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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 2, 1998
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Metrocall, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-21924 54-1215634
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) file number) Identification No.)
6677 Richmond Highway, Alexandria, Virginia
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(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (703) 660-6677
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ITEM 2. ACQUISITIONS OR DISPOSITIONS OF ASSETS
On October 2, 1998, Metrocall, Inc. ("Registrant" or "Metrocall")
completed the transactions contemplated by the Stock Purchase Agreement dated
as of June 26, 1998 ("Stock Purchase Agreement") between Metrocall, AT&T
Wireless Services, Inc. ("Wireless"), McCaw Communications Companies, Inc. and
AT&T Two Way Messaging Communications, Inc. Pursuant to the Stock Purchase
Agreement, Metrocall acquired the stock of certain subsidiaries of Wireless that
operated the paging and messaging services business of AT&T Corp. and also
acquired a 50KHz/50KHz Narrowband Personal Communications Services license. The
purchase price for the acquisition (subject to post-closing adjustments, if any)
consisted of $110 million in cash and $95 million in stated value of a new
series of convertible preferred stock of the Registrant designated as Series C
Convertible Preferred Stock. The cash portion of the purchase price was funded
by draws under a new $100 million term loan facility (described below) and
Metrocall's revolving credit facility.
ITEM 5. OTHER EVENTS
(a) SERIES C CONVERTIBLE PREFERRED STOCK. On October 2, 1998, in
connection with the AT&T acquisition described above, Metrocall issued 95,000
shares of a new series of convertible preferred stock of the Registrant
designated as Series C Convertible Preferred Stock (the "Series C Preferred")
with an aggregate stated value of $95 million. Metrocall's stockholders approved
the issuance of the Series C Preferred on September 29, 1998. The terms of the
Series C Preferred are set forth in a Certificate of Designation, Number,
Powers, Preferences and Relative, Participating, Optional and Other Rights of
Series C Convertible Preferred Stock of Metrocall, Inc. ("Certificate of
Designation"). Dividends are payable in cash or additional shares of Series C
Preferred, at Registrant's option, semi-annually on outstanding shares of Series
C Preferred at an annual rate of 8% of stated value. The Series C Preferred is
convertible into Metrocall common stock beginning October 1, 2003. Each share is
convertible into the number of shares of Metrocall common stock equal to the
stated value divided by $10.40, subject to anti-dilution adjustments. The Series
C Preferred is also convertible upon certain change of control events, as
defined in the Certificate of Designation. Metrocall has the right to redeem the
Series C Preferred beginning October 1, 2001, and must redeem the Series C
Preferred on October 1, 2010. The Series C Preferred is not transferrable for 18
months after issuance. The Series C Preferred ranks junior to Registrant's
existing Series A Convertible Preferred Stock and Series B Junior Convertible
Preferred Stock and to future issues of senior securities. Metrocall will be
required to register the Series C Preferred and/or the common stock into which
it is convertible pursuant to a registration rights agreement (the "Registration
Rights Agreement.")
(b) INCREASE IN NUMBER OF AUTHORIZED COMMON SHARES. On September 29,
1998 Metrocall's stockholders approved an increase in the number of authorized
shares of Metrocall common stock from 80 million to 100 million.
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(c) SENIOR CREDIT FACILITY. On October 2, 1998, Metrocall and its bank
lenders amended Registrant's existing credit agreement (as amended, the "Credit
Facility") to establish a new $100 million term loan facility. Under the Credit
Facility, subject to certain conditions, Metrocall may borrow up to $400 million
under three loan facilities. Facility A is a $175 million reducing revolving
credit facility, Facility B is a $125 million term loan facility and Facility C
is $100 million term loan facility. Amounts repaid under Facility B and Facility
C may not be reborrowed. The Credit Facility is secured by substantially all the
assets of the Registrant. Required quarterly repayments begin on March 31, 2000
and continue through December 31, 2004 for the Facility A and Facility B
commitments and through March 31, 2005 for the Facility C commitment.
The Credit Facility contains various covenants that, among other
restrictions, require the Registrant to maintain certain financial ratios,
including total debt to annualized operating cash flow (not to exceed 6.0 to 1.0
through December 31, 1998 and declining thereafter), senior debt to annualized
operating cash flow, annualized operating cash flow to pro forma debt service,
total sources of cash to total uses of cash and operating cash flow to interest
expense (in each case, as such terms are defined in the Credit Facility). The
covenants also limit additional indebtedness and future mergers and acquisitions
without the approval of the lenders and restrict the payment of cash dividends
and other stockholder distributions by the Registrant during the term of the
Credit Facility. The Credit Facility also prohibits certain changes in ownership
control of the Registrant during the term of the Credit Facility.
(d) The foregoing summaries of the terms of the Stock Purchase
Agreement, the Certificate of Designation, the Registration Rights Agreement and
the Credit Facility are qualified in their entirety by reference to the Stock
Purchase Agreement, the Certificate of Designation, the Registration Rights
Agreement and the Credit Facility, which are included in the Exhibits hereto.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS.
(a) FINANCIAL STATEMENTS. The Registrant has previously filed the
information required by this item on a Definitive Proxy Statement on Form 14A
filed with the Securities and Exchange Commission on August 31, 1998 and such
information is incorporated herein by reference.
(b) PRO FORMA FINANCIAL INFORMATION. The Registrant has previously filed
the information required by this item on a Definitive Proxy Statement on Form
14A filed with the Securities and Exchange Commission on August 31, 1998 and
such information is incorporated herein by reference.
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(c) EXHIBITS
Exhibit Description
2.1 Stock Purchase Agreement by and among Metrocall, Inc. and AT&T
Wireless Services, Inc., McCaw Communications Companies, Inc. and
AT&T Two Way Messaging Communications, Inc. dated June 26, 1998 (the
"Stock Purchase Agreement."). (a)
4.1 Certificate of Designation, Number, Powers, Preferences and
Relative, Participating, Optional and Other Rights of Series C
Convertible Preferred Stock of Metrocall, Inc. (the "Certificate of
Designation"). *
10.1 Registration Rights Agreement. *
10.2 Third Amended and Restated Loan Agreement by and among Metrocall,
certain lenders and Toronto Dominion (Texas), Inc. as administrative
agent, dated October 2, 1998 (the "Credit Facility"). *
(a) Incorporated by reference to Metrocall's Definitive Proxy Statement on Form
14A filed with the Securities and Exchange Commission on August 31, 1998.
* Exhibit filed herewith.
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 hereunto duly authorized.
METROCALL, INC.
By: /s/ Vincent D. Kelly
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Vincent D. Kelly
Chief Financial Officer and Treasurer
Date: October 16, 1998
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EXHIBIT INDEX
Exhibit Description
2.1 Stock Purchase Agreement by and among Metrocall, Inc. and AT&T
Wireless Services, Inc., McCaw Communications Companies, Inc. and
AT&T Two Way Messaging Communications, Inc. dated June 26, 1998 (the
"Stock Purchase Agreement."). (a)
4.1 Certificate of Designation, Number, Powers, Preferences and
Relative, Participating, Optional and Other Rights of Series C
Convertible Preferred Stock of Metrocall, Inc. (the "Certificate of
Designation"). *
10.1 Registration Rights Agreement. *
10.2 Third Amended and Restated Loan Agreement by and among Metrocall,
certain lenders and Toronto Dominion (Texas), Inc. as administrative
agent, dated October 2, 1998 (the "Credit Facility"). *
(a) Incorporated by reference to Metrocall's Definitive Proxy Statement on Form
14A filed with the Securities and Exchange Commission on August 31, 1998.
* Exhibit filed herewith.
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EXHIBIT 4.1
CERTIFICATE OF DESIGNATION, NUMBER, POWERS,
PREFERENCES AND RELATIVE, PARTICIPATING,
OPTIONAL AND OTHER RIGHTS OF
SERIES C CONVERTIBLE PREFERRED STOCK
OF
METROCALL, INC.
Metrocall, Inc. (the "Corporation"), a corporation organized and
existing under the General Corporation Law of the State of Delaware, hereby
certifies that, pursuant to the provisions of Section 151 of the General
Corporation Law of the State of Delaware, its Board of Directors, adopted the
following resolution by unanimous written consent as of June 19, 1998:
WHEREAS, the Board of Directors of the Corporation is authorized by
the Amended and Restated Certificate of Incorporation to issue up to 1,000,000
shares of preferred stock in one or more classes or series and, in connection
with the creation of any class or series, to fix by the resolutions providing
for the issuance of shares the powers, designations, preferences and relative,
participating, optional or other rights of the class or series and the
qualifications, limitations or restrictions thereof; and
WHEREAS, it is the desire of the Board of Directors of the
Corporation, pursuant to such authority, to authorize and fix the terms and
provisions of a series of preferred stock and the number of shares constituting
the series;
NOW, THEREFORE, BE IT RESOLVED, that there is hereby authorized a
series of preferred stock on the terms and with the provisions herein set forth
on Annex A attached to this resolution.
/s/ Shirley B. White
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Shirley B. White
Assistant Secretary
ATTEST:
/s/ Vincent D. Kelly
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Vincent D. Kelly
Chief Financial Officer
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ANNEX A
SERIES C CONVERTIBLE PREFERRED STOCK
The powers, designations, preferences and relative, participating,
optional or other rights of the Series C Convertible Preferred Stock of
Metrocall, Inc. (the "Corporation") are as follows:
1. DESIGNATION AND AMOUNT.
This series of preferred stock shall be designated as "Series C
Convertible Preferred Stock," and shall have $0.01 par value per share. The
number of authorized shares constituting this series shall be 25,000 shares.
Shares of the Series C Convertible Preferred Stock shall have a stated value of
$10,000.00 per share (the "Stated Value"). The Corporation may issue fractional
shares of Series C Convertible Preferred Stock.
2. DIVIDENDS.
(a) Right to Receive Dividends. Holders of the Series C Convertible
Preferred Stock shall be entitled to receive, when and as declared by the Board
of Directors of the Corporation (the "Board of Directors"), to the extent
permitted by the General Corporation Law of the State of Delaware, cumulative
dividends at the rate, in the form, at the times and in the manner set forth in
this Section 2. Such dividends shall accrue on any given share from the day of
issuance of such share and shall accrue from day to day whether or not earned or
declared, provided, that dividends shall accrue on any shares of Series C
Convertible Preferred Stock issued pursuant to Section 4.3(b) of that certain
Stock Purchase Agreement dated June 26, 1998 by and among AT&T Wireless
Services, Inc., et al. and the Corporation from the date of the initial issuance
of Series C Convertible Preferred Stock by the Corporation (the "Initial
Issuance Date").
(b) Form of Dividend. Any dividend payment made with respect to the
Series C Convertible Preferred Stock may be made, at the sole discretion of the
Board of Directors, in cash out of funds legally available for such purpose or
by issuing the number of shares of Series C Convertible Preferred Stock equal to
the amount of the dividend divided by the Stated Value. Any such dividend
payment may be made, in the sole discretion of the Board of Directors, partially
in cash and partially in shares of Series C Convertible Preferred Stock
determined in accordance with the preceding formula; provided, that, in the
event that any such dividend payment is made partially in cash and partially in
shares of Series C Convertible Preferred Stock, each holder of Series C
Convertible Preferred Stock shall receive a ratable amount of cash and Series C
Convertible Preferred Stock that is proportionate to the amount of Series C
Convertible
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Preferred Stock held by such holder on which such dividend is paid. All shares
of Series C Convertible Preferred Stock issued as a dividend shall be fully paid
and nonassessable.
(c) Dividend Rate. The dividend rate on the Series C Convertible
Preferred Stock shall be 8% of the Stated Value per share per annum.
(d) Payment of Dividends. Dividends shall be payable in arrears,
when and as declared by the Board of Directors, on May 15 and November 15 of
each year (each such semiannual payment date a "Dividend Payment Date"), except
that if any such date is a Saturday, Sunday or legal holiday then such dividend
shall be payable on the first immediately succeeding calendar day which is not a
Saturday, Sunday or legal holiday. Dividends shall accrue on each share of
Series C Convertible Preferred Stock as set forth in Section 2(a), and, after
payment of a dividend as required hereunder, from and after each Dividend
Payment Date based on the number of days elapsed and a 365-day year. If a
payment of a dividend as required hereunder is not made, dividends shall accrue
from the date of the last payment in full of the required dividend. The dividend
payable on each Dividend Payment Date after issuance of any share of Series C
Convertible Preferred Stock shall be the pro rata portion of the Dividend Rate
based upon the number of days from and including the date of issuance or the
last Dividend Payment Date, as the case may be, up to and including such
Dividend Payment Date and a 365-day year. Each dividend shall be paid to the
holders of record of shares of the Series C Convertible Preferred Stock as they
appear on the books of the Corporation on such record date, not more than 45
days nor fewer than 10 days preceding the respective Dividend Payment Date, as
shall be fixed by the Board of Directors.
(e) Dividend Preference. Dividends in cash on the Series C
Convertible Preferred Stock shall be payable after dividends are paid on the
Series A Convertible Preferred Stock, $.01 par value, of the Corporation (the
"Series A Preferred Stock"), on the Series B Junior Convertible Preferred Stock,
$.01 par value of the Corporation (the "Series B Preferred Stock"), and on any
other class or series of preferred stock of the Corporation that by its terms is
senior to the Series C Convertible Preferred Stock in right of payment of
dividends or liquidation preference (together with the Series A Preferred Stock
and the Series B Preferred Stock, "Senior Stock") and before any dividends or
distributions or other payments shall be paid or set aside for payment upon the
Common Stock or any other stock ranking on liquidation or as to dividends or
distributions junior to the Series C Convertible Preferred Stock (any such
stock, together with the Common Stock, being referred to hereinafter as "Junior
Stock"), other than a dividend, distribution or payment paid solely in shares of
Common Stock or other Junior Stock that is not Redeemable Stock. If at any time
dividends on the outstanding Series C Convertible Preferred Stock at the rate
set forth herein shall not have been paid or declared and set apart for payment
with respect to all preceding and current periods, the amount of the deficiency
shall be fully paid or declared and set apart for payment, before any dividend,
distribution or payment shall be declared or paid upon or set apart for the
shares of any class of Junior Stock, other than a dividend, distribution or
payment paid solely in shares of Common Stock or other Junior Stock that is not
Redeemable Stock. The term "Redeemable Stock" shall mean any equity security
that
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by its terms or otherwise is required to be redeemed for cash on or prior to the
Final Redemption Date (as defined in Section 7) or is redeemable for cash at the
option of the holder thereof at any time prior to the Final Redemption Date.
If there shall be outstanding shares of any Parity Securities (as
defined below), no full dividends shall be declared or paid or set apart for
payment on any such Parity Securities for any period unless full cumulative
dividends have been or contemporaneously are declared and paid or declared and a
sum or additional shares of Series C Convertible Preferred Stock as permitted
hereunder sufficient for the payment thereof set apart for such payment on the
Series C Convertible Preferred Stock for all dividend periods terminating on or
prior to the date of payment of such dividends; provided that in no event shall
any dividends be declared or paid in cash on Parity Securities unless dividends
in cash of not less than a ratable amount are declared and paid on Series C
Convertible Preferred Stock. The term "Parity Securities" shall mean any class
or series of capital stock which is entitled to share ratably with the Series C
Convertible Preferred Stock in the payment of dividends, including
accumulations, if any, and, in the event that the amounts payable thereon on
liquidation are not paid in full, are entitled to share ratably with the Series
C Convertible Preferred Stock in any distribution of assets; provided that
Parity Securities shall not include any shares of Series C Convertible Preferred
Stock issued as dividends pursuant to this Section 2.
If dividends on the Series C Convertible Preferred Stock and on any
other series of Parity Securities are in arrears, in making any dividend payment
on account of such arrears, the Corporation shall make payments ratably (and
ratably as to cash, in-kind or other payments) upon all outstanding shares of
the Series C Convertible Preferred Stock and shares of such other Parity
Securities in proportion to the respective aggregate amounts of dividends in
arrears on the Series C Convertible Preferred Stock and on such other series of
Parity Securities to the date of such dividend payment.
(f) Common Stock Dividends. If prior to October 1, 2003, the
Corporation pays or sets aside for payment any dividend or distribution on the
Common Stock (a "Common Stock Dividend") (other than dividends or distributions
paid solely in shares of Common Stock or rights, options or warrants to purchase
Common Stock), the Series C Convertible Preferred Stock will be entitled to
receive Common Stock Dividends, as and when paid on the Common Stock, in an
amount per share equal to (i) the Accreted Stated Value (as defined below) per
share divided by the Conversion Price, times (ii) the amount of the Common Stock
Dividend payable per share of Common Stock. Any Common Stock Dividend shall be
paid to the holders of record of shares of the Series C Convertible Preferred
Stock as they appear on the books of the Corporation on such record date as
shall be fixed by the Board of Directors for the payment of the Common Stock
Dividend. If the Corporation declares any Common Stock Dividend on or after
October 1, 2003, the Corporation will provide notice of the record date for such
dividend to the holders of record of shares of the Series C Convertible
Preferred Stock as they appear on the books of the Corporation, such notice to
be provided no later than at least fifteen (15) business days prior to the
record date and no later than the date on which the Corporation is required to
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give notice of the record date for such dividend under Rule 10b-17 of the
Securities and Exchange Commission or any successor rule or applicable law.
3. LIQUIDATION PREFERENCE.
In the event of any bankruptcy, liquidation, dissolution or winding
up of the Corporation, either voluntary or involuntary, each holder of Series C
Convertible Preferred Stock at the time thereof shall be entitled to receive,
prior and in preference to any distribution of any of the assets or funds of the
Corporation to the holders of the Common Stock or other Junior Stock by reason
of their ownership of such stock, but after payment to holders of the Senior
Stock of any amounts to which they are entitled, an amount per share of Series C
Convertible Preferred Stock equal to the Stated Value plus any accrued and
unpaid dividends to the date of liquidation. If the assets and funds legally
available for distribution among the holders of Series C Convertible Preferred
Stock shall be insufficient to permit the payment to the holders of the full
aforesaid preferential amount, then the assets and funds shall be distributed
ratably among holders of Series C Convertible Preferred Stock in proportion to
the number of shares of Series C Convertible Preferred Stock owned by each
holder. If any Parity Securities are outstanding, and the assets and funds
legally available for distribution among the Series C Convertible Preferred
Stock and the Parity Securities shall be insufficient to permit the payment to
holders of Series C Convertible Preferred Stock the full aforesaid preferential
amount and the preferential amount payable upon liquidation to any outstanding
Parity Securities, the holders of Series C Convertible Preferred Stock and the
holders of such other Parity Securities shall share ratably (and ratably as to
cash or other distributions) in any distribution of assets of the Corporation in
proportion to the full respective preferential amounts to which they are
entitled.
4. VOTING RIGHTS.
The holders of the Series C Convertible Preferred Stock shall have
no voting rights except as set forth in the Corporation's Amended and Restated
Certificate of Incorporation, as it may be amended or restated from time to time
(the "Certificate of Incorporation") or as provided by applicable law, and
except for the following:
(a) Changes in Organizational Documents. So long as the Series C
Convertible Preferred Stock is outstanding, the Corporation shall not, without
first obtaining the affirmative vote or written consent of the holders of a
majority of the then outstanding shares of Series C Convertible Preferred Stock,
voting as a single class, amend, repeal, modify or supplement (i) any provision
of the Certificate of Incorporation or the Bylaws of the Corporation, each as in
effect on the Initial Issuance Date, or any successor bylaws, if such amendment,
repeal, modification or supplement in any way adversely affects the powers,
designations, preferences or other rights of the Series C Convertible Preferred
Stock, provided, that nothing contained herein shall be construed to prohibit
the Corporation from issuing any
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debt or equity securities, regardless of ranking, or (ii) this Certificate of
Designation, Number, Powers, Preferences and Relative, Participating, Optional
and Other Rights of Series C Convertible Preferred Stock ("Certificate of
Designation").
(b) Means of Voting. The rights of the holders of Series C
Convertible Preferred Stock under this Section 4 may be exercised (i) at a
meeting of the holders of shares of such Series C Convertible Preferred Stock,
called for the purpose by the Corporation; or (ii) by written consent signed by
the holders of the requisite percentage of the then outstanding shares of the
Series C Convertible Preferred Stock, delivered to the Secretary or Assistant
Secretary of the Corporation. Except to the extent otherwise provided herein or
to the extent that holders of a majority of the Series C Convertible Preferred
Stock decide otherwise, any meeting of the holders of Series C Convertible
Preferred Stock shall be conducted in accordance with the provisions of the
By-Laws of the Corporation applicable to meetings of stockholders. In the event
of a conflict or inconsistency between the By-Laws of the Corporation and any
term of this Certificate of Designation, including, but not limited to this
Section 4, the terms of this Certificate of Designation shall prevail.
5. CONVERSION
Shares of Series C Convertible Preferred Stock may be converted into
shares of Common Stock, on the terms and conditions set forth in this Section 5.
(a) Optional Conversion. Beginning on October 1, 2003 (except as to
any shares which shall have been called for redemption prior to October 1,
2003), each holder of Series C Convertible Preferred Stock shall have right, at
any time and from time to time thereafter, to convert all, but not less than
all, of the shares of Series C Convertible Preferred Stock held by such holder
or its affiliates into that number of shares of Common Stock equal to the
Accreted Stated Value of the shares converted divided by the Conversion Price,
provided, that in the event that on or after October 1, 2003 the Corporation
delivers a notice of redemption of Series C Convertible Preferred Stock pursuant
to Section 6(c), the right to convert may be exercised with respect to shares of
Series C Convertible Preferred Stock called for redemption in such notice only
during the period ending fifteen (15) days prior to the redemption date
specified in such notice.
(b) Change of Control. (i) If a Change of Control occurs prior to
October 1, 2003, each holder of shares of Series C Convertible Preferred Stock
may, at its option, at times specified below, convert all, but not less than
all, such shares held by such holder into the number of fully paid and
nonassessable shares of Common Stock determined by dividing (x) the Stated Value
multiplied by the number of shares surrendered plus any accrued but unpaid
dividends on such shares by (y) the Conversion Price.
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(ii) For the purposes of this Section 5(b), "Change of
Control" means the occurrence of one or more of the following events:
(A) a person or entity or group (as that term is used in
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) of
persons or entities (in each case, a "Beneficial Owner") shall have become
the beneficial owner of a majority (by voting power or otherwise) of the
securities of the Corporation ordinarily having the right to vote in the
election of directors;
(B) during any consecutive three-year period commencing
on or after October 1, 1998, individuals who at the beginning of such
period constituted the Board of Directors (together with any director
elected by the Series A Preferred Stock and any new directors whose
election by such Board of Directors or whose nomination for election by
the stockholders of the Corporation was approved by a vote of 66 2/3% of
the directors then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of
the Board of Directors then in office;
(C) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all, or substantially
all, the assets of the Corporation to any Beneficial Owner (other than any
wholly owned subsidiary of the Corporation);
(D) the merger or consolidation of the Corporation with
or into another corporation or the merger of another corporation into the
Corporation with the effect that immediately after such transaction any
Beneficial Owner shall have become the beneficial owner of securities of
the surviving corporation of such merger or consolidation representing a
majority of the combined voting power of the outstanding securities of the
surviving corporation ordinarily having the right to vote in the election
of directors; or
(E) the adoption of a plan leading to the liquidation or
dissolution of the Corporation;
(iii) (A) The Corporation shall give the holders notice
pursuant to Section 5(g) of a Change of Control within five business days
after the occurrence of such Change of Control. Except as set forth in
Section 5(b)(iii)(B), the right to convert set forth in this Section 5(b)
shall be exercised by any holder only within 10 business days after such
notice has been given of the occurrence of the Change of Control.
(B) If the Corporation agrees to enter into a
transaction that, when consummated, would result in a Change of Control
defined in Sections 5(b)(ii)(C) or (D), the Corporation shall give notice
to the holders of such transaction at least 15
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business days prior to the consummation of the transaction, and the
holders may, within 10 business days after the date of such notice,
exercise the right to convert the Series C Convertible Preferred Stock
into Common Stock, such conversion to take effect at or immediately prior
to the record date for holders of Common Stock to receive the
consideration to be paid to such holders in the transaction. In addition,
if the transaction results is a Going Private Transaction (as defined
below), then the Conversion Price for purposes of conversion as described
in the preceding sentence shall be the lesser of (x) the Conversion Price
in effect immediately prior to the notice by the Corporation given to
holders pursuant to the preceding sentence and (y) the value of the
consideration per share of Common Stock (determined by the Board of
Directors, in good faith, as of the date of the first public announcement
of the transaction) to be paid to holders of Common Stock in the
transaction times 1.1, provided, that in no event shall the Conversion
Price for this purpose be less than $7.40 (as such amount may be adjusted
pursuant to that certain Warrant Agreement between the Corporation and The
First National Bank of Boston dated as of November 15, 1996, which
adjustment provisions are substantially similar to the adjustment
provision in 5(i)). For purposes hereof, a "Going Private Transaction"
shall mean a Change of Control defined in Sections 5(b)(ii) (C) or (D), as
a result of which, immediately after consummation of such transaction, the
securities into which the Series C Convertible Preferred Stock would be
convertible are not listed on a national securities exchange or the NASDAQ
National Market System or, even if such securities are so listed, the
number of issued and outstanding shares of such securities (excluding (x)
shares owned by any beneficial owner of a majority of such shares and (y)
"restricted" shares within the meaning of Rule 144 under the Securities
Act of 1933, or any successor rule, that cannot be sold without limitation
under Rule 144) is less than three (3) times the number of shares into
which all outstanding shares of the Series C Convertible Preferred Stock
would be convertible after giving effect to the transaction.
(c) Conversion Price. The Conversion Price of the shares of Series C
Convertible Preferred Stock shall be $10.40, adjusted as set forth herein.
(d) Common Stock. The Common Stock to be issued upon conversion
hereunder shall be fully paid and nonassessable.
(e) Procedures for Conversion. (i) In order to convert shares of
Series C Convertible Preferred Stock into shares of Common Stock, the holder
shall surrender the certificate or certificates therefore, duly endorsed for
transfer, at any time during normal business hours, to the Corporation at its
principal or at such other office or agency then maintained by it for such
purpose (the "Payment Office"), accompanied (or preceded as required by Section
5(a)) by written notice to the Corporation of such holder's election to convert
and (if so required by the Corporation or any conversion agent) by an instrument
of transfer, in form reasonably satisfactory to the Corporation and to any
conversion agent, duly executed by the registered holder or by his duly
authorized attorney, and any cash payment required pursuant to Section
5(e)(iii). As promptly as practicable after the surrender for conversion of any
share of the Series
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C Convertible Preferred Stock in the manner provided in the preceding sentence,
and the payment in cash of any amount required by the provisions of Section
5(e)(iii), but in any event within three Trading Days of such surrender for
payment, the Corporation will deliver or cause to be delivered at the Payment
Office to or upon the written order of the holder of such shares, certificates
representing the number of full shares of Common Stock issuable upon such
conversion, issued in such name or names as such holder may direct. Such
conversion shall be deemed to have been made immediately prior to the close of
business on the date of such surrender of the shares in proper order for
conversion, and all rights of the holder of such share as a holder of such
shares shall cease at such time and the person or persons in whose name or names
the certificates for such shares of Common Stock are to be issued shall be
treated for all purposes as having become the record holder or holders thereof
at such time; provided, however, that any such surrender and payment on any date
when the stock transfer books of the Corporation shall be closed shall
constitute the person or persons in whose name or names the certificates for
such shares of Common Stock are to be issued as the record holder or holders
thereof for all purposes immediately prior to the close of business on the next
succeeding day on which such stock transfer books are opened.
(ii) The Corporation shall not be required to issue
fractional shares of Common Stock upon conversion of shares of Series C
Convertible Preferred Stock. At the Corporation's discretion, in the event the
Corporation determines not to issue fractional shares, in lieu of any
fractional shares to which the holder would otherwise be entitled, the
Corporation shall pay cash equal to such fraction multiplied by the Conversion
Price.
(iii) The issuance of certificates for shares of Common Stock
upon conversion shall be made without charge for any issue, stamp or other
similar tax in respect of such issuance. However, if any such certificate is to
be issued in a name other than that of the holder of record of the shares
converted, the person or persons requesting the issuance thereof shall pay to
the Corporation the amount of any tax which may be payable in respect of any
transfer involved in such issuance or shall establish to the satisfaction of the
Corporation that such tax has been paid or is not payable.
(f) Reservation of Stock Issuable Upon Conversion. The Corporation
shall reserve and keep available out of its authorized but unissued shares of
Common Stock, solely for the purpose of effecting the conversion of the shares
of the Series C Convertible Preferred Stock, 11,500,000 shares of Common Stock.
If at any time the number of authorized and unissued shares of Common Stock that
are reserved for issuance upon conversion of the shares of Series C Convertible
Preferred Stock, shall not be sufficient to effect the conversion of all then
outstanding shares of the Series C Convertible Preferred Stock, the Corporation
will take such corporate action as may, in the opinion of its counsel, be
necessary to increase its authorized but unissued shares of Common Stock to such
number of shares as shall be sufficient for such purpose, including, without
limitation, taking appropriate board action, recommending such an increase to
the holders of Common Stock, holding shareholders meetings, soliciting votes and
proxies in favor of such increase to obtain the requisite stockholder approval
and upon such
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<PAGE> 10
approval, the Corporation shall reserve and keep available such additional
shares solely for the purpose of effecting the conversion of the shares of the
Series C Convertible Preferred Stock.
(g) Notices. Any notice required by the provisions of this
Certificate of Designation to be given to the holders of shares of Series C
Convertible Preferred Stock shall be deemed given five days after such notice is
deposited in the United States mail, postage prepaid, and addressed to each
holder of record at its address appearing on the books of the Corporation, or
the next business day after such notice is delivered to a recognized overnight
courier service with next-business day delivery specified.
(h) Reorganization, Merger or Sale of the Corporation.
(i) Notwithstanding any other provision hereof, in case of
(A) any reorganization or any reclassification of the capital stock of the
Corporation or (B) any merger or consolidation of the Corporation, that in
any such case results in the Common Stock being converted into other
securities or property, or the right to receive other securities or
property, then, to the extent the Corporation or the holders do not
otherwise redeem or convert all outstanding shares of Series C Convertible
Preferred Stock, appropriate adjustment (as determined by the Board of
Directors) shall be made in the application of the provisions herein set
forth with respect to the rights and interests of the holders of the
Series C Convertible Preferred Stock, to the end that the provisions set
forth herein shall thereafter be applicable, as nearly as equivalent as is
practicable, in relation to any shares of stock thereafter deliverable
upon the conversion of the shares of Series C Convertible Preferred Stock.
(ii) In case of any merger, consolidation, reclassification
or other similar reorganization, to the extent the Corporation is not the
surviving entity, and the Corporation or the holders do not otherwise
redeem or convert all outstanding shares of Series C Convertible Preferred
Stock, the Series C Convertible Preferred Stock shall be converted into or
exchanged for and shall become shares of the surviving corporation having,
in respect of the surviving corporation, substantially the same powers,
preferences and relative participating, optional or other special rights,
and the qualifications, limitations or restrictions thereon, that the
Series C Convertible Preferred Stock had immediately prior to such
transaction. In the case the Corporation is not the surviving entity, the
Conversion Price shall be adjusted at the closing of the transaction to
equal the Conversion Price in effect immediately prior to the closing
divided by the fair market value of the common stock immediately prior to
the closing multiplied by the fair market value of the common stock of the
surviving entity at the closing.
(iii) References in this Section 5 to "Common Stock" shall
include all stock or other securities or property (including cash) into
which Common Stock is converted following any merger, reorganization or
reclassification of the capital stock of the Corporation.
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<PAGE> 11
(i) Adjustments. The number of shares of Common Stock issuable upon
conversion of shares of the Series C Convertible Preferred Stock that are then
outstanding and the Conversion Price shall be subject to adjustment from time to
time as follows:
(i) Stock Dividends; Stock Splits; Reverse Stock Splits. In case
the Corporation shall (A) declare or pay a dividend on its outstanding
Common Stock in shares of Common Stock or make a distribution to all
holders of its outstanding Common Stock in shares of Common Stock, (B)
subdivide its outstanding Common Stock into a greater number of shares
or reclassify its outstanding Common Stock, or (C) combine its
outstanding Common Stock into a smaller number of shares, the number of
shares of Common Stock issuable upon conversion of each share of Series
C Convertible Preferred Stock shall be adjusted so that the holder of
each such share shall thereafter be entitled to receive the kind and
number of shares of Common Stock that such holder would have owned or
have been entitled to receive after the happening of any of the events
described above, had such share been converted in full immediately prior
to the happening of such event or any record date with respect thereto
(with any record date requirement being deemed to have been satisfied),
and, in any such case, the number of shares of Common Stock issuable
upon conversion of each such share shall be subject to further
adjustments under this Section 5(i). An adjustment made pursuant to this
Section 5(i)(i) shall become effective at the record date, if any, for
such event.
(ii) Distributions to Stockholders. In case the Corporation
shall issue to holders of its Common Stock rights, options, warrants or
convertible or exchangeable securities (collectively, the "rights")
entitling them to subscribe for or purchase Common Stock at a price per
share of Common Stock (determined by dividing (A) the total amount
receivable by the Corporation in consideration of the issuance of such
rights plus the total consideration payable to the Corporation upon
exercise, conversion or exchange thereof, by (B) the total number of
shares of Common Stock covered by such rights) that is lower than the
Current Market Price per share of Common Stock in effect immediately
prior to such issuance, then the number of shares of Common Stock
issuable upon conversion of all shares of Series C Convertible Preferred
Stock shall be increased in a manner determined by multiplying the
number of shares of Common Stock theretofore issuable upon the
conversion of all shares of Series C Convertible Preferred Stock by a
fraction, the numerator of which shall be the number of shares of Common
Stock outstanding immediately prior to the issuance of such rights plus
the number of additional shares of Common Stock offered for subscription
or purchase, and the denominator of which shall be the number of shares
of Common Stock outstanding immediately prior to the issuance of such
rights plus the number of shares of Common Stock which the aggregate
consideration to be received by the Corporation in connection with such
issuance (as defined in the following sentence) would purchase at the
then Current Market Price per share of Common Stock. For purposes of
this Section 5(i), the "Current Market Price" per share of Common Stock
for any date shall mean average of the closing prices of the
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<PAGE> 12
Common Stock for the 10 trading days prior to such date. For purposes of
this Section 5(i)(ii), the "aggregate consideration to be received by
the Corporation" in connection with any issuance of such rights shall be
deemed to be the consideration received by the Corporation for such
rights plus any consideration or premiums stated in such rights to be
paid for the shares of Common Stock covered thereby.
(iii) Issuance of Common Stock at Lower Values. In case the
Corporation shall, in a transaction to which Section 5(i)(i) is
inapplicable (and, in any event, other than upon conversion of Series A
Preferred Stock, Series B Preferred Stock, or Series C Convertible
Preferred Stock, or upon exercise of any warrants or employee stock
options that were outstanding on the Initial Issuance Date or pursuant
to contractual commitments to which the Corporation was bound on the
Initial Issuance Date), issue or sell shares of Common Stock, or rights,
options, warrants or convertible or exchangeable securities containing
the right to subscribe for or purchase shares of Common Stock, at a
price per share of Common Stock (determined, in the case of rights,
options, warrants or convertible or exchangeable securities, by dividing
(A) the total amount receivable by the Corporation in consideration of
the issuance and sale of such rights, options, warrants or convertible
or exchangeable securities, plus the total consideration payable to the
Corporation upon exercise, conversion or exchange thereof, by (B) the
total number of shares of Common Stock covered by such rights, options,
warrants or convertible or exchangeable securities) that is lower (at
the date of such sale or issuance) than the Current Market Price per
share of Common Stock in effect immediately prior to such sale or
issuance or for no consideration, then in each case the number of shares
of Common Stock thereafter issuable upon the conversion of the shares of
Series C Convertible Preferred Stock shall be increased in a manner
determined by multiplying the number of shares of Common Stock
theretofore issuable upon the conversion of all shares of Series C
Convertible Preferred Stock by a fraction, of which the numerator shall
be the number of shares of Common Stock outstanding immediately prior to
the sale or issuance, plus the number of additional shares of Common
Stock offered for subscription or purchase or to be issued upon
conversion or exchange of such convertible or exchangeable securities,
and of which the denominator shall be the number of shares of Common
Stock outstanding immediately prior to the sale or issuance plus the
number of shares of Common Stock which the aggregate consideration to be
received by the Corporation (as defined in the following paragraph) in
connection with such sale or issuance would purchase at the then Current
Market Price per share of Common Stock.
For the purpose of such adjustments the "aggregate consideration
to be received by the Corporation" therefor shall be deemed to be the
consideration received by the Corporation for such rights, options,
warrants or convertible or exchangeable securities plus any
consideration or premiums stated in such rights, options, warrants or
convertible or exchangeable securities to be paid for the shares of
Common Stock covered thereby.
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<PAGE> 13
In case the Corporation shall issue or sell shares of Common
Stock or rights, options, warrants or convertible or exchangeable
securities containing the right to subscribe for or purchase shares of
Common Stock for a consideration consisting, in whole or in part, of
property other than cash or its equivalent, then in determining the
"price per share of Common Stock" and the "consideration" receivable by
or payable to the Corporation for purposes of Sections 5(i)(ii) and
5(i)(iii), the Board of Directors of the Corporation shall determine, in
good faith, the fair value of such property. In case the Corporation
shall issue and sell rights, options, warrants or convertible or
exchangeable securities containing the right to subscribe for or
purchase shares of Common Stock, together with one or more other
securities as part of a unit at a price per unit, then in determining
the "price per share of Common Stock" and the "consideration" receivable
by or payable to the Corporation for purposes of Sections 5(i)(ii) and
5(i)(iii), the Board of Directors of the Corporation shall determine, in
good faith, the fair value of the rights, options, warrants or
convertible or exchangeable securities then being sold as part of such
unit.
Any increase of the number of shares of Common Stock issuable
upon conversion of shares of Series C Convertible Preferred Stock
pursuant to this Section 5(i)(iii) shall be allocated among such Series
C Convertible Preferred Stock on a pro rata basis.
(iv) Expiration of Rights, Options and Conversion Privileges.
Upon the expiration of any rights, options, warrants or conversion or
exchange rights that have previously resulted in an adjustment under
this Section 5(i), if any thereof shall not have been exercised, the
number of shares of Common Stock issuable upon conversion of Series C
Convertible Preferred Stock shall be readjusted and shall thereafter,
upon any future exercise, be such as they would have been had they been
originally adjusted (or had the original adjustment not been required,
as the case may be) as if (i) the only shares of Common Stock so issued
were the shares of Common Stock, if any, actually issued or sold upon
the exercise of such rights, options, warrants or conversion or exchange
rights and (ii) such shares of Common Stock, if any, were issued or sold
for the consideration actually received by the Corporation upon such
exercise plus the consideration, if any, actually received by the
Corporation for issuance, sale or grant of all such rights, options,
warrants or conversion or exchange rights whether or not exercised;
provided that no such readjustment shall have the effect of decreasing
the number of shares issuable upon conversion of Series C Convertible
Preferred Stock by a number that is in excess of the amount or number of
the adjustment initially made in respect of the issuance, sale or grant
of such rights, options, warrants or conversion or exchange rights or
shall have the effect of decreasing the number of shares of Common Stock
that have been issued upon conversion of any shares of Series C
Convertible Stock prior to the date of such readjustment.
(v) De minimis Adjustments. No adjustment in the number of
shares of Common Stock issuable under any Series C Convertible Preferred
Stock shall be
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<PAGE> 14
required unless such adjustment would require an increase or decrease of
at least one percent (1%) in the number of shares of Common Stock
purchasable upon a conversion of Series C Convertible Preferred Stock;
provided, that any adjustments which by reason of this Section 5(i) are
not required to be made shall be carried forward and taken into account
in any subsequent adjustment. All calculations shall be made to the
nearest one-thousandth of a share.
(vi) Notice of Adjustment. Whenever the number of shares of
Common Stock or other stock or property issuable upon the conversion of
Series C Convertible Preferred Stock is adjusted, as herein provided,
the Corporation shall deliver to the holders thereof a certificate of a
firm of independent public accountants selected by the Board of
Directors of the Corporation (who may be the regular accountants
employed by the Corporation) setting forth the number of shares of
Common Stock or other stock or property issuable upon the conversion of
each share of Series C Convertible Preferred Stock after such
adjustment, setting forth a brief statement of the facts requiring such
adjustment and setting forth the computation by which such adjustment
was made and shall promptly mail by first class mail, postage prepaid,
to each holder notice of such adjustment or adjustments.
(vii) Adjustment of Conversion Price. Whenever the number of
shares of Common Stock issuable upon conversion of the Series C
Convertible Preferred Stock is adjusted as provided in this Section
5(i), the Conversion Price shall be adjusted by multiplying such
Conversion Price immediately prior to such adjustment by a fraction, the
numerator of which shall be the number of shares issuable upon
conversion of a share of Series C Convertible Preferred Stock
immediately prior to such adjustment, and the denominator of which is
the number of shares so issuable immediately thereafter.
6. OPTIONAL REDEMPTION
(a) Redemption Price. Beginning on October 1, 2001, the
Corporation, at its sole option, may redeem all, but not less than all, shares
of the Series C Convertible Preferred Stock for cash, at any time or from time
to time, for the redemption price per share set forth below:
<TABLE>
<CAPTION>
DATE OF REDEMPTION REDEMPTION PRICE
------------------ ----------------
<S> <C>
October 1, 2001 to September 30, 2002 105.0% of Redemption Value
October 1, 2002 to September 30, 2003 102.5% of Redemption Value
</TABLE>
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<PAGE> 15
<TABLE>
<CAPTION>
DATE OF REDEMPTION REDEMPTION PRICE
------------------ ----------------
<S> <C>
After September 30, 2003 100.0% of Accreted Stated
Value
</TABLE>
For purposes hereof, "Redemption Value" for a share of Series C
Convertible Preferred Stock shall equal the greater of (i) Accreted Stated
Value, and (ii) if the Current Market Price of the Common Stock on the date of
the notice of redemption is greater than the Conversion Price, then an amount
determined in accordance with the following formula:
RV = (CMP)(SV)/CP
For purposes of this formula:
RV = Redemption Value per share
SV = Accreted Stated Value per share
CMP = Current Market Price
CP = Conversion Price
"Accreted Stated Value" per share means the Stated Value per share
plus accrued and unpaid dividends, if any, on such share through the date of
redemption.
(b) Notice of Redemptions. Notice of redemptions shall be given by
first class mail, postage prepaid, not less than 20 nor more than 60 business
days prior to the redemption date or, if such notice period is not feasible in
connection with a transaction described in Section 5(g), such notice period as
is practicable in the circumstances, to each holder of record of the shares to
be redeemed, at such holder's address as the same appears on the books of the
Corporation. Each such notice shall state: (i) the redemption date; (ii) the
place or places where certificates for such shares are to be surrendered for
payment of the redemption price; and (iii) that dividends on the shares to be
redeemed will cease to accrue on the redemption date.
(c) Cessation of Dividends on Shares Redeemed. Notice having been
mailed as stated in subsection (c) above, from and after the close of business
on the redemption date (unless default shall be made by the Corporation in
providing money for the payment of the redemption price of the shares called for
redemption), dividends on the shares of the Series C Convertible Preferred Stock
redeemed shall cease to accrue, and said shares shall no longer be deemed to be
outstanding, and all rights of the holders thereof as stockholders of the
Corporation (except the right to receive from the Corporation the redemption
price) shall cease. Upon surrender in accordance with said notice of the
certificates for any shares so redeemed (properly endorsed or assigned for
transfer, if the Board of Directors of the Corporation shall so require and the
notice shall so state), such shares shall be redeemed by the Corporation at the
redemption price aforesaid.
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<PAGE> 16
(d) Status of Redeemed or Converted Shares. Upon redemption or
conversion, any shares of the Series C Convertible Preferred Stock which have
been so redeemed or converted shall be retired and thereafter have the status of
authorized but unissued shares of preferred stock, without designation as to
series until such shares are once more designated as part of a particular series
by the Board of Directors or a duly authorized committee thereof.
7. MANDATORY REDEMPTION.
On October 1, 2010 (the "Final Redemption Date"), the Corporation shall
redeem from any source of funds legally available therefor, in the manner
provided in Section 6(c) above, all of the shares of the Series C Convertible
Preferred Stock then outstanding at a redemption price equal to the Stated Value
per share, plus, without duplication, an amount in cash equal to all accrued and
unpaid dividends per share to the Final Redemption Date.
8. PREEMPTIVE RIGHTS.
No shares of Series C Convertible Preferred Stock shall have any rights of
preemption whatsoever as to any securities of the Corporation, or any warrants,
rights or options issued or granted with respect thereto, regardless of how such
securities or such warrants, rights or options may be designated, issued or
granted.
9. TRANSFERABILITY.
No shares of Series C Convertible Preferred Stock shall be transferable
without the consent of the Corporation until April 1, 2000; provided, however,
this provision shall terminate and be of no further force or effect immediately
upon the occurrence of a Problematic Regulatory Change of Control. A
"Problematic Regulatory Change of Control" is a Change of Control which causes
the Holder and/or its affiliates to receive an attributable interest in any
radio spectrum or FCC Service with respect to which the FCC or applicable law
imposes a spectrum cap (including, without limitation, spectrum caps imposed on
the holding of broadband CMRS or narrowband PCS spectrum), multiple ownership
restriction, or other material limitation. "FCC Service" shall mean any service
subject to FCC (or successor agency) regulation or oversight.
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<PAGE> 1
EXHIBIT 10.1
EXECUTION COPY
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered
into as of October 1, 1998, by and among METROCALL, INC., a Delaware corporation
(the "Company"), and MCCAW COMMUNICATIONS COMPANIES, INC., a Washington
corporation ("McCaw").
RECITALS
WHEREAS, the Company and McCaw are parties to that certain Stock
Purchase Agreement, dated as of June 26, 1998 (the "Stock Purchase Agreement"),
pursuant to which McCaw will acquire 9500 shares, as such amount may be adjusted
pursuant to the Stock Purchase Agreement, of the Company's Series C Convertible
Preferred Stock (the "Preferred Stock"), the terms and conditions of which are
set forth in the Certificate of Designation (as hereinafter defined) and
WHEREAS, in connection with the purchase and sale of the Preferred
Stock, the Company has agreed, on the terms and conditions set forth herein, to
register the Preferred Stock and Common Stock into which the Preferred Stock is
convertible, as set forth below.
NOW THEREFORE, in consideration of the foregoing recitals and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.01 "Certificate of Designation" means the Certificate or
Designation, Number, Powers, Preferences and Relative, Participating, Optional
and Other Rights of Series C Convertible Preferred Stock of Metrocall, Inc., as
filed with the Secretary of State of Delaware on October 1, 1998.
1.02 "Closing" means the closing of the purchase and sale of
Preferred Stock pursuant to the Stock Purchase Agreement.
1.03 "Commission" means the Securities and Exchange Commission or
any other federal agency at the time administering the Securities Act.
1.04 "Conversion Shares" means shares of Common Stock issuable upon
conversion of Preferred Shares, provided, however, that any Conversion Share
will cease to be a
<PAGE> 2
Conversion Share when (i) such Conversion Share has been transferred pursuant to
an effective registration statement under the Securities Act covering such
Conversion Share (but not including any transfer exempt from registration under
the Securities Act), or (ii) the Preferred Stock which is convertible into such
Conversion Share has been transferred pursuant to an effective registration
statement under the Securities Act covering such Preferred Stock (but not
including any transfer exempt from registration under the Securities Act).
1.05 "Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any similar federal statute and the rules and regulations of the
Commission thereunder, all as the same shall be in effect from time to time.
1.06 "Governmental Authority" means any nation or government, any
state or other political subdivision thereof and any court, panel, judge, board,
bureau, commission, agency or other entity, body or other Person exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
1.07 "Holder" means McCaw and each transferee permitted pursuant to
Section 6.04 of this Agreement that has become a party to this Agreement as
provided in Section 6.04.
1.08 "Person" means an individual or corporation, partnership,
trust, unincorporated organization, association or other entity and includes any
Governmental Authority.
1.09 "Preferred Shares" means the shares of Series C Convertible
Preferred Stock issued to McCaw pursuant to the Stock Purchase Agreement and any
additional or replacement shares of Preferred Stock issued with respect to
Preferred Shares upon any stock dividend, stock split, recapitalization or
similar event.
1.10 "Registrable Securities" means Preferred Shares and any other
securities issued with respect to Preferred Shares upon any stock dividend,
stock split, recapitalization or similar event; provided, however, that
Conversion Shares shall not be deemed to be Registrable Securities; and provided
further that any Registrable Security will cease to be a Registrable Security
when (i) such Registrable Security has been transferred pursuant to an effective
registration statement under the Securities Act covering such Registrable
Security (but not including any transfer exempt from registration under the
Securities Act), or (ii) such Registrable Security is no longer held of record
by a Holder.
1.11 "Securities Act" means the Securities Act of 1933, as amended,
or any similar federal statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect from time to time.
1.12 "Shares" means the Conversion Shares and the Registrable
Securities.
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<PAGE> 3
ARTICLE II
REGISTRATION RIGHTS
2.01 Required Registration.
(a) The Company shall prepare and file with the Commission
registration statements under the Securities Act with respect to the Conversion
Shares and shall use its best efforts to cause such registration statements to
become effective promptly after filing. The registration statement with respect
to the Conversion Shares shall be filed with the Commission on or before the
earliest of (i) ninety (90) days before the fifth anniversary of the Closing, or
(ii) forty-five (45) days after any conversion by a Holder of Conversion Shares
pursuant to Section 5.2(b) of the Certificate of Designation, provided, that the
Company shall be required under this clause (ii) to register only the Conversion
Shares or other securities issued in connection with such conversion.
(b) Except as provided in Section 2.01(c) of this Agreement,
the Company shall use its best efforts to maintain the effectiveness of each
registration statement filed pursuant to this Section 2.01 until such time as
all Shares registered pursuant to the registration statement either have been
transferred pursuant to the registration statement or are eligible to be sold
pursuant to Rule 144 under the Securities Act without regard to any restrictions
pursuant to Rule 144(k).
(c) The obligations of the Company under this Section 2.01 are
subject to the condition that the Company shall be entitled to require the
Holders to suspend for up to ninety (90) days once in any twelve month period
the sale of Shares pursuant to a registration statement filed pursuant to this
Section if and for so long as (i) the Board of Directors of the Company
determines, in its reasonable judgment, that the sale of Shares pursuant thereto
would materially interfere with any material financing, acquisition, corporate
reorganization or other material transaction by the Company, (ii) the Company
promptly gives the Holders of the Conversion Shares written notice of such
determination, and (iii) all other similarly situated shareholders shall also be
subject to the same suspension. The Company shall have no obligation to maintain
the effectiveness of a registration statement with respect to Conversion Shares
during periods when the Holders are required to suspend the sale of such Shares
as provided in this Section 2.01(c). As soon as practicable after the expiration
of such periods, the Company shall amend its registration statements as
necessary to permit the Holders to sell Shares pursuant to such registration
statements.
2.02 Registrations by Request.
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<PAGE> 4
(a) Beginning on April 1, 2000, the Company shall, within
ninety (90) days after receiving a written request therefor from the record
Holder or Holders of Registrable Securities representing at least 50% of the
Preferred Shares then outstanding, prepare and file a registration statement
under the Securities Act covering the Registrable Securities which are the
subject of such request and shall use its best efforts to cause such
registration statement to become effective promptly thereafter. The Company
shall not be obligated to prepare, file and cause to become effective pursuant
to this Section 2.02(a) more than two registration statements for the Preferred
Shares.
(b) In the event that the Holders of Registrable Securities
representing the Registrable Shares for which registration has been requested
pursuant to Section 2.02(a) hereof determine for any reason not to proceed with
such registration at any time before the registration statement has been
declared effective by the Commission, and such registration statement, if
theretofore filed with the Commission, is withdrawn with respect to the
securities covered thereby, and such Holders agree to bear their own expenses
incurred in connection therewith and (subject to Section 2.02(d)) to reimburse
the Company for the reasonable out-of-pocket expenses incurred by it
attributable to the registration of such Registrable Securities, then the
Holders of such Registrable Securities shall not be deemed to have exercised
their right to require the Company to register Registrable Securities pursuant
to Section 2.02(a) hereof.
(c) Except as provided in Section 2.02(d) of this Agreement,
the Company shall use its best efforts to maintain the effectiveness of each
registration statement filed pursuant to this Section 2.02 until such time as
all Shares registered pursuant to the registration statement either have been
transferred pursuant to the registration statement or are eligible to be sold
pursuant to Rule 144 under the Securities Act without regard to any restrictions
pursuant to Rule 144(k). Each Holder shall provide written notice to the Company
within fifteen (15) days after it has sold all of its Registrable Securities
registered pursuant to this Section 2.02.
(d) The obligations of the Company under this Section 2.02 are
subject to the condition that the Company shall be entitled to postpone for up
to ninety (90) days once in any twelve month period the filing of any
registration statement otherwise required to be prepared and filed by it
pursuant to this Section 2.02 if, at the time it receives requests for
registration pursuant thereto, and for so long as the Board of Directors of the
Company determines, in its reasonable judgment, that the filing of such
registration statement and the offering of Registrable Securities pursuant
thereto would materially interfere with any material financing, acquisition,
corporate reorganization or other material transaction by the Company, and the
Company promptly gives the Holders requesting such registration written notice
of such determination and all other similarly situated shareholders shall also
be subject to the same suspension. If the Company shall so postpone the filing
of a registration statement, the Holders requesting such registration shall have
the right to withdraw the requests for registration by giving written notice to
the Company within thirty days after receipt of the Company's notice of
postponement and, in the event of such withdrawal, such requests shall not be
counted as being
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<PAGE> 5
requests for one of the registration statements that the Company is obligated to
prepare, file and cause to become effective pursuant to Section 2.02(a) hereof,
nor shall the Holders be required to reimburse the Company for out-of-pocket
expenses incurred by it attributable to the registration of such Registrable
Securities.
2.03 "Piggy-Back" Registrations.
(a) If, at any time after April 1, 2000, the Company is
requested pursuant to Section 2.02 to register any of the Registrable Securities
under the Securities Act on a registration statement on Form S-1, Form S-2 or
Form S-3 (or an equivalent general registration form then in effect) for the
account of any Holder (a "Registering Shareholder") of Registrable Securities
(an "offering"), then in each such case the Company shall, not later than 15
days after receipt of notice from the Registering Shareholder, give written
notice thereof to each other Holder of Registrable Securities. Upon the written
direction of any such Holder of Registrable Securities, given within 10 days of
the receipt by such Holder of any such written notice (which direction shall
specify the number of Registrable Securities intended to be disposed of by such
Holder and the intended method of distribution thereof), the Company shall
include in such registration statement any or all of the Registrable Securities
then owned by such Holder requesting such registration (a "Requesting
Shareholder"), to the extent necessary to permit the sale or other disposition
of the shares constituting such number of Registrable Securities as such
Requesting Shareholder shall have so directed the Company to be so registered.
Any Requesting Shareholder shall have the right to withdraw such direction by
giving written notice to the Company to such effect within ten (10) days after
giving such direction.
(b) In the event that the Company proposes to register
Registrable Securities pursuant to Section 2.03(a), and any managing underwriter
shall advise the Requesting Shareholder or Shareholders and the Registering
Shareholders in writing that the inclusion in the registration statement of some
or all of the Registrable Securities sought to be registered by the Requesting
Shareholders creates a significant risk that the price per share that such
Requesting Shareholder or Shareholders and such Registering Shareholders will
derive from such registration will be adversely affected or that the number of
shares or securities sought to be registered (including any securities sought to
be registered at the instance of the Requesting Shareholder or Shareholders and
those sought to be registered by non-Requesting Shareholders who are Registering
Shareholders) is too large a number to be reasonably sold, the Company will
include in such registration statement such number of shares or securities as
the Company, the Registering Shareholders and the Requesting Shareholders are so
advised can be sold in such offering without such an effect (the "Maximum
Number"), as follows and in the following order of priority: (i) first, the
number of shares or securities sought to be registered by non-Requesting
Shareholders who are Registering Shareholders and (ii) second, if the number of
shares or securities to be registered under clause (i) is less than the Maximum
Number, such shares or
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securities sought to be registered by such Requesting Shareholder or
Shareholders pro rata in proportion to the number of shares or securities sought
to be registered by all the Requesting Shareholders, which, when added to the
number of Registrable Securities to be registered by Registering Shareholders
who are non-Requesting Shareholders, equals the Maximum Number.
2.04. Registration for Underwritten Offerings.
(a) At any time after April 1, 2000, the Holders of a majority
of all outstanding Preferred Shares and Conversion Shares may request the
Company to register under the Securities Act for sale in an underwritten
secondary offering all or any portion of the Registrable Securities or
Conversion Shares held by such Holders or to be issued upon conversion of
Preferred Shares held by such Holders; provided, however, that (i) any such
request must be to register no less than a majority of all outstanding Preferred
Shares or Conversion Shares, and (ii) the Company shall not be obligated under
this Section 2.04 to register Registrable Securities or Conversion Shares for
more than one underwritten secondary offering. For purposes of determining
whether Holders of a majority of all outstanding Preferred Shares and Conversion
Shares have requested registration under this Section 2.04(a), each issued and
outstanding Conversion Share shall be counted as one share and each issued and
outstanding Preferred Share shall be counted as the number of Conversion Shares
into which such Preferred Share is convertible on the date of such request.
(b) Promptly following receipt of any request that complies
with the requirements of Section 2.04(a), the Company shall immediately give
notice of such request to all other Holders of Preferred Shares and Conversion
Shares, and shall use its best efforts to register under the Securities Act, for
public sale in a firm commitment underwritten secondary offering, the number of
Registrable Securities or Conversion Shares specified in the initial request and
in any requests received within 20 days after the date of such notice from other
Holders of Preferred Shares or Conversion Shares. The Company shall have the
right to designate the managing underwriter of any such offering subject to the
consent of the Holders making such requests, which consent shall not be
unreasonably withheld.
(c) In the event that the Holders of a majority of the
outstanding Preferred Shares and Conversion Shares as to which registration of
Registrable Securities or Conversion Shares for sale in an underwritten
secondary offering has been requested pursuant to Section 2.04(a) hereof
determine for any reason not to proceed with such registration and offering at
any time before the registration statement has been declared effective by the
Commission, and such registration statement, if theretofore filed with the
Commission, is withdrawn with respect to the securities covered thereby, and
such Holders agree to bear their own expenses incurred in connection therewith
and (subject to Section 2.04(e)) to reimburse the Company for the reasonable
out-of-pocket expenses incurred by it attributable to the registration and
underwritten secondary offering of such Registrable Securities or Conversion
Shares, then the Holders of the Preferred Shares and Conversion Shares shall not
be deemed to have exercised
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their right to require the Company to register Registrable Securities or
Conversion Shares for sale in an underwritten secondary offering pursuant to
Section 2.04(a) hereof.
(d) The Company shall be entitled to include in any
registration statement referred to in this Section 2.04, for sale in the
underwritten offering, shares of Common Stock to be sold by the Company for its
own account, except as and to the extent that, in the opinion of the managing
underwriter, such inclusion would adversely affect the marketing of the shares
to be sold. Except as provided in this Section 2.04(d) or in Section 2.04(e),
the Company will not file with the Commission any other registration statement
with respect to its Common Stock, whether for its own account or that of other
stockholders, from the date of receipt of a notice from the requesting Holders
pursuant to Section 2.04(a) until the completion of the period of distribution
of the Shares contemplated thereby.
(e) The obligations of the Company under this Section 2.04 are
subject to the condition that the Company shall be entitled to postpone for up
to 90 days the filing of any registration statement otherwise required to be
prepared and filed by it pursuant to this Section 2.04 if (i) at the time it
receives requests for registration pursuant thereto, and for so long as the
Board of Directors of the Company determines, in its reasonable judgment, that
the filing of such registration statement and the offering of Registrable
Securities or Conversion Shares pursuant thereto would materially interfere with
any material financing, acquisition, corporate reorganization or other material
transaction by the Company, (ii) the Company promptly gives the Holders
requesting such registration written notice of such determination, and (iii) all
other similarly situated shareholders shall also be subject to the same
suspension. If the Company shall so postpone the filing of a registration
statement, the Holders requesting such registration shall have the right to
withdraw the requests for registration by giving written notice to the Company
within thirty days after receipt of the Company's notice of postponement and, in
the event of such withdrawal, such requests shall not be counted as being
requests for the registration statement that the Company is obligated to
prepare, file and cause to become effective pursuant to this Section 2.04, nor
shall the Holders be required to reimburse the Company for out-of-pocket
expenses incurred by it attributable to the registration of such Conversion
Shares.
ARTICLE III
REGISTRATION PROCEDURES
3.01 Company Obligations. Following the Closing, the Company will:
(a) furnish to the Holders, prior to the filing of a
registration statement pertaining to any Shares (each a "Registration
Statement") or any prospectus, amendment or supplement thereto, copies of each
such Registration Statement as proposed to be filed, which documents will be
subject to the reasonable review and comments of the Holders (and their
respective attorneys), and the Company will not file any such Registration
Statement, any
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<PAGE> 8
prospectus or any amendment or supplement thereto (or any such documents
incorporated by reference) to which the Holders shall reasonably object in
writing; and thereafter furnish to the Holders such number of copies of such
Registration Statement, each amendment and supplement thereto (including any
exhibits thereto), the prospectus included in such Registration Statement
(including each preliminary prospectus) and such other documents as any Holder
may reasonably request in writing in order to facilitate the disposition of the
Shares registered pursuant to such Registration Statement; provided, however,
that the obligation of the Company to deliver copies of prospectuses or
preliminary prospectuses to any Holder shall be subject to the receipt by the
Company of reasonable assurances from such Holder that such Holder will comply
with the applicable provisions of the Securities Act and of such other
securities or blue sky laws as may be applicable in connection with any use of
such prospectuses or preliminary prospectuses;
(b) use its best efforts to register or qualify the Shares
registered pursuant to such Registration Statement under such other securities
or blue sky laws of such jurisdictions as a Holder may reasonably request and do
any and all other acts and things which may be reasonably necessary to enable
the Holder to consummate the disposition in such jurisdictions of such Shares;
provided, however, that the Company will not be required to (i) qualify
generally to do business in any jurisdiction where it would not otherwise be
required to qualify but for this subsection, (ii) subject itself to taxation in
any such jurisdiction, or (iii) consent to general service of process in any
such jurisdiction;
(c) apply, prior to or concurrently with the filing of the
Registration Statements, to the Nasdaq National Market System (or, if the
Company is not listed on the Nasdaq National Market System, any other exchange
on which the Company's Common Stock is then listed) for the listing of the
Conversion Shares and use its best effort to obtain the listing of such stock;
(d) notify the Holders in writing at any time when a
prospectus relating to the Shares registered pursuant to such Registration
Statement is required to be delivered under the Securities Act, of the
occurrence of an event requiring the preparation of a supplement or amendment to
such prospectus or filing of a report incorporated in the prospectus by
reference so that, as thereafter delivered to the purchasers of such Shares,
such prospectus (including documents incorporated therein by reference) will not
contain an untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading and promptly prepare, file with the Commission and make available
to the Holders any such supplement, amendment or report incorporated in the
prospectus by reference, including, without limitation, after any period
referred to in Section 2.01(c) or 2.02(d);
(e) make available for inspection by the Holders of Shares to
be registered pursuant to a Registration Statement and any attorney, accountant
or other professional retained thereby (collectively, the "Inspectors"), all
financial and other records, pertinent corporate documents and properties of the
Company (collectively, the "Records") as shall be
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<PAGE> 9
reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers, directors and employees to
supply all information reasonably requested by any such Inspectors in connection
with such Registration Statement; provided, that the Company shall not be
required to make such information available to more than one law firm on behalf
of all Holders of Shares to be registered pursuant to a Registration Statement.
Records that the Company determines, in good faith, to be confidential and which
it notifies the Inspectors in writing are confidential shall not be disclosed by
the Inspectors unless (i) in the judgment of counsel to the Company the
disclosure of such Records is necessary to avoid or correct a misstatement or
omission in such Registration Statement, (ii) the release of such Records is
ordered pursuant to a subpoena or other order from a court of competent
jurisdiction, or (iii) the information in such Records is generally available to
the public. As a condition of receiving access to such confidential information
described in clause (i) or (ii) of the preceding sentence, the Holders of such
Shares shall agree that such confidential information obtained by them as a
result of such inspections shall be deemed confidential and shall not be used by
them as the basis for any market transactions in the securities of the Company
unless and until such information is made generally available to the public, it
being understood that nothing in this sentence shall reduce the Company's
obligations hereunder, including under Section 3.01(d). Each Holder
further shall agree that it will, upon learning that disclosure of such Records
from such Holder is sought in a court of competent jurisdiction, give notice to
the Company and allow the Company, at its expense, to undertake appropriate
action to prevent disclosure of the Records deemed confidential;
(f) obtain consents from its independent public accountants in
customary form as required to obtain and maintain effectiveness of the
registration statement and, in connection with its obligations under Section
2.04, obtain a "cold comfort" letter from such accountants in customary form;
(g) obtain an opinion or opinions from its counsel in
customary form and reasonably satisfactory to the Holders and their respective
legal counsel and, in an underwritten offering, to the underwriters and their
legal counsel;
(h) make generally available to the Holders earnings
statements, which need not be audited, satisfying the provisions of Section
11(a) of the Securities Act no later than forty-five days after the end of the
twelve-month period beginning with the first month of the first fiscal quarter
commencing after the effective date of a Registration Statement, which earnings
statements shall cover said twelve-month period;
(i) in an underwritten offering, make available its management
personnel for meetings with potential purchasers or "road shows" for a period of
not more than seven consecutive business days;
(j) promptly notify each Holder of the issuance or threatened
issuance of any stop order or other order suspending the effectiveness of a
Registration Statement or
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<PAGE> 10
preventing or suspending the use of any preliminary prospectus, prospectus or
prospectus supplement, use reasonable efforts to prevent the issuance of any
such threatened stop order or other order, and, if any such order is issued, use
its best efforts to obtain the lifting or withdrawal of such order at the
earliest possible moment and promptly notify each Holder of any such lifting or
withdrawal;
(k) if requested by any Holder, the Company will promptly
incorporate in a prospectus supplement or post-effective amendment to a
Registration Statement such information concerning such Holder and such Holder's
intended method of distribution as such Holder requests to be included therein
(and which is not violative of an applicable law, rule or regulation, in the
reasonable judgment of the Company, after consultation with its outside legal
counsel), including, without limitation, with respect to any change in the
intended method of distribution, the amount or kind of Shares being offered by
such Holder, the offering price for such Shares or any other terms of the
offering or distribution of the Shares, and the Company will make all required
filings of such prospectus supplement or post-effective amendment as soon as
possible after being notified of the matters to be incorporated in such
prospectus supplement or post-effective amendment;
(l) as promptly as practicable after the filing with the SEC
of any document which is incorporated by reference into a registration
statement, notify each Holder of such filing and deliver a copy of such document
to each Holder;
(m) cooperate with the Holders to facilitate the timely
preparation and delivery of certificates, not bearing any restrictive legends,
unless otherwise required by the Holders, representing the Shares to be sold
under the Registration Statement, and enable such Shares to be in such
denominations and registered in such names as such Holders may request;
(n) cooperate with the Holders, their respective legal counsel
and any other interested party (including any interested broker-dealer) in
making any filings or submissions required to be made, and the furnishing of all
appropriate information in connection therewith, with the NASD;
(o) cause its subsidiaries to take all action necessary to
effect the registration of the Shares contemplated hereby, including preparing
and filing any required financial or other information;
(p) make available to the transfer agent for each class or
series of Shares a supply of certificates or other instruments evidencing or
constituting such Shares which shall be in a form complying with the
requirements of such transfer agent, promptly after a registration thereof; and
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<PAGE> 11
(q) use its best efforts to keep each such registration or
qualification effective, including through new filings, amendments or renewals,
during the period the Registration Statement is required to be kept effective
and do any and all other acts or things reasonably necessary or advisable in
connection with such registration or qualifications in all jurisdictions in
which qualification or registration is necessary.
3.02 Information from Holders. The Company may require the Holders
to promptly furnish in writing to the Company such information regarding the
distribution of the Shares as it may from time to time reasonably request and
such other information as may be legally required in connection with such
registration.
3.03 Suspension of Sales. The Holders agree that, upon receipt of
any notice from the Company of the happening of any event of the kind described
in subsection 3.01(d) hereof, they will immediately discontinue disposition of
Shares pursuant to a Registration Statement until they receive copies of the
supplemented or amended prospectus contemplated by subsection 3.01(d) hereof,
and, if so directed by the Company, the Holders will deliver to the Company all
copies, other than permanent file copies then in their possession, of the most
recent prospectus (including any prospectus supplement) covering such Shares at
the time of receipt of such notice or destroy all such copies.
ARTICLE IV
REGISTRATION EXPENSES
4.01 Except as provided in Section 4.02, all fees and expenses
incident to the Company's performance of or compliance with this Agreement shall
be borne by the Company, including, without limitation, the following fees and
expenses: (a) all SEC, National Association of Securities Dealers, Inc., stock
exchange or other registration and filing fees and listing fees; (b) the fees
and expenses of the Company's compliance with securities or blue sky laws
(including reasonable fees and disbursements of counsel in connection with blue
sky qualifications of the Shares); (c) printing expenses; (d) the fees and
disbursements of counsel for the Company and of one counsel for the applicable
Holders for each registration, and the fees and expenses for independent
certified public accountants and other persons retained by the Company in
connection with such registration; (e) fees of transfer agents and registrars;
and (f) messenger and delivery expenses. In addition, the Company shall pay its
internal expenses (including, without limitation, all salaries and expenses of
its officers and employees performing legal or accounting duties), the expense
of any annual audit or quarterly review, the expense of any liability insurance
obtained by the Company, and the expenses and fees for listing or authorizing
for quotation the securities to be registered on each securities exchange on
which any shares of the Common Stock are then listed or quoted.
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<PAGE> 12
4.02 The Holders shall pay all underwriting discounts and
commissions and all of their internal expenses incurred in connection with the
registration (including, without limitation, all salaries and expenses of
Holders' officers and employees performing legal or accounting duties). In
connection with an underwritten offering pursuant to Section 2.04, the Holders
and the Company shall share equally the expenses identified in the first
sentence of Section 4.01 (but not the expenses identified in the second sentence
of 4.01) as well as any other expenses of the offering (except as set forth in
the preceding sentence), including, without limitation, any annual audit,
special audit, if necessary, and "cold comfort" letters required by or incident
to the performance of any agreement with the underwriter
ARTICLE V
INDEMNIFICATION; CONTRIBUTION
5.01 Indemnification by the Company. The Company agrees to
indemnify and hold harmless each Holder, each of such Holder's officers,
directors, partners and members, and each of such Holder's legal counsel and
independent accountants, if any, and each person controlling any such persons
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, with respect to which registration, qualification or compliance
has been effected pursuant to this Agreement, and each underwriter, if any, and
each person who controls any underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages, liabilities and expenses (including reasonable costs of
investigation, any legal and any other expenses reasonably incurred in
connection with investigating, preparing or defending any such claim, loss,
damage, liability or action, and any of the foregoing incurred in settlement of
any litigation, commenced or threatened) arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in a
Registration Statement or prospectus contained therein or in any amendment or
supplement thereto or in any preliminary prospectus, or arising out of or based
upon any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
or any violation by the Company of any rule or regulation promulgated under the
Securities Act or any state securities laws applicable to the Company and
relating to action or inaction by the Company in connection with any
registration, qualification or compliance required hereunder or arising out of
or based upon the Company's breach of any representation, warranty, covenant or
agreement contained in this Agreement; provided, however, that the Company shall
not be liable in any such case to the extent any of such losses, claims,
damages, liabilities or expenses arise out of, or are based upon, any such
untrue statement or omission or allegation thereof based upon information
furnished in writing to the Company by such Holder expressly for use therein.
5.02 Indemnification by Holders. McCaw agrees, and each other
Holder that is not a signatory to this Agreement agrees by exercising any of its
rights hereunder, severally to indemnify and hold harmless the Company, its
directors and officers and each person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or
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<PAGE> 13
Section 20 of the Exchange Act and each underwriter, if any, and each person who
controls any underwriter within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act to the same extent as the foregoing indemnity
from the Company set forth above in (a), but only with respect to information
furnished in writing by such Holder, or on its behalf expressly for use in the
Registration Statement or prospectus relating to the Shares, any amendment or
supplement thereto or any preliminary prospectus, under the heading "Selling
Shareholders" and "Distribution" and provided that the obligation of each Holder
to indemnify will be several and not joint. In case any action or proceeding
shall be brought against the Company or its directors or officers, any such
controlling person, or any such underwriter or controlling person of an
underwriter in respect of which indemnity may be sought against the Holder, the
Holder shall have the rights and duties given to the Company, and the Company or
its directors or officers or such controlling person or any such underwriter or
controlling person of an underwriter shall have the rights and duties given to
the Holder, by the preceding Section 5.01 hereof.
5.03 Conduct of Indemnification Proceedings. If any action or
proceeding (including any governmental investigation) shall be brought or
asserted against any person entitled to indemnification under Section 5.01 or
5.02 above (an "Indemnified Party") in respect of which indemnity may be sought
from any party who has agreed to provide such indemnification (an "Indemnifying
Party"), the Indemnifying Party shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to such Indemnified Party, and
shall assume the payment of all expenses. Such Indemnified Party shall have the
right to employ separate counsel in any such action and to participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Party unless (a) the Indemnifying Party has agreed
to pay such fees and expenses, or (b) such Indemnified Party shall have been
advised by counsel that there is an actual or potential conflict of interest on
the part of counsel employed by the Indemnifying Party to represent such
Indemnified Party (in which case, if such Indemnified Party notifies the
Indemnifying Party in writing that Indemnified Party elects to employ separate
counsel at the expense of the Indemnifying Party, the Indemnifying Party shall
not have the right to assume the defense of such action or proceeding on behalf
of such Indemnified Party; it being understood, however, that the Indemnifying
Party shall not, in connection with any one cause of action or proceeding or
separate but substantially similar or related actions or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys
(together with appropriate local counsel) at any time for all such Indemnified
Parties, which firm shall be designated in writing by such Indemnified Parties
unless there shall be conflicts of interest among such Indemnified Parties, in
which case the Indemnifying Party shall be liable for the fees and expenses of
additional counsel). The Indemnifying Party shall not be liable for any
settlement of any such action or proceeding or any threatened action or
proceeding effected without its written consent, which consent shall not be
unreasonably withheld, but if settled with its written consent or if there be a
final judgment of the plaintiff in any such action or proceedings, the
Indemnifying Party shall indemnify and hold harmless such Indemnified Parties
from and against any loss or liability (to the extent stated above) by reason of
such settlement or judgment. The failure of any Indemnified Party to give prompt
notice of a claim for
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<PAGE> 14
indemnification hereunder shall not limit the Indemnifying Party's obligations
to indemnify under this Agreement, except to the extent such failure is
prejudicial to the ability of the Indemnifying Party to defend the action. No
Indemnifying Party, in the defense of any such claim or litigation, shall,
except with the consent of each Indemnified Party, consent to entry of any
judgment or enter into any settlement unless (x) there is no finding or
admission of any violation of any rights of any Person and no effect on any
other claims that be made against any Indemnified Party, (y) the sole relief
provided is monetary damages that are paid in full by the Indemnifying Party and
(z) such judgment or settlement includes as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release from
all liability in respect of such claim or litigation.
5.04 Contribution. If the indemnification provided for in this
Article V is unavailable to the Indemnified Parties in respect of any losses,
claims, damages, liabilities or judgment referred to herein, then such
Indemnifying Party, in lieu of Indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such losses, claims, damages, liabilities and judgments in the following
manner: as between the Company on the one hand and any Indemnified Party
entitled to indemnification under Section 5.01 on the other, in such proportion
as is appropriate to reflect the relative fault of the Company on the one hand
and any Indemnified Party entitled to indemnification under Section 5.02 on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative fault of the Company on the one hand and
of any Indemnified Party entitled to indemnification under Section 5.02 on the
other shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by such party,
and the party's relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. No person guilty
of fraudulent misrepresentation (within the means of subsection 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
5.05 Survival. The indemnity and contribution agreements contained
in this Article V shall remain operative and in full force and effect with
respect to any sales of Shares made pursuant to a registration statement filed
pursuant to this Agreement regardless of (a) any termination of this Agreement,
(b) any investigation made by or on behalf of any Indemnified Party or by or on
behalf of the Company, and (c) the consummation of the sale or successive resale
of the Shares.
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ARTICLE VI
MISCELLANEOUS
6.01 Rules 144 and 144A. The Company covenants that following the
registration of Shares it will file any reports required to be filed by it under
the Securities Act and the Exchange Act so as to enable Holders holding
registered Shares to sell such Shares without registration under the Securities
Act within the limitation of the exemptions provided by (a) Rules 144 and 144A
under the Securities Act, as each such Rule may be amended from time to time, or
(b) any similar rule or rules hereafter adopted by the SEC. Upon the request of
any such Holder, the Company will forthwith deliver to such Holder a written
statement as to whether it has complied with such requirements.
6.02 Amendments and Waivers. The provision of this Agreement may
not be amended, modified or supplemented, and waivers or consents to departures
from the provisions hereof may not be given other than as mutually agreed upon
in writing by the Company and the Holders of each of (i) 75% of the Registrable
Securities and (ii) 75% of the Conversion Shares.
6.03 Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, regular mail,
registered first-class mail, confirmed facsimile or recognized express courier
service by next business day delivery;
(i) if to the Company:
Metrocall, Inc.
6677 Richmond Highway
Alexandria, Virginia 22306
Attn: Chief Financial Officer
Fax Number: (703) 768-9625
with a copy to:
Wilmer, Cutler & Pickering
2445 M Street, N.W.
Washington, D.C. 20037-1420
Attn: Thomas W. White, Esq.
Fax Number: (202) 663-6363
(ii) if to any Holder, to its address appearing on the
stock records of the Company.
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Notices shall be deemed given on the day on which delivered by hand or
facsimile, if delivered by 5:00 p.m. Eastern time; on the fifth business day
after mailing if delivered by mail; or the business day after delivery to an
overnight air courier if next-day delivery is specified.
6.04 Successors and Assigns. No Holder may assign any rights or
benefits under this Agreement except as provided in this Section 6.04. A Holder
may assign to any transferee without the Company's consent such Holder's rights
and benefits with respect to Preferred Shares or Conversion Shares. A transferee
that executes and delivers to the Company an agreement pursuant to which it
becomes bound by the terms of this Agreement shall retain the rights and
benefits of the transferor under this Agreement. The Company shall not assign
any rights, benefits or obligations under this Agreement without prior written
consent of the Holders of a majority of each of (i) the Registrable Securities
and (ii) the Conversion Shares provided, however, that the Company shall assign
its rights, benefits and obligations to any person the Company is merged with or
consolidated into or to any person to whom the Company sells substantially all
of its assets. This Agreement shall inure to the benefit of and be binding upon
the permitted successors and assigns of the Company, McCaw and the other
Holders.
6.05 Counterparts. This Agreement may be executed in a number of
identical counterparts and it shall not be necessary for the Company and McCaw
to execute each of such counterparts, but when each has executed and delivered
one or more of such counterparts, the several parts, when taken together, shall
be deemed to constitute one and the same instrument, enforceable against each in
accordance with its terms. In making proof of this Agreement, it shall not be
necessary to produce or account for more than one such counterpart executed by
the party against whom enforcement of this Agreement is sought.
6.06 Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
6.07 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OR CHOICE OF LAW.
6.08 Severability. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or further laws effective during
the term of this Agreement, such provision shall be fully severable; this
Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part of this Agreement; and the
remaining provisions of this Agreement shall remain in full force and effect and
shall not be affected by the illegal, invalid or unenforceable provision or by
its severance from this Agreement.
6.09 Entire Agreement. This Agreement and the Stock Purchase
Agreement (including exhibits thereto) are intended by the Company and McCaw as
the final expression of
- 16 -
<PAGE> 17
their agreement and are intended to be a complete and exclusive statement of
their agreement and understanding in respect of the subject matter contained
herein. This Agreement supersedes all prior agreements and understandings
between the Company and McCaw with respect to such subject matter.
6.10 Third Party Beneficiaries. Other than Indemnified Parties not
a party hereto, this Agreement is intended for the benefit of the Company, McCaw
and their respective successors and permitted assigns and is not for the benefit
of, nor may any provision hereof be enforced by, any other person or entity.
6.11 Obligations Several; Independent Nature of Each Holder's
Rights. Each obligation of any Holder is several and no such Holder shall be
responsible for the obligations of any other Holder. Nothing contained herein,
and no action taken by any such Holder pursuant hereto, shall be deemed to
constitute such Holders as a partnership, an association, a joint venture or any
other kind of entity. Each Holder shall be entitled to protect and enforce its
rights arising out of this Agreement without notice to or the consent of any
other person and it shall not be necessary for any other such Holder to be
joined as an additional party in any proceeding for such purpose.
6.12 Nonwaiver. No course of dealing or any delay or failure to
exercise any right, power or remedy hereunder on the part of the Holder shall
operate as a waiver of or otherwise prejudice such Holder's rights, powers or
remedies.
6.13 Remedies. The Company acknowledges that the remedies at law of
the Holder in the event of any default or threatened default by the Company in
the performance of or compliance with any of the terms of this Agreement are not
and will not be adequate and that, to the fullest extent permitted by law, such
terms may be specifically enforced by a decree for the specific performance of
any agreement contained herein or by an injunction against a violation of any of
the terms hereof or otherwise without requiring such Holder to post any bond or
other security, unless otherwise required by applicable law (which cannot be
waived by the Company).
[Execution page following]
- 17 -
<PAGE> 18
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
METROCALL, INC.
By: /s/ Steven D. Jacoby
------------------------------------------
Name: Steven D. Jacoby
Title: Executive Vice President & Chief Operating
Officer
MCCAW COMMUNICATIONS COMPANIES, INC.
By: /s/ Mary Hawkins Key
------------------------------------------
Name: Mary Hawkins Key
Title: V.P.
- 18 -
<PAGE> 1
EXHIBIT 10.2
EXECUTION COPY
10/02/98
THIRD
AMENDED AND RESTATED LOAN AGREEMENT
among
METROCALL, INC.,
the "Borrower";
The Financial Institutions Signatory Hereto;
with
NATIONSBANK, N.A. and FIRST UNION NATIONAL BANK,
as "Documentation Agents";
TORONTO DOMINION (TEXAS), INC., BANKBOSTON, N.A.,
NATIONSBANK, N.A. and FIRST UNION NATIONAL BANK,
as "Managing Agents";
and
TORONTO DOMINION (TEXAS), INC.,
as "Administrative Agent" for the Banks
dated as of October 2, 1998
with TD SECURITIES (USA) INC., as "Lead Arranger" and "Book Manager"
and
BANCBOSTON ROBERTSON STEPHENS INC., as Syndication Agent
<PAGE> 2
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE 1 Definitions............................................................6
ARTICLE 2 Credit Facilities.....................................................28
Section 2.1 Commitments...........................................................28
Section 2.2 Manner of Borrowing and Disbursement..................................29
Section 2.3 Interest..............................................................32
Section 2.4 Commitment Fees.......................................................34
Section 2.5 Mandatory Commitment Reductions.......................................34
Section 2.6 Voluntary Commitment Reductions.......................................35
Section 2.7 Prepayments and Repayments............................................36
Section 2.8 Notes; Loan Accounts..................................................38
Section 2.9 Manner of Payment.....................................................38
Section 2.10 Reimbursement.........................................................40
Section 2.11 Pro Rata Treatment....................................................40
Section 2.12 Capital Adequacy......................................................41
Section 2.13 Bank Tax Forms........................................................41
ARTICLE 3 Conditions Precedent..................................................42
Section 3.1 Conditions Precedent to Effectiveness of Agreement....................42
Section 3.2 Conditions Precedent to Each Advance..................................44
ARTICLE 4 Representations and Warranties........................................45
Section 4.1 Representations and Warranties........................................45
Section 4.2 Survival of Representations and Warranties, etc.......................52
ARTICLE 5 General Covenants.....................................................52
Section 5.1 Preservation of Existence and Similar Matters.........................52
Section 5.2 Business; Compliance with Applicable Law..............................52
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; Loans........................................56
Section 5.10 Use of Proceeds.......................................................56
Section 5.11 Indemnity.............................................................56
Section 5.12 Interest Rate Hedging.................................................57
Section 5.13 Covenants Regarding Formation of Subsidiaries and Acquisitions........58
Section 5.14 Payment of Wages......................................................59
Section 5.15 Further Assurances....................................................59
Section 5.16 License Subs..........................................................59
ARTICLE 6 Information Covenants.................................................60
Section 6.1 Quarterly Financial Statements and Information........................60
Section 6.2 Annual Financial Statements and Information...........................60
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
Section 6.3 Performance Certificates..............................................61
Section 6.4 Copies of Other Reports...............................................61
Section 6.5 Notice of Litigation and Other Matters................................62
ARTICLE 7 Negative Covenants....................................................63
Section 7.1 Indebtedness of the Borrower and its Subsidiaries.....................63
Section 7.2 Limitation on Liens...................................................64
Section 7.3 Amendment and Waiver..................................................65
Section 7.4 Liquidation, Merger, or Disposition of Assets.........................65
Section 7.5 Limitation on Guaranties..............................................66
Section 7.6 Investments and Acquisitions..........................................67
Section 7.7 Restricted Payments and Purchases.....................................68
Section 7.8 Senior Leverage Ratio.................................................68
Section 7.9 Total Leverage Ratio..................................................69
Section 7.10 Annualized Operating Cash Flow to Pro Forma Debt Service
Ratio.................................................................69
Section 7.11 Total Sources to Total Uses Ratio.....................................69
Section 7.12 Operating Cash Flow to Net Cash Interest Expense Ratio................70
Section 7.13 Affiliate Transactions................................................70
Section 7.14 Real Estate...........................................................70
Section 7.15 ERISA Liabilities.....................................................71
Section 7.16 Unrestricted Subsidiaries.............................................71
Section 7.17 No Limitation on Upstream Dividends by Subsidiaries...................72
ARTICLE 8 Default...............................................................72
Section 8.1 Events of Default.....................................................72
Section 8.2 Remedies..............................................................75
Section 8.3 Payments Subsequent to Declaration of Event of Default................77
ARTICLE 9 The Agents............................................................78
Section 9.1 Appointment and Authorization.........................................78
Section 9.2 Interest Holders......................................................78
Section 9.3 Consultation with Counsel.............................................78
Section 9.4 Documents.............................................................79
Section 9.5 Administrative Agent and Affiliates...................................79
Section 9.6 Responsibility of the Administrative Agent............................79
Section 9.7 Security Documents....................................................79
Section 9.8 Action by the Administrative Agent....................................79
Section 9.9 Notice of Default or Event of Default.................................80
Section 9.10 Responsibility Disclaimed.............................................81
Section 9.11 Indemnification.......................................................81
Section 9.12 Credit Decision.......................................................82
Section 9.13 Successor Administrative Agent........................................82
Section 9.14 Delegation of Duties..................................................82
Section 9.15 Agents................................................................83
</TABLE>
- ii -
<PAGE> 4
<TABLE>
<S> <C> <C>
ARTICLE 10 Change in Circumstances Affecting Eurodollar Advances.................83
Section 10.1 Eurodollar Basis Determination Inadequate or Unfair...................83
Section 10.2 Illegality............................................................83
Section 10.3 Increased Costs.......................................................84
Section 10.4 Effect On Other Advances..............................................85
ARTICLE 11 Miscellaneous.........................................................86
Section 11.1 Notices...............................................................86
Section 11.2 Expenses..............................................................87
Section 11.3 Waivers...............................................................88
Section 11.4 Set-Off...............................................................88
Section 11.5 Assignment............................................................89
Section 11.6 Accounting Principles.................................................91
Section 11.7 Counterparts..........................................................91
Section 11.8 Governing Law.........................................................91
Section 11.9 Severability..........................................................91
Section 11.10 Interest..............................................................92
Section 11.11 Table of Contents and Headings........................................92
Section 11.12 Amendment and Waiver..................................................92
Section 11.13 Entire Agreement......................................................93
Section 11.14 Other Relationships...................................................93
Section 11.15 Directly or Indirectly................................................93
Section 11.16 Reliance on and Survival of Various Provisions........................93
Section 11.17 Senior Debt...........................................................93
Section 11.18 Obligations Several...................................................93
ARTICLE 12 Waiver of Jury Trial..................................................94
Section 12.1 Waiver of Jury Trial..................................................94
</TABLE>
- iii -
<PAGE> 5
EXHIBITS
<TABLE>
<S> <C> <C>
Exhibit A - Form of Borrower's Pledge Agreement
Exhibit B - Form of Borrower Security Agreement
Exhibit C - Form of Certificate of Financial Condition
Exhibit D-1 - Form of Facility A Note
Exhibit D-2 - Form of Facility B Note
Exhibit D-3 - Form of Facility C. Note
Exhibit E - Form of Request for Advance
Exhibit F - Form of Trademark Security Agreement
Exhibit G - Form of Use of Proceeds Letter
Exhibit H - Form of Borrower's Loan Certificate
Exhibit I - Form of Subsidiary Loan Certificate
Exhibit J - Form of Subsidiary Security Agreement
Exhibit K - Form of Subsidiary Guaranty
Exhibit L - Form of Subsidiary Pledge Agreement
Exhibit M - Form of Assignment and Assumption Agreement
</TABLE>
SCHEDULES
<TABLE>
<S> <C> <C>
Schedule 1 - Licenses
Schedule 2 - Purchase Money Security Interests as of Agreement Date
Schedule 3 - Lender Notice Addresses
Schedule 4 - Real Estate Partnerships
Schedule 5 - Subsidiaries
Schedule 6 - Exceptions to Representations and Warranties
Schedule 7 - License Subs
Schedule 8 - Litigation
Schedule 9 - Agreements with Affiliates
Schedule 10 - Indebtedness for Money Borrowed Outstanding After Agreement Date
Schedule 11 - Amendments and Waivers to Charter and Subordinated Debt
Documents
Schedule 12 - Proposed Real Estate Acquisition
</TABLE>
<PAGE> 6
THIRD AMENDED AND RESTATED LOAN AGREEMENT
THIS THIRD AMENDED AND RESTATED LOAN AGREEMENT made as of the 2nd day of
October, 1998, by and among METROCALL, INC., a Delaware corporation (the
"Borrower"), the financial institutions party hereto as Banks (together with any
financial institution which subsequently becomes a Bank hereunder the "Banks"),
NATIONSBANK, N.A. and FIRST UNION NATIONAL BANK, as Documentation Agents (in
such capacity, the "Documentation Agents"), TORONTO DOMINION (TEXAS), INC.,
BANKBOSTON, N.A., NATIONSBANK, N.A. and FIRST UNION NATIONAL BANK as Managing
Agents (in such capacity, the "Managing Agents") and TORONTO DOMINION (TEXAS),
INC., as Administrative Agent for the Banks (the "Administrative Agent").
W I T N E S S E T H:
WHEREAS, the Borrower, the Administrative Agent, and certain of the
Banks are all parties to that certain Second Amended and Restated Loan Agreement
dated as of October 21, 1997, as amended by that certain First Amendment to
Second Amended and Restated Loan Agreement dated as of July 15, 1998, and that
certain Second Amendment to Second Amended and Restated Loan Agreement dated as
of August 24, 1998 (collectively, the "Prior Loan Agreement"); and
WHEREAS, the Borrower has requested that the Administrative Agent and
the Banks consent to certain amendments to the Prior Loan Agreement, as more
fully set forth in this Third Amended and Restated Loan Agreement; and
WHEREAS, the Administrative Agent and the Banks have agreed to amend and
restate the Prior Loan Agreement in its entirety as set forth herein; and
WHEREAS, the Borrower acknowledges and agrees that the Security Interest
(as defined in the Prior Loan Agreement) granted to the Administrative Agent,
for itself and on behalf of the Banks pursuant to the Prior Loan Agreement and
the Loan Documents (as defined in the Prior Loan Agreement) executed in
connection therewith shall remain outstanding and in full force and effect in
accordance with the Prior Loan Agreement and shall continue to secure the
Obligations (as defined herein); and
WHEREAS, the Borrower acknowledges and agrees that (i) the Obligations
(as defined herein) represent, among other things, the amendment, restatement,
renewal, extension, consolidation and modification of the Obligations (as
defined in the Prior Loan Agreement) arising in connection with the Prior Loan
Agreement and the other Loan Documents (as defined in the Prior Loan Agreement)
executed in connection therewith; (ii) the parties hereto intend that the Prior
Loan Agreement and the other Loan Documents (as defined in the Prior Loan
Agreement) executed in connection therewith and the collateral pledged
thereunder shall secure, without interruption or impairment of any kind, all
existing Indebtedness under the Prior Loan
- 5 -
<PAGE> 7
Agreement and the other Loan Documents (as defined in the Prior Loan Agreement)
executed in connection therewith as so amended, restated, restructured, renewed,
extended, consolidated and modified hereunder, together with all other
Obligations hereunder; (iii) all Liens evidenced by the Prior Loan Agreement and
the other Loan Documents (as defined in the Prior Loan Agreement) executed in
connection therewith are hereby ratified, confirmed and continued; and (iv) the
Loan Documents (as defined herein) are intended to restructure, restate, renew,
extend, consolidate, amend and modify the Prior Loan Agreement and the other
Loan Documents (as defined in the Prior Loan Agreement) executed in connection
therewith; and
WHEREAS, the parties hereto intend that (i) the provisions of the Prior
Loan Agreement and the other Loan Documents (as defined in the Prior Loan
Agreement) executed in connection therewith, to the extent restructured,
restated, renewed, extended, consolidated, amended and modified hereby, are
hereby superseded and replaced by the provisions hereof and of the Loan
Documents (as defined herein): and (ii) the Notes (as hereinafter defined)
amend, renew, extend, modify, replace, are substituted for and supersede in
their entirety, but do not extinguish the indebtedness arising under, the
promissory notes issued pursuant to the Prior Loan Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by each of the parties hereto, the
parties hereby amend and restate the Prior Loan Agreement as follows:
ARTICLE 1
Definitions
For the purposes of this Agreement:
"A+ Indenture" shall mean that certain Indenture dated as of October 24,
1995 as modified by First Supplemental Indenture dated as of November 14, 1996
and Second Supplemental Indenture dated as of November 15, 1996 between the
Borrower (as successor to A+ Communications, Inc.) and IBJ Schroder Bank & Trust
Company, with respect to the 11-7/8% Senior Subordinated Notes Due 2005 of the
Borrower (as successor to A+ Network, Inc.).
"Acquisition" shall mean (whether by purchase, lease, exchange, issuance
of stock or other equity or debt securities, merger, reorganization or any other
method) (i) any acquisition by the Borrower or any of its Restricted
Subsidiaries of any other Person, which Person shall then become consolidated
with the Borrower or any such Restricted Subsidiary in accordance with GAAP, or
(ii) any acquisition by the Borrower or any of its Restricted Subsidiaries of
all or any substantial part of the assets of any other Person.
"Administrative Agent" shall mean Toronto Dominion (Texas), Inc., in its
capacity as Administrative Agent for the Banks or any successor Administrative
Agent appointed pursuant to Section 9.13 of this Agreement.
- 6 -
<PAGE> 8
"Administrative Agent's Office" shall mean the office of the
Administrative Agent located at 909 Fannin, Suite 900, Houston, Texas 77010, 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 Article 2 hereof on the occasion of any borrowing and having the
same Interest Rate Basis and Interest Period; 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 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 Third Amended and Restated Loan Agreement,
together with all Exhibits and Schedules hereto.
"Agreement Date" shall mean the date as of which this Agreement is
dated.
"Annualized Operating Cash Flow" shall mean, as of any date, the product
of (a) Operating Cash Flow for the most recently completed fiscal quarter, times
(b) four (4).
"Applicable Law" shall mean, in respect of any Person, all provisions of
constitutions, statutes, rules, regulations and orders of governmental bodies or
regulatory agencies applicable to such Person, including, without limiting the
foregoing, the Licenses, the Communications Act and all Environmental Laws, 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 margin applicable to
Base Rate Advances and Eurodollar Advances, as the case may be, in each case
determined in accordance with Section 2.3(f) hereof.
"Asset Disposition" shall mean any transfer, conveyance, sale, lease or
other disposition by the Borrower or any of the Restricted Subsidiaries
(including a consolidation or merger or other sale of any such Restricted
Subsidiary with, into or to another Person in a transaction in which such
Subsidiary ceases to be a Subsidiary, but excluding a disposition by a
Restricted Subsidiary to the Borrower or a wholly-owned Restricted Subsidiary of
the Borrower or by the Borrower to a wholly-owned Restricted Subsidiary, and
excluding the creation of a Lien) of (i) shares of Capital Stock or other
ownership interests of a Restricted Subsidiary, (ii) substantially all of the
assets of the Borrower or any of the Restricted Subsidiaries representing a
division or line of business or (iii) other assets or rights of the Borrower or
any of the Restricted Subsidiaries outside of the ordinary course of business,
in any case where the
- 7 -
<PAGE> 9
consideration received by the Borrower or a Restricted Subsidiary or the fair
market value of the assets subject to such disposition exceeds $1,000,000.
"AT&T Acquisition" shall mean the acquisition of all of the stock of
McCaw RCC Communications, Inc. and a 50KHZ/50KHZ Narrowband Personal
Communications Service License from AT&T Two Way Messaging Communications, Inc.
pursuant to the AT&T Acquisition Agreement.
"AT&T Acquisition Agreement" shall mean that certain Stock Purchase
Agreement dated as of June 26, 1998 by and among the Borrower, AT&T Wireless
Services, Inc., McCaw Communications Companies, Inc. and AT&T Two Way Messaging
Communications, Inc.
"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.
"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.
"Base Rate" shall mean, at any time, the higher of (a) the rate of
interest adopted by The Toronto-Dominion Bank, New York Branch as its reference
rate for the determination of interest rates for loans of varying maturities in
United States dollars to United States residents of varying degrees of
creditworthiness and being quoted at such time by such bank as its "prime rate"
or "base rate," or (b) the Federal Funds Rate plus one-half of one percent
(1/2%) per annum. The Base Rate is not necessarily the lowest rate of interest
charged to borrowers of The Toronto- Dominion Bank, New York Branch.
"Base Rate Advance" shall mean an Advance which the Borrower requests to
be made as a Base Rate Advance or is reborrowed as a Base Rate Advance, in
accordance with the provisions of Section 2.2 hereof, and which shall be in a
principal amount of at least $1,000,000, and in an integral multiple of
$500,000.
"Base Rate Basis" shall mean a simple interest rate equal to the sum of
(i) the Base Rate and (ii) the Applicable Margin. The Base Rate Basis shall be
adjusted automatically as of the opening of business on the effective date of
each change in the Base Rate to account for such change, and shall also be
changed to reflect changes in the Applicable Margin.
"Board of Directors" when used with reference to the Borrower, shall
mean the Board of Directors of the Borrower, or the Executive Committee of the
Board of Directors of the Borrower.
"Borrower" shall mean Metrocall, Inc., a Delaware corporation.
- 8 -
<PAGE> 10
"Borrower's Pledge Agreements" shall mean, collectively, that certain
Amended and Restated Borrower's Pledge Agreement dated as of September 20, 1996,
that certain First Supplemental Borrower's Pledge Agreement dated as of November
15, 1996, and that certain Third Supplemental Borrower's Pledge Agreement dated
as of December 31, 1997, or any other similar agreement substantially in the
form of Exhibit A attached hereto, pursuant to which the Borrower has pledged to
the Administrative Agent, for itself and on behalf of the Banks, all of the
Borrower's Capital Stock ownership in any Restricted Subsidiaries existing on
the Agreement Date or formed or acquired by the Borrower after the Agreement
Date.
"Borrower Security Agreements" shall mean, collectively, that certain
Amended and Restated Borrower Security Agreement dated as of September 20, 1996
between the Borrower and the Administrative Agent, or any other similar
agreement substantially in the form of Exhibit B attached hereto.
"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
Houston, Texas, New York, New York and London, England, as relevant to the
determination to be made or the action to be taken.
"Capital Expenditures" shall mean, in respect of any Person,
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.
"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 lessee in accordance with GAAP.
"Cash Equivalents" shall mean investments in (i) certificates of deposit
and other interest bearing deposits or accounts with U.S. commercial banks
having, or whose parent corporation has, a combined capital and surplus of at
least $300,000,000, which mature within one year from the date of investment,
(ii) 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 U.S.
government, which obligations mature within one year from the date of
investment, (iii) direct obligations issued by any U.S. state or political
subdivision thereof, which mature within one year from the date of investment
and have the highest rating obtainable from Standard & Poor's Corporation or
Moody's Investors Service on the date of investment, or (iv) commercial paper
which has the highest rating obtainable from Standard & Poor's Ratings Group, a
division of McGraw Hill, Inc., or any successor, or Moody's Investors Service,
or any successor, on the date of investment.
"Certificate of Financial Condition" shall mean a certificate,
substantially in the form of
- 9 -
<PAGE> 11
Exhibit C attached hereto, signed by the chief financial officer of the
Borrower, together with any schedules, exhibits or annexes appended thereto.
"Change in Control Event" shall mean the occurrence of any of the
following events or the existence of any of the following conditions: (i) a
person or entity or group (as that term is used in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended) of persons or entities shall have
become the beneficial owner of a majority (by voting power or otherwise) of the
securities of the Borrower ordinarily having the right to vote in the election
of directors, (ii) during any consecutive three-year period commencing on or
after September 27, 1995, individuals who at the beginning of such period
constituted the Board of Directors of the Borrower (together with any directors
who are members of such Board of Directors of the Borrower on September 27, 1995
and any new directors whose election by such Board of Directors of the Borrower
or whose nomination for election by the stockholders of the Borrower was
approved by a vote of 66-2/3% of the directors then still in office who were
either directors at the beginning of such period or whose election or nomination
for election was previously so approved) cease for any reason to constitute a
majority of the Board of Directors of the Borrower then in office, (iii) any
sale, lease, exchange or other transfer (in one transaction or a series of
related transactions) of all, or substantially all, the assets of the Borrower
to any person or entity or group (as defined above in this definition) of
persons or entities (other than any wholly owned Subsidiary of the Borrower),
(iv) the merger or consolidation of the Borrower with or into another
corporation or the merger of another corporation into the Borrower with the
effect that immediately after such transaction any person or entity or group (as
defined above in this definition) of persons or entities shall have become the
beneficial owner of securities of the surviving corporation of such merger or
consolidation representing a majority of the combined voting power of the
outstanding securities of the surviving corporation ordinarily having the right
to vote in the election of directors, (v) the adoption of a plan leading to the
liquidation or dissolution of the Borrower or (vi) or any "change of control" or
"change of control event," however designated or denominated, shall have been
deemed to have occurred under any agreement of the Borrower or any of its
Subsidiaries having an aggregate economic value to such Person exceeding
$5,000,000.
"Co-Agents" shall mean, collectively, Fleet National Bank, Royal Bank of
Canada and PNC Bank, National Association.
"COBRA" shall mean the Consolidated Omnibus Budget Reconciliation Act of
1985 and any amendments thereto.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral" shall mean any property of any kind constituting collateral
for the Obligations under any of the Loan Documents.
"Commitment Ratio" shall mean, with respect to any Bank for any
Commitment, the percentage equivalent of the ratio which such Bank's portion of
such Commitment bears to the
- 10 -
<PAGE> 12
aggregate amount of such Commitment (as each may be adjusted from time to time
as provided herein); and 'Commitment Ratios' shall mean, with respect to any
Commitment, the Commitment Ratios of all of the Banks with respect to such
Commitment. As of the Agreement Date, the Commitment Ratios of the Banks party
to this Agreement are as follows:
<TABLE>
<CAPTION>
Facility A Facility A Facility B Facility B Facility C Facility C Total Dollar
Banks Commitment Commitment Commitment Commitment Commitment Commitment Commitment
Ratio Ratio Ratio
<S> <C> <C> <C> <C> <C> <C> <C>
Toronto $17,833,041.76 10.1903095686% $12,737,886.97 10.1903095686% $20,000,000.00 20.00% $50,570,928.73
Dominion
(Texas), Inc.
BankBoston, $14,916,375.06 8.5236428914% $654,553.64 0.5236429120% $20,000,000.00 20.00% $35,570,928.70
N.A.
First Union $17,333,479.13 9.9048452143% $17,381,056.52 5.9048452143% $20,000,000.00 20.00% $44,714,535.65
National Bank
(formerly
known as First
Union National
Bank of North
Carolina)
Fleet National $17,333,479.13 9.9048452143% $2,381,056.52 1.9048452160% $ 0.00 0% $19,714,535.65
Bank
Royal Bank of $17,333,479.13 9.9048452143% $0.00 0% $ 0.00 0% $17,333,479.13
Canada
PNC Bank, $12,500,000.00 7.1428571429% $ 8,928,571.43 7.1428571429% $ 0.00 0% $21,428,571.43
National
Association
NationsBank, $17,333,479.13 9.9048452184% $12,381,056.51 9.9048452080% $20,000,000.00 20.00% $49,714,535.64
N.A.
Riggs Bank $10,416,666.68 5.9523809520% $ 7,440,476.19 5.9538809520% $ 0.00 0% $17,857,142.87
N.A.
SunTrust $7,500,000.01 4.2857142889% $ 5,357,142.86 4.2857142889% $ 0.00 0% $12,857,142.87
Bank, Central
Florida,
National
Association
Van Kampen $17,500,000.00 10.0000000000% $12,500,000.00 10.0000000000% $ 0.00 0% $30,000,000.00
American
Prime Rate
Income Trust
Finova Capital $17,500,000.00 10.0000000000% $12,500,000.00 10.000000000% $5,000,000.00 5.00% $35,000,000.00
Corporation
</TABLE>
- 11 -
<PAGE> 13
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Commercial $ 2,500,000.00 1.4285714311% $24,166,770.80 19.3334166400% $ 0.00 0% $26,666,770.80
Loan Funding
Trust I
Debt $0.00 0% $10,000,000.00 8.00000000% $ 0.00 0% $10,000,000.00
Strategies
Fund II, Inc.
Van Kampen $ 5,000,000.00 2.8571428570% $ 3,571,428.51 2.85714856% $ 0.00 0% $ 8,571,428.51
American
Capital Senior
Income Trust
KZH-CNC $ 0.00 0% $ 5,000,000.00 4.00% $ 0.00 0% $ 5,000,000.00
LLC
Morgan $ 0.00 0% $ 0.0% 0% $15,000,000.00 15.00% $15,000,000.00
Stanley Senior
Funding, Inc.
TOTALS: $175,000,000.00 100% $125,000,000.00 100% $100,000,000.00 100% $400,000,000.00
</TABLE>
"Commitments" shall mean, collectively, the Facility A Commitment, the
Facility B Commitment, and the Facility C Commitment.
"Common Stock" shall mean, in respect of any Person, Capital Stock of
such Person that does not rank prior, as to the payment of dividends or as to
the distribution of assets upon any voluntary or involuntary liquidation,
dissolution or winding up of such Person, to shares of Capital Stock of any
other class of such Person.
"Communications Act" shall mean the Communications Act of 1934, and any
similar or successor federal statute, and the rules and regulations of the FCC
thereunder, all as the same may be in effect from time to time.
"Default" shall mean any Event of Default, and any of the events
specified in Section 8.1, 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 Base Rate, plus (b) the Applicable Margin for Base Rate Advances,
plus (c) two percent (2%).
"Documentation Agents" shall mean, collectively, NationsBank, N.A. and
First Union National Bank.
"Employee Pension Plan" shall mean any Plan which (a) is maintained by
the Borrower, any of its Subsidiaries or any ERISA Affiliate and (b) is subject
to Part 3 of Title I of ERISA.
"Environmental Laws" shall mean all applicable federal, state or local
laws, statutes, rules, regulations or ordinances, codes, common law, consent
agreements, orders, decrees,
- 12 -
<PAGE> 14
judgments or injunctions issued, promulgated, approved or entered thereunder
relating to public health, safety or the pollution or protection of the
environment, including, without limitation, those relating to releases,
discharges, emissions, spills, leaching, or disposals to air, water, land or
ground water, to the withdrawal or use of ground water, to the use, handling or
disposal of polychlorinated biphenyls, asbestos or urea formaldehyde, to the
treatment, storage, disposal or management of hazardous substances (including,
without limitation, petroleum, crude oil or any fraction thereof, or other
hydrocarbons), pollutants or contaminants, to exposure to toxic, hazardous or
other controlled, prohibited, or regulated substances, including, without
limitation, any such provisions under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (42 U.S.C. ss. 9601 et seq.),
or the Resource Conservation and Recovery Act of 1976, as amended (42 U.S.C. ss.
6901 et seq.).
"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 a member of any group of organizations
(within the meaning of Code Sections 414(b), 414(c), 414(m), or 414(o)) of which
the Borrower is a member.
"Eurodollar Advance" shall mean an Advance which the Borrower requests
to be made as a Eurodollar Advance or which is reborrowed as a Eurodollar
Advance, in accordance with the provisions of Section 2.2 hereof, and which
shall be in a principal amount of at least $1,000,000 and in an integral
multiple of $500,000.
"Eurodollar Basis" shall mean a simple per annum interest rate (rounded
upward, if necessary, to the nearest one-hundredth (1/100th) of one percent)
equal to the sum of (a) the quotient of (i) the Eurodollar Rate divided by (ii)
one minus the Eurodollar Reserve Percentage, if any, stated as a decimal, plus
(b) the Applicable Margin. The Eurodollar Basis shall apply to Interest Periods
of one (1), two (2), three (3), six (6), and twelve (12) months, and, once
determined, shall remain unchanged during the applicable Interest Period, except
for changes to reflect adjustments in the Eurodollar Reserve Percentage and the
Applicable Margin as adjusted pursuant to Section 2.3(f) hereof. The Eurodollar
Basis for any Eurodollar Advance shall be adjusted as of the effective date of
any change in the Eurodollar Reserve Percentage. The Borrower may not elect an
Interest Period in excess of six (6) months unless the Administrative Agent has
notified the Borrower that each of the Banks has funds available to it for such
Bank's portion of the proposed Advance which are not required for other
purposes, and that such funds are available to each Bank at a rate (exclusive of
reserves and other adjustments) at or below the Eurodollar Rate for such
proposed Advance and Interest Period.
"Eurodollar Rate" shall mean, for any Interest Period, the average of
the interest rates per annum at which deposits in United States Dollars for such
Interest Period are offered to The Toronto-Dominion Bank, New York Branch in the
Eurodollar market at approximately 11:00 a.m. (New York time) two (2) Business
Days before the first day of such Interest Period, in
- 13 -
<PAGE> 15
an amount approximately equal to the principal amount of, and for a length of
time approximately equal to the Interest Period for, the Eurodollar Advance
sought by the Borrower.
"Eurodollar Reserve Percentage" shall mean the percentage which is in
effect from time to time under Regulation D of the Board of Governors of the
Federal Reserve System, as such regulation may be amended from time to time, as
the maximum reserve requirement applicable with respect to Eurocurrency
Liabilities (as that term is defined in Regulation D), whether or not any Bank
has any such Eurocurrency Liabilities subject to such reserve requirement at
that time.
"Event of Default" shall mean any of the events specified in Section
8.1, provided that any requirement for notice or lapse of time has been
satisfied.
"Excess Cash Flow" shall mean, with respect to the Borrower and the
Restricted Subsidiaries on a consolidated basis, as of the end of the second
(2nd) and fourth (4th) fiscal quarters of the Borrower based on the quarterly
financial statements required to be provided under Section 6.1 hereof with
respect to such relevant quarters, the remainder of (a) Operating Cash Flow for
the two (2) most recently completed fiscal quarters, minus (b) the sum of the
following: (i) Capital Expenditures made by such Persons during such fiscal
quarters; (ii) income taxes estimated to be payable in cash by such Persons for
such fiscal quarters; (iii) Net Cash Interest Expense incurred during such
fiscal quarters; (iv) scheduled principal payments made in respect of
Indebtedness for Money Borrowed paid by such Persons during such fiscal quarters
(including imputed principal payments with respect to Capitalized Lease
Obligations); and (v) Restricted Payments and Restricted Purchases made during
such quarters.
"Facility A Commitment" shall mean the several obligations of the Banks
to fund their respective portions of Loans to the Borrower in accordance with
their respective Commitment Ratios in an aggregate amount of up to $175,000,000
pursuant to the terms hereof and as such obligations may be reduced from time to
time pursuant to the terms hereof.
"Facility A Notes" shall mean, collectively, those certain promissory
notes in an aggregate original principal amount of $175,000,000, and issued to
each of the Banks by the Borrower with respect to the Facility A Commitment,
each one substantially in the form of Exhibit D-1 attached hereto, any other
promissory notes issued by the Borrower to evidence the Loans under the Facility
A Commitment, and any extensions, renewals or amendments to, or replacements of,
the foregoing.
"Facility B Commitment" shall mean, collectively, the several
obligations of the Banks which funded an aggregate amount of $125,000,000
pursuant to the Prior Loan Agreement as such obligations may be reduced from
time to time pursuant to the terms hereof.
- 14 -
<PAGE> 16
"Facility B Notes" shall mean, collectively, those certain promissory
notes in an aggregate original principal amount equal to the Facility B
Commitment, and issued to each of the Banks by the Borrower with respect to the
Facility B Commitment, each one substantially in the form of Exhibit D-2
attached hereto, any other promissory notes issued by the Borrower to evidence
the Loans under the Facility B Commitment, and any extensions, renewals, or
amendments to, or replacement of, the foregoing.
"Facility C Commitment" shall mean the several obligations of the Banks
to fund their respective portions of the Loans to the Borrower in accordance
with the Banks' respective Commitment Ratios in the aggregate amount of up to
$100,000,000 pursuant to the terms hereof and as such obligations may be reduced
from time to time pursuant to the terms hereof.
"Facility C Notes" shall mean, collectively, those certain promissory
notes in an aggregate original principal amount of $100,000,000, issued to the
Banks by the Borrower with respect to the Facility C Commitment, each one
substantially in the form of Exhibit N hereto, any other promissory notes issued
by the Borrower to evidence the Loans under the Facility C Commitment, and any
extensions, renewals or amendments to, or replacements of, the foregoing.
"FCC" shall mean the Federal Communications Commission, or any other
similar or successor agency of the federal government administering the
Communications Act.
"Federal Funds Rate" shall mean, as of any date, the weighted average of
the rates on overnight federal funds transactions with the 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 New York, 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 (3) federal
funds brokers of recognized standing selected by the Administrative Agent.
"GAAP" shall mean, as in effect from time to time in the United States,
generally accepted accounting principles, consistently applied.
"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 as to amounts drawn down by beneficiaries of
outstanding letters of credit or capital call requirements.
- 15 -
<PAGE> 17
"Indebtedness" shall mean, with respect to any Person, and without
duplication, (a) all items, except items of shareholders' and partners' equity
or capital stock or surplus or general contingency or deferred tax reserves,
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, including,
without limitation, to the extent of the higher of the book value or fair market
value of the property or asset securing such obligation (if less than the amount
of such obligation), secured non-recourse obligations of such Person, (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, but only to the extent of
the higher of the fair market value or the book value of the property or asset
subject to such Lien (if less than the amount of such obligation) if the
obligation secured thereby shall not have been assumed, (c) to the extent not
otherwise included, 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, and (e) to the extent not otherwise included, all
obligations subject to Guaranties of such Person or its Subsidiaries, 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, all Indebtedness issued or assumed as full or partial payment
for property or services (other than trade payables arising in the ordinary
course of business, but only if and so long as such accounts are payable on
customary trade terms), 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.
"Indemnitee" shall have the meaning ascribed thereto in Section 5.11
hereof.
"Interest Expense" shall mean, for any period, all cash interest paid
(including imputed interest with respect to Capitalized Lease Obligations) with
respect to any Indebtedness for Money Borrowed of the Borrower and the
Restricted Subsidiaries on a consolidated basis 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 during such period (but
specifically excluding fees paid during previous periods but amortized during
such period in accordance with GAAP), and all cash dividend payments made in
respect of any preferred stock or convertible preferred securities of the
Borrower during such period all as calculated in
- 16 -
<PAGE> 18
accordance with GAAP (except as specifically provided herein).
"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.
"Interest Period" shall mean (a) in connection with any Base Rate
Advance, the period beginning on the date such Advance is made and ending on the
last day of the calendar quarter in which such Advance is made, provided,
however, that if a Base Rate Advance is made on the last day of any calendar
quarter, it shall have an Interest Period ending on, and its Payment Date shall
be, the last day of the following calendar quarter, and (b) in connection with
any Eurodollar Advance, the term of such Advance selected by the Borrower or
otherwise determined in accordance with this Agreement, provided, that any Base
Rate Advance or any Eurodollar Advance prepaid pursuant to Section 2.7(a) below
shall have an Interest Period ending on, and its Payment Date shall be, the date
of prepayment.
"Interest Rate Basis" shall mean the Base Rate Basis or the Eurodollar
Basis, as appropriate.
"known to the Borrower" or "to the knowledge of the Borrower" shall mean
known by or reasonably should have been known by the executive officers of the
Borrower (which shall include, without limitation, the chairman/president, the
chief executive officer, the chief financial officer, the chief operating
officer, the treasurer, the secretary and any in-house general counsel).
"Lead Arranger" shall mean TD Securities (USA) Inc.
"License Subs" shall mean the wholly-owned Restricted Subsidiaries of
the Borrower formed to hold the Licenses.
"Licenses" shall mean any radio, telephone, microwave, paging or other
license, authorization, certificate of compliance or convenience, franchise,
approval or permit, granted or issued by the FCC or any other governmental
authority and held by the Borrower or any of the Restricted Subsidiaries, all of
which 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
- 17 -
<PAGE> 19
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 Notes, the Security
Documents, all subordination agreements entered into by creditors of the
Borrower or any of the Restricted Subsidiaries with respect to Indebtedness for
Money Borrowed of the Borrower or any of the Restricted Subsidiaries, all legal
opinions or reliance letters issued by counsel to the Borrower or any of the
Restricted Subsidiaries, all fee letters, all Requests for Advance, all Interest
Rate Hedge Agreements between the Borrower or any Restricted Subsidiary, 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.
"Loans" shall mean, collectively, the amounts advanced by the Banks to
the Borrower under the Commitments, not to exceed the aggregate amount of the
Commitments, and evidenced by the Notes.
"Majority Banks" shall mean Banks the total of whose Commitment Ratios
equals or exceeds fifty-one percent (51%) of the Commitment Ratios of all Banks
entitled to vote hereunder.
"Managing Agents" shall mean, collectively, The Toronto-Dominion Bank,
BankBoston, N.A. and NationsBank, N.A..
"Materially Adverse Effect" shall mean (a) any material adverse effect
upon the business, assets, liabilities, financial condition, results of
operations, properties, or business prospects of the Borrower or any of the
Restricted Subsidiaries, or (b) a material adverse effect upon the binding
nature, validity, or enforceability of this Agreement or any of the Notes, or
upon the ability of the Borrower or any of its Subsidiaries to perform the
payment obligations or other material 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 Loans 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 (a) for Loans advanced under the Facility A
Commitment or the Facility B Commitment, December 31, 2004 or as the case may
be, such earlier date as payment of the Obligations shall be due (whether by
acceleration, reduction of the applicable Commitment to zero or otherwise) and
(b) for Loans advanced under the Facility C Commitment, March 31, 2005 or as the
case may be, such earlier date as payment of the
- 18 -
<PAGE> 20
obligations shall be due (whether by acceleration, reduction of the Facility C
Commitment to zero or otherwise).
"Multiemployer Plan" shall mean a multiemployer pension plan as defined
in Section 3(37) of ERISA to which the Borrower, any of its Subsidiaries or any
ERISA Affiliate is or has been required to contribute subsequent to September
25, 1980.
"Necessary Authorizations" shall mean all approvals and licenses from,
and all filings and registrations with, any governmental or other regulatory
authority, including, without limiting the foregoing, the Licenses and all
approvals, licenses, filings and registrations under the Communications Act,
necessary in order to enable the Borrower and the Restricted Subsidiaries to
own, construct, maintain, and operate paging systems and to invest in other
Persons who own, construct, maintain, and operate paging systems.
"Net Available Proceeds" from any Asset Disposition by any Person shall
mean cash or Cash Equivalents received (including by way of sale or discounting
of a note, installment receivable or other receivable, but excluding any other
consideration received in the form of assumption by the acquiree of Indebtedness
for Money Borrowed or other obligations relating to such properties or assets or
received in any other noncash form) therefrom by such Person, net of (i) all
legal, title and recording tax expenses, commissions and other fees and expenses
incurred and all federal, state, provincial, foreign and local taxes required to
be accrued as a liability as a consequence of such Asset Disposition, (ii) all
payments made by such Person or its Subsidiaries on any Indebtedness for Money
Borrowed which is secured by the assets subject to such Asset Disposition in
accordance with the terms of any Lien upon or with respect to such assets or
which must by the terms of such Lien, or in order to obtain a necessary consent
to such Asset Disposition or by Applicable Law, be repaid out of the proceeds
from such Asset Disposition, (iii) all distributions and other payments made to
minority interest holders in Subsidiaries of such Person or joint ventures, if
any, as a result of such Asset Disposition and (iv) a reasonable reserve for the
after-tax costs of any indemnification payments (fixed or contingent)
attributable to the seller's indemnities to the purchaser undertaken by the
Borrower or any of its Subsidiaries in connection with such Asset Disposition.
"Net Cash Interest Expense" shall mean for the Borrower and the
Restricted Subsidiaries on a consolidated basis for any period, Interest
Expense, minus interest earned by the Borrower and the Restricted Subsidiaries
on investments as determined in accordance with GAAP.
"Net Income" shall mean, for the Borrower and the Restricted
Subsidiaries on a consolidated basis, for any period, net income determined in
accordance with GAAP.
"Net Purchase Price" shall mean the aggregate fair market value of all
cash or other
- 19 -
<PAGE> 21
property, of whatever nature, paid or transferred or to be paid or transferred
by the Borrower or any of the Restricted Subsidiaries, directly or indirectly,
in respect of any Acquisition, including, without limitation, fees and other
transaction costs and all amounts paid in escrow or subject to any deferral or
contingency, but excluding the fair market value of any Capital Stock of the
Borrower issued as part of the purchase price for such Acquisition.
"1995 Indenture" shall mean that certain Indenture dated as of September
27, 1995 between the Borrower and First Union National Bank of Virginia, as
trustee with respect to the Borrower's 10-3/8% Senior Subordinated Notes due
2007.
"1997 Indenture" shall mean that certain Indenture dated as of October
21, 1997 between the Borrower and First Union National Bank of Virginia, as
trustee with respect to the Borrower's 9-3/4% Senior Subordinated Notes due
2007.
"Notes" shall mean, collectively, the Facility A Notes, the Facility B
Notes, and the Facility C Notes, any other promissory notes issued by the
Borrower to evidence the Loans, and any extensions, renewals or amendments to,
or replacements of, the foregoing.
"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 Loans 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 from time to
time, or as a result of making the Loans, whether such obligations are direct or
indirect, absolute or contingent, due or not due, contractual or tortious,
liquidated or unliquidated, arising by operation of law or otherwise, now
existing or hereafter arising.
"Office Building Acquisition Agreement" shall mean that certain Option
and Purchase Agreement of Sale dated April 14, 1994 between Douglas Jemal and
Joyce Jemal and the Borrower with respect to the acquisition by the Borrower for
a purchase price not to exceed $2,900,000 of a 51% interest in the office
complex located at 6910 Richmond Highway, Alexandria, Virginia 23306, as such
agreement may be amended, modified or supplemented from time to time, together
with all exhibits, schedules and appendices thereto, all of which shall be in
form and substance reasonably satisfactory to the Managing Agents.
"Office Building Acquisition Date" shall mean the date on which the
Borrower acquires the Office Building Assets pursuant to the Office Building
Acquisition Agreement.
- 20 -
<PAGE> 22
"Office Building Assets" shall mean the interest in the office complex
located at 6910 Richmond Highway, Alexandria, Virginia 22306 to be acquired by
the Borrower pursuant to the Office Building Acquisition Agreement.
"Office Building Partnership" shall mean 6910 Richmond Highway
Associates, a Virginia general partnership, or any successor or other entity to
which the Borrower contributes the Office Building Assets in accordance with
Section 8(g) of the Office Building Acquisition Agreement.
"Operating Cash Flow" shall mean, with respect to the Borrower and the
Restricted Subsidiaries on a consolidated basis for any fiscal quarter, the sum
of (a) Net Income for such quarter (after eliminating any extraordinary gains
and losses, including gains and losses from the sale of assets, other than sales
of pagers and other products or services in the ordinary course of business, and
any deferred tax benefits), 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 plus the amount of fees paid in
respect of Indebtedness for Money Borrowed during prior periods but amortized
during such period in accordance with GAAP, (iii) tax expense, and (iv) other
non-cash charges, all as determined in accordance with GAAP. For purposes of
determining the Senior Leverage Ratio and the Total Leverage Ratio, Operating
Cash Flow attributable to any Acquisition will be included in the foregoing
calculation from the first day of the fiscal quarter during which such
Acquisition occurs to the extent that the calculation of such Operating Cash
Flow is based on audited financial statements of the Person acquired or whose
assets are acquired by the Borrower or any of the Restricted Subsidiaries, as
applicable, or other such financial statements which are satisfactory to the
Managing Agents and which are certified by the chief financial officer of the
Borrower to be true, complete and correct and prepared in accordance with GAAP,
provided that for purposes of calculating Operating Cash Flow attributable to an
Acquisition, the Borrower may make pro forma adjustments acceptable to the
Managing Agents to reflect reductions in costs of the Acquisition effective at
or near the time of the Acquisition.
"Payment Date" shall mean the last day of any Interest Period.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
successor thereto.
"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,
- 21 -
<PAGE> 23
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 due or
being diligently contested in good faith, if reserves or appropriate provisions
shall have been made therefor;
(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
such Person imposed by any of the Licenses as presently in effect or by the
Communications Act and any regulations thereunder;
(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) Liens reflected by Uniform Commercial Code financing
statements filed in respect of Capitalized Lease Obligations permitted pursuant
to Section 7.1(h) hereof and true leases of the Borrower or any of its
Subsidiaries;
(h) Purchase money security interests securing Indebtedness
described on Schedule 2 attached hereto and other Indebtedness in an aggregate
principal amount not to exceed $500,000 at any time outstanding; and
(i) Liens securing other Indebtedness in an aggregate principal
amount not to exceed $10,000,000, provided that such Liens do not attach to
assets of such Person which constitute "margin stock," as that term is defined
in Regulation U.
"Person" shall mean an individual, corporation, limited liability
company, association, partnership, joint venture, trust or estate, an
unincorporated organization, a government or any agency or political subdivision
thereof, or any other entity.
"Plan" shall mean an employee benefit plan within the meaning of Section
3(3) of ERISA or any other employee benefit plan maintained for employees of any
Person or any affiliate of such Person.
- 22 -
<PAGE> 24
"Prior Loan Agreement" shall have the meaning ascribed to such term in
the preamble to this Agreement.
"Pro Forma Debt Service" shall mean with respect to the Borrower and the
Restricted 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 Eurodollar
Advances, the amount of all (i) scheduled payments of principal on Indebtedness
for Money Borrowed for such period (including imputed principal payments with
respect to Capitalized Lease Obligations), determined on the basis of the
aggregate amount of Indebtedness for Money Borrowed outstanding as of the date
of calculation and giving effect to any mandatory reductions in the Commitments
and the operation of the other terms of this Agreement (or other instruments or
agreements governing Indebtedness for Money Borrowed) during such next
succeeding twelve (12) month period, (ii) cash interest payable (including
imputed interest with respect to Capitalized Lease Obligations) with respect to
Indebtedness for Money Borrowed of such Persons, (iii) fees payable under this
Agreement and the other Loan Documents (but specifically excluding fees paid
during previous periods but amortized during such period in accordance with
GAAP), and (iv) other payments (including fees) payable by such Persons during
such period in respect of Indebtedness for Money Borrowed (other than voluntary
prepayments under Section 2.7 hereof). 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,
Eurodollar Advances, 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 Eurodollar Basis (as determined on the
date of calculation and based on the then current adjustment under Section
2.3(f) hereof) for a Eurodollar Advance having an Interest Period of twelve (12)
months; provided, however, that if such Eurodollar Basis cannot be determined in
the reasonable opinion of the Administrative Agent, such interest shall be
calculated using the Base Rate Basis as then in effect.
"ProNet Indenture" shall mean that certain Indenture dated as of June
15, 1995 between the Borrower (as successor to ProNet Inc.) and The Bank of New
York, Inc. (as successor to First Interstate Bank of Texas, N.A.), as trustee as
amended prior to the Agreement Date.
"Regulation U" shall mean Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Reportable Event" shall mean, with respect to any Employee Pension
Plan, an event described in Section 4043(b) of ERISA.
"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
- 23 -
<PAGE> 25
shall be in substantially the form of Exhibit E attached hereto, and shall,
among other things, (i) specify the Commitment under which such Advance is to be
made, the date of the Advance, which shall be a Business Day, the amount of the
Advance, the type of Advance (Eurodollar or Base Rate), and, with respect to
Eurodollar Advances, the Interest Period selected by the Borrower, (ii) state
that there shall not exist a Default as of the date of such Advance and after
giving effect thereto, and (iii) provide calculations demonstrating compliance
with Sections 7.8, 7.9 and 7.10 hereof, after giving effect to the proposed
Advance, and the Applicable Margin related 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 Restricted 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 Restricted 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 Affiliate.
"Restricted Purchase" shall mean any payment (including, without
limitation, any sinking fund payment, prepayment or installment payment) on
account of the purchase, redemption, defeasance 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, 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.
"Restricted Subsidiary" shall mean each Subsidiary of the Borrower which
is not an Unrestricted Subsidiary.
"Security Documents" shall mean the Borrower's Pledge Agreements, the
Borrower Security Agreements, the Subsidiary Guaranties, the Subsidiary Pledge
Agreements, the Subsidiary Security Agreements, the Trademark Security
Agreements, any other agreement or instrument providing Collateral for the
Obligations whether now or hereafter in existence, and any filings, instruments,
agreements, and documents related thereto or to this Agreement, and providing
the Administrative Agent, for the benefit of itself and the Banks, with
Collateral for
- 24 -
<PAGE> 26
the Obligations.
"Security Interest" shall mean all Liens in favor of the Administrative
Agent, for the benefit of itself and the Banks, created hereunder or under any
of the Security Documents to secure the Obligations.
"Senior Debt" shall mean Total Debt minus Subordinated Debt which is
permitted to be outstanding in accordance with the terms of Section 7.1 hereof.
"Senior Leverage Ratio" shall mean, as of any date, the ratio of (a) the
Senior Debt on such date to (b) Annualized Operating Cash Flow as of the end of
the fiscal quarter being tested or the most recently completed fiscal quarter
for which financial statements are required to have been delivered to the Banks
pursuant to Section 6.1 or 6.2 hereof, as applicable.
"Series C Preferred Stock" shall mean the Borrower's Series C Preferred
Stock issued to pay a portion of the purchase price of the AT&T Acquisition.
"Subordinated Debt" shall mean the Indebtedness for Money Borrowed of
the Borrower issued pursuant to the 1995 Indenture, the A+ Indenture, the 1997
Indenture, the ProNet Indenture and any other Indebtedness for Money Borrowed of
the Borrower or any of the Restricted Subsidiaries which is expressly
subordinated to the payment of the Obligations.
"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 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, except that, other than Beacon Peak Associates and
Beacon Communications Associates, Ltd., the partnerships set forth on Schedule 4
attached hereto shall not constitute Subsidiaries of the Borrower. Beacon Peak
Associates and Beacon Communications Associates, Ltd. shall constitute
Subsidiaries of the Borrower but shall be subject to the provisions set forth in
the first footnote to Schedule 5 attached hereto. The Subsidiaries of the
Borrower as of the Agreement Date are set forth on Schedule 5 attached hereto.
"Subsidiary Guaranties" shall mean, collectively, that certain Amended
and Restated
- 25 -
<PAGE> 27
Master Subsidiary Guaranty dated as of September 20, 1996, that certain First
Supplemental Master Subsidiary Guaranty dated as of November 15, 1996, and that
certain Second Supplemental Master Subsidiary Guaranty dated as of December 31,
1997, in favor of the Administrative Agent and the Banks given by each
Restricted Subsidiary of the Borrower, and shall include any similar agreements
substantially in the form of Exhibit K attached hereto.
"Subsidiary Pledge Agreements" shall mean those certain Subsidiary
Pledge Agreements between each Restricted Subsidiary of the Borrower having one
or more of its own Subsidiaries, on the one hand, and the Administrative Agent,
on the other hand, and shall include that certain Master Subsidiary Pledge
Agreement dated as of December 31, 1997, and any similar agreements
substantially in the form of Exhibit L attached hereto.
"Subsidiary Security Agreements" shall mean, collectively, that certain
Amended and Restated Master Subsidiary Security Agreement dated as of September
20, 1996, that certain First Supplemental Master Subsidiary Security Agreement
dated as of November 15, 1996, and that certain Second Supplemental Master
Subsidiary Security Agreement dated as of December 31, 1997, among each of the
Restricted Subsidiaries and the Administrative Agent, and shall include any
similar agreements substantially in the form of Exhibit J attached hereto.
"Syndication Agent" shall mean BancBoston Robertson Stephens Inc.
"Tracking Asset Disposition" shall mean the Borrower's disposition of
all the assets of the Tracking Subsidiary pursuant to the Tracking Asset
Purchase Agreement
"Tracking Asset Purchase Agreement" shall mean that Asset Purchase
Agreement negotiated to effect the Tracking Asset Disposition.
"Tracking Subsidiary" shall mean Electronic Tracking Systems, Inc., a
wholly-owned Subsidiary of the Borrower.
"Total Debt" shall mean with respect to the Borrower and the Restricted
Subsidiaries on a consolidated basis, as of any date, determined in accordance
with GAAP, the difference between (a) the aggregate amount of Indebtedness for
Money Borrowed, minus (b) the aggregate amount of cash or Cash Equivalents then
held by the Borrower and the Restricted Subsidiaries.
"Total Leverage Ratio" shall mean, as of any date, the ratio of (a)
Total Debt on such date to (b) Annualized Operating Cash Flow as of the end of
the fiscal quarter being tested or the most recently completed fiscal quarter
for which financial statements are required to have been delivered to the Banks
pursuant to Section 6.1 or 6.2 hereof, as applicable.
- 26 -
<PAGE> 28
"Total Sources" shall mean, with respect to the Borrower and the
Restricted Subsidiaries on a consolidated basis for the most recently completed
fiscal quarter, the sum of (a) Operating Cash Flow; (b) the amount of equity
contributed to the Borrower in cash during such period; (c) the amount of any
Net Available Proceeds from any Asset Dispositions during such period; (d) the
amount, if greater than or equal to zero, by which Indebtedness for Money
Borrowed outstanding as at the end of such period exceeds the amount of
Indebtedness for Money Borrowed outstanding as at the end of the preceding such
period; (e) the aggregate amount of additional Advances the Borrower would then
be permitted to borrow under the Commitments and remain in compliance with
Sections 7.8, 7.9 and 7.10 hereof; and (f) cash and Cash Equivalents on hand as
of the beginning of such period.
"Total Uses" shall mean, with respect to the Borrower and the Restricted
Subsidiaries on a consolidated basis for the most recently completed fiscal
quarter, the sum of (a) the amount, if greater than or equal to zero, by which
Indebtedness for Money Borrowed outstanding as at the end of the preceding such
period exceeds the amount of Indebtedness for Money Borrowed outstanding as at
the end of such period; (b) the amount of Net Cash Interest Expense for such
period; (c) the amount of Capital Expenditures made during such period; (d) cash
taxes paid during such period; (e) the Net Purchase Price of any Acquisitions
made during such period; and (f) the amount of any Restricted Payments and
Restricted Purchases made during such period.
"Trademark Security Agreements" shall mean, collectively, that certain
Amended and Restated Borrower Trademark Security Agreement dated as of September
20, 1996, and that certain Trademark Agreement dated as of December 31, 1997,
and any other similar agreement substantially in the form of Exhibit F attached
hereto.
"Transponder Lease Agreement" shall mean any agreement by and between
the Borrower or any of the Restricted 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.
"Unrestricted Subsidiary" shall mean such other Subsidiaries of the
Borrower as have been designated as "Unrestricted Subsidiaries" by the Borrower
with the prior written consent of the Majority Banks.
"Use of Proceeds Letters" shall mean those certain Use of Proceeds
Letters, substantially in the form of Exhibit G attached hereto, to be delivered
to the Administrative Agent and the Banks on the date of any Advance hereunder.
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.
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<PAGE> 29
ARTICLE 2
Credit Facilities
Section 2.1 Commitments
(a) Facility A 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 lend to the Borrower,
prior to the Maturity Date, an amount not to exceed at any one time outstanding,
in the aggregate, the Facility A Commitment. The Borrower hereby acknowledges
that all "Obligations" in respect of "Advances" outstanding on the Agreement
Date under the "Facility A Commitment" (as such terms are defined in the Prior
Loan Agreement) shall be deemed to have been made to the Borrower as Advances
under the Facility A Commitment hereunder and shall constitute a portion of the
Obligations. Subject to the terms and conditions hereof, Advances under the
Facility A Commitment may be repaid and reborrowed from time to time on a
revolving basis.
(b) Facility B Commitment. The Banks which issued a "Facility
B Commitment" under and as defined in the Prior Loan Agreement have previously
lent to the Borrower the amount in the aggregate of $125,000,000. The Borrower
hereby acknowledges that all "Obligations" in respect of "Advances" outstanding
under the "Facility B Commitment" (as such terms are defined in the Prior Loan
Agreement) shall be deemed to have been made to the Borrower as Advances of the
Facility B Commitment hereunder and shall constitute a portion of the
Obligations. Subject to the terms and conditions hereof, Advances under the
Facility B Commitment may be repaid and reborrowed to effect a change in the
Interest Rate Basis or Interest Periods relating thereto; provided, however,
there shall be no increase in the principal amount outstanding under the
Facility B Commitment.
(c) Facility C 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 lend to the Borrower,
on the Agreement Date, an amount not to exceed, in the aggregate, the Facility C
Commitment. Subject to the terms and conditions hereof, Advances under the
Facility C Commitment may be repaid and reborrowed to effect a change in the
Interest Rate Basis or Interest Periods relating thereto; provided, however
there shall be no increase in the principal amount outstanding under the
Facility C Commitment after the Agreement Date.
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<PAGE> 30
Section 2.2 Manner of Borrowing and Disbursement.
(a) Choice of Interest Rate, Etc. Any Advance shall, at the
option of the Borrower, be made as a Base Rate Advance or a Eurodollar Advance;
provided, however, that at such time as there shall have occurred and be
continuing a Default hereunder, the Borrower shall not have the right to receive
a Eurodollar Advance. Any notice given to the Administrative Agent in connection
with a requested Advance hereunder shall be given to the Administrative Agent
prior to 11:00 a.m. (New York time) in order for such Business Day to count
toward the minimum number of Business Days required.
(b) Base Rate Advances.
(i) Advances. The Borrower shall give the Administrative
Agent irrevocable prior written notice prior to 11:00 a.m. (New York
time) on the date of any requested Base 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 or telecopy of the
contents thereof.
(ii) Repayments and Reborrowings. The Borrower may repay
or prepay a Base Rate Advance without regard to its Payment Date and (A)
upon irrevocable prior written notice prior to 11:00 a.m. (New York
time) on the date of any requested repayment and reborrowing, reborrow
all or a portion of the principal amount thereof as a Base Rate Advance,
(B) upon at least three (3) Business Days' irrevocable prior written
notice, reborrow all or a portion of the principal thereof as one or
more Eurodollar Advances, or (C) not reborrow all or any portion of such
Base Rate Advance. On the date indicated by the Borrower, such Base Rate
Advance shall be so repaid and, as applicable, reborrowed. The failure
to give timely notice hereunder with respect to the Payment Date of any
Base Rate Advance shall be deemed a request for a Base Rate Advance.
(c) Eurodollar Advances.
(i) Advances. Upon request, the Administrative Agent,
whose determination shall be conclusive, shall determine the available
Eurodollar Bases and shall notify the Borrower of such Eurodollar Bases.
The Borrower shall give the Administrative Agent in the case of
Eurodollar Advances at least three (3) Business Days' irrevocable prior
written notice in the form of a Request for Advance, or telephonic
notice
- 29 -
<PAGE> 31
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 or telecopy of the contents thereof.
(ii) Repayments and Reborrowings. At least three (3)
Business Days prior to the Payment Date for each Eurodollar Advance, the
Borrower shall give the Administrative Agent written notice specifying
whether all or a portion of such Eurodollar Advance (A) is to be repaid
and then reborrowed in whole or in part as one or more Eurodollar
Advances, (B) is to be repaid and then reborrowed in whole or in part as
a Base Rate Advance, or (C) is to be repaid and not reborrowed. The
failure to give such notice shall preclude the Borrower from reborrowing
such Advance as a Eurodollar Advance on its Payment Date and shall be
deemed a request for a Base Rate Advance. Upon such Payment Date such
Eurodollar Advance will, subject to the provisions hereof, be so repaid
and, as applicable, reborrowed.
(d) 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 portion of the Advance. Each Bank shall, not later
than 12:00 noon (New York 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 portion of any Advance which represents an additional borrowing
hereunder in immediately available funds.
(e) Disbursement.
(i) Prior to 2:00 p.m. (New York 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 12:00 noon (New York time) on the date of
any Advance that such Bank will not make available to the Administrative
Agent such Bank's ratable portion of such Advance, the Administrative
Agent may assume that such Bank has made or will make
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<PAGE> 32
such 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 ratable 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 Federal Funds Rate.
(iii) If such Bank shall repay to the Administrative Agent
such corresponding amount, such amount so repaid shall constitute such
Bank's 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
Federal Funds Rate. The failure of any Bank to fund its portion of any
Advance shall not relieve any other Bank of its obligation, if any,
hereunder to fund its respective 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
Section 3.2 hereof, a Bank for any reason fails or refuses to fund its
portion of such Advance, then, until such time as such Bank has funded
its 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 portion of the
Loans 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 portion of the Loans.
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<PAGE> 33
Section 2.3 Interest.
(a) On Base Rate Advances. Interest on each Base Rate Advance
shall be computed on the basis of a year of 365/366 days for the actual number
of days elapsed and shall be payable at the Base Rate Basis for such Advance, in
arrears on the applicable Payment Date. Interest on Base Rate Advances then
outstanding shall also be due and payable on the Maturity Date.
(b) On Eurodollar Advances. Interest on each Eurodollar
Advance shall be computed on the basis of a 360-day year for the actual number
of days elapsed and shall be payable at the Eurodollar Basis for such Advance,
in arrears on the applicable Payment Date, and, in addition, if the Interest
Period for a Eurodollar Advance exceeds three (3) months, interest on such
Eurodollar Advance shall also be due and payable in arrears on every
three-month anniversary of the beginning of such Interest Period. Interest on
Eurodollar Advances then outstanding shall also be due and payable on the
Maturity Date.
(c) Interest if no Notice of Selection of Interest Rate
Basis. If the Borrower fails to give the Administrative Agent timely notice of
its selection of a Eurodollar Basis, or if for any reason a determination of a
Eurodollar Basis for any Advance is not timely concluded, the Base Rate Basis
shall apply to such Advance.
(d) Interest Upon Default. Immediately upon the occurrence of
an Event of Default hereunder, 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.
(e) Eurodollar Rate Contracts. At no time may the number of
outstanding Eurodollar Advances exceed eight (8).
(f) Applicable Margin. The Applicable Margin shall be
determined by the Administrative Agent with respect to any Advance based upon
the Total 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:
(i) For Loans advanced under the Facility A Commitment or the Facility B
Commitment:
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<PAGE> 34
<TABLE>
<CAPTION>
Total Base Rate Advance Eurodollar Advance
Leverage Ratio Applicable Margin Applicable Margin
-------------- ----------------- -----------------
<S> <C> <C>
A. Greater than 5.50:1 1.375% 2.500%
B. Greater than 5.00:1, but 1.250% 2.375%
less than or equal to 5.50:1
C. Greater than 4.50:1, but 1.000% 2.125%
less than or equal to 5.00:1
D. Greater than 4.00:1, but 0.750% 1.875%
less than or equal to 4.50:1
E. Greater than 3.50:1, but 0.500% 1.625%
less than or equal to 4.00:1
F. Greater than 3.00:1, but 0.250% 1.375%
less than or equal to 3.50:1
G. Greater than 2.50:1, but 0.125% 1.250%
less than or equal to 3.00:1
H. Less than or equal to 0.000% 0.875%
2.50:1
</TABLE>
(ii) For Loans advanced under the Facility C Commitment:
<TABLE>
<CAPTION>
Total Base Rate Advance Eurodollar Advance
Leverage Ratio Applicable Margin Applicable Margin
-------------- ----------------- -----------------
<S> <C> <C>
A. Greater than 5.50:1 2.00% 3.00%
B. Greater than 4.50:1, but 1.75% 2.75%
less than or equal to 5.50:1
C. Less than or equal to 1.50% 2.50%
4.50:1
</TABLE>
Notwithstanding the foregoing, if the Borrower shall fail timely
to deliver the Administrative Agent the financial statements required for the
calculation of the Total 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 Total Leverage Ratio for such period shall be conclusively
presumed to be, and the Applicable Margin shall be calculated based upon, the
Total Leverage Ratio which is one level greater than the Total Leverage Ratio in
effect for the immediately preceding fiscal quarter for which financial
statements were delivered or were due to be delivered, provided that such Total
Leverage Ratio for any such period shall be recalculated upon delivery to the
Administrative Agent of the delinquent financial statements and an appropriate
adjustment shall be made by the Administrative Agent to the Applicable Margin,
based upon the Total Leverage Ratio reflected in the delinquent financial
statements, retroactive
- 33 -
<PAGE> 35
to the first day for which the presumed Total Leverage Ratio was applied.
Section 2.4 Commitment Fees.
(a) The Borrower agrees to pay each of the Banks, in accordance
with their respective Commitment Ratios, a commitment fee on the aggregate
unborrowed balance of the Facility A Commitment for each day from the Agreement
Date until the Maturity Date (i) at all times during which the Total Leverage
Ratio is greater than or equal to 4.50:1, at the rate of three-eighths of one
percent (3/8%) per annum, and (ii) at all times during which the Total Leverage
Ratio is less than 4.50:1, at the rate of one-quarter of one percent (1/4%) per
annum.
(b) Such commitment fees shall be computed on the basis of a
year of 365/366 days for the actual number of days elapsed, shall be payable
quarterly in arrears on the last day of each calendar 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.
Section 2.5 Mandatory Commitment Reductions.
(a) Scheduled Reductions in Facility A Commitment. Commencing
March 31, 2000 and at the end of each calendar quarter thereafter, the Facility
A Commitment shall be automatically and permanently reduced by an amount equal
to the percentage of the Facility A Commitment as in effect on the Agreement
Date, as set forth below:
<TABLE>
<CAPTION>
Amount of
Dates of Facility A Commitment Reductions Each Reduction
----------------------------------------- --------------
<S> <C>
March 31, 2000, June 30, 2000,
September 30, 2000 and December 31, 2000 2.500%
March 31, 2001, June 30, 2001,
September 30, 2001 and December 31, 2001 3.750%
March 31, 2002, June 30, 2002,
September 30, 2002 and December 31, 2002 5.000%
March 31, 2003, June 30, 2003,
September 30, 2003 and December 31, 2003 6.250%
March 31, 2004, June 30, 2004,
</TABLE>
- 34 -
<PAGE> 36
September 30, 2004 and December 31, 2004 7.500%
(b) Excess Cash Flow Recapture. Commencing on March 31, 2000
and on each March 31st and September 30th occurring thereafter during the term
of this Agreement, the Facility A Commitment shall be automatically and
permanently reduced by an amount equal to fifty percent (50%) of Excess Cash
Flow, determined for the two (2) consecutive fiscal quarters then ended.
(c) Reductions in Facility B Commitment and Facility C
Commitment from Subordinated Debt Proceeds. The Facility B Commitment and the
Facility C Commitment shall be automatically and permanently reduced, pro rata
between the Facility B Commitment and the Facility C Commitment, in an amount
equal to the aggregate amount of any Subordinated Debt (net of reasonable and
customary transaction costs) issued by the Borrower or any of its Restricted
Subsidiaries on or after the Agreement Date immediately upon the issuance
thereof.
The Borrower shall make a repayment of the Loans outstanding under the
applicable Commitment, together with accrued interest thereon, on or before the
effective date of each reduction in such Commitment under this Section 2.5, such
that the aggregate principal amount of the Loans outstanding under such
Commitment at no time exceeds such Commitment as so reduced. Any remaining
unpaid principal and interest under the Commitments shall be due and payable in
full on the Maturity Date, and the Commitments shall thereupon terminate to the
extent not previously terminated.
Section 2.6 Voluntary Commitment Reductions. The Borrower shall have
the right, at any time and from time to time after the Agreement Date, upon at
least three (3) Business Days' prior written notice to the Administrative Agent,
without premium or penalty, to cancel or reduce permanently all or a portion of
the Facility A Commitment on the basis of the respective Commitment Ratios of
the Banks applicable to the Facility A Commitment; provided, however, that any
such partial reduction shall be made in an amount not less than $5,000,000 and
in integral multiples of $1,000,000. As of the date of cancellation or reduction
set forth in such notice, the Facility A Commitment shall be permanently reduced
to the amount stated in the Borrower's notice for all purposes herein, and the
Borrower shall pay to the Administrative Agent for the Banks the amount
necessary to reduce the principal amount of the Loans then outstanding under
Facility A Commitment to not more than the amount of Facility A Commitment as so
reduced, together with accrued interest on the amount so prepaid and commitment
fees accrued through the date of the reduction with respect to the amount
reduced.
- 35 -
<PAGE> 37
Section 2.7 Prepayments and Repayments.
(a) Prepayment. The principal amount of any Base Rate Advance
may be prepaid in full or ratably in part at any time, without penalty and
without regard to the Payment Date for such Advance. Eurodollar Advances may be
prepaid prior to the applicable Payment Date, upon three (3) Business Days'
prior written notice to the Administrative Agent, provided that the Borrower
shall reimburse the Banks and the Administrative Agent, on the earlier of demand
by the applicable Bank or the Maturity Date, for any loss or out-of-pocket
expense incurred by any Bank or the Administrative Agent in connection with such
prepayment, as set forth in Section 2.10 hereof. Any prepayment hereunder shall
be in amounts of not less than $1,000,000 and in integral multiples thereof.
Amounts prepaid pursuant to this Section may be reborrowed, subject to the terms
and conditions hereof. Prepayments of Advances under the Facility B Commitment
and the Facility C Commitment shall be applied to amounts outstanding thereunder
in inverse order of maturity. Amounts prepaid under the Facility A Commitment
pursuant to this Section may be reborrowed, subject to the terms and conditions
hereof.
(b) Repayments.
(i) Loans in Excess of Commitments. If, at any time, the
amount of the Loans then outstanding under any Commitment shall exceed
the applicable Commitment, the Borrower shall, on such date and subject
to Section 2.10 hereof, make a repayment of the principal amount of the
Loans in an amount equal to such excess, together with any accrued
interest and fees with respect thereto.
(ii) Scheduled Repayments under Facility B Commitment.
Commencing March 31, 2000, the principal balance then outstanding under
the Facility B Commitment shall be amortized in quarterly installments
equal to the percentage of the principal balance outstanding under the
Facility B Commitment on the Facility B Commitment Termination Date set
forth below on the dates set forth below:
<TABLE>
<CAPTION>
Repayment Dates Percentage
--------------- ----------
<S> <C>
March 31, 2000, June 30, 2000,
September 30, 2000 and December 31, 2000 2.500%
March 31, 2001, June 30, 2001,
September 30, 2001 and December 31, 2001 3.750%
March 31, 2002, June 30, 2002,
</TABLE>
- 36 -
<PAGE> 38
<TABLE>
<S> <C>
September 30, 2002 and December 31, 2002 5.000%
March 31, 2003, June 30, 2003,
September 30, 2003 and December 31, 2003 6.250%
March 31, 2004, June 30, 2004,
September 30, 2004 and December 31, 2004 7.500%
</TABLE>
(iii) Scheduled Repayments under Facility C Commitment.
Commencing March 31, 2000, the principal balance then outstanding under
the Facility C Commitment shall be amortized in quarterly installments
equal to the percentage set forth
on the dates set forth below:
<TABLE>
<CAPTION>
Repayment Dates Percentage
--------------- ----------
<S> <C>
March 31, 2000, June 30, 2000,
September 30, 2000 and December 31, 2000 0.250%
March 31, 2001, June 30, 2001,
September 30, 2001 and December 31, 2001 0.250%
March 31, 2002, June 30, 2002,
September 30, 2002 and December 31, 2002 0.250%
March 31, 2003, June 30, 2003,
September 30, 2003 and December 31, 2003 0.250%
March 31, 2004, June 30, 2004,
September 30, 2004 and December 31, 2004 0.250%
January 31, 2005 47.500%
March 31, 2005 47.500%
</TABLE>
(iv) Equity Proceeds. The Borrower shall repay Loans
outstanding under the Facility A Commitment, with the proceeds of any
equity issued by the Borrower on or after the Agreement Date, net of
reasonable and customary transaction costs.
(v) Asset Sale Proceeds. The Borrower shall repay the
Loans
- 37 -
<PAGE> 39
outstanding under the Facility B Commitment and the Facility C
Commitment as set forth in Section 7.4(a) hereof, pro rata between such
Commitments. Any such payments shall be applied to Loans outstanding
thereunder in inverse order of maturity.
(vi) 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 2.8 Notes; Loan Accounts.
(a) The Loans shall be repayable in accordance with the terms
and provisions set forth herein and shall be evidenced by the Notes. One
Facility A Note, one Facility B Note and one Facility C Note shall be payable to
the order of each Bank for such Commitment, in accordance with such Bank's
respective Commitment Ratio for the applicable Commitment. The Notes shall be
issued by the Borrower to the Banks and shall be duly executed and delivered by
one or more Authorized Signatories.
(b) Each Bank may open and maintain on its books in the name
of the Borrower a loan account with respect to its portion of the Loans and
interest thereon. Each Bank which opens such a loan account shall debit such
loan account for the principal amount of its 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 Loans. The records of a
Bank with respect to the loan account maintained by it shall be prima facie
evidence of its portion of the Loans 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 Loans.
Section 2.9 Manner of Payment.
(a) Each payment (including any prepayment) by the Borrower on
account of the principal of or interest on the Loans, commitment fees and any
other amount owed to the Banks or the Administrative Agent or any of them under
this Agreement or the Notes shall be made not later than 1:00 p.m. (New York
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 money of
the United States of America in immediately available funds. Any payment
received by the Administrative Agent after 1:00 p.m. (New York 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. (New
York 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
- 38 -
<PAGE> 40
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. In the event that the Administrative Agent shall fail to make
distribution to any Bank as required under this Section 2.9, the Administrative
Agent agrees to pay such Bank interest from the date such payment was due until
paid at the Federal Funds Rate.
(b) The Borrower agrees to pay principal, interest, fees and
all other amounts due hereunder or under the Notes without set-off or
counterclaim or any deduction whatsoever and free and clear of all taxes, levies
and withholding. If the Borrower is required by Applicable Law to deduct any
taxes from or in respect of any sum payable to the Administrative Agent or any
Bank hereunder, under any Note or under any other Loan Document: (i) the sum
payable hereunder or thereunder, as applicable, shall be increased to the extent
necessary to provide that, after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.9(b)), the
Administrative Agent or such Bank, as applicable, receives an amount equal to
the sum it would have received had no such deductions been made; (ii) the
Borrower shall make such deductions from such sums payable hereunder or
thereunder, as applicable, and pay the amount so deducted to the relevant taxing
authority as required by Applicable Law; and (iii) the Borrower shall provide
the Administrative Agent or such Bank, as applicable, with evidence satisfactory
to the Administrative Agent or such Bank, as applicable, that such deducted
amounts have been paid to the relevant taxing authority.
(c) 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 in accordance where applicable with the respective Commitment
Ratios of the Banks for the applicable Commitment: (i) to the payment 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
Loans; (iii) to the payment of all other amounts not otherwise referred to in
this Section 2.9(c) then due and payable to the Administrative Agent and the
Banks, or any of them, hereunder or under the Notes or any other Loan Document;
(iv) to the payment of principal then due and payable on the Loans made under
the Facility B Commitment and the Facility C Commitment, pro rata between the
Facility B Commitment and the Facility C Commitment on the basis of the
respective Commitment Ratios of the Banks applicable to the particular Facility
B Commitment and Facility C Commitment; and (v) to the payment of principal then
due and payable on the Loans made under the Facility A Commitment.
(d) 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
- 39 -
<PAGE> 41
connection with such payment.
Section 2.10 Reimbursement.
(a) Whenever any Bank shall sustain or incur any losses or
out-of-pocket expenses in connection with (i) failure by the Borrower to borrow
any Eurodollar Advance after having given notice of its intention to borrow in
accordance with Section 2.2 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), or (ii) prepayment (or failure to prepay after giving notice
thereof) of any Eurodollar Advance in whole or in part for any reason, the
Borrower agrees to pay to such Bank, upon the earlier of such Bank's demand or
the Maturity Date, an amount sufficient to compensate such Bank for all such
losses and out-of-pocket expenses other than any lost margin on the Loans. 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 conclusively correct
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 2.11 Pro Rata Treatment.
(a) Advances. Each Advance from the Banks under any Commitment
shall be made pro rata on the basis of the respective Commitment Ratios of the
Banks applicable to the particular Commitment.
(b) Payments. Except as provided in Section 2.2(e) and Article
10 hereof, each payment and prepayment of principal of the Loans and each
payment of interest on the Loans, shall be made to the Banks pro rata on the
basis of their respective unpaid principal amounts outstanding under the Notes
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 Loans in excess of its ratable share of the Loans
under its Commitment Ratio, such Bank shall forthwith purchase from the other
Banks such participations in the portion of the Loans 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 agrees that any
Bank so purchasing a
- 40 -
<PAGE> 42
participation from another Bank pursuant to this Section 2.11(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.
Section 2.12 Capital Adequacy. If after the date hereof, the adoption
of any Applicable Law regarding the capital adequacy of banks or bank holding
companies, or any change in Applicable Law (whether adopted before or after the
Agreement Date) or any change in the interpretation or administration thereof by
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by such Bank with any
directive regarding capital adequacy (whether or not having the force of law) of
any such governmental authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on any Bank's or any Bank's
holding company's capital as a consequence of its obligations hereunder with
respect to the Loans and the Commitments to a level below that which it could
have achieved but for such adoption, change or compliance (taking into
consideration such Bank's policies with respect to capital adequacy immediately
before such adoption, change or compliance and assuming that such Bank's capital
was fully utilized prior to such adoption, change or compliance) by an amount
reasonably deemed by such Bank to be material, then, upon the earlier of demand
by such Bank or the Maturity Date, the Borrower shall promptly pay to such Bank
such additional amounts as shall be sufficient to compensate such Bank for such
reduced return, together with interest on such amount from the fourth (4th) day
after the date of demand or the Maturity Date, as applicable, until payment in
full thereof at the Default Rate. A certificate of such Bank setting forth the
amount to be paid to such Bank by the Borrower as a result of any event referred
to in this paragraph and supporting calculations in reasonable detail shall be
presumptively correct absent manifest error.
Section 2.13 Bank Tax Forms. On or prior to the Agreement Date and on
or prior to the first Business Day of each calendar year thereafter, to the
extent available under Applicable Law, each Bank which is organized in a
jurisdiction other than the United States shall provide each of the
Administrative Agent and the Borrower with a properly executed original of Forms
4224 or 1001 (or any successor form) prescribed by the Internal Revenue Service
or other documents satisfactory to the Borrower and the Administrative Agent,
and a properly executed Internal Revenue Service Form W-8 or W-9, as the case
may be, certifying (i) as to such Bank's status for purposes of determining
exemption from United States withholding taxes with respect to all payments to
be made to such Bank hereunder and under the Notes or (ii) that all payments to
be made to such Bank hereunder and under the Notes are subject to such taxes at
a rate reduced to zero by an applicable tax treaty. Each such Bank agrees to
provide the Administrative Agent and the Borrower with new forms prescribed by
the Internal Revenue Service upon the expiration or obsolescence of any
previously delivered form, or after the occurrence of any event requiring a
change in the most recent forms delivered by it to the Administrative Agent and
the Borrower, to
- 41 -
<PAGE> 43
the extent available under Applicable Law.
ARTICLE 3
Conditions Precedent
Section 3.1 Conditions Precedent to Effectiveness of Agreement. The
obligation of the Banks to undertake the Facility C 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 certificate of the Borrower dated as of the
Agreement Date, confirming the effectiveness of the Security Documents.
(ii) a certificate of each Restricted Subsidiary of the
Borrower (including all License Subs existing as of the Agreement Date)
dated as of the Agreement Date, confirming the effectiveness of the
Security Documents.
(iii) duly executed Facility C Notes;
(iv) the Managing Agents shall have received evidence
satisfactory to them that the AT&T Acquisition has been consummated and
the Series C Preferred Stock issued pursuant to terms and conditions
satisfactory to the Managing Agents.
(v) The Managing Agents shall have received opinions of
FCC and special corporate counsel to the Borrower with respect to this
Agreement and the AT&T Acquisition, which opinions shall be in form and
substance satisfactory to the Managing Agents.
(vi) The Managing Agents shall have received certification
to the Agents and the Banks of the Borrower's compliance with Sections
7.8, 7.9, 7.10, 7.11 and 7.12 of this Agreement after giving effect to
the AT&T Acquisition together with any calculations necessary to
demonstrate such compliance.
(vii) The Managing Agents shall have received all
documentation required under Section 5.13 of this Agreement with respect
to the AT&T Acquisition.
(viii) The Managing Agents shall have received copies of the
AT&T
- 42 -
<PAGE> 44
Acquisition Agreement and all other documents related to the AT&T
Acquisition, including, without limitation, lien search results from
appropriate jurisdictions, all of which shall be certified by an
Authorized Signatory to be true, complete and correct as of the
Agreement Date, together with duly executed UCC-1 financing statements
and other collateral documentation deemed reasonably necessary by the
Managing Agents to reflect or perfect the Security Interest of the
Administrative Agent (for itself and on behalf of the Banks) in such
assets.
(ix) The Managing Agents shall have received reliance
letters regarding opinions of counsel to the other parties to the AT&T
Acquisition Agreement in form and substance satisfactory to the Managing
Agents and its special counsel.
(x) 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 all
necessary consents to the closing of this Agreement and the AT&T Acquisition
Agreement, the other Loan Documents and the AT&T Acquisition Agreement, have
been obtained or made, are in full force and effect and with the exception of
the running of any waiting periods, 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
and each other Loan Document are true and correct as of the Agreement Date and
that no Default or Event of Default then exists or is continuing or will be
caused by the AT&T Acquisition.
(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, the AT&T
Acquisition the transactions contemplated hereby, which 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 on the business, assets or financial
condition of the Borrower or any of its Subsidiaries from that reflected in the
audited annual financial statements for the fiscal year ending December 31, 1997
or the Form 10-Q for the fiscal quarter ending June 30, 1998 of the Borrower,
each as
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<PAGE> 45
delivered to the Administrative Agent and the Banks.
Section 3.2 Conditions Precedent to Each Advance. The obligation of
the Banks to make each Advance after the Agreement Date is subject to the
fulfillment of each of the following conditions immediately prior to or
contemporaneously with such Advance:
(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, are made at and as of the
time of such Advance, 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 Advance, 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 the Loans outstanding hereunder, the
Administrative Agent and the Banks shall have received a certificate of the
Borrower stating that there is no default or event of default, and no event or
condition exists which could give rise to any put right or other right of
prepayment under, any of the agreements evidencing Indebtedness for Money
Borrowed of the Borrower or any of its Subsidiaries, both before and after
giving effect to the proposed Advance of the Loans hereunder.
(c) With respect to Advances which, if funded, would increase
the aggregate principal amount of Loans outstanding hereunder, the
Administrative Agent shall have received a duly executed Request for Advance and
a Use of Proceeds Letter;
(d) 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;
(e) With respect to any Advance relating to any Acquisition or
the formation of any Subsidiary which is permitted hereunder, the Administrative
Agent and the Banks shall have received such documents and instruments relating
to such Acquisition or formation of such new Subsidiary as are described in
Section 5.13 hereof or otherwise required herein; and
(f) No event shall have occurred and no condition shall exist
which, in the judgment of the Majority Banks, has had or may be expected to have
a Materially Adverse Effect on the business, assets or financial condition of
the Borrower or any of its Subsidiaries.
- 44 -
<PAGE> 46
ARTICLE 4
Representations and Warranties
Section 4.1 Representations and Warranties. The Borrower hereby
agrees, represents and warrants, upon the Agreement Date, and at all times
thereafter as required pursuant to the terms hereof, in favor of the
Administrative Agent and each Bank that:
(a) Organization; Ownership; Power; Qualification. The
Borrower is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. 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. Each Subsidiary of the Borrower is a
corporation or partnership duly organized, validly existing and in good standing
under the laws of the state of its 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, in good standing and authorized to do business in each
jurisdiction in which the character of their respective properties or the nature
of their respective businesses requires such qualification or authorization.
(b) Authorization; Enforceability. The Borrower has the
corporate power and has taken all necessary corporate action to authorize it to
borrow 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, 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).
(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 5 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
- 45 -
<PAGE> 47
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, 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 any such Subsidiary). Except as set forth on Schedule 5,
attached hereto, the Borrower's ownership interest in each of its Subsidiaries
represents a direct or indirect controlling interest of such Subsidiary for
purposes of directing 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 the Notes, 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 or articles
of incorporation or by-laws or partnership agreement, 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, and
investing in paging service systems and communications businesses incidental or
directly relating thereto.
(f) Licenses, etc. Except as set forth on Schedule 6 attached
hereto, the Licenses have been duly issued are in full force and effect and, as
of the Agreement Date, are held by License Subs as set forth on Schedule 7
attached hereto. The Borrower and the Restricted Subsidiaries are in compliance
in all material respects with all of the provisions thereof. The Borrower and
the Restricted Subsidiaries have secured all Necessary Authorizations and all
such Necessary Authorizations are in full force and effect. Neither any License
nor any
- 46 -
<PAGE> 48
Necessary Authorization is the subject of any pending or, to the best of the
Borrower's knowledge, threatened revocation. The sole assets of each License Sub
are Licenses used in the operation and construction of the paging business of
the Borrower and the Restricted Subsidiaries and management agreements with the
Borrower and such of the Restricted Subsidiaries as operate the portion of the
paging system subject to the License held by it.
(g) Compliance with Law. The Borrower and its Subsidiaries are
in compliance in all material respects with all Applicable Law.
(h) Title to Assets. The Borrower and the Restricted
Subsidiaries have good, legal and marketable title to, or a valid leasehold
interest in, all of the assets referred to in the audited annual financial
statements of the Borrower and the Restricted Subsidiaries for the fiscal year
ended December 31, 1997 delivered to the Banks prior to the Agreement Date (or
such later date as a balance sheet is delivered pursuant to Article 6 hereof).
None of the properties or assets of the Borrower or any of the Restricted
Subsidiaries is subject to any Liens, except for Permitted Liens. Except for
financing statements evidencing Permitted Liens, no financing statement under
the Uniform Commercial Code as in effect in any jurisdiction and no other filing
which names the Borrower or any of its Subsidiaries as debtor or which covers or
purports to cover any of the assets of the Borrower or any of the Restricted
Subsidiaries is currently effective and on file in any state or other
jurisdiction, and neither the Borrower nor any of the Restricted Subsidiaries
has signed any such financing statement or filing or any security agreement
authorizing any secured party thereunder to file any such financing statement or
filing.
(i) Litigation. There is no action, suit, proceeding or
investigation pending against, or, to the best of the Borrower's knowledge,
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 body (including without limitation the
FCC) except as set forth on Schedule 8 attached hereto (as such schedule may be
updated with the consent of the Majority Banks from time to time). 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. All federal, state and other tax returns of the
Borrower and each of its Subsidiaries required by law to be filed have been duly
filed and all federal, state and other taxes, including, without limitation,
withholding taxes, assessments and other governmental charges or levies required
to be paid by the Borrower or any of its Subsidiaries or imposed upon the
Borrower or any of its Subsidiaries or any of their respective properties,
income, profits or
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<PAGE> 49
assets, which are due and payable, have been paid, except any such taxes (i) (x)
the payment of which the Borrower or any of its Subsidiaries is diligently
contesting in good faith by appropriate proceedings, (y) for which adequate
reserves have been provided on the books of the Borrower or the Subsidiary of
the Borrower involved, and (z) as to which no Lien other than a Permitted Lien
has attached and no foreclosure, distraint, sale or similar proceedings have
been commenced, or (ii) which may result from audits not yet conducted. The
charges, accruals and reserves on the books of the Borrower and each of its
Subsidiaries in respect of taxes are, in the judgment of the Borrower, adequate.
(k) Financial Statements. The Borrower has furnished or caused
to be furnished to the Administrative Agent and the Banks the audited financial
statements for the Borrower and its Subsidiaries on a consolidated basis for the
fiscal year ended December 31, 1997, and unaudited financial statements for the
fiscal quarter ended June 30, 1998, 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 the Restricted Subsidiaries on a
consolidated and consolidating 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 the Restricted 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, and there are no material unrealized losses of
the Borrower or any of the Restricted Subsidiaries and no material anticipated
losses of the Borrower or any of the Restricted Subsidiaries other than those
which have been previously disclosed in writing to the Administrative Agent and
the Banks and identified as such.
(l) No Material Adverse Change. Since December 31, 1997, 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 Subsidiary of the Borrower
and each of their respective Plans are in compliance with ERISA and the Code and
neither the Borrower nor any of its ERISA Affiliates, including its
Subsidiaries, has incurred any accumulated funding deficiency with respect to
any such Plan within the meaning of ERISA or the Code. The Borrower, each of its
Subsidiaries, and each other ERISA Affiliate have complied with all requirements
of COBRA. Neither the Borrower nor any of its Subsidiaries 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. Neither the Borrower nor any of its ERISA
Affiliates, including its Subsidiaries, has incurred any material liability to
PBGC in connection with any such Plan. The assets of each
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such Plan 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 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 such Plan. No such 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 "prohibited transaction"
(as such term is defined in Section 406 of ERISA or Section 4975 of the Code)
which would subject such Plan or any other Plan of the Borrower or any of its
Subsidiaries, any trust created thereunder, or any such party in interest or
fiduciary, or any party dealing with any such Plan or any such trust, to the tax
or penalty on "prohibited transactions" imposed by Section 502 of ERISA or
Section 4975 of the Code. Neither the Borrower nor any of its ERISA Affiliates,
including its Subsidiaries, is or has been obligated to make any payment to a
Multiemployer Plan.
(n) Compliance with Regulations T, U and X. Neither the
Borrower nor any of the Borrower's Subsidiaries is engaged principally in or has
as one of its important activities the business of extending credit for the
purpose of purchasing or carrying, and neither the Borrower nor any of the
Borrower's Subsidiaries owns or presently intends to acquire, any "margin
security" or "margin stock" as defined in Regulations T, U, and X (12 C.F.R.
Parts 207, 220, 221 and 224) of the Board of Governors of the Federal Reserve
System (herein called "margin stock"). None of the proceeds of the Loans will be
used, directly or indirectly, for the purpose of purchasing or carrying any
margin stock or for the purpose of reducing or retiring any Indebtedness which
was originally incurred to purchase or carry margin stock or for any other
purpose which might constitute this transaction a "purpose credit" within the
meaning of said Regulations T, U, and X. The Borrower has not taken, caused or
authorized to be taken, and will not take any action which might cause this
Agreement or the Notes to violate Regulation T, U, or X or any other regulation
of the Board of Governors of the Federal Reserve System or to violate the
Securities Exchange Act of 1934, in each case as now in effect or as the same
may hereafter be in effect. If so requested by the Administrative Agent, the
Borrower will furnish the Administrative Agent with (i) a statement or
statements in conformity with the requirements of Federal Reserve Forms G-3
and/or U-1 referred to in Regulation U of said Board of Governors and (ii) other
documents evidencing its compliance with the margin regulations, reasonably
requested by the Administrative Agent. Neither the making of the Loans nor the
use of proceeds thereof will violate, or be inconsistent with, the revisions of
Regulations T, U, or X of said Board of Governors.
(o) Investment Company Act. Neither the Borrower nor any of
its Subsidiaries is required to register under the provisions of the Investment
Company Act of 1940, as amended, and neither the entering into or performance by
the Borrower and its Subsidiaries of this Agreement and the Loan Documents nor
the issuance of the Notes violates any provision of
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<PAGE> 51
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 or authority pursuant to any provisions of such Act.
(p) Governmental Regulation. Neither the Borrower nor any of
its Subsidiaries is required to obtain any consent, approval, authorization,
permit or license which has not already been obtained from, or effect any filing
or registration which has not already been effected with, any federal, state or
local regulatory authority 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 which has not already been obtained from, or effect any filing or
registration which has not already been effected with, any federal, state or
local regulatory authority in connection with the performance, in accordance
with their respective terms, of this Agreement or any other Loan Document.
(q) Absence of Default, Etc. The Borrower and its Subsidiaries
are in compliance in all respects with all of the provisions of their respective
partnership agreements, Certificates or Articles of Incorporation and By-Laws,
as the case may be, and no event has occurred or failed to occur (including,
without limitation, any matter which could create a Default hereunder by
cross-default) which has not been remedied or waived, the occurrence or
non-occurrence of which constitutes, (i) a Default or (ii) a material default by
the Borrower or any of its Subsidiaries, or an event or condition giving rise to
any put right or other prepayment right of any holder of Indebtedness, under any
indenture, agreement or other instrument relating to Indebtedness of the
Borrower or any of its Subsidiaries (other than as set forth on Schedule 6
attached hereto), or a default under any License (which Default could reasonably
be expected to result in an Event of Default under Section 8.1(m) hereof), or a
default under any judgment, decree or order to which the Borrower or any of its
Subsidiaries is a party or by which the Borrower or any of its Subsidiaries or
any of their respective properties may be bound or affected. 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 issued by the
FCC.
(r) Accuracy and Completeness of Information. All information,
reports, prospectuses and other papers and data relating to the Borrower or any
of its Subsidiaries or, to the best of the Borrower's knowledge, the other
parties to the AT&T Acquisition Agreement, or any of their respective
Subsidiaries and furnished by or on behalf of the Borrower or any of its
Subsidiaries to the Administrative Agent or the Banks were, at the time
furnished, true, complete and correct in all material respects to the extent
necessary to give the Administrative Agent and the Banks true and accurate
knowledge of the subject matter.
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<PAGE> 52
(s) Agreements with Affiliates. Except for agreements or
arrangements with Affiliates wherein the Borrower or one or more of the
Restricted Subsidiaries provides services to such Affiliates for fair
consideration and which are set forth on Schedule 9 attached hereto, neither the
Borrower nor any of the Restricted 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.
(t) Payment of Wages. The Borrower and each of the Restricted
Subsidiaries are in compliance with the Fair Labor Standards Act, as amended, in
all material respects, and such Persons have paid all minimum and overtime wages
required by law to be paid to their respective employees.
(u) Priority. The Security Interest is a valid and perfected
first priority security 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). The fair market value of all partnership
interests owned by the Borrower or any of its Subsidiaries which do not
constitute Collateral is less than $5,000,000 in the aggregate.
(v) Indebtedness for Money Borrowed. Except as described on
Schedule 10 attached hereto, neither the Borrower nor any of its Subsidiaries
has outstanding, as of the Agreement Date, and after giving effect to the
initial Advances hereunder on the Agreement Date, any Indebtedness for Money
Borrowed.
(w) Solvency. As of the Agreement Date and after giving effect
to the transactions contemplated by the Loan Documents and, both before and
after giving effect to the AT&T Acquisition, (i) the property of the Borrower,
at a fair valuation, will exceed its debt; (ii) the capital of the Borrower will
not be unreasonably small to conduct its business; (iii) the Borrower will not
have incurred debts, or have intended to incur debts, beyond its ability to pay
such debts as they mature; and (iv) the present fair salable value of the assets
of the Borrower will be materially greater than the amount that will be required
to pay its probable liabilities (including debts) as they become absolute and
matured. For purposes of this Section, "debt"
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means any liability on a claim, and "claim" means (i) the right to payment,
whether or not such right is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, undisputed, legal, equitable, secured or
unsecured, or (ii) the right to an equitable remedy for breach of performance if
such breach gives rise to a right to payment, whether or not such right to an
equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured,
undisputed, secured or unsecured.
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 Advance 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.
ARTICLE 5
General Covenants
So long as any of the Obligations is outstanding and unpaid or the Banks
have an obligation to fund Advances 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:
Section 5.1 Preservation of Existence and Similar Matters. Except as
permitted under Section 7.4(b) below and except with respect to Subsidiaries
which are created solely for the purpose of effecting Acquisitions permitted
hereby which are dissolved immediately following the subject Acquisitions, the
Borrower will, and will cause each of the Restricted
Subsidiaries to:
(i) preserve and maintain its existence, and its material
rights, franchises, licenses and privileges in the state of its
incorporation, including, without limiting the foregoing, the
Licenses and all other Necessary Authorizations; and
(ii) 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
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cause each of its Subsidiaries to, (a) engage solely in the business of owning,
constructing, managing, operating and investing in paging service systems and
communications businesses incidental or directly relating thereto, and (b)
comply in all material respects with the requirements of all Applicable Law.
Section 5.3 Maintenance of Properties. The Borrower will, and will
cause each of the Restricted 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 the Restricted 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 the
Restricted Subsidiaries will maintain a fiscal year ending on December 31.
Section 5.5 Insurance. The Borrower will, and will cause each of the
Restricted Subsidiaries to:
(a) Maintain insurance including, but not limited to, business
interruption coverage and public liability coverage insurance from responsible
companies in such amounts and against such risks to the Borrower and each of the
Restricted Subsidiaries as is prudent for similarly situated companies engaged
in the paging and wireless communications industry.
(b) Keep their respective assets insured by insurers on terms
and in a manner acceptable to the Administrative Agent against loss or damage by
fire, theft, burglary, loss in transit, explosions and hazards insured against
by extended coverage, in amounts which are prudent for the paging and wireless
communications industry and satisfactory to the Administrative Agent, all
premiums thereon to be paid by the Borrower and the Restricted Subsidiaries.
(c) 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, and name
the Administrative Agent as additional named lender loss payee and, as
appropriate, additional insured, to the extent of the Obligations.
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Section 5.6 Payment of Taxes and Claims. The Borrower will, and will
cause each of its Subsidiaries to, pay and discharge all taxes, including,
without limitation, withholding taxes, assessments and governmental charges or
levies required to be paid by them or imposed upon them or their income or
profits or upon any properties belonging to them, prior to the date on which
penalties attach thereto, and all lawful claims for labor, materials and
supplies which, if unpaid, might become a Lien or charge upon any of their
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 shall have been set aside on the
appropriate books, but only so long as such tax, assessment, charge, levy or
claim does not become a Lien or charge other than a Permitted Lien and no
foreclosure, distraint, sale or similar proceedings shall have been commenced.
The Borrower will, and will cause each of its Subsidiaries to, timely file all
information returns required by federal, state or local tax authorities.
Section 5.7 Compliance with ERISA.
(a) The Borrower shall, and shall cause its Subsidiaries to,
make all contributions to any Employee Pension Plan when such contributions are
due and not incur any "accumulated funding deficiency" within the meaning of
Section 412(a) of the Code, 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, and shall cause its Subsidiaries to,
comply in all material respects with the requirements of COBRA with respect to
any Plans subject to the requirements thereof.
(c) 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, that any
Reportable Event has occurred with respect to any Employee Pension Plan or that
PBGC has instituted or will institute proceedings under Title IV of ERISA to
terminate any Employee Pension Plan or to appoint a trustee to administer any
Employee Pension Plan, 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
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<PAGE> 56
Department of Labor which sets forth or proposes any action or determination
with respect to such Plan, (iii) promptly after the filing thereof, any annual
report required to be filed pursuant to ERISA in connection with each Plan
maintained by the Borrower or any of its ERISA Affiliates, including the
Subsidiaries, and (iv) promptly upon the Administrative Agent's or any Bank's
request therefor, such additional information concerning any such Plan as may be
reasonably requested by the Administrative Agent or any Bank.
(d) 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.
(e) 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.
(f) 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 could have a Materially Adverse Effect:
(i) engage in any transaction in connection with which the
Borrower, any of its Subsidiaries or any ERISA Affiliate could be
subject to either a civil penalty assessed pursuant to 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 could result in any liability of the
Borrower, any of its Subsidiaries or any ERISA Affiliate to the PBGC;
(iii) fail to make full payment when due of all amounts
which, under the provisions of any 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
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<PAGE> 57
(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; Loans. Subject to any provisions
herein or in any other Loan Document, the Borrower will, and will cause each of
the Restricted Subsidiaries to, pay any and all of their respective Indebtedness
when and as it becomes due or to the extent of trade payables of such Persons
otherwise in accordance with ordinary business practices customary for the
wireless communications industry, other than amounts diligently disputed in 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 Facility A Commitment and the Facility C
Commitment directly or indirectly: (a) to fund Capital Expenditures of the
Borrower and the Restricted Subsidiaries; (b) for working capital needs and
other general corporate purposes of the Borrower and the Restricted Subsidiaries
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 (c)
subject to compliance with Section 5.13 hereof, to finance Acquisitions
permitted pursuant to Section 7.6 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 within the meaning of
Regulations T, U, and X of the Board of Governors of the Federal Reserve System.
Section 5.11 Indemnity. The Borrower for itself and on behalf of each
of the Restricted Subsidiaries jointly and severally agrees to indemnify and
hold harmless each Bank, the Administrative Agent, the Managing Agents, the
Documentation Agent, the Syndication Agent and each of their respective
affiliates, employees, representatives, shareholders, officers,
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directors and counsel (any of the foregoing shall be an "Indemnitee") from and
against any and all claims, liabilities, losses, damages, actions, attorneys'
fees and expenses (as such fees and expenses are incurred) and demands by any
party, including the costs of investigating and defending such claims, whether
or not the Borrower, any Subsidiary or the Person seeking indemnification is the
prevailing party (a) resulting from any breach or alleged breach by the Borrower
or any Subsidiary of the Borrower of any representation or warranty made
hereunder; or (b) otherwise arising out of (i) the Commitments or otherwise
under this Agreement, any Loan Document or any transaction contemplated hereby
or thereby, including, without limitation, the use of the proceeds of Loans
hereunder in any fashion by the Borrower or the performance of their respective
obligations under the Loan Documents by the Borrower or any of its Subsidiaries,
(ii) allegations of any participation by the Banks, the Managing Agents, the
Documentation Agent, the Syndication Agent and the Administrative Agent, or any
of them, in the affairs of the Borrower or any of its Subsidiaries, or
allegations that any of them has any joint liability with the Borrower or any of
its Subsidiaries for any reason, (iii) any claims against the Banks, the
Managing Agents, the Documentation Agent, the Syndication Agent and the
Administrative Agent, or any of them, by any shareholder or other investor in or
lender to the Borrower or any Subsidiary, by any brokers or finders or
investment advisers or investment bankers retained by the Borrower or by any
other third party, arising out of the Commitments or otherwise under this
Agreement; or (c) in connection with taxes (not including federal or state
income taxes or other taxes based solely upon the revenues of such Persons),
fees, and other charges payable in connection with the Loans, or the execution,
delivery, and enforcement of this Agreement, the Security Documents, the other
Loan Documents, and any amendments thereto or waivers of any of the provisions
thereof; unless the Person seeking indemnification hereunder is determined in
such case to have acted with gross negligence or willful misconduct, in any
case, by a final, non-appealable judicial order of a court of competent
jurisdiction. The obligations of the Borrower and the Restricted Subsidiaries
under this Section 5.11 are in addition to, and shall not otherwise limit, any
liabilities which the Borrower might otherwise have in connection with any
warranties or similar obligations of the Borrower or any of its Subsidiaries in
any other Loan Document.
Section 5.12 Interest Rate Hedging. The Borrower shall at all times
maintain one or more Interest Rate Hedge Agreements with respect to the
Borrower's interest obligations on an aggregate principal amount of not less
than fifty percent (50%) of the principal amount of Total Debt outstanding from
time to time. Such Interest Rate Hedge Agreements shall provide interest rate
protection in conformity with ISDA standards and for a period of at least three
(3) years from the date of such Interest Rate Hedge Agreements or, if earlier,
until the Maturity Date on terms acceptable to the Managing Agents, such terms
to include consideration of the creditworthiness of the other party to the
proposed Interest Rate Hedge Agreement. Interest Rate Hedge Agreements required
hereby may be in the form of (i) an "on-market" interest rate swap, (ii) an
interest rate cap having a cap not higher than two percent (2%) per annum above
the
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prevailing interest rate for U.S. Treasury securities having a term
approximately equal to the term of the interest rate cap in question, or (iii)
any other interest rate hedging product satisfactory to the Managing Agents.
Indebtedness for Money Borrowed of the Borrower and the Restricted Subsidiaries
which bears interest at a fixed rate shall be deemed to be subject to an
Interest Rate Hedge Agreement for purposes of this Section. Subject to
compliance with Section 7.1(d) hereof, the Borrower may also enter into interest
rate floors corresponding to any interest rate caps it has entered into in
accordance with this Agreement, so long as (i) the floors are lower in rate than
the corresponding caps, (ii) such floors have terms no longer than the
corresponding caps, and (iii) such floors conform to ISDA standards. All
Obligations of the Borrower to the Administrative Agent or any of the Banks
pursuant to any Interest Rate Hedge Agreement permitted hereunder and all Liens
granted to secure such Obligations shall rank pari passu with all other
Obligations and Liens securing such other Obligations; and any Interest Rate
Hedge Agreement between the Borrower and any other Person shall be unsecured.
Section 5.13 Covenants Regarding Formation of Subsidiaries and
Acquisitions. At the time of (i) any Acquisition permitted hereunder or (ii) the
formation of any new Restricted Subsidiary of the Borrower or any of its
Subsidiaries which is permitted under this Agreement, including, without
limitation, the formation of any License Sub, the Borrower will, and will cause
its Subsidiaries, as appropriate, to (a) provide to the Administrative Agent (1)
an executed Master Subsidiary Security Agreement for such new Restricted
Subsidiary, in substantially the form of Exhibit J attached hereto, together
with appropriate UCC-1 financing statements, (2) an executed Subsidiary Guaranty
for such new Restricted Subsidiary, in substantially the form of Exhibit K
attached hereto, and (3), to the extent applicable, a Trademark Security
Agreement, substantially in the form of Exhibit F attached hereto, together with
other appropriate documentation, all of which shall constitute both Security
Documents and Loan Documents for purposes of this Agreement, as well as a loan
certificate for such new Restricted Subsidiary, substantially in the form of
Exhibit I attached hereto, together with appropriate attachments; (b) pledge to
the Administrative Agent all of the Capital Stock of such Subsidiary or Person
which is acquired or formed, beneficially owned by the Borrower or any of the
Borrower's Subsidiaries, as the case may be, as additional Collateral for the
Obligations to be held by the Administrative Agent in accordance with the terms
of the Borrower's Pledge Agreement, an existing Subsidiary Pledge Agreement, or
a new Subsidiary Pledge Agreement in substantially the form of Exhibit L
attached hereto, and execute and deliver to the Administrative Agent all such
other documentation for such pledge as, in the opinion of the Administrative
Agent, is appropriate; and (c) provide revised financial projections for the
remainder of the fiscal year and for each subsequent year until the Maturity
Date which reflect such Acquisition or formation, certified by the chief
financial officer of the Borrower, together with a statement by such Person that
no Default exists or would be caused by such Acquisition or formation, and all
other documentation, including one or more opinions of counsel, which are
satisfactory to the Administrative Agent and which in its opinion is appropriate
with respect to such Acquisition or
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the formation of such Subsidiary. Any document, agreement or instrument executed
or issued pursuant to this Section 5.13 shall be a "Loan Document" for purposes
of this Agreement.
Section 5.14 Payment of Wages. The Borrower shall and shall cause each
of the Restricted Subsidiaries to at all times comply, in all material respects,
with the requirements of the Fair Labor Standards Act, as amended, including,
without limitation, the provisions of such Act relating to the payment of
minimum and overtime wages as the same may become due from time to time.
Section 5.15 Further Assurances. The Borrower will promptly cure, or
cause to be cured, defects in the creation and issuance of any of the Notes and
the execution and delivery of the Loan Documents (including this Agreement),
resulting from any acts or failure to act by the Borrower or any of the
Borrower's Subsidiaries or any employee or officer thereof. The Borrower at its
expense will promptly execute and deliver to the Administrative Agent and the
Banks, or cause to be executed and delivered to the Administrative Agent and the
Banks, all such other and further documents, agreements, and instruments in
compliance with or accomplishment of the covenants and agreements of the
Borrower in the Loan Documents, including this Agreement, or to correct any
omissions in the Loan Documents, or more fully to state the obligations set out
herein or in any of the Loan Documents, or to obtain any consents, all as may be
necessary or appropriate in connection therewith and as may be reasonably
requested.
Section 5.16 License Subs. Promptly (and in any event within one
hundred eighty (180) days) after the consummation of any Acquisition permitted
hereunder, the Borrower shall cause each of the Licenses held by the Borrower or
any of the Restricted Subsidiaries to be transferred to one or more License
Subs, each of which License Subs shall have as its sole asset or assets the
Licenses of the Borrower or any of the Restricted Subsidiaries and a management
agreement with the Borrower and such of the Restricted Subsidiaries as operates
the portion of the paging system of the Borrower and the Restricted Subsidiaries
subject to such License or Licenses, such that from and after such applicable
date neither the Borrower nor the Restricted Subsidiaries (other than License
Subs) shall hold any Licenses other than through one or more duly created and
existing License Subs. The Borrower shall not permit the License Subs to have
any business activities, operations, assets, Indebtedness, Guaranties or Liens
(other than pursuant to a Subsidiary Guaranty and Master Subsidiary Security
Agreement issued in connection herewith). At the time of the transfer of the
Licenses to the License Subs, the Borrower shall provide to the Administrative
Agent copies of any required consents to such transfer from the FCC and any
other governmental authority, together with a certificate of an Authorized
Signatory stating that all Necessary Authorizations relating to such transfer
have been obtained or made, are in full force and effect and are not subject to
any pending or threatened reversal or cancellation.
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ARTICLE 6
Information Covenants
So long as any of the Obligations is outstanding and unpaid or the Banks
have an obligation to fund Advances 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 Form 10-Q of the
Borrower for such quarter, and, to the extent not contained therein, the balance
sheets of the Borrower on a consolidated and consolidating basis with its
Restricted Subsidiaries, and of the Unrestricted Subsidiaries on a stand-alone
basis, 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 and consolidating basis with its
Restricted Subsidiaries, and of the Unrestricted Subsidiaries on a stand-alone
basis, 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 figures with respect to any Acquisitions
consummated during such period, 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 basis with its Restricted Subsidiaries, and
of the Unrestricted Subsidiaries on a stand-alone basis, as at the end of such
period and the results of operations for such period, and for the elapsed
portion of the year ended with the last day of such period, subject only to
normal year-end and audit adjustments.
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 Form
10-K of the Borrower for such year, and, to the extent not contained therein,
the audited consolidated and consolidating balance sheets of the Borrower and
the Restricted Subsidiaries, and of the Unrestricted Subsidiaries on a
stand-alone basis, as of the end of such fiscal year and the related audited
consolidated and consolidating statements of operations of the Borrower and the
Restricted Subsidiaries, and of the Unrestricted Subsidiaries on a stand-alone
basis, for such fiscal year and for the previous fiscal year, the related
audited consolidated and consolidating statements of cash flow and stockholders'
equity of the Borrower and the Restricted Subsidiaries, and of the Unrestricted
Subsidiaries on a stand-alone basis, for such fiscal year and for the previous
fiscal year, which shall be accompanied by an opinion of independent certified
public accountants of
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<PAGE> 62
recognized national standing acceptable to the Administrative Agent, together
with a statement of such accountants that in connection with their audit,
nothing came to their attention that caused them to believe that the Borrower
was not in compliance with or was otherwise in Default under the terms,
covenants, provisions or conditions of Articles 7 and 8 hereof insofar as they
relate to accounting or financial matters.
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:
(a) setting forth as and at the end of such quarterly period
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 2.3(f), and (ii) whether or not the Borrower was in compliance with the
requirements of Sections 7.8, 7.9, 7.10, 7.11 and 7.12; and
(b) stating that no Default has occurred as at the end of such
quarterly period or 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 reports, if
any, submitted to the Borrower by the Borrower's independent public accountants
regarding the Borrower, including, without limitation, any management report
prepared in connection with the annual audit referred to in Section 6.2.
(b) Promptly upon receipt thereof, copies of any material
adverse notice or report regarding any License from the FCC or any other
governmental authority.
(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 business prospects of the Borrower or any of its
Subsidiaries or, to the extent available to the Borrower, ProNet Inc. or any of
its Subsidiaries, as the Administrative Agent or any Bank may reasonably
request.
(d) 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.
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<PAGE> 63
(e) Prior to January 31 of each year, an annual budget for the
Borrower and the Restricted Subsidiaries, containing information and in a form
substantially similar to that shown in the budget delivered to the Banks in
connection with the execution of this Agreement.
(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 Securities and Exchange Commission or any national securities exchange.
(g) Within thirty (30) days after the last day of each month
prior to the delivery of financial statements of the Borrower and the Restricted
Subsidiaries for the fiscal quarter ending September 30, 1996 as required
pursuant to Section 6.2 hereof, the balance sheet of the Borrower on a
consolidated basis with the Restricted Subsidiaries as at the end of such month,
and the related statements of operations and cash flows of the Borrower on a
consolidated basis with the Restricted Subsidiaries, 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 and the Restricted Subsidiaries on a consolidated basis as at the end
of such month and the results of operations for such month, subject only to
normal year-end and audit adjustments.
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 proceedings and
investigations by or before any governmental body 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, officers,
directors or principal shareholders, 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;
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<PAGE> 64
(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 the Borrower, or an event or condition which gives
rise to any put right or other prepayment right of any holder of
Indebtedness, 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;
(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 Subsidiaries 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; and
(vi) the occurrence of any event subsequent to the
Agreement Date which, if such event had occurred prior to the
Agreement Date, would have constituted an exception to the
representation and warranty in Section 4.1(m) of this Agreement.
ARTICLE 7
Negative Covenants
So long as any of the Obligations is outstanding and unpaid or the Banks
have an obligation to fund Advances 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
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 the Restricted 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(d) below);
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(b) operating accounts payable, accrued expenses and customer
advance payments incurred in the ordinary course of business;
(c) Indebtedness secured by Permitted Liens;
(d) Obligations under Interest Hedge Agreements having a
notional principal amount of not more than $125,000,000 in the aggregate;
(e) Indebtedness of the Borrower or any of the Restricted
Subsidiaries to the Borrower or any other Restricted Subsidiary so long as the
corresponding debt instruments are pledged to the Administrative Agent as
security for the Obligations;
(f) Indebtedness for Money Borrowed of the Borrower which is
pari passu with the Obligations in an aggregate principal amount not to exceed
$100,000,000, provided that (i) such Indebtedness for Money Borrowed is issued
under and governed by this Agreement pursuant to an amendment to this Agreement
which is in form and substance satisfactory to the Majority Banks and (ii) both
before and after giving effect to the incurrence of such Indebtedness for Money
Borrowed, the Borrower shall be in compliance with the terms of this Agreement,
including, without limitation, Sections 7.8, 7.9, 7.10, 7.11 and 7.12 hereof;
(g) Unsecured Subordinated Debt of the Borrower issued
pursuant to the 1995 Indenture, the A+ Indenture, the ProNet Indenture and other
unsecured Subordinated Debt (including, without limitation, seller notes issued
in conjunction with Acquisitions permitted under Section 7.6 hereof), provided
that (i) such Subordinated Debt is subordinated to the prior payment and
performance of the Obligations on terms satisfactory to the Majority Banks, (ii)
under the terms of such Subordinated Debt there shall be no payment or
prepayment of principal in respect thereof prior to the first anniversary of the
Maturity Date, and (iii) both before and after giving effect to the incurrence
of such Subordinated Debt, the Borrower shall be in compliance with the terms of
this Agreement, including, without limitation, Sections 7.8, 7.9, 7.10, 7.11 and
7.12 hereof, and the Borrower shall have delivered to the Banks pro forma
projections satisfactory to the Majority Banks demonstrating such compliance
through the Maturity Date; and
(h) Other unsecured Indebtedness, including, without
limitation, Indebtedness under Capitalized Lease Obligations which does not
exceed $10,000,000 in the aggregate at any one time outstanding.
Section 7.2 Limitation on Liens. The Borrower shall not, and shall not
permit any of the Restricted 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,
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whether now owned or hereafter acquired, except for Permitted Liens.
Section 7.3 Amendment and Waiver. Except as set forth on Schedule 11
attached hereto, the Borrower shall not, and shall not permit any of the
Restricted Subsidiaries to, enter into any amendment of, or agree to or accept
or consent to any waiver of any of the provisions of (a) 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),
or (b) any documents relating to Subordinated Debt.
Section 7.4 Liquidation, Merger, or Disposition of Assets.
(a) Disposition of Assets. The Borrower shall not, and shall
not permit any Restricted Subsidiary to, make any Asset Disposition in one or
more transactions involving Net Available Proceeds of $10,000,000 or more,
individually or in the aggregate with all other Asset Dispositions, during each
fiscal year of the Borrower, without the prior written consent of the Majority
Banks. Further, the Borrower shall not make, and shall not permit any Restricted
Subsidiary to make, any Asset Disposition in one or more transactions, unless:
(i) the Borrower (or such Subsidiary, as the case may be) receives consideration
at the time of such Asset Disposition at least equal to the fair market value of
the assets sold or disposed of as determined by the Board of Directors of the
Borrower; (ii) at least 80% of the consideration for such Asset Disposition
consists of cash or Cash Equivalents or the assumption of Indebtedness for Money
Borrowed of the Borrower to the extent that the Borrower is released from all
liability on such Indebtedness for Money Borrowed; and (iii) all Net Available
Proceeds of such Asset Disposition, less any amounts invested within 180 days of
such Asset Disposition in assets related to the business of the Borrower (or
invested within one year of such Asset Disposition in assets related to the
business of the Borrower, pursuant to an agreement to make such investment
entered into within 180 days of such Asset Disposition), are applied within such
180- (or 360-) day period to repay Loans then outstanding.
If, within 180 days after an Asset Disposition, the Borrower or a
Restricted Subsidiary enters into a contract providing for the investment of Net
Available Proceeds in assets relating to the business of the Borrower and such
contract is terminated without fault on the part of the Borrower or such
Subsidiary prior to the making of such investment, the Borrower or such
Subsidiary, as the case may be, shall within 90 days after the termination of
such agreement, or within 180 days after such Asset Disposition, whichever is
later, invest or otherwise apply the funds that were to be invested pursuant to
such agreement in accordance with the preceding paragraph, and any funds so
invested or applied shall for all purposes hereof be deemed to have been so
invested or applied within the 180- (or 360-) day period provided for in such
paragraph.
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(b) Liquidation or Merger. The Borrower shall not, and shall
not permit any of the Restricted 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 Restricted Subsidiaries, provided the Borrower
is the surviving corporation, or (ii) a merger between or among two or more
Restricted Subsidiaries of the Borrower, or (iii) in connection with an
Acquisition permitted hereunder effected by a merger in which the Borrower is
the surviving corporation or, in a merger in which the Borrower is not a party,
where the surviving corporation is a Restricted Subsidiary or (iv) liquidation
of the Tracking Subsidiary after the Tracking Asset Disposition.
(c) Tracking Asset Disposition. Notwithstanding Sections
7.4(a) and (b), the Borrower may make the Tracking Asset Disposition; provided,
however, that on or prior to the consummation of the Tracking Asset Disposition,
the Borrower shall provide to the Managing Agents, in form and substance
satisfactory to the Managing Agents, the following: (i) copies of the Tracking
Asset Purchase Agreement and all other documents related to the Tracking Asset
Disposition in form and substance satisfactory to the Managing Agents; (ii)
evidence satisfactory to the Managing Agents that the Tracking Asset Disposition
has been consummated pursuant to terms and conditions satisfactory to the
Managing Agents; (iii) certification to the Administrative Agent and the Banks
of the Borrower's compliance with Sections 7.8, 7.9, 7.10, 7.11 and 7.12 of the
Loan Agreement after giving effect to the Tracking Asset Disposition together
with any calculations necessary to demonstrate such compliance; (iv)
certification to the Administrative Agent, the Managing Agents and the Banks
that a Default does not exist and will not be caused by the Tracking Asset
Disposition; (v) all material information pertaining to the Tracking Asset
Disposition; and (vi) evidence of compliance with Sections 7.4(a)(i), 7.4(a)(ii)
and 7.4(a)(iii) hereof. For purposes of Section 7.4(a) hereof, the Net Available
Proceeds from the Tracking Asset Disposition shall not count against the
$10,000,000 basket in the first sentence thereof.
Section 7.5 Limitation on Guaranties. The Borrower shall not, and
shall not permit any of the Restricted 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, or
(b) obligations under agreements of the Borrower or any of the Restricted
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 Restricted Subsidiaries, (c) Guaranties of
Indebtedness incurred as permitted pursuant to Section 7.1 hereof, or (d) as may
be contained in any Loan Document including, without limitation, the Subsidiary
Guaranty.
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Section 7.6 Investments and Acquisitions. The Borrower shall not, and
shall not permit any of the Restricted Subsidiaries to, directly or indirectly,
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 assets or property in the ordinary course of business), or
make any Acquisition, except that so long as no Default then exists or would be
caused thereby:
(a) The Borrower and the Restricted Subsidiaries may, directly
or through a brokerage account (i) purchase marketable, direct obligations of
the United States of America, its agencies and instrumentalities maturing within
three hundred sixty-five (365) days of the date of purchase, (ii) purchase
commercial paper issued by corporations, each of which shall have a combined net
worth of at least $100 million and each of which conducts a substantial part of
its business in the United States of America, maturing within two hundred
seventy (270) days from the date of the original issue thereof, and rated "P-2"
or better by Moody's Investors Service, Inc., or any successor, or "A-2" or
better by Standard and Poor's Ratings Group, a division of McGraw Hill, Inc., or
any successor, and (iii) purchase repurchase agreements, bankers' acceptances,
and certificates of deposit maturing within three hundred sixty-five (365) days
of the date of purchase which are issued by, or time deposits maintained with, a
United States national or state bank the deposits of which are insured by the
Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance
Corporation and having capital, surplus and undivided profits totaling more than
$100 million and rated "A" or better by Moody's Investors Service, Inc., or any
successor, or Standard and Poor's Ratings Group, a division of McGraw Hill,
Inc., or any successor;
(b) Subject to compliance with Section 5.13 hereof, the
Borrower may own Capital Stock of any License Sub as permitted by Section 5.16
hereof;
(c) Provided that the Borrower complies with Section 5.13
hereof in connection therewith, and provides to the Administrative Agent and the
Banks financial projections and calculations, in form and substance satisfactory
to the Managing Agents, specifically demonstrating the Borrower's compliance
with Sections 7.8, 7.9, 7.10, 7.11 and 7.12 hereto and its ability to meet its
repayment obligations hereunder through the Maturity Date, after giving effect
thereto, the Borrower may make the following Acquisitions:
(i) the AT&T Acquisition;
(ii) Acquisitions of paging companies for an aggregate
Net Purchase Price not to exceed $50,000,000 during the term of this Agreement;
(iii) additional Acquisitions of paging companies so long
as the Total
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Leverage Ratio, after giving effect to the proposed Acquisition, is less than
5.00 to 1; and
(iv) other Acquisitions with the prior written consent of
the Majority Banks.
(d) The Borrower may make investments in wireless
communications ventures in an aggregate amount not to exceed, during the term of
this Agreement, the sum of (i) $25,000,000 plus (ii) sixty percent (60%) of the
amount of all proceeds (net of reasonable and customary transaction costs) from
the issuance by the Borrower of additional equity on or after the Agreement Date
in excess of $25,000,000; provided that (a) all ownership interests of the
Borrower or any of its Subsidiaries in such ventures, of whatever nature, are
pledged to the Administrative Agent as Collateral for the Obligations pursuant
to documentation satisfactory to the Majority Banks, and (b) all recourse to the
Borrower or any of its Subsidiaries with respect to any such venture shall be
limited to the amount of the investment made therein by the Borrower in
accordance herewith.
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) scheduled payments of accrued interest in respect of Subordinated Debt
incurred in accordance with Section 7.1 hereof, and (b) dividend payments in
respect of any preferred stock or convertible preferred securities of the
Borrower in an aggregate amount not to exceed $10,000,000 in any calendar year.
Section 7.8 Senior Leverage Ratio. (a) As of the end of any calendar
quarter, (b) at the time of any Advance hereunder (after giving effect to such
Advance), (c) upon the incurrence by the Borrower of any Subordinated Debt
(after giving effect thereto), (d) at the time of any Asset Disposition by the
Borrower or any Restricted Subsidiary, and (e) at the time of any acquisition or
investment by the Borrower or any Restricted Subsidiary, the Borrower shall not
permit the Senior Leverage Ratio to exceed the ratios set forth below during the
periods indicated:
<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
January 1, 1998 through
December 31, 1998 3.50:1
January 1, 1999 through
December 31, 1999 3.25:1
January 1, 2000 and thereafter 3.00:1
</TABLE>
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<PAGE> 70
Section 7.9 Total Leverage Ratio. (a) As of the end of any calendar
quarter, (b) at the time of any Advance hereunder (after giving effect to such
Advance), (c) upon the incurrence by the Borrower of any Subordinated Debt
(after giving effect thereto), (d) at the time of any proposed Asset Disposition
by the Borrower or any Restricted Subsidiary, and (e) at the time of any
acquisition or investment by the Borrower or any Restricted Subsidiary, the
Borrower shall not permit the Total Leverage Ratio to exceed the ratios set
forth below during the periods indicated:
<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
January 1, 1997 through
December 31, 1998 6.00:1
January 1, 1999 through
December 31, 1999 5.75:1
January 1, 2000 through
December 31, 2000 5.25:1
January 1, 2001 through
December 31, 2001 4.50:1
January 1, 2002 and thereafter 4.00:1
</TABLE>
Section 7.10 Annualized Operating Cash Flow to Pro Forma Debt Service
Ratio. (a) As of the end of any calendar quarter, (b) at the time of any Advance
hereunder (after giving effect to such Advance), (c) upon the incurrence by the
Borrower of any Subordinated Debt (after giving effect thereto), (d) at the time
of any Asset Disposition by the Borrower or any Restricted Subsidiary, and (e)
at the time of any acquisition or investment by the Borrower or any Restricted
Subsidiary, the Borrower shall not permit the ratio of (i) Annualized Operating
Cash Flow (for the calendar quarter end being tested in the case of Section
7.10(a) hereof, or for the most recently completed fiscal quarter end for which
financial statements are required to have been delivered pursuant to Section 6.1
or 6.2 hereof, as the case may be, in the case of Sections 7.10(b), (c), (d) and
(e) hereof) to (ii) Pro Forma Debt Service to be less than 1.25:1.
Section 7.11 Total Sources to Total Uses Ratio. The Borrower shall not
permit the ratio of (a) Total Sources to (b) Total Uses as of any date to be
less than or equal to 1.05 to 1.
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<PAGE> 71
Section 7.12 Operating Cash Flow to Net Cash Interest Expense Ratio.
(a) As of the end of any calendar quarter, (b) at the time of any Advance, (c)
upon the incurrence by the Borrower of any Subordinated Debt, (d) at the time of
any proposed Asset Disposition by the Borrower or any Restricted Subsidiary, and
(e) at the time of any acquisition or investment by the Borrower or any
Restricted Subsidiary, the Borrower shall not permit the ratio of (i) Operating
Cash Flow for the most recently completed fiscal quarter (calculated as of the
end of the fiscal quarter being tested in the case of Section 7.12(a) hereof, or
as of the end of the most recently completed fiscal quarter for which financial
statements are required to have been delivered pursuant to Section 6.1 or 6.2
hereof, as the case may be, in the case of Sections 7.12(b), (c), (d) and (e)
hereof) to (ii) Net Cash Interest Expense for such fiscal quarter to be less
than or equal to the ratios set forth below for the periods indicated:
<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
April 1, 1997 through
December 31, 1999 1.75:1
January 1, 2000 through
December 31, 2000 2.00:1
January 1, 2001
and thereafter 2.25:1
</TABLE>
Section 7.13 Affiliate Transactions. Except as set forth on Schedule 9
attached hereto, the Borrower shall not, and shall not permit any of the
Restricted 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 (other than to the Borrower or a Restricted Subsidiary),
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 7.14 Real Estate. Except as set forth on Schedule 12 attached
hereto, neither the Borrower nor any of the Restricted Subsidiaries shall
purchase any real estate or enter into any sale/leaseback transaction.
Notwithstanding the foregoing, the Borrower may purchase the Office Building
Assets pursuant to the Office Building Acquisition Agreement provided that (a)
at all times prior to contribution of the Office Building Assets to the Office
Building Partnership (i) the Borrower grants a negative pledge on the Office
Building Assets to the Administrative Agent and delivers to the Administrative
Agent all other documentation, including, without limitation, opinions of
counsel, an appraisal and a Phase I environmental audit which in the reasonable
opinion of the Managing Agents is appropriate with respect to such grant,
including any documentation requested by the Banks (collectively, the "Office
Building Documents") and
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(ii) not less than five (5) days prior to the Office Building Acquisition Date,
the Borrower shall have provided the Managing Agents with copies of the Office
Building Acquisition Agreement, the Office Building Documents and all other
documents related to the transfer of the Office Building Assets to the Borrower,
including, without limitation, lien search results from appropriate
jurisdictions with respect to the Office Building Assets, all of which shall be
certified by an Authorized Signatory to be true, complete and correct, and all
of which shall be in form and substance satisfactory to the Managing Agents; (b)
prior to or simultaneously with the contribution of the Office Building Assets
to the Office Building Partnership, (i) the Borrower shall have provided the
Managing Agents with all documentation required by Section 5.13 hereof and (ii)
the Borrower shall have provided the Managing Agents with replacement Office
Building Documents pursuant to which the Office Building Partnership grants a
negative pledge on the Office Building Assets to the Administrative Agent all of
which replacement Office Building Documents shall be form and substance
saisfactory to the Managing Agents and (c) the Borrower shall promptly cause the
contribution of the Office Building Assets to the Office Building Partnership.
Section 7.15 ERISA Liabilities. The Borrower shall not, and shall cause
each of its ERISA Affiliates not to, (i) permit the assets of any of their
respective Plans to be less than the amount necessary to provide all accrued
benefits under such Plans, or (ii) enter into any Multiemployer Plan.
Section 7.16 Unrestricted Subsidiaries. The Borrower may form or
otherwise acquire Unrestricted Subsidiaries with the prior written consent of
the Majority Banks. The Borrower shall not permit any Unrestricted Subsidiary
to: (a) create, assume, incur or otherwise become or remain obligated in respect
of or permit to be outstanding any Indebtedness, other than Indebtedness which
is non-recourse to the Borrower and the Restricted Subsidiaries; (b) create,
assume, incur or permit to exist or to be created, any Lien on any of its
properties or assets, whether now owned or hereafter acquired, other than Liens
securing Indebtedness which is non-recourse to the Borrower and the Restricted
Subsidiaries; (c) Guaranty, assume, be obligated with respect to, or permit to
be outstanding any Guaranty of, any obligation of any other Person other than
Guaranties which are non-recourse to the Borrower and the Restricted
Subsidiaries; or (d) own any assets or conduct any business or other activities
without the prior written consent of the Majority Banks. In addition, the
Borrower shall not and shall not permit any of its Subsidiaries to: (x) pledge
or permit the pledge of the Capital Stock or other ownership interests of any
Unrestricted Subsidiary to any Person (other than to the Administrative Agent as
additional Collateral for the Obligations); (y) make any loan or advance to, or
Guaranty any obligations of, any Unrestricted Subsidiary or otherwise acquire
for consideration evidences of Indebtedness, Capital Stock or other securities
of any Unrestricted Subsidiary, other than investments permitted under Section
7.6 hereof and other than intercompany loans and advances among the Unrestricted
Subsidiaries; or (z) transfer any assets to any Unrestricted Subsidiary.
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<PAGE> 73
The Borrower shall not permit the net worth of any Unrestricted Subsidiary,
after giving effect to all contingent liabilities and as otherwise determined in
accordance with GAAP, to be less than zero at any time.
Section 7.17 No Limitation on Upstream Dividends by Subsidiaries. The
Borrower shall not permit any Restricted Subsidiary to enter into or agree, or
otherwise become subject, to any agreement, contract or other arrangement with
any Person pursuant to the terms of which (a) such Restricted Subsidiary is or
would be prohibited from or limited in declaring or paying any cash dividends or
distributions on any class of its Capital Stock or any other ownership interests
owned directly or indirectly by the Borrower or from making any other
distribution on account of any class of any such Capital Stock or ownership
interests (herein referred to as "Upstream Dividends") or (b) the declaration or
payment of Upstream Dividends by a Restricted Subsidiary to the Borrower or to
another Restricted Subsidiary, on an annual or cumulative or other basis, is or
would be otherwise limited or restricted.
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 law or pursuant to any
judgment or order of any court or any order, rule or regulation of any
governmental or non-governmental body:
(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; or
(b) The Borrower shall default in the payment of: (i) any
interest under any of the Notes 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 Notes when due; or
(c) The Borrower shall default in the performance or
observance of any agreement or covenant contained in Sections 5.2(a), 5.10,
5.13, or 5.16 or in Articles 6 or 7 hereof; or
(d) The Borrower shall default in the performance or
observance of any other
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<PAGE> 74
agreement or covenant contained in this Agreement not specifically referred to
elsewhere in this Section 8.1, and such default shall not be cured within a
period of thirty (30) days from the occurrence of such default; or
(e) There shall occur any default in the performance or
observance of any agreement or covenant or breach of any representation or
warranty 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, which shall not be cured within a
period of thirty (30) days from the occurrence of such default; or
(f) There shall be entered and remain unstayed a decree or
order for relief in respect of the Borrower or any of the Borrower's
Subsidiaries 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 the Borrower or any of the
Borrower's Subsidiaries, or of any substantial part of their respective
properties; or ordering the winding-up or liquidation of the affairs of the
Borrower, or any of the Borrower's Subsidiaries; or an involuntary petition
shall be filed against the Borrower or any of the Borrower's Subsidiaries and a
temporary stay entered, and (i) such petition and stay shall not be diligently
contested, or (ii) any such petition and stay shall continue undismissed for a
period of sixty (60) consecutive days; or
(g) The Borrower or any of the Borrower's Subsidiaries 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 the Borrower or any of
the Borrower's Subsidiaries 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 the Borrower or any of the Borrower's
Subsidiaries or of any substantial part of their respective properties, or the
Borrower or any of the Borrower's Subsidiaries shall fail generally to pay their
respective debts as they become due or shall be adjudicated insolvent; the
Borrower shall suspend or discontinue its business; the Borrower or any of the
Borrower's Subsidiaries shall have concealed or removed any of its property with
the intent to hinder or defraud its creditors or shall have made a fraudulent or
preferential transfer under any applicable fraudulent conveyance or bankruptcy
law, or the Borrower or any of the Borrower's Subsidiaries shall take any action
in furtherance of any such action; or
(h) A judgment 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
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<PAGE> 75
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, after the expiration of any such stay, such judgment, warrant or process
shall not have been paid or discharged or removed to bond; or
(i) 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 of its Subsidiaries or any ERISA
Affiliate, or to which the Borrower or any of its Subsidiaries 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 such
Plan; or PBGC shall institute proceedings to terminate any such Plan; or the
Borrower or any of its Subsidiaries or any ERISA Affiliate shall incur any
liability to PBGC in connection with the termination of any such Plan; or any
Plan or trust created under any Plan of the Borrower or any of its Subsidiaries
or any ERISA Affiliate shall engage in a "prohibited transaction" (as such term
is defined in Section 406 of ERISA or Section 4975 of the Code) which would
subject any such Plan, any trust created thereunder, any trustee or
administrator thereof, or any party dealing with any such Plan or trust to the
tax or penalty on "prohibited transactions" imposed by Section 502 of ERISA or
Section 4975 of the Code; or
(j) Any event not referred to elsewhere in this Section 8.1
shall occur which has a Materially Adverse Effect; or
(k) There shall occur (i) any default under (A) the 1995
Indenture, (B) the ProNet Indenture, (C) the 1997 Indenture or (D) any other
document, instrument or agreement relating to any Indebtedness of the Borrower
or any of the Borrower's Subsidiaries having an aggregate principal amount
exceeding $5,000,000; or (ii) any event which directly or indirectly causes the
Borrower or any of its Subsidiaries to be required to offer to prepay any
Indebtedness or which directly or indirectly gives any holder of any
Indebtedness of the Borrower or any of its Subsidiaries the right to require the
Borrower or any of its Subsidiaries to prepay any such Indebtedness under the
1995 Indenture, the ProNet Indenture, the 1997 Indenture or any other document,
instrument or agreement relating to any Indebtedness of the Borrower or any of
the Borrower's Subsidiaries having an aggregate principal amount exceeding
$5,000,000; or (iii) any default under any Interest Rate Hedge Agreement having
a notional principal amount of $1,000,000 or more; or
(l) The FCC shall deliver to the Borrower or any of its
Subsidiaries an order to show cause why an order of revocation should not be
issued based upon any alleged attribution of "alien ownership" (within the
meaning of 47 U.S.C. Section 310(b) and any interpretation
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<PAGE> 76
of the FCC thereunder) to the Borrower or any of its Subsidiaries and (i) the
Borrower shall fail to respond thereto in accordance with such order and
Applicable Law within thirty (30) days after such delivery (or such shorter
period specified by such order or Applicable Law), or (ii) such order shall not
have been rescinded within one hundred eighty (180) days after such delivery; or
(m) One or more Licenses shall be terminated or revoked or
substantially adversely modified such that the Borrower and the Restricted
Subsidiaries are no longer able to operate the related paging 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 the Restricted Subsidiaries are no longer able to operate the related paging
system or portions thereof and retain the revenue received therefrom, if any,
and, in either case, there shall be any loss of revenue or forecast revenue of
the Borrower or any of the Restricted Subsidiaries as a direct or indirect
result thereof; or
(n) 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; or
(o) Any Security Document shall for any reason, fail or cease
(except by reason of lapse of time) 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, subject only to Permitted Liens; or
(p) Any Change in Control Event shall occur or exist; or
(q) All or substantially all of the Capital Stock of the
Borrower shall be held by a holding company or parent company; or
(r) There shall occur any default by the Borrower or any
Restricted Subsidiary under or a cancellation of, without replacement, any
Transponder Lease Agreement which default is not cured within any applicable
cure period; or
(s) Any objection to the AT&T Acquisition is filed within the
thirty and forty day waiting periods following the grant of FCC approval for the
AT&T Acquisition and such
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objection remains outstanding on the sixty-first day following the filing
thereof.
Section 8.2 Remedies.
(a) If an Event of Default specified in Section 8.1 (other
than an Event of Default under Section 8.1(f) or Section 8.1(g)) 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
Commitments, and/or (ii) declare the principal of and interest on the Loans and
the Notes and all other amounts owed to the Banks and the Administrative Agent
under this Agreement, the Notes 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, the Notes
or any other Loan Document to the contrary notwithstanding, and the Commitments
shall thereupon forthwith terminate.
(b) Upon the occurrence and continuance of an Event of Default
specified in Section 8.1(f) or Section 8.1(g), all principal, interest and other
amounts due hereunder and under the Notes, and all other Obligations, shall
thereupon and concurrently therewith become due and payable and the Commitments
shall forthwith terminate and the principal amount of the Loans 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 Notes, as provided in subsection
(a) or (b) of this Section 8.2, above, 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) Following acceleration of the Notes as provided in
subsection (a) or (b) of this Section 8.2, provided the Majority Banks elect to
initiate (or direct the Administrative Agent to initiate) either (i) a civil
proceeding for the appointment of a receiver with respect to the Borrower's
assets or (ii) an involuntary bankruptcy (or similar) petition against the
Borrower, the Majority Banks shall have the right, but not the obligation, to
direct the Administrative Agent, to the extent permitted under Applicable Law,
to take possession of and to operate the paging systems of the Borrower and the
Restricted Subsidiaries during the "Pre-receivership Period," as defined below,
in accordance with the terms of the Licenses and pursuant to the terms and
subject to any limitations contained in the Security Documents and, within
guidelines established by the Majority Banks prior to such action, to make any
and all payments and expenditures necessary or desirable in connection
therewith, including, without limitation, payment of wages as required under the
Fair Labor Standards Act, as amended, and any necessary withholding
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taxes to state or federal authorities. In the event the guidelines referred to
in the preceding sentence do not contemplate payments or expenditures that
subsequently arise in the ordinary course after the Administrative Agent has
begun to operate the systems, the Administrative Agent may, after giving three
(3) Business Days' notice to the Banks of its intention to do so, make such
payments and expenditures as it deems reasonable and advisable in its sole
discretion to maintain the normal day-to-day operation of such systems. All
payments and expenditures incurred in connection with this provision in excess
of receipts shall constitute costs and expenses of performance and/or collection
reimbursable by the Borrower pursuant to Section 11.2 hereof, which until paid
by the Borrower shall be reimbursed to the Administrative Agent by the Banks
pursuant to Section 9.11 hereof. No exercise by the Administrative Agent and the
Majority Banks of the rights granted to any of them under this Section 8.2(d)
shall constitute a waiver of any other rights and remedies granted to the
Administrative Agent and the Banks, or any of them, under this Agreement or any
other Loan Document or at law. The Borrower hereby irrevocably appoints the
Administrative Agent, as collateral agent for the Banks, the true and lawful
attorney of the Borrower, in its name and stead and on its behalf, to execute,
receipt for or otherwise act in connection with any and all contracts,
instruments or other documents in connection with the completion and operating
of such systems in the exercise of the Administrative Agent and Banks' rights
under this Section 8.2(d). Such power of attorney is coupled with an interest
and is irrevocable. The rights of the Administrative Agent and the Banks under
this Section 8.2(d) shall be subject to the prior compliance with the
Communications Act and the FCC rules and policies promulgated thereunder to the
extent applicable to the exercise of such rights. If the Administrative Agent
(or the Banks) take possession of the systems pursuant to this Section 8.2(d)
prior to initiation of the actions described in the first sentence of this
Section, the Administrative Agent shall initiate such action within the time
period established by the Majority Banks prior to such action. The "Pre-
receivership Period" referred to in the first sentence of this Section 8.2(d)
shall mean the time period beginning on the date of the first possession of the
systems by the Administrative Agent (or the Banks) and ending upon the earlier
of (i) the taking of possession of the systems by a receiver appointed by a
court of competent jurisdiction or (ii) the taking of possession of the systems
by a trustee or by the Borrower as debtor-in-possession following the entry of
an order for relief in a case of the Borrower pending under the United States
Bankruptcy Code.
(e) Upon acceleration of the Notes, as provided in subsection
(a) or (b) of this Section 8.2, the Administrative 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 the Restricted Subsidiaries, and the
Borrower, for itself and on behalf of the Restricted 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. The rights of the Administrative Agent under this Section
8.2(e) shall be subject to its prior compliance with the
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<PAGE> 79
Communications Act and the FCC rules and policies promulgated thereunder to the
extent applicable to the exercise of such rights.
(f) The rights and remedies of the Administrative Agent and
the Banks hereunder shall be cumulative, and not exclusive.
Section 8.3 Payments Subsequent to Declaration of Event of Default.
Subsequent to the acceleration of the Loans under Section 8.2 hereof, payments
and prepayments under this Agreement made to any of the Administrative Agent and
the Banks or otherwise received by any of such Persons (from realization on
Collateral for the Obligations or otherwise) shall be paid over to the
Administrative Agent (if necessary) and distributed by the Administrative Agent
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 by it
in connection with the sale or disposition of any Collateral for the Obligations
and all amounts under Section 11.2(b) and (c); second, to the Banks and the
Administrative Agent for any fees hereunder or under any of the other Loan
Documents then due and payable; third, to the Banks pro rata on the basis of
their respective unpaid principal amounts (except as provided in Section
2.2(e)), to the payment of any unpaid interest which may have accrued on the
Obligations; fourth, to the Banks pro rata until all Loans have been paid in
full (and, for purposes of this clause, obligations under Interest Rate Hedge
Agreements with the Banks or any of them shall be paid on a pro rata basis with
the Loans); fifth, to the Banks pro rata on the basis of their respective unpaid
amounts, to the payment of any other unpaid Obligations; and sixth, to the
Borrower or as otherwise required by law.
ARTICLE 9
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 portion of the Loans and in its Notes
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 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
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the interests of such Bank in its portion of the Loans and in its Notes 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 Powell, Goldstein, Frazer & Murphy LLP, Atlanta, Georgia, special
counsel to the Administrative Agent, or with other legal counsel selected by it
and shall not be liable for any action taken or 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 Note, 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
Commitments and the Loans, the Bank which is an affiliate of 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
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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.
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, unless the Administrative Agent shall have been instructed
by the Majority 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
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 the Borrower's 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 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 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
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or any Bank, or shall request inconsistent action with respect to such Default
or Event of Default, the Administrative Agent may, but shall not be required to,
take such action and assert such rights (other than rights under Article 8
hereof) 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;
(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 the Notes or any other Loan Document, or
(ii) 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 document contemplated by this
Agreement or any information provided pursuant to this Agreement, any other Loan
Document, or any other document contemplated by this Agreement, or for the
validity, effectiveness, enforceability or sufficiency of this Agreement, the
Notes, any other Loan Document, or any other document contemplated by this
Agreement; 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, the Managing Agents, the Syndication Agent and the
Documentation 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 asserted against the Administrative Agent, the Managing
Agents, the Syndication Agent and the Documentation Agent in any way relating to
or arising out of this Agreement, any other Loan Document, or any other document
contemplated by this Agreement or any other Loan Document or any action taken or
omitted by the Administrative Agent, the Managing Agents, the
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Syndication Agent and the Documentation Agent under this Agreement, any other
Loan Document, or any other document contemplated by this Agreement, except that
no Bank shall be liable to the Administrative Agent, the Managing Agents, the
Syndication Agent and the Documentation 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 such Person 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 portion of the Loans 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 Loans remains outstanding or
such Bank has an obligation to make its 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 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 shall
have the right to appoint a successor Administrative Agent, which appointment
shall, prior to a Default, be subject to the consent of the Borrower, acting
reasonably. 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 Bank or a commercial bank organized
under the laws of the United States of America or any political subdivision
thereof which has combined capital and reserves in excess of $250,000,000. Such
appointment shall, prior to a Default, be subject to the consent of the
Borrower, acting reasonably. Upon the 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
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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 advice of counsel
concerning all matters pertaining to such duties.
Section 9.15 Agents. None of the Managing Agents, the Co-Agents or the
Documentation Agents shall have any duties or obligations under this Agreement
or the other Loan Documents in their capacities Managing Agents, as Co-Agents or
Documentation Agents.
ARTICLE 10
Change in Circumstances
Affecting Eurodollar Advances
Section 10.1 Eurodollar Basis Determination Inadequate or Unfair. If
with respect to any proposed Eurodollar Advance for any Interest Period, the
Administrative Agent determines after consultation with the Banks that deposits
in dollars (in the applicable amount) are not being offered to each of the Banks
in the relevant market for such Interest Period, the Administrative Agent shall
forthwith give notice thereof to the Borrower and the Banks, whereupon until the
Administrative Agent notifies the Borrower that the circumstances giving rise to
such situation no longer exist, the obligations of any affected Bank to make its
portion of such type of Eurodollar Advances shall be suspended.
Section 10.2 Illegality. If after the date hereof, the adoption of any
Applicable Law, or any change in any Applicable Law (whether adopted before or
after the Agreement Date), or any change in interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any Bank
with any directive (whether or not having the force of law) of any such
authority, central bank or comparable agency, shall make it unlawful or
impossible for any Bank to make, maintain or fund its portion of Eurodollar
Advances, such Bank shall so notify the Administrative Agent, and the
Administrative Agent shall forthwith give notice thereof to the other Banks and
the Borrower. Before giving any notice to the Administrative Agent pursuant to
this Section 10.2, such Bank shall designate a different lending office if such
designation will avoid the need for giving such notice and will not, in the sole
judgment of such Bank, be
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otherwise materially disadvantageous to such Bank. Upon receipt of such notice,
notwithstanding anything contained in Article 2 hereof, the Borrower shall repay
in full the then outstanding principal amount of such Bank's portion of each
affected Eurodollar Advance, together with accrued interest thereon, on either
(a) the last day of the then current Interest Period applicable to such affected
Eurodollar Advances if such Bank may lawfully continue to maintain and fund its
portion of such Eurodollar Advance to such day or (b) immediately if such Bank
may not lawfully continue to fund and maintain its portion of such affected
Eurodollar Advances to such day. Concurrently with repaying such portion of each
affected Eurodollar Advance, the Borrower may borrow a Base Rate Advance from
such Bank, and such Bank shall make such Advance, if so requested, in an amount
such that the outstanding principal amount of the affected Note held by such
Bank shall equal the outstanding principal amount of such Note or Notes
immediately prior to such repayment.
Section 10.3 Increased Costs.
(a) If after the date hereof, the adoption of any Applicable
Law, or any change in any Applicable Law (whether adopted before or after the
Agreement Date), or any interpretation or change in interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof or compliance
by any Bank with any directive (whether or not having the force of law) of any
such authority, central bank or comparable agency:
(1) shall subject any Bank to any tax, duty or other
charge with respect to its obligation to make its portion of Eurodollar
Advances, or its portion of existing Advances, or shall change the basis
of taxation of payments to any Bank of the principal of or interest on
its portion of Eurodollar Advances or in respect of any other amounts
due under this Agreement, in respect of its portion of Eurodollar
Advances or its obligation to make its portion of Eurodollar Advances
(except for changes in the rate or method of calculation of tax on the
overall net income of such Bank); or
(2) shall impose, modify or deem applicable any reserve
(including, without limitation, any imposed by the Board of Governors of
the Federal Reserve System, but excluding any included in an applicable
Eurodollar Reserve Percentage), special deposit, capital adequacy,
assessment or other requirement or condition against assets of, deposits
with or for the account of, or commitments or credit extended by, any
Bank or shall impose on any Bank or the London interbank borrowing
market any other condition affecting its obligation to make its portion
of such Eurodollar Advances or its portion of existing Advances;
and the result of any of the foregoing is to increase the cost to such Bank of
making or
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maintaining any of its portion of Eurodollar Advances, or to reduce the amount
of any sum received or receivable by such Bank under this Agreement or under its
Note with respect thereto, then, on the earlier of a date within ten (10) days
after demand by such Bank or the Maturity Date, the Borrower agrees to pay to
such Bank such additional amount or amounts as will compensate such Bank for
such increased costs. Each Bank will promptly notify the Borrower and the
Administrative Agent of any event of which it has knowledge, occurring after the
date hereof, which will entitle such Bank to compensation pursuant to this
Section 10.3 and will designate a different lending office if such designation
will avoid the need for, or reduce the amount of, such compensation and will
not, in the sole judgment of such Bank made in good faith, be otherwise
disadvantageous to such Bank.
(b) 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. In determining such amount, such Bank may use any
reasonable averaging and attribution methods. If any Bank demands compensation
under this Section 10.3, the Borrower may at any time, upon at least five (5)
Business Days' prior notice to such Bank, prepay in full such Bank's portion of
the then outstanding Eurodollar Advances, together with accrued interest thereon
to the date of prepayment, along with any reimbursement required under Section
2.10 hereof. Concurrently with prepaying such portion of Eurodollar Advances the
Borrower may borrow a Base Rate Advance, or a Eurodollar Advance not so
affected, from such Bank, and such Bank shall, if so requested, make such
Advance in an amount such that the outstanding principal amount of the affected
Note or Notes held by such Bank shall equal the outstanding principal amount of
such Note or Notes immediately prior to such prepayment.
Section 10.4 Effect On Other Advances. If notice has been given
pursuant to Section 10.1, 10.2 or 10.3 suspending the obligation of any Bank to
make its portion of any type of Eurodollar Advance, or requiring such Bank's
portion of Eurodollar Advances to be repaid or prepaid, then, unless and until
such Bank notifies the Borrower that the circumstances giving rise to such
repayment no longer apply, all amounts which would otherwise be made by such
Bank as its portion of Eurodollar Advances shall, unless otherwise notified by
the Borrower, be made instead as Base Rate Advances.
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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
deemed to have been given three (3) Business Days after deposit in the mail,
designated as certified mail, return receipt requested, postage-prepaid, or one
(1) Business Day after being entrusted to a reputable commercial overnight
delivery service for next day delivery, or when sent on a Business Day prior to
5:00 p.m. (New York time) by telecopy addressed to the party to which such
notice is directed at its address determined as provided in this Section 11.1.
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:
Metrocall, Inc.
6677 Richmond Highway
Alexandria, Virginia 22306
Attn: Vincent D. Kelly
Telecopy No.: (703) 768-3958
with a copy to:
Wilmer, Cutler & Pickering
2445 M Street, N.W.
Washington, D.C. 20037-1420
Attn: George P. Stamas, Esq. and
Thomas W. White, Esq.
Telecopy No.: (202) 663-6363
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(ii) If to the Administrative Agent, to it at:
Toronto Dominion (Texas), Inc.
909 Fannin, Suite 1700
Houston, Texas 77010
Attn: Neva Nesbitt
Telecopy No.: (713) 951-9921
with a copy to:
Powell, Goldstein, Frazer & Murphy LLP
Sixteenth Floor
191 Peachtree Street, N.E.
Atlanta, Georgia 30303
Attn: Cindy A. Brazell, Esq.
Telecopy No.: (404) 572-6999
(iii) If to the Banks, to them at the addresses set forth beside
their names on Schedule 3 hereto.
Copies shall be provided to persons other than parties hereto only in the case
of notices under Article 8 hereof and the failure to provide such copies shall
not affect the validity of the notice given to the primary recipient.
(b) Any party hereto may change the address to which notices
shall be directed under this Section 11.1 by giving ten (10) days' prior written
notice of such change to the other parties.
Section 11.2 Expenses. The Borrower will promptly pay, or reimburse:
(a) all out-of-pocket expenses of the Administrative Agent,
the Managing Agents, the Syndication Agent and the Documentation 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 fees
and disbursements of Powell, Goldstein, Frazer & Murphy, special counsel for the
Administrative Agent;
(b) all out-of-pocket expenses of the Administrative Agent,
the Managing Agents, the Syndication Agent and the Documentation Agent in
connection with the
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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 special counsel for the Administrative Agent; and
(c) all 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 Notes, which in each case shall include fees and
out-of-pocket expenses of counsel for the Administrative Agent, the Managing
Agents, the Syndication Agent and the Documentation 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 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, 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 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 Set-Off. In addition to any rights now or hereafter
granted under Applicable Law and not by way of limitation of any such rights,
upon the occurrence of an Event of Default and during the continuation thereof,
the Administrative Agent and each of the Banks are hereby authorized by the
Borrower at any time or from time to time, without notice to the Borrower or to
any other Person, any such notice being hereby expressly waived, to set off and
to appropriate and to apply any and all deposits (general or special, time or
demand, including, but not limited to, Indebtedness evidenced by certificates of
deposit, in each case whether matured or unmatured) and any other Indebtedness
at any time held or owing by any Bank or the Administrative Agent, to or for the
credit or the account of the Borrower or any of its
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Subsidiaries, against and on account of the obligations and liabilities of the
Borrower to the Banks and the Administrative Agent, including, but not limited
to, all Obligations and any other claims of any nature or description arising
out of or connected with this Agreement, the Notes or any other Loan Document,
irrespective of whether (a) any Bank or the Administrative Agent shall have made
any demand hereunder or (b) any Bank or the Administrative Agent shall have
declared the principal of and interest on the Loans and other amounts due
hereunder to be due and payable as permitted by Section 8.2 and although such
obligations and liabilities or any of them shall be contingent or unmatured.
Upon direction by the Administrative Agent with the consent of the Banks, each
Bank holding deposits of the Borrower or any of its Subsidiaries shall exercise
its set-off rights as so directed.
Section 11.5 Assignment.
(a) The Borrower may not assign or transfer any of its rights
or obligations hereunder, under the Notes or under any other Loan Document
without the prior written consent of each Bank.
(b) Each Bank may sell assignments or participations of one
hundred percent (100%) of its interests hereunder to (A) one or more affiliates
of such Bank, or (B) any Federal Reserve Bank as collateral security pursuant to
Regulation A of the Board of Governors of the Federal Reserve System and any
Operating Circular issued by such Federal Reserve Bank without limitation.
(c) Each of the Banks may at any time enter into assignment
agreements or participations with one or more other banks or other Persons
pursuant to which such Bank may assign or participate its interests under this
Agreement and the other Loan Documents, including its interest in any particular
Advance or portion thereof, provided, that all assignments and participations
(other than assignments to another Bank, which may be made without limitation,
whether as to dollar amount or otherwise, so long as, if such assignment takes
place after the occurrence of an Event of Default such assignment is made with
the prior written consent of the Administrative Agent, which consent shall not
be unreasonably withheld, and other assignments and participations described in
Section 11.5(b) which may be made without any limitation whatsoever) shall be in
minimum principal amounts of $5,000,000, and shall be subject to the following
additional terms and conditions:
(i) No assignment shall be sold without the prior consent
of the Administrative Agent and, prior to the occurrence of an Event of
Default, the consent of the Borrower, which consents shall not be
unreasonably withheld;
(ii) Any Person purchasing a participation or an assignment
of any
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portion of the Loans from any Bank shall be required to represent and
warrant that its purchase shall not constitute a "prohibited
transaction" (as defined in Section 4.1(m) hereof);
(iii) Assignments permitted hereunder (including the
assignment of any Advance or portion thereof) may be made with all
voting rights, and shall be made pursuant to an Assignment and
Assumption Agreement substantially in the form of Exhibit M attached
hereto;
(iv) An administrative fee of $2,500 shall be payable to
the Administrative Agent by the assigning Bank at the time of any
assignment hereunder;
(v) [RESERVED];
(vi) No participation agreement shall confer any rights
under this Agreement or any other Loan Document to any purchaser
thereof, or relieve any issuing Bank from any of its obligations under
this Agreement, and all actions hereunder shall be conducted as if no
such participation had been granted; provided, however, that any
participation agreement may confer on the participant the right to
approve or disapprove decreases in the interest rate, increases in the
principal amount of the Loans participated in by such participant,
decreases in fees, extensions of the Maturity Date or other principal
payment date for the Loans or of a scheduled reduction of either
Commitment or releases of Collateral or any Subsidiary Guaranty;
(vii) Each Bank agrees to provide the Administrative Agent
and the Borrower with prompt written notice of any issuance of
participations in or assignments of its interests hereunder;
(viii) No assignment, participation or other transfer of any
rights hereunder or under the Notes shall be effected that would result
in any interest requiring registration under the Securities Act of 1933,
as amended, or qualification under any state securities law;
(ix) No such assignment may be made to any bank or other
financial institution (x) with respect to which a receiver or
conservator (including, without limitation, the Federal Deposit
Insurance Corporation, the Resolution Trust Company or the Office of
Thrift Supervision) has been appointed or (y) that is not "adequately
capitalized" (as such term is defined in Section 131(b)(1)(B) of the
Federal Deposit Insurance Corporation Improvement Act as in effect on
the Agreement Date); and
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(x) If applicable, each Bank shall, and shall cause each
of its assignees to, provide to the Administrative Agent on or prior to
the effective date of any assignment an appropriate Internal Revenue
Service form as required by Applicable Law supporting such Bank's or
assignee's position that no withholding by the Borrower or the
Administrative Agent for U.S. income tax payable by such Bank or
assignee in respect of amounts received by it hereunder is required. For
purposes of this Agreement, an appropriate Internal Revenue Service form
shall mean Form 1001 (Ownership Exemption or Reduced Rate Certificate of
the U.S. Department of Treasury), or Form 4224 (Exemption from
Withholding of Tax on Income Effectively Connected with the Conduct of a
Trade or Business in the United States), or any successor or related
forms adopted by the relevant U.S. taxing authorities.
(d) Except as specifically set forth in Section 11.5(c)
hereof, nothing in this Agreement or the Notes, expressed or implied, is
intended to or shall confer on any Person other than the respective parties
hereto and thereto and their successors and assignees permitted hereunder and
thereunder any benefit or any legal or equitable right, remedy or other claim
under this Agreement or the Notes.
(e) In the case of any participation, all amounts payable by
the Borrower under the Loan Documents shall be calculated and made in the manner
and to the parties hereto as if no such participation had been sold.
(f) The provisions of this Section 11.5 shall not apply to any
purchase of participations among the Banks pursuant to Section 2.11 hereof.
Section 11.6 Accounting Principles. All references in this Agreement to
GAAP shall be to such principles as in effect from time to time. All accounting
terms used herein without definition shall be used as defined under GAAP. All
references to the financial statements of the Borrower and to its Net Income,
Operating Cash Flow, Senior Debt, Total Debt, Interest Expense, Pro Forma Debt
Service, and other such terms shall be deemed to refer to such items of the
Borrower and the Restricted Subsidiaries, on a fully consolidated basis.
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 the Notes shall be
construed in accordance with and governed by the internal laws of the State of
New York applicable to agreements made and to be performed in New York. If any
action or proceeding shall be brought by the Administrative Agent or any Bank
hereunder or under any other Loan Document in order
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to enforce any right or remedy under this Agreement or under any Note or any
other Loan Document, the Borrower hereby consents and will, and the Borrower
will cause each Subsidiary to, submit to the jurisdiction of any state or
federal court of competent jurisdiction sitting within the area comprising the
Southern District of New York on the date of this Agreement. The Borrower, for
itself and on behalf of its Subsidiaries, hereby agrees that service of the
summons and complaint and all other process which may be served in any such
suit, action or proceeding may be effected by mailing by registered mail a copy
of such process to the offices of the Borrower at the address given in Section
11.1 hereof and that personal service of process shall not be required. Nothing
herein shall be construed to prohibit service of process by any other method
permitted by law, or the bringing of any suit, action or proceeding in any 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. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof in that jurisdiction or affecting the validity or
enforceability of such provision in any other jurisdiction.
Section 11.10 Interest.
(a) In no event shall the amount of interest due or payable
hereunder or under the Notes exceed the maximum rate of interest allowed by
Applicable Law, and in the event any such payment is inadvertently made by the
Borrower or inadvertently received by the Administrative Agent or any Bank, then
such excess sum shall be credited as a payment of principal, unless the Borrower
shall notify the Administrative Agent or such Bank, in writing, that it elects
to have such excess sum returned forthwith. It is the express intent hereof that
the Borrower not pay and the Administrative Agent and the Banks not receive,
directly or indirectly in any manner whatsoever, interest in excess of that
which may legally be paid by the Borrower under Applicable Law.
(b) Notwithstanding the use by the Banks of the Base Rate and
the Eurodollar Rate as reference rates for the determination of interest on the
Loans, the Banks shall be under no obligation to obtain funds from any
particular source in order to charge interest to the Borrower at interest rates
related to such reference rates.
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.
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Section 11.12 Amendment and Waiver. Neither this Agreement nor any term
hereof 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 any Commitment, (b) any
delay or extension in the terms of repayment of the Loans or any mandatory
reductions in either Commitment provided in Sections 2.5 or 2.7 hereof, (c) any
reduction in principal, interest or fees due hereunder or postponement of the
payment thereof without a corresponding payment by the Borrower, (d) any release
of any portion of the Collateral for the Loans, 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 of any Guaranty of all or any portion of the
Obligations, 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), or (g) any amendment of this Section 11.12, of
the definition of Majority Banks, 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 may be made only by an instrument in
writing signed by the Administrative Agent and by each of the Banks.
Section 11.13 Entire Agreement. Except as otherwise expressly provided
herein, this Agreement and the other documents described or contemplated herein
will embody the entire agreement and understanding among the parties hereto and
thereto and supersede all prior agreements and understandings relating to the
subject matter hereof and thereof.
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.
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
- 93 -
<PAGE> 95
any of them, and (ii) shall survive the execution and delivery of the Notes and
shall continue in full force and effect so long as any Note is outstanding and
unpaid. Any right to indemnification hereunder, including, without limitation,
rights pursuant to Sections 2.10, 2.12, 5.11, 10.3 and 11.2 hereof, shall
survive the termination of this Agreement and the payment and performance of all
Obligations.
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.
ARTICLE 12
Waiver of Jury Trial
Section 12.1 Waiver of Jury Trial. THE BORROWER, FOR ITSELF AND ON
BEHALF OF THE SUBSIDIARIES, AND EACH OF THE ADMINISTRATIVE AGENT AND THE BANKS,
HEREBY AGREE TO WAIVE AND HEREBY WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY COURT
AND IN ANY ACTION OR PROCEEDING OF ANY TYPE IN WHICH THE BORROWER, ANY OF THE
BORROWER'S SUBSIDIARIES, ANY OF THE BANKS, THE ADMINISTRATIVE AGENT, OR ANY OF
THEIR RESPECTIVE SUCCESSORS OR ASSIGNS IS A PARTY, AS TO ALL MATTERS AND THINGS
ARISING DIRECTLY OR INDIRECTLY OUT OF THIS AGREEMENT, ANY OF THE NOTES OR THE
OTHER LOAN DOCUMENTS AND THE RELATIONS AMONG THE PARTIES LISTED IN THIS SECTION
12.1. EXCEPT AS PROHIBITED BY LAW, EACH PARTY TO THIS AGREEMENT WAIVES ANY
RIGHTS IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION REFERRED TO IN THIS
SECTION, ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY
DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. EACH PARTY TO THIS
AGREEMENT (i) CERTIFIES THAT NEITHER ANY REPRESENTATIVE, AGENT OR ATTORNEY OF
THE ADMINISTRATIVE AGENT OR ANY BANK HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT THE ADMINISTRATIVE AGENT OR ANY BANK WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVERS AND (ii) ACKNOWLEDGES THAT IT HAS BEEN
INDUCED TO ENTER INTO THIS AGREEMENT AND EACH OTHER LOAN DOCUMENT BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. THE
PROVISIONS OF THIS SECTION HAVE BEEN FULLY DISCLOSED BY AND TO THE
- 94 -
<PAGE> 96
PARTIES AND THE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS. NO PARTY HAS IN
ANY WAY AGREED WITH OR REPRESENTED TO ANY OTHER PARTY THAT THE PROVISIONS OF
THIS SECTION WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
- 95 -
<PAGE> 97
IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
caused it to be executed by their duly authorized officers, all as of the day
and year first above written.
METROCALL, INC., a Delaware corporation
By: /s/ Vincent D. Kelly
-----------------------------------
Name: Vincent D. Kelly
Title: Chief Financial Officer and Treasurer
Metrocall, Inc.
Third Amended and Restated Loan Agreement
Signature Page 1
<PAGE> 98
TORONTO DOMINION (TEXAS), INC., as
Administrative Agent, as a Managing Agent and as a Bank
By:/s/ Jeffery R. Lents
-----------------------------------------
Name: Jeffery R. Lents
------------------------------
Title: Vice President
------------------------------
Metrocall, Inc.
Third Amended and Restated Loan Agreement
Signature Page 2
<PAGE> 99
BANKBOSTON, N.A., as a Managing Agent and as a
Bank
By: /s/ Julie V. Jalelian
---------------------------------------------
Name: Julie V. Jalelian
-------------------------------------
Title: Director
------------------------------------
Metrocall, Inc.
Third Amended and Restated Loan Agreement
Signature Page 3
<PAGE> 100
NATIONSBANK, N.A., as a Documentation Agent, as a
Managing Agent and as a Bank
By: /s/ Jennifer F. Zydney
-----------------------------------------------
Name: Jennifer F. Zydney
------------------------------------
Title: Vice President
------------------------------------
Metrocall, Inc.
Third Amended and Restated Loan Agreement
Signature Page 4
<PAGE> 101
FIRST UNION NATIONAL BANK, as a Documentation
Agent and as a Bank
By: /s/ Jim F. Redman
------------------------------------------
Name: Jim F. Redman
-------------------------------
Title: Senior Vice President
------------------------------
Metrocall, Inc.
Third Amended and Restated Loan Agreement
Signature Page 5
<PAGE> 102
FLEET NATIONAL BANK, as a Bank
By: /s/ David Belanger
-----------------------------------------
Name: David Belanger
-------------------------------
Title: Bank Officer
------------------------------
Metrocall, Inc.
Third Amended and Restated Loan Agreement
Signature Page 6
<PAGE> 103
ROYAL BANK OF CANADA, as a Bank
By: /s/ John P. Page
-----------------------------------------
Name: John P. Page
-------------------------------
Title: Senior Manager
------------------------------
Metrocall, Inc.
Third Amended and Restated Loan Agreement
Signature Page 7
<PAGE> 104
PNC BANK, NATIONAL ASSOCIATION, as a Bank
By: /s/ Thomas A. Coates
-----------------------------------------
Name: Thomas A. Coates
-------------------------------
Title: Vice President
------------------------------
Metrocall, Inc.
Third Amended and Restated Loan Agreement
Signature Page 8
<PAGE> 105
RIGGS BANK N.A., as a Bank
By: /s/ Ana G. Tejblum
-----------------------------------------
Name: Ana G. Tejblum
-------------------------------
Title: Vice President
------------------------------
Metrocall, Inc.
Third Amended and Restated Loan Agreement
Signature Page 9
<PAGE> 106
SUNTRUST BANK, CENTRAL FLORIDA, N.A.,
as a Bank
By: /s/ Jorge Arrieta
-----------------------------------------
Name: Jorge Arrieta
-------------------------------
Title: Vice President
------------------------------
Metrocall, Inc.
Third Amended and Restated Loan Agreement
Signature Page 10
<PAGE> 107
VAN KAMPEN AMERICAN CAPITAL PRIME RATE
INCOME TRUST, as a Bank
By:
Name:
Title:
Metrocall, Inc.
Third Amended and Restated Loan Agreement
Signature Page 11
<PAGE> 108
FINOVA CAPITAL CORPORATION, as a Bank
By: /s/ Andrew J. Pluta
-----------------------------------------
Name: Andrew J. Pluta
-------------------------------
Title: Vice President
------------------------------
Metrocall, Inc.
Third Amended and Restated Loan Agreement
Signature Page 12
<PAGE> 109
COMMERCIAL LOAN FUNDING TRUST I, as a Bank
By: LEHMAN COMMERCIAL PAPER, INC., not in
its individual capacity but solely as Administrative Agent
By:
Name:
Title:
Metrocall, Inc.
Third Amended and Restated Loan Agreement
Signature Page 13
<PAGE> 110
DEBT STRATEGIES FUND II, INC., as a Bank
By:
Name:
Title:
Metrocall, Inc.
Third Amended and Restated Loan Agreement
Signature Page 14
<PAGE> 111
VAN KAMPEN AMERICAN CAPITAL SENIOR
INCOME TRUST, as a Bank
By:
Name:
Title:
Metrocall, Inc.
Third Amended and Restated Loan Agreement
Signature Page 15
<PAGE> 112
KZH CNC LLC, as a Bank
By: /s/ Virginia Conway
-----------------------------------------
Name: Virginia Conway
-------------------------------
Title: Authorized Agent
------------------------------
Metrocall, Inc.
Third Amended and Restated Loan Agreement
Signature Page 16
<PAGE> 113
MORGAN STANLEY SENIOR FUNDING, INC., as a
Bank
By: /s/ Michael T. McLaughlin
--------------------------------
Name: Michael T. McLaughlin
---------------------
Title: Principal
---------------------
Metrocall, Inc.
Third Amended and Restated Loan Agreement
Signature Page 17
