EXHIBIT E
FORM OF
BORROWER'S LOAN CERTIFICATE
The undersigned, who is the of Paging Network of Canada
Inc., a Canada corporation (the "Borrower"), does hereby certify on behalf of
the Borrower that he is the duly elected and qualified of the Borrower
and an Authorized Signatory of the Borrower.
In connection with the making of certain Accommodations to the
Borrower by the Banks under that certain Loan Agreement of even date herewith
(the "Loan Agreement") by and among the Borrower, The Toronto-Dominion Bank, as
administrative agent (the "Administrative Agent"), and The Toronto-Dominion Bank
and such other financial institutions as become "Banks" thereunder
(collectively, the "Banks"), the undersigned hereby further certifies to the
Administrative Agent and the Banks on behalf of the Borrower that:
1. Attached hereto as Exhibit A is a true, complete, and correct
copy of the Certificate and Articles of Incorporation of the
Borrower, certified by appropriate government officials of the
jurisdiction of incorporation of the Borrower, as in full
force and effect on the date hereof.
2. Attached hereto as Exhibit B is a true, complete and correct
copy of the By-Laws of the Borrower, together with all
amendments thereto, as in full force and effect on the date
hereof.
3. Attached hereto as Exhibit C is a true, complete and correct
copy of the resolutions of the Board of Directors of the
Borrower authorizing the execution of the Loan Agreement, each
other Loan Document to which the Borrower is a party, and the
creation and assumption, by the Borrower, of the Obligations.
4. Attached hereto as Exhibit D are true, complete, and correct
copies of certificates of good standing for the Borrower from
appropriate government officials of the jurisdiction of
incorporation of the Borrower and for each other jurisdiction
in which the Borrower carries on business. The Borrower has,
from the dates of such certificates to the date hereof,
remained in good standing under the laws of such jurisdiction.
5. Attached hereto as Exhibit E are true, complete and correct
copies of any shareholders' agreements or voting trust
agreements in effect with respect to the Capital Stock of the
Borrower.
<PAGE> 113
6. The following persons are the Authorized Signatories of the
Borrower, each of such persons having been duly elected, and
set forth opposite their respective names below are their
respective genuine signatures:
NAME SIGNATURE DATE
____ _________ ____
- ------------------ --------------------- ------------
- ------------------ --------------------- ------------
- ------------------ --------------------- ------------
Capitalized terms used herein and not otherwise defined are used as
defined in the Loan Agreement.
IN WITNESS WHEREOF, I have signed this Certificate on the ____ day
of ____________ 1996.
PAGING NETWORK OF CANADA INC.,
a Canada corporation
By: _____________________________
Name: ________________________
Title: _______________________
EXHIBITS:
Exhibit A - Certificate and Articles of Incorporation
Exhibit B - By-Laws
Exhibit C - Authorizing Resolutions
Exhibit D - Certificates of Good Standing
Exhibit E - Shareholder's Agreements or Voting Trust Agreements
E-2
<PAGE> 114
EXHIBIT F
FORM OF SUBSIDIARY LOAN CERTIFICATE
<PAGE> 115
EXHIBIT F
FORM OF SUBSIDIARY LOAN CERTIFICATE
The undersigned, who is the ________________ of _________________ a
____________________ [corporation] [partnership] (the "Subsidiary"), does
hereby certify on behalf of the Subsidiary that he is the duly elected and
qualified ____________________ of [_______________, the _______________ of]
the Subsidiary and an Authorized Signatory.
In connection with the making of certain Accommodations to Paging
Network of Canada Inc., a Canada corporation (the "Borrower") by the Banks
under that certain Loan Agreement of even date herewith (the "Loan Agreement")
by and among the Borrower, The Toronto-Dominion Bank, as administrative agent
(the "Administrative Agent), and The Toronto-Dominion Bank and such other
financial institutions as become "Banks" thereunder (collectively, the
"Banks"), the undersigned hereby further certifies to the Administrative Agent
and the Banks on behalf of the Subsidiary that:
1. Attached hereto as Exhibit A is a true, complete, and correct copy of
the Certificate and Articles of Incorporation of the Subsidiary,
certified by appropriate government officials of the jurisdiction of
incorporation of the Subsidiary, as in full force and effect on the
date hereof.
2. Attached hereto as Exhibit B is a true, complete and correct copy of
the By-Laws of the Subsidiary, together with all amendments thereto,
as in full force and effect on the date hereof.
3. Attached hereto as Exhibit C is a true, complete and correct copy of
the resolutions of the Board of Directors of the Subsidiary authorizing
the execution of each Loan Document to which the Subsidiary is a
party.
4. Attached hereto as Exhibit D are true, complete, and correct copies
of certificates of good standing for the Subsidiary from appropriate
government officials of the jurisdiction of incorporation of the
Subsidiary and for each other jurisdiction in which the Subsidiary
carries on business. The Subsidiary has, from the dates of such
certificates to the date hereof, remained in good standing under the
laws of such jurisdiction.
5. Attached hereto as Exhibit E are true, complete and correct copies of
any shareholders' agreements or voting trust agreements in effect with
respect to the Capital Stock of the Subsidiary.
<PAGE> 116
6. The following persons are the Authorized Signatories of the
Subsidiary, each of such persons having been duly elected, and set
forth opposite their respective names below are their respective
genuine signatures:
NAME SIGNATURE DATE
---- --------- ----
- ------------------ --------------------- ------------
- ------------------ --------------------- ------------
- ------------------ --------------------- ------------
Capitalized terms used herein and not otherwise defined are used as
defined in the Loan Agreement.
IN WITNESS WHEREOF, I have signed this Certificate this ____ day of
_____________, 1996.
[___________________________ a
_____________________ partnership,
through its General Partner:)
_______________________, a
______________ corporation
By: ____________________________________
Its:____________________________________
EXHIBITS:
Exhibit A - Certificate and Articles of Incorporation/Partnership
Exhibit B - By-Laws/Partnership Agreement
Exhibit C - Authorizing Resolutions
Exhibit D - Certificates of Good Standing
Exhibit E - Shareholder's Agreements or Voting Trust Agreements
F-2
<PAGE> 117
EXHIBIT G
FORM OF PERFORMANCE CERTIFICATE
<PAGE> 118
EXHIBIT G
FORM OF PERFORMANCE CERTIFICATE
The undersigned, who is the _______________ of Paging Network of
Canada Inc., a Canada corporation (the "Borrower"), does hereby certify on
behalf of the Borrower that he is the duly elected and qualified ___________
of the Borrower and an Authorized Signatory of the Borrower.
1. [WITH RESPECT TO QUARTERLY STATEMENTS: The accompanying
unaudited financial statements of the Borrower on a consolidated and
consolidating (unconsolidated) basis with its Subsidiaries as of [DATE] and for
the quarterly accounting period ended [DATE] are complete and correct and
present fairly, in accordance with GAAP, the financial condition of the
Borrower on a consolidated and consolidating (unconsolidated) basis with its
Subsidiaries, and the results of operations for such quarter, and for the
elapsed portion of the fiscal year ended with the last day of such quarter, in
each case on the basis presented and subject only to normal year-end
adjustments and the absence of footnotes.]
[WITH RESPECT TO FISCAL YEAR STATEMENTS: The accompanying audited
financial statements of the Borrower on a consolidated and consolidating
(unconsolidated) basis with its Subsidiaries as of [DATE] and for the fiscal
year ended [DATE], and for the previous fiscal year, are complete and correct
and present fairly, in accordance with GAAP, the financial condition of the
Borrower on a consolidated and consolidating (unconsolidated) basis with its
Subsidiaries as of the end of such period, and the results of operations for
such fiscal year, and for the previous fiscal year.]
2. Attached hereto are arithmetical calculations required to
establish (i) any adjustment to the Applicable Margins, as provided for in
Section 2.6(d) of the Loan Agreement, and (ii) whether or not the Borrower was
in compliance with the requirements of the following Sections of the Loan
Agreement:
(a) Section 7.8 - Leverage Ratio
(b) Section 7.9 - Annualized Operating Cash Flow to
Pro Forma Debt Service
(c) Section 7.10 - Total Debt Per Subscriber
(d) Section 7.11 - Capital Expenditures
(e) Section 7.12 - Minimum Revenue Test
(f) Section 7.13 - Minimum Units in Service (including
a breakdown by each category set
forth in the definition of Units in
Service)
<PAGE> 119
3. Based on an examination sufficient to enable me to make an
informed statement, no Default exists at the end of such quarter or fiscal
year, as applicable.
4. All capitalized terms not otherwise defined herein are used
herein as defined in the Loan Agreement.
Date:____________________ ________________
[OFFICER]
[TITLE]
G-2
<PAGE> 120
EXHIBIT H
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
<PAGE> 121
EXHIBIT H
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement is made and entered into as
of ______________, by ______________, and between ________________________
(the "Assignor"), and _____________________ (the "Assignee").
Recitals
A. Paging Network of Canada Inc., a Canada corporation (the
"Borrower"), the Assignor (together with any other Person which becomes a
'Bank' under the Loan Agreement, as such term is hereinafter defined, the
"Banks") and The Toronto-Dominion Bank, as administrative agent (the
"Administrative Agent"), are parties to a certain Loan Agreement dated as of
June 5, 1996 (the "Loan Agreement"). Pursuant to the Loan Agreement, the Banks
have agreed to make Accommodations to the Borrower pro rata in an aggregate
original principal amount of the Commitment, as such amount may be reduced from
time to time pursuant to the Loan Agreement. The Assignor's pro rata portion of
the Commitment is the amount specified in Item 1 of Schedule 1 hereto (the
"Assignor's Commitment"). The aggregate principal amount of the outstanding
Accommodations made by the Assignor to the Borrower under the Commitment
pursuant to the Assignor's Commitment is specified in Item 2 of Schedule 1
hereto (the "Assignor's Accommodations"). All capitalized terms not otherwise
defined herein are used herein as defined in the Loan Agreement.
B. The Assignor wishes to sell and assign to the Assignee, and
the Assignee wishes to purchase and assume from the Assignor, (i) the portion
of the Assignor's Commitment specified in Item 3 of Schedule 1 hereto
("Assigned Commitment"), and (ii) the portion of the Assignor's Accommodations
under the Commitment specified in Item 4 of Schedule 1 hereto (the "Assigned
Accommodations").
The parties agree as follows:
1. Assignment. Subject to the terms and conditions set forth
herein, the Assignor hereby sells and assigns to the Assignee, and the Assignee
purchases and assumes from the Assignor, without recourse and except as
provided in Section 3(a) hereof, without representation or warranty to the
Assignor, on the date set forth above (the "Assignment Date") (a) all right,
title, and interest of the Assignor to the Assigned Accommodations and (b) all
obligations of the Assignor under the Loan Agreement with respect to the
Assigned Commitment. As full consideration for the sale of the Assigned
Accommodations and the Assigned Commitment, the Assignee shall pay to the
Assignor on the Assignment Date such amount as shall have been agreed to
between the Assignor and the Assignee (the "Purchase Price").
<PAGE> 122
2. Consents. The Administrative Agent [and the Borrower] hereby
consent[s] to the assignment made herein. [Note: Borrower consent only
required prior to a Default.]
3. Representations and Warranties. Each of the Assignor and the
Assignee represents and warrants to the other, to the Administrative Agent and
to the Borrower (a) that (i) it has full power and legal right to execute and
deliver this Agreement and to perform the provisions of this Agreement; (ii)
the execution, delivery, and performance of this Agreement have been authorized
by all necessary action, corporate or otherwise, on its part and do not violate
any provisions of its charter or by-laws or any contractual obligations or
requirement of law binding on it; and (iii) this Agreement constitutes its
legal, valid and binding obligation, enforceable against it in accordance with
its terms subject, as to enforcement of remedies, to the following
qualifications: (A) an order of specific performance and an injunction are
discretionary remedies and, in particular, may not be available where damages
are considered an adequate remedy at law, and (B) enforcement may be limited by
bankruptcy, insolvency, liquidation, reorganization, reconstruction and other
similar laws affecting enforcement of creditors' rights generally (insofar as
any such law relates to the bankruptcy, insolvency or similar event of the
Assignee or the Assignor, as the case may be), and (b) that its purchase of the
Assigned Accommodations and the Assigned Commitment does not constitute a
"prohibited transaction" as defined in Section 4.1(m) of the Loan Agreement.
4. Condition Precedent. The obligations of the Assignor and the
Assignee hereunder shall be subject to the fulfillment of the condition that
(a) the Assignor shall have received payment in full of the Purchase Price and
(b) the Assignor and the Assignee shall have complied with other applicable
provisions of Section 11.5 of the Loan Agreement.
5. Notice of Assignment. The Assignor hereby gives notice of the
assignment and assumption of the Assigned Accommodations and the Assigned
Commitment to the Administrative Agent and hereby instructs the Borrower to
make payments with respect to the Assigned Accommodations and the Assigned
Commitment directly to the Administrative Agent for the benefit of the Assignee
as provided in the Loan Agreement; provided, however, that the Borrower and the
Administrative Agent shall be entitled to continue to deal solely and directly
with the Assignor in connection with the interests so assigned until the
Administrative Agent shall have received a copy of this Assignment and
Assumption Agreement duly executed by the Assignor, the Assignee, the
Administrative Agent, and, if applicable, the Borrower, and shall have received
the assignment fee described in Section 11.5 of the Loan Agreement. From and
H-2
<PAGE> 123
after the Assignment Date, the Assignee shall be deemed to be a party to the
Loan Agreement and, to the extent that rights and obligations thereunder shall
have been assigned to Assignee as provided herein, shall have the rights and
obligations of a Bank under the Loan Agreement. After the Assignment Date, and
with respect to all such amounts accrued from the Assignment Date, (a) all
interest, principal, fees, and other amounts that would otherwise be payable to
the Assignor in respect of the Assigned Accommodations and the Assigned
Commitment shall be paid to the Assignee, (b) if the Assignor receives any
payment on account of the Assigned Accommodations or the Assigned Commitment
that is payable to the Assignee, the Assignor shall promptly deliver such
payment to the Assignee, and (c) if the Assignee receives any payment in
respect of Obligations of the Borrower accrued prior to the Assignment Date,
then Assignee shall pay over the same to Assignor.
6. Independent Investigation. The Assignee acknowledges that it
is purchasing the Assigned Accommodations and the Assigned Commitment from the
Assignor without recourse and, except as provided in Section 3(a) hereof,
without representation or warranty. The Assignee further acknowledges that it
has made its own independent investigation and credit evaluation of the
Borrower in connection with its purchase of the Assigned Accommodations and the
Assigned Commitment and has received copies of all Loan Documents that it has
requested. Except for the representations or warranties set forth in Section
3(a), the Assignee acknowledges that it is not relying on any representation or
warranty of the Assignor, expressed or implied, including without limitation,
any representation or warranty relating to the legality, validity, genuineness,
enforceability, collectibility, interest rate, repayment schedule, or accrual
status of the Assigned Accommodations or the Assigned Commitment, the legality,
validity, genuineness, or enforceability of the Loan Agreement, or any other
Loan Document referred to in or delivered pursuant to the Loan Agreement, or
the financial condition or creditworthiness of the Borrower. The Assignor has
not acted and will not be acting as either the representative, agent or trustee
of the Assignee with respect to matters arising out of or relating to the Loan
Agreement or this Agreement. From and after the Assignment Date, the Assignor
shall have no rights or obligations with respect to the Assigned Accommodations
or the Assigned Commitment.
7. Method of Payment. All payments to be made by the Assignor or
the Assignee party hereunder shall be in funds available at the place of
payment on the same day and shall be made by wire transfer to the account
designated by the party to receive payment.
H-3
<PAGE> 124
8. Integration. This Agreement shall supersede any prior
agreement or understanding between the parties (other than the Loan Agreement
or other Loan Documents) as to the subject matter hereof.
9. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and shall be
binding upon the parties, their successors and assigns.
10. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the Applicable Laws of the Province of Ontario
and the Applicable Laws of Canada applicable therein which apply to contracts
to be performed entirely in Ontario.
H-4
<PAGE> 125
IN WITNESS WHEREOF, the Assignor and Assignee have executed, sealed
and delivered this Agreement as of the date first above written.
[ASSIGNOR]
By:
-------------------------------
Title:
--------------------------
[ASSIGNEE]
By:
-------------------------------
Title:
--------------------------
ASSIGNMENT AND
ASSUMPTION AGREEMENT
SIGNATURE PAGE 1
<PAGE> 126
Consented to by:
THE TORONTO-DOMINION BANK,
as Administrative Agent
By:
---------------------------
Title:
-------------------------
PAGING NETWORK OF CANADA INC.,
a Canada corporation
By:
---------------------------
Title:
-------------------------
ASSIGNMENT AND
ASSUMPTION AGREEMENT
SIGNATURE PAGE 2
<PAGE> 1
EXHIBIT 10.16
C $35,000,000
CREDIT FACILITY FOR
MADISON TELECOMMUNICATIONS HOLDINGS INC.
(THE "BORROWER")
PROVIDED BY
THE TORONTO-DOMINION BANK
AND SUCH OTHER FINANCIAL INSTITUTIONS AS BECOME BANKS
(THE "BANKS")
THE TORONTO-DOMINION BANK AS ADMINISTRATIVE AGENT
(THE "ADMINISTRATIVE AGENT")
CLOSING DATE: JUNE 5, 1996
A. Loan Agreement
1. Loan Agreement, together with Exhibits and Schedules
EXHIBITS
Exhibit A Form of Draft Bankers' Acceptance
Exhibit B Form of Drawing Notice
Exhibit C Form of Request for Advance
Exhibit D Form of Use of Proceeds Letter
Exhibit E Form of Acceptance
Exhibit F Form of Borrower's Loan Certificate
Exhibit G Form of Subsidiary Loan Certificate
Exhibit H Form of Performance Certificate
Exhibit I Form of Assignment and Assumption Agreement
SCHEDULES
Schedule 1 Licenses
Schedule 2 Security Documents
Schedule 3 Subsidiaries
Schedule 4 Agreements with Affiliates
<PAGE> 2
B. Collateral Documents
2. Demand Debenture (Hypothec) executed by the Borrower
3. Debenture Pledge Agreement executed by the Borrower
4. General Assignment of Book Debts executed by the Borrower
5. Securities Pledge Agreement executed by the Borrower
Exhibit A - Securities
6. Demand Debenture (Hypothec) executed by MTI
7. Debenture Pledge Agreement executed by MTI
8. General Assignment of Book Debts executed by MTI
9. Guarantee executed by MTI
10. Securities Pledge Agreement executed by PNCHI
Exhibit A - Securities
11. Guarantee executed by PNCHI
12. Securities Pledge Agreement executed by MVC
Exhibit A - Securities
13. Guarantee executed by MVC
14. Letter of Credit
15. Guarantee executed by PNI
16. Deposit Agreement executed by PNI
17. Deposit Agreement executed by MVC
C. Legal Opinions
18. McCarthy Tetrault, Canadian counsel to the Borrower
-2-
<PAGE> 3
19. Legal opinions of local Canadian counsel to the Borrower with
respect to the Canadian Security
20. Bingham, Dana & Gould, general corporate counsel to PNI
21. Ferris, Vaughan, Wills & Murphy, general corporate counsel to
PNI
22. Powell, Goldstein, Frazer & Murphy, special New York counsel to
Administrative Agent
D. Certificates, Diligence Items, and Other Conditions Precedent to the
Closing and Funding
23. Borrower's Loan Certificate
Exhibit A - Certificate of Incorporation
Exhibit B - By-Laws
Exhibit C - Authorizing Resolutions
Exhibit D - Certificates of Status, Compliance or Good
Standing
Exhibit E - Shareholders' Agreement or Voting Trust Agreement
24. Subsidiary Loan Certificate of MTI
Exhibit A - Certificate of Incorporation/Partnership
Exhibit B - By-Laws/Partnership Agreement
Exhibit C - Authorizing Resolutions
Exhibit D - Certificates of Status, Compliance or Good
Standing
Exhibit E - Shareholders' Agreement or Voting Trust Agreement
25. Copies of Insurance Binders/Certificates with respect to the
Assets of the Borrower and the Borrower's Subsidiaries
KEY:
MTI - Madison Telecommunications Inc.
MVC - Madison Venture Corporation
PNCHI - Paging Network Canadian Holdings, Inc.
-3-
<PAGE> 4
LOAN AGREEMENT
AMONG
MADISON TELECOMMUNICATIONS HOLDINGS INC. (THE "BORROWER");
THE TORONTO-DOMINION BANK AND
SUCH OTHER FINANCIAL INSTITUTIONS AS BECOME
"BANKS" HEREUNDER (COLLECTIVELY, THE "BANKS"); AND
THE TORONTO-DOMINION BANK, AS ADMINISTRATIVE AGENT
FOR THE BANKS (THE "ADMINISTRATIVE AGENT")
INDEX
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE 1 Definitions . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 2 Credit Facility . . . . . . . . . . . . . . . . . . . . . . 23
Section 2.1 Commitment . . . . . . . . . . . . . . . . . . . . . 23
Section 2.2 Uncollateralized Advances . . . . . . . . . . . . . . 24
Section 2.3 Collateralized Advances . . . . . . . . . . . . . . . 25
Section 2.4 Notification of Banks; Disbursement . . . . . . . . . 28
Section 2.5 Bankers' Acceptances . . . . . . . . . . . . . . . . 30
Section 2.6 Interest; Fees . . . . . . . . . . . . . . . . . . . 33
Section 2.7 Fees . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 2.8 Mandatory Commitment Reductions . . . . . . . . . . . 36
Section 2.9 Optional Prepayments; Commitment
Reductions . . . . . . . . . . . . . . . . . . . . . 37
Section 2.10 Mandatory Repayments . . . . . . . . . . . . . . . . 37
Section 2.11 Evidence of Obligations; Accommodation
Accounts . . . . . . . . . . . . . . . . . . . . . . 38
Section 2.12 Manner of Payment . . . . . . . . . . . . . . . . . . 38
Section 2.13 Reimbursement . . . . . . . . . . . . . . . . . . . . 39
Section 2.14 Pro Rata Treatment . . . . . . . . . . . . . . . . . 40
ARTICLE 3 Conditions Precedent . . . . . . . . . . . . . . . . . . . 41
Section 3.1 Conditions Precedent to Agreement . . . . . . . . . . 41
Section 3.2 Conditions Precedent to All
Accommodations . . . . . . . . . . . . . . . . . . . 44
ARTICLE 4 Representations and Warranties . . . . . . . . . . . . . . 45
Section 4.1 Representations and Warranties . . . . . . . . . . . 45
Section 4.2 Survival of Representations and
Warranties, etc . . . . . . . . . . . . . . . . . . . 53
Section 4.3 No Representations by Banks . . . . . . . . . . . . . 53
</TABLE>
<PAGE> 5
<TABLE>
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----
<S> <C>
ARTICLE 5 General Covenants . . . . . . . . . . . . . . . . . . . . . 53
Section 5.1 Preservation of Existence and Similar
Matters . . . . . . . . . . . . . . . . . . . . . . . 54
Section 5.2 Business; Compliance with Applicable
Law . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 5.3 Maintenance of Properties . . . . . . . . . . . . . . 54
Section 5.4 Accounting Methods and Financial
Records . . . . . . . . . . . . . . . . . . . . . . . 54
Section 5.5 Insurance . . . . . . . . . . . . . . . . . . . . . . 54
Section 5.6 Payment of Taxes and Claims . . . . . . . . . . . . . 55
Section 5.7 Compliance with ERISA . . . . . . . . . . . . . . . . 55
Section 5.8 Visits and Inspections . . . . . . . . . . . . . . . 57
Section 5.9 Payment of Indebtedness; Accommodations . . . . . . . 57
Section 5.10 Use of Proceeds . . . . . . . . . . . . . . . . . . . 58
Section 5.11 Protect Security Interests . . . . . . . . . . . . . 58
Section 5.12 Environmental Audits . . . . . . . . . . . . . . . . 58
Section 5.13 Further Assurances . . . . . . . . . . . . . . . . . 59
ARTICLE 6 Information Covenants . . . . . . . . . . . . . . . . . . . 59
Section 6.1 Quarterly Financial Statements and
Information . . . . . . . . . . . . . . . . . . . . . 59
Section 6.2 Annual Financial Statements and
Information . . . . . . . . . . . . . . . . . . . . . 59
Section 6.3 Performance Certificates . . . . . . . . . . . . . . 60
Section 6.4 Copies of Other Reports . . . . . . . . . . . . . . . 60
Section 6.5 Notice of Litigation and Other Matters . . . . . . . 61
Section 6.6 Environmental Reporting . . . . . . . . . . . . . . . 62
ARTICLE 7 Negative Covenants . . . . . . . . . . . . . . . . . . . . 62
Section 7.1 Indebtedness of the Borrower and its
Subsidiaries . . . . . . . . . . . . . . . . . . . . 63
Section 7.2 Limitation on Liens . . . . . . . . . . . . . . . . . 63
Section 7.3 Amendment and Waiver . . . . . . . . . . . . . . . . 63
Section 7.4 Liquidation, Merger, or Disposition of
Assets . . . . . . . . . . . . . . . . . . . . . . . 64
Section 7.5 Limitation on Guaranties . . . . . . . . . . . . . . 64
Section 7.6 Investments and Acquisitions . . . . . . . . . . . . 64
Section 7.7 Restricted Payments and Purchases . . . . . . . . . . 64
Section 7.8 Leverage Ratio . . . . . . . . . . . . . . . . . . . 65
Section 7.9 Annualized Operating Cash Flow to Pro
Forma Debt Service . . . . . . . . . . . . . . . . . 65
Section 7.10 Total Debt Per Subscriber . . . . . . . . . . . . . . 65
</TABLE>
-ii-
<PAGE> 6
<TABLE>
<CAPTION>
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----
<S> <C>
Section 7.11 Capital Expenditures . . . . . . . . . . . . . . . . 65
Section 7.12 Minimum Revenue Test . . . . . . . . . . . . . . . . 66
Section 7.13 Minimum Units in Service . . . . . . . . . . . . . . 66
Section 7.14 Affiliate Transactions . . . . . . . . . . . . . . . 67
Section 7.15 Real Estate . . . . . . . . . . . . . . . . . . . . . 67
Section 7.16 ERISA Liabilities . . . . . . . . . . . . . . . . . . 67
ARTICLE 8 Default . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 8.1 Events of Default . . . . . . . . . . . . . . . . . . 67
Section 8.2 Remedies . . . . . . . . . . . . . . . . . . . . . . 71
ARTICLE 9 The Administrative Agent . . . . . . . . . . . . . . . . . 72
Section 9.1 Appointment and Authorization . . . . . . . . . . . . 72
Section 9.2 Interest Holders . . . . . . . . . . . . . . . . . . 72
Section 9.3 Consultation with Counsel . . . . . . . . . . . . . . 72
Section 9.4 Documents . . . . . . . . . . . . . . . . . . . . . . 73
Section 9.5 Administrative Agent and Affiliates . . . . . . . . . 73
Section 9.6 Responsibility of the Administrative
Agent . . . . . . . . . . . . . . . . . . . . . . . . 73
Section 9.7 Security Documents . . . . . . . . . . . . . . . . . 73
Section 9.8 Action by the Administrative Agent . . . . . . . . . 74
Section 9.9 Notice of Default or Event of Default . . . . . . . . 74
Section 9.10 Responsibility Disclaimed . . . . . . . . . . . . . . 75
Section 9.11 Indemnification . . . . . . . . . . . . . . . . . . . 75
Section 9.12 Credit Decision . . . . . . . . . . . . . . . . . . . 76
Section 9.13 Successor Administrative Agent . . . . . . . . . . . 76
Section 9.14 Delegation of Duties . . . . . . . . . . . . . . . . 77
Section 9.15 Determination by Administrative Agent
Conclusive and Binding . . . . . . . . . . . . . . . 77
ARTICLE 10 Computations and Indemnities . . . . . . . . . . . . . . . 77
Section 10.1 Indemnity for Change in Circumstances . . . . . . . . 77
Section 10.2 Indemnity for Transactional and
Environmental Liability . . . . . . . . . . . . . . . 78
Section 10.3 Taxation on Payments . . . . . . . . . . . . . . . . 80
Section 10.4 Judgment Currency . . . . . . . . . . . . . . . . . . 81
Section 10.5 Claims for Increased Costs and Taxes . . . . . . . . 82
Article II Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . 82
Section 11.1 Notices . . . . . . . . . . . . . . . . . . . . . . . 82
Section 11.2 Expenses . . . . . . . . . . . . . . . . . . . . . . 84
</TABLE>
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<PAGE> 7
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Section 11.3 Waivers . . . . . . . . . . . . . . . . . . . . . . . 85
Section 11.4 Right to Combine and Set-Off . . . . . . . . . . . . 86
Section 11.5 Assignment . . . . . . . . . . . . . . . . . . . . . 86
Section 11.6 Accounting Principles . . . . . . . . . . . . . . . . 87
Section 11.7 Counterparts . . . . . . . . . . . . . . . . . . . . 88
Section 11.8 Governing Law . . . . . . . . . . . . . . . . . . . . 88
Section 11.9 Severability . . . . . . . . . . . . . . . . . . . . 88
Section 11.10 Interest . . . . . . . . . . . . . . . . . . . . . . 88
Section 11.11 Table of Contents and Headings . . . . . . . . . . . 89
Section 11.12 Amendment and Waiver . . . . . . . . . . . . . . . . 89
Section 11.13 Non-Merger . . . . . . . . . . . . . . . . . . . . . 90
Section 11.14 Other Relationships . . . . . . . . . . . . . . . . . 90
Section 11.15 Directly or Indirectly . . . . . . . . . . . . . . . 90
Section 11.16 Reliance on and Survival of Various
Provisions . . . . . . . . . . . . . . . . . . . . . 91
Section 11.17 Senior Debt . . . . . . . . . . . . . . . . . . . . . 91
Section 11.18 Obligations Several . . . . . . . . . . . . . . . . . 91
Section 11.19 Confidentiality . . . . . . . . . . . . . . . . . . . 91
Section 11.20 Time of the Essence . . . . . . . . . . . . . . . . . 92
Section 11.21 Third Party Beneficiaries . . . . . . . . . . . . . . 92
Section 11.22 Enurement . . . . . . . . . . . . . . . . . . . . . . 92
</TABLE>
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<PAGE> 8
EXHIBITS
Exhibit A - Form of Draft Bankers' Acceptance
Exhibit B - Form of Drawing Notice
Exhibit C - Form of Request for Advance
Exhibit D - Form of Acceptance
Exhibit E - Form of Borrower's Loan Certificate
Exhibit F - Form of Subsidiary Loan Certificate
Exhibit G - Form of Performance Certificate
Exhibit H - Form of Assignment and Assumption Agreement
SCHEDULES
Schedule 1 - Licenses
Schedule 2 - Security Documents
Schedule 3 - Subsidiaries
Schedule 4 - Agreements with Affiliates
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<PAGE> 9
LOAN AGREEMENT
MADISON TELECOMMUNICATIONS HOLDINGS INC. (THE "BORROWER");
THE TORONTO-DOMINION BANK AND
SUCH OTHER FINANCIAL INSTITUTIONS AS BECOME
"BANKS" HEREUNDER (COLLECTIVELY, THE "BANKS"); AND
THE TORONTO-DOMINION BANK, AS ADMINISTRATIVE AGENT
FOR THE BANKS (THE "ADMINISTRATIVE AGENT")
agree as follows as of the 5th day of June, 1996:
ARTICLE 1
Definitions
For the purposes of this Agreement:
"Accommodation" shall mean (i) an Advance made by the Banks or any one
or more of them on the occasion of any Borrowing; and (ii) a Bankers'
Acceptance created by any Bank on the occasion of any Drawing.
"Accommodation Notice" shall mean a Request for Advance or a Drawing
Notice.
"Administrative Agent" shall mean The Toronto-Dominion Bank, in its
capacity as Administrative Agent for the Banks or any successor Administrative
Agent appointed pursuant to Section 9.13 of this Agreement.
"Administrative Agent's Office" shall mean the office of the
Administrative Agent located at 8th Floor, Toronto Dominion Tower, Toronto
Dominion Centre, Toronto, Ontario M5K lA2, or such other office as may be
designated pursuant to the provisions of Section 11.1 of this Agreement.
"Advance" shall mean amounts advanced by the Banks to the Borrower
pursuant to Section 2.2 and Section 2.3 hereof on the occasion of any Borrowing
and shall include, as designated by the Borrower in accordance with the terms
of this Agreement, a Collateralized Advance and an Uncollateralized Advance;
and "Advances" shall mean more than one Advance.
"Affiliate" shall mean, with respect to a Person, any other Person
directly or indirectly controlling, controlled by, or under common control
with, such first Person. For purposes of this definition, "control" when used
with respect to any Person includes, without limitation, the direct or indirect
beneficial ownership of more than ten percent (10%) of the voting securities
<PAGE> 10
or voting equity of such Person or the power to direct or cause the direction
of the management and policies of such Person whether by contract or otherwise.
"Agreement" shall mean this Loan Agreement, together with all Exhibits
and Schedules hereto.
"Agreement Date" shall mean June 5, 1996.
"Annualized Operating Cash Flow" shall mean, as of any date, the
product of (a) the aggregate Operating Cash Flow for the Borrower Group on a
combined basis for the fiscal quarter end being tested or the most recently
completed fiscal quarter, as the case may be, times (b) four (4).
"Applicable Law" shall mean, in respect of any Person, all provisions
of constitutions, statutes, codes, ordinances, rules, regulations, municipal
by-laws, judicial, arbitral, administrative, ministerial, departmental or
regulatory judgments, orders, decisions, rulings or awards, policies and
guidelines of any Governmental Entity, or any provisions of the foregoing,
including general principles of common and civil law and equity, applicable to
such Person, including, without limiting the foregoing, the Licenses, and all
orders, decisions, judgments and decrees of all courts and arbitrators in
proceedings or actions to which the Person in question is a party or by which
it is bound.
"Applicable Margin" shall mean the interest rate or fee margin
applicable to Advances and Bankers' Acceptances, as the case may be, in each
case determined in accordance with Section 2.6(d) hereof.
"Assets" means, with respect to any Person, all property and assets of
such Person, both real and personal, of every kind and wheresoever situate,
whether now owned or hereafter acquired.
"Authorized Signatory" shall mean such senior personnel of a Person as
may be duly authorized and designated in writing by such Person to execute
documents, agreements and instruments on behalf of such Person.
"Available Commitment" shall mean, as of any date, the greater of (a)
the Equivalent Canadian Dollar Amount of the aggregate amount of Permitted
Collateral held on such date by the Administrative Agent pursuant to the
Deposit Agreement; and (b) $35,000,000, but only to the extent that (i) the
Minimum Permitted Collateral Amount is held on such date by the Administrative
Agent pursuant to the Deposit Agreement and (ii) as of end of the most recently
completed fiscal quarter for which
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<PAGE> 11
financial statements have been delivered pursuant to Sections 6.1 or 6.2, as
applicable, hereof either (A) the Leverage Ratio is less than 7.0 to 1 or (B)
(i) the aggregate number of Units in Service is greater than or equal to 45,000
and (ii) Gross Revenue for the Borrower Group on a combined basis is greater
than or equal to $1,875,000; provided, however, that the Available Commitment
shall not at any time exceed (1) the Commitment on such date and (2) the
product of (x) the Equivalent Canadian Dollar Amount of the aggregate amount of
Permitted Collateral held on such date by the Administrative Agent pursuant to
the Deposit Agreement times (y) 1.55555556; and provided, further, however,
that from and after the date of any event which, with respect to the Licenses,
results in a violation of the Canadian ownership and control rules promulgated
under the Radiocommunication Act (Canada), the Telecommunications Act (Canada)
and any replacement act or any regulations made under any such act, the
Available Commitment shall be as set forth in clause (a) of this definition.
"Bankers' Acceptance" shall have the meaning set forth in Section 2.5
hereof and shall include, as designated by the Borrower in accordance with the
terms of this Agreement, a Collateralized Bankers' Acceptance and an
Uncollateralized Bankers' Acceptance.
"Bankers' Acceptance Fee Rate" shall mean the Applicable Margin for
Bankers' Acceptances as determined in accordance with Section 2.6(d) hereof.
"Bankers' Acceptance Permitted Collateral Rate" shall mean, with
respect to any Bankers' Acceptance, the sum of (a) the rate of interest per
annum which is equivalent to the rate quoted to the Borrower by the
Administrative Agent as the Administrative Agent's Canadian Dollar bankers'
acceptance rate for bankers' acceptances having the same term to maturity as
such Bankers' Acceptance, plus (b) 0.500%.
"Banks" shall mean those financial institutions whose names appear as
"Banks" on the signature pages to this Agreement, together with any assignees
thereof pursuant to Section 11.5 hereof; and "Bank" shall mean any one of the
foregoing Banks.
"Borrower" shall mean Madison Telecommunications Holdings Inc., a
Canada corporation.
"Borrower Group" shall mean, collectively, the Borrower and its
Subsidiaries and PageNet Canada and its Subsidiaries.
"Borrowing" shall mean a borrowing consisting of one or more Advances.
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<PAGE> 12
"Business" shall have the meaning specified in Section 4.1(e) hereof.
"Business Day" shall mean a day on which banks and foreign exchange
markets are open for the transaction of business required for this Agreement in
Toronto, Canada, as relevant to the determination to be made or the action to
be taken.
"Capital Expenditures" shall mean, for any Person for any period,
expenditures for the purchase of assets of long-term use which would be
required to be capitalized on the balance sheet of such Person in accordance
with GAAP; provided, however, that Capital Expenditures for any period shall be
reduced by the net book value of Units in Service sold during such period,
which had been reflected in the determination of Capital Expenditures for any
prior periods' Capital Expenditures.
"Capital Stock" shall mean, as applied to any Person, any capital
stock of such Person, regardless of class or designation, and all warrants,
options, purchase rights, conversion or exchange rights, voting rights, calls
or claims of any character with respect thereto.
"Capitalized Lease Obligation" shall mean that portion of any
obligation of a Person as lessee under a lease which at the time would be
required to be capitalized on the balance sheet of such Person in accordance
with GAAP.
"Change Event" shall mean the occurrence of any of the following
events or the existence of any of the following conditions: (a) Paging Network,
Inc. shall cease to own, directly or indirectly, (i) 33-1/3% of the voting
Capital Stock of the Borrower and (ii) 100% of the nonvoting Capital Stock of
the Borrower; or (b) except in connection with a transfer to (i) a Person
acceptable to all of the Banks acting reasonably, or (ii) Paging Network, Inc.
(or a wholly-owned Subsidiary of Paging Network, Inc.) so long as on such date
(A) the sum of the principal amount of all Advances and the Face Amount of all
Bankers' Acceptances then outstanding does not exceed the sum of (1) the
Equivalent Canadian Dollar Amount of the Permitted Collateral held by the
Administrative Agent under the Deposit Agreement on such date and (2) the
Letter of Credit or (B) such transfer is in full compliance with the Canadian
ownership and control rules promulgated under the Radiocommunication Act
(Canada), the Telecommunications Act (Canada) and any replacement act or any
regulations made under any such act, Madison Venture Corporation shall cease to
own, directly or indirectly, 66-2/3% of the voting Capital Stock of the
Borrower; or (c) the Borrower shall fail to own, directly or indirectly through
one or more
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<PAGE> 13
wholly-owned Subsidiaries all of the issued and outstanding Capital Stock of
each of its Subsidiaries.
"Claim" shall mean any claim of any nature whatsoever, including any
demand, liability (whether accrued or accruing, actual or contingent),
obligation, debt, cause of action, suit, proceeding, judgment, award,
assessment and reassessment.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral" shall mean any property of any kind constituting or
intended to constitute collateral for the Obligations under any of the Loan
Documents and shall include, without limitation, the Permitted Collateral.
"Collateralized Advance" shall mean a Collateralized Prime Rate
Advance and a Cost of Funds Rate Advance; provided, however, that the Borrower
may not request a Collateralized Advance (and no Collateralized Advance shall
be made) if on the date of such Collateralized Advance the sum of the
Equivalent Canadian Dollar Amount of the Permitted Collateral held under the
Deposit Agreement and the Letter of Credit does not equal or exceed the sum of
the principal amount of all Collateralized Advances and the Face Amount of all
Collateralized Bankers' Acceptances then outstanding plus the principal amount
of the Collateralized Advance so requested.
"Collateralized Bankers' Acceptance" shall mean a Drawing which the
Borrower requests to be made as a Collateralized Bankers' Acceptance or is
continued as or converted into a Collateralized Bankers' Acceptance in
accordance with the provisions of Section 2.5 hereof; provided, however, that
the Borrower may not request a Collateralized Bankers' Acceptance (and no such
Bankers' Acceptance shall be issued) if on the date of such Drawing the sum of
the Equivalent Canadian Dollar Amount of the Permitted Collateral held pursuant
to the Deposit Agreement and the Letter of Credit does not equal or exceed the
sum of the principal amount of all Collateralized Advances and the Face Amount
of all Collateralized Bankers' Acceptances outstanding on such date plus the
Face Amount of the Collateralized Bankers' Acceptance so requested.
"Collateralized Prime Rate Advance" shall mean a Collateralized
Advance which bears interest at the Prime Rate Basis and which the Borrower
requests to be made as a Collateralized Prime Rate Advance or is continued as
or converted into a Collateralized Prime Rate Advance, in accordance with the
provisions of this Agreement, and which shall be in a principal
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<PAGE> 14
amount of at least $500,000 and in an integral multiple of $500,000.
"Commitment" shall mean the several obligations of the Banks to make
Accommodations to the Borrower pro rata, in accordance with their respective
Commitment Ratios, in an aggregate amount of up to $35,000,000 pursuant to the
terms hereof, as such obligations may be reduced from time to time pursuant to
the terms hereof.
"Commitment Ratio" shall mean, with respect to any Bank, the
percentage equivalent of the ratio which such Bank's pro rata portion of the
total Commitment bears to the aggregate amount of the Commitment (as each may
be adjusted from time to time as provided herein); and "Commitment Ratios"
shall mean the Commitment Ratios of all of the Banks with respect to the
Commitment. As of the Agreement Date the Commitment Ratio of the only Bank
party to this Agreement, The Toronto-Dominion Bank, is 100%.
"Cost of Funds Rate" shall mean, for each Interest Period for each
Collateralized Advance which bears interest at the Cost of Funds Rate, the per
annum rate of interest equal to the rate of interest per annum, calculated on
the basis of a year of 365 days or 366 days (in the case of a leap year), equal
to the rate of interest per annum quoted by The Toronto-Dominion Bank at
approximately 10:00 a.m. (Toronto time) on the first day of such Interest
Period, as the rate that would be payable by The Toronto-Dominion Bank if it
were to issue in the Canadian money market its deposit liability instruments in
an aggregate principal amount approximately equal to the principal amount of,
and for a length of time approximately equal to the Interest Period for, such
Collateralized Advance, whether or not The Toronto-Dominion Bank shall actually
issue such deposit liability instruments on the date on which such quotation is
given, plus one-half of one percent (0.5%). The Cost of Funds Rate shall apply
to Interest Periods of one (1), two (2), three (3) or six (6) months (nine (9)
or twelve (12) months subject to availability) and, once determined, shall
remain unchanged during such Interest Period.
"Cost of Funds Rate Advance" shall mean a Collateralized Advance which
bears interest at the Cost of Funds Rate and which the Borrower requests to be
made as a Cost of Funds Rate Advance or is continued as or converted into a
Cost of Funds Rate Advance, in accordance with the provisions of this
Agreement, and which shall be in a principal amount of at least $500,000 and in
an integral multiple of $500,000.
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<PAGE> 15
"Default" shall mean any Event of Default, and any of the events
specified in Section 8.1 hereof, regardless of whether there shall have
occurred any passage of time or giving of notice, or both, that would be
necessary in order to constitute such event an Event of Default.
"Default Rate" shall mean a simple per annum interest rate equal to
the sum of (a) the Prime Rate, plus (b) the Applicable Margin for
Uncollateralized Prime Rate Advances, plus (c) two percent (2%).
"Deposit Agreement" shall mean, collectively, that certain Deposit
Agreement of even date herewith between PageNet and the Administrative Agent
for the benefit of the Banks, the Deposit Agreement of even date herewith
between Madison Venture Corporation and the Administrative Agent for the
benefit of the Banks and any other Deposit Agreement entered into by the
Administrative Agent after the Agreement Date.
"Dollar" or "$" shall mean (except where specifically designated
otherwise) lawful money of Canada.
"Draft" shall mean, at any time, a blank bill of exchange within the
meaning of the Bills of Exchange Act (Canada) in substantially the form set out
in Exhibit A hereto drawn by the Borrower on a Bank and bearing such
distinguishing letters and numbers as such Bank may determine, but which at
such time, except as otherwise provided herein, has not been completed or
accepted by such Bank.
"Drawing" shall mean the creation of a Bankers' Acceptance by a Bank.
"Drawing Date" shall have the meaning ascribed to such term in the
definition of "Drawing Notice" set forth herein.
"Drawing Fee" shall mean, with respect to each Draft drawn by the
Borrower hereunder and accepted by a Bank on any Drawing Date, an amount equal
to the Bankers' Acceptance Fee Rate multiplied by the aggregate Face Amount of
such Draft, calculated daily on the basis of the term to maturity of such Draft
and a year of 365 days or 366 days (in the case of a leap year).
"Drawing Notice" shall mean a certificate designated as a "Drawing
Notice," signed by an Authorized Signatory of the Borrower requesting a Drawing
hereunder, which shall be in substantially the form of Exhibit B and shall,
among other things, specify: (a) the requested date for such Drawing (the
"Drawing Date"); (b) the aggregate Face Amount of Drafts to be accepted in
Canadian Dollars; (c) the Interest Period for such
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<PAGE> 16
Drafts; and (d) whether the requested Drawing is to be a Collateralized
Bankers' Acceptance or an Uncollateralized Bankers' Acceptance.
"Employee Pension Plan" shall mean any Plan subject to the minimum
funding requirement of Section 302 of ERISA or Section 412 of the Code.
"Environmental Auditor" shall mean a qualified environmental auditor
at arm's length from the Borrower and acceptable to the Administrative Agent.
"Environmental Laws" shall mean all Applicable Laws in force from time
to time relating to the environment, Hazardous Substances, pollution or
protection of the environment, including Laws relating to: (i) on site or
off-site contamination; (ii) occupational health and safety; (iii) chemical
substances or products; (iv) Releases of pollutants, contaminants, chemicals or
other industrial, toxic or radioactive substances or Hazardous Substances into
the environment; and (v) the manufacture, processing, distribution, use,
treatment, storage, transport or handling of Hazardous Substances.
"Environmental Liabilities and Costs" shall mean all Losses and
Claims, whether known or unknown, current or potential, past, present or
future, imposed by, under or pursuant to Environmental Laws, including all
Losses and Claims related to Remedial Actions and all reasonable fees,
disbursements and expenses of counsel, experts, personnel and consultants,
where such Losses and Claims are based on, arise out of or are otherwise in
respect of: (i) the ownership or operation of the Business or any Assets
related to the Business; (ii) the conditions on, under, above or about any real
property, assets, equipment or facilities currently or previously owned, leased
or operated by the Borrower or its Subsidiaries; (iii) expenditures necessary
to cause the operations of the Business or Assets either related to the
Business or owned, leased or operated by the Borrower or its Subsidiaries to
comply materially with any and all requirements, including expenditures
necessary to effect the closure, decommissioning or rehabilitation of any of
the operations of the business or Assets either related to the Business or
owned, leased or operated by the Borrower or its Subsidiaries; (iv) the use,
generation, manufacture, refining, treatment, transportation, storage,
handling, recycling, disposal, depositing, transferring, producing or
processing of Hazardous Substances; (v) liability for personal injury or
property damage, including damages assessed for the maintenance of a public or
private nuisance; and (vi) any other matter affecting the Real Estate or other
Assets within the jurisdiction of any Governmental Entity administering any
Environmental Law.
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<PAGE> 17
"Environmental Notice" shall mean any written claim, citation,
directive, request for information, statement of claim, notice of
investigation, letter or other communication from any Person given pursuant to
Environmental Laws.
"Environmental Permits" shall mean all permits, certificates,
approvals, registrations and licenses issued by any Governmental Entity to the
Borrower, its Subsidiaries or to the Business pursuant to Environmental Laws
and relating to or required for the operation of the Business or the use of the
Real Estate or other Assets of the Borrower or its Subsidiaries.
"Equivalent Canadian Dollar Amount" shall mean, on any day (a) with
respect to Permitted Collateral denominated in Dollars, the principal or face
amount of such Permitted Collateral, and (b) with respect to Permitted
Collateral denominated in U.S. Dollars, the equivalent amount of Dollars
determined using the quoted spot rate at which the Administrative Agent's
principal office in Toronto offers to provide Dollars in exchange for U.S.
Dollars in Toronto at 12:00 noon (Toronto time) on such day.
"Equivalent U.S. Dollar Amount" shall mean, on any day, with respect
to any amount of Dollars, the equivalent amount of U.S. Dollars determined by
using the quoted spot rate at which the Administrative Agent's principal office
in Toronto offers to provide U.S. Dollars in exchange for Dollars in Toronto at
12:00 noon (Toronto time) on such day.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as in effect from time to time.
"ERISA Affiliate" shall mean any Person, including a Subsidiary or an
Affiliate of the Borrower, that is treated as a single employer with the
Borrower pursuant to Section 414(b), (c), (m) or (o) of the Code.
"Event of Default" shall mean any of the events specified in Section
8.1 hereof, provided that any requirement for notice or lapse of time has been
satisfied.
"Face Amount" shall mean, in respect of a Bankers' Acceptance, the
amount payable to the holder thereof on its maturity.
"GAAP" shall mean accounting principles generally accepted in Canada
as recommended in the Handbook of the Canadian Institute of Chartered
Accountants as in effect on the Agreement Date.
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<PAGE> 18
"Government List" shall mean a list maintained by any Governmental
Entity of sites identified for investigation or clean-up pursuant to any
Environmental Law.
"Governmental Entity" shall mean any: (i) multinational, federal,
provincial, state, municipal, local or other government, governmental or public
department, central bank, court, commission, board, bureau, agency or
instrumentality, domestic or foreign; (ii) any subdivision, agent, commission,
board, or authority of any of the foregoing; or (iii) any quasigovernmental or
private body exercising any regulatory, expropriation or taxing authority under
or for the account of any of the foregoing.
"Gross Revenue" shall mean, with respect to any Person and its
Subsidiaries on a consolidated basis, for the most recently completed fiscal
quarter, gross revenues determined in accordance with GAAP.
"Guaranty" or "Guaranteed," as applied to an obligation, shall mean
and include (a) a guaranty, direct or indirect, in any manner, of all or any
part of such obligation, and (b) any agreement, direct or indirect, contingent
or otherwise, the practical effect of which is to assure in any way the payment
or performance (or payment of damages in the event of non-performance) of all
or any part of such obligation, including, without limiting the foregoing, any
reimbursement obligations with respect to outstanding letters of credit or
capital call requirements.
"Hazardous Substance" shall mean any Substance which is or is deemed
to be, alone or in any combination, hazardous, hazardous waste, toxic, a
pollutant, a deleterious substance, a contaminant or a source of pollution or
contamination under any Environmental Law, whether or not such Substance is
defined as hazardous under the Environmental Law.
"Immaterial Site Specific Licenses" shall mean, at any time, the
aggregate Site Specific Licenses, the termination or cancellation of which,
without contemporaneous replacement, would not reasonably be expected to have a
Materially Adverse Effect.
"Indebtedness" shall mean, with respect to any Person, and without
duplication, (a) all items which in accordance with GAAP would be included in
determining total liabilities as shown on the liability side of a balance sheet
of such Person, except (i) items of shareholders' and partners' equity or
capital stock, (ii),items of surplus or general contingency or deferred tax
reserves incurred in the ordinary course of business, (iii) accounts incurred
and payable in the ordinary course of business,
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<PAGE> 19
(iv) dividends payable, or (v) deferred pension costs, (b) all direct or
indirect obligations of any other Person secured by any Lien to which any
property or asset owned by such Person is subject, whether or not the
obligation secured thereby shall have been assumed, (c) all Capitalized Lease
Obligations of such Person and all obligations of such Person with respect to
leases constituting part of a sale and lease-back arrangement, (d) all
reimbursement obligations with respect to outstanding letters of credit,
bankers' acceptances or similar instruments, (e) all obligations, contingent or
otherwise, arising under Guaranties issued by such Person, and (f) all
obligations of such Person under Interest Rate Hedge Agreements.
"Indebtedness for Money Borrowed" shall mean, with respect to any
Person, Indebtedness for money borrowed and Indebtedness represented by notes
payable and drafts accepted representing extensions of credit, all obligations
evidenced by bonds, debentures, notes or other similar instruments, all
Indebtedness upon which interest charges are customarily paid, all Capitalized
Lease Obligations, all reimbursement obligations with respect to outstanding
letters of credit, bankers' acceptances or similar instruments, all
Indebtedness issued or assumed as full or partial payment for property or
services, whether or not any such notes, drafts, obligations or Indebtedness
represent Indebtedness for money borrowed, and, without duplication, Guaranties
of any of the foregoing. For purposes of this definition, interest which is
accrued but not paid on the scheduled due date for such interest shall be
deemed Indebtedness for Money Borrowed.
"Interest Expense" shall mean, for any Person for any period, all
interest expense (including imputed interest with respect to Capitalized Lease
Obligations) with respect to any Indebtedness for Money Borrowed of such Person
during such period pursuant to the terms of such Indebtedness for Money
Borrowed, together with all fees paid in respect of such Indebtedness for Money
Borrowed to the extent not already included in cash interest paid, all as
calculated in accordance with GAAP.
"Interest Period" shall mean (a) in connection with any Prime Rate
Advance, the period beginning on the date such Advance is made and ending on
the last day of the calendar month in which such Advance is made, provided,
however, that if a Prime Rate Advance is made on the last day of any calendar
month, it shall have an Interest Period ending on, and its Payment Date shall
be, the last day of the following calendar month, (b) in connection with any
Collateralized Advance which bears interest at the Cost of Funds Rate, the term
of such Advance selected by the Borrower or otherwise determined in accordance
with this Agreement; provided, however, (i) any applicable Interest Period
which would otherwise end on a day which is not a Business Day shall be
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<PAGE> 20
extended to the next succeeding Business Day unless such Business Day falls in
another calendar month, in which case such Interest Period shall end on the
next preceding Business Day and (ii) any applicable Interest Period which
begins on a day for which there is no numerically corresponding day in the
calendar month during which such Interest Period is to end shall (subject to
clause (i) above) end on the last day of such calendar month, and (c) in
connection with any Bankers' Acceptance, the term of such Bankers' Acceptance
selected by the Borrower or otherwise determined in accordance with this
Agreement.
"Interest Rate Hedge Agreements" shall mean the obligations of any
Person pursuant to any arrangement with any other Person whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest
on a stated notional amount in exchange for periodic payments made by such
Person calculated by applying a fixed or a floating rate of interest on the
same notional amount and shall include, without limitation, interest rate
swaps, caps, floors, collars and similar arrangements.
"known to the Borrower" or "to the knowledge of the Borrower" shall
mean known by the executive officers of the Borrower or any Subsidiary (which
shall mean the chairman/president, the chief executive officer, the chief
financial officer, the chief operating officer, the treasurer, and any in-house
general counsel or other Persons performing like functions) or, based upon the
reasonable inquiry that an executive officer would make, should have been known
by such executive officer.
"Leasehold Real Estate" shall mean the land and premises of the
Borrower and its Subsidiaries held under agreement to lease or other right of
occupation.
"Letter of Credit" shall mean that certain irrevocable letter of
credit in the original principal amount of at least $4,500,000 issued in favor
of the Administrative Agent for the benefit of the Banks and all renewals
thereof and substitutions therefor, all of which shall be in form and substance
satisfactory to the Administrative Agent.
"Leverage Ratio" shall mean, as of any date, the ratio of (a) Total
Debt for the Borrower Group on a combined basis to (b) Annualized Operating
Cash Flow.
"Licenses" shall mean any radio, telephone, microwave, wireless
messaging or other license (excluding Immaterial Site Specific Licenses),
authorization, certificate of compliance or
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<PAGE> 21
convenience, franchise, approval or permit, granted or issued by any
Governmental Entity and held by the Borrower or any of its Subsidiaries, all of
which (other than Site Specific Licenses) are listed as of the Agreement Date
on Schedule 1 hereto.
"Lien" shall mean, with respect to any property, any mortgage, lien,
pledge, negative pledge or other agreement not to pledge, assignment, charge,
security interest, title retention agreement, levy, execution, seizure,
attachment, garnishment or other encumbrance of any kind in respect of such
property, whether created by statute, contract, the common law or otherwise,
and whether or not choate, vested or perfected.
"Loan Documents" shall mean this Agreement, the Security Documents,
all subordination agreements entered into by creditors of the Borrower or any
of its Subsidiaries with respect to Indebtedness for Money Borrowed of the
Borrower or any of its Subsidiaries, all legal opinions or reliance letters
issued by counsel to the Borrower or any of its Subsidiaries, all fee letters,
all Requests for Advance, all Interest Rate Hedge Agreements between the
Borrower, on the one hand, and the Administrative Agent and the Banks, or any
of them, on the other hand, and all other documents and agreements executed or
delivered in connection with or contemplated by this Agreement.
"Loss" means any loss whatsoever, whether direct or indirect,
including expenses, costs, damages, judgments, penalties, fines, charges,
claims, demands, liabilities, loss of profits, debts, interest, any and all
legal fees and disbursements, on a solicitor and own client basis.
"Majority Banks" shall mean (i) at any time that no Accommodations are
outstanding hereunder, Banks the total of whose Commitment Ratios equals or
exceeds sixty-six and two-thirds percent (66-2/3%) of the aggregate Commitment
Ratios of all Banks entitled to vote hereunder, or (ii) at any time that there
are Accommodations outstanding hereunder, Banks the total of whose
Accommodations outstanding equals or exceeds sixty-six and two-thirds percent
(66-2/3%) of the total principal amount of the Accommodations then outstanding
of all Banks hereunder (excluding from such calculation the Accommodations of
any Banks who fail to provide Accommodations as provided in Section 2.4(b)
hereof).
"Materially Adverse Effect" shall mean (a) any material adverse effect
upon the business, assets, liabilities, financial condition, results of
operations, properties, or business of the Borrower and its Subsidiaries on a
consolidated basis, or (b) except as a result of the action or inaction of the
Administrative Agent or any Bank, a material adverse effect upon
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<PAGE> 22
the validity or enforceability of this Agreement or any of the Loan Documents,
or upon the ability of the Borrower or any of its Subsidiaries to perform the
payment obligations or other obligations under this Agreement or any other Loan
Document, or upon the value of the Collateral or upon the rights, benefits or
interests of the Banks in and to the Accommodations or the rights of the
Administrative Agent and the Banks in the Collateral; in either case, whether
resulting from any single act, omission, situation, status, event or
undertaking, or taken together with other such acts, omissions, situations,
statuses, events or undertakings.
"Maturity Date" shall mean June 30, 2003, or as the case may be, such
earlier date as payment of the obligations shall be due (whether by
acceleration, reduction of the Commitment to zero or otherwise).
"Minimum Permitted Collateral Amount" shall mean, as of any date, (a)
prior to June 30, 1999, $22,500,000 (or the Equivalent U.S. Dollar Amount), and
(b) thereafter, the lesser of (i) $22,500,000 (or the Equivalent U.S. Dollar
Amount) and (ii) the product of (A) sixty-four and three-tenths of one percent
(64.3%) times (B) the Commitment as of such date.
"Multiemployer Plan" shall mean an Employee Pension Plan which is a
"multiemployer plan" within the meaning set forth in Section 4001(a)(3) of
ERISA.
"Necessary Authorizations" shall mean all approvals and licenses from,
and all filings and registrations with, any Governmental Entity or other
regulatory authority, including, without limiting the foregoing, the Licenses
and all approvals, licenses, filings and registrations under Applicable Law,
necessary in order to enable the Borrower and its Subsidiaries to own,
construct, maintain, and operate wireless messaging systems currently being
constructed, maintained or operated and to invest in other Persons who own,
construct, maintain, and operate wireless messaging systems.
"Net Income" shall mean, for any Person and its Subsidiaries on a
consolidated basis, for any period, net income determined in accordance with
GAAP for such Person and its Subsidiaries.
"Network and Equipment Agreement" shall mean that certain Network
Coordination and Equipment Supply Agreement dated as of October 28, 1994
between PageNet and Madison Telecommunications Inc., as amended by Amendment
No.1 dated as of October 26, 1995.
"Obligations" shall mean all payment and performance obligations of
every kind, nature and description of the
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<PAGE> 23
Borrower, its Subsidiaries, and any other obligors to the Banks or the
Administrative Agent, or any of them, under this Agreement and the other Loan
Documents (including any interest, fees and other charges on the Accommodations
or otherwise under the Loan Documents that would accrue but for the filing of a
bankruptcy action with respect to the Borrower or any of its Subsidiaries,
whether or not such claim is allowed in such bankruptcy action and including
Obligations to the Administrative Agent or any of the Banks under any Interest
Rate Hedge Agreements) as they may be amended, restated or supplemented from
time to time and all extensions or renewals, or as a result of making the
Accommodations, whether such obligations are direct or indirect, absolute or
contingent, due or not due, contractual or tortious, liquidated or
unliquidated, arising by operation of Applicable Law or otherwise, now existing
or hereafter arising.
"Operating Cash Flow" shall mean, with respect to any Person and its
Subsidiaries, on a consolidated basis, at the end of the most recently
completed fiscal quarter, as determined in accordance with GAAP, the sum of (a)
Net Income for such period (after eliminating any extraordinary gains and
losses, including gains and losses from the sale of assets), plus (b) to the
extent deducted in determining Net Income, the sum of the following for such
period: (i) depreciation and amortization expense, (ii) Interest Expense and
(iii) income tax expense and (iv) all other non-cash items which will not
require cash payment in the future. Operating Cash Flow attributable to any
acquisition will be included in the determination of Operating Cash Flow as if
the Assets so acquired had been acquired on the first day of such fiscal
period, and the operating results of any acquired Assets for that portion of
any fiscal period in which they were not owned by the Borrower or any of its
Subsidiaries shall be determined by reference to financial information prepared
by the prior owners thereof, subject to such adjustments as the Administrative
Agent may reasonably require.
"PageNet" shall mean Paging Network, Inc., a Delaware corporation.
"PageNet Canada" shall mean Paging Network of Canada Inc., a Canada
corporation.
"PageNet Canada Agreement" shall mean that certain Loan Agreement
dated as of even date herewith by and among Paging Network of Canada Inc., the
Banks and the, Administrative Agent.
"PageNet Guaranty" shall mean that certain Guaranty in favor of the
Administrative Agent for the benefit of the Banks, given by PageNet of even
date herewith.
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<PAGE> 24
"Payment Date" shall mean the last day of any Interest Period.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
successor thereto.
"Permitted Asset Sale" shall mean the sale by the Borrower or any of
its Subsidiaries of all or any part of its Assets as permitted under Section
7.4 hereof.
"Permitted Collateral" shall mean (a) the Letter of Credit (or the
proceeds thereof in Dollars if such Letter of Credit is drawn), (b) U.S.
Dollars, (c) marketable, direct obligations of the United States of America
maturing within ninety (90) days of the date of purchase, or (d) other
collateral acceptable to the Banks at any time and from time to time held by or
on deposit with the Administrative Agent pursuant to the Deposit Agreement as
collateral for the PageNet Guaranty.
"Permitted Investments" shall mean: (a) negotiable instruments or
securities in bearer or registered form which are not held for more than 30
days and which evidence: (i) obligations of or guaranteed by the Government of
Canada so long as they have the Permitted Rating; (ii) obligations of or
guaranteed by a province or municipality of Canada so long as they have the
Permitted Rating; (iii) deposits or bankers' acceptances issued or accepted by
any Schedule I Canadian chartered bank so long as they have the Permitted
Rating; (iv) commercial paper of Canadian corporations or other Canadian
issuers so long as it has the Permitted Rating; (v) other similar negotiable
instruments or securities which are issued or guaranteed by Persons which have
the Permitted Rating; or (b) demand deposits in any Schedule I Canadian
chartered bank so long as they have the Permitted Rating or (c) investments in
any wholly-owned Subsidiary of the Borrower so long as the corresponding debt
instruments, if any, are pledged to the Administrative Agent as security for
the Obligations.
"Permitted Liens" shall mean, as applied to any Person:
(a) Any Lien in favor of the Administrative Agent or any
Bank given to secure the Obligations;
(b) (i) Liens on real estate or other property for taxes,
assessments, governmental charges or levies not yet delinquent and (ii) Liens
for taxes, assessments, judgments, governmental charges or levies or claims the
non-payment of which is being diligently contested in good faith by appropriate
proceedings and for which adequate reserves have been set aside on such
Person's books, but only so long as no foreclosure,
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<PAGE> 25
distraint, sale or similar proceedings have been commenced with respect
thereto;
(c) Liens of carriers, warehousemen, mechanics, laborers
and materialmen incurred in the ordinary course of business for sums not yet
more than sixty (60) days past due or being diligently contested in good faith,
if adequate reserves shall have been set aside on such Person's books, but only
so long as no foreclosure, distraint, sale or similar proceedings have been
commenced with respect thereto;
(d) Liens incurred in the ordinary course of business in
connection with worker's compensation and unemployment insurance;
(e) Restrictions on the transfer of the Licenses or
assets of the Borrower or its Subsidiaries imposed by any of the Licenses as
presently in effect;
(f) Easements, rights-of-way, and other similar
encumbrances on the use of real property which do not materially interfere with
the ordinary conduct of the business of such Person or the use of such
property;
(g) The reservations, limitations, provisos and
conditions, if any, expressed in any original grants of real property from the
Crown;
(h) Purchase money security interests to the extent
incurred in connection with the acquisition of any property or assets by the
Borrower or any of its Subsidiaries permitted hereunder; provided, that
(1) such Lien shall attach only to the property
or asset acquired in such transaction and shall not extend to or cover
any other assets or properties of the Borrower or any of its
Subsidiaries;
(2) the Indebtedness secured or covered by such
Lien shall not exceed the cost of the asset or property acquired and
shall not be increased; and
(3) all such Indebtedness secured or covered by
such Liens shall not exceed $500,000 in the aggregate at anytime
outstanding;
(i) Undetermined and inchoate Liens, rights of distress
and charges incurred in the ordinary course of business which have not been
filed or exercised or which relate to obligations not due or payable, or if due
or payable, the
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<PAGE> 26
validity of which is being contested diligently and in good faith by
appropriate proceedings, but only so long as no foreclosure, distraint, sale or
similar proceedings have been commenced with respect thereto;
(j) Title defects or irregularities in respect of real
property which are of a minor nature and which in the aggregate do not
materially impair the use of such property for the purpose for which it is used
or the conduct of the business of such Person;
(k) The rights reserved to or vested in any Governmental
Entity by the terms of any lease, License, franchise, grant or permit or by any
statutory provision, to terminate any such lease, license, franchise, grant or
permit, or to require annual or other payments as a condition to the
continuance thereof; and
(1) Any Liens resulting from the deposit of cash or
securities in connection with contracts, tenders or expropriation proceedings,
or to secure surety or appeal bonds, costs of litigation when required by law
and public, statutory and other like obligations incurred in the ordinary
course of business.
"Permitted Rating" shall mean, with respect to any Permitted
Investment, a rating for short-term indebtedness of R-1 (Middle) or better from
Dominion Bond Rating Service Limited or A-l+ from CBRS Inc. or a rating for
long-term indebtedness of A (High) or better from Dominion Bond Rating Service
Limited or A (High) from CBRS Inc.
"Person" shall mean an individual, corporation, limited liability
company, association, partnership, joint venture, trust or estate, an
unincorporated organization, any Governmental Entity or other entity.
"Plan" shall mean an employee benefit plan within the meaning of
Section 3(3) of ERISA.
"Prime Rate" shall mean, for any particular day, a per annum interest
rate equal to the higher of (a) the variable rate of interest per annum,
calculated on the basis of a year of 365 days or 366 days (in the case of a
leap year), equal to the rate of interest per annum established and reported by
The Toronto-Dominion Bank to the Bank of Canada for such day as the variable
rate of interest per annum for determination of interest rates that The
Toronto-Dominion Bank charges to its customers of varying degrees of
creditworthiness in Canada for Canadian Dollar loans made by it in Canada, and
(b) the sum of the simple average of the rates per annum for Canadian Dollar
bankers' acceptances
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<PAGE> 27
having a term of 30 days that appears on the Reuters Screen CDOR Page as of
10:00 a.m. (Toronto time) for such day plus one percent (1%). The Prime Rate is
not necessarily the lowest rate of interest charged to customers of The
Toronto-Dominion Bank.
"Prime Rate Advance" shall mean a Collateralized Prime Rate Advance or
an Uncollateralized Prime Rate Advance.
"Prime Rate Basis" shall mean a simple interest rate equal to the sum
of (i) the Prime Rate and (ii) the Applicable Margin for Prime Rate Advances
which are Collateralized Advances or Uncollateralized Advances, as the case may
be. The Prime Rate Basis shall be adjusted automatically as of the opening of
business on the effective date of each change in the Prime Rate to account for
such change, and shall also be changed to reflect changes in the Applicable
Margin for Prime Rate Advances in accordance with Section 2.6(d).
",Pro Forma Debt Service" shall mean, as of any date with respect of
any Person and its Subsidiaries, on a consolidated basis, with respect to the
next succeeding complete twelve (12) month period following the calculation
date, and after giving effect to any Interest Rate Hedge Agreements and taking
into account Bankers' Acceptances, the sum of the aggregate of all principal,
interest expense, fees and other payments payable by such Persons during such
next succeeding twelve (12) month period with respect to Indebtedness for Money
Borrowed of such Persons. For purposes of this definition, where interest
payments for the twelve (12) month period immediately succeeding the
calculation date are not fixed by way of Interest Rate Hedge Agreements,
Bankers' Acceptances or otherwise for the entire period, interest shall be
calculated on such Indebtedness for Money Borrowed for periods for which
interest payments are not so fixed at the Bankers' Acceptance Permitted
Collateral Rate for a Bankers' Acceptance having an Interest Period of twelve
(12) months as determined on the date of calculation; provided, however, that
if such Bankers' Acceptance Permitted Collateral Rate cannot be determined in
the reasonable opinion of the Administrative Agent, such interest shall be
calculated using the Prime Rate Basis as then in effect.
"Real Estate" shall mean the real estate of the Borrower and its
Subsidiaries held in fee simple (or an interest analogous to a fee simple
interest as it relates to real estate situate in the Province of Quebec).
"Release" when used as a verb includes release, spill, leak, emit,
deposit, discharge, leach, migrate or dispose into the environment and
"Release" when used as a noun has a correlative meaning.
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<PAGE> 28
"Remedial Action" shall mean any action, whether voluntary or
compelled, that is reasonably necessary to: (i) clean up, remove, treat or in
any other way deal with Hazardous Substances in the environment; (ii) prevent
any Release of Hazardous Substances where such Release would violate any
Environmental Laws or would endanger or threaten to endanger public health or
welfare or the environment; or (iii) perform remedial studies, investigations,
restoration and post-remedial studies, investigations and monitoring on, about
or in connection with the business or any of the Real Estate or other Assets
(including the Collateral).
"Reportable Event" shall mean, with respect to any Employee Pension
Plan subject to Title IV of ERISA, an event described in Section 4043(b) of
ERISA as to which the requirement of advance notice has not been waived or an
event described in Sections 2615.11, 2615.12, 2615.13, 2615.15 or 2615.19 of
PBGC regulations.
"Request for Advance" shall mean a certificate designated as a
"Request for Advance," signed by an Authorized Signatory of the Borrower
requesting an Advance hereunder, which shall be in substantially the form of
Exhibit C attached hereto, and shall, among other things, (a) specify the date
of the Advance, which shall be a Business Day, the amount of the Advance, the
type of Advance (Collateralized or Uncollateralized) and, with respect to
Collateralized Advances (if appropriate), the Interest Period selected by the
Borrower, and (b) state that there shall not exist a Default as of the date of
such Advance and after giving effect thereto.
"Restricted Payment" shall mean (a) any direct or indirect
distribution, dividend or other payment to any Person (other than to the
Borrower or any wholly-owned Subsidiary of the Borrower) on account of any
general or limited partnership interest in, or shares of Capital Stock or other
securities of, the Borrower or any of its Subsidiaries (other than dividends
payable solely in the Capital Stock of such Person and stock splits),
including, without limitation, any direct or indirect distribution, dividend or
other payment to any Person (other than to the Borrower or any wholly-owned
Subsidiary of the Borrower) on account of any warrants or other rights or
options to acquire shares of Capital Stock of the Borrower or any of its
Subsidiaries; (b) any payment of principal of, or interest on, or payment into
a sinking fund for the retirement of, or any defeasance of subordinated debt;
and (c) any management, consulting or similar fees, or any interest thereon,
payable by the Borrower or any of its Subsidiaries to any partner, shareholder
or Affiliate of any such Person.
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<PAGE> 29
"Restricted Purchase" shall mean any payment (including, without
limitation, any sinking fund payment, prepayment or installment payment) on
account of the purchase, redemption or other acquisition or retirement of any
general or limited partnership interest in, or shares of Capital Stock of or
other securities or subordinated debt of the Borrower or any of the Borrower's
Subsidiaries (other than to the Borrower or any wholly-owned Subsidiary of the
Borrower), including, without limitation, any warrants or other rights or
options to acquire shares of Capital Stock of the Borrower or of any of the
Borrower's Subsidiaries or any loan, advance, release or forgiveness of
Indebtedness by the Borrower or any of its Subsidiaries to any partner,
shareholder or Affiliate of any such Person.
"Sales and Distribution Agreement" shall mean that certain Sales and
Distribution Agreement dated as of October 28, 1994 between Paging Network of
Canada Inc. and Madison Telecommunications Inc. as amended by Amendment No.1
dated as of October 26, 1995.
"Security Documents" means those agreements and other documents in
favor of the Administrative Agent for the benefit of itself and the Banks
described in Schedule 2, as such documents may be amended or supplemented from
time to time, and any other agreement or instrument which may from time to time
be held by the Administrative Agent for the benefit of itself and the Banks as
security for all or any portion of the Obligations.
"Security Interest" shall mean all Liens in favor of the
Administrative Agent, for the benefit of itself and the Banks, created or
intended to be created hereunder or under any of the Security Documents to
secure the Obligations.
"Site Specific Licenses" shall mean all licenses or other
authorizations granted in respect of the use of specific transmitter locations
pursuant to the Licenses listed on Schedule 1.
"Subsidiary" shall mean, as applied to any Person, (a) any corporation
of which more than fifty percent (50%) of the outstanding stock (other than
directors' qualifying shares) having ordinary voting power to elect a majority
of its board of directors, regardless of the existence at the time of a right
of the holders of any class or classes of securities of such corporation to
exercise such voting power by reason of the happening of any contingency, or
any partnership of which more than fifty percent (50%) of the outstanding
partnership interests, is at the time owned directly or indirectly by such
Person, or by one or more Subsidiaries of such Person, or by such
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<PAGE> 30
Person and one or more Subsidiaries of such Person, or (b) any other entity
which is directly or indirectly controlled or capable under the current facts
of being controlled by such Person, or by one or more Subsidiaries of such
Person, or by such Person and one or more Subsidiaries of such Person. The
Subsidiaries of the Borrower as of the Agreement Date are set forth on Schedule
3 attached hereto.
"Substance" shall mean any substance, waste, liquid, gaseous or solid
matter, fuel, micro-organism, sound, vibration, ray,, heat, odor, radiation,
energy vector, plasma, and organic or inorganic matter.
"Taxes" shall mean all taxes imposed by any Governmental Entity,
including income, profits, real property, personal property, goods and
services, sales, transfer, purchase, stumpage, registration, capital, excise,
payroll, unemployment, disability, employee's income withholding, social
security or withholding.
"Total Debt" shall mean, as of any date, with respect of any Person
and its Subsidiaries on a consolidated basis, the difference between (a) the
aggregate amount of Indebtedness for Money Borrowed, determined in accordance
with GAAP, minus (b) the aggregate principal amount of Collateralized Advances
and the Face Amount of Collateralized Bankers' Acceptances outstanding on such
date.
"Total Subscribers" shall mean, as of any date, the aggregate number
of subscribers for the wireless messaging services of the Borrower Group on a
combined basis.
"Transponder Lease Agreement" shall mean any agreement by and between
the Borrower or any of its Subsidiaries and any other Person for the license,
lease or other agreement to use telecommunications satellites in the operation
of the business of the Borrower or such Subsidiaries and any other agreement
related thereto.
"U.S. Dollars" and "U.S.$" shall mean lawful money of the United
States of America.
"Uncollateralized Advance" shall mean an Uncollateralized Prime Rate
Advance.
"Uncollateralized Bankers' Acceptance" shall mean a Drawing which the
Borrower requests to be made as an Uncollateralized Bankers' Acceptance or is
continued as or converted into an Uncollateralized Bankers' Acceptance in
accordance with the provisions of Section 2.5 hereof.
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"Uncollateralized Prime Rate Advance" shall mean an Uncollateralized
Advance which bears interest at the Prime Rate Basis and which the Borrower
requests to be made as an Uncollateralized Prime Rate Advance or is continued
or converted as an Uncollateralized Prime Rate Advance, in accordance with the
provisions of this Agreement, and which shall be in a principal amount of at
least $500,000 and in an integral multiple of $500,000.
"Units in Service" shall mean, as of any date, for the Borrower Group
on a combined basis, the aggregate number of wireless messaging units that are
operating pursuant to valid and binding agreements with customers, where the
customer is delinquent less than sixty (60) days (unless the amount for such
customer which is delinquent sixty (60) days or more constitutes less than
thirty-five (35) percent of such customer's current monthly billing), except
for governmental or corporate customers delinquent less than ninety (90) days
that (a) have been serviced by such Person for at least six (6) months and have
a consistent prior payment history and in which the customer has made a payment
within the last forty-five (45) days equal to or greater than the amount of the
current monthly billing for such customer, or (b) have a regular history of
paying on their accounts amounts equal to or greater than the amount of the
current monthly billing for such customer and whose total account receivable is
(i) no older and (ii) no greater in dollar amount, than such account receivable
was on the date ninety (90) days prior.
Each definition of an agreement in this Article 1 shall include such
agreement as modified, amended or supplemented from time to time in accordance
herewith.
ARTICLE 2
Credit Facility
Section 2.1 Commitment. The Banks agree, severally, in accordance
with their respective Commitment Ratios and not jointly, upon the terms and
subject to the conditions of this Agreement, to make available to the Borrower
such Accommodations as may be requested by the Borrower, prior to the Maturity
Date, in an amount not at any one time outstanding to exceed, in the aggregate,
the Available Commitment. Each of the Banks shall, on the terms and conditions
of this Agreement, make its pro rata share of Advances, and Bankers'
Acceptances on the occasion of any Borrowing or Drawing, as applicable,
available to the Borrower under the Commitment. All Advances and Bankers'
Acceptances requested hereunder shall be made available to the Borrower in
accordance with Sections 2.2, 2.3 and 2.5 hereof,
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<PAGE> 32
respectively. Any notice given to the Administrative Agent in connection with a
requested Accommodation hereunder shall be given to the Administrative Agent
prior to 12:00 noon (Toronto time) in the case of Advances and 1:00 p.m.
(Toronto time) in the case of Bankers' Acceptances in order for such Business
Day to count toward the minimum number of Business Days required.
Section 2.2 Uncollateralized Advances.
(a) Choice of Interest Rate, Etc. Any Uncollateralized
Advance shall be made as an Uncollateralized Prime Rate Advance.
(b) Manner of Borrowing.
(i) Uncollateralized Advances. The Borrower shall
give the Administrative Agent irrevocable prior written notice prior
to 12:00 noon (Toronto time) at least one (1) Business Day prior to
the date of any requested Uncollateralized Prime Rate Advance in the
form of a Request for Advance, or telephonic notice followed
immediately by a Request for Advance; provided, however, that the
Borrower's failure to confirm any telephonic notice with a Request for
Advance shall not invalidate any notice so given if acted upon by the
Administrative Agent. Upon receipt of such notice from the Borrower,
the Administrative Agent shall promptly notify each Bank by telephone
of the contents thereof.
(ii) Conversions of Uncollateralized Prime Rate
Advances. At least two (2) Business Days prior to the Payment Date for
each Uncollateralized Prime Rate Advance, the Borrower shall give the
Administrative Agent written notice specifying whether all or a
portion of such Uncollateralized Prime Rate Advance is to be
converted, in whole or in part, to Uncollateralized Bankers'
Acceptances, Collateralized Prime Rate Advances, Cost of Funds Rate
Advances or Collateralized Bankers' Acceptances. The Borrower may,
subject to the provisions of this Agreement, convert the outstanding
principal amount of an Uncollateralized Prime Rate Advance, in whole
or in part, to (A) Bankers' Acceptances, by giving a Drawing Notice in
accordance with Section 2.5 hereof (including in accordance with the
period for notice set forth in Section 2.5(b) hereof), (B) Cost of
Funds Rate Advances by giving a Request for Advance in accordance with
Section 2.3(c) hereof (including in accordance with the period for
notice set forth in Section 2.3 (c) (ii) hereof), and (C)
Collateralized Prime Rate Advances by giving the Request for Advance
in accordance with Section 2.3(b) hereof (including in
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<PAGE> 33
accordance with the period for notice set forth in Section 2.3(b)
hereof). The Borrower may convert the Uncollateralized Prime Rate
Advance on any Business Day. If the Uncollateralized Prime Rate
Advance to be converted cannot be converted to an aggregate Face
Amount of Bankers' Acceptances in an amount which may be drawn as
Bankers' Acceptances under this Agreement, then the amount which
cannot be so converted, subject to the other terms and conditions of
this Agreement, shall thereafter continue to be outstanding as an
Uncollateralized Prime Rate Advance. When any Uncollateralized Prime
Rate Advances are to be converted, in whole or in part, to Bankers'
Acceptances, the Borrower shall repay and there shall become due and
payable on the Drawing Date, the principal amount of such
Uncollateralized Prime Rate Advances which are to be so converted.
Upon such Payment Date such Uncollateralized Prime Rate Advance will,
subject to the provisions hereof, be so repaid and, as applicable,
reborrowed.
Section 2.3 Collateralized Advances.
(a) Choice of Interest Rate, Etc. Any Collateralized
Advance shall, at the option of the Borrower, be made as a Collateralized Prime
Rate Advance or as a Cost of Funds Rate Advance.
(b) Collateralized Prime Rate Advances.
(i) Advances. The Borrower shall give the
Administrative Agent irrevocable prior written notice prior to 12:00 noon
(Toronto time) at least one (1) Business Day prior to the date of any requested
Collateralized Prime Rate Advance in the form of a Request for Advance, or
telephonic notice followed immediately by a Request for Advance; provided,
however, that the Borrower's failure to confirm any telephonic notice with a
Request for Advance shall not invalidate any notice so given if acted upon by
the Administrative Agent. Upon receipt of such notice from the Borrower, the
Administrative Agent shall promptly notify each Bank by telephone of the
contents thereof.
(ii) Conversions of Collateralized Prime Rate
Advances. At least two (2) Business Days prior to the Payment Date for each
Collateralized Prime Rate Advance, the Borrower shall give the Administrative
Agent written notice specifying whether all or a portion of such Collateralized
Prime Rate Advance is to be converted, in whole or in part, to Collateralized
Bankers' Acceptances, Cost of Funds Rate Advances, Uncollateralized Prime Rate
Advances or Uncollateralized Bankers, Acceptances. The Borrower may, subject to
the provisions of this Agreement, convert the outstanding principal amount of a
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<PAGE> 34
Collateralized Prime Rate Advance, in whole or in part, to (A) Bankers'
Acceptances, by giving a Drawing Notice in accordance with Section 2.5 hereof
(including in accordance with the period for notice set forth in Section 2. 5
(b) hereof), (B) Cost of Funds Rate Advances by giving a Request for Advance in
accordance with Section 2.3 (c) hereof (including in accordance with the period
for notice set forth in Section 2.3(c)(ii) hereof), and (C) Uncollateralized
Prime Rate Advances by giving the Request for Advance in accordance with
Section 2.2(b) hereof (including in accordance with the period for notice set
forth in Section 2.2(b) hereof). In the case of any such conversion, the
Borrower shall notify the Administrative Agent of the amount of any
Collateralized Prime Rate Advance to be converted. The Borrower may convert a
Collateralized Prime Rate Advance on any Business Day. If the Collateralized
Prime Rate Advance to be converted to Bankers' Acceptances cannot be converted
to an aggregate Face Amount of Bankers' Acceptances in an amount which may be
drawn as Bankers' Acceptances under this Agreement, then the amount which
cannot be so converted shall, subject to the other terms and conditions of this
Agreement, thereafter continue to be outstanding as a Collateralized Prime Rate
Advance. When any Collateralized Prime Rate Advances are to be converted, in
whole or in part, to Bankers' Acceptances the Borrower shall repay and there
shall become due and payable on the Drawing Date, the principal amount of such
Collateralized Prime Rate Advances which are to be so converted. Upon such
Payment Date such Collateralized Prime Rate Advance will, subject to the
provisions hereof, be so repaid and, as applicable, reborrowed.
(c) Cost of Funds Rate Advances.
(i) Advances. The Borrower shall give the
Administrative Agent irrevocable prior written notice prior to 12:00 noon
(Toronto time) at least one (1) Business Day prior to the date of any requested
Cost of Funds Rate Advance in the form of a Request for Advance, or telephonic
notice followed immediately by a Request for Advance; provided, however, that
the Borrower's failure to confirm any telephonic notice with a Request for
Advance shall not invalidate any notice so given if acted upon by the
Administrative Agent. Upon receipt of such notice from the Borrower, the
Administrative Agent shall promptly notify each Bank by telephone of the
contents thereof.
(ii) Conversions and Continuations of Cost of
Funds Rate Advances. At least two (2) Business Days prior to the Payment Date
for each Cost of Funds Rate Advance, the Borrower shall give the Administrative
Agent written notice specifying whether all or a portion of such Cost of Funds
Rate Advance is to be converted or continued, in whole or in part, to
Collateralized Bankers' Acceptances, Collateralized Prime Rate Advances,
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<PAGE> 35
Uncollateralized Prime Rate Advances, Cost of Funds Rate Advances or
Uncollateralized Bankers' Acceptances. The Borrower may, subject to the
provisions of this Agreement, convert or continue the outstanding principal
amount of a Cost of Funds Rate Advance, in whole or in part, to (A) Bankers'
Acceptances, by giving a Drawing Notice in accordance with Section 2.5 hereof
(including in accordance with the period for notice set forth in Section 2.5(b)
hereof), (B) Collateralized Prime Rate Advances by giving a Request for Advance
in accordance with Section 2.3(b) hereof (including in accordance with the
notice provisions set forth in Section 2.3(b) hereof), (C) Uncollateralized
Prime Rate Advances by giving the Request for Advance in accordance with
Section 2.2(b) hereof (including in accordance with the notice provisions set
forth in Section 2.2(b) hereof) and (D) Cost of Funds Rate Advances by giving a
Request for Advance in accordance with Section 2.3(c)(i) hereof (including in
accordance with the notice provisions of Section 2.3(c)(ii) hereof). In the
case of any such conversion, the Borrower shall notify the Administrative Agent
of the amount of any Cost of Funds Rate Advance to be converted. The Borrower
may convert a Cost of Funds Rate Advance on the Payment Date for such Advance.
If the Cost of Funds Rate Advance to be converted to Bankers' Acceptances
cannot be converted to an aggregate Face Amount of Bankers' Acceptances in an
amount which may be drawn as Bankers' Acceptances under this Agreement, then
the amount which cannot be so converted shall, subject to the other terms and
conditions of this Agreement, thereafter be converted to a Collateralized Prime
Rate Advance. When any Cost of Funds Rate Advances are to be converted or
continued, in whole or in part, to Bankers' Acceptances or Cost of Funds Rate
Advances, as the case may be, the Borrower shall repay and there shall become
due and payable on the Drawing Date or the date of the Advance, as the case may
be, the principal amount of such Cost of Funds Rate Advances which are to be so
converted or continued. Upon such Payment Date such Cost of Funds Rate Advance
will, subject to the provisions hereof, be so repaid and, as applicable,
reborrowed.
(iii) Interest if no Notice of Selection of
Interest Rate Given. If the Borrower fails to give the Administrative Agent
timely notice of a continuation or conversion of a Cost of Funds Rate Advance,
such Cost of Funds Rate Advance shall, on its Payment Date, automatically be
converted to a Collateralized Prime Rate Advance (or, if subsection (d) of this
Section 2.3 is applicable, an Uncollateralized Prime Rate Advance).
(d) Automatic Conversion of Collateralized Advances and
Collateralized Bankers' Acceptances. If, on any date, the sum of the principal
amount of Collateralized Advances and the Face Amount of Collateralized
Bankers' Acceptances then
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<PAGE> 36
outstanding exceeds the sum of the Equivalent Canadian Dollar Amount of
Permitted Collateral held by the Administrative Agent pursuant to the Deposit
Agreement on such date and the Letter of Credit, (i) an amount of
Collateralized Advances up to the amount of such excess (beginning with
Collateralized Prime Rate Advances, then Cost of Funds Rate Advances) shall
automatically (A) if such Advance is a Collateralized Prime Rate Advance, be
converted to an Uncollateralized Prime Rate Advance, and (B) if such Advance is
a Cost of Funds Rate Advance, bear interest at the Prime Rate Basis for
Uncollateralized Advances from such date until the Payment Date for such
Advance, and (ii) if after such conversions of, or adjustments to, all
Collateralized Advances there remains an excess, the Borrower shall on such
date pay to the Administrative Agent for the benefit of the Banks an amount
equal to the increased Drawing Fee which would be payable for Uncollateralized
Bankers' Acceptances from such date until the Payment Date for the Face Amount
of Collateralized Bankers' Acceptances equal to such excess.
Section 2.4 Notification of Banks; Disbursement.
(a) Notification of Banks. Upon receipt of a Request for
Advance, or a notice from the Borrower with respect to any outstanding Advance
prior to the Payment Date for such Advance, the Administrative Agent shall
promptly notify each Bank by telephone or telecopy of the contents thereof and
the amount of such Bank's pro rata portion of the Advance. Each Bank shall, not
later than 11:00 a.m. (Toronto time) on the date of borrowing specified in such
notice, make available to the Administrative Agent at the Administrative
Agent's Office, or at such account as the Administrative Agent shall designate,
the amount of its pro rata portion of any Advance which represents an
additional borrowing hereunder in immediately available funds.
(b) Disbursement.
(i) Prior to 2:00 p.m. (Toronto time) on the date
of an Advance hereunder, the Administrative Agent shall, subject to
the satisfaction of the conditions set forth in Article 3 hereof,
disburse the amounts made available to the Administrative Agent by the
Banks in like funds by (a) transferring the amounts so made available
by wire transfer pursuant to the Borrower's instructions, or (b) in
the absence of such instructions, crediting the amounts so made
available to the account of the Borrower maintained with the
Administrative Agent.
(ii) Unless the Administrative Agent shall have
received notice from a Bank prior to 11:00 a.m. (Toronto time) on the
date of any Advance that such Bank will not
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<PAGE> 37
make available to the Administrative Agent such Bank's pro rata
portion of such Advance, the Administrative Agent may assume that such
Bank has made or will make such pro rata portion available to the
Administrative Agent on the date of such Advance and the
Administrative Agent may in its sole discretion and in reliance upon
such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent the Bank does not make such
pro rata portion available to the Administrative Agent, such Bank
agrees to repay to the Administrative Agent on demand such
corresponding amount together with interest thereon, for each day from
the date such amount is made available to the Borrower until the date
such amount is repaid to the Administrative Agent, at the Prime Rate.
(iii) If such Bank shall repay to the
Administrative Agent such corresponding amount, such amount so repaid
shall constitute such Bank's pro rata portion of the applicable
Advance for purposes of this Agreement. If such Bank does not repay
such corresponding amount immediately upon the Administrative Agent's
demand therefor, the Administrative Agent shall notify the Borrower
and the Borrower shall immediately pay such corresponding amount to
the Administrative Agent, with interest at the Prime Rate. The failure
of any Bank to fund its pro rata portion of any Advance shall not
relieve any other Bank of its obligation, if any, hereunder to fund
its respective pro rata portion of the Advance on the date of such
borrowing, but no Bank shall be responsible for any such failure of
any other Bank.
(iv) In the event that, at any time when the
Borrower is not in Default and has otherwise satisfied each of the
conditions in Article 3 hereof, a Bank for any reason fails or refuses
to fund its pro rata portion of such Advance, then, until such time as
such Bank has funded its pro rata portion of such Advance (which late
funding shall not absolve such Bank from any liability it may have to
the Borrower), or all other Banks have received payment in full from
the Borrower (whether by repayment or prepayment) or otherwise of the
principal and interest due in respect of such Advance, such
non-funding Bank shall not have the right (A) to vote regarding any
issue on which voting is required or advisable under this Agreement or
any other Loan Document, and such Bank's pro rata portion of the
Accommodations shall not be counted as outstanding for purposes of
determining "Majority Banks" hereunder, or (B) to receive payments of
principal, interest or fees from the Borrower, the Administrative
Agent or the other Banks in respect of its pro rata portion of the
Accommodations.
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<PAGE> 38
Section 2.5 Bankers' Acceptances.
(a) Acceptances and Drafts. The Banks agree subject to
the terms and conditions of this Agreement to create acceptances ("Bankers'
Acceptances") by accepting Drafts of the Borrower under the Available
Commitment from time to time, on any Business Day prior to the Maturity Date,
which Drafts have an aggregate Face Amount equal to such Bank's pro rata share
of the total Accommodations being made by way of Bankers' Acceptances. Bankers'
Acceptances shall be created by Banks acceptance of Drafts. Each Drawing shall
be in an aggregate amount of not less than $1,000,000 and in an integral amount
of $100,000.
(b) Procedure for Drawing. The Borrower shall give the
Administrative Agent irrevocable prior written notice prior to 1:00 p.m.
(Toronto time) at least two (2) Business Days prior to the date of the proposed
Drawing in the form of a Drawing Notice, or telephonic notice followed
immediately by a Drawing Notice; provided, however, that the Borrower's failure
to confirm any telephonic notice with a Drawing Notice shall not invalidate any
notice so given if acted upon by the Administrative Agent. Upon receipt of a
Drawing Notice, the Administrative Agent shall be responsible for making all
necessary arrangements with each of the Banks with respect to the stamping of
Bankers' Acceptances in the manner contemplated in this Section 2.5. The
Borrower shall not in any Drawing Notice select an Interest Period for a Draft
which ends after the Maturity Date or which conflicts with the repayments
provided for in Sections 2.8 or 2.10(b) hereof.
(c) Form of Drafts. Each Draft presented by the Borrower
for acceptance by a Bank: (i) shall be in a Face Amount of not less than
$1,000,000 and in an integral multiple of $100,000; (ii) shall be dated the
date of the Drawing; (iii) shall mature and be payable by the Borrower on a
Business Day which occurs one (1), two (2), three (3) or six (6) months (nine
(9) or twelve (12) months subject to availability) after the Drawing Date; and
(iv) be substantially in the form of Exhibit A hereto. The acceptance endorsed
by a Bank on any Draft shall be substantially in the form of Exhibit D hereto.
The Borrower hereby renounces, and shall not claim, any days of grace for the
payment of any Bankers' Acceptances.
(d) Acceptance of Drafts. Not later than 12:00 noon
(Toronto time) on the Drawing Date specified for a relevant Drawing, a Bank:
(i) shall complete one or more Drafts dated the date of such Drawing in an
aggregate Face Amount equal to such Bank's pro rata portion of the amount of
such Drawing and with the Interest Period specified by the Borrower in its
Drawing Notice; (ii) shall accept the Drafts; and (iii) shall purchase
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<PAGE> 39
the Bankers' Acceptance thereby created in the manner provided in Section
2.5(e) hereof.
(e) Purchase of Bankers' Acceptances. The Borrower shall
request a quotation from the Administrative Agent of the purchase price of all
Bankers' Acceptances created hereunder on the Drawing Date for such Bankers'
Acceptances. The Administrative Agent, after consultation with the Banks, shall
notify the Borrower of the purchase price for the Bankers' Acceptance in the
Face Amount and for the Interest Period specified by the Borrower. The purchase
price shall be calculated by reference to a discount rate which is an
arithmatic average (rounded up to the nearest 0.01%) of the discount rates of
the Banks determined in accordance with normal market practice at or about
10:00 a.m. (Toronto time) on the applicable Drawing Date for Bankers'
Acceptances of each Bank having a comparable Face Amount and comparable
maturity date as such Bankers' Acceptances. Each Bank shall purchase all
Bankers' Acceptances created by such Bank hereunder at the purchase price
quoted by the Administrative Agent to such Bank and such purchase price shall
be paid and satisfied by such Bank making payment to the Administrative Agent
in the amount of such purchase price less the applicable Drawing Fee. The
Administrative Agent shall disburse the amounts made available to the
Administrative Agent by the Banks in like funds by (a) transferring the amounts
so made available by wire transfer pursuant to the Borrower's instructions, or
(b) in the absence of such instructions, crediting the amounts so made
available to the account of the Borrower maintained with the Administrative
Agent. Bankers' Acceptances purchased by a Bank hereunder may be held by it for
its own account until maturity or sold by it at any time prior thereto in the
relevant market therefor in Canada, in the Bank's sole discretion.
(f) Reimbursement at Payment Date. Subject to Section
2.5(g) hereof, the Borrower shall pay to the Administrative Agent on behalf of
a Bank in same day funds, and there shall become due and payable at 11:00 a.m.
(Toronto time) on the Payment Date for each Bankers' Acceptance, an amount in
Canadian Dollars equal to the Face Amount of such Bankers' Acceptance accepted
by such Bank. The Borrower shall make each payment hereunder in respect of
Bankers' Acceptances by deposit of the required funds in accordance with
Section 2.12 hereof. If the Borrower fails to pay the Bank pursuant to this
Section 2.5(f), or to convert or renew the Face Amount of such Bankers'
Acceptance pursuant to Section 2.5(g) hereof, the unpaid amount due and payable
to such Bank in respect of such Bankers' Acceptance shall automatically be
converted to a Prime Rate Advance on the Payment Date, and shall bear interest:
(i) for the first three (3) days from the date on which such amount is
converted, or until such earlier
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date as a Request for Advance is given in accordance with Section 2.2 or 2.3
hereof, as the case may be, at a per annum rate of interest equal to 115% of
the Prime Rate Basis; and (ii) thereafter, at a rate per annum equal to the
Prime Rate Basis, in each case, until such amount is paid in full.
(g) Renewal or Conversion of Bankers' Acceptances. For
effect on the Payment Date of a Bankers' Acceptance, the Borrower may elect:
(i) to renew all or a portion of the Face Amount of such Bankers' Acceptance by
giving a Drawing Notice in accordance with this Section 2.5 (including in
accordance with the period for notice set forth in Section 2.5(b) hereof); or
(ii) to have all or a portion of the Face Amount of such Bankers, Acceptance
converted to an Advance, by giving a Request for Advance in accordance with
Section 2.2 or 2.3 hereof (including in accordance with the period for notice
set forth in Section 2.2 or 2.3 hereof, as the case may be). If the Bankers'
Acceptance to be converted cannot be converted into an Advance in an amount
which may be outstanding as an Advance under this Agreement, then the amount
which cannot be so converted shall be repaid to the Administrative Agent on
behalf of a Bank on the date of such conversion in accordance with Section
2.5(f) hereof.
(h) Prepayments. Except as required by Section 2.9 or
2.10 hereof, no repayment of Bankers' Acceptances shall be made by the Borrower
to a Bank prior to the Payment Dates of such Bankers' Acceptances as have been
created by the Borrower. if the Borrower shall prepay any Bankers' Acceptances
accepted by a Bank as required by Section 2.9 or 2.10 hereof then (unless such
prepayment has been rescinded or otherwise is required to be returned by such
Bank for any reason), as between the Borrower and such Bank, such Bank shall
thereafter be solely responsible for the payment of the Face Amount of such
Bankers' Acceptances as have been created by the Borrower to the holder or
holders thereof in accordance with the terms thereof.
(i) Circumstances Making Bankers' Acceptances
Unavailable. If the Banks or any one or more of them determine in good faith
that by reason of circumstances affecting the money market there is no market
for Bankers' Acceptances and advises the Administrative Agent and the Borrower
to such effect, in writing, then the right of the Borrower to request a Drawing
shall be suspended until the Banks determine that the circumstances causing
such suspension no longer exist and the Administrative Agent so notifies the
Borrower. Any Drawing Notice which is outstanding at the time of such notice by
the Banks or any one or more of them shall be deemed to be a Request for
Advance requesting a Prime Rate Advance in the principal amount equal to the
requested Face Amount in such Drawing Notice.
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<PAGE> 41
(j) Presigned Draft Forms. To enable the Banks to create
Bankers' Acceptances or complete Drafts in the manner specified in this Section
2.5, the Borrower shall supply the Banks with such number of Drafts as the
Banks may reasonably request, duly endorsed and executed on behalf of the
Borrower by any one or more Authorized Signatories in accordance with the
Borrower's required signing authorities as evidenced by the then current
borrowing by-law and resolution, certified copies of which have been delivered
to the Bank. Each Bank shall exercise such care in the custody and safekeeping
of Drafts as it would exercise in the custody and safekeeping of similar
property owned by it. The signatures of such Authorized Signatories may be
mechanically reproduced in facsimile and Drafts and Bankers' Acceptances
bearing such facsimile signatures shall be binding upon the Borrower as if they
had been manually signed by such Authorized Signatories. Notwithstanding that
any of the Authorized Signatories whose manual or facsimile signature appears
on any Draft as one of such Authorized Signatories may no longer hold office at
the date thereof or at the date of its acceptance by a Bank hereunder or at any
time thereafter, any Draft or Bankers' Acceptance so signed shall be valid and
binding upon the Borrower. A Bank shall not be liable for its failure to accept
a Bankers' Acceptance as required hereunder if the cause of such failure is, in
whole or in part, due to the failure of the Borrower to provide Drafts, duly
endorsed and executed on behalf of the Borrower, on a timely basis.
Section 2.6 Interest; Fees.
(a) Interest on Uncollateralized Prime Rate Advances.
Interest on each Uncollateralized Prime Rate Advance shall be computed daily
and shall be payable at the Prime Rate Basis for such Advance, in arrears on
the applicable Payment Date. Interest on Uncollateralized Prime Rate Advances
then outstanding shall also be due and payable on the Maturity Date.
(b) Interest on Collateralized Advances.
(i) Cost of Funds Rate. Interest on each Cost of
Funds Rate Advance shall be computed daily and shall be payable at the Cost of
Funds Rate for such Advance, in arrears on the applicable Payment Date, and, in
addition, if the Interest Period for a Cost of Funds Rate Advance exceeds one
(1) month, interest on such Cost of Funds Rate Advance shall also be due and
payable in arrears on every one (1) month. anniversary of the beginning of such
Interest Period. Interest on Cost of Funds Rate Advances then outstanding shall
also be due and payable on the Maturity Date.
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<PAGE> 42
(ii) Collateralized Prime Rate Advances. Interest
on each Collateralized Prime Rate Advance shall be computed daily and shall be
payable at the Prime Rate Basis for such Advance, in arrears on the applicable
Payment Date. Interest on Collateralized Prime Rate Advances then outstanding
shall also be due and payable on the Maturity Date.
(c) Interest Upon Default. Immediately upon the
occurrence and during the continuance of an Event of Default under (1) Section
8.1(b) hereof, or (2) resulting from a failure to comply with any provision of
Article 7 hereof, the outstanding Obligations (to the extent permitted by
Applicable Law) shall bear interest at the Default Rate. Such interest shall
be payable on demand by the Majority Banks and shall accrue until the earlier
of (i) waiver or cure of the applicable Event of Default, (ii) agreement by the
Majority Banks (or, if applicable to the underlying Event of Default, all of
the Banks) to rescind the charging of interest at the Default Rate, or (iii)
payment in full of the Obligations.
(d) Applicable Margin. With respect to any Accommodation,
the Applicable Margin shall be determined by the Administrative Agent based
upon the Leverage Ratio as of the end of the fiscal quarter most recently
ended, effective as of the fifth (5th) Business Day after the financial
statements referred
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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<PAGE> 43
to in Section 6.1 or 6.2 hereof, as the case may be, are furnished to the
Administrative Agent and each Bank for such fiscal quarter, as follows:
<TABLE>
<CAPTION>
Collateral-
ized Collateral- Uncollateralized
Bankers' ized Prime Rate Uncollateralized
Acceptances Advances Advance Bankers'
Applicable Applicable Applicable Acceptance
Leverage Ratio Margin Margin Margin Applicable Margin
--------------- ------ ------ ------ -----------------
<S> <C> <C> <C> <C> <C>
A. Greater than
6.00:1 0.500% 0.00% 2.000% 3.000%
B. Greater than
5.00:1, but
less than or
equal to
6.00:1 0.500% 0.00% 1.750% 2.750%
C. Greater than
4.00:1, but
less than or
equal to
5.00:1 0.500% 0.00% 1.500% 2.500%
D. Greater than
3.00:1, but
less than or
equal to
4.00:1 0.500% 0.00% 1.000% 2.000%
E. Less than or
equal to
3.00:1 0.500% 0.00% 0.500% 1.500%
</TABLE>
Notwithstanding the foregoing, if the Borrower shall fail
timely to deliver to the Administrative Agent the financial statements
required for the calculation of the Leverage Ratio for any fiscal
quarter, then commencing with the fifth (5th) Business Day after the
date such financial statements were due and continuing through the
fifth (5th) Business Day following the date of delivery thereof, the
Leverage Ratio for such period shall be conclusively presumed to be,
and the Applicable Margin shall be calculated based upon, the Leverage
Ratio which is one level greater than the Leverage Ratio in effect for
the immediately preceding fiscal quarter for which financial
statements were delivered or were due to be delivered. If, for any
reason, the Leverage Ratio cannot be calculated or determined, the
Applicable Margin shall be based upon the Leverage Ratio set forth for
level A above.
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<PAGE> 44
Section 2.7 Fees.
(a) Commitment Fees. The Borrower agrees to pay each of
the Banks, in accordance with their respective Commitment Ratios, commitment
fees as follows: (i) a commitment fee on the aggregate unborrowed available
balance of the Commitment, for each day from June 19, 1996 until the Maturity
Date at the rate of five-tenths of one percent (0.500%) per annum and (ii) a
commitment fee on the aggregate unborrowed unavailable balance of the
Commitment, for each day from June 19, 1996 until the Maturity Date at the rate
of three-eighths of one percent (0.375%) per annum. Such commitment fees shall
be computed daily on the basis of a year of 365 or 366 days (in the case of a
leap year), shall be payable quarterly in arrears on the last day of each
quarter, and shall be fully earned when due and nonrefundable when paid. A
final payment of all commitment fees then payable shall also be due and payable
on the Maturity Date.
(b) Drawing Fees. Drawing Fees for Bankers, Acceptances
hereunder shall be payable in advance on the date of its respective Drawing,
and shall be fully earned when due and non-refundable when paid.
Section 2.8 Mandatory Commitment Reductions. Commencing June 30,
1999 and at the end of each fiscal quarter thereafter, an amount equal to
thirty-five and seven tenths of one percent (35.70%) of the Commitment as in
effect on June 29, 1999, shall be automatically and permanently reduced by the
percentages set forth below:
<TABLE>
<CAPTION>
Quarterly Percentage
Reduction of an Amount
Equal to thirty-five
and seven tenths of one
percent (35.70%) of
Commitment In Effect on
Dates of Commitment Reduction June 29, 1999
----------------------------- -------------
<S> <C>
June 30, 1999, September 30, 1999
December 31, 1999 and March 31, 2000 2.000%
June 30, 2000, September 30, 2000
December 31, 2000 and March 31, 2001 6.750%
June 30, 2001, September 30, 2001
December 31, 2001 and March 31, 2002 9.500%
June 30, 2002, September 30, 2002
December 31, 2002 and March 31, 2003 6.750%
</TABLE>
The Borrower shall make a repayment of the Accommodations outstanding under the
Commitment, together with accrued interest thereon, on or before the effective
date of each reduction in the
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Commitment under this Section 2.8, such that the aggregate principal amount of
the Accommodations outstanding at no time exceeds the Commitment as so reduced.
In addition, any remaining unpaid principal and interest under the Commitment
shall be due and payable in full on the Maturity Date.
Section 2.9 Optional Prepayments; Commitment Reductions.
(a) Prepayment of Accommodations. The Borrower may
without penalty (but subject to Section 2.13 hereof) at any time prepay in full
or in part the principal amount of any Advance prior to the Payment Date for
such Advance, upon three (3) Business Days' prior written notice to the
Administrative Agent of such prepayment. Partial prepayments shall be in a
principal amount of not less than $1,000,000.00, and in an integral multiple of
$500,000.00.
(b) Commitment Reduction. The Borrower may without
penalty (but subject to Section 2.13 hereof) at any time terminate or
permanently reduce all or any part of the Commitment by giving the
Administrative Agent and the Banks at least three (3) Business Days' prior
written notice thereof; provided, however, that any reduction shall reduce the
Commitment in a principal amount of at least $3,500,000.00 and in an integral
multiple of $500,000.00, and provided, further, that no such reduction shall be
permitted if it would require a prepayment of a Bankers' Acceptance. The
Borrower shall make any required repayment or prepayment of Accommodations
outstanding under the Commitment, plus accrued interest on such portion of the
Accommodations and any accrued fees in respect thereof, on or before the
effective date of the reduction of the Commitment, so that the principal amount
of the Accommodations outstanding after such repayment or prepayment does not
exceed the Commitment as so reduced. The Borrower shall not have any right to
rescind any termination or reduction pursuant to this Section 2.9(b).
Reductions in the Commitment after June 30, 1999 pursuant to this Section
2.9(b) shall be applied pro rata over the Commitment reduction schedule set
forth in Section 2.8 hereof.
Section 2.10 Mandatory Repayments. In addition to the scheduled
Commitment reductions provided for in Section 2.8 hereof, the Borrower shall
repay the obligations as follows:
(a) Accommodations in Excess of Available Commitment. If,
at any time, the amount of the Accommodations then outstanding under the
Commitment shall exceed the Available Commitment, the Borrower shall, on such
date and subject to Section 2.13 hereof, make a repayment of the principal
amount of the Accommodations in an amount equal to such excess, together with
any accrued interest and fees with respect thereto. If any
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such repayment results in a prepayment of any Bankers, Acceptance, the Borrower
shall make a deposit with the Administrative Agent the Face Amount of such
Bankers' Acceptances and hereby irrevocably authorizes and directs the
Administrative Agent to apply such payment to the Borrower's reimbursement
obligations in respect of such Drawing on the Payment Date therefor.
(b) Maturity Date. In addition to the foregoing, a final
payment of all Obligations then outstanding shall be due and payable on the
Maturity Date.
Section 2.11 Evidence of obligations; Accommodation Accounts.
(a) The indebtedness of the Borrower in respect of all
obligations (other than Accommodations and interest) hereunder shall be prima
facie evidenced by the account records maintained by the Administrative Agent.
The failure of the Administrative Agent to correctly record any amount or date
shall not, however, affect the obligation of the Borrower to pay amounts due
hereunder to the Administrative Agent or any of the Banks in accordance with
this Agreement.
(b) Each Bank may open and maintain on its books in the
name of the Borrower a loan account with respect to its pro rata portion of the
Accommodations and interest thereon. Each Bank which opens such a loan account
shall debit such loan account for the principal amount of its pro rata portion
of each Advance made by it and accrued interest thereon, and shall credit such
loan account for each payment on account of principal of or interest on its
Accommodations. The records of a Bank with respect to the loan account
maintained by it shall be prima facie evidence of its pro rata portion of the
Accommodations and accrued interest thereon absent manifest error, but the
failure of any Bank to make any such notations or any error or mistake in such
notations shall not affect the Borrower's repayment obligations with respect to
such Accommodations.
Section 2.12 Manner of Payment.
(a) Each payment (including any prepayment) by the
Borrower on account of the principal of or interest on the Accommodations,
commitment fees and any other amount owed to the Banks or the Administrative
Agent or any of them under this Agreement or the other Loan Documents shall be
made not later than 1:00 p.m. (Toronto time) on the date specified for payment
under this Agreement to the Administrative Agent at the Administrative Agent's
Office, for the account of the Banks or the Administrative Agent, as the case
may be, in lawful Canadian
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currency in immediately available funds. Any payment received by the
Administrative Agent after 1:00 p.m. (Toronto time) shall be deemed received on
the next Business Day. Receipt by the Administrative Agent of any payment
intended for any Bank or Banks hereunder prior to 1:00 p.m. (Toronto time) on
any Business Day shall be deemed to constitute receipt by such Bank or Banks on
such Business Day. In the case of a payment for the account of a Bank, the
Administrative Agent will promptly thereafter distribute the amount so received
in like funds to such Bank. If the Administrative Agent shall not have received
any payment from the Borrower as and when due, the Administrative Agent will
promptly notify the Banks accordingly.
(b) Prior to the declaration of an Event of Default under
Section 8.2 hereof, if some but less than all amounts due from the Borrower are
received by the Administrative Agent with respect to the Obligations, the
Administrative Agent shall distribute such amounts in the following order of
priority, all on a pro rata basis to the Banks: (i) to the payment on a pro
rata basis of any fees or expenses then due and payable to the Administrative
Agent and the Banks, or any of them; (ii) to the payment of interest then due
and payable on the Accommodations; (iii) to the payment of all other amounts
not otherwise referred to in this Section 2.12(b) then due and payable to the
Administrative Agent and the Banks, or any of them, hereunder or under any
other Loan Document; and (iv) to the payment of principal then due and payable
on the Accommodations.
(c) Subject to any contrary provisions in the definition
of Interest Period, if any payment under this Agreement or any of the other
Loan Documents is specified to be made on a day which is not a Business Day, it
shall be made on the next Business Day, and such extension of time shall in
such case be included in computing interest and fees, if any, in connection
with such payment.
Section 2.13 Reimbursement.
(a) Upon the earlier of demand or the Maturity Date, the
Borrower shall pay to the Administrative Agent or the Banks such amount or
amounts as will compensate the Administrative Agent or the Banks for any loss,
cost or expense incurred by them: (i) as a result of (A) failure by the
Borrower to borrow any Cost of Funds Rate Advance after having given notice of
its intention to borrow in accordance with Section 2.3 hereof (whether by
reason of the Borrower's election not to proceed or the non-fulfillment of any
of the conditions set forth in Article 3 hereof), or (B) prepayment (or failure
to prepay after giving notice thereof) of any Cost of Funds Rate Advance in
whole or in part prior to its Payment Date; or (ii) with respect to any
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Bankers' Acceptance arising from any Claim, including legal fees and
disbursements, respecting the collection of amounts owing by the Borrower
hereunder in respect of such Bankers' Acceptance or the enforcement of the
Administrative Agent's or Banks' rights hereunder in respect of such Bankers'
Acceptance, including legal proceedings attempting to restrain the
Administrative Agent or the Banks from paying any amount under such Bankers'
Acceptance, except for any loss, cost or expense resulting from the gross
negligence or willful misconduct of the Administrative Agent or such Bank, as
applicable, as determined by a final, non-appealable judicial order of a court
of competent jurisdiction. Such Bank's good faith determination of the amount
of such losses or out-of-pocket expenses, as set forth in writing and
accompanied by calculations in reasonable detail demonstrating the basis for
its demand, shall be prima facie evidence of such losses or expenses absent
manifest error.
(b) Losses subject to reimbursement hereunder shall
include, without limiting the generality of the foregoing, expenses incurred by
any Bank or any participant of such Bank permitted hereunder in connection with
the re-employment of funds prepaid, paid, repaid, not borrowed, or not paid,
as the case may be, and will be payable as a result of acceleration of the
Obligations.
Section 2.14 Pro Rata Treatment.
(a) Advances. Each Advance from the Banks hereunder shall
be made pro rata on the basis of the respective Commitment Ratios of the Banks.
(b) Payments Prior to Declaration of Event of Default.
Except as provided in Section 2.5(f) hereof and Article 10 hereof, each payment
and prepayment of principal of the Accommodations and each payment of interest
on the Accommodations, shall be made to the Banks pro rata on the basis of
their respective unpaid principal amounts outstanding hereunder immediately
prior to such payment or prepayment. If any Bank shall obtain any payment
(whether involuntary, through the exercise of any right of set-off, or
otherwise) on account of the Accommodations in excess of its pro rata share of
the Accommodations under its Commitment Ratio, such Bank shall forthwith
purchase from the other Banks such participations in the portion of the
Accommodations made by them as shall be necessary to cause such purchasing Bank
to share the excess payment ratably with each of them; provided, however, that
if all or any portion of such excess payment is thereafter recovered from such
purchasing Bank, such purchase from each Bank shall be rescinded and such Bank
shall repay to the purchasing Bank the purchase price to the extent of such
recovery. The Borrower
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<PAGE> 49
agrees that any Bank so purchasing a participation from another Bank pursuant
to this Section 2.14(b) may, to the fullest extent permitted by law, exercise
all its rights of payment (including the right of set-off) with respect to such
participation as fully as if such Bank were the direct creditor of the Borrower
in the amount of such participation.
(c) Payments Subsequent to Declaration of Event of
Default. Subsequent to the acceleration of the Accommodations under Section 8.2
hereof, payments and prepayments made to the Administrative Agent or the Banks
or otherwise received by any of them (from realization on Collateral for the
Obligations or otherwise) on account of the Accommodations shall be distributed
as follows: first, to the Administrative Agent's reasonable costs and expenses,
if any, incurred in connection with the collection of such payment or
prepayment, including, without limitation, any reasonable costs incurred in
connection with the sale or disposition of any Collateral for the Obligations;
second, to the payment of fees then due and payable to the Administrative Agent
and the Banks and any reasonable costs and expenses, if any, incurred by any of
the Banks under Section 11.2 hereof, pro rata on the basis of the amount of
such Obligations; third, to any unpaid interest which may have accrued on the
Obligations, pro rata on the basis of the amount of such Obligations; fourth,
to any unpaid principal or the Face Amount of the Obligations and Obligations
under Interest Rate Hedge Agreements, pro rata on the basis of the amount of
such Obligations; fifth, to damages incurred by the Administrative Agent or any
Bank by reason of any breach hereof or of any other Loan Document, pro rata on
the basis of the amount of such Obligations; and sixth, upon satisfaction in
full of all remaining Obligations, to the Borrower or as otherwise required by
Applicable Law.
ARTICLE 3
Conditions Precedent
Section 3.1 Conditions Precedent to Agreement. The obligation of
the Banks to undertake the Commitment and the effectiveness of this Agreement
are subject to the prior or contemporaneous fulfillment of each of the
following conditions:
(a) The Administrative Agent and the Banks shall have
received each of the following:
(i) the loan certificate of the Borrower dated as
of the Agreement Date, in substantially the form attached hereto as
Exhibit E, including a certificate of incumbency
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with respect to each Authorized Signatory of such Person, together
with the following items: (A) a true, complete and correct copy of the
Certificate and Articles of Incorporation and By-laws of the Borrower
as in effect on the Agreement Date, (B) certificates of status,
compliance or good standing for the Borrower issued by the appropriate
government officials of the jurisdiction of incorporation of the
Borrower and for each jurisdiction in which the Borrower carries on
business, (C) a true, complete and correct copy of the corporate
resolutions of the Borrower authorizing the Borrower to execute,
deliver and perform this Agreement and the other Loan Documents to
which it is a party and the transactions contemplated hereby and
thereby, and (D) a true, complete and correct copy of any
shareholders' agreements or voting trust agreements in effect with
respect to the Capital Stock of the Borrower;
(ii) a loan certificate of each Subsidiary of the
Borrower dated as of the Agreement Date, in substantially the form
attached hereto as Exhibit F, including a certificate of incumbency
with respect to each Authorized Signatory of such Person, together
with the following items: (A) a true, complete and correct copy of the
Certificate and Articles of Incorporation or Certificate of
Partnership, as applicable, of such Person as in effect on the
Agreement Date, (B) a true, complete and correct copy of the By-laws
or Partnership Agreement, as applicable, of such Person as in effect
on the Agreement Date, (C) certificates of status, compliance or good
standing for such Person issued by the appropriate government
officials of the jurisdiction of incorporation or formation, as
applicable, of such Person and for each jurisdiction in which such
Person is required to qualify to do business, (D) a true, complete and
correct copy of the corporate resolutions of such Person (or another
appropriate Person) authorizing such Person to execute, deliver and
perform the Loan Documents to which it is party and the transactions
contemplated thereby, and (E) a true, complete and correct copy of any
shareholders' agreements or voting trust agreements in effect with
respect to the Capital Stock of such Person;
(iii) duly executed Security Documents;
(iv) evidence of the registration and perfection
of the Security Documents in all offices where such registration,
filing or recording is necessary or desirable to protect any rights or
remedies of the Administrative Agent and the Banks thereunder;
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(v) copies of insurance binders or certificates
covering the assets of the Borrower and its Subsidiaries, and
otherwise meeting the requirements of Section 5.5 hereof, together
with copies of the underlying insurance policies;
(vi) legal opinions of (a) McCarthy Tetrault,
Canadian counsel to the Borrower and its Subsidiaries; (b) local
counsel opinions for each of the Canadian provinces, each as counsel
to the Borrower and its Subsidiaries, (c) Farris, Vaughan, Wills &
Murphy, counsel to Madison Venture Corporation and (iv) Bingham, Dana
& Gould, counsel to PageNet and Paging Network Canadian Holdings,
Inc., each addressed to each Bank and the Administrative Agent, and
dated as of the Agreement Date;
(vii) unaudited financial information of the
Borrower and its Subsidiaries on a consolidated basis through the
fiscal quarter ending March 31, 1996 and the month ending April 30,
1996 and certified by the chief financial officer or the chief
executive officer of the Borrower;
(viii) lien search results with respect to the
Borrower and its Subsidiaries from appropriate jurisdictions; and
(ix) all such other documents as the
Administrative Agent or any Bank may reasonably request, certified by
an appropriate governmental official or an Authorized Signatory if so
requested.
(b) The Administrative Agent and the Banks shall have
received evidence satisfactory to them that all Necessary Authorizations,
including any consent or authorization of Industry Canada and all other
necessary consents to the closing of this Agreement and the other Loan
Documents, have been obtained or made, are in full force and effect and are not
subject to any pending or, to the knowledge of the Borrower, threatened
reversal or cancellation, and the Administrative Agent and the Banks shall have
received a certificate of an Authorized Signatory so stating.
(c) The Borrower shall certify to the Administrative
Agent and the Banks that each of the representations and warranties in Article
4 hereof are true and correct as of the Agreement Date and that no Default or
Event of Default then exists or is continuing.
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(d) There shall not exist as of the Agreement Date any
action, suit, proceeding or investigation pending against, or, to the knowledge
of the Borrower, threatened against or in any manner relating adversely to, the
Borrower, any of its Subsidiaries, any of their respective properties, which,
in the judgment of the Administrative Agent, could be expected to have a
Materially Adverse Effect.
(e) No event shall have occurred and no condition shall
exist which, in the judgment of the Administrative Agent, has had or could be
expected to have a Materially Adverse Effect.
(f) The Administrative Agent and the Banks shall have
received evidence satisfactory to them of the simultaneous closing of the
PageNet Canada Agreement dated as of even date hereof.
(g) The Administrative Agent and the Banks shall have
received all agreements entered into, in connection with the Business, by
Paging Network, Inc. and Madison Venture Corporation and their respective
Subsidiaries, which agreements shall be in form and substance satisfactory to
the Administrative Agent and the Banks and shall each be collaterally assigned
to the Administrative Agent for the benefit of the Banks.
(h) The Administrative Agent and the Banks and their
counsel shall have received payment of all fees due and payable on the
Agreement Date.
Section 3.2 Conditions Precedent to All Accommodations. The
obligation of the Banks to make any Accommodation hereunder is subject to the
fulfillment of each of the following conditions immediately prior to or
contemporaneously with such Accommodation satisfactory to the Majority Banks:
(a) All of the representations and warranties of the
Borrower under this Agreement and the other Loan Documents (including, without
limitation, all representations and warranties with respect to the Borrower's
Subsidiaries), which, pursuant to Section 4.2 hereof or otherwise, are made at
and as of the time of such Accommodation, shall be true and correct at such
time in all material respects, both before and after giving effect to the
application of the proceeds of such Accommodation, and after giving effect to
any updates to information provided to the Banks in accordance with the terms
of such representations and warranties, and no Default hereunder shall then
exist or be caused thereby;
(b) With respect to Advances which, if funded, would
increase the aggregate principal amount of Accommodations
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outstanding hereunder, the Administrative Agent shall have received a duly
executed Request for Advance;
(c) Each of the Administrative Agent and the Banks shall
have received all such other certificates, reports, statements, opinions of
counsel (if such Advance is in connection with an acquisition) or other
documents as the Administrative Agent or any Bank may reasonably request;
(d) No event shall have occurred and no condition shall
exist which has had or which could reasonably be expected to have a Materially
Adverse Effect;
(e) No Applicable Law, proposed Applicable Law, change in
any Applicable Law, or the interpretation or enforcement of any Applicable Law
shall have been enacted (including the enactment of any Applicable Law
respecting Taxes or environmental matters or any change therein or in the
interpretation or enforcement thereof), the effect of which will be to prohibit
the Administrative Agent or any of the Banks from making such Accommodation or
to increase materially the cost thereof to the Banks.
ARTICLE 4
Representations and Warranties
Section 4.1 Representations and Warranties. To induce the
Administrative Agent and each of the Banks to make Accommodations available
hereunder, the Borrower hereby agrees, represents and warrants, upon the
Agreement Date, and at all times thereafter as required pursuant to Sections
3.2 and 4.2 hereof, in favor of the Administrative Agent and each Bank that:
(a) Organization; Ownership; Power; Qualification. The
Borrower is a corporation duly incorporated or amalgamated, as the case may be,
and organized, validly subsisting and in good standing under the laws of its
jurisdiction of incorporation. The Borrower has the corporate power and
authority to own its properties and to carry on its business as now being and
as proposed hereafter to be conducted and to borrow monies and to enter into
agreements therefor. Each Subsidiary of the Borrower is a corporation or
partnership duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation or formation, as the case may be,
and has the corporate or partnership power, as the case may be, and authority
to own its properties and to carry on its business as now being and as proposed
hereafter to be conducted. The Borrower and each of its Subsidiaries are duly
qualified, licensed or registered to
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carry on business as an extra-provincial corporation in the jurisdictions in
which the nature of its properties or the business carried on by it make such
qualification necessary.
(b) Authorization; Enforceability. The Borrower has the
corporate power and has taken all necessary corporate action to authorize it to
obtain Accommodations hereunder, to execute, deliver and perform this Agreement
and each of the other Loan Documents to which it is a party in accordance with
their respective terms, and to consummate the transactions contemplated hereby
and thereby. This Agreement has been duly executed and delivered by the
Borrower and is, and each of the other Loan Documents to which the Borrower is
party is, a legal, valid and binding obligation of the Borrower enforceable
against the Borrower in accordance with its terms, subject only to their
enforceability against the other parties thereto and to any limitation under
Applicable Laws relating to: (i) bankruptcy, insolvency, reorganization,
moratorium or creditors' rights generally; and (ii) the discretion that a court
may exercise in the granting of equitable remedies (insofar as any such law
relates to the bankruptcy, insolvency or similar event of the Borrower).
(c) Subsidiaries: Authorization; Enforceability. The
Borrower's Subsidiaries and the Borrower's direct and indirect ownership
thereof as of the Agreement Date are as set forth on Schedule 3 attached
hereto, and to the extent such Subsidiaries are corporations, the Borrower has
the unrestricted right to vote the issued and outstanding shares of the
Subsidiaries shown thereon and such shares of such Subsidiaries have been duly
authorized and issued and are fully paid and nonassessable. Each Subsidiary of
the Borrower has the corporate or partnership power and has taken all necessary
corporate or partnership action to authorize it to execute, deliver and perform
each of the Loan Documents to which it is a party in accordance with their
respective terms and to consummate the transactions contemplated by this
Agreement and by such Loan Documents. Each of the Loan Documents to which any
Subsidiary of the Borrower is party is a legal, valid and binding obligation of
such Subsidiary enforceable against such Subsidiary in accordance with its
terms, subject only to their enforceability against the other parties thereto
and to any limitation under Applicable Laws relating to: (i) bankruptcy,
insolvency, reorganization, moratorium or creditors' rights generally; and (ii)
the discretion that a court may exercise in the granting of equitable remedies
(insofar as any such law relates to the bankruptcy, insolvency or similar event
of any such Subsidiary). The Borrower's ownership interest in each of its
Subsidiaries represents a direct or indirect controlling interest of such
Subsidiary for purposes of directing
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or causing the direction of the management and policies of each Subsidiary.
(d) Compliance with Other Loan Documents and Contemplated
Transactions. The execution, delivery and performance, in accordance with their
respective terms, by the Borrower of this Agreement, and by the Borrower and
its Subsidiaries of each of the other Loan Documents to which they are
respectively party, and the consummation of the transactions contemplated
hereby and thereby, do not and will not (i) require any consent or approval,
governmental or otherwise, not already obtained, (ii) violate any Applicable
Law respecting the Borrower or any Subsidiary of the Borrower, (iii) conflict
with, result in a breach of, or constitute a default under the certificate of
incorporation, constating documents or by-laws or partnership agreements, as
the case may be, as amended, of the Borrower or of any Subsidiary of the
Borrower, or under any indenture, agreement, or other instrument, including
without limitation the Licenses, to which the Borrower or any of its
Subsidiaries is a party or by which any of them or their respective properties
may be bound, or (iv) result in or require the creation or imposition of any
Lien upon or with respect to any property now owned or hereafter acquired by
the Borrower or any of its Subsidiaries, except for Permitted Liens.
(e) Business. The Borrower, together with its
Subsidiaries, is engaged solely in the business of owning, constructing,
managing, operating, investing in, wireless messaging systems and
communications businesses incidental or directly relating thereto.
(f) Licenses, etc. The Licenses have been duly issued and
are in full force and effect. The Borrower and its Subsidiaries are in
compliance in all material respects with all of the provisions thereof. The
Borrower and its Subsidiaries have secured all Necessary Authorizations and all
such Necessary Authorizations are in full force and effect. Neither any License
nor any Necessary Authorization is the subject of any pending or, to the best
of the Borrower's knowledge, threatened revocation.
(g) Compliance with Law. The Borrower and its
Subsidiaries are in compliance in all material respects with all material
Applicable Law, including, without limitation, all Environmental Laws.
(h) Title to Assets. Each of the Borrower and its
Subsidiaries is the sole beneficial owner of, and has a good and marketable
title to, and will be lawfully possessed of its Assets, including the
Collateral, free and clear of all Liens, except Permitted Liens, and each of
the Borrower and the
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Subsidiaries has full legal right to mortgage, pledge, charge and assign to the
Administrative Agent for the benefit of itself and the Banks the Collateral to
the Administrative Agent pursuant to the Security Documents as contemplated
herein. No Person has any written or oral agreement, option, understanding or
commitment, or any right or privilege capable of becoming any agreement,
option, understanding or commitment, for the purchase from the Borrower or the
Subsidiaries of any of the Collateral.
(i) Litigation. There is no action, suit, proceeding or
investigation pending against, or, to the knowledge of the Borrower, threatened
against or in any other manner relating adversely to, the Borrower or any of
its Subsidiaries or any of their respective properties, including without
limitation the Licenses, in any court or before any arbitrator of any kind or
before or by any Governmental Entity in Canada or elsewhere, nor is there any
such material action, suit or proceeding which would prevent the Borrower from
proceeding with any Accommodations. None of the Borrower or any of its
Subsidiaries is in default with respect to any judgment, order, writ,
injunction, decree or award of any court or Governmental Entity or any
arbitrator or board in Canada or elsewhere, nor is there any judgment, order,
writ, injunction, decree or award which would prevent the Borrower from
proceeding with any Accommodations. No such action, suit, proceeding or
investigation (i) calls into question the validity of this Agreement or any
other Loan Document, or (ii) individually or collectively involves the
possibility of any judgment or liability not fully covered by insurance which,
if determined adversely to the Borrower or any of its Subsidiaries, would have
a Materially Adverse Effect.
(j) Taxes. Each of the Borrower and its Subsidiaries has
in a timely manner filed all tax returns, elections, filings and reports with
respect to Taxes required by, and in accordance with, Applicable Law to be
filed by it. Each of the Borrower and its Subsidiaries has paid, or reserved in
the financial statements, all Taxes which are due and payable, and has paid all
assessments and reassessments and all other Taxes, governmental charges
penalties, interest and fines due and payable by it on or before the date
hereof. Each of the Borrower and its Subsidiaries has no liability, contingent
or otherwise, for Taxes, except Taxes not now due and payable with respect to
ordinary operations during the current fiscal period adequate provision for the
payment of which has been made. Each of the Borrower and its Subsidiaries has
paid as and when due all applicable Taxes and remitted as required by
Applicable Law all applicable Taxes and deductions and any interest or
penalties related thereto, except any such taxes (i) the payment of which the
Borrower or any subsidiary is diligently contesting in good faith by
appropriate proceedings, (ii) for which adequate
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reserves to the extent required by GAAP have been provided on the books of the
Borrower or the Subsidiary involved, and (iii) as to which no Lien other than
a Permitted Lien has attached and no foreclosure, distraint, sale or similar
proceedings have been commenced.
(k) Financial Statements. The Borrower has furnished or
caused to be furnished to the Administrative Agent and the Banks financial
information for the Borrower and its Subsidiaries, all of which, together with
other financial statements furnished to the Banks subsequent to the Agreement
Date have been prepared in accordance with GAAP and present fairly in all
material respects the financial position of the Borrower and its Subsidiaries
on a consolidated and consolidating (unconsolidated) basis, as the case may be,
on and as at such dates and the results of operations for the periods then
ended (subject, in the case of unaudited financial statements, to normal
year-end and audit adjustments). Neither the Borrower nor any of its
Subsidiaries has any material liabilities, contingent or otherwise, other than
as disclosed in the financial statements referred to in the preceding sentence
or as set forth or referred to in this Agreement.
(l) No Material Adverse Change. Since December 31, 1995,
there has occurred no event which has had or which could reasonably be
expected to have a Materially Adverse Effect.
(m) ERISA. The Borrower and each ERISA Affiliate of the
Borrower and each of their respective Plans are in compliance with ERISA and
the Code (except for instances of non-compliance which, individually and in the
aggregate, would not have a Materially Adverse Effect) and neither the Borrower
nor any of its ERISA Affiliates has incurred any accumulated funding deficiency
with respect to any such Employee Pension Plan within the meaning of ERISA or
the Code. The Borrower and each other ERISA Affiliate have complied with all
requirements of COBRA (except for instances of non-compliance which,
individually and in the aggregate, would not have a Materially Adverse Effect).
Neither the Borrower nor any of its ERISA Affiliates has made any promises of
retirement or other benefits to employees, except as set forth in the Plans, in
written agreements with such employees, or in the Borrower's employee handbook
and memoranda to employees except for promises which, individually or in the
aggregate, would not have a Materially Adverse Effect. Neither the Borrower nor
any of its ERISA Affiliates has incurred any material liability to PBGC in
connection with any Plan. The assets of each Plan of the Borrower and its ERISA
Affiliates which is subject to Title IV of ERISA are sufficient to provide the
benefits under such Plan, the payment of which PBGC would guarantee if such
Plan were terminated, and such assets are also
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sufficient to provide all other "benefit liabilities" (within the meaning of
Section 4041 of ERISA) due under the Plan upon termination. No Reportable Event
has occurred and is continuing with respect to any Plan. No Plan or trust
created thereunder, or party in interest (as defined in Section 3(14) of
ERISA), or any fiduciary (as defined in Section 3(21) of ERISA), has engaged in
a nonexempt "prohibited transaction" (as such term is defined in Section 406 of
ERISA or Section 4975 of the Code) which would subject the Borrower or any of
its ERISA Affiliates to the tax or penalty on "prohibited transactions" imposed
by Section 502 of ERISA or Section 4975 of the Code, which tax or penalty,
individually or in the aggregate, would have a Materially Adverse Effect.
Neither the Borrower nor any of its ERISA Affiliates is obligated to make any
contribution to a Multiemployer Plan.
(n) No Margin Stock. The Borrower and its Subsidiaries do
not own or have any present intention of acquiring any "margin stock" as
defined in Regulation U (12 CFR Part 221, as amended) of the Board of Governors
of the Federal Reserve System (herein called "Margin Stock"). None of the
proceeds of any Accommodation will be used, directly or indirectly, for the
purpose of purchasing or carrying any Margin Stock or maintaining, reducing or
retiring any indebtedness which was originally incurred to purchase or carry
any Margin Stock, or to extend credit to others for the purpose of purchasing
or carrying any Margin Stock, or for any other purpose which might constitute
this transaction a "purpose credit" within the meaning of such Regulation (12
CFR Part 207, as amended). Neither the Borrower nor any agent acting on its
behalf has taken or will take any action which might cause this Agreement or
any of the Loan Documents to violate, or be inconsistent with, Regulation G,
Regulation U or Regulation X (12 CFR Part 224, as amended) or any other
regulation of the Board of Governors of the Federal Reserve System or to
violate, or be inconsistent with, the Securities Exchange Act of 1934, as
amended, in each case as in effect now or as the same may hereafter be in
effect.
(o) Governmental Regulation. Neither the Borrower nor any
of its Subsidiaries is required to obtain any consent, approval, authorization,
permit or license (excluding Immaterial Site Specific Licenses) which has not
already been obtained from, or effect any filing or registration which has not
already been effected with, any Governmental Entity in connection with the
execution and delivery of this Agreement or any other Loan Document. Neither
the Borrower nor any of its Subsidiaries is required to obtain any consent,
approval, authorization, permit or license (excluding Immaterial Site Specific
Licenses) which has not already been obtained from, or effect any filing or
registration which has not already been effected with, any Governmental Entity
in connection with the performance, in
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accordance with their respective terms, of this Agreement or any other Loan
Document.
(p) Absence of Default, Etc. Neither the Borrower nor any
of its Subsidiaries is subject to, or a party to, any charter or by-law
restriction, any Applicable Law, any Claim, any contract or instrument, a Lien
or any other restriction of any kind or character which would prevent the
consummation of the transactions contemplated by this Agreement or compliance
by the Borrower or such Subsidiary with the terms, conditions and provisions
hereof or of any Loan Document to which it is a party or the continued
operation of the business on or after the date hereof on substantially the same
basis as operated to the date hereof in each case. Neither the Borrower nor any
of its Subsidiaries is a party to or bound by any contract or agreement
continuing after the Agreement Date, or bound by any Applicable Law, the
performance of which or the compliance with which, as applicable, could have a
Materially Adverse Effect or result in the loss of any License.
(q) Accuracy and Completeness of Information. None of:
(i) this Agreement, (ii) any of the Loan Documents, or (iii) any certificate or
statement in writing which has been supplied by or on behalf of the Borrower or
its Subsidiaries or by any of the directors, officers or employees of the
Borrower or its Subsidiaries in connection with the transactions contemplated
hereby or by any of the Loan Documents contained any untrue statement of a
material fact, or omitted any statement of a material fact, necessary in order
to make the statements contained herein or therein not materially misleading at
the time it was furnished. There is no material fact known to the Borrower or
its Subsidiaries or any of their directors, officers or employees which the
Borrower has not disclosed to the Administrative Agent in writing and which
could be expected to have a Materially Adverse Effect.
(r) Agreements with Affiliates. Except for (1) agreements
or arrangements set forth on Schedule 4 and (2) agreements or arrangements with
Affiliates wherein the Borrower or one or more of its Subsidiaries provides
services to such Affiliates on terms no less advantageous to the Borrower or
such Subsidiary than would be the case if such transaction had been effected
with a non-Affiliate, neither the Borrower nor any of its Subsidiaries has (i)
any agreements or arrangements of any kind with any Affiliate or (ii) any
management or consulting agreements of any kind with any Affiliate.
(s) Priority. Except as a result of the action or
inaction of the Administrative Agent or any Bank, the Security Interest is a
valid and perfected first priority security
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interest in the Collateral in favor of the Administrative Agent, for the
benefit of itself and the Banks, securing, in accordance with the terms of the
Security Documents, the Obligations, and the Collateral is subject to no Liens
other than Permitted Liens. The Liens created by the Security Documents are
enforceable as security for the Obligations in accordance with their terms with
respect to the Collateral subject, as to enforcement of remedies, to the
following qualifications: (i) an order of specific performance and an
injunction are discretionary remedies and, in particular, may not be available
where damages are considered an adequate remedy at law, and (ii) enforcement
may be limited by bankruptcy, insolvency, liquidation, reorganization,
reconstruction and other similar laws affecting enforcement of creditors'
rights generally (insofar as any such law relates to the bankruptcy, insolvency
or similar event of the Borrower or any of its Subsidiaries, as the case may
be).
(t) Indebtedness. Neither the Borrower nor any of its
Subsidiaries has outstanding, as of the Agreement Date, and after giving effect
to the initial Accommodations hereunder on the Agreement Date, any Indebtedness
for Money Borrowed other than the Obligations hereunder.
(u) Solvency. As of the Agreement Date after the closing
of the PageNet Canada Agreement, and after giving effect to the transactions
contemplated by the Loan Documents, the Borrower and its Subsidiaries were and
continue to be able to pay their liabilities as they become due.
(v) Books and Records. All books and records of the
Borrower and its Subsidiaries have been fully, properly and accurately kept and
completed in accordance with GAAP and there are no material inaccuracies or
discrepancies of any kind contained or reflected therein.
(w) Environmental Liabilities. Neither the Borrower nor
any of its Subsidiaries has incurred or is incurring any material liability
pursuant to any Environmental Law, including any material Environmental
Liabilities and Costs. To the best knowledge of the Borrower, there is no past
or present fact, condition or circumstance relating to the Business, or the
Real Estate, the Leasehold Real Estate and the Assets currently or formerly
owned or leased by or under the charge, management or control of the Borrower
or any of its Subsidiaries (the "Affected Properties") that could reasonably be
expected to result in any material liability or material potential liability
under any Environmental Laws. Neither the Borrower nor any of its Subsidiaries
has received an Environmental Notice pursuant to, or raising concerns in
respect of, any material liability pursuant to any Environmental Laws and to
the best of the knowledge of the
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Borrower, there are no reasonable grounds which would give rise to the issuance
of any Environmental Notice concerning material liability pursuant to any
Environmental Law. To the best knowledge of the Borrower, there are no
Hazardous Substances at, in, or under the Affected Properties at levels or
concentrations in excess of levels or concentrations set out in Environmental
Laws. Neither the Borrower nor, to the best of the knowledge of the Borrower,
any of its directors or officers has ever: (i) been convicted of any offense
for non-compliance with any Environmental Laws; (ii) been fined or otherwise
penalized for non-compliance with Environmental Laws; or (iii) settled any
prosecution in respect thereof short of conviction.
(x) The Transponder Lease Agreement, the Network and
Equipment Agreement and the Sales and Distribution Agreement represent the only
material agreements of the Borrower and its Subsidiaries.
Section 4.2 Survival of Representations and Warranties, etc. All
representations and warranties made under this Agreement and any other Loan
Document shall be deemed to be made, and shall be true and correct, at and as
of the Agreement Date and on the date of each Accommodation except to the
extent previously fulfilled in accordance with the terms hereof and to the
extent relating specifically to the Agreement Date. All representations and
warranties made under this Agreement and the other Loan Documents shall
survive, and not be waived by, the execution hereof by the Banks and the
Administrative Agent, any investigation or inquiry by any Bank or the
Administrative Agent, or the making of any Advance under this Agreement.
Section 4.3 No Representations by Banks. No representation,
warranty or other statement made by the Administrative Agent or any one or more
of the Banks in respect of the Commitment or any Accommodation made hereunder
shall be binding on such Person unless made by it in writing.
ARTICLE 5
General Covenants
So long as any of the Obligations is outstanding and unpaid or the
Banks have any Commitment hereunder (whether or not the conditions to borrowing
have been or can be fulfilled), and unless the Majority Banks, or such greater
number of Banks as may be expressly provided herein, shall otherwise consent in
writing:
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Section 5.1 Preservation of Existence and Similar Matters. The
Borrower will, and will cause each of its Subsidiaries to:
(a) preserve and maintain its existence, and its material
rights, franchises, licenses and privileges in the jurisdiction of its
incorporation, including, without limiting the foregoing, the Licenses and all
other Necessary Authorizations; and
(b) qualify and remain qualified and authorized to do
business in each jurisdiction in which the character of its properties or the
nature of its business requires such qualification or authorization.
Section 5.2 Business; Compliance with Applicable Law. The
Borrower will, and will cause each of its Subsidiaries to, (a) comply in all
material respects with the requirements of all material Applicable Law,
including, without limitation, all Environmental Laws, and (b) engage solely in
the Business.
Section 5.3 Maintenance of Properties. The Borrower will, and
will cause each of its Subsidiaries to, maintain or cause to be maintained in
the ordinary course of business in good repair, working order and condition
(reasonable wear and tear excepted) all properties used in their respective
businesses (whether owned or held under lease), other than obsolete equipment
or unused assets, and from time to time make or cause to be made all needed and
appropriate repairs, renewals, replacements, additions, betterments and
improvements thereto.
Section 5.4 Accounting Methods and Financial Records. The
Borrower will, and will cause each of its Subsidiaries on a consolidated and
consolidating basis to, maintain a system of accounting established and
administered in accordance with GAAP, keep adequate records and books of
account in which complete entries will be made in accordance with GAAP and
reflecting all transactions required to be reflected by GAAP, and keep accurate
and complete records of their respective properties and assets. The Borrower
and its Subsidiaries will maintain a fiscal year ending on December 31.
Section 5.5 Insurance. The Borrower will, and will cause each of
its Subsidiaries to:
(a) Maintain in respect of itself, and each of its
Subsidiaries, or cause each of its Subsidiaries to maintain directly: (i) in
respect of the Collateral, adequate insurance coverage at all times with
financially sound and reputable insurers in such forms and amounts and against
such risks
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acceptable to the Administrative Agent, showing the Administrative Agent as an
additional named insured and loss payee; and (ii) in respect of itself and its
Assets (other than the Collateral), adequate insurance coverage at all times
with financially sound and reputable insurers in such forms and amounts and
against such risks as are reasonable for the business operations that are
carried on by it from time to time.
(b) Require that each insurance policy provide for at
least thirty (30) days' prior written notice to the Administrative Agent of any
termination of or proposed cancellation or nonrenewal of such policy.
Section 5.6 Payment of Taxes and Claims. The Borrower will, and
will cause each of its Subsidiaries to, pay and discharge, before the same
shall become delinquent: (i) all Taxes, assessments and governmental charges
or levies or Claims imposed upon it or upon any of its Assets; and (ii) all
lawful Claims which, if unpaid, might by Applicable Law become a Lien upon its
Assets, in each case except for any such Tax, assessment, charge, levy or Claim
which would result in a Lien which is a Permitted Lien. The Borrower will, and
will cause each of its Subsidiaries to, timely file all information returns
required by any Governmental Entity.
Section 5.7 Compliance with ERISA.
(a) The Borrower shall, and shall cause its Subsidiaries
to avoid any "accumulated funding deficiency" within the meaning of Section
412(a) of the Code with respect to any Employee Pension Plan, whether or not
waived, and will otherwise comply in all material respects with the
requirements of the Code and ERISA with respect to the operation of all Plans.
(b) The Borrower shall furnish to the Administrative
Agent and the Banks (i) within thirty (30) days after any officer of the
Borrower obtains knowledge that a "prohibited transaction" (within the meaning
of Section 406 of ERISA or Section 4975 of the Code) has occurred with respect
to any Plan of the Borrower or its ERISA Affiliates, including its
Subsidiaries, which could subject the Borrower or any of its ERISA Affiliates
to the tax or penalty on "prohibited transactions" imposed by Section 502 of
ERISA or Section 4975 of the Code which tax or penalty, individually or in the
aggregate, would have a Materially Adverse Effect, that any Reportable Event
has occurred with respect to any Employee Pension Plan of the Borrower or any
of its ERISA Affiliates or that PBGC has instituted or will institute
proceedings under Title IV of ERISA to terminate any Employee Pension Plan of
the Borrower or any of its ERISA Affiliates or to appoint a trustee to
administer any Employee Pension Plan of the
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Borrower or any of its ERISA Affiliates, a statement setting forth the details
as to such prohibited transaction, Reportable Event or termination or
appointment proceedings and the action which it (or any other Employee Pension
Plan sponsor if other than the Borrower) proposes to take with respect thereto,
together with a copy of the notice of such Reportable Event given to PBGC if a
copy of such notice is available to the Borrower, any of its Subsidiaries or
any of its ERISA Affiliates, (ii) promptly after receipt thereof, a copy of any
notice the Borrower, any of its Subsidiaries or any of its ERISA Affiliates or
the sponsor of any Plan receives from PBGC, or the Internal Revenue service or
the Department of Labor which sets forth or proposes any action or
determination with respect to such Plan which could have a Materially Adverse
Effect, (iii) promptly upon the Administrative Agent's request therefor, any
annual report filed pursuant to ERISA in connection with each Employee Pension
Plan maintained by the Borrower or any of its ERISA Affiliates, including the
Subsidiaries, and (iv) promptly upon the Administrative Agent's request
therefor, such additional information concerning any such Employee Pension Plan
as may be reasonably requested by the Administrative Agent or any Bank.
(c) The Borrower will promptly notify the Administrative
Agent and the Banks of any excise taxes which have been assessed or which the
Borrower, any of its Subsidiaries or any of its ERISA Affiliates has reason to
believe may be assessed against the Borrower, any of its Subsidiaries or any of
its ERISA Affiliates by the Internal Revenue Service or the Department of Labor
with respect to any Plan of the Borrower or its ERISA Affiliates, including its
Subsidiaries which, individually or in the aggregate, could have a Materially
Adverse Effect.
(d) Within the time required for notice to the PBGC under
Section 302(f)(4)(A) of ERISA, the Borrower will notify the Administrative
Agent and the Banks of any lien arising under Section 302(f) of ERISA in favor
of any Plan of the Borrower or its ERISA Affiliates, including its
Subsidiaries.
(e) The Borrower will not, and will not permit any of its
subsidiaries or any of its ERISA Affiliates to take any of the following
actions or permit any of the following events to occur if such action or event
together with all other such actions or events would subject the Borrower, any
of its Subsidiaries, or any of its ERISA Affiliates to any tax, penalty, or
other liabilities which would have a Materially Adverse Effect:
(i) engage in any transaction in connection with which
the Borrower or any of its Subsidiaries would be subject to either a
civil penalty assessed pursuant to
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Section 502(i) of ERISA or a tax imposed by Section 4975 of the Code;
(ii) terminate any Employee Pension Plan in a manner, or
take any other action, which would result in any liability of the
Borrower, any of its Subsidiaries or any ERISA Affiliate to the PBGC,
other than for payment of PBGC premiums;
(iii) fail to make full payment when due of all amounts
which, under the provisions of any Employee Pension Plan, the
Borrower, any of its Subsidiaries or any ERISA Affiliate is required
to pay as contributions thereto, or permit to exist any accumulated
funding deficiency within the meaning of Section 412(a) of the Code,
whether or not waived, with respect to any Employee Pension Plan; or
(iv) permit the present value of all benefit liabilities
under all Employee Pension Plans which are subject to Title IV of
ERISA to exceed the present value of the assets of such Plans
allocable to such benefit liabilities (within the meaning of Section
4041 of ERISA), except as may be permitted under actuarial funding
standards adopted in accordance with Section 412 of the Code.
Section 5.8 Visits and Inspections. The Borrower will, and will
cause each of its Subsidiaries to, permit representatives of the Administrative
Agent and any of the Banks, upon reasonable notice, to (i) visit and inspect
the properties of the Borrower or any of its Subsidiaries during business
hours, (ii) inspect and make extracts from and copies of their respective books
and records, and (iii) discuss with their respective principal officers their
respective businesses, assets, liabilities, financial positions, results of
operations and business prospects. The Borrower and each of its Subsidiaries
will also permit representatives of the Administrative Agent and any of the
Banks to discuss with their respective accountants the Borrower's and the
Borrower's Subsidiaries' businesses, assets, liabilities, financial positions,
results of operations and business prospects.
Section 5.9 Payment of Indebtedness; Accommodations. Subject to
any provisions herein or in any other Loan Document, the Borrower will, and
will cause each of its Subsidiaries to, pay any and all of their respective
Indebtedness prior to its becoming delinquent or having any late fees assessed
or to the extent of trade payables of such Persons otherwise in accordance
with-ordinary business practices customary for the wireless messaging industry,
other than amounts diligently disputed in
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good faith and for which adequate reserves have been set aside in accordance
with GAAP.
Section 5.10 Use of Proceeds. The Borrower will use the aggregate
proceeds of all Advances under the Accommodations directly or indirectly:
(a) to fund Capital Expenditures associated with the
Business and the ongoing need for wireless messaging units for its Canadian
wireless messaging system;
(b) for working capital needs and other general corporate
purposes of the Borrower which do not otherwise conflict with this Section 5.10
(including, without limitation, the payment of fees and expenses incurred in
connection with the execution and delivery of this Agreement and the other Loan
Documents and payments permitted under Section 7.7 hereof).
No proceeds of Advances hereunder shall be used for the purchase or carrying or
the extension of credit for the purpose of purchasing or carrying, any Margin
Stock.
Section 5.11 Protect Security Interests. Except for the filing of
renewal statements and the making of other filings by the Administrative Agent
as a secured party or assignee, at all times take all action and supply the
Administrative Agent with all information necessary to maintain the Liens
provided for under the Security Documents and confer upon the Administrative
Agent the security interests intended to be created thereby.
Section 5.12 Environmental Audits. Promptly if requested by the
Administrative Agent: (i) if a Default has occurred and is continuing or the
Administrative Agent or the Majority Banks have a reasonable good faith
commercial concern as to the financial condition of the Borrower, conduct
environmental audits having a scope acceptable to the Administrative Agent with
respect to the potential liability under applicable Environmental Laws of the
Borrower and its Subsidiaries, their respective Real Estate or other Assets,
and the Business, such environmental audits to be conducted by the
Environmental Auditor, and provide copies of such environmental audits to the
Administrative Agent; (ii) if the Administrative Agent or the Majority Banks
have a good faith concern that there is a material non-compliance by the
Borrower or any of its Subsidiaries with Environmental Laws, conduct such
environmental audit concerning alleged material non-compliance as the
Administrative Agent or such Majority Banks may require, such audits to be
conducted by the Environmental Auditor, and provide copies of such
environmental audits to the Administrative Agent; and (iii) diligently remedy
any material non-compliance with Environmental Laws revealed by any such audit.
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Section 5.13 Further Assurances. At its cost and expense, upon
request of the Administrative Agent, the Borrower will duly execute and deliver
or cause to be duly executed and delivered to the Administrative Agent such
further instruments and do and cause to be done such further acts as may be
necessary or proper in the reasonable opinion of the Administrative Agent to
carry out more effectively the provisions and purposes of the Loan Documents.
ARTICLE 6
Information Covenants
So long as any of the Obligations is outstanding and unpaid or the
Banks have any Commitment hereunder (whether or not the conditions to borrowing
have been or can be fulfilled) and unless the Majority Banks shall otherwise
consent in writing, the Borrower will furnish or cause to be furnished to each
Bank and the Administrative Agent, at their respective offices:
Section 6.1 Quarterly Financial Statements and Information.
Within forty-five (45) days after the last day of each of the first three (3)
fiscal quarters of the Borrower during any fiscal year, a copy of the balance
sheets of the Borrower on a consolidated and consolidating (unconsolidated)
basis with its Subsidiaries as at the end of such quarter and as of the end of
the preceding fiscal year, and the related statements of operations and the
related statements of cash flows of the Borrower on a consolidated basis with
its Subsidiaries for such quarter and for the elapsed portion of the year ended
with the last day of such quarter, which shall set forth in comparative form
such figures as at the end of and for such quarter and appropriate prior
period, shall provide consolidated and consolidating (unconsolidated) figures
with respect to any acquisitions consummated during such quarter, and shall be
certified by the chief financial officer of the Borrower to have been prepared
in accordance with GAAP and to present fairly in all material respects the
financial position of the Borrower on a consolidated and consolidating
(unconsolidated) basis with its Subsidiaries as at the end of such quarter and
the results of operations for such quarter, and for the elapsed portion of the
year ended with the last day of such quarter, subject only to normal year-end
and audit adjustments and the absence of footnotes.
Section 6.2 Annual Financial Statements and Information. Within
ninety (90) days after the end of each fiscal year of the Borrower, a copy of
the audited consolidated and consolidating (unconsolidated) balance sheets of
the Borrower and its
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Subsidiaries as of the end of such fiscal year and the related audited
unconsolidated statements of operations for such fiscal year and for the
previous fiscal year, the related audited consolidated and consolidating
(unconsolidated) statements of cash flow and stockholders' equity for such
fiscal year and for the previous fiscal year, which shall be accompanied by an
opinion of Ernst & Young or such other independent auditor acceptable to the
Administrative Agent, certified to have been prepared in accordance with GAAP
and to present fairly in all material respects the financial position of the
Borrower on a consolidated and consolidating (unconsolidated) basis with its
Subsidiaries as at the end of such fiscal year.
Section 6.3 Performance Certificates. At the time the financial
statements are furnished pursuant to Sections 6.1 and 6.2, a certificate of the
president or chief financial officer of the Borrower as to its financial
performance, in substantially the form of Exhibit G hereto:
(a) setting forth as and at the end of such quarter or
fiscal year, as the case may be, the arithmetical calculations required to
establish (i) any adjustment to the Applicable Margins, as provided for in
Section 2.6(d) hereof, and (ii) whether or not the Borrower was in compliance
with the requirements of Sections 7.8, 7.9, 7.10, 7.11, 7.12 and 7.13 hereof;
and
(b) stating that no Default has occurred as at the end of
such quarter or fiscal year, as the case may be, or, if a Default has occurred,
disclosing each such Default and its nature, when it occurred, whether it is
continuing and the steps being taken by the Borrower with respect to such
Default.
Section 6.4 Copies of Other Reports.
(a) Promptly upon receipt thereof, copies of all material
reports, if any, submitted to the Borrower by the Borrower's independent
auditors regarding the Borrower, including, without limitation, any management
report prepared in connection with the annual audit referred to in Section 6.2
hereof.
(b) Promptly upon receipt thereof, copies of any material
adverse notice or report regarding any License from any Governmental Entity.
(c) From time to time and promptly upon each request,
such data, certificates, reports, statements, documents or further information
regarding the business, assets, liabilities, financial position, projections,
results of operations or
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business prospects of the Borrower or any of its Subsidiaries, as the
Administrative Agent or any Bank may reasonably request.
(d) Promptly upon request but not more frequently than
annually, certificates of insurance indicating that the requirements of Section
5.5 hereof remain satisfied for such fiscal year, together with copies of any
new or replacement insurance policies obtained during such year.
(e) Within sixty (60) days after each fiscal year end,
the annual budget for the Borrower and its Subsidiaries, including forecasts of
the income statement and a cash flow statement for such fiscal year, on a
quarter by quarter basis.
(f) Promptly after the sending thereof, copies of all
statements, reports and other information which the Borrower or any of its
Subsidiaries sends to security holders of the Borrower generally or files with
the Ontario Securities Commission or any other securities commission or stock
exchange.
Section 6.5 Notice of Litigation and Other Matters. Notice
specifying the nature and status of any of the following events, promptly, but
in any event not later than fifteen (15) days after the occurrence of any of
the following events becomes known to the Borrower:
(i) the commencement of all material proceedings and
investigations by or before any Governmental Entity particular to the
Borrower and/or any of its Subsidiaries and all actions and
proceedings in any court or before any arbitrator against, or to the
extent known to the Borrower, in any other way relating materially
adversely to the Borrower or any Subsidiary of the Borrower, or any of
their respective properties, assets or businesses or any License;
(ii) any material adverse change with respect to the
business, assets, liabilities, financial position, results of
operations or business prospects of the Borrower or any Subsidiary of
the Borrower other than changes in the ordinary course of business
which have not had and would not reasonably be expected to have a
Materially Adverse Effect;
(iii) any material amendment or change to the financial
projections or annual budget provided to the Banks by the Borrower;
(iv) any Default or the occurrence or non-occurrence of
any event (A) which constitutes, or which with the passage of time or
giving of notice or both would constitute a default by the Borrower or
any Subsidiary of
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the Borrower under any material agreement other than this Agreement
and the other Loan Documents to which the Borrower or any subsidiary
of the Borrower is party or by which any of their respective
properties may be bound, or (B) which could have a Materially Adverse
Effect, giving in each case the details thereof and specifying the
action proposed to be taken with respect thereto; and
(v) the occurrence of any Reportable Event or a
"prohibited transaction" (as such term is defined in Section 406 of
ERISA or Section 4975 of the Code) with respect to any Plan of the
Borrower or any of its ERISA Affiliates or the institution or
threatened institution by PBGC of proceedings under ERISA to terminate
or to partially terminate any such Plan or the commencement or
threatened commencement of any litigation regarding any such Plan or
naming it or the trustee of any such Plan with respect to such Plan or
any action taken by the Borrower, any Subsidiary of the Borrower or
any ERISA Affiliate of the Borrower to withdraw or partially withdraw
from any Plan or to terminate any Plan, to the extent any of the
foregoing would have, individually or in the aggregate, a Materially
Adverse Effect.
Section 6.6 Environmental Reporting. Promptly, and in any event
within fifteen (15) days of becoming aware of its existence, notify the
Administrative Agent in writing of any notice or other state of affairs
(providing details of any actions taken by the Borrower in response) which
could reasonably be expected to give rise to: (i) Environmental Liabilities and
Costs of $500,000 or more; or (ii) any violation of Environmental Laws
involving the possible imposition of a fine of $500,000 or more or the shutting
down of any facility forming part of the Business for a period in excess of 24
hours; and (iii) any facts or circumstances which could reasonably be expected
to give rise to (x) Environmental Liabilities and Costs of $500,000 or more, or
(y) any violation of Environmental Laws involving the possible imposition of a
fine of $500,000 or more or the shutting down of any facility forming part of
the Assets for a period in excess of 24 hours.
ARTICLE 7
Negative Covenants
So long as any of the obligations is outstanding and unpaid or the
Banks have any Commitment hereunder (whether or not the conditions to borrowing
have been or can be fulfilled) and unless the Majority Banks, or such greater
number of Banks as may be
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expressly provided herein, shall otherwise give their prior consent in writing:
Section 7.1 Indebtedness of the Borrower and its Subsidiaries.
The Borrower shall not, and shall not permit any of its Subsidiaries to,
create, assume, incur or otherwise become or remain obligated in respect of, or
permit to be outstanding, any Indebtedness except:
(a) the Obligations (other than the Obligations described
in Section 7.1(c) below);
(b) Indebtedness secured by Permitted Liens;
(c) obligations under Interest Rate Hedge Agreements
having a notional principal amount of not more than fifty percent (50%) of the
Accommodations in the aggregate outstanding at any time;
(d) Indebtedness of the Borrower or any of its
wholly-owned subsidiaries to any other wholly-owned Subsidiary of the Borrower
so long as the corresponding debt instruments are pledged to the Administrative
Agent as security for the Obligations;
(e) Indebtedness of any of wholly-owned Subsidiaries of
the Borrower to the Borrower so long as the corresponding debt instruments are
pledged to the Administrative Agent as security for the obligations; and
(f) Capitalized Lease Obligations in an aggregate amount
not to exceed $500,000 at any time outstanding.
Section 7.2 Limitation on Liens. The Borrower shall not, and
shall not permit any of its Subsidiaries to, create, assume, incur or permit to
exist or to be created, assumed, incurred or permitted to exist, directly or
indirectly, any Lien on any of its properties or assets, whether now owned or
hereafter acquired, except for Permitted Liens.
Section 7.3 Amendment and Waiver. The Borrower shall not, and
shall not permit any of its Subsidiaries to, enter into any amendment of, or
agree to or accept or consent to any waiver of any of the provisions of its
articles or certificate of incorporation or partnership agreement or by-laws,
as appropriate (other than immaterial amendments relating to corporate
governance which could not reasonably be expected to have an adverse effect on
the Administrative Agent or any Bank or any of their rights or claims under any
of the Loan Documents)
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Section 7.4 Liquidation, Merger, or Disposition of Assets.
(a) Disposition of Assets. The Borrower shall not, and
shall not permit any of its Subsidiaries to, at any time sell, exchange, lease,
abandon, or otherwise dispose of any Assets (other than Assets disposed of in
the ordinary course of business) without the prior written consent of all the
Banks.
(b) Liquidation or Merger. The Borrower shall not, and
shall not permit any of its Subsidiaries to, at any time liquidate or dissolve
itself (or suffer any liquidation or dissolution) or otherwise wind up, or
enter into any merger, other than (i) a merger or consolidation among the
Borrower and one or more of its Subsidiaries, provided the Borrower is the
surviving corporation, or (ii) a merger between or among two or more
Subsidiaries of the Borrower, or (iii) in connection with an acquisition
permitted hereunder effected by a merger in which the Borrower or, in a merger
in which the Borrower is not a party, a Subsidiary of the Borrower is the
surviving corporation.
Section 7.5 Limitation on Guaranties. The Borrower shall not, and
shall not permit any of its Subsidiaries to, at any time Guaranty, assume, be
obligated with respect to, or permit to be outstanding any Guaranty of, any
obligation of any other Person other than (a) a guaranty by endorsement of
negotiable instruments for collection in the ordinary course of business, (b)
obligations under agreements of the Borrower or any of its Subsidiaries entered
into in connection with leases of real property or the acquisition of services,
supplies and equipment in the ordinary course of business of the Borrower or
any of its subsidiaries, or (c) Guaranties of Indebtedness incurred as
permitted pursuant to Section 7.1 hereof.
Section 7.6 Investments and Acquisitions. The Borrower shall not,
and shall not permit any of its subsidiaries to, directly or indirectly, (a)
make any loan or advance, or otherwise acquire for consideration evidences of
Indebtedness, Capital Stock or other securities of any Person or other assets
or property other than (i) assets or property in the ordinary course of
business or (ii) Permitted Investments; or (b) except with the consent of the
Majority Banks, make any acquisition.
Section 7.7 Restricted Payments and Purchases. The Borrower shall
not, and shall not permit any of its Subsidiaries to, directly or indirectly
declare or make any Restricted Payment or Restricted Purchase, except that so
long as no Default hereunder then exists or would be caused thereby the
Borrower may make (a) payments to Paging Network, Inc. for reimbursement of
start-up expenses in an aggregate amount of not more than United
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States Dollars $8,600,000 and (b) distributions to Paging Network, Inc. and
Madison Venture Corporation so long as the Leverage Ratio is below 4.00 to 1
(both before and after giving effect to such distribution).
Section 7.8 Leverage Ratio. Commencing April 1, 1998, the
Borrower shall not permit the Leverage Ratio to exceed the ratios set forth
below during the periods indicated:
<TABLE>
<CAPTION>
Period Ratio
------ ------
<S> <C>
April 1, 1998 through
June 30, 1998 6.00:1
July 1, 1998 through
September 30, 1998 5.00:1
October 1, 1998 through
December 31, 1998 4.00:1
January 1, 1999 through
March 31, 1999 3.00:1
April 1, 1999 and thereafter 2.50:1.
</TABLE>
Section 7.9 Annualized Operating Cash Flow to Pro Forma Debt Service.
Commencing October 1, 1998, the Borrower shall not permit the ratio of
Annualized Operating Cash Flow to Pro Forma Debt Service for the Borrower Group
on a combined basis to be less than the ratios set forth below for the periods
indicated:
<TABLE>
<CAPTION>
Period Ratio
------ ------
<S> <C>
October 1, 1998 through
September 30, 2001 1.25:1
October 1, 2001 and
thereafter 1.50:1
</TABLE>
Section 7.10 Total Debt Per Subscriber. The Borrower shall not at
any time permit the Total Debt for the Borrower Group on a combined basis
divided by Total Subscribers to be greater than or equal to $275.00.
Section 7.11 Capital Expenditures. Commencing with the year in
which the Available Commitment exceeds the Minimum Permitted Collateral Amount,
the Borrower shall not permit the aggregate Capital Expenditures for the
Borrower Group on a
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combined basis to exceed the following for the fiscal years
indicated:
<TABLE>
<CAPTION>
Total
Capital
Period Expenditures
------ ---------------
<S> <C>
At December 31, 1996 $45,000,000.00
At December 31, 1997 $20,000,000.00
At December 31, 1998
and thereafter $17,500,000.00
</TABLE>
To the extent not used in 1996, an amount equal to the unused Total Capital
Expenditure availability may be carried forward to 1997. Thereafter, to the
extent not used in any fiscal year, an amount equal to the lesser of (a) the
unused Total Capital Expenditure availability (exclusive of any carry forwards
from prior periods) for such fiscal year and (b) 10% of the Total Capital
Expenditure availability shown above (exclusive of any carry forwards from
prior periods) for such fiscal year, may be carried forward to the next
succeeding fiscal year.
Section 7.12 Minimum Revenue Test. Commencing December 31, 1996
and continuing for each fiscal quarter through the fiscal quarter ending June
30, 1998, the Borrower shall not permit the aggregate Gross Revenue for the
Borrower Group on a combined basis to be less than the following for the fiscal
quarters indicated:
<TABLE>
<CAPTION>
Quarter Ending Minimum Revenue
-------------- ---------------
<S> <C>
12/31/96 $1,770,000
03/31/97 $2,800,000
06/30/97 $3,860,000
09/30/97 $4,960,000
12/31/97 $6,100,000
03/31/98 $7,270,000
06/30/98 $8,490,000
</TABLE>
Section 7.13 Minimum Units in Service. Commencing December 31,
1996 and continuing for each fiscal quarter through the fiscal quarter ending
June 30, 1998, the Borrower shall not
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permit the minimum number of Units in Service to be less than the following for
the fiscal quarters indicated:
<TABLE>
<CAPTION>
Minimum Pagers
Quarter Ending In Service
-------------- --------------
<S> <C>
12/31/96 42,200
03/31/97 63,800
06/30/97 86,400
09/30/97 110,200
12/31/97 135,200
03/31/98 161,400
06/30/98 188,900
</TABLE>
Section 7.14 Affiliate Transactions. Except for those agreements
described in Schedule 4 hereto, the Borrower shall not, and shall not permit
any of its Subsidiaries to, at any time engage in any transaction with an
Affiliate, or make an assignment or other transfer of any of its properties or
assets to any Affiliate, on terms less advantageous to the Borrower or such
Subsidiary than would be the case if such transaction had been effected with a
non- Affiliate.
Section 7.15 Real Estate. Neither the Borrower nor any of its
Subsidiaries shall purchase any Real Estate or enter into any sale/leaseback
transaction.
Section 7.16 ERISA Liabilities. The Borrower shall not, and shall
cause each of its ERISA Affiliates not to enter into any Multiemployer Plan.
ARTICLE 8
Default
Section 8.1 Events of Default. Each of the following shall
constitute an Event of Default, whatever the reason for such event and whether
it shall be voluntary or involuntary or be effected by operation of Applicable
Law or pursuant to any judgment or order of any court or any order, rule or
regulation of any Person:
(a) Any representation or warranty made under this
Agreement or any other Loan Document shall prove incorrect or misleading in any
material respect when made or deemed to be made pursuant to Section 4.2 hereof;
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(b) The Borrower shall default in the payment of: (i)
any interest under any of the Loan Documents or fees or other amounts payable
to the Banks and the Administrative Agent under any of the Loan Documents, or
any of them, when due and such default is not cured within three (3) Business
Days after the occurrence thereof; or (ii) any principal under any of the Loan
Documents when due;
(c) The Borrower shall default in the performance or
observance of any agreement or covenant contained in Sections 5.2 or 5.10 or in
Articles 6 or 7 hereof; provided however, that on any date on which the
aggregate of Accommodations outstanding hereunder is less than the aggregate
amount of the Equivalent Canadian Dollar Amount of Permitted Collateral held by
the Administrative Agent pursuant to the Deposit Agreement and the Letter of
Credit, the failure to comply with Section 7.12 or 7.13 hereof shall not
constitute a default hereunder until any such failure has continued for a
period of two (2) consecutive complete calendar quarters;
(d) The Borrower shall default in the performance or
observance of any other agreement or covenant contained in this Agreement not
specifically referred to elsewhere in this Section 8.1 or there shall occur any
default in the performance or observance of any agreement or covenant contained
in any of the Loan Documents (other than this Agreement or as otherwise
provided in Section 8.1 of this Agreement) by the Borrower, any of its
Subsidiaries, or any other obligor thereunder, and such default shall not be
cured within a period of thirty (30) days from the date on which the Borrower
becomes aware of or receives notice of such default;
(e) The Borrower or any of its Subsidiaries shall: (i)
become insolvent or generally not pay its debts as such debts become due; (ii)
admit in writing its inability to pay its debts generally or shall make a
general assignment for the benefit of creditors; (iii) file a notice of
intention to file a proposal under any Applicable Law relating to bankruptcy,
insolvency or reorganization or relief of debtors; (iv) have instituted against
it any proceeding, which proceeding continues undismissed or unstayed for a
period of sixty (60) consecutive days or any of the actions sought in such
proceeding (including the entry of an order for relief against it or the
appointment of a receiver, trustee, custodian or other similar official for it
or for any substantial part of its Assets) shall occur, or institute any
proceeding seeking: (A) to adjudicate it a bankrupt or insolvent; (B) any
liquidation, winding-up, reorganization, arrangement, adjustment, protection,
relief or composition of it or its debts
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under any Applicable Law relating to bankruptcy, insolvency or reorganization
or relief of debtors; or (C) the entry of an order for relief or the
appointment of a receiver, trustee or other similar official for it or for any
substantial part of its Assets; or (v) take any corporate action to authorize
any of the foregoing actions;
(f) A notice is sent to or received by the Borrower or
any of its Subsidiaries from any creditor with respect to the intention of such
creditor to enforce security on: (i) any of the Collateral; or (ii) any Assets
of the Borrower or any of its Subsidiaries (other than the Collateral) unless
such notice is being contested in good faith by appropriate legal proceedings
and such notice does not involve any immediate danger of the sale, forfeiture
or loss of any of the Assets of the Borrower or any of its Subsidiaries (other
than the Collateral) that are the subject of such notice;
(g) A judgment or order for the payment of money not
covered by insurance shall be entered by any court against the Borrower or any
of the Borrower's Subsidiaries for the payment of money which exceeds singly or
in the aggregate with other such judgments, $500,000, or a warrant of
attachment or execution or similar process shall be issued or levied against
property of the Borrower or any of the Borrower's Subsidiaries which, together
with all other such property of the Borrower or any of the Borrower's
Subsidiaries subject to other such process, exceeds in value $500,000 in the
aggregate, and if, within thirty (30) days after the entry, issue or levy
thereof, such judgment, warrant or process shall not have been paid or
discharged or stayed pending appeal or removed to bond, or if, commenced and
not stayed, after the expiration of any such stay, such judgment, warrant or
process shall not have been paid or discharged or removed to bond;
(h) There shall be at any time any "accumulated funding
deficiency," as defined in ERISA or in Section 412 of the Code, with respect to
any Plan maintained by the Borrower or any ERISA Affiliate, or to which the
Borrower or any ERISA Affiliate has any liabilities, or any trust created
thereunder; or a trustee shall be appointed by a United States District Court
to administer any Employee Pension Plan; or PBGC shall institute proceedings to
terminate any Employee Pension Plan; or the Borrower or any ERISA Affiliate
shall incur any liability to PBGC in connection with the termination of any
Employee Pension Plan; or any Plan or trust created under any Plan of the
Borrower or any ERISA Affiliate shall engage in a "prohibited transaction" (as
such term is defined in Section 406 of ERISA or Section 4975
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of the Code) which would subject the Borrower or any Subsidiary to any tax or
penalty on "prohibited transactions" imposed by Section 502 of ERISA or Section
4975 of the Code;
(i) There shall occur (i) any default which entitles the
holders to accelerate the maturity thereof under any document, instrument or
agreement relating to any Indebtedness of any member of the Borrower Group
having an aggregate principal amount exceeding $1,000,000; or (ii) any default
which entitles the holders to terminate any Interest Rate Hedge Agreement
having a notional principal amount of $1,000,000 or more;
(j) One or more Licenses shall be terminated or revoked,
substantially adversely modified or no longer available to the Borrower such
that the Borrower and its Subsidiaries are no longer able to operate the
related wireless messaging system or portions thereof and retain the revenue
received therefrom, if any, or any such License shall fail to be renewed at the
stated expiration thereof such that the Borrower and its Subsidiaries are no
longer able to operate the related wireless messaging system or portions
thereof and retain the revenue received therefrom, if any, and, in either case,
there shall be a loss of revenue of the Borrower or any of its Subsidiaries as
a direct or indirect result thereof which loss of revenues could reasonably be
expected to have a Materially Adverse Effect;
(k) Any Loan Document or any material provision thereof,
shall at any time and for any reason be declared by a court of competent
jurisdiction to be null and void, or a proceeding shall be commenced by the
Borrower or any of the Borrower's Subsidiaries or any shareholder, or by any
governmental authority having jurisdiction over the Borrower or any of the
Borrower's Subsidiaries or any shareholder, seeking to establish the invalidity
or unenforceability thereof (exclusive of questions of interpretation of any
provision thereof), or the Borrower or any of the Borrower's Subsidiaries shall
deny that it has any liability or obligation for the payment of principal or
interest purported to be created under any Loan Document;
(l) Subject only to Permitted Liens, any Security
Document shall for any reason (other than as a result of the action or inaction
of the Administrative Agent or any Bank), fail or cease to create a valid and
perfected and first-priority Lien on or Security Interest in any portion of the
Collateral purported to be covered thereby;
(m) Any Change Event shall occur or exist; or
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(n) There shall occur any default by the Borrower or any
Subsidiary of the Borrower under or a cancellation of, in any case without
contemporaneous replacement, any Transponder Lease Agreement, the Network and
Equipment Agreement or the Sales and Distribution Agreement which default is
not cured within any applicable cure period and which default would be
reasonably likely to have a Materially Adverse Effect.
Section 8.2 Remedies.
(a) If an Event of Default specified in Section 8.1
hereof (other than an Event of Default under Section 8.1(e) hereof) shall have
occurred and shall be continuing, the Administrative Agent, at the request of
the Majority Banks subject to Section 9.8(a) hereof, shall (i) terminate the
Commitment, and/or (ii) declare the principal of and interest on the
Accommodations and all other amounts owed to the Banks and the Administrative
Agent under this Agreement and any other Loan Documents to be forthwith due and
payable without presentment, demand, protest or other notice of any kind, all
of which are hereby expressly waived, anything in this Agreement or any other
Loan Document to the contrary notwithstanding, and the Commitment shall
thereupon forthwith terminate, and/or (iii) the security constituted by the
Security Documents and any other security now or hereafter held by the
Administrative Agent shall become and be enforceable.
(b) Upon the occurrence and continuance of an Event of
Default specified in Section 8.1(e) hereof, all principal, interest and other
amounts due hereunder and under the Loan Documents, and all other obligations,
shall thereupon and concurrently therewith become due and payable and the
Commitment shall forthwith terminate and the principal amount of the
Accommodations outstanding hereunder shall bear interest at the Default Rate,
all without any action by the Administrative Agent or the Banks, or the
Majority Banks, or any of them, and without presentment, demand, protest or
other notice of any kind, all of which are expressly waived, anything in this
Agreement or in the other Loan Documents to the contrary notwithstanding.
(c) Upon acceleration of the obligations, as provided in
subsection (a) or (b) of this Section 8.2, the Administrative Agent and the
Banks shall have all of the post-default rights granted to them, or any of
them, as applicable, under the Loan Documents and under Applicable Law.
(d) Upon acceleration of the obligations, as provided in
subsection (a) or (b) of this Section 8.2, the Administrative
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Agent, upon request of the Majority Banks, shall have the right to the
appointment of a receiver for the properties and assets of the Borrower and its
Subsidiaries, and the Borrower, for itself and on behalf of its Subsidiaries,
hereby consents to such rights and such appointment and hereby waives any
objection the Borrower or any Subsidiary may have thereto or the right to have
a bond or other security posted by the Administrative Agent on behalf of the
Banks, in connection therewith.
(e) The rights and remedies of the Administrative Agent
and the Banks hereunder shall be cumulative, and not exclusive.
ARTICLE 9
The Administrative Agent
Section 9.1 Appointment and Authorization. Each Bank hereby
irrevocably appoints and authorizes, and hereby agrees that it will require any
transferee of any of its interest in its pro rata portion of the Accommodations
irrevocably to appoint and authorize, the Administrative Agent to take such
actions as its agent on its behalf and to exercise such powers hereunder and
under the other Loan Documents as are delegated by the terms hereof and
thereof, together with such powers as are reasonably incidental thereto.
Neither the Administrative Agent nor any of its directors, officers, employees,
agents or counsel, shall be liable to the Banks for any action taken or omitted
to be taken by it or them hereunder or in connection herewith, except for its
or their own gross negligence or willful misconduct as determined by a final,
non-appealable judicial order of a court of competent jurisdiction.
Section 9.2 Interest Holders. The Administrative Agent may treat
each Bank, or the Person designated in the last notice filed with the
Administrative Agent, as the holder of all of the interests of such Bank in its
pro rata portion of the Accommodations until written notice of transfer, signed
by such Bank (or the Person designated in the last notice filed with the
Administrative Agent) and by the Person designated in such written notice of
transfer, in form and substance satisfactory to the Administrative Agent, shall
have been filed with the Administrative Agent.
Section 9.3 Consultation with Counsel. The Administrative Agent
may consult with legal counsel selected by it and shall not be liable to the
Banks for any action taken or
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suffered by it in good faith in consultation with such counsel and in
reasonable reliance on such consultations.
Section 9.4 Documents. The Administrative Agent shall be under no
duty to examine, inquire into, or pass upon the validity, effectiveness or
genuineness of this Agreement, any other Loan Document, or any instrument,
document or communication furnished pursuant hereto or in connection herewith,
and the Administrative Agent shall be entitled to assume that they are valid,
effective and genuine, have been signed or sent by the proper parties and are
what they purport to be.
Section 9.5 Administrative Agent and Affiliates. With respect to
the Commitment and the Accommodations, the Bank which is the Administrative
Agent shall have the same rights and powers hereunder as any other Bank and the
Administrative Agent and Affiliates of the Administrative Agent may accept
deposits from, lend money to and generally engage in any kind of business with
the Borrower, any of its Subsidiaries or any Affiliates of, or Persons doing
business with, the Borrower, as if they were not affiliated with the
Administrative Agent and without any obligation to account therefor.
Section 9.6 Responsibility of the Administrative Agent. The
duties and obligations of the Administrative, Agent under this Agreement are
only those expressly set forth in this Agreement. The Administrative Agent
shall be entitled to assume that no Default or Event of Default has occurred
and is continuing unless it has actual knowledge, or has been notified in
writing by the Borrower, of such fact, or has been notified by a Bank in
writing that such Bank considers that a Default or an Event of Default has
occurred and is continuing, and such Bank shall specify in detail the nature
thereof in writing. The Administrative Agent shall not be liable hereunder for
any action taken or omitted to be taken except for its own gross negligence or
willful misconduct as determined by a final, non-appealable judicial order of a
court of competent jurisdiction. The Administrative Agent shall provide each
Bank with copies of such documents received from the Borrower as such Bank may
reasonably request.
Section 9.7 Security Documents. The Administrative Agent is
hereby authorized to act on behalf of the Banks, in its own capacity and
through other agents and sub-agents appointed by it, under the Security
Documents, provided that the Administrative Agent shall not agree to the
release of any Collateral, or any property encumbered by any mortgage, pledge
or security interest, except in compliance with Section 11.12 hereof.
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Section 9.8 Action by the Administrative Agent.
(a) The Administrative Agent shall be entitled to use its
discretion with respect to exercising or refraining from exercising any rights
which may be vested in it by, and with respect to taking or refraining from
taking any action or actions which it may be able to take under or in respect
of, this Agreement or any other Loan Document, unless the Administrative Agent
shall have been instructed by the Majority Banks (or, where expressly required,
all the Banks) to exercise or refrain from exercising such rights or to take or
refrain from taking such action; provided that the Administrative Agent shall
not exercise any rights under Section 8.2(a) of this Agreement without the
request of the Majority Banks (or, where expressly required, all the Banks)
unless time is of the essence. The Administrative Agent shall incur no
liability to the Banks under or in respect of this Agreement with respect to
anything which it may do or refrain from doing in the reasonable exercise of
its judgment or which may seem to it to be necessary or desirable in the
circumstances, except for its gross negligence or willful misconduct as
determined by a final, non-appealable judicial order of a court of competent
jurisdiction.
(b) The Administrative Agent shall not be liable to the
Banks or to any Bank or the Borrower or any of its Subsidiaries in acting or
refraining from acting under this Agreement or any other Loan Document in
accordance with the instructions of the Majority Banks (or, where expressly
required, all the Banks), and any action taken or failure to act pursuant to
such instructions shall be binding on all Banks. The Administrative Agent shall
not be obligated to take any action which is contrary to Applicable Law or
which would in the Administrative Agent's reasonable opinion subject the
Administrative Agent to liability.
Section 9.9 Notice of Default or Event of Default. In the event
that the Administrative Agent or any Bank shall acquire actual knowledge, or
shall have been notified, of any Default or Event of Default, the
Administrative Agent or such Bank shall promptly notify the Banks and the
Administrative Agent, as applicable (provided failure to give such notice shall
not result in any liability on the part of such Bank or the Administrative
Agent), and the Administrative Agent shall take such action and assert such
rights under this Agreement and the other Loan Documents as the Majority Banks
shall request in writing, and the Administrative Agent shall not be subject to
any liability by reason of its acting pursuant to any such request. If the
Majority Banks (or, where expressly required, all the Banks)
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shall fail to request the Administrative Agent to take action or to assert
rights under this Agreement or any other Loan Documents in respect of any
Default or Event of Default within ten (10) days after their receipt of the
notice of any Default or Event of Default from the Administrative Agent or any
Bank, the Administrative Agent may, but shall not be required to, take such
action and assert such rights (other than rights under Sections 8.2(a) or 11.12
of this Agreement) as it deems in its discretion to be advisable for the
protection of the Banks, except that, if the Majority Banks have instructed the
Administrative Agent not to take such action or assert such right, in no event
shall the Administrative Agent act contrary to such instructions.
Section 9.10 Responsibility Disclaimed. The Administrative Agent
shall not be under any liability or responsibility whatsoever as Administrative
Agent:
(a) To the Borrower or any other Person as a consequence
of any failure or delay in performance by or any breach by, any Bank or Banks
of any of its or their obligations under this Agreement or any of the other
Loan Documents;
(b) To any Bank or Banks, as a consequence of any failure
or delay in performance by, or any breach by, (i) the Borrower of any of its
obligations under this Agreement or any other Loan Document, or (ii) the
Borrower, any Subsidiary of the Borrower or any other obligor under any other
Loan Document;
(c) To any Bank or Banks, for any statements,
representations or warranties in this Agreement or any other Loan Document, or
any information provided pursuant to this Agreement, or any other Loan
Document, or for the validity, effectiveness, enforceability or sufficiency of
this Agreement or any other Loan Document; or
(d) To any Person for any act or omission other than that
arising from gross negligence or willful misconduct of the Administrative Agent
as determined by a final, non-appealable judicial order of a court of competent
jurisdiction.
Section 9.11 Indemnification. The Banks agree to indemnify the
Administrative Agent (to the extent not reimbursed by the Borrower) pro rata
according to their respective Commitment Ratios, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses (including fees and expenses of experts, agents,
consultants and counsel), or disbursements of any kind or nature whatsoever
which may be imposed on, incurred by or
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asserted against the Administrative Agent in any way relating to or arising out
of this Agreement or any other Loan Document or any action taken or omitted by
the Administrative Agent under this Agreement or any other Loan Document,
except that no Bank shall be liable to the Administrative Agent for any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses, or disbursements resulting from the gross
negligence or willful misconduct of the Administrative Agent as determined by a
final, non-appealable judicial order of a court of competent jurisdiction.
Section 9.12 Credit Decision. Each Bank represents and warrants to
each other and to the Administrative Agent that:
(a) In making its decision to enter into this Agreement
and to make its pro rata portion of the Accommodations it has independently
taken whatever steps it considers necessary to evaluate the financial condition
and affairs of the Borrower and that it has made an independent credit
judgment, and that it has not relied upon the Administrative Agent or
information provided by the Administrative Agent (other than information
provided to the Administrative Agent by the Borrower and forwarded by the
Administrative Agent to the Banks); and
(b) So long as any portion of the Accommodations remains
outstanding or such Bank has an obligation to make its pro rata portion of
Advances hereunder, it will continue to make its own independent evaluation of
the Collateral and of the financial condition and affairs of the Borrower.
Section 9.13 Successor Administrative Agent. Subject to the
appointment and acceptance of a successor Administrative Agent as provided
below, the Administrative Agent may resign at any time by giving fifteen (15)
days prior written notice thereof to the Banks and the Borrower and may be
removed at any time for cause by the Majority Banks. Upon any such resignation
or removal, the Majority Banks, and prior to the occurrence of a Default with
the consent of the Borrower not to be unreasonably withheld, shall have the
right to appoint a successor Administrative Agent. If no successor
Administrative Agent shall have been so appointed by the Majority Banks and
shall have accepted such appointment within thirty (30) days after the retiring
Administrative Agent gave notice of resignation or the Majority Banks' removal
of the retiring Administrative Agent, then the retiring Administrative Agent
may, on behalf of the Banks-, appoint a successor Administrative Agent which
shall be any Person organized under the laws of Canada which has combined
capital and reserves in excess of $250,000,000. Upon the
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acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges, duties
and obligations of the retiring Administrative Agent and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder and under the other Loan Documents. After any retiring Administrative
Agent's resignation or removal hereunder as Administrative Agent the provisions
of this Article shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as the
Administrative Agent.
Section 9.14 Delegation of Duties. The Administrative Agent may
execute any of its duties under the Loan Documents by or through agents or
attorneys selected by it using reasonable care, and shall be entitled to rely
upon advice of counsel concerning all matters pertaining to such duties.
Section 9.15 Determination by Administrative Agent Conclusive and
Binding. Any determination to be made by the Administrative Agent on behalf of
or with the approval of the Banks or the Majority Banks under this Agreement
shall be made by the Administrative Agent in good faith and, if so made, shall
be binding on the Banks, absent manifest error.
ARTICLE 10
Computations and Indemnities
Section 10.1 Indemnity for Change in Circumstances. If with
respect to the Banks: (a) any change in Applicable Law, or any change in the
interpretation or application by any Governmental Entity of any Applicable Law
occurring or becoming effective after the date hereof; or (b) any compliance by
the Administrative Agent or any of the Banks with any direction, request or
requirement (whether or not having the force of Applicable Law) of any
Governmental Entity made or becoming effective after the date hereof, in either
case shall have the effect of causing Loss to the Administrative Agent or any
of the Banks by:
(i) increasing the cost to the Administrative Agent or any of the
Banks of performing its obligations under this Agreement or in
respect of any Advance or Bankers' Acceptance (including the
costs of maintaining any
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capital, reserve or special deposit requirements in connection
therewith);
(ii) requiring the Administrative Agent or any of the Banks to
maintain or allocate any capital or additional capital or
affecting its allocation of capital in respect of its
obligations under this Agreement or in respect of any Advances
or Bankers' Acceptances;
(iii) reducing any amount payable to the Administrative Agent or any
of the Banks under this Agreement or in respect of any Advance
or Bankers' Acceptance by any amount it deems material (other
than a reduction resulting from a higher rate of income tax or
other special tax relating to the Administrative Agent's or
any Bank's income in general); or
(iv) causing the Administrative Agent or any of the Banks to make
any payment or to forgo any return on, or calculated by
reference to, any amount received or receivable by the
Administrative Agent or any of the Banks under this Agreement
in respect of any Advance or Bankers' Acceptance;
then the Administrative Agent may give notice to the Borrower specifying the
nature of the event giving rise to such Loss and the Borrower shall, within
thirty (30) days or, if earlier, on the Maturity Date, pay such amounts as the
Administrative Agent may specify to be necessary to compensate the
Administrative Agent or any of the Banks for any such Loss incurred after the
date of such notice. The Administrative Agent or any Bank claiming compensation
under this Section 10.1 shall provide the Borrower with a written certificate
setting forth the additional amount or amounts to be paid to it hereunder and
calculations therefor in reasonable detail. Such certificate shall be
presumptively correct absent manifest error. In determining such amount, such
Person may use any reasonable averaging and attribution methods which are
consistently applied to similarly situated borrowers of such Person.
Section 10.2 Indemnity for Transactional and Environmental
Liability. (a) The Borrower hereby agrees to indemnify, exonerate and hold the
Administrative Agent and each Bank and each of their respective officers,
directors, employees, agents and other representatives (collectively, the
"Indemnified Parties") free and harmless from and against any and all claims,
demands, actions, causes of action, suits, losses, costs (including all
documentary, recording, filing, mortgage or stamp
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taxes or duties), charges, liabilities and damages, and expenses in connection
therewith (irrespective of whether such Indemnified Party is a party to the
action for which such indemnification hereunder is sought), and including
reasonable legal fees and disbursements (collectively, in this Section 10.2
(a), the "Indemnified Liabilities") paid, incurred or suffered by, or asserted
against, the Indemnified Parties or any of them or, with respect to, or as a
direct or indirect result of: (i) any transaction financed or to be financed in
whole or in part, directly or indirectly, with the proceeds of any
Accommodation obtained hereunder; or (ii) the execution, delivery, performance
or enforcement of this Agreement or any other Loan Document, except for such
Indemnified Liabilities that a court of competent jurisdiction determines by a
final non-appealable order are on account of the relevant Indemnified Party's
gross negligence or wilful misconduct.
(b) Without limiting the generality of the indemnity set
out in Section 10.2(a) hereof, the Borrower hereby further agrees to indemnify,
exonerate and hold the Indemnified Parties free and harmless from and against
any and all claims, demands, actions, causes of action, suits, losses, costs,
charges, liabilities and damages, and expenses in connection therewith,
including reasonable legal fees and disbursements (collectively, in this
Section 10.2(b), the "Indemnified Liabilities") paid, incurred or suffered by,
or asserted against, the Indemnified Parties or any of them for, with respect
to, or as a direct or indirect result of any Environmental Liabilities and
Costs.
(c) All obligations provided for in this Section 10.2
shall not be reduced or impaired by any investigation made by or on behalf of
the Administrative Agent or any of the Banks.
(d) The Borrower hereby agrees that, for the purposes of
effectively allocating the risk of loss placed on the Borrower by this Section
10.2, the Administrative Agent and each of the Banks shall be deemed to be
acting as the agent or trustee on behalf of and for the benefit of its
officers, directors and agents.
(e) If, for any reason, the obligations of the Borrower
pursuant to this Section 10.2 shall be unenforceable, the Borrower agrees to
make the maximum contribution to the payment and satisfaction of each
obligation that is permissible under Applicable Law, except to the extent that
a court of competent jurisdiction determines by a final non-appealable order
such obligations arose on account of the gross negligence or wilful misconduct
of any Indemnified Party.
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Section 10.3 Taxation on Payments. The Borrower hereby agrees:
(a) that any and all payments made by the Borrower under
or pursuant to any of the Loan Documents shall be made without set-off or
counterclaim and free and clear of, and without deduction for, any and all
present or future Taxes, levies, imposts, deductions, charges, fees, duties or
withholding or other charges of any nature imposed by any taxing authority, and
all liabilities with respect thereto, imposed by any jurisdiction as a
consequence or result of any action taken by the Borrower, including the making
of any payment under or pursuant to any of the Loan Documents, excluding, in
the case of the Administrative Agent, or any Bank, taxes imposed on its income
or capital taxes or receipts and franchise taxes. If the Borrower shall be
required by Law to deduct any Taxes from or in respect of any sum payable to
the Administrative Agent or any Bank hereunder or pursuant to any of the Loan
Documents, the sum payable to the Administrative Agent or such Bank, as the
case may be, shall be increased as may be necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 10.3) the Administrative Agent or such Bank, as the case may
be, receives an amount equal to the sum it would have received had no such
deductions been made. If a Tax credit is received by the Administrative Agent
or such Bank for any Taxes deducted or withheld by the Borrower in accordance
with this Section 10.3(a) and in respect of which additional amounts have been
paid by the Borrower under this Section 10.3(a), then, to the extent such Tax
credit is reasonably identified by the Administrative Agent or such Bank as
being related to the additional amounts paid by the Borrower under this Section
10.3(a) and has been received and utilized by the Administrative Agent or such
Bank, the Administrative Agent or such Bank shall pay to the Borrower an amount
equal to such Tax credit; provided that such amount shall not exceed the
additional amounts paid by the Borrower to the Administrative Agent or such
Bank under this Section 10.3(a); and
(b) to indemnify and hold harmless the Administrative
Agent and each Bank for the full amount of Taxes (excluding, in the case of the
Administrative Agent, or any Bank, taxes imposed on its income or capital taxes
or receipts and franchise taxes) and for any incremental Taxes due to the
Borrower's failure to remit to the Administrative Agent and the Banks the
required receipts or other required documentary evidence of payment of such
Taxes or due to the Borrower's failure to pay any Taxes (excluding, in the case
of the Administrative Agent, or any Bank, taxes imposed on its income or
capital taxes or receipts and
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franchise taxes) when due to the appropriate taxing authority (including any
Taxes imposed by any taxing authority on amounts payable under this Section
10.3) paid by the Administrative Agent or any Bank and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes were correctly or legally assessed. The
Administrative Agent or any Bank shall promptly notify the Borrower of such
payment and, if such payment was made pursuant to an incorrect or illegal
assessment, shall reasonably cooperate with the Borrower, at the expense of the
Borrower, in any dispute of such assessment. The Administrative Agent or any
Bank claiming compensation under this Section 10.3 shall provide the Borrower
with a written certificate setting forth the additional amount or amounts to be
paid to it hereunder and calculations therefor in reasonable detail. Such
certificate shall be presumptively correct absent manifest error. Payment
pursuant to this indemnification shall be made within thirty (30) days from the
date the Administrative Agent or such Bank makes written demand therefor or if
earlier, on the Maturity Date.
Section 10.4 Judgement Currency. If, for the purposes of
obtaining judgment in any court, it is necessary to convert any sum due, or
owing hereunder or under any other Loan Document to the Administrative Agent or
any one or more of the Banks in any currency (the "Original Currency") into
another currency (the "Other Currency"), the parties hereto agree, to the
fullest extent that they may effectively do so, that the rate of exchange used
shall be that at which in accordance with normal banking procedures the
Administrative Agent could purchase the original Currency with the Other
Currency on the Business Day preceding that on which final judgment is granted.
The obligations of the Borrower in respect of any sum due in
the Original Currency from it to the Administrative Agent or any one or more of
the Banks under any of the Loan Documents shall, notwithstanding any judgement
in any Other Currency, be discharged only to the extent that on the Business
Day following receipt by the Administrative Agent of any sum adjudged to be so
due or owing in such other Currency, the Administrative Agent may in accordance
with normal banking procedures purchase the Original Currency with such Other
Currency. If the amount of the Original Currency so purchased is less than the
sum originally due or owing to the Administrative Agent or any one or more of
the Banks in the Original Currency, the Borrower shall, as a separate
obligation and notwithstanding any such judgement, indemnify the Administrative
Agent or such Bank against such Loss, and if the amount of the Original
Currency so purchased exceeds the sum originally due or owing to the
Administrative
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Agent or such Bank in the Original Currency, the Administrative Agent or such
Bank shall remit such excess to the Borrower.
Section 10.5 Claims for Increased Costs and Taxes. Prior to the
occurrence of a Default in the event that any Bank shall have notified the
Borrower that it is entitled to claim compensation pursuant to Section 10.01 or
10.3 hereof (each such Bank being an "Affected Bank"), the Borrower may
designate a replacement Canadian chartered bank reasonably acceptable to the
Administrative Agent (a "Replacement Bank") to assume the Commitment and the
obligations of any such Affected Bank hereunder, and to purchase the
outstanding Accommodations of such Affected Bank and such Affected Bank's
rights hereunder and with respect thereto, without recourse upon, or warranty
by, or expense to, such Affected Bank, for a purchase price equal to the
outstanding principal amount of the Accommodations of such Affected Bank plus
all interest accrued and unpaid thereon and all other amounts owing to such
Affected Bank hereunder and upon such assumption and purchase by the
Replacement Bank, such Replacement Bank shall be deemed to be a "Bank" for
purposes of this Agreement and such Affected Bank shall cease to be a "Bank"
for purposes of this Agreement and shall no longer have any obligations or
rights hereunder (other than any obligations or rights which according to this
Agreement shall survive the termination of the Commitment).
Article 11
Miscellaneous
Section 11.1 Notices.
(a) Except as otherwise expressly provided herein, all
notices and other communications under this Agreement and the other Loan
Documents (unless otherwise specifically stated therein) shall be in writing
and shall be personally delivered to an officer or other responsible employee
of the addressee or sent by facsimile, charges prepaid, at or to the applicable
addresses or facsimile numbers, as the case may be, set forth in this Section
11.1. Any communication which is personally delivered as aforesaid shall be
deemed to have been validly and effectively given on the date of such delivery
if such date is a Business Day and such delivery was made during normal
business hours of the recipient; otherwise, it shall be deemed to have been
validly and effectively given on the Business Day next following such date of
delivery. Any communication which is transmitted by facsimile as aforesaid
shall be deemed to have been validly and effectively
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given on the date of transmission if such date is a Business Day and such
transmission was made during normal business hours of the recipient; otherwise,
it shall be deemed to have been validly and effectively given on the Business
Day next following such date of transmission. All notices and other
communications under this Agreement shall be given to the parties hereto at the
following addresses:
(i) If to the Borrower, to it at:
Madison Telecommunications Holdings, Inc.
c/o Madison Ventures Corporation
1970 Alberta Street
Vancouver, British Columbia V5Y 3X4
Attn: Mr. Bruce W. Aunger
Telecopy No.: (604) 879-1483 with a copy to:
Blake, Cassels & Graydon
1700-1030 West George Street
Vancouver, BC V6E2Y3
Attn: Anne M. Stewart, Q.C.
Telecopy No.: (604) 631-3309
Paging Network of Canada Inc.
c/o Paging Network, Inc.
4965 Preston Park Boulevard Suite 500
Plano, Texas 75093
Attn: Mr. Robert Thompson
Telecopy No.: (214) 985-6551
Paging Network of Canada, Inc.
3250 Bloor Street, West
Suite 700
Toronto, Ontario
Canada M8X 2X9
Attn: President
Telecopy No.: (416) 207-4321
Roger Feldman, Esq.
Bingham, Dana & Gould
150 Federal Street
Boston, Massachusetts 02110
Telecopy No.: (617) 951-8736
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McCarthy Tetrault
275 Sparks Street
Suite 1000
Ottawa Ontario
KlR 7X9 Canada
Attn: Anthony H.A. Keenleyside, Esq.
Telecopy No.: (613) 563-9386
If to the Administrative Agent, to
it at:
Toronto Dominion Tower, 8th Floor
Toronto Dominion Centre
Toronto, Ontario M5K lA2
Attn: Manager, Agency
Telecopy No.: (416) 982-5535
with a copy to:
The Toronto-Dominion Bank
Communications Finance
31 West 52nd Street
New York, New York 10019-6101 Attn: Mr. David E.
Oliver
Telecopy No.: (212) 262-1928
If to the Banks, to them at the addresses set forth
beside their names on the signature pages hereof.
(b) Each Accommodation Notice and any notice of a
prepayment shall be irrevocable and binding on the Borrower. With respect to
any Accommodation Notice, the Administrative Agent may act upon the basis of
telephonic notice believed by it reasonably and in good faith to be from the
Borrower prior to receipt of an Accommodation Notice. In the event of conflict
between the Administrative Agent's record of the applicable terms of any
Accommodation and such Accommodation Notice, the Administrative Agent's record
shall prevail.
(c) Any party hereto may change the address to which
notices shall be directed under this Section 11.1 by giving five (5) days'
prior written notice of such change to the other parties.
Section 11.2 Expenses. The Borrower will promptly pay, or
reimburse:
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(a) all reasonable and customary out-of-pocket expenses
of the Administrative Agent in connection with the preparation, negotiation,
execution and delivery of this Agreement and the other Loan Documents, and the
transactions contemplated hereunder and thereunder and the making of the
initial Advance hereunder (whether or not such Advance is made), including, but
not limited to, the reasonable fees and disbursements of counsel for the
Administrative Agent;
(b) all reasonable and customary out-of-pocket expenses
of the Administrative Agent in connection with the restructuring and "work out"
of the transactions contemplated in this Agreement or the other Loan Documents,
and the preparation, negotiation, execution and delivery of any waiver,
amendment or consent by the Administrative Agent and the Banks, or any of them,
relating to this Agreement or the other Loan Documents, including, but not
limited to, the fees and disbursements of any experts, agents or consultants
and of counsel for the Administrative Agent; and
(c) all reasonable and customary out-of-pocket costs and
expenses of obtaining performance under this Agreement or the other Loan
Documents and all out-of-pocket costs and expenses of collection if an Event of
Default occurs in the payment of the Obligations, which in each case shall
include reasonable fees and out-of-pocket expenses of counsel for the
Administrative Agent and the Banks.
Section 11.3 Waivers. The rights and remedies of the
Administrative Agent and the Banks under this Agreement and the other Loan
Documents shall be cumulative and not exclusive of any rights or remedies which
they would otherwise have. No failure or delay by the Administrative Agent, the
Majority Banks, or the Banks, or any of them, in exercising any right, shall
operate as a waiver of such right. The Administrative Agent and the Banks
expressly reserve the right to require strict compliance with the terms of this
Agreement and the other Loan Documents in connection with any future funding of
a Request for Advance. In the event the Banks decide to fund a Request for
Advance at a time when the Borrower is not in strict compliance with the terms
of this Agreement and the other Loan Documents, such decision by the Banks
shall not be deemed to constitute an undertaking by the Banks to fund any
further Request for Advance or preclude the Banks or the Administrative Agent
from exercising any rights available under the Loan Documents or at law or
equity. Any waiver or indulgence granted by the Administrative Agent, the
Banks, or the Majority Banks, or any of them, shall not constitute a
modification of this Agreement or any other Loan
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Document, except to the extent expressly provided in such waiver or indulgence,
or constitute a course of dealing at variance with the terms of this Agreement
or any other Loan Document such as to require further notice of their intent to
require strict adherence to the terms of this Agreement or any other Loan
Document in the future.
Section 11.4 Right to Combine and Set-Off. Upon the occurrence and
during the continuance of any Event of Default, the Administrative Agent or any
one or more of the Banks is hereby authorized at any time and from time to
time, to the fullest extent permitted by Applicable Law, to combine, set-off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by the
Administrative Agent or such Bank to or for the credit or the account of the
Borrower with or against any and all of the Obligations of the Borrower now or
hereafter existing under any of the Loan Documents, irrespective of whether or
not the Administrative Agent shall have made any demand under any of the Loan
Documents and although such Obligations may be unmatured. The Administrative
Agent or such Bank agrees promptly to notify the Borrower after any such
combination or set-off and application made by the Administrative Agent or such
Bank provided that the failure to give such notice shall not affect the
validity of such combination or set-off and application. The rights of the
Administrative Agent and the Banks under this Section are in addition to other
rights and remedies (including, without limitation, other rights of combination
and set-off) which the Administrative Agent or the Banks may have.
Section 11.5 Assignment.
(a) The Borrower may not assign or transfer any of its
rights or obligations hereunder or under any other Loan Document without the
prior written consent of each Bank and the Administrative Agent.
(b) Any Bank may, without the consent of the Borrower
grant participations in all or any part of the Commitment to one or more
Persons (each a "Participant"). Any Bank may, with the consent of the
Administrative Agent, and, prior to the occurrence and continuance of a
Default, with the consent of the Borrower (which consent is not to be
unreasonably withheld or delayed), assign all or any part of its respective
interest in the Commitment to one or more Persons; provided that prior to the
occurrence and continuance of a Default (i) such Person is a resident of Canada
for the purpose of the Income Tax Act (Canada)
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or (ii) such assignment will not cause the Borrower to incur any increased
costs pursuant to Section 10.3 hereof (each an "Assignee").
(c) The Administrative Agent or any Bank may deliver a
copy of any financial statement or any other information relating to the
prospects, business, Assets or condition (financial or otherwise) of the
Borrower or any of its Subsidiaries which may be furnished to it under this
Agreement or otherwise to any Participant or Assignee or any prospective
Participant or Assignee; provided that each such delivery is made on the
understanding that the information contained therein is confidential in nature.
(d) Without limitation of its obligations hereunder, the
Borrower shall, at its sole cost and expense, give such certificates,
acknowledgments and other further assurances in respect of this Agreement and
the Commitment as any Bank may reasonably require in connection with any
participation or assignment pursuant to this Section.
(e) Except in the case of an Assignee which has delivered
an Assignment and Assumption Agreement substantially in the form of Exhibit H
hereto, prior to the occurrence of a Default or an Event of Default, a Bank
granting a participation or making an assignment shall act on behalf of all of
its Participants and Assignees in all dealings with the Borrower in respect
hereof.
(f) Any Bank shall deliver to the Borrower an agreement
substantially in the form of Exhibit H hereto by which any Assignee of such
Bank assumes the obligations and agrees to be bound by all the terms and
conditions of this Agreement, all as if such Assignee had been an original
party hereto. Upon any such assignment and such assumption of the obligations
of a Bank by an Assignee, the assigning Bank and the Borrower shall be mutually
released from their respective obligations to each other hereunder to the
extent of such assignment and assumption and shall thenceforth have no
liability or obligations to each other to such extent, except in respect of
matters which shall have arisen prior to such assignment.
(g) An administrative fee of $5,000 shall be payable to
the Administrative Agent by the assigning Bank at the time of any assignment
hereunder.
Section 11.6 Accounting Principles. All accounting terms used
herein without definition shall be used as defined under
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GAAP. GAAP shall be applied on a basis consistent with prior fiscal years of
the Borrower.
Section 11.7 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but
all such separate counterparts shall together constitute but one and the same
instrument.
Section 11.8 Governing Law. This Agreement and all Loan Documents
shall be governed by and interpreted in accordance with the Applicable Laws of
the Province of Ontario and the Applicable Laws of Canada applicable therein
which apply to contracts made and to be performed entirely in Ontario; provided
that any Loan Document stated to be governed by and interpreted in accordance
with the laws of any other jurisdiction shall be governed by and interpreted in
accordance with the laws of such jurisdiction. The parties hereby irrevocably
attorn and submit to the non-exclusive jurisdiction of the courts of Ontario
with respect to any matter arising under or related to this Agreement or any
Loan Document; provided that, with respect to any other Loan Document stated to
be governed by the laws of any other jurisdiction, the parties agree to attorn
and submit to the non-exclusive jurisdiction of the courts of such other
jurisdiction. The Borrower agrees that final judgment in such suit, action or
proceeding shall be conclusive and may be enforced in any other jurisdiction by
suit on the judgment or in any other manner provided by Applicable Law.
Section 11.9 Severability. If any provision of this Agreement or
any Loan Document is, or becomes, illegal, invalid or unenforceable, such
provision shall be severed from this Agreement or such Loan Document and be
ineffective to the extent of such illegality, invalidity or unenforceability.
The remaining provisions hereof or thereof shall be unaffected by such
provision and shall continue to be valid and enforceable.
Section 11.10 Interest.
(a) For purposes of the Interest Act (Canada): (i)
whenever any interest or fee under this Agreement is calculated using a rate
based on a year of 360 days, such rate determined pursuant to such calculation,
when expressed as an annual rate, is equivalent to (x) the applicable rate
based on a year of 360 days, (y) multiplied by the actual number of days in the
calendar year in which the period for which such interest or fee is calculated
ends, and (z) divided by 360; (ii) the principle of deemed reinvestment of
interest shall not apply to any interest calculation under this Agreement; and
(iii) the
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rates of interest stipulated in this Agreement are intended to be nominal rates
and not effective rates or yields.
(b) Notwithstanding any provision to the contrary
contained in this Agreement, in no event shall the aggregate "interest" (as
defined in Section 347 of the Criminal Code, Revised Statutes of Canada, 1985,
c.46 as the same may be amended, replaced or re-enacted from time to time)
payable under this Agreement exceed the maximum amount of interest on the
"Credit advanced" (as defined in that section) under this Agreement lawfully
permitted under that section and, if any payment, collection or demand pursuant
to this Agreement in respect of "interest" (as defined in that section) is
determined to be contrary to the provisions of that section, such payment,
collection or demand shall be deemed to have been made by mutual mistake of the
Borrower and the Administrative Agent and the Banks and the amount of such
payment or collection shall be refunded to the Borrower. For purposes of this
Agreement, the effective annual rate of interest shall be determined in
accordance with generally accepted actuarial practices and principles over the
term of the Credit Facilities are outstanding on the basis of annual
compounding of the lawfully permitted rate of interest and, in the event of
dispute, a certificate of a Fellow of the Canadian Institute of Actuaries
appointed by the Administrative Agent will be conclusive for the purposes of
such determination absent manifest error.
Section 11.11 Table of Contents and Headings. The Table of Contents
and the headings of the various subdivisions used in this Agreement are for
convenience only and shall not in any way modify or amend any of the terms or
provisions hereof, nor be used in connection with the interpretation of any
provision hereof.
Section 11.12 Amendment and Waiver. Neither this Agreement nor any
other Loan Document nor any term hereof or thereof may be amended orally, nor
may any provision hereof be waived orally but only by an instrument in writing
signed by the Majority Banks and the Administrative Agent and, in the case of
an amendment, by the Borrower, except that in the event of (a) any increase in
the amount of the Commitment, (b) any delay or extension in the terms of
repayment of the Accommodations or any mandatory reductions in the Commitment
provided in Sections 2.6 or 2.8 hereof or amend the provisions of this
Agreement dealing with the types of Accommodations available hereunder, (c) any
reduction in principal, interest or fees due hereunder (without a corresponding
payment by the Borrower in the amount of such reduction) or postponement or
subordination of the payment
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<PAGE> 98
thereof without a corresponding payment by the Borrower, (d) any release of any
portion of the Collateral for the Accommodations, except in connection with a
merger, sale or other disposition otherwise permitted hereunder (in which case
such release shall require no further approval by the Banks), (e) any waiver of
any Default due to the failure by the Borrower to pay any sum due to any of the
Banks hereunder, (f) any release or amendment of any Security Document except
in connection with a merger, sale or other disposition otherwise permitted
hereunder (in which case, such release or amendment shall require no further
approval by the Banks), or (g) any amendment of this Section 11.12, or the
definitions of Majority Banks or Permitted Collateral, or of any Section herein
to the extent that such Section requires action by all Banks, any amendment or
waiver or consent may be made only by an instrument in writing signed by each
of the Banks and the Administrative Agent and, in the case of an amendment, by
the Borrower. Any amendment to any provision hereunder governing the rights,
obligations, or liabilities of the Administrative Agent solely to any of the
Banks may be made only by an instrument in writing signed by the Administrative
Agent and by each of the Banks.
Section 11.13 Non-Merger. Except as otherwise expressly provided in
this Agreement, the covenants, representations and warranties of the parties
contained in this Agreement and the other Loan Documents shall not merge on and
shall survive the Agreement Date and the making of any Accommodation, and
notwithstanding such closing or Accommodation, or any investigation made by or
on behalf of any party, shall continue in full force and effect. Neither the
Agreement Date nor the making of any Accommodation shall prejudice any right of
one party against any other party in respect of anything done or omitted
hereunder or under any of the other Loan Documents or in respect of any right
to damages or other remedies.
Section 11.14 Other Relationships. No relationship created
hereunder or under any other Loan Document shall in any way affect the ability
of the Administrative Agent and each Bank to enter into or maintain business
relationships with the Borrower or any of its Affiliates beyond the
relationships specifically contemplated by this Agreement and the other Loan
Documents.
Section 11.15 Directly or Indirectly. If any provision in this
Agreement refers to any action taken or to be taken by any Person, or which
such Person is prohibited from taking, such provision shall be applicable
whether such action is taken directly or indirectly by such Person, whether or
not expressly specified in such provision.
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<PAGE> 99
Section 11.16 Reliance on and Survival of Various Provisions. All
covenants, agreements, statements, representations and warranties made herein
or in any certificate delivered pursuant hereto (i) shall be deemed to have
been relied upon by the Administrative Agent and each of the Banks
notwithstanding any investigation heretofore or hereafter made by them, and
(ii) shall survive the execution and delivery of this Agreement and shall
continue in full force and effect so long as any Obligation is outstanding and
unpaid. Any right to indemnification hereunder, including, without limitation,
rights pursuant to Sections 2.13, 10.1, 10.2, 10.3 and 11.2 hereof, shall
survive the termination of this Agreement and the payment and performance of
all Obligations for a period of three (3) years thereafter.
Section 11.17 Senior Debt. The Obligations are secured by the
Security Documents and are intended by the parties hereto to be senior in right
of payment to all other Indebtedness of the Borrower.
Section 11.18 Obligations Several. The obligations of the
Administrative Agent and each of the Banks hereunder are several, not joint.
Section 11.19 Confidentiality. The Banks shall hold all non-public,
proprietary or confidential information (which has been identified as such by
the Borrower) obtained pursuant to the requirements of this Agreement in
accordance with their customary procedures for handling confidential
information of this nature and in accordance with safe and sound banking
practices; provided, however, the Banks may make disclosure of any such
information to such of their examiners, Affiliates, outside auditors, counsel,
consultants, appraisers and other professional advisors as may be reasonably
necessary in connection with this Agreement or as reasonably required by any
proposed participant or assignee or as required or requested by any
Governmental Entity or representative thereof or in connection with the
enforcement hereof or of any other Loan Document or related document or
pursuant to legal process or with respect to any litigation between or among
the Borrower and any of the Banks; provided, however, that, as a condition to
receipt of any such information, each such Affiliate, auditor, counsel,
consultant, appraiser, professional advisor, proposed participant or assignee
shall agree in writing to treat all such information as confidential; and
provided, further, that prior to any such disclosure to any unrelated entity
outside the ordinary course of business or pursuant to legal process, the
disclosing Bank shall give notice of such disclosure to the Borrower and
cooperate with
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<PAGE> 100
the Borrower in any efforts to limit or restrict such disclosure. In no event
shall any Bank be obligated or required to return any materials furnished to it
by the Borrower. The foregoing provisions shall not apply to a Bank with
respect to information that (i) is or becomes generally available to the public
(other than through such Bank), (ii) is already in the possession of such Bank
on a nonconfidential basis, or (iii) comes into the possession of such Bank in
a manner not known to such Bank to involve a breach of a duty of
confidentiality owing to the Borrower.
Section 11.20 Time of the Essence. Time shall be of the essence of
this Agreement.
Section 11.21 Third Party Beneficiaries. Each party hereto intends
that this Agreement shall not benefit or create any right or cause of action in
or on behalf of any Person, other than the parties hereto and the Persons
contemplated in Section 10.2 hereof, and no Person, other than the parties
hereto and the Persons contemplated in Section 10.2 hereof, shall be entitled
to rely on the provisions hereof in any action, suit, proceeding, hearing or
other forum.
Section 11.22 Enurement. This Agreement shall enure to the benefit
of and be binding upon the parties hereto and any Person becoming a party to
this Agreement through the procedure set out in Section 11.5 hereof. This
Agreement shall be binding upon any assigns and enure to the benefit of any
permitted assigns.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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<PAGE> 101
IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
caused it to be executed under seal by their duly authorized officers, all as
of the day and year first above written.
BORROWER: MADISON TELECOMMUNICATIONS HOLDINGS
INC., a Canada corporation
By: /s/ [ILLEGIBLE]
----------------------------------------
Its: VICE PRESIDENT FINANCE AND DIRECTOR
-----------------------------------
ADMINISTRATIVE AGENT: THE TORONTO-DOMINION BANK
By: /s/ [ILLEGIBLE]
----------------------------------------
Its: Manager-Agency
-----------------------------------
BANK:
ADDRESS: THE TORONTO-DOMINION BANK
8th Floor By: /s/ [ILLEGIBLE]
Toronto Dominion Tower ----------------------------------------
Toronto Dominion Centre Its: Manager-Communications Finance
Toronto, Ontario M5K lA2 -----------------------------------
MADISON TELECOMMUNICATIONS HOLDINGS, INC.
LOAN AGREEMENT
SIGNATURE PAGE 1
<PAGE> 102
EXHIBIT A
FORM OF DRAFT BANKERS' ACCEPTANCE
<PAGE> 103
EXHIBIT A
FORM OF DRAFT BANKERS' ACCEPTANCE
B.A.:
-------------------------------
DUE DATE:
---------------------------
- ------------------------ ------------------------ ------------------------
TERM IN DAYS BRANCH DOMICILE ISSUE DATE
ON________________ WITHOUT GRACE, FOR VALUE RECEIVED, PAY TO THE ORDER OF THE
UNDERSIGNED, THE SUM OF $_______________ DOLLARS
----
----
----
TO: [INSERT NAME OF PURCHASER]
- ------------------------------- -------------------------------
Signature
- ------------------------------- -------------------------------
Signature
<PAGE> 104
EXHIBIT B
FORM OF DRAWING NOTICE
<PAGE> 105
EXHIBIT B
FORM OF DRAWING NOTICE
The undersigned, Madison Telecommunications Holdings Inc., a Canada
corporation (the "Borrower"), acting by and through _______________, the duly
elected and qualified _______________ of the Borrower, in connection with that
certain Loan Agreement (as in effect on the date hereof, the "Loan Agreement"),
dated as of June 5, 1996, among the various financial institutions which are
party thereto (the "Banks"), The Toronto-Dominion Bank, as administrative agent
(the "Administrative Agent"), and the Borrower, hereby certifies to the
Administrative Agent and the Banks that:
1. The Borrower, pursuant to Section 2.5(b) of the Loan
Agreement, hereby requests a Drawing under the Loan Agreement, and in that
connection sets forth below the information relating to such Drawing (the
"Proposed Drawing") as required by Section 2.5(b) of the Loan Agreement:
(i) The Business Day of Proposed Drawing is ____________,
19__.
(ii) The aggregate Face Amount of Drafts to be accepted is
[insert amount in Canadian dollars].
(iii) The contract maturity date for such Drafts is ___
days).
(iv) The Proposed Drawing shall be a
[Collateralized/Uncollateralized] Bankers' Acceptance.
After giving effect to the Proposed Drawing, $________ which is the Equivalent
Canadian Dollar Amount of the Permitted Collateral, and which represents the
Minimum Permitted Collateral Amount is on deposit with the Administrative Agent
pursuant to the Deposit Agreement and the Letter of Credit. After giving effect
to the Proposed Drawing, the Applicable Margin for such Drawing shall be:
__________. The proceeds of the Proposed Drawing should be wired as set forth on
Schedule 1 attached hereto. The foregoing instructions shall be irrevocable.
2. All of the representations and warranties of the Borrower made
under the Loan Agreement (including, without limitation, all representations
and warranties with respect to the Borrower's Subsidiaries) and the other Loan
Documents, which, pursuant to Section 4.2 of the Loan Agreement or otherwise,
are made on the date hereof, are as of the date hereof, and will be as of the
date of such Proposed Drawing, true and correct in all material respects both
before and after giving effect to the application of the proceeds of the
Proposed Drawing in connection
<PAGE> 106
with which this Drawing Notice is given, and after giving effect to any updates
to information provided to the Banks in accordance with the terms of such
representations and warranties.
3. There does not exist, as of this date, and there will not
exist after giving effect to the Proposed Drawing requested in this Drawing
Notice, any Default under the Loan Agreement.
4. All Necessary Authorizations have been obtained or made, are
in full force and effect and are not subject to any pending or threatened
reversal or cancellation.
5. There has occurred no event having, or which could be
reasonably expected to have, a Materially Adverse Effect since December 31,
1995.
6. All other conditions precedent to the Proposed Drawing
requested hereby set forth in Section 3.2 of the Loan Agreement have been
satisfied.
Capitalized terms used in this Drawing Notice and not otherwise
defined are used as defined in the Loan Agreement.
IN WITNESS WHEREOF, the Borrower, acting through an Authorized
Signatory, has signed this Drawing Notice, as of the ___ day of
___________________, _____.
MADISON TELECOMMUNICATIONS HOLDINGS
INC., a Canada corporation
By:
-------------------------------------
Its:
--------------------------------
Schedule 1 - Wiring Instructions
Schedule 2 - Compliance Calculations
B-2
<PAGE> 107
EXHIBIT C
FORM OF REQUEST FOR ADVANCE
<PAGE> 108
EXHIBIT C
FORM OF REQUEST FOR ADVANCE
Madison Telecommunications Holdings Inc., a Canada corporation (the
"Borrower"), acting by and through _______________, the duly elected and
qualified _______________ of the Borrower, in connection with that certain Loan
Agreement (as in effect on the date hereof, the "Loan Agreement"), dated as of
June 5, 1996, among the various financial institutions which are party thereto
(the "Banks"), The Toronto-Dominion Bank, as administrative agent (the
"Administrative Agent"), and the Borrower, hereby certifies to the
Administrative Agent and the Banks that:
1. The Borrower, pursuant to Section [2.2(b)/2.3(b)/2.3(c)] of the
Loan Agreement, hereby requests a [Collateralized/Uncollateralized Prime Rate
Advance][Cost of Funds Rate Advance] (the "Proposed Advance") in the amount of
$__________ to be made on _____________ ___, ____, under the Commitment. After
giving effect to the Proposed Advance, $__________ which is the Equivalent
Canadian Dollar Amount of the Permitted Collateral, and which represents the
Minimum Permitted Collateral Amount, is on deposit with the Administrative Agent
pursuant to the Deposit Agreement and the Letter of Credit. After giving effect
to the Proposed Advance, the Applicable Margin for such Advance shall be:
__________. The proceeds of the Proposed Advance should be wired as set forth on
Schedule 1 attached hereto. [The Interest Period for the Proposed Advance shall
be ___ month(s).] The foregoing instructions shall be irrevocable.
2. All of the representations and warranties of the Borrower made
under the Loan Agreement (including, without limitation, all representations
and warranties with respect to the Borrower's Subsidiaries) and the other Loan
Documents, which, pursuant to Section 4.2 of the Loan Agreement or otherwise,
are made on the date hereof, are as of the date hereof, and will be as of the
date of such Advance, true and correct in all material respects both before and
after giving effect to the application of the proceeds of the Advance in
connection with which this Request for Advance is given, and after giving
effect to any updates to information provided to the Banks in accordance with
the terms of the representations and warranties.
3. There does not exist, as of this date, and there will not
exist after giving effect to the Advance requested in this Request for Advance,
any Default under the Loan Agreement.
4. All Necessary Authorizations have been obtained or made, are
in full force and effect and are not subject to any pending or threatened
reversal or cancellation.
<PAGE> 109
5. There has occurred no event having, or which could be
reasonably expected to have, a Materially Adverse Effect since December 31,
1995.
6. All other conditions precedent to the Advance requested hereby
set forth in Section 3.2 of the Loan Agreement have been satisfied.
Capitalized terms used in this Request for Advance and not otherwise
defined are used as defined in the Loan Agreement.
IN WITNESS WHEREOF, the Borrower, acting through an Authorized
Signatory, has signed this Request for Advance, as of the ____ day of
______________, ____.
MADISON TELECOMMUNICATIONS HOLDINGS
INC., a Canada corporation
By:
--------------------------------
Its:
----------------------------
Schedule 1 - Wiring Instructions
Schedule 2 - Compliance Calculations
C-2
<PAGE> 110
EXHIBIT D
FORM OF ACCEPTANCE
<PAGE> 111
EXHIBIT D
FORM OF ACCEPTANCE
FOR: [INSERT NAME OF BANK]
BRANCH
MANAGER
OFFICER IN CHARGE OF OPERATIONS
<PAGE> 112
EXHIBIT E
FORM OF BORROWER'S LOAN CERTIFICATE
<PAGE> 113
EXHIBIT E
FORM OF
BORROWER'S LOAN CERTIFICATE
The undersigned, who is the __________________ of Madison
Telecommunications Holdings Inc., a Canada corporation (the "Borrower"),
does hereby certify on behalf of the Borrower that he is the duly elected and
qualified _______________ of the Borrower and an Authorized Signatory of
the Borrower.
In connection with the making of certain Accommodations to the
Borrower by the Banks under that certain Loan Agreement of even date herewith
(the "Loan Agreement") by and among the Borrower, The Toronto-Dominion Bank, as
administrative agent (the "Administrative Agent), and The Toronto-Dominion Bank
and such other financial institutions as become "Banks" thereunder
(collectively, the "Banks"), the undersigned hereby further certifies to the
Administrative Agent and the Banks on behalf of the Borrower that:
1. Attached hereto as Exhibit A is a true, complete, and correct copy of
the Certificate and Articles of Incorporation of the Borrower,
certified by appropriate government officials of the jurisdiction of
incorporation of the Borrower, as in full force and effect on the date
hereof.
2. Attached hereto as Exhibit B is a true, complete and correct copy of
the By-Laws of the Borrower, together with all amendments thereto, as
in full force and effect on the date hereof.
3. Attached hereto as Exhibit C is a true, complete and correct copy of
the resolutions of the Board of Directors of the Borrower authorizing
the execution of the Loan Agreement, each other Loan Document to which
the Borrower is a party, and the creation and assumption, by the
Borrower, of the Obligations.
4. Attached hereto as Exhibit D are true, complete, and correct copies of
certificates of good standing for the Borrower from appropriate
government officials of the jurisdiction of incorporation of the
Borrower and for each other jurisdiction in which the Borrower carries
on business. The Borrower has, from the dates of such certificates to
the date hereof, remained in good standing under the laws of such
jurisdiction.
5. Attached hereto as Exhibit E are true, complete and correct copies of
any shareholders' agreements or voting trust agreements in effect with
respect to the Capital Stock of the Borrower.
<PAGE> 114
6. The following persons are the Authorized Signatories of the Borrower,
each of such persons having been duly elected, and set forth opposite
their respective names below are their respective genuine signatures:
NAME SIGNATURE DATE
------------ ------------------- ------------------
------------ ------------------- ------------------
------------ ------------------- ------------------
Capitalized terms used herein and not otherwise defined are used as
defined in the Loan Agreement.
IN WITNESS WHEREOF, I have signed this Certificate on the ______ day of
____________________________ 1996.
MADISON TELECOMMUNICATIONS
HOLDINGS INC., a Canada corporation
By:
-------------------------------
Name:
--------------------------
Title:
-------------------------
EXHIBITS:
Exhibit A - Certificate and Articles of Incorporation
Exhibit B - By-Laws
Exhibit C - Authorizing Resolutions
Exhibit D - Certificates of Good Standing
Exhibit E - Shareholder's Agreements or Voting Trust Agreements
E-2
<PAGE> 115
EXHIBIT F
FORM OF SUBSIDIARY LOAN CERTIFICATE
<PAGE> 116
EXHIBIT F
FORM OF SUBSIDIARY LOAN CERTIFICATE
The undersigned, who is the __________________ of ____________________,
a __________________ [corporation] [partnership] (the "Subsidiary"), does hereby
certify on behalf of the Subsidiary that he is the duly elected and qualified
__________________ of [_________________ , the ________________ of
[____________________, the ___________________ of] the Subsidiary and an
Authorized Signatory.
In connection with the making of certain Accommodations to Madison
Telecommunications Holdings Inc., a Canada corporation (the "Borrower") by the
Banks under that certain Loan Agreement of even date herewith (the "Loan
Agreement") by and among the Borrower, The Toronto-Dominion Bank, as
administrative agent (the "Administrative Agent), and The Toronto-Dominion Bank
and such other financial institutions as become "Banks" thereunder
(collectively, the "Banks"), the undersigned hereby further certifies to the
Administrative Agent and the Banks on behalf of the Subsidiary that:
1. Attached hereto as Exhibit A is a true, complete, and correct copy of
the Certificate and Articles of Incorporation of the Subsidiary,
certified by appropriate government officials of the jurisdiction of
incorporation of the Subsidiary, as in full force and effect on the
date hereof.
2. Attached hereto as Exhibit B is a true, complete and correct copy of
the By-Laws of the subsidiary, together with all amendments thereto,
as in full force and effect on the date hereof.
3. Attached hereto as Exhibit C is a true, complete and correct copy of
the resolutions of the Board of Directors of the Subsidiary authorizing
the execution of each Loan Document to which the Subsidiary is a party.
4. Attached hereto as Exhibit D are true, complete, and correct copies of
certificates of good standing for the Subsidiary from appropriate
government officials of the jurisdiction of incorporation of the
Subsidiary and for each other jurisdiction in which the Subsidiary
carries on business. The Subsidiary has, from the dates of such
certificates to the date hereof, remained in good standing under the
laws of such jurisdiction.
5. Attached hereto as Exhibit E are true, complete and correct copies of
any shareholders' agreements or voting trust agreements in effect with
respect to the Capital Stock of the Subsidiary.
<PAGE> 117
6. The following persons are the Authorized Signatories of the
Subsidiary, each of such persons having been duly elected, and set
forth opposite their respective names below are their respective
genuine signatures:
NAME SIGNATURE DATE
- ------------------------- ------------------------- ------------------------
- ------------------------- ------------------------- ------------------------
- ------------------------- ------------------------- ------------------------
Capitalized terms used herein and not otherwise defined are used as
defined in the Loan Agreement.
IN WITNESS WHEREOF, I have signed this Certificate this ______ day of
____________________ , 1996.
[___________________________ , a
________________________ partnership,
through its General Partner:]
____________________________ , a
_________________________ corporation
By:
----------------------------------
Its:
----------------------------------
EXHIBITS:
Exhibit A - Certificate and Articles of Incorporation/Partnership
Exhibit B - By-Laws/Partnership Agreement
Exhibit C - Authorizing Resolutions
Exhibit D - Certificates of Good Standing
Exhibit E - Shareholder's Agreements or Voting Trust Agreements
F-2
<PAGE> 118
EXHIBIT G
FORM OF PERFORMANCE CERTIFICATE
<PAGE> 119
EXHIBIT G
FORM OF PERFORMANCE CERTIFICATE
The undersigned, who is the _____________________ of Madison
Telecommunications Holdings Inc., a Canada corporation (the "Borrower"), does
hereby certify on behalf of the Borrower that he is the duly elected and
qualified __________________ of the Borrower and an Authorized Signatory of
the Borrower.
1. [WITH RESPECT TO QUARTERLY STATEMENTS: The accompanying
unaudited financial statements of the Borrower on a consolidated and
consolidating (unconsolidated) basis with its Subsidiaries as of [DATE] and for
the quarterly accounting period ended [DATE] are complete and correct and
present fairly, in accordance with GAAP, the financial condition of the
Borrower on a consolidated and consolidating (unconsolidated) basis with its
Subsidiaries, and the results of operations for such quarter, and for the
elapsed portion of the fiscal year ended with the last day of such quarter, in
each case on the basis presented and subject only to normal year-end
adjustments and the absence of footnotes.]
[WITH RESPECT TO FISCAL YEAR STATEMENTS: The accompanying audited
financial statements of the Borrower on a consolidated and consolidating
(unconsolidated) basis with its Subsidiaries as of [DATE] and for the fiscal
year ended [DATE], and for the previous fiscal year, are complete and correct
and present fairly, in accordance with GAAP, the financial condition of the
Borrower on a consolidated and consolidating (unconsolidated) basis with its
Subsidiaries as of the end of such period, and the results of operations for
such fiscal year, and for the previous fiscal year.]
2. Attached hereto are arithmetical calculations required to
establish (i) any adjustment to the Applicable Margins, as provided for in
Section 2.6(d) of the Loan Agreement, and (ii) whether or not the Borrower was
in compliance with the requirements of the following Sections of the Loan
Agreement:
(a) Section 7.8 - Leverage Ratio
(b) Section 7.9 - Annualized Operating Cash Flow to
Pro Forma Debt Service
(c) Section 7.10 - Total Debt Per Subscriber
(d) Section 7.11 - Capital Expenditures
(e) Section 7.12 - Minimum Revenue Test
(f) Section 7.13 - Minimum Units in Service
(including a breakdown by each
category set forth in the definition
of Units in Service)
<PAGE> 120
3. Based on an examination sufficient to enable me to make an
informed statement, no Default exists at the end of such quarter or fiscal
year, as applicable.
4. All capitalized terms not otherwise defined herein are used
herein as defined in the Loan Agreement.
Date:
--------------------------- ------------------------------------
[OFFICER)
[TITLE]
G-2
<PAGE> 121
EXHIBIT H
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
<PAGE> 122
EXHIBIT H
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement is made and entered into as of
_____________, ____, by and between _______________ (the "Assignor"), and
_______________ (the "Assignee").
Recitals
A. Madison Telecommunications Holdings Inc., a Canada corporation
(the "Borrower"), the Assignor (together with any other Person which becomes a
'Bank' under the Loan Agreement, as such term is hereinafter defined, the
"Banks") and The Toronto-Dominion Bank, as administrative agent (the
"Administrative Agent"), are parties to a certain Loan Agreement dated as of
June 5, 1996 (the "Loan Agreement"). Pursuant to the Loan Agreement, the Banks
have agreed to make Accommodations to the Borrower pro rata in an aggregate
original principal amount of the Commitment, as such amount may be reduced from
time to time pursuant to the Loan Agreement. The Assignor's pro rata portion of
the Commitment is the amount specified in Item 1 of Schedule 1 hereto (the
"Assignor's Commitment"). The aggregate principal amount of the outstanding
Accommodations made by the Assignor to the Borrower under the Commitment
pursuant to the Assignor's Commitment is specified in Item 2 of Schedule 1
hereto (the "Assignor's Accommodations"). All capitalized terms not otherwise
defined herein are used herein as defined in the Loan Agreement.
B. The Assignor wishes to sell and assign to the Assignee, and
the Assignee wishes to purchase and assume from the Assignor, (i) the portion
of the Assignor's Commitment specified in Item 3 of Schedule 1 hereto
("Assigned Commitment"), and (ii) the portion of the Assignor's Accommodations
under the Commitment specified in Item 4 of Schedule 1 hereto (the "Assigned
Accommodations").
The parties agree as follows:
1. Assignment. Subject to the terms and conditions set forth
herein, the Assignor hereby sells and assigns to the Assignee, and the Assignee
purchases and assumes from the Assignor, without recourse and except as
provided in Section 3(a) hereof, without representation or warranty to the
Assignor, on the date set forth above (the "Assignment Date") (a) all right,
title, and interest of the Assignor to the Assigned Accommodations and (b) all
obligations of the Assignor under the Loan Agreement with respect to the
Assigned Commitment. As full consideration for the sale of the Assigned
Accommodations and the Assigned Commitment, the Assignee shall pay to the
Assignor on
<PAGE> 123
the Assignment Date such amount as shall have been agreed to between the
Assignor and the Assignee (the "Purchase Price").
2. Consents. The Administrative Agent [and the Borrower] hereby
consent[s] to the assignment made herein. (Note: Borrower consent only
required prior to a Default.]
3. Representations and Warranties. Each of the Assignor and the
Assignee represents and warrants to the other, to the Administrative Agent and
to the Borrower (a) that (i) it has full power and legal right to execute and
deliver this Agreement and to perform the provisions of this Agreement; (ii)
the execution, delivery, and performance of this Agreement have been authorized
by all necessary action, corporate or otherwise, on its part and do not violate
any provisions of its charter or by-laws or any contractual obligations or
requirement of law binding on it; and (iii) this Agreement constitutes its
legal, valid and binding obligation, enforceable against it in accordance with
its terms subject, as to enforcement of remedies, to the following
qualifications: (A) an order of specific performance and an injunction are
discretionary remedies and, in particular, may not be available where damages
are considered an adequate remedy at law, and (B) enforcement may be limited by
bankruptcy, insolvency, liquidation, reorganization, reconstruction and other
similar laws affecting enforcement of creditors' rights generally (insofar as
any such law relates to the bankruptcy, insolvency or similar event of the
Assignee or the Assignor, as the case may be), and (b) that its purchase of the
Assigned Accommodations and the Assigned Commitment does not constitute a
"prohibited transaction" as defined in Section 4.1(m) of the Loan Agreement.
4. Condition Precedent. The obligations of the Assignor and the
Assignee hereunder shall be subject to the fulfillment of the condition that
(a) the Assignor shall have received payment in full of the Purchase Price and
(b) the Assignor and the Assignee shall have complied with other applicable
provisions of Section 11.5 of the Loan Agreement.
5. Notice of Assignment. The Assignor hereby gives notice of the
assignment and assumption of the Assigned Accommodations and the Assigned
Commitment to the Administrative Agent and hereby instructs the Borrower to
make payments with respect to the Assigned Accommodations and the Assigned
Commitment directly to the Administrative Agent for the benefit of the Assignee
as provided in the Loan Agreement; provided, however, that the Borrower and the
Administrative Agent shall be entitled to continue to deal solely and directly
with the Assignor in connection with the interests so assigned until the
Administrative Agent shall have received a copy of this Assignment and
Assumption Agreement duly executed by the
H-2
<PAGE> 124
Assignor, the Assignee, the Administrative Agent, and, if applicable, the
Borrower, and shall have received the assignment fee described in Section 11.5
of the Loan Agreement. From and after the Assignment Date, the Assignee shall
be deemed to be a party to the Loan Agreement and, to the extent that rights
and obligations thereunder shall have been assigned to Assignee as provided
herein, shall have the rights and obligations of a Bank under the Loan
Agreement. After the Assignment Date, and with respect to all such amounts
accrued from the Assignment Date, (a) all interest, principal, fees, and other
amounts that would otherwise be payable to the Assignor in respect of the
Assigned Accommodations and the Assigned Commitment shall be paid to the
Assignee, (b) if the Assignor receives any payment on account of the Assigned
Accommodations or the Assigned Commitment that is payable to the Assignee, the
Assignor shall promptly deliver such payment to the Assignee, and (c) if the
Assignee receives any payment in respect of Obligations of the Borrower accrued
prior to the Assignment Date, then Assignee shall pay over the same to
Assignor.
6. Independent Investigation. The Assignee acknowledges that it
is purchasing the Assigned Accommodations and the Assigned Commitment from the
Assignor without recourse and, except as provided in Section 3(a) hereof,
without representation or warranty. The Assignee further acknowledges that it
has made its own independent investigation and credit evaluation of the
Borrower in connection with its purchase of the Assigned Accommodations and the
Assigned Commitment and has received copies of all Loan Documents that it has
requested. Except for the representations or warranties set forth in
Section 3(a), the Assignee acknowledges that it is not relying on any
representation or warranty of the Assignor, expressed or implied, including
without limitation, any representation or warranty relating to the legality,
validity, genuineness, enforceability, collectibility, interest rate, repayment
schedule, or accrual status of the Assigned Accommodations or the Assigned
Commitment, the legality, validity, genuineness, or enforceability of the Loan
Agreement, or any other Loan Document referred to in or delivered pursuant to
the Loan Agreement, or the financial condition or creditworthiness of the
Borrower. The Assignor has not acted and will not be acting as either the
representative, agent or trustee of the Assignee with respect to matters arising
out of or relating to the Loan Agreement or this Agreement. From and after the
Assignment Date, the Assignor shall have no rights or obligations with respect
to the Assigned Accommodations or the Assigned Commitment.
7. Method of Payment. All payments to be made by the Assignor or
the Assignee party hereunder shall be in funds available at the place of
payment on the same day and shall be
H-3
<PAGE> 125
made by wire transfer to the account designated by the party to receive
payment.
8. Integration. This Agreement shall supersede any prior
agreement or understanding between the parties (other than the Loan Agreement
or other Loan Documents) as to the subject matter hereof.
9. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and shall be
binding upon the parties, their successors and assigns.
10. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the Applicable Laws of the Province of Ontario
and the Applicable Laws of Canada applicable therein which apply to contracts
to be performed entirely in Ontario.
H-4
<PAGE> 126
IN WITNESS WHEREOF, the Assignor and Assignee have executed, sealed
and delivered this Agreement as of the date first above written.
[ASSIGNOR]
By:
-------------------------------------
Title:
-----------------------------------
[ASSIGNEE]
By:
-------------------------------------
Title:
-----------------------------------
ASSIGNMENT AND
ASSUMPTION AGREEMENT
SIGNATURE PAGE 1
<PAGE> 127
Consented to by:
THE TORONTO-DOMINION BANK,
as Administrative Agent
By:
----------------------------------
Title:
--------------------------------
MADISON TELECOMMUNICATIONS
HOLDINGS INC., a Canada
corporation
By:
----------------------------------
Title:
--------------------------------
ASSIGNMENT AND
ASSUMPTION AGREEMENT
SIGNATURE PAGE 2
<PAGE> 1
EXHIBIT 12
PAGING NETWORK, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- ------------------
1996 1995 1996 1995
-------- -------- ------- --------
<S> <C> <C> <C> <C>
Earnings:
Net loss............................... $(18,532) $(16,169) $(30,638) $(22,990)
Fixed charges.......................... 34,916 30,531 69,494 51,487
Earnings............................. -------- -------- -------- --------
$ 16,384 $ 14,362 $ 38,856 $ 28,497
======== ======== ======== ========
Fixed charges:
Interest expense....................... $ 28,754 $ 25,836 $ 57,321 $ 42,407
Amortization of deferred financing
costs................................ 1,284 1,032 2,567 1,978
Interest portion of rental
expense.............................. 4,878 3,663 9,606 7,102
-------- -------- -------- --------
Fixed charges........................ $ 34,916 $ 30,531 $ 69,494 $ 51,487
======== ======== ======== ========
Ratio of earnings to fixed charges....... - - - -
======== ======== ======== ========
Deficiency of earnings available to cover
fixed charges.......................... $(18,532) $(16,169) $(30,638) $(22,990)
======== ======== ======== ========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> APR-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 34,333
<SECURITIES> 0
<RECEIVABLES> 48,337
<ALLOWANCES> 4,621
<INVENTORY> 32,264
<CURRENT-ASSETS> 117,765
<PP&E> 993,283
<DEPRECIATION> 272,129
<TOTAL-ASSETS> 1,218,022
<CURRENT-LIABILITIES> 131,739
<BONDS> 1,195,516
0
0
<COMMON> 1,025
<OTHER-SE> (110,258)
<TOTAL-LIABILITY-AND-EQUITY> 1,218,022
<SALES> 5,019
<TOTAL-REVENUES> 199,179
<CGS> 27,124
<TOTAL-COSTS> 161,068
<OTHER-EXPENSES> 29,519
<LOSS-PROVISION> 2,825
<INTEREST-EXPENSE> 30,038
<INCOME-PRETAX> (18,532)
<INCOME-TAX> 0
<INCOME-CONTINUING> (18,532)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (18,532)
<EPS-PRIMARY> (0.18)
<EPS-DILUTED> (0.18)
</TABLE>
