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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER: 0-21924
METROCALL, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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<S> <C>
DELAWARE 54-1215634
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
</TABLE>
<TABLE>
<S> <C>
6677 RICHMOND HIGHWAY, ALEXANDRIA, VIRGINIA 22306
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
</TABLE>
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (703) 660-6677
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes
of common stock as of the latest practicable date:
<TABLE>
CLASS OUTSTANDING AT MAY 8, 2000
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<S> <C>
Common Stock, $.01 par value 84,470,500
</TABLE>
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<PAGE> 2
METROCALL, INC. AND SUBSIDIARIES
INDEX TO FORM 10-Q
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<CAPTION>
PAGE
NUMBER
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<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Interim Condensed Consolidated Financial
Statements
Balance Sheets, December 31, 1999 and March 31,
2000...................................................... 3
Statements of Operations for the three months
ended March 31, 1999 and 2000............................. 4
Statement of Stockholders' Equity for the three
months ended March 31, 2000............................... 5
Statements of Cash Flows for the three months
ended March 31, 1999 and 2000............................. 6
Notes to Interim Condensed Consolidated Financial
Statements................................................ 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations............... 11
Item 3.Quantitative and Qualitative Disclosures About
Market Risk........................................ 18
PART II. OTHER INFORMATION
Item 1. Legal Proceedings................................. 19
Item 2. Changes in Securities............................. 19
Item 3. Defaults Upon Senior Securities................... 19
Item 4. Submission of Matters to a Vote of Security
Holders................................................ 19
Item 5. Other Information................................. 19
Item 6. Exhibits and Reports on Form 8-K.................. 19
SIGNATURES.................................................. 20
</TABLE>
2
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PART I. FINANCIAL INFORMATION
ITEM 1. INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
METROCALL, INC. AND SUBSIDIARIES
BALANCE SHEETS
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE INFORMATION)
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1999 2000
------------ ----------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents................................. $ 2,787 $ $49,878
Accounts receivable, less allowance for doubtful accounts
of $7,103 as of December 31, 1999 and $6,446 as of March
31, 2000................................................ 52,015 47,096
Prepaid expenses and other current assets................. 3,333 4,855
---------- ----------
Total current assets............................... 58,135 101,829
---------- ----------
PROPERTY AND EQUIPMENT:
Land, buildings and leasehold improvements................ 15,685 15,777
Furniture, office equipment and vehicles.................. 76,962 79,242
Paging and plant equipment................................ 377,047 379,353
Less -- Accumulated depreciation and amortization......... (192,329) (201,768)
---------- ----------
277,365 272,604
---------- ----------
INTANGIBLE ASSETS, net of accumulated amortization of
approximately $433,088 as of December 31, 1999 and
$485,978 as of March 31, 2000............................. 682,026 632,038
OTHER ASSETS................................................ 8,021 24,496
---------- ----------
TOTAL ASSETS................................................ $1,025,547 $1,030,967
========== ==========
CURRENT LIABILITIES:
Current maturities of long-term debt...................... $ 643 $ 665
Accounts payable.......................................... 28,144 20,517
Accrued expenses and other current liabilities............ 42,022 34,212
Deferred revenues and subscriber deposits................. 24,235 38,391
---------- ----------
Total current liabilities.......................... 95,044 93,785
---------- ----------
CAPITAL LEASE OBLIGATIONS, less current maturities.......... 3,001 2,843
CREDIT FACILITY AND OTHER LONG-TERM DEBT, less current
maturities................................................ 75,375 91,357
SENIOR SUBORDINATED NOTES................................... 698,608 698,652
DEFERRED INCOME TAX LIABILITY............................... 146,387 130,738
MINORITY INTEREST IN PARTNERSHIP............................ 510 510
---------- ----------
Total liabilities.................................. 1,018,925 1,017,885
---------- ----------
COMMITMENTS AND CONTINGENCIES
SERIES A CONVERTIBLE PREFERRED STOCK, 14% cumulative; par
value $.01 per share; 810,000 shares authorized; 239,517
shares and 227,585 shares issued and outstanding as of
December 31, 1999 and March 31, 2000, respectively and a
liquidation preference of $60,927 and $56,896 at December
31, 1999 and March 31, 2000, respectively................. 53,939 53,356
SERIES C CONVERTIBLE PREFERRED STOCK, 8% cumulative; par
value $.01 per share; 25,000 shares authorized; 9,595
shares and 0 shares issued and outstanding as of December
31, 1999 and March 31, 2000, and a liquidation preference
of $104,817 and $0 at December 31, 1999 and March 31,
2000, respectively........................................ 104,817 0
STOCKHOLDERS' EQUITY:
Common stock, par value $.01 per share; authorized
200,000,000 shares; 41,901,908 and 80,353,988 shares
issued and outstanding as of December 31, 1999 and March
31, 2000, respectively.................................. 419 804
Additional paid-in capital................................ 341,070 509,344
Accumulated deficit....................................... (493,623) (550,422)
---------- ----------
Total stockholders' equity (deficit)............... (152,134) (40,274)
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY.................. $1,025,547 $1,030,967
========== ==========
</TABLE>
See notes to interim condensed consolidated financial statements.
3
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METROCALL, INC. AND SUBSIDIARIES
STATEMENTS OF OPERATIONS
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE INFORMATION)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-------------------------
1999 2000
----------- -----------
<S> <C> <C>
REVENUES:
Service, rent and maintenance revenues.................... $ 140,454 $ 128,507
Product sales............................................. 14,576 11,545
----------- -----------
Total revenues.................................... 155,030 140,052
Net book value of products sold................... (9,815) (7,765)
----------- -----------
145,215 132,287
----------- -----------
OPERATING EXPENSES:
Service, rent and maintenance expenses.................... 39,994 30,408
Selling and marketing..................................... 25,025 24,431
General and administrative................................ 41,352 41,389
Depreciation.............................................. 23,052 26,010
Amortization.............................................. 52,671 52,157
----------- -----------
182,094 174,395
----------- -----------
Loss from operations.............................. (36,879) (42,108)
INTEREST EXPENSE............................................ (20,700) (21,564)
INTEREST AND OTHER (EXPENSE) INCOME......................... 16 319
----------- -----------
LOSS BEFORE INCOME TAX BENEFIT.............................. (57,563) (63,353)
INCOME TAX BENEFIT.......................................... 15,550 15,649
----------- -----------
Net loss.......................................... (42,013) (47,704)
PREFERRED DIVIDENDS......................................... (4,003) (2,787)
SERIES C PREFERRED EXCHANGE INDUCEMENT...................... -- (6,308)
GAIN ON REPURCHASE OF PREFERRED STOCK....................... 2,208 --
----------- -----------
Loss attributable to common stockholders.......... $ (43,808) $ (56,799)
=========== ===========
BASIC AND DILUTED LOSS PER SHARE
ATTRIBUTABLE TO COMMON STOCKHOLDERS....................... $ (1.05) $ (1.17)
=========== ===========
Weighted-average common shares outstanding.................. 41,670,693 48,452,227
=========== ===========
</TABLE>
See notes to interim condensed consolidated financial statements.
4
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METROCALL, INC. AND SUBSIDIARIES
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2000
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE INFORMATION)
<TABLE>
<CAPTION>
COMMON STOCK
------------------- ADDITIONAL
SHARES PAR PAID-IN ACCUMULATED
OUTSTANDING VALUE CAPITAL DEFICIT TOTAL
----------- ----- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C>
BALANCE, December 31, 1999.............. 41,901,908 $419 $341,070 $(493,623) $(152,134)
Common stock issued for employee stock
and benefit plans..................... 687,527 7 3,026 -- 3,033
Common stock issued upon exercise of
warrants.............................. 1,102,920 11 2,667 -- 2,678
Common stock issued in exchange for
Series C Preferred stock.............. 13,250,000 133 105,235 -- 105,368
Other common stock issuances............ 23,411,633 234 51,038 -- 51,272
Series C Preferred exchange
inducement............................ -- -- 6,308 (6,308) --
Preferred dividends..................... -- -- -- (2,787) (2,787)
Net loss................................ -- -- -- (47,704) (47,704)
---------- ---- -------- --------- ---------
BALANCE, March 31, 2000................. 80,353,988 $804 $509,344 $(550,422) $ (40,274)
========== ==== ======== ========= =========
</TABLE>
See notes to interim condensed consolidated financial statements.
5
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METROCALL, INC. AND SUBSIDIARIES
STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-------------------
1999 2000
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss.................................................. $(42,013) $(47,704)
Adjustments to reconcile net loss to net cash provided by
operating activities--
Depreciation and amortization.......................... 75,723 78,167
Amortization of debt financing costs and debt
discount.............................................. 810 776
Deferred income taxes.................................. (15,681) (15,649)
Cash provided by (used in) changes in assets and
liabilities:
Accounts receivable.................................... 5,245 4,919
Prepaid expenses and other current assets.............. (1,290) (1,522)
Accounts payable....................................... (4,397) (7,627)
Accrued expenses and other current liabilities......... 4,069 (5,074)
Deferred revenues and subscriber deposits.............. (3,462) (844)
-------- --------
Net cash provided by operating activities......... 19,004 5,442
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment, net.................. (25,466) (21,249)
Additions to intangibles.................................. (394) (1,273)
Other..................................................... (1,567) (1,841)
-------- --------
Net cash used in investing activities............. (27,427) (24,363)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under credit facility.......................... 29,000 91,000
Payments under credit facility............................ -- (75,000)
Net proceeds from issuances of common stock............... 376 51,426
Repurchase of Series B Preferred stock.................... (16,240) --
Deferred debt financing costs............................. (308) (1,261)
Principal payments on long-term debt...................... (238) (153)
-------- --------
Net cash provided by financing activities......... 12,590 66,012
-------- --------
NET INCREASE IN CASH AND CASH EQUIVALENTS................... 4,167 47,091
CASH AND CASH EQUIVALENTS, beginning of period.............. 8,436 2,787
-------- --------
CASH AND CASH EQUIVALENTS, end of period.................... $ 12,603 $ 49,878
======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash payments for interest................................ $ 17,405 $ 25,183
======== ========
Cash payments for income taxes............................ $ -- $ 172
======== ========
</TABLE>
See notes to interim condensed consolidated financial statements.
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METROCALL, INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000
1. GENERAL
The accompanying unaudited interim condensed consolidated financial
statements included herein have been prepared in accordance with the rules and
regulations of the Securities and Exchange Commission (SEC). The interim
condensed consolidated financial statements include the consolidated accounts of
Metrocall, Inc. and its majority owned subsidiaries (collectively, "Metrocall").
In the opinion of management, all adjustments (consisting of normal recurring
adjustments) necessary for a fair statement of the financial position, results
of operations and cash flows for the interim periods presented have been made.
The preparation of the financial statements includes estimates that are used
when accounting for revenues, allowance for uncollectible receivables,
telecommunications expenses, and depreciation and amortization. Actual results
could differ from those estimates. The results of operations for the
three-months ended March 31, 2000, are not necessarily indicative of the results
to be expected for the full year. Some information and footnote disclosures
normally included in financial statements or notes thereto prepared in
accordance with generally accepted accounting principles (GAAP) have been
condensed or omitted pursuant to SEC rules and regulations. Metrocall believes,
however, that its disclosures are adequate to make the information presented not
misleading. You should read these interim condensed consolidated financial
statements in conjunction with the consolidated financial statements and notes
thereto included in Metrocall's 1999 Annual Report on Form 10-K.
2. RISKS AND OTHER IMPORTANT FACTORS
Metrocall sustained net losses of $129.1 million, $172.5 million and $47.7
million for fiscal years 1998, 1999 and the three months ended March 31, 2000,
respectively. Those losses are significantly attributable to its consolidation
and growth strategies and capital expenditure requirements. Metrocall cannot
assure you that it can reverse such losses in the future. At March 31, 2000,
Metrocall had an accumulated deficit of approximately $550.4 million.
Metrocall's losses from operations and net losses are expected to continue.
Metrocall cannot assure you that it will achieve profitability in the future.
Metrocall's operations require the availability of substantial funds to
finance the maintenance and growth of its existing paging operations and
advanced messaging operations and equipment, development and construction of
future wireless communications networks, expansion into new markets, and the
acquisition of other wireless communications companies. At March 31, 2000,
Metrocall had approximately $793.5 million outstanding under its credit
facility, senior subordinated notes, capital leases and other long-term debt. At
March 31, 2000, Metrocall was in compliance with each of the covenants under its
$200.0 million credit facility. Metrocall's ability to borrow additional amounts
in the future, including amounts currently available under the credit facility,
is dependent on Metrocall's ability to comply with the provisions of its credit
facility as well as availability of financing in the capital markets. Amounts
available under Metrocall's credit facility are subject to certain financial
covenants and other restrictions. At March 31, 2000, Metrocall had $109.0
million of additional borrowings available under its credit facility based on
its total leverage covenant under which net debt cannot exceed six-times
annualized EBITDA (also known as annualized operating cash flow). In the event
that Metrocall's EBITDA continues to decrease on a quarterly basis in the second
quarter or in future quarters, Metrocall could violate one or more of the
covenants of its credit facility. There can be no assurance that Metrocall will
remain in compliance with the financial covenants under its credit facility in
future periods.
Metrocall is also subject to certain additional risks and uncertainties
including, but not limited to, changes in technology, business integration,
competition, regulation, litigation and subscriber turnover.
7
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METROCALL, INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS -- (CONTINUED)
3. SIGNIFICANT ACCOUNTING POLICIES
Revenue Recognition
Metrocall recognizes revenue under service, rental and maintenance
agreements with customers as the related services are performed. Sales of
equipment are recognized upon delivery.
Long-Lived Assets
Long-lived assets and identifiable intangibles to be held and used are
reviewed for impairment on a periodic basis and whenever events or changes in
circumstances indicate that the carrying amount should be addressed. Impairment
is measured by comparing the book value to the estimated undiscounted future
cash flows expected to result from use of the assets and their eventual
disposition. Metrocall believes that no permanent impairment in the carrying
value of long-lived assets existed at March 31, 2000.
4. INVESTMENT IN INCISCENT, INC. (INCISCENT)
On March 17, 2000, Metrocall purchased 50.0% of Inciscent's Series A
Convertible Preferred Stock in exchange for $15.0 million of in-kind services
and a license to access Metrocall's subscriber base. Metrocall will account for
its investment under the equity method of accounting. At March 31, 2000,
Metrocall has reflected its $15.0 million investment in Inciscent in other
assets and the $15.0 million obligation for in-kind services and access to its
subscriber base as deferred revenue on the accompanying balance sheet. Metrocall
will recognize revenue on the in-kind services provided to Inciscent as they are
performed. Metrocall will recognize revenue ratably on the license to access its
customer base over the five-year license period.
5. LONG-TERM DEBT
On March 17, 2000, Metrocall and its bank lenders entered into a Fifth
Amended and Restated Credit Facility (the "credit facility"). Under the credit
facility, subject to certain conditions, Metrocall may borrow up to $200.0
million under two loan facilities. Facility A is a $150.0 million reducing
revolving credit facility, and Facility B is a $50.0 million term loan facility.
The credit facility is secured by substantially all of the assets of Metrocall.
Required quarterly repayments begin on March 31, 2002 and continue through June
1, 2005 for both the Facility A and Facility B commitments. The final maturity
of the loan facilities is June 1, 2005.
The credit facility contains various covenants that, among other
restrictions, require Metrocall to maintain certain financial ratios, including
total debt to annualized operating cash flow (not to exceed 6.0 to 1.0 through
December 31, 2000 and declining thereafter), senior debt to annualized operating
cash flow (not to exceed 1.75 to 1.0 through December 31, 2000 and declining to
1.50 to 1.0 thereafter), 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 Metrocall during the term
of the credit facility. The credit facility also provides that certain changes
in control of Metrocall during the term of the credit facility will constitute a
default.
6. CAPITAL STOCK
Exchange of Series C Preferred
On February 2, 2000, Metrocall and AT&T Wireless, Inc. entered into a
Securities Exchange Agreement under which Metrocall agreed to issue 13,250,000
shares of its common stock to AT&T Wireless, Inc., the sole holder of
Metrocall's Series C Convertible Preferred Stock (Series C Preferred), in
exchange for all the issued and outstanding shares of the Series C Preferred.
Metrocall issued the shares of
8
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METROCALL, INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS -- (CONTINUED)
6. CAPITAL STOCK -- (CONTINUED)
its common stock on March 17, 2000 and immediately canceled and retired the
shares of Series C Preferred it had received in the exchange transaction.
Metrocall recorded the exchange transaction by eliminating the carrying
value of the Series C Preferred with a corresponding credit to common stock and
additional paid-in capital on the balance sheet. On the date the exchange
agreement was reached with AT&T Wireless, Inc. the carrying value of the Series
C Preferred exceeded the market price of the 13.25 million shares of common
stock to be issued by approximately $78.6 million.
Under GAAP, Metrocall was required to recognize an "inducement" for
purposes of determining the net loss applicable to common stockholders equal to
the excess of (1) the fair value of the 13.25 million shares of common stock
issued to the holder of the Series C Preferred over (2) the fair value of the
common stock that would have been issued pursuant to the original conversion
terms of the Series C Preferred. Had the original conversion terms been
followed, Metrocall would have issued approximately 10.1 million shares based on
the carrying value of the Series C Preferred on the date of the exchange. The
inducement represents the fair value of the 3.15 million incremental shares of
common stock that were issued to the holder in the exchange, or $6.3 million.
Common Stock Investments
On March 17, 2000, Metrocall issued approximately 7.8 million shares of
common stock for $2.19 per share to each of three equity investors: PSINet, Inc.
(PSINet), Aether Systems, Inc. (Aether) and affiliates of Hicks, Muse, Tate &
Furst Incorporated (HMTF) pursuant to common stock purchase agreements with each
entity dated February 2, 2000. Total proceeds raised from the issuances were
approximately $51.0 million and will be used to reduce outstanding debt balances
or for other corporate purposes.
Shareholder Rights Plan
In February 2000, the Board of Directors adopted a shareholder's rights
plan and declared a dividend distribution of one preferred share purchase right
("Right") for each outstanding share of common stock. The distribution was
payable to stockholders of record at the close of business on March 6, 2000.
Each Right, when exercisable, entitles the registered holder to purchase from
Metrocall 1/1000th of a share of Series E Junior Participating Preferred Stock,
par value $.01 per share (the "Series E Preferred") at a price of $50 per
1/1000th share, subject to adjustment. For purposes of the plan, the Board of
Directors has designated 100,000 shares of Series E Preferred, which may be
increased or decreased by the Board of Directors.
7. EMPLOYEE STOCK OPTION AND OTHER BENEFIT PLANS
Stock Option Plans
During the three months ended March 31, 2000, the Board of Directors
approved grants of options to purchase 2,126,000 shares of Metrocall common
stock to current officers, employees and directors with exercise prices ranging
from $1.97 to $2.41 per share, a price equal to or greater than the fair market
value on the date of grant.
Employee Stock Purchase Plan
On January 1, 2000, Metrocall issued 201,109 shares of common stock under
the Stock Purchase Plan with a purchase price of approximately $1.69 per share.
9
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METROCALL, INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS -- (CONTINUED)
8. CONTINGENCIES
Legal and Regulatory Matters
Metrocall is subject to certain legal and regulatory matters in the normal
course of business. In the opinion of management, the outcome of such matters
will not have a material adverse effect on Metrocall's financial position or
results of operations.
9. SUBSEQUENT EVENT
Metrocall issued 4,116,512 shares of its common stock in exchange for
$40,099,000 aggregate principal amounts of its outstanding senior subordinated
notes between April 20, 2000 and May 5, 2000. The aggregate principal amounts of
senior subordinated notes per series are reflected below:
<TABLE>
<S> <C>
11 7/8% senior subordinated notes due 2005.............. $ 7,032,000
10 3/8% senior subordinated notes due 2005.............. 4,317,000
9 3/4% senior subordinated notes due 2007............... 15,250,000
11% senior subordinated notes due 2008.................. 13,500,000
-----------
$40,099.000
===========
</TABLE>
Metrocall conducted these exchanges without registration under the
Securities Act of 1933 in reliance upon the exemption in section 3(a)(9) of that
act. The exchanges will be accounted for as an extinguishment of debt with any
gain on the transaction recorded as an extraordinary item in the second quarter
of 2000.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion and analysis of financial
condition and results of operations of Metrocall together with the financial
statements and the notes thereto which appear elsewhere in this quarterly report
and Metrocall's Annual Report on Form 10-K for the year ended December 31, 1999.
Forward-looking Statements
This Quarterly Report on Form 10-Q includes forward-looking statements.
Metrocall has based these forward-looking statements on its current expectations
and projections about future events. These forward-looking statements are
subject to risks, uncertainties and assumptions, and include:
- Metrocall's high leverage and need for substantial capital;
- Metrocall's ability to service debt;
- Metrocall's history of net operating losses;
- the restrictive covenants governing Metrocall's indebtedness;
- Metrocall's ability to cover fixed charges;
- the amortization of Metrocall's intangible assets;
- Metrocall's ability to implement its business strategies;
- the impact of competition and technological developments;
- satellite transmission failures;
- subscriber turnover;
- litigation;
- regulatory changes;
- the risks associated with Metrocall's investment in Inciscent;
- dependence on key suppliers; and
- dependence on key management personnel.
Other matters set forth in this Quarterly Report on Form 10-Q may also
cause actual results to differ materially from those described in the
forward-looking statements. Metrocall undertakes no obligation to update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise. In light of these risks, uncertainties and
assumptions, the forward-looking events discussed in this Quarterly Report on
Form 10-Q might not occur.
OVERVIEW
Metrocall is a leading provider of local, regional, and national paging and
other wireless messaging services. Through its nationwide network, Metrocall
provides messaging services to over 1,000 U.S. cities, including the top 100
Standard Metropolitan Statistical Areas. Since 1993, Metrocall's subscriber base
has increased from less than 250,000 in 1993 to more than 5.9 million. Metrocall
has achieved this growth through a combination of internal growth and a program
of mergers and acquisitions. As of March 31, 2000, Metrocall was the third
largest paging company in the United States based on number of subscribers.
Metrocall believes that its enhanced nationwide coverage gives it a
competitive advantage in gaining additional subscribers. On May 1, 2000,
Metrocall acquired NationPage, Inc. in a stock purchase transaction with AT&T
Wireless, Inc. This acquisition added approximately 80,000 subscribers located
principally in eastern Pennsylvania, New Jersey and upstate New York.
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Metrocall believes that the paging and wireless messaging industry is
likely to undergo additional consolidation and has announced that it intends to
participate in the consolidation process. Potential future consolidations would
be evaluated on several key operating and financial elements including:
- geographic presence;
- FCC regulatory licenses held;
- overall valuation of potential target, including subscriber base and
potential synergies;
- consideration to be given;
- potential increase operating cash flow and free cash flow; and,
- availability of financing and the ability to reduce the combined
companies long-term debt.
Any potential transaction may result in substantial capital requirements for
which additional financing may be required. No assurance can be given that such
additional financing would be available on terms satisfactory to Metrocall.
In November 1999, Arch Communications Group, Inc. (Arch) and Paging
Network, Inc. (PageNet) announced that they had agreed to merge. Completion of
this merger is subject to a number of conditions, including agreement by holders
of PageNet's outstanding senior unsecured notes to exchange their notes for Arch
common stock. Metrocall has had and may continue to have informal discussions
with certain holders of these notes about whether Metrocall might be able to
present an alternative to the Arch merger. Metrocall has not made any offer with
respect to PageNet, and there is no assurance that Metrocall will make any such
proposal or that the proposal would be successful. Metrocall also engages, from
time to time, in discussions with other industry participants about potential
consolidation transactions. Again, there can be no assurance that any such
discussion will lead to a consolidation transaction.
Metrocall's growth, whether internal or through consolidation, requires
significant capital investment for paging equipment and technical
infrastructure. Metrocall also purchases subscriber devices for that portion of
its subscriber base to which it rents pagers. During the three months ended
March 31, 2000, capital expenditures totaled $21.5 million, which included
approximately $16.1 million for subscriber equipment, representing increases in
pagers on hand and on rent or lease. Metrocall estimates capital expenditures
for the year ending December 31, 2000 will approximate $90.0 million, primarily
for one-way and two-way messaging devices, transmission equipment and
information system enhancements.
For the remainder of 2000, Metrocall's operational focus will include the
following:
- Managing capital requirements and increasing free cash flow by:
-- continuing to focus on selling, rather than leasing, one-way or
two-way messaging devices in order to reduce capital expenditure
requirements per subscriber;
-- increasing revenues associated with the recent introduction of
two-way messaging products and air-time services, which will generate
higher ARPU than traditional paging services;
-- increasing revenues and cash flow through sales of value-added
advanced messaging and information services which generate higher
average monthly revenue per unit (ARPU) than traditional paging
services; and
-- further increasing the utilization of the nationwide network to serve
more customers per frequency and expand presence in existing markets
with minimal capital outlay.
- Managing and lowering operating costs through cost containment
initiatives; and other operational efficiencies such as the recent
combination of Metrocall's commercial and internal voice mail and data
networking over the same Asynchronous Transfer Mode (ATM) network; and,
- Maximizing internal growth potential by continuing to broaden Metrocall's
distribution network and expanding target markets to capitalize on the
growing appeal of two-way and advanced messaging and other wireless
products;
12
<PAGE> 13
RESULTS OF OPERATIONS
The definitions below will be helpful in understanding the discussion of
Metrocall's results of operations.
- Service, rent and maintenance revenues: include primarily monthly,
quarterly, semi-annually and annually billed recurring revenue, not
generally dependent on usage, charged to subscribers for paging and
related services such as voice mail and pager repair and replacement.
Service, rent and maintenance revenues also include revenues derived from
cellular and long distance services.
- Net revenues: include service, rent and maintenance revenues and sales of
customer owned and maintained ("COAM") pagers less net book value of
products sold.
- Service, rent and maintenance expenses: include costs related to the
management, operation and maintenance of the Metrocall's network systems
and customer service support centers.
- Selling and marketing expenses: include salaries, commissions and
administrative costs for Metrocall's sales force and related marketing
and advertising expenses.
- General and administrative expenses: include executive management,
accounting, office telephone, repairs and maintenance, management
information systems and employee benefits.
THREE MONTHS ENDED MARCH 31, 2000 COMPARED WITH 1999
The following table sets forth the amounts of revenues and the percentages
of net revenues (defined as total revenues less the net book value of products
sold) represented by certain items in Metrocall's Interim Condensed Consolidated
Statements of Operations and certain other information for the three months
ended March 31, 1999 and 2000.
<TABLE>
<CAPTION>
MARCH 31, % OF MARCH 31, % OF INCREASE OR
1999 REVENUES 2000 REVENUES (DECREASE)
---------- -------- ---------- -------- -----------
<S> <C> <C> <C> <C> <C>
REVENUES
Service, rent and maintenance......... $ 140,454 96.7 $ 128,507 97.1 $(11,947)
Product sales......................... 14,576 10.0 11,545 8.7 (3,031)
---------- ----- ---------- ----- --------
Total revenues................ 155,030 106.7 140,052 105.8 (14,978)
Net book value of products sold....... (9,815) (6.7) (7,765) (5.8) (2,050)
---------- ----- ---------- ----- --------
Net revenues.......................... $ 145,215 100.0 $ 132,287 100.0 $(12,928)
========== ===== ========== ===== ========
ARPU.................................... $ 8.15 $ 7.18 $ (0.97)
Number of subscribers................... 5,750,215 5,989,863 239,648
</TABLE>
Total revenues decreased approximately $15.0 million, or approximately
9.7%, from $155.0 million for the three months ended March 31, 1999 ("1999") to
$140.0 million for the three months ended March 31, 2000 ("2000"). Net revenues
decreased approximately $12.9 million, or 8.9%, from $145.2 million in 1999 to
$132.3 million in 2000. ARPU for paging services decreased from $8.15 per unit
in 1999 to $7.18 per unit in 2000. There was an increase in the number of
subscribers of 239,648 since March 31, 1999. The decrease in net revenues was
primarily the result of a change in subscriber mix that occurred since March 31,
1999, which benefited the indirect distribution channels, which are
characterized by lower ARPUs. Since March 31, 1999, the majority of the
subscribers that have been added into Metrocall's distribution channels have
been under its strategic alliances. This channel is characterized by lower ARPU
but is also characterized by lower operating costs as the alliance party
provides a portion of the marketing, billing and other services for the
subscriber. Metrocall expects that revenues and ARPU will continue to be
affected by the shift in distribution mix that occurred during 1999 and may
continue to decrease within its traditional one-way business during the
remainder of 2000 as two-way messaging products and other competing messaging
products and technologies attract existing subscribers. Metrocall expects to
focus its direct sales and marketing resources over the remainder of 2000 to
concentrate on selling newly available two-way messaging products and air-time
services and other advanced messaging products to existing and new subscribers.
These products and services are generally characterized by higher
13
<PAGE> 14
ARPU than Metrocall's current ARPU. Metrocall does not expect a significant
revenue impact from the new two-way services in the first half of 2000 based on
current product availability estimates.
Product sales decreased approximately $3.0 million or 20.8% from $14.6
million in 1999 to $11.5 million in 2000 and decreased as a percentage of net
revenues from 10.0% in 1999 to 8.7% in 2000. Net book value of products sold
decreased approximately $2.0 million or 20.9% from $9.8 million in 1999 to $7.8
million in 2000 and decreased as a percentage of net revenues from 6.7% in 1999
to 5.8% in 2000. The majority of the decrease in product sales is attributable
to the sale of Metrocall's electronic tracking business, which occurred in
November 1999. Product sales generated from this business were approximately
$1.7 million through March 31, 1999.
The following tables set forth the amounts of operating expenses and
related percentages of net revenues represented by certain items in Metrocall's
Interim Condensed Consolidated Statements of Operations and certain other
information for the three months ended March 31, 1999 and 2000.
<TABLE>
<CAPTION>
MARCH 31, % OF MARCH 31, % OF INCREASE OR
1999 REVENUES 2000 REVENUES (DECREASE)
--------- -------- --------- -------- -----------
<S> <C> <C> <C> <C> <C>
OPERATING EXPENSES
Service, rent and maintenance.............. $ 39,994 27.5 $ 30,408 23.0 $(9,586)
Selling and marketing...................... 25,025 17.2 24,431 18.5 (594)
General and administrative................. 41,352 28.5 41,389 31.3 37
Depreciation and amortization.............. 75,723 52.2 78,167 59.1 2,444
-------- ----- -------- ----- -------
$182,094 125.4 $174,395 131.9 $(7,699)
======== ===== ======== ===== =======
</TABLE>
<TABLE>
<CAPTION>
MARCH 31, MARCH 31,
1999 2000 (DECREASE)
--------- --------- ----------
<S> <C> <C> <C>
OPERATING EXPENSES PER UNIT IN SERVICE
Monthly service, rent and maintenance....................... $2.34 $1.70 $(0.64)
Monthly selling and marketing............................... 1.46 1.37 (0.09)
Monthly general and administrative.......................... 2.42 2.32 (0.10)
----- ----- ------
Average monthly operating costs............................. $6.22 $5.39 $(0.83)
===== ===== ======
</TABLE>
Overall, Metrocall experienced a decrease in average monthly operating
costs per unit in service (operating costs per unit before depreciation and
amortization) from 1999 to 2000. Average monthly operating cost per unit
decreased $0.83 from $6.22 per unit for 1999 to $5.39 per unit for 2000. Each
operating expense is discussed separately below.
Service, rent and maintenance expenses decreased approximately $9.6 million
from $40.0 million in 1999 to $30.4 million in 2000 and decreased as a
percentage of net revenues from 27.5% in 1999 to 23.0% in 2000. Monthly service,
rent and maintenance expense per unit has decreased from $2.34 per unit in 1999
to $1.70 per unit in 2000. Service, rent and maintenance expenses have decreased
as a percentage of revenues primarily due to a decrease in telecommunication
expenses as a result of renegotiated telecommunications contracts,
deconstruction of redundant tower sites and other cost reduction initiatives.
Metrocall expects that its service, rent and maintenance expenses for its
traditional paging services may be flat for the remainder of 2000 and may
increase due to service costs related to providing two-way messaging services as
Metrocall expands its two-way message services and incurs additional costs
associated with operating leases for two-way messaging equipment.
Selling and marketing expenses decreased approximately $0.6 million from
$25.0 million in 1999 to $24.4 million in 2000 and increased as a percentage of
net revenues from 17.2% in 1999 to 18.5% in 2000. The overall expense decrease
was the result of lower sales commissions offset by higher salary costs
associated with a 15% increase in the number of sales representatives since
March 31, 1999. Selling and marketing expenses increased as a percentage of
revenues during 2000 as a result of the reduction in revenues. Monthly selling
and marketing expenses per unit has decreased from $1.46 per unit in 1999 to
$1.37 per unit in 2000 as a result of the increase in the subscriber base from
March 31, 1999. Metrocall
14
<PAGE> 15
expects that selling and marketing expenses may continue to increase as it
continues to expand its sales force and conducts national advertising programs
to promote two-way messaging services.
General and administrative expenses remained flat at $41.4 million in 2000,
and increased as a percentage of net revenues from 28.5% in 1999 to 31.3% in
2000. General and administrative expenses have increased as a percentage of net
revenues due to the reduction in revenues. Monthly general and administrative
expense per unit has decreased from $2.42 per unit in 1999 to $2.32 per unit in
2000 due to the increase in the subscriber base since March 31, 1999. Metrocall
expects general and administrative expenses will remain consistent on a
quarterly basis for the remainder of 2000 and expects that they will slightly
decline when compared to what Metrocall incurred in the comparable quarters of
1999.
Depreciation expense increased approximately $3.0 million from $23.0
million in 1999 to $26.0 million in 2000. The increase in depreciation expense
resulted primarily from depreciation expense on subscriber equipment and
property, plant and equipment and computer hardware and software that had been
acquired since March 31, 1999.
Amortization decreased $0.5 million from $52.7 million in 1999 to $52.2
million in 2000 primarily as a result of a small number of intangible assets,
for which amortization expense had been incurred in the three months ended March
31, 1999, being fully amortized by December 31, 1999. Amortization expense was
comprised of the following elements in 1999 and 2000:
<TABLE>
<CAPTION>
AMORTIZATION MARCH 31, MARCH 31,
PERIOD 1999 2000 INCREASE
------------ --------- --------- --------
<S> <C> <C> <C> <C>
Subscriber lists.................................... 3 years $36,148 $35,958 $190
FCC licenses........................................ 10 years 9,065 8,984 81
Goodwill............................................ 10 years 5,645 5,645 --
Other............................................... various 1,813 1,570 243
------- ------- ----
$52,671 $52,157 $514
======= ======= ====
</TABLE>
Metrocall expects that amortization expenses will continue to be a
significant non-cash operating expenses for the remainder of 2000 and 2001 as it
amortizes amounts allocated to subscriber lists of acquired companies.
<TABLE>
<CAPTION>
MARCH 31, MARCH 31, INCREASE OR
1999 2000 (DECREASE)
--------- --------- -----------
<S> <C> <C> <C>
OTHER
Interest and other income, net.............................. $ 16 $ 319 $ 303
Interest expense............................................ (20,700) (21,564) 864
Income tax benefit.......................................... 15,550 15,649 99
Net loss.................................................... (42,013) (47,704) 5,691
Preferred dividends......................................... (4,003) (2,787) (1,216)
Series C Preferred exchange inducement...................... -- (6,308) 6,308
Gain on repurchase of preferred stock....................... 2,208 -- 2,208
EBITDA...................................................... 38,844 36,059 (2,785)
</TABLE>
Interest expense increased approximately $0.9 million, from $20.7 million
in 1999 to $21.6 million in 2000 due to higher average debt balances outstanding
during 2000. Average debt balances were approximately $20 million greater in
2000 than in 1999 primarily as a result of debt incurred for general corporate
purposes in 2000.
Metrocall's net loss increased approximately $5.7 million from $42.0
million in 1999 to $47.7 million in 2000. The increase in net loss was primarily
the result of the decreases in revenues as a result of the reduction in ARPU,
offset partially by decreases in operating expenses. Net losses are expected to
continue in future periods.
Preferred dividends decreased approximately $1.2 million in 2000 from $4.0
million in 1999 to $2.8 million in 2000. The decrease is attributable to the
cessation of dividends on the Series C Preferred in
15
<PAGE> 16
February 2000 after Metrocall and the holder of the Series C Preferred reached
an agreement to exchange the Series C Preferred for Metrocall common stock.
In February 2000, Metrocall and the holder of all the issued and
outstanding shares of Metrocall's Series C Preferred reached an agreement in
which the holder of the Series C Preferred agreed to exchange such shares for
13.25 million shares of Metrocall common stock. The number of shares of common
stock issued by Metrocall in the transaction was approximately 3.15 million
shares in excess of what Metrocall would have issued had the holder elected to
convert the Series C Preferred based on its original conversion provisions.
However, under the original conversion terms the holder of the Series C
Preferred would have not had the ability to convert its holdings until October
2003 or earlier upon a change of control event. The $6.3 million inducement
recorded in connection with this transaction represents the fair market value of
the 3.15 million additional shares of common stock that were issued by
Metrocall. At the time of the transaction, the carrying value of the Series C
Preferred was approximately $105.4 million. If held to maturity, Metrocall could
have been required to redeem the Series C Preferred in for approximately $239.0
million in cash. Metrocall recorded the issuance of common stock and the
reduction of the $105.4 million carrying value of the Series C Preferred as an
increase to stockholders' equity, which represented an excess of $78.6 million
over the then fair value of the common stock.
In January 1999, Metrocall repurchased and retired all of the outstanding
shares of its Series B Junior Convertible Preferred Stock for $16.2 million,
representing a $2.2 million discount from its carrying value.
EBITDA means earnings before interest, taxes, depreciation and
amortization. While not a measure under generally accepted accounting
principles, EBITDA is a standard measure of financial performance in the paging
industry. EBITDA may not be comparable to similarly titled measures reported by
other companies since all companies do not calculate EBITDA in the same manner.
EBITDA should not be considered as an alternative to net income (loss) from
operations, cash flows from operating activities, or any other measure of
financial performance under GAAP. EBITDA as defined by Metrocall is used in its
credit facility and senior subordinated note indentures as part of the tests to
determine its ability to incur debt and make restricted payments. EBITDA
decreased $2.8 million from $38.8 million in 1999 to $36.0 million in 2000. The
decrease is due to the decrease in net revenue of $12.9 million offset by the
decrease in operating expenses of $10.1 million. EBITDA margin increased from
26.7% in 1999 to 27.3% in 2000. EBITDA may continue to decrease until such time
as Metrocall can produce meaningful revenue contribution from the new two-way
messaging products and services.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
Cash Flows
For the three months ended March 31, 2000, Metrocall's cash provided by
operating activities decreased by approximately $13.6 million from $19.0 million
for the three months ended March 31, 1999 to $5.4 million for the three months
ended March 31, 2000.
Net cash used in investing activities decreased approximately $3.0 million
from $27.4 million for the three months ended March 31, 1999 to $24.4 million
for the three months ended March 31, 2000. The decrease in net cash used for
investing activities was primarily the result of a decrease in purchases of
property and equipment. Capital expenditures were approximately $25.5 million
and $21.5 million for the quarters ended March 31, 1999 and 2000, respectively.
Capital expenditures for the three months ended March 31, 2000 included
approximately $16.1 million for one-way and two-way messaging devices
representing increases in pagers on hand and net increases to the rental
subscriber base. The balance of capital expenditures included $1.8 million for
information systems and computer related equipment, $3.0 million for network
construction and development and $0.6 million for general purchases including
leasehold improvements and office equipment. Total capital expenditures for the
year ending December 31, 2000 are estimated to be approximately $90.0 million
and primarily consist of messaging devices, paging and transmission equipment
and information systems enhancements. Metrocall expects that its capital
expenditures for the year ending December 31, 2000, will be financed through a
combination of operating cash flow and borrowings. Projected capital
expenditures are subject to change based on internal growth, general business
and economic conditions and competitive pressures.
16
<PAGE> 17
Net cash provided by financing activities increased approximately $53.4
million from $12.6 million for the three months ended March 31, 1999 to $66.0
million for the three months ended March 31, 2000. The increase was primarily
the result of additional net borrowings under the Metrocall's credit facility of
$16.0 million and proceeds from the common stock investments made by HMTF,
PSINet, and Aether of approximately $51.0 million.
Working Capital
Metrocall's working capital improved by $44.9 million from a deficit of
($36.9) million at December 31, 1999 to $8.0 million at March 31, 2000. The
improvement in working capital was primarily the result of an increase in cash
and cash equivalents at March 31, 2000 as a result of the proceeds received from
the common stock investments described above, and a decrease in accounts payable
and accrued expenses balances related to the timing of payments to Metrocall's
vendors for its operating expenses; these were offset by a decrease in accounts
receivable as a result of improved collections experience and the decrease in
revenues.
Long-Term Debt
At December 31, 1999 and March 31, 2000, long-term debt consisted of:
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31, INCREASE OR
1999 2000 (DECREASE)
------------ --------- -----------
<S> <C> <C> <C>
LONG-TERM DEBT
Borrowings under the credit facility....................... $ 75,000 $ 91,000 $16,000
Senior subordinated notes.................................. 698,608 698,652 44
Capital leases and other debt.............................. 4,019 3,865 (154)
-------- -------- -------
Total long-term debt.................................. $777,627 $793,517 $15,890
======== ======== =======
</TABLE>
Borrowings and repayments under the credit facility. During the three
months ended March 31, 2000, Metrocall increased its net borrowings outstanding
under its credit facility by approximately $16.0 million from December 31, 1999.
These funds were primarily used for general corporate purposes.
On March 17, 2000, Metrocall and certain lenders entered into a Fifth
Amended and Restated Credit Facility (the "credit facility"). Subject to certain
conditions, Metrocall may borrow up to $200.0 million under the facility. Under
the credit facility, Metrocall is required to comply with or maintain certain
financial and operating covenants including certain financial ratios, such as
total debt to annualized operating cash flow, 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
agreement). 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 Metrocall. The credit
facility agreement also provides that certain changes in control of Metrocall,
as defined, will constitute a default. At March 31, 2000, Metrocall was in
compliance with all of these covenants. At March 31, 2000, $91.0 million was
outstanding under the credit facility and $109.0 million of additional
borrowings were available to the Metrocall based on its total leverage covenant.
As described above, certain of the covenants under the credit facility are
determined based on Metrocall's quarterly EBITDA, which is also known as
operating cash flow. In the event that Metrocall's EBITDA continues to decrease
in the second quarter or future quarters, Metrocall could violate one or more of
the covenants under its credit facility. In the event that this occurs,
Metrocall could be viewed to be in default of its credit facility and
Metrocall's bank lenders could prevent it from borrowing any additional amounts
under the credit facility until the default is cured or may require that all of
the outstanding borrowings be repaid. Under this circumstance, there can be no
assurance that the bank lenders would grant a waiver for the covenant that was
in default or that Metrocall would be able to pay or refinance such outstanding
borrowings on acceptable terms to Metrocall. There can be no assurance that
Metrocall will continue to remain in compliance with the covenants of its credit
facility.
17
<PAGE> 18
Senior subordinated notes. There are no principal payments required under
the senior subordinated notes during the year ending 2000. Between April 20,
2000 and May 5, 2000, in multiple transactions, Metrocall issued 4,116,512
shares of its common stock in exchange for $40,099,000 aggregate principal
amounts of its outstanding senior subordinated notes. The aggregate principal
amounts of senior subordinated notes per series are reflected below:
<TABLE>
<S> <C>
11 7/8% senior subordinated notes due 2005............. $ 7,032,000
10 3/8% senior subordinated notes due 2005............. 4,317,000
9 3/4% senior subordinated notes due 2007.............. 15,250,000
11% senior subordinated notes due 2008................. 13,500,000
-----------
$40,099,000
===========
</TABLE>
Metrocall conducted these exchanges without registration under the
Securities Act of 1933 in reliance upon the exemption in section 3(a)(9) of that
act.
Access to Future Capital. Metrocall's ability to access borrowings under
the credit facility and to meet its debt service and other obligations
(including compliance with financial covenants) will be dependent upon its
future performance and its cash flows from operations. These dependencies will
be subject to financial, business and other factors, certain of which are beyond
Metrocall's control, such as prevailing economic conditions. Metrocall cannot
assure you that, in the event it were to require additional financing, such
additional financing would be available on terms permitted by agreements
relating to existing indebtedness or otherwise satisfactory to it. Metrocall
believes that funds generated by its operations, together with those available
under its credit facility, will be sufficient to finance estimated capital
expenditure requirements and to fund its existing operations for the foreseeable
future.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Metrocall is exposed to risks associated with interest rate changes.
Metrocall does not foresee any significant changes in its exposure to
fluctuations in interest rates in the near future. At March 31, 2000, total
outstanding debt consisted of five issues of fixed rate, senior subordinated
notes and the credit facility, which had a variable interest rate:
FIXED RATE DEBT:
<TABLE>
<CAPTION>
EFFECTIVE INTEREST PAYMENTS
PRINCIPAL BALANCE FAIR VALUE INTEREST RATE MATURITY DUE
- ----------------- -------------- ------------- -------- -----------------
<S> <C> <C> <C> <C>
$100.0 million $ 87.0 million 13.65% 2005 Semi-Annually
$ 0.2 million $ 0.2 million 11.88% 2005 Semi-Annually
$150.0 million $125.6 million 12.39% 2007 Semi-Annually
$200.0 million $166.0 million 11.75% 2007 Semi-Annually
$250.0 million $206.3 million 13.33% 2008 Semi-Annually
</TABLE>
No principal repayments are due under these notes until maturity. If at
maturity Metrocall refinanced these notes at interest rates that are 1/4
percentage point higher than their stated rates, its per annum interest costs
would increase by $1.8 million. Based on the outstanding balances at March 31,
2000 a hypothetical immediate 1/4 percentage point change in interest rates
would change the fair value of its fixed rate debt obligations by approximately
$6.1 million.
VARIABLE RATE DEBT:
<TABLE>
<CAPTION>
WEIGHTED AVERAGE INTEREST PAYMENTS
PRINCIPLE BALANCE INTEREST RATE MATURITY DUE
- ----------------- ---------------- -------- -----------------
<S> <C> <C> <C>
$91.0 million 7.6% 2005 Quarterly
</TABLE>
Metrocall's credit facility bears interest at floating rates and matures in
2005. As of March 31, 2000 there was $91.0 million outstanding under the credit
facility and $109.0 million available for future borrowings. Based on weighted
average borrowings outstanding under the credit facility during the three months
ended March 31, 2000, a 1/4 percentage point change in our weighted average
interest rate would have caused interest expense to increase or decrease by
approximately $0.2 million. Repayments under the credit facility may be made at
anytime without penalty.
18
<PAGE> 19
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Metrocall is subject to certain legal and regulatory matters in the normal
course of business. In the opinion of management, the outcome of such assertions
will not have a material adverse effect on the financial position or its results
of operations.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits Required by Item 601 of Regulation S-K.
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
- ------- -------------------
<C> <S>
10.1 Fifth Amended and Restated Loan Agreement by and among
Metrocall, certain lenders and Toronto Dominion (Texas),
Inc. as administrative agent, dated as of March 17, 2000.
11.1 Statement re: computation of per share earnings.
27 Financial Data Schedule.
</TABLE>
- ---------------
(b) Reports on Form 8-K
Metrocall filed a Current Report on Form 8-K with the SEC on February 11,
2000 regarding agreements to exchange common stock for Series C Preferred, issue
shares of its common stock to three equity investors, and to acquire shares of
Inciscent's Series A Preferred Stock.
Metrocall filed a Current Report on Form 8-K with the SEC on February 28,
2000 regarding the adoption of its shareholder rights plan.
Metrocall filed a Current Report on Form 8-K with the SEC on March 27, 2000
regarding consummation of its agreements to exchange common stock for the Series
C Preferred, to issue shares of its common stock to three equity investors, and
to acquire shares of Inciscent's Series A Preferred Stock; and entering into a
revised credit facility agreement.
19
<PAGE> 20
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: May 15, 2000 METROCALL, INC.
/s/ VINCENT D. KELLY
--------------------------------------
Vincent D. Kelly
Chief Financial Officer,
Treasurer and Executive Vice President
20
<PAGE> 1
EXHIBIT 10.1
EXECUTION COPY
3/17/00
FIFTH
AMENDED AND RESTATED LOAN AGREEMENT
among
METROCALL, INC.,
the "Borrower";
The Financial Institutions Signatory Hereto;
TORONTO DOMINION (TEXAS), INC., as "Administrative Agent" for the Lenders
dated as of March 17, 2000
with
BANK OF AMERICA, N.A. (f/k/a NationsBank, N.A.), as "Documentation Agent";
FIRST UNION NATIONAL BANK, as "Co-Documentation Agent";
and
THE TORONTO-DOMINION BANK, as Issuing Bank;
TD SECURITIES (USA) INC. and FIRST UNION SECURITIES, INC.,
as "Co-Lead Arrangers" and "Co-Book Managers"
and
FLEETBOSTON ROBERTSON STEPHENS INC., as "Syndication Agent"
<PAGE> 2
<TABLE>
<CAPTION>
INDEX
-----
Page
----
<S> <C>
ARTICLE 1 Definitions ................................................... 2
ARTICLE 2 Credit Facilities ............................................. 23
Section 2.1 Commitments ................................................... 23
Section 2.2 Manner of Borrowing and Disbursement .......................... 23
Section 2.3 Interest ...................................................... 26
Section 2.4 Commitment and Letter of Credit Fees .......................... 28
Section 2.5 Mandatory Commitment Reductions ............................... 29
Section 2.6 Voluntary Commitment Reductions ............................... 30
Section 2.7 Prepayments and Repayments .................................... 31
Section 2.8 Notes; Loan Accounts .......................................... 33
Section 2.9 Manner of Payment ............................................. 34
Section 2.10 Reimbursement ................................................. 35
Section 2.11 Pro Rata Treatment ............................................ 35
Section 2.12 Capital Adequacy .............................................. 36
Section 2.13 Bank Tax Forms ................................................ 36
Section 2.14 Letters of Credit ............................................. 37
ARTICLE 3 Conditions Precedent .......................................... 42
Section 3.1 Conditions Precedent to Effectiveness of Agreement ............ 42
Section 3.2 Conditions Precedent to Each Advance .......................... 44
Section 3.3 Conditions Precedent to Issuance of Letters of Credit ......... 45
ARTICLE 4 Representations and Warranties ................................ 46
Section 4.1 Representations and Warranties ................................ 46
Section 4.2 Survival of Representations and Warranties, etc ............... 53
ARTICLE 5 General Covenants ............................................. 53
Section 5.1 Preservation of Existence and Similar Matters ................. 53
Section 5.2 Business; Compliance with Applicable Law ...................... 54
Section 5.3 Maintenance of Properties ..................................... 54
Section 5.4 Accounting Methods and Financial Records ...................... 54
Section 5.5 Insurance ..................................................... 54
Section 5.6 Payment of Taxes and Claims ................................... 54
Section 5.7 Compliance with ERISA ......................................... 55
Section 5.8 Visits and Inspections ........................................ 56
Section 5.9 Payment of Indebtedness; Loans ................................ 57
Section 5.10 Use of Proceeds ............................................... 57
Section 5.11 Indemnity ..................................................... 57
Section 5.12 Interest Rate Hedging ......................................... 58
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 .................................................. 60
</TABLE>
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<TABLE>
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ARTICLE 6 Information Covenants ......................................... 60
Section 6.1 Quarterly Financial Statements and Information ................ 60
Section 6.2 Annual Financial Statements and Information ................... 61
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 .......................................... 64
Section 7.4 Liquidation, Merger, or Disposition of Assets ................. 65
Section 7.5 Limitation on Guaranties ...................................... 66
Section 7.6 Investments and Acquisitions .................................. 66
Section 7.7 Restricted Payments and Purchases ............................. 67
Section 7.8 Senior Leverage Ratio ......................................... 68
Section 7.9 Total Leverage Ratio .......................................... 68
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 ................................................... 71
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 ..................................................... 78
Section 9.5 Administrative Agent and Affiliates ........................... 78
Section 9.6 Responsibility of the Administrative Agent and the Issuing Bank 79
Section 9.7 Security Documents ............................................ 79
Section 9.8 Action by the Administrative Agent and the Issuing Bank ....... 79
Section 9.9 Notice of Default or Event of Default ......................... 80
Section 9.10 Responsibility Disclaimed ..................................... 80
Section 9.11 Indemnification ............................................... 81
Section 9.12 Credit Decision ............................................... 811
Section 9.13 Successor Administrative Agent ................................ 81
Section 9.14 Delegation of Duties .......................................... 82
Section 9.15 Agents ........................................................ 82
</TABLE>
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<TABLE>
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ARTICLE 10 Change in Circumstances Affecting Eurodollar Advances ......... 82
Section 10.1 Eurodollar Basis Determination Inadequate or Unfair ........... 82
Section 10.2 Illegality .................................................... 82
Section 10.3 Increased Costs ............................................... 83
Section 10.4 Effect On Other Advances ...................................... 84
ARTICLE 11 Miscellaneous ................................................. 85
Section 11.1 Notices ....................................................... 85
Section 11.2 Expenses ...................................................... 86
Section 11.3 Waivers ....................................................... 87
Section 11.4 Set-Off ....................................................... 87
Section 11.5 Assignment .................................................... 88
Section 11.6 Accounting Principles ......................................... 90
Section 11.7 Counterparts .................................................. 90
Section 11.8 Governing Law ................................................. 90
Section 11.9 Severability .................................................. 90
Section 11.10 Interest ...................................................... 91
Section 11.11 Table of Contents and Headings ................................ 91
Section 11.12 Amendment and Waiver .......................................... 91
Section 11.13 Entire Agreement .............................................. 92
Section 11.14 Other Relationships ........................................... 92
Section 11.15 Directly or Indirectly ........................................ 92
Section 11.16 Reliance on and Survival of Various Provisions ................ 92
Section 11.17 Senior Debt ................................................... 92
Section 11.18 Obligations Several ........................................... 92
ARTICLE 12 Waiver of Jury Trial .......................................... 92
Section 12.1 Waiver of Jury Trial .......................................... 92
</TABLE>
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<TABLE>
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EXHIBITS
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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 E - Form of Request for Advance
Exhibit F - Form of Request for Issuance of Letter of Credit
Exhibit G - Form of Trademark Security Agreement
Exhibit H - Form of Use of Proceeds Letter
Exhibit I - Form of Borrower's Loan Certificate
Exhibit J - Form of Subsidiary Loan Certificate
Exhibit K - Form of Subsidiary Security Agreement
Exhibit L - Form of Subsidiary Guaranty
Exhibit M - Form of Subsidiary Pledge Agreement
Exhibit N - Form of Assignment and Assumption Agreement
SCHEDULES
Schedule 1 - Licenses
Schedule 2 - Purchase Money Security Interests as of Agreement Date
Schedule 3 - Commitment Ratios and 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>
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<PAGE> 6
FIFTH AMENDED AND RESTATED LOAN AGREEMENT
THIS FIFTH AMENDED AND RESTATED LOAN AGREEMENT made as of the 17th day of
March, 2000, by and among METROCALL, INC., a Delaware corporation (the
"Borrower"), the financial institutions party hereto as Lenders (together with
any financial institution which subsequently becomes a Lender hereunder the
"Lenders"), BANK OF AMERICA, N.A. (f/k/a NationsBank, N.A.), as Documentation
Agent (the "Documentation Agent"), FIRST UNION NATIONAL BANK, as
Co-Documentation Agent (the "Co-Documentation Agent") and TORONTO DOMINION
(TEXAS), INC., as Administrative Agent for the Lenders (the "Administrative
Agent").
W I T N E S S E T H:
WHEREAS, the Borrower, the Administrative Agent and certain of the Lenders
are all parties to that certain Fourth Amended and Restated Loan Agreement dated
as of December 22, 1998 (the "Prior Loan Agreement"); and
WHEREAS, the Borrower has requested that the Administrative Agent and the
Lenders consent to certain amendments to the Prior Loan Agreement, as more fully
set forth in this Fifth Amended and Restated Loan Agreement; and
WHEREAS, the Administrative Agent and the Lenders 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 Lenders 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 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,
<PAGE> 7
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 Lenders or any successor
Administrative Agent appointed pursuant to Section 9.13 of this Agreement.
"Administrative Agent's Office" shall mean the office of the
Administrative Agent located at 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.
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"Advance" shall mean amounts advanced by the Lenders 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 Fifth 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 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.
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"Authorized Signatory" shall mean such senior personnel of a Person as may
be duly authorized and designated in writing by such Person to execute
documents, agreements and instruments on behalf of such Person.
"Available Facility A Commitment" shall mean, at any time, (a) the
Facility A Commitment minus (b) the sum of (i) the aggregate amount of Facility
A Loans then outstanding plus (ii) the aggregate amount of all Letter of Credit
Obligations then outstanding.
"Available Letter of Credit Commitment" shall mean, at any time, the
lesser of (a) (i) $10,000,000, minus (ii) all Letter of Credit Obligations then
outstanding, and (b) the Available Facility A Commitment.
"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 Converted to 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.
"Borrower's Pledge Agreements" shall mean, collectively, that certain
Second Amended and Restated Borrower's Pledge Agreement dated as of even date
herewith 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 Lenders, 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.
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"Borrower Security Agreements" shall mean, collectively, that
certain Second Amended and Restated Borrower Security Agreement dated as of even
date herewith 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.
"CEO" shall mean the Chief Executive Officer of the Borrower on the
Agreement Date.
"Certificate of Financial Condition" shall mean a certificate,
substantially in the form of Exhibit C attached hereto, signed by the chief
financial officer of the Borrower, together with any schedules, exhibits or
annexes appended thereto.
"CFO" shall mean the Chief Financial Officer of the Borrower on the
Agreement Date.
"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
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<PAGE> 11
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 the date hereof, 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 the date hereof 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,
(vi) the termination by the Borrower without cause (as defined in the respective
officer's employment agreement) of any of the CEO, COO, or CFO, or two or more
of any of the CEO, COO, or CFO cease to be employed by the Borrower (other than
by reason of termination for cause, death or disability), or (vii) 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.
"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.
"Co-Documentation Agent" shall mean First Union National Bank.
"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 Lender for any
Commitment, the percentage equivalent of the ratio which such Lender's portion
of such Commitment bears to the 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
Lenders with respect to such Commitment. As of the
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Agreement Date, the Commitment Ratios of the Lenders party to this Agreement are
set forth on Schedule 3 hereto.
"Commitments" shall mean, collectively, the Facility A Commitment and the
Facility B 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.
"Common Stock Investment" shall mean the purchase of an aggregate of
23,411,613 shares of the Borrower's Common Stock at a price of $2.19 per share
by HMTF I, PSINet, Inc., and Aether Systems, Inc., pursuant to and in accordance
with those certain stock purchase agreements each dated as of February 2, 2000.
"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.
"Continue, " "Continuation" and "Continued" shall mean the continuation
pursuant to Article 2 hereof of a Eurodollar Advance as a Eurodollar Advance
from one Interest Period to a different Interest Period.
"Convert, " "Conversion" and "Converted" shall mean a conversion pursuant
to Article 2 hereof of a Eurodollar Advance into a Base Rate Advance or of a
Base Rate Advance into a Eurodollar Advance, as applicable.
"COO" shall mean the Chief Operating Officer of the Borrower on the
Agreement Date.
"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 Agent" shall mean Bank of America, N.A.
(f/k/a NationsBank, N.A.).
"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,
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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. Section 9601 et
seq.), or the Resource Conservation and Recovery Act of 1976, as amended (42
U.S.C. Section 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 Converted to or Continued 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 Lenders has funds available to it for
such Lender's portion of the proposed Advance which are not required for other
purposes, and that such funds are available to each Lender 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, New York time) two (2)
Business Days before the first day of such Interest Period, in an amount
approximately equal to the principal amount of, and for a length of
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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 Lender
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 Lenders
to fund their respective portions of Loans to the Borrower in accordance with
their respective Commitment Ratios in an aggregate amount of up to $150,000,000
pursuant to the terms hereof and as such obligations may be reduced from time to
time pursuant to the terms hereof.
"Facility A Loans" shall mean, collectively, the amounts advanced by the
Lenders having Facility A Commitments to the Borrower under the Facility A
Commitments, and evidenced by the Facility A Notes.
"Facility A Notes" shall mean, collectively, those certain promissory
notes in an aggregate original principal amount of $150,000,000, and issued to
each of the Lenders 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 have the meaning ascribed thereto in the
Prior Loan Agreement.
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"Facility B Loans" shall mean, collectively, the amounts advanced by the
Lenders having Facility B Commitments to the Borrower under the Facility B
Commitments, and evidenced by the Facility B Notes.
"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 Lenders 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 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.
"HMTF I" shall mean HMTF Bridge MC I, LLC, an affiliate of Hicks, Muse,
Tate & Furst, Incorporated, and its Affiliates to which it has assigned its
rights to make the Common Stock Investment in the Borrower.
"HMTF Option" shall mean the option held by HMTF I to purchase 8,333,333
shares of the Borrower's Common Stock at a price of $3.00 per share.
"Inciscent" shall mean Inciscent, Inc., a Delaware corporation.
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"Inciscent Service Agreement" shall mean an agreement between the Borrower
and Inciscent having terms no less favorable to the Borrower than those set
forth in Exhibit C to the Inciscent Stock Purchase Agreement.
"Inciscent Stock Purchase Agreement" shall mean that certain Series A
Preferred Stock Purchase Agreement dated as of February 8, 2000, among Inciscent
and the purchasers named therein.
"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
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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 accordance with GAAP
(except as specifically provided herein).
"Interest Period" shall mean (a) in connection with any Base Rate Advance,
the period beginning on the date such Advance is made or Converted to a Base
Rate Advance and ending on the last day of the calendar quarter in which such
Advance is made or Converted to a Base Rate Advance, provided, however, that if
a Base Rate Advance is made or Converted 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.
"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.
"Issuing Bank" shall mean The Toronto-Dominion Bank, as issuer of the
Letters of Credit, and its successors and assigns hereunder.
"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).
"Lenders" shall mean (i) those financial institutions whose names appear
as "Lenders" on the signature pages to this Agreement, together with any
assignees thereof pursuant to Section 11.5 hereof and (ii) the Issuing Bank,
together with any successors assignees thereof; and "Lender" shall mean any one
of the foregoing Lenders.
"Letter of Credit Obligations" shall mean, at any time, the sum of (a) an
amount equal to the aggregate undrawn and unexpired amount (including the amount
to which any such Letter of Credit can be reinstated pursuant to the terms
thereof) of the then outstanding Letters of Credit
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and (b) an amount equal to the aggregate drawn, but unreimbursed, drawings on
any Letters of Credit.
"Letter of Credit Reserve Account" shall mean any account maintained by
the Administrative Agent for the benefit of the Issuing Bank and the Lenders,
the proceeds of which shall be applied as provided in Section 8.2(a) hereof.
"Letters of Credit" shall mean Standby Letters of Credit issued by the
Issuing Bank on behalf of the Borrower or any Restricted Subsidiaries in
accordance with the terms hereof.
"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 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 Requests
for Issuance of Letters of Credit, all Letters of Credit, all Interest Rate
Hedge Agreements between the Borrower or any Restricted Subsidiary, on the one
hand, and the Administrative Agent and the Lenders, 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 Facility A Loans and the Facility B
Loans.
"Majority Lenders" shall mean Lenders the total of whose Commitment Ratios
equals or exceeds fifty-one percent (51%) of the Commitment Ratios of all
Lenders entitled to vote hereunder.
"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
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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 Lenders in and to the Loans or the rights of the Administrative
Agent and the Lenders in the Collateral; in either case, whether resulting from
any single act, omission, situation, status, event or undertaking, or taken
together with other such acts, omissions, situations, statuses, events or
undertakings.
"Maturity Date" shall mean June 1, 2005, or such earlier date as payment
of the Obligations shall be due (whether by acceleration, reduction of the
applicable 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 Asset 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 Available Capital Proceeds" shall mean, with respect to any sale,
issuance or other disposition of any Indebtedness or any Capital Stock of any
Person by such Person, 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
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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 the aggregate amount of any reasonable and customary
transaction costs incurred in connection therewith, including, without
limitation, all fees and expenses of attorneys, accountants and other
consultants, all underwriting or placement agent fees, and fees and expenses of
any trustee, registrar or transfer agent.
"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 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.
"1998 Indenture" shall mean that certain Indenture dated as of December
22, 1998 between the Borrower and First Union National Bank, as trustee with
respect to the Borrower's 11% Senior Subordinated Notes due 2008.
"Notes" shall mean, collectively, the Facility A Notes and the Facility B
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 Lenders, the Administrative Agent or the Issuing Bank, or any of
them, under this Agreement and the other Loan Documents (including, without
limitation, 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
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of the Lenders under any Interest Rate Hedge Agreements and the Letter of Credit
Obligations) 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 Administrative Agent.
"Office Building Acquisition Date" shall mean the date on which the
Borrower acquires the Office Building Assets pursuant to the Office Building
Acquisition Agreement.
"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 limited liability 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
Administrative Agent 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
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adjustments acceptable to the Administrative Agent 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,
any Lender or the Issuing Bank given to secure the Obligations;
(b) (i) Liens on real estate or other property for taxes,
assessments, governmental charges or levies not yet delinquent and (ii) Liens
for taxes, assessments, judgments, governmental charges or levies or claims the
non-payment of which is being diligently contested in good faith by appropriate
proceedings and for which adequate reserves have been set aside on such Person's
books, but only so long as no foreclosure, distraint, sale or similar
proceedings have been commenced with respect thereto;
(c) Liens of carriers, warehousemen, mechanics, laborers and
materialmen incurred in the ordinary course of business for sums not yet 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
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(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.
"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.
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"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, Continuation or Conversion hereunder, which shall be in substantially
the form of Exhibit E attached hereto, and shall, among other things, (i)
specify the Commitment under which such Advance, Continuation or Conversion 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,
Continuation or Conversion and after giving effect thereto, and (iii) provide
calculations demonstrating compliance with Sections 7.8, 7.9, 7.10, 7.11 and
7.12 hereof, after giving effect to the proposed Advance, and the Applicable
Margin related thereto.
"Request for Issuance of Letter of Credit" shall mean any certificate
signed by an Authorized Signatory of the Borrower requesting that the Issuing
Bank issue a Letter of Credit hereunder, which certificate shall be in
substantially the form of Exhibit F attached hereto and shall, among other
things, specify (a) the stated amount of the Letter of Credit, (b) the effective
date for the issuance of the Letter of Credit (which shall be a Business Day),
(c) the date on which the Letter of Credit is to expire (which shall be a
Business Day), (d) the Person for whose benefit such Letter of Credit is to be
issued, (e) that the requirements of Section 3.3 hereof have been satisfied, and
(f) other relevant terms of such Letter of Credit.
"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
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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 Lenders, with
Collateral for the Obligations.
"Security Interest" shall mean all Liens in favor of the Administrative
Agent, for the benefit of itself and the Lenders, created hereunder or under any
of the Security Documents to secure the Obligations.
"Senior Debt" shall mean Total Debt minus Subordinated Debt which is
ermitted 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
Lenders pursuant to Section 6.1 or 6.2 hereof, as applicable.
"Standby Letter of Credit" shall mean a letter of credit issued to support
obligations of the Borrower or its Restricted Subsidiaries incurred in the
ordinary course of business.
"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, the 1998 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
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<PAGE> 26
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 (i) Inciscent shall not
constitute a Subsidiary of the Borrower and (ii) other than Beacon Peak
Associates, the partnerships set forth on Schedule 4 attached hereto shall not
constitute Subsidiaries of the Borrower. Beacon Peak Associates 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 Second
Amended and Restated Master Subsidiary Guaranty dated as of even date herewith
in favor of the Administrative Agent and the Lenders given by each Restricted
Subsidiary of the Borrower, and shall include any similar agreements
substantially in the form of Exhibit L 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 Amended and Restated Master
Subsidiary Pledge Agreement dated as of even date herewith, and any similar
agreements substantially in the form of Exhibit M attached hereto.
"Subsidiary Security Agreements" shall mean, collectively, that certain
Second Amended and Restated Master Subsidiary Security Agreement dated as of
even date herewith among each of the Restricted Subsidiaries and the
Administrative Agent, and shall include any similar agreements substantially in
the form of Exhibit K attached hereto.
"Syndication Agent" shall mean FleetBoston Robertson Stephens Inc.
"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 Lenders
pursuant to Section 6.1 or 6.2 hereof, as applicable.
"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 Net Available
Capital Proceeds from the issuance of Capital Stock by the Borrower during such
period; (c) the amount of any Net Available Asset 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
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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
Second Amended and Restated Borrower Trademark Security Agreement dated as of
even date herewith, and that certain Amended and Restated Trademark Security
Agreement for Contact Communications, Inc. dated as of even date herewith, and
any other similar agreement substantially in the form of Exhibit G 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 Lenders.
"Use of Proceeds Letters" shall mean those certain Use of Proceeds
Letters, substantially in the form of Exhibit H attached hereto, to be delivered
to the Administrative Agent and the Lenders 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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ARTICLE 2
Credit Facilities
Section 2.1 Commitments
(a) Facility A Commitment. The Lenders 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, the Borrower may (a)
Convert a Base Rate Advance into a Eurodollar Advance or a Eurodollar Advance
into a Base Rate Advance or (ii) Continue a Eurodollar Advance as a Eurodollar
Advance.
(b) Facility B Commitment. The Lenders who 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 $50,000,000 of which
$50,000,000 is outstanding on the Agreement Date. The Borrower hereby
acknowledges that all "Obligations" in respect of "Advances" outstanding on the
Agreement Date 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 under the Facility B Commitment hereunder and shall constitute a
portion of the Obligations. Subject to the terms and conditions hereof, the
Borrower may from time to time (i) Convert a Base Rate Advance into a Eurodollar
Advance or a Eurodollar Advance into a Base Rate Advance or (ii) Continue a
Eurodollar Advance as a Eurodollar Advance; provided, however, that there shall
be no increase in the principal amount of the Facility B Loans outstanding on
the Agreement Date.
(c) The Letters of Credit. Subject to the terms and conditions of
this Agreement, the Issuing Bank agrees to issue Letters of Credit for the
account of the Borrower (for itself and on behalf of its Restricted
Subsidiaries) pursuant to Section 2.14 hereof in an aggregate amount not to
exceed the Available Letter of Credit Commitment determined immediately prior to
giving effect to the issuance thereof.
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
or Continue a Eurodollar Advance or to Convert a Base Rate Advance to a
Eurodollar Advance. Any notice given to the Administrative Agent in connection
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with a requested Advance hereunder shall be given to the Administrative Agent
prior to 11:00 a.m. (New York, 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, 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 Lender by telephone or telecopy of the contents
thereof.
(ii) Conversions. The Borrower may, without regard to the
applicable Payment Date and upon at least three (3) Business Days'
irrevocable prior telephonic notice followed by a Request for Advance,
Convert all or a portion of the principal of a Base Rate Advance to a
Eurodollar Advance. On the date indicated by the Borrower, such Base Rate
Advance shall be so Converted. The failure to give timely notice hereunder
with respect to the Payment Date of any Base Rate Advance shall be
considered 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 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 Lender by telephone or
telecopy of the contents thereof.
(ii) Conversions and Continuations. At least three (3)
Business Days prior to the Payment Date for each Eurodollar Advance, the
Borrower shall give the Administrative Agent telephonic notice followed by
written notice specifying whether all or a portion of such Eurodollar
Advance (A) is to be Continued in whole or in part as one or more
Eurodollar Advances, (B) is to be Converted in whole or in part to a Base
Rate Advance, or (C) is to be repaid. The failure to give such notice
shall preclude the Borrower from Continuing such Advance as a Eurodollar
Advance on its Payment Date and shall be considered a request to Convert
such Advance to a Base Rate Advance.
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Upon such Payment Date such Eurodollar Advance will, subject to the
provisions hereof, be so Continued, Converted or repaid, as applicable.
(d) Notification of Lenders. Upon receipt of a Request for Advance,
or a notice of a Conversion or Continuation from the Borrower with respect to
any outstanding Advance prior to the Payment Date for such Advance, the
Administrative Agent shall promptly notify each Lender by telephone or telecopy
of the contents thereof and the amount of such Lender's portion of the Advance.
Each Lender shall, not later than 12:00 noon (New York, 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, 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 Lenders 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 Lender prior to 12:00 noon (New York, New York time) on the
date of any Advance that such Lender will not make available to the
Administrative Agent such Lender's ratable portion of such Advance, the
Administrative Agent may assume that such Lender has made or will make
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 Lender does not make such
ratable portion available to the Administrative Agent, such Lender 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 Lender shall repay to the Administrative Agent
such corresponding amount, such amount so repaid shall constitute such
Lender's portion of the applicable Advance for purposes of this Agreement.
If such Lender 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 Lender to fund its portion of any
Advance shall not relieve any other Lender of its obligation, if any,
hereunder to fund its respective
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portion of the Advance on the date of such borrowing, but no Lender
shall be responsible for any such failure of any other Lender.
(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 Lender for any reason fails or refuses to fund its portion
of such Advance, then, until such time as such Lender has funded its
portion of such Advance (which late funding shall not absolve such Lender
from any liability it may have to the Borrower), or all other Lenders 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 Lender 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 Lender's portion of the
Loans shall not be counted as outstanding for purposes of determining
"Majority Lenders" hereunder, or (B) to receive payments of principal,
interest or fees from the Borrower, the Administrative Agent or the other
Lenders in respect of its portion of the Loans.
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 Lenders and shall accrue until the earlier
of (i) waiver or cure of the applicable Event of Default, (ii) agreement by the
Majority Lenders (or, if applicable to the underlying Event of Default, all
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of the Lenders) 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 Lender for such fiscal quarter, as follows:
<TABLE>
<CAPTION>
Total Base Rate Advance Eurodollar Advance
Leverage Ratio Applicable Margin Applicable Margin
-------------- ----------------- -----------------
<S> <C> <C>
A. Greater than 5.50:1 1.875% 3.000%
B. Greater than 5.00:1, but less than or equal to 5.50:1 1.750% 2.875%
C. Greater than 4.50:1, but less than or equal to 5.00:1 1.625% 2.750%
D. Greater than 4.00:1, but less than or equal to 4.50:1 1.500% 2.625%
E. Greater than 3.50:1, but less than or equal to 4.00:1 1.25% 2.375%
F. Greater than 3.00:1, but less than or equal to 3.50:1 0.875% 2.000%
G. Less than or equal to 3.00:1 0.625% 1.750%
</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
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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 to the first day for which the
presumed Total Leverage Ratio was applied.
Section 2.4 Commitment and Letter of Credit Fees.
(a) Commitment Fee.
(i) The Borrower agrees to pay each of the Lenders, in
accordance with their respective Commitment Ratios, a commitment fee for each
day from the Agreement Date through the Maturity Date based on the aggregate
outstanding balance of the Facility A Commitment and equal to the Commitment Fee
Percentage as determined below multiplied by the aggregate unborrowed balance of
the Facility A Commitment:
<TABLE>
<CAPTION>
Aggregate Outstanding Then the Commitment Fee
Balance of Facility A Commitment is: Percentage (per annum) shall be:
------------------------------------ --------------------------------
<S> <C>
A. less than 50% of aggregate Facility A 0.750%
Commitment
B. greater than or equal to 50% of aggregate 0.500%
Facility A Commitment but less than 75%
of aggregate Facility A Commitment
C. greater than or equal to 75% of aggregate 0.375%
Facility A Commitment
</TABLE>
(ii) 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.
(b) Letter of Credit Fees.
(i) The Borrower shall pay to the Issuing Bank a fee on the
undrawn face amount of any outstanding Letters of Credit from the date of
issuance through the expiration date of each such Letter of Credit at a rate of
one-eighth of one percent (0.125%) per annum, which fee shall be computed on the
basis of a year of 365/366 days for the actual number of days elapsed, and shall
be payable quarterly in arrears on the last day of each calendar quarter (and on
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the Maturity Date) commencing on March 31, 2000 and shall be fully earned when
due and non-refundable when paid.
(ii) The Borrower shall also pay to the Administrative Agent
on behalf of the Lenders in accordance with their respective Commitment Ratios
under the Facility A Commitment, a fee on the undrawn face amount of any
outstanding Letters of Credit for each day from the date of issuance thereof
through the expiration date for each such Letter of Credit at a rate per annum
equal to the Applicable Margin for Eurodollar Advances under the Facility A
Commitment. Such Letter of Credit Fee 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 for each quarter on the last day of each calendar quarter
(and on the Maturity Date) commencing on March 31, 2000. The Letter of Credit
Fee set forth in this Section 2.4(b)(ii) shall be subject to increase and
decrease on the dates and in the amounts set forth in Section 2.3(f) hereof in
the same manner as the adjustment of the Applicable Margin with respect to
Eurodollar Advances upon satisfaction of the requirements set forth in Section
2.3(f) hereof.
Section 2.5 Mandatory Commitment Reductions.
(a) Scheduled Reductions in Facility A Commitment. Commencing March
31, 2002 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, 2002, June 30, 2002,
September 30, 2002 and December 31, 2002 6.250%
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 6.250%
March 31, 2005 6.250%
Maturity Date 18.750%
</TABLE>
(b) Reduction from Excess Cash Flow. The Facility A Commitment shall
be automatically and permanently reduced by the amount required under Section
2.7(b)(v) hereof; provided, however, that if there are no Loans outstanding
under the Facility B Commitment, then the Facility A Commitment shall be reduced
by an amount equal to Excess Cash Flow.
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Reductions to the Facility A Commitment under this Section 2.5(b) shall be
applied to the reductions set forth in Section 2.5(a) hereof pro rata across the
reductions set forth therein.
(c) Reduction from Permitted Asset Sales. The Facility A Commitment
shall be automatically and permanently reduced by the amount required under
Section 2.7(b)(iv) hereof; provided, however, that if there are no Loans
outstanding under the Facility B Commitment, the Facility A Commitment shall be
reduced by an amount equal to the Available Net Proceeds. Reductions to the
Facility A Commitment under this Section 2.5(c) shall be applied to the
reductions set forth in Section 2.5(a) hereof pro rata across the reductions set
forth therein.
(d) Reduction from Equity Issuance. The Facility A Commitment shall
be automatically and permanently reduced by the amount required under Section
2.7(b)(iii) hereof; provided, however, that if there are no Loans outstanding
under the Facility B Commitment, the Facility A Commitment shall be reduced by
the total amount required under Section 2.7(b)(iii) hereof. Reductions to the
Facility A Commitment under this Section 2.5(d) shall be applied to the
reductions set forth in Section 2.5(a) hereof pro rata across the reductions set
forth therein.
(e) Reduction from Subordinated Debt Issuance. The Facility A
Commitment shall be automatically and permanently reduced by the amount required
under Section 2.7(b)(vi) hereof; provided, however, that if there are no Loans
outstanding under the Facility B Commitment, the Facility A Commitment shall be
reduced by the total amount required under Section 2.7(b)(vi) hereof. Reductions
to the Facility A Commitment under this Section 2.5(e) shall be applied to the
reductions set forth in Section 2.5(a) hereof pro rata across the reductions set
forth therein.
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 Lenders 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 Lenders the amount
necessary to reduce the principal amount of the Loans then
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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.
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 Lenders and the Administrative Agent, on the earlier of demand by
the applicable Lender or the Maturity Date, for any loss or out-of-pocket
expense incurred by any Lender 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 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 and Letter of Credit Obligations in Excess of
Commitments. If, at any time, the amount of (A) the Loans then outstanding
under any Commitment shall exceed the applicable Commitment or (B) the
aggregate amount of the Facility A Loans and the Letter of Credit
Obligations exceeds the Facility A Commitment, the Borrower shall, on such
date and subject to Section 2.10 hereof, make a repayment of the principal
amount of the Loans or, if there are no such Loans outstanding, establish,
if applicable, a Letter of Credit Reserve Account, in each case, 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, 2002, 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 March 30, 2002 on the dates set forth below:
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<PAGE> 37
<TABLE>
<CAPTION>
Repayment Dates Percentage
--------------- ----------
<S> <C>
March 31, 2002, June 30, 2002,
September 30, 2002 and December 31, 2002 6.250%
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 6.250%
March 31, 2005 6.250%
Maturity Date 18.750%
</TABLE>
(iii) Equity Proceeds. The Borrower shall repay Loans outstanding
under the Facility B Commitment and permanently reduce the Facility A
Commitment, with 50% of the Net Available Capital Proceeds of any equity
issued by the Borrower on or after the Agreement Date; provided, however,
so long as the Borrower provides to the Administrative Agent and the
Lenders calculations, in form and substance satisfactory to the
Administrative Agent, specifically demonstrating (1) the Borrower's
compliance with Sections 7.8, 7.9, 7.10, 7.11 and 7.12, in form and
substance satisfactory to the Administrative Agent, both before and after
giving effect thereto and (2) that the Total Leverage Ratio is less than
or equal to 4.50:1.00, both before and after giving effect thereto, then
none of such Net Available Capital Proceeds shall be required to be
applied as set forth above; provided further, however, that none of the
Net Available Capital Proceeds generated from the Common Stock Investment
or the exercise of the HMTF Option by HMTF I shall be required to be
applied as set forth herein. All such proceeds shall be applied pro rata
between the Commitments. Repayments of Loans under the Facility B
Commitment shall be applied to the repayment schedule set forth in Section
2.7(b)(ii) in inverse order of maturity. Reductions to the Facility A
Commitment shall be applied as set forth in Section 2.5 hereof.
(iv) Asset Sale Proceeds. The Borrower shall repay the Loans
outstanding under the Facility B Commitment and permanently reduce the
Facility A Commitment as set forth in Section 7.4(a) hereof, with the
Available Net Proceeds from any Asset Disposition not reinvested in
accordance with Section 7.4(a). All such proceeds shall be applied pro
rata between the Commitments. Repayments of Loans under the Facility B
Commitment shall be applied to the repayment schedule set forth in Section
2.7(b)(ii) in inverse order of maturity. Reductions to the Facility A
Commitment shall be applied as set forth in Section 2.5 hereof.
(v) Excess Cash Flow. Commencing on March 31, 2002 and on each
March 31st and September 30th occurring thereafter during the term of this
Agreement,
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the Borrower shall repay Loans outstanding under the Facility B Commitment
and permanently reduce the Facility A Commitment by an amount equal to
fifty percent (50%) of Excess Cash Flow determined for the two (2)
consecutive fiscal quarters then ended. All such proceeds shall be applied
pro rata between the Commitments. Repayments of Loans under the Facility B
Commitment shall be applied to the repayment schedule set forth in Section
2.7(b)(ii) in inverse order of maturity. Reductions to the Facility A
Commitment shall be applied as set forth in Section 2.5 hereof
(vi) Subordinated Debt Proceeds. The Borrower shall repay Loans
outstanding under the Facility B Commitment and permanently reduce the
Facility A Commitment pro rata, in an amount equal to the Net Available
Capital Proceeds of any Subordinated Debt issued by the Borrower on or
after the Agreement Date, immediately upon the issuance thereof; provided,
however, that so long as the Borrower provides to the Administrative Agent
and the Lenders calculations, in form and substance satisfactory to the
Administrative Agent, specifically demonstrating (A) the Borrower's
compliance with Sections 7.8, 7.9, 7.10, 7.11 and 7.12, in form and
substance satisfactory to the Administrative Agent, both before and after
giving effect thereto and (B) that the Total Leverage Ratio is less than
or equal to 5.0:1, both before and after giving effect thereto, then only
50% of such proceeds shall be required to be applied as set forth above.
All such proceeds shall be applied pro rata between the Commitments.
Repayments of Loans under the Facility B Commitment shall be applied to
the repayment schedule set forth in Section 2.7(b)(ii) in inverse order of
maturity. Reductions to the Facility A Commitment shall be applied as set
forth in Section 2.5 hereof.
(vii) 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 and one Facility B Note shall be payable to the order of each Lender for
such Commitment, in accordance with such Lender's respective Commitment Ratio
for the applicable Commitment. The Notes shall be issued by the Borrower to the
Lenders and shall be duly executed and delivered by one or more Authorized
Signatories.
(b) Each Lender 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 Lender 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
Lender 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
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<PAGE> 39
Lender 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 Lenders 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, 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 Lenders 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, New York time)
shall be deemed received on the next Business Day. Receipt by the Administrative
Agent of any payment intended for any Lender or Lenders hereunder prior to 1:00
p.m. (New York, New York time) on any Business Day shall be deemed to constitute
receipt by such Lender or Lenders on such Business Day. In the case of a payment
for the account of a Lender, the Administrative Agent will promptly thereafter
distribute the amount so received in like funds to such Lender. If the
Administrative Agent shall not have received any payment from the Borrower as
and when due, the Administrative Agent will promptly notify the Lenders
accordingly. In the event that the Administrative Agent shall fail to make
distribution to any Lender as required under this Section 2.9, the
Administrative Agent agrees to pay such Lender 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 Lender
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 Lender, 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 Lender, as applicable, with evidence
satisfactory to the Administrative Agent or such Lender, 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 Lenders
for the applicable Commitment: (i) to the payment of any fees or expenses
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then due and payable to the Administrative Agent, the Lenders and the Issuing
Bank, 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, the
Lenders and the Issuing Bank, 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 (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 connection with such
payment.
Section 2.10 Reimbursement.
(a) Whenever any Lender shall sustain or incur any losses or
out-of-pocket expenses in connection with (i) failure by the Borrower to borrow,
Continue or Convert any Eurodollar Advance after having given notice of its
intention to borrow, Continue or Convert such Advance 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
Lender, upon the earlier of such Lender's demand or the Maturity Date, an amount
sufficient to compensate such Lender for all such losses and out-of-pocket
expenses other than any lost margin on the Loans. Such Lender'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 Lender or any
participant of such Lender 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 Lenders under any Commitment
shall be made pro rata on the basis of the respective Commitment Ratios of the
Lenders 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 Lenders pro rata on the basis of
their respective unpaid principal
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<PAGE> 41
amounts outstanding under the Notes immediately prior to such payment or
prepayment. If any Lender 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 Lender
shall forthwith purchase from the other Lenders such participations in the
portion of the Loans made by them as shall be necessary to cause such purchasing
Lender 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 Lender, such purchase from each Lender shall be rescinded and
such Lender shall repay to the purchasing Lender the purchase price to the
extent of such recovery. The Borrower agrees that any Lender so purchasing a
participation from another Lender 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
Lender 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 Lender 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 Lender's or any Lender'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 Lender's policies with respect to capital adequacy
immediately before such adoption, change or compliance and assuming that such
Lender's capital was fully utilized prior to such adoption, change or
compliance) by an amount reasonably deemed by such Lender to be material, then,
upon the earlier of demand by such Lender or the Maturity Date, the Borrower
shall promptly pay to such Lender such additional amounts as shall be sufficient
to compensate such Lender 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 Lender setting forth the amount to be paid to such Lender 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 Lender 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 Lender 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 Lender's status for purposes of determining exemption
from United States withholding taxes
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with respect to all payments to be made to such Lender hereunder and under the
Notes or (ii) that all payments to be made to such Lender hereunder and under
the Notes are subject to such taxes at a rate reduced to zero by an applicable
tax treaty. Each such Lender 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 the extent available under
Applicable Law.
Section 2.14 Letters of Credit.
(a) Subject to the terms and conditions hereof, the Issuing Bank, on
behalf of the Lenders, and in reliance on the agreements of the Lenders set
forth in Section 2.14(d) below, hereby agrees to issue one or more Letters of
Credit up to an aggregate face amount equal to the Available Letter of Credit
Commitment determined immediately prior to giving effect to the issuance
thereof; provided, however, that the Issuing Bank shall not issue any Letter of
Credit unless the conditions precedent to the issuance thereof set forth in
Section 3.3 hereof have been satisfied, and shall have no obligation to issue
any Letter of Credit if any Default then exists or would be caused thereby or
if, after giving effect to such issuance, the Available Facility A Commitment
would be less than zero; and provided further, however, that at no time shall
the total Letter of Credit Obligations outstanding hereunder exceed $10,000,000.
Each Letter of Credit shall (1) be denominated in United States dollars, and (2)
expire no later than the earlier to occur of (A) the Business Day prior to the
Maturity Date, and (B) 364 days after its date of issuance (but may contain
provisions for automatic renewal to a date on or before the Business Day prior
to the Maturity Date provided that no Default or Event of Default exists on the
renewal date or would be caused by such renewal). Each Letter of Credit shall be
subject to the Uniform Customs and Practice for Documentary Credits (1993
Revision), International Chamber of Commerce Publication No. 500 and, to the
extent not inconsistent therewith, the laws of the State of New York. The
Issuing Bank shall not at any time be obligated to issue, or cause to be issued,
any Letter of Credit if such issuance would conflict with, or cause the Issuing
Bank to exceed any limits imposed by, any Applicable Law. If a Letter of Credit
provides that it is automatically renewable unless notice is given by the
Issuing Bank that it will not be renewed, the Issuing Bank shall not be bound to
give a notice of non-renewal unless directed to do so by the Majority Lenders at
least five (5) days prior to the latest date on which the Issuing Bank is
required to give notice of a non-renewal of such Letter of Credit.
(b) The Borrower may from time to time request and be provided by
the Issuing Bank the issuance of Letters of Credit. The Borrower shall execute
and deliver to the Administrative Agent and the Issuing Bank a Request for
Issuance of Letter of Credit for each Letter of Credit to be issued by the
Issuing Bank, not later than 12:00 noon (New York, New York time) on the fifth
(5th) Business Day preceding the date on which the requested Letter of Credit is
to be issued, or such shorter notice as may be acceptable to the Issuing Bank
and the Administrative Agent. Upon receipt of any such Request for Issuance of
Letter of Credit, subject to satisfaction of all conditions precedent thereto as
set forth in Section 3.3 hereof, the Issuing Bank shall process such Request for
Issuance of Letter of Credit and the certificates, documents
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<PAGE> 43
and other papers and information delivered to it in connection therewith in
accordance with its customary procedures and shall promptly issue the Letter of
Credit requested thereby. The Issuing Bank shall furnish a copy of such Letter
of Credit to the Borrower and the Administrative Agent following the issuance
thereof. The Borrower shall pay or reimburse the Issuing Bank for normal and
customary costs and expenses incurred by the Issuing Bank in issuing, effecting
payment under, amending or otherwise administering the Letters of Credit.
(c) At such time as the Administrative Agent shall be notified by
the Issuing Bank that the beneficiary under any Letter of Credit has drawn on
the same, the Administrative Agent shall promptly notify the Borrower and each
Lender, by telephone or telecopy, of the amount of the draw and, in the case of
each Lender, such Lender's portion of such draw amount as calculated in
accordance with its Commitment Ratio under the Facility A Commitment.
(d) The Borrower hereby agrees to immediately reimburse the Issuing
Bank for amounts paid by the Issuing Bank in respect of draws under a Letter of
Credit issued at the Borrower's request. In order to facilitate such repayment,
the Borrower hereby irrevocably requests the Lenders having a Facility A
Commitment, and such Lenders hereby severally agree, on the terms and conditions
of this Agreement (other than as provided in Article 2 hereof with respect to
the amounts of, the timing of requests for, and the repayment of Advances
hereunder and in Article 3 hereof with respect to conditions precedent to
Advances hereunder), with respect to any drawing under a Letter of Credit prior
to the occurrence of an event described in clauses (f) or (g) of Section 8.1
hereof, to make an Advance (which Advance may be a Eurodollar Advance if the
Borrower so requests in a timely manner or may be Converted to a Eurodollar
Advance as provided herein) to the Borrower on each day on which a draw is made
under any Letter of Credit and in the amount of such draw, and to pay the
proceeds of such Advance directly to the Issuing Bank to reimburse the Issuing
Bank for the amount paid by it upon such draw. Each Lender having a Facility A
Commitment shall pay its share of such Advance by paying its portion of such
Advance to the Administrative Agent in accordance with Section 2.2(e) hereof and
its Commitment Ratio under the Facility A Commitment, without reduction for any
set-off or counterclaim of any nature whatsoever and regardless of whether any
Default or Event of Default (other than with respect to an event described in
clauses (f) or (g) of Section 8.1 hereof) then exists or would be caused
thereby. If at any time that any Letters of Credit are outstanding, any of the
events described in clauses (f) or (g) of Section 8.1 hereof shall have occurred
and be continuing, then each Lender having a Facility A Commitment shall,
automatically upon the occurrence of any such event and without any action on
the part of the Issuing Bank, the Borrower, the Administrative Agent or such
Lenders, be deemed to have purchased an undivided participation in the face
amount of all Letters of Credit then outstanding in an amount equal to such
Lender's Commitment Ratio under the Facility A Commitment, and each Lender
having a Facility A Commitment shall, notwithstanding such Event of Default,
upon a drawing under any Letter of Credit, immediately pay to the Administrative
Agent for the account of the Issuing Bank, in immediately available funds, the
amount of such Lender's participation (and the Issuing Bank shall deliver to
such Lender a loan participation certificate dated the date of the occurrence of
such event and in the amount of such Lender's Commitment Ratio under the
Facility A Commitment). The disbursement of funds in connection with a draw
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under a Letter of Credit pursuant to this Section 2.14(d) shall be subject to
the terms and conditions of Section 2.2(e) hereof. The obligation of each Lender
having a Facility A Commitment to make payments to the Administrative Agent, for
the account of the Issuing Bank, in accordance with this Section 2.14 shall be
absolute and unconditional and no such Lender shall be relieved of its
obligations to make such payments by reason of noncompliance by any other Person
with the terms of the Letter of Credit or for any other reason. The
Administrative Agent shall promptly remit to the Issuing Bank the amounts so
received from the other Lenders. Any overdue amounts payable by the Lenders
having a Facility A Commitment to the Issuing Bank in respect of a draw under
any Letter of Credit shall bear interest, payable on demand, at the rate on
overnight federal funds transactions with members of the Federal Reserve System
arranged by federal funds brokers, as published for such day by the Federal
Reserve Bank of New York.
(e) The Borrower agrees that any action taken or omitted to be taken
by the Issuing Bank in connection with any Letter of Credit, except for such
actions or omissions as shall constitute gross negligence or willful misconduct
on the part of the Issuing Bank, shall be binding on the Borrower as between the
Borrower and the Issuing Bank, and shall not result in any liability of the
Issuing Bank to the Borrower. The obligation of the Borrower to reimburse the
Lenders for Advances made to reimburse the Issuing Bank for draws under the
Letter of Credit shall be absolute, unconditional and irrevocable, and shall be
paid strictly in accordance with the terms of this Agreement under all
circumstances whatsoever, including, without limitation, the following
circumstances:
(i) Any lack of validity or enforceability of any
Loan Document;
(ii) Any amendment or waiver of or consent to
any departure from any or all of the Loan Documents;
(iii) Any improper use which may be made of any Letter of
Credit or any improper acts or omissions of any beneficiary or transferee
of any Letter of Credit in connection therewith;
(iv) The existence of any claim, set-off, defense or any right
which the Borrower may have at any time against any beneficiary or any
transferee of any Letter of Credit (or Persons for whom any such
beneficiary or any such transferee may be acting) or any Lender (other
than the defense of payment to such Lender in accordance with the terms of
this Agreement) or any other Person, whether in connection with any Letter
of Credit, any transaction contemplated by any Letter of Credit, this
Agreement, any other Loan Document, or any unrelated transaction;
(v) Any statement or any other documents presented under any
Letter of Credit proving to be insufficient, forged, fraudulent or invalid
in any respect or any statement therein being untrue or inaccurate in any
respect whatsoever, provided that
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<PAGE> 45
such payment shall not have constituted gross negligence or willful
misconduct of the Issuing Bank;
(vi) The insolvency of any Person issuing any documents in
connection with any Letter of Credit;
(vii) Any breach of any agreement between the Borrower and any
beneficiary or transferee of any Letter of Credit, provided that the same
shall not have resulted from the gross negligence or willful misconduct of
the Issuing Bank;
(viii) Any irregularity in the transaction with respect to
which any Letter of Credit is issued, including any fraud by the
beneficiary or any transferee of such Letter of Credit, but excluding any
irregularity resulting from the gross negligence or willful misconduct of
the Issuing Bank;
(ix) Any errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph,
wireless or otherwise, whether or not they are in code, provided that the
same shall not be the result of the gross negligence or willful misconduct
of the Issuing Bank;
(x) Any act, error, neglect or default, omission, insolvency
or failure of business of any of the correspondents of the Issuing Bank,
provided that the same shall not have constituted the gross negligence or
willful misconduct of the Issuing Bank;
(xi) Any other circumstances arising from causes
beyond the control of the Issuing Bank;
(xii) Payment by the Issuing Bank under any Letter of Credit
against presentation of a sight draft or a certificate which does not
comply with the terms of such Letter of Credit, provided that such payment
shall not have constituted gross negligence or willful misconduct of the
Issuing Bank; and
(xiii) Any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing, provided that such other
circumstances or happenings shall not have been the result of gross
negligence or willful misconduct of the Issuing Bank or any Lender.
(f) If any change in Applicable Law, any change in the
interpretation or administration thereof, or any change in compliance with
Applicable Law by the Issuing Bank or any Lender as a result of any official
request or directive of any governmental authority, central bank or comparable
agency (whether or not having the force of law) shall (i) impose, modify or deem
applicable any reserve (including, without limitation, any imposed by the Board
of Governors of the Federal Reserve System), special deposit, capital adequacy,
assessment or other requirements or conditions against Letters of Credit issued
by the Issuing Bank or against
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<PAGE> 46
participations by any other Lender in the Letters of Credit or (ii) impose on
the Issuing Bank or any other Lender any other condition regarding any Letter of
Credit or any participation therein, and the result of any of the foregoing in
the reasonable determination of the Issuing Bank or such Lender, as the case may
be, is to increase the cost to the Issuing Bank or such Lender of issuing or
maintaining any Letter of Credit or purchasing or maintaining any participation
therein, as the case may be, by an amount (which amount shall be reasonably
determined) deemed by the Issuing Bank or such Lender to be material, and the
designation of a different lending office will not avoid the need for additional
compensation, then, on request by the Issuing Bank or such Lender, the Borrower
shall pay, within ten (10) days after demand, the Issuing Bank or such Lender,
as the case may be, such additional amount or amounts as the Issuing Bank or
such Lender, as the case may be, so determines will compensate it for such
increased costs. A certificate of the Issuing Bank or such Lender setting forth
the amount, and in reasonable detail the basis for the Issuing Bank or such
Lender's determination of such amount, to be paid to the Issuing Bank or such
Lender by the Borrower as a result of any event referred to in this paragraph
shall, absent manifest error, be conclusive.
(g) Each Lender having a Facility A Commitment shall be responsible
for its pro rata share (based on such Lender's Commitment Ratio under the
Facility A Commitment) of any and all reasonable out-of-pocket costs, expenses
(including reasonable legal fees) and disbursements which may be incurred or
made by the Issuing Bank in connection with the collection of any amounts due
under, the administration of, or the presentation or enforcement of any rights
conferred by any Letter of Credit, the Borrower's or any guarantor's obligations
to reimburse or otherwise. In the event the Borrower shall fail to pay such
expenses of the Issuing Bank within ten (10) days after demand for payment by
the Issuing Bank, each Lender having a Facility A Commitment shall thereupon pay
to the Issuing Bank its pro rata share (based on such Lender's Commitment Ratio
under the Facility A Commitment) of such expenses within five (5) days from the
date of the Issuing Bank's notice to the Lenders having a Facility A Commitment
of the Borrower's failure to pay; provided, however, that if the Borrower or any
guarantor shall thereafter pay such expense, the Issuing Bank will repay to each
Lender having a Facility A Commitment the amounts received from such Lender
hereunder.
(h) The Borrower agrees that each Advance by the Lenders having a
Facility A Commitment to reimburse the Issuing Bank for draws under any Letter
of Credit, shall, for all purposes hereunder, be deemed to be an Advance under
the Facility A Commitment to the Borrower and shall be payable and bear interest
in accordance with all other Loans to the Borrower.
(i) The Borrower will indemnify and hold harmless the Administrative
Agent, each other Lender and the Issuing Bank and each of their respective
employees, representatives, officers and directors from and against any and all
claims, liabilities, obligations, losses (other than loss of profits), damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever (including reasonable attorneys' fees, but excluding
taxes) which may be imposed on, incurred by or asserted against the
Administrative Agent, any such other Lender or the Issuing Bank in any way
relating to or arising out of the
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issuance of a Letter of Credit, except that the Borrower shall not be liable to
the Administrative Agent, any such Lender or the Issuing Bank for any portion of
such claims, liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses, or disbursements resulting from the gross
negligence or willful misconduct of the Administrative Agent, such Lender or the
Issuing Bank, as the case may be, as determined by a non-appealable judicial
order. This Section 2.14(i) shall survive termination of this Agreement.
(j) Successor Issuing Bank. The Issuing Bank may resign as Issuing
Bank upon sixty (60) days' prior written notice to the Administrative Agent, the
Lenders and the Borrower. If the Issuing Bank shall resign as Issuing Bank under
this Agreement, then the Borrower shall appoint from among the Lenders a
successor issuer of Letters of Credit, whereupon such successor issuer shall
succeed to the rights, powers and duties of the Issuing Bank, and the term
"Issuing Bank" shall mean such successor issuer effective upon such appointment.
At the time such resignation shall become effective, the Borrower shall pay to
the resigning Issuing Bank all accrued and unpaid fees pursuant to Section
2.4(b)(i) hereof. The acceptance of any appointment as the Issuing Bank
hereunder by a successor Lender shall be evidenced by an agreement entered into
by such successor, in a form satisfactory to the Borrower and the Administrative
Agent and, from and after the effective date of such agreement, such successor
Lender shall have all the rights and obligations of the previous Issuing Bank
under this Agreement and the other Loan Documents. After the resignation of the
Issuing Bank hereunder, the resigning Issuing Bank shall remain a party hereto
and shall continue to have all the rights and obligations of a Issuing Bank
under this Agreement and the other Loan Documents with respect to Letters of
Credit issued by it prior to such resignation, but shall not be required to
issue additional Letters of Credit. After any retiring Issuing Bank's
resignation as Issuing Bank, the provisions of this Agreement relating to the
Issuing Bank shall inure to its benefit as to any actions taken or omitted to be
taken by it (i) while it was Issuing Bank under this Agreement or (ii) at any
time with respect to Letters of Credit issued by such Issuing Bank.
ARTICLE 3
Conditions Precedent
Section 3.1 Conditions Precedent to Effectiveness of Agreement . The
obligation of the Lenders to undertake the Commitments 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 Lenders shall have received
each of the following:
(i) duly executed Notes;
(ii) duly executed Borrower's Pledge Agreement;
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(iii) duly executed Borrower Security Agreement;
(iv) duly executed Subsidiary Guaranties;
(v) duly executed Subsidiary Pledge Agreements;
(vi) duly executed Subsidiary Security Agreements;
(vii) duly executed Trademark Security Agreements;
(viii) the loan certificate of the Borrower dated as of the
Agreement Date, in substantially the form attached hereto as Exhibit I,
including a certificate of incumbency with respect to each Authorized
Signatory of such Person, together with the following items: (A) a true,
complete and correct copy of the Certificate of Incorporation of the
Borrower, as amended, as in effect on the Agreement Date, (B) a true,
complete and correct copy of the Bylaws of the Borrower as in effect on
the Agreement Date, (C) certificates of good standing for the Borrower
issued by the Secretary of State or similar state official for the state
of formation of the Borrower and for each state in which the Borrower is
required to qualify to do business, (D) a true, complete and correct copy
of the corporate resolutions of the Board of Directors of the Borrower
authorizing the Borrower to execute, deliver and perform this Agreement
and the other Loan Documents, and (E) a true, complete and correct copy of
any shareholders' agreements or voting agreements in effect with respect
to the Capital Stock of the Borrower;
(ix) a loan certificate of each Restricted Subsidiary of the
Borrower (including all License Subs existing as of the Agreement Date)
dated as of the Agreement Date, in substantially the form attached hereto
as Exhibit J, including a certificate of incumbency with respect to each
Authorized Signatory of such Person, together with the following items:
(A) a true, complete and correct copy of the Articles or Certificate of
Incorporation or Formation of such Person as in effect on the Agreement
Date, (B) a true, complete and correct copy of the By-Laws or Operating or
Partnership Agreement of such Person as in effect on the Agreement Date,
(C) certificates of good standing for such Person issued by the Secretary
of State or similar state official for the state of formation of such
Person and for each state in which such Person is required to qualify to
do business, (D) a true, complete and correct copy of the resolutions of
such Person (or another appropriate Person) authorizing such Person to
execute, deliver and perform the Loan Documents to which it is party, and
(E) a true, complete and correct copy of any shareholders' agreements or
voting agreements in effect with respect to the Capital Stock of such
Person;
(x) a Certificate of Financial Condition of the Borrower;
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(xi) the Administrative Agent shall have received opinions of
FCC and special corporate counsel to the Borrower with respect to this
Agreement, which opinions shall be in form and substance satisfactory to
the Administrative Agent; and
(xii) all such other documents as the Administrative Agent or
any Lender may reasonably request, certified by an appropriate
governmental official or an Authorized Signatory if so requested.
(b) The Administrative Agent and the Lenders shall have received
evidence satisfactory to them that all Necessary Authorizations, including all
necessary consents to the closing of this Agreement and the other Loan Documents
have been obtained or made, are in full force and effect and 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 Lenders shall have received a certificate of an
Authorized Signatory so stating.
(c) The Borrower shall certify to the Administrative Agent and the
Lenders 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
this Agreement.
(d) There shall not exist as of the Agreement Date any action, suit,
proceeding or investigation pending against, or, to the knowledge of the
Borrower, threatened against or in any manner relating adversely to, the
Borrower, any of its Subsidiaries, any of their respective properties, which
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, 1999 as
delivered to the Administrative Agent and the Lenders.
(f) The Administrative Agent shall have received evidence reasonably
satisfactory to it of the simultaneous receipt by the Borrower of at least
$48,000,000 in Net Available Capital Proceeds from the Common Stock Investment.
Section 3.2 Conditions Precedent to Each Advance. The obligation of the
Lenders 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
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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 Lenders 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 Lenders 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 Lenders 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 Lender 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 Lenders 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 Lenders, 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.
Section 3.3 Conditions Precedent to Issuance of Letters of Credit. The
obligation of the Issuing Bank to issue each Letter of Credit hereunder is
subject to the fulfillment of each of the following conditions immediately prior
to or contemporaneously with such issuance:
(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
issuance of Letter of Credit, shall be true and correct at such time in all
material respects, both before and after giving effect to the issuance of such
Letter of Credit, and after giving effect to any updates to information provided
to the Lenders in accordance with the terms of such representations and
warranties, and no Default hereunder shall then exist or be caused thereby;
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(b) The Administrative Agent shall have received a Request for
Issuance of a Letter of Credit;
(c) The Administrative Agent, the Issuing Bank and each of the
Lenders having a Facility A Commitment shall have received all such other
certificates, reports, statements, opinions of counsel (if such Letter of Credit
is in connection with an Acquisition) or other documents as any of them may
reasonably request; and
(d) No event shall have occurred and no condition shall exist which,
in the judgment of the Majority Lenders, 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.
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 Lender 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
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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 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.
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(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 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,
1999 delivered to the Lenders 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 Lenders 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
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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 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 Lenders the audited financial
statements for the Borrower and its Subsidiaries on a consolidated basis for the
fiscal year ended December 31, 1999, all of which, together with other financial
statements furnished to the Lenders 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 Lenders and identified as such.
(l) No Material Adverse Change. Since December 31, 1999, 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 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
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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 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
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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 and furnished by or on behalf of the Borrower or any of its
Subsidiaries to the Administrative Agent or the Lenders were, at the time
furnished, true, complete and correct in all material respects to the extent
necessary to give the Administrative Agent and the Lenders true and accurate
knowledge of the subject matter.
(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.
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(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 Lenders, 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, (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" 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.
(x) Patents, Trademarks, etc. The Borrower and each of its
Restricted Subsidiaries owns, possesses or has the right to use all licenses and
rights to all patents, trademarks, trademark rights, trade names, trade name
rights, service marks, and copyrights, and rights with respect thereto,
necessary to conduct its business in all material respects as now conducted,
without known conflict with any patent, trademark, trade name, service mark,
license or copyright of any other Person, and in each case, with respect to
patents, trademarks, trademark rights, trade names, trade names, copyrights and
licenses with respect thereto owned by the Borrower or its Restricted
Subsidiaries subject to no mortgage, pledge, lien, lease, encumbrance, charge,
security interest, title retention agreement or option. All such licenses and
rights with
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respect to patents, trademarks, trademark rights, trade names, trade name
rights, service marks and copyrights are in full force and effect, and to the
extent applicable, the Borrower and its Restricted Subsidiaries are in full
compliance in all material respects with all of the provisions thereof. No such
patent, trademark, trademark rights, trade names, trade name rights, service
marks, copyrights or licenses is subject to any pending or, to the best of the
Borrower's knowledge, threatened attack or revocation. Neither the Borrower nor
any of its Restricted Subsidiaries owns any registered copyrights or patents and
the Borrower's business is not subject to any license (other than general
business licenses and permits).
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 or issuance of a Letter of
Credit, 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
Lenders and the Administrative Agent, any investigation or inquiry by any Lender
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 Lenders
have an obligation to fund Advances hereunder or the Issuing Bank has an
obligation to issue Letters of Credit hereunder (in each case, whether or not
the conditions to borrowing or issuing a Letter of Credit, as applicable, have
been or can be fulfilled), and unless the Majority Lenders, or such greater
number of Lenders 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.
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Section 5.2 Business; Compliance with Applicable Law. The Borrower will,
and will cause each of its Subsidiaries to, (a) engage solely in the business of
owning, constructing, managing, operating and investing in paging and wireless
messaging 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 on behalf of itself, the Lenders and the Issuing Bank as
additional named lender loss payee and, as appropriate, additional insured, to
the extent of the Obligations.
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,
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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
Lenders (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
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 Lender's
request therefor, such additional information concerning any such Plan as may be
reasonably requested by the Administrative Agent or any Lender.
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(d) The Borrower will promptly notify the Administrative Agent and
the Lenders 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
Lenders 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
(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 Lenders, 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
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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
Lenders 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 Commitments 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 Lender, the Administrative Agent, the Issuing Bank, the
Documentation Agent, the Co-Documentation Agent, the Syndication Agent and each
of their respective affiliates, employees, representatives, shareholders,
officers, 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 Lenders, the
Issuing Bank, the Documentation Agent, the Co-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
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for any reason, (iii) any claims against the Lenders, the Issuing Bank, the
Documentation Agent, the Co-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 Administrative Agent, 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 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 Administrative
Agent. 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 Lenders
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
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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 K 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 L attached hereto, and (3) to the extent applicable, a Trademark
Security Agreement, substantially in the form of Exhibit G 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 J 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 M 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 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, the
Lenders and the Issuing Bank, or cause to be executed and delivered to the
Administrative Agent, the Lenders and the Issuing Bank, 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.
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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.
ARTICLE 6
Information Covenants
So long as any of the Obligations is outstanding and unpaid or the Lenders
have an obligation to fund Advances hereunder or the Issuing Bank has an
obligation to issue Letters of Credit hereunder (in each case, whether or not
the conditions to borrowing or issuing a Letter of Credit, as applicable, have
been or can be fulfilled) and unless the Majority Lenders shall otherwise
consent in writing, the Borrower will furnish or cause to be furnished to each
Lender, the Administrative Agent and the Issuing Bank, 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
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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. Beginning with
the fiscal year ended December 31, 1999, 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 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.
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(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 or any of its Subsidiaries, as the
Administrative Agent, any Lender or the Issuing 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.
(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 Lenders 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.
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 Lenders by the Borrower;
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(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 Lenders
have an obligation to fund Advances hereunder or the Issuing Bank has an
obligation to issue Letters of Credit hereunder (in each case, whether or not
the conditions to borrowing or issuing a Letter of Credit, as applicable, have
been or can be fulfilled) and unless the Majority Lenders, or such greater
number of Lenders 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 Rate 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 Lenders 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, the 1997 Indenture,
the 1998 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 Lenders, (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
Lenders pro forma projections satisfactory to the Majority Lenders 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, 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
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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 amendments which
could not reasonably be expected to have an adverse effect on the Administrative
Agent, any Lender or the Issuing Bank or any of their rights or claims under any
of the Loan Documents), (b) any documents relating to Subordinated Debt
(excluding the A+ Indenture) or (c) the Inciscent Service Agreement or the
Inciscent Stock Purchase Agreement other than amendments that do not violate
Section 7.13 hereof.
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 Asset 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
Lenders. 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 Asset 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 Asset 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.
(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
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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.
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.
Section 7.6 Investments and Acquisitions. Except as permitted under
Section 7.7 hereof, 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 Lenders
financial
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projections and calculations, in form and substance satisfactory to the
Administrative Agent, 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, both before and after
giving effect thereto, the Borrower may make the following Acquisitions:
(i) Acquisitions of paging companies for an
aggregate Net Purchase Price not to exceed $50,000,000 during
the term of this Agreement;
(ii) additional Acquisitions of paging companies so long as
the Total Leverage Ratio, after giving effect to the proposed Acquisition, is
less than 5.00 to 1; and
(iii) other Acquisitions with the prior
written consent of the Majority Lenders.
(d) Provided that the Borrower complies with Section 5.13 hereof in
connection therewith, and provides to the Administrative Agent and the Lenders
financial projections and calculations, in form and substance satisfactory to
the Administrative Agent specifically demonstrating the Borrower's compliance
with Sections 7.8, 7.9, 7.10, 7.11 and 7.12 hereto both before and after giving
effect thereto, the Borrower may make investments in wireless communications in
an aggregate amount not to exceed, during the term of this Agreement, (i) the
sum of $25,000,000 plus (ii) sixty percent (60%) of the difference of (x) the
Net Available Capital Proceeds from the issuance by the Borrower of Capital
Stock on or after the Agreement Date in excess of $25,000,000 minus (y) the Net
Available Capital Proceeds used to make Restricted Purchases or Restricted
Payments pursuant to clause (i)(y) of Section 7.7(c) hereof, to the extent that
the difference of (x) and (y) hereof is a positive number; provided that (a) the
value of any capital stock of the Borrower issued as payment for such Investment
shall be excluded when calculating the maximum investment amount permitted to be
made by the Borrower; (b) 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 Lenders, and (c) 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;
and
(e) The Borrower may make an investment in Inciscent on the terms
set forth in the Inciscent Stock Purchase Agreement as in effect on the
Agreement Date.
Section 7.7 Restricted Payments and Purchases. Except as otherwise
permitted by Section 7.16 hereof, 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 and provided that the Borrower
is in compliance with Sections 7.8, 7.9, 7.10, 7.11 and 7.12 hereof both before
and after giving effect to any such restricted Payment or Restricted Purchase,
the Borrower may (a) make scheduled payments of accrued interest in respect of
Subordinated Debt incurred in accordance with Section 7.1 hereof; (b) repurchase
outstanding Subordinated Debt issued
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pursuant to the A+ Indenture for an aggregate amount not to exceed $200,000; and
(c) make other Restricted Payments and Restricted Purchases, including
repurchases by the Borrower of its Capital Stock in an aggregate amount not to
exceed, during the term of this Agreement, (i) the sum of (x) $35,000,000 plus
(y) the aggregate amount of Net Available Capital Proceeds from the issuance of
Capital Stock by the Borrower on or after the Agreement Date minus (ii) the
amount of any investments in wireless communications that are made pursuant to
clause (ii) of Section 7.6(d) hereof.
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, (e) at the time of any acquisition or
investment by the Borrower or any Restricted Subsidiary and (f) at the time of
the issuance of any Letter of Credit (after giving effect to such Letter of
Credit), 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>
Agreement Date through
December 31, 2001 1.75:1.00
January 1, 2002 and thereafter 1.50:1.00
</TABLE>
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, (e) at the time of any acquisition
or investment by the Borrower or any Restricted Subsidiary and (f) at the time
of the issuance of any Letter of Credit (after giving effect to such Letter of
Credit), 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>
Agreement Date through
December 31, 2000 6.00:1.00
January 1, 2001 through
December 31, 2001 5.50:1.00
January 1, 2002 through
December 31, 2002 5.00:1.00
</TABLE>
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<TABLE>
<S> <C>
January 1, 2003 through
December 31, 2003 4.50:1.00
January 1, 2004 and thereafter 4.00:1.00
</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, (e) at
the time of any acquisition or investment by the Borrower or any Restricted
Subsidiary and (f) at the time of the issuance of any Letter of Credit (after
giving effect to such Letter of Credit), 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 or equal to 1.25:1.00.
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 1.05:1.00.
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, (e) at
the time of any acquisition or investment by the Borrower or any Restricted
Subsidiary and (f) at the time of the issuance of any Letter of Credit (after
giving effect to such Letter of Credit), 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>
Agreement Date through
December 31, 2000 1.75:1.00
January 1, 2001 through
December 31, 2001 2.00:1.00
January 1, 2002
and thereafter 2.25:1.00
</TABLE>
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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; provided,
however, that the Borrower and its Restricted Subsidiaries may amend employment
contracts in the ordinary course of business and the Borrower may engage in
transactions with Inciscent as specified in and in accordance with the Inciscent
Stock Purchase Agreement and the Inciscent Service Agreement.
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 or a Restricted Subsidiary 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 Administrative Agent is appropriate with
respect to such grant, including any documentation requested by the Lenders
(collectively, the "Office Building Documents") and (ii) not less than five (5)
days prior to the Office Building Acquisition Date, the Borrower shall have
provided the Administrative Agent 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 Administrative Agent; (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 Administrative
Agent with all documentation required by Section 5.13 hereof and (ii) the
Borrower shall have provided the Administrative Agent 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
satisfactory to the Administrative Agent; 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
Lenders. The Borrower
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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 Lenders. 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. 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. Notwithstanding the foregoing and provided that
the Borrower provides to the Administrative Agent and the Lenders financial
projections and calculations, in form and substance satisfactory to the
Administrative Agent, specifically demonstrating the Borrower's compliance with
Sections 7.8, 7.9, 7.10, 7.11 and 7.12 hereto, both before and after giving
effect thereto, the Borrower may form one or more Unrestricted Subsidiaries to
finance pager purchases and may invest up to an aggregate of $15,000,000 in such
Unrestricted Subsidiaries through a purchase of the Capital Stock of, or
membership interests in, such Unrestricted Subsidiaries, or a loan or advance
to, or a Guaranty of the obligations of, such Unrestricted Subsidiaries which
may be funded with an Advance hereunder.
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.
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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 Lenders 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 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
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(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 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
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(k) There shall occur (i) any default under (A) the 1995 Indenture,
(B) the ProNet Indenture, (C) the 1997 Indenture, (D) the 1998 Indenture, or (E)
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, the 1998 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 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
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(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.
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
Lenders subject to Section 9.8(a) hereof, shall (i) (A) terminate the
Commitments, and/or (B) declare the principal of and interest on the Loans and
the Notes and all other amounts owed to the Lenders, the Administrative Agent
and the Issuing Bank 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, and
(ii) require the Borrower to, and the Borrower shall thereupon, deposit in an
interest bearing account with the Administrative Agent, as cash collateral for
the Obligations, an amount equal to the maximum amount currently or at any time
thereafter available to be drawn on all outstanding Letters of Credit, and the
Borrower hereby pledges to the Administrative Agent, the Lenders and the Issuing
Bank and grants to them a security interest in, all such cash as security for
the Obligations.
(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, and the Borrower shall
thereupon forthwith deposit in an interest bearing account with the
Administrative Agent, as cash collateral for the Obligations, an amount equal to
the maximum amount currently or at any time thereafter available to be drawn on
all outstanding Letters of Credit, all without any action by the Administrative
Agent or the Lenders, or the Majority Lenders, or the Issuing Bank, 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, the Lenders and the
Issuing Bank shall have all of
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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 Lenders 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 Lenders 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 Lenders 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 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 Lenders 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 Lenders
pursuant to Section 9.11 hereof. No exercise by the Administrative Agent and the
Majority Lenders 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 Lenders, 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 Lenders and the Issuing Bank,
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's, the
Lenders' and the Issuing Bank's 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, the Lenders and the Issuing Bank 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 Lenders or the
Issuing Bank) 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 Lenders 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 Lenders or the Issuing Bank)
and ending upon the earlier of (i) the taking of possession of the systems by a
receiver
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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
Lenders, 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 Lenders and the
Issuing Bank, in connection therewith. The rights of the Administrative Agent
under this Section 8.2(e) shall be subject to its prior compliance with the
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, the Lenders
and the Issuing Bank hereunder shall be cumulative, and not exclusive.
(g) In the event that the Administrative Agent establishes a cash
collateral account as contemplated by this Section 8.2, the Administrative Agent
shall invest all funds in such account in such investments as the Administrative
Agent, in its sole and absolute discretion, deems appropriate. The Borrower
hereby acknowledges and agrees that any interest earned on such funds shall be
retained by the Administrative Agent as additional collateral for the
Obligations. Upon satisfaction in full of all Obligations, the Administrative
Agent shall pay any amounts then held in such account to the Borrower.
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,
the Lenders and the Issuing Bank 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 and
Issuing Bank'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 Lenders, the Administrative Agent and the
Issuing Bank for any fees hereunder or under any of the other Loan Documents
then due and payable; third, to the Lenders 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 Lenders pro rata until all Loans have been paid in full (and, for
purposes of this clause, obligations under Interest Rate Hedge Agreements with
the Lenders or any of them shall be paid on a pro rata basis with the Loans);
fifth, to the Lenders 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.
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ARTICLE 9
The Agents
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
Lender, or the Person designated in the last notice filed with the
Administrative Agent, as the holder of all of the interests of such Lender in
its portion of the Loans and in its Notes until written notice of transfer,
signed by such Lender (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 Lender which is an affiliate of the
Administrative Agent shall have the same rights and powers hereunder as any
other Lender 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
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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 and the Issuing
Bank. The duties and obligations of the Administrative Agent and the Issuing
Bank under this Agreement are only those expressly set forth in this Agreement.
The Administrative Agent and the Issuing Bank 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 Lender in writing that such Lender considers that a
Default or an Event of Default has occurred and is continuing, and such Lender
shall specify in detail the nature thereof in writing. The Administrative Agent
and the Issuing Bank 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 Lender and the Issuing
Bank with copies of such documents received from the Borrower as such Lender and
the Issuing Bank may reasonably request.
Section 9.7 Security Documents. The Administrative Agent is hereby
authorized to act on behalf of the Lenders, 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 and the Issuing Bank.
(a) The Administrative Agent and the Issuing Bank 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 or the Issuing
Bank, as applicable, shall have been instructed by the Majority Lenders 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 Lenders (or, where expressly required, all the Lenders) unless time is
of the essence. The Administrative Agent and the Issuing Bank 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 and the Issuing Bank
shall not be liable to the Lenders or to any Lender 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
Lenders (or, where expressly required, all the Lenders), and any
action taken or failure to act pursuant to such instructions
shall be binding on all Lenders. The
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Administrative Agent and the Issuing Bank 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, any Lender or the Issuing Bank shall acquire actual
knowledge, or shall have been notified, of any Default or Event of Default, the
Administrative Agent, such Lender or the Issuing Bank shall promptly notify the
Lenders, the Administrative Agent and the Issuing Bank, as applicable (provided
failure to give such notice shall not result in any liability on the part of
such Lender, the Administrative Agent or the Issuing Bank), and the
Administrative Agent shall take such action and assert such rights under this
Agreement and the other Loan Documents as the Majority Lenders 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 Lenders 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, any Lender or the
Issuing 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
Lenders, except that, if the Majority Lenders 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 Lender or Lenders of
any of its or their obligations under this Agreement;
(b) To any Lender or Lenders, 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 Lender or Lenders, 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
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(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 Lenders agree to indemnify the
Administrative Agent, the Syndication Agent, the Documentation Agent and the
Co-Documentation Agent (to the extent not reimbursed by the Borrower) pro rata
according to their respective Commitment Ratios and the Issuing Bank, 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 Syndication Agent, the Documentation Agent, the
Co-Documentation Agent and the Issuing Bank 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 Syndication Agent, the Documentation
Agent, the Co-Documentation Agent and the Issuing Bank under this Agreement, any
other Loan Document, or any other document contemplated by this Agreement,
except that no Lender shall be liable to the Administrative Agent, the
Syndication Agent, the Documentation Agent, Co-Documentation Agent and the
Issuing Bank 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 Lender 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 Lenders); and
(b) So long as any portion of the Loans remains outstanding or such
Lender 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 Lenders, the Issuing Bank and the Borrower and may be removed at any time
for cause by the Majority Lenders. Upon any such resignation or removal, the
Majority Lenders shall have the right to appoint a successor Administrative
Agent, which appointment shall, prior to a Default, be subject to the consent of
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the Borrower, acting reasonably. If no successor Administrative Agent shall
have been so appointed by the Majority Lenders and shall have accepted such
appointment within thirty (30) days after the retiring Administrative Agent gave
notice of resignation or the Majority Lenders' removal of the retiring
Administrative Agent, then the retiring Administrative Agent may, on behalf of
the Lenders and the Issuing Bank, appoint a successor Administrative Agent which
shall be any Lender 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 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. Neither the Documentation Agent nor the
Co-Documentation Agent shall have any duties or obligations under this Agreement
or the other Loan Documents in their capacities as 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 Lenders that
deposits in dollars (in the applicable amount) are not being offered to each of
the Lenders in the relevant market for such Interest Period, the Administrative
Agent shall forthwith give notice thereof to the Borrower and the Lenders,
whereupon until the Administrative Agent notifies the Borrower that the
circumstances giving rise to such situation no longer exist, the obligations of
any affected Lender 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
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any Lender 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 Lender to make, maintain or fund its portion of Eurodollar
Advances, such Lender shall so notify the Administrative Agent, and the
Administrative Agent shall forthwith give notice thereof to the other Lenders
and the Borrower. Before giving any notice to the Administrative Agent pursuant
to this Section 10.2, such Lender 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 Lender, be otherwise materially disadvantageous to such
Lender. 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 Lender'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
Lender may lawfully continue to maintain and fund its portion of such Eurodollar
Advance to such day or (b) immediately if such Lender 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 Lender, and such
Lender shall make such Advance, if so requested, in an amount such that the
outstanding principal amount of the affected Note held by such Lender 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 Lender
with any directive (whether or not having the force of law) of any such
authority, central bank or comparable agency:
(1) shall subject any Lender 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 Lender 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 Lender); 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
Lender or shall impose on any Lender or the London interbank borrowing
market any
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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 Lender of
making or maintaining any of its portion of Eurodollar Advances, or to reduce
the amount of any sum received or receivable by such Lender 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 Lender or the Maturity Date, the Borrower
agrees to pay to such Lender such additional amount or amounts as will
compensate such Lender for such increased costs. Each Lender 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 Lender 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 Lender made in
good faith, be otherwise disadvantageous to such Lender.
(b) Any Lender 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 Lender may use any reasonable
averaging and attribution methods. If any Lender demands compensation under this
Section 10.3, the Borrower may at any time, upon at least five (5) Business
Days' prior notice to such Lender, prepay in full such Lender'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 Lender, and such Lender 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 Lender 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 Lender to make
its portion of any type of Eurodollar Advance, or requiring such Lender's
portion of Eurodollar Advances to be repaid or prepaid, then, unless and until
such Lender notifies the Borrower that the circumstances giving rise to such
repayment no longer apply, all amounts which would otherwise be made by such
Lender 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, 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: Thomas W. White, Esq.
Telecopy No.: (202) 663-6363
(ii) If to the Administrative Agent, to it at:
Toronto Dominion (Texas), Inc.
909 Fannin, Suite 1700
Houston, Texas 77010
Attn: Jeff Lents
Telecopy No.: (713) 951-9921
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with a copy to:
TD Securities (USA) Inc.
31 West 52nd Street
New York, New York 10019-6101
Attn: Amy Josephson
Telecopy No.: (212) 827-7261
with an additional 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 Lenders, 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
Issuing Bank, the Syndication Agent, the Documentation Agent and the
Co-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
Issuing Bank, the Syndication Agent, the Documentation Agent and
Co-Documentation Agent in connection with the restructuring and "work out" of
the transactions contemplated in this Agreement or the other Loan Documents, and
the preparation, negotiation, execution and delivery of any waiver, amendment or
consent by the Administrative Agent, the Lenders and the Issuing Bank, or any of
them, relating to this Agreement or the other Loan Documents, including, but not
limited to, the
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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 Issuing Bank, the Syndication Agent,
the Documentation Agent and the Co-Documentation Agent and the Lenders.
Section 11.3 Waivers. The rights and remedies of the Administrative Agent
, the Lenders and the Issuing Bank 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 Lenders, the Lenders and the Issuing Bank, or any of them, in
exercising any right, shall operate as a waiver of such right. The
Administrative Agent, the Lenders and the Issuing Bank 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
Lenders decide to fund a Request for Advance or the Issuing Bank decides to
issue any Letter of Credit at a time when the Borrower is not in strict
compliance with the terms of this Agreement, such decision by the Lenders and
the Issuing Bank, respectively, shall not be deemed to constitute an undertaking
by the Lenders to fund any further Request for Advance, or by the Issuing Bank
to issue any further Letter of Credit, respectively, or preclude the Lenders,
the Administrative Agent or the Issuing Bank from exercising any rights
available under the Loan Documents or at law or equity. Any waiver or indulgence
granted by the Administrative Agent, the Lenders, the Majority Lenders and the
Issuing Bank, 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, each of the Lenders and the Issuing Bank is 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 Lender, the
Administrative Agent or the Issuing Bank, to or for the credit or the account of
the Borrower or any of its Subsidiaries, against and on account of the
obligations and liabilities of the Borrower to the Lenders, the Administrative
Agent and the Issuing Bank, 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 Lender, the Administrative Agent or the Issuing Bank, as applicable,
shall have made any
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demand hereunder or (b) any Lender, the Administrative Agent or the Issuing
Bank, as applicable, 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 Lenders, each Lender or the Issuing 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 Lender.
(b) Each Lender may sell assignments or participations of one
hundred percent (100%) of its interests hereunder to (A) one or more affiliates
of such Lender, 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 Lenders may at any time enter into assignment
agreements or participations with one or more other Lenders or other Persons
pursuant to which such Lender 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 Lender, 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 portion of the Loans from any Lender 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 N attached hereto;
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(iv) An administrative fee of $3,500 shall be
payable to the Administrative Agent by the assigning Lender
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 Lender 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 Lender 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
(x) If applicable, each Lender 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 Lender's or assignee's
position that no withholding by the Borrower or the Administrative Agent
for U.S. income tax payable by such Lender 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.
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(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 Lenders 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 Lender
hereunder or under any other Loan Document in order 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
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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 Lender,
then such excess sum shall be credited as a payment of principal, unless the
Borrower shall notify the Administrative Agent or such Lender, 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 Lenders
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 Lenders of the Base Rate and the
Eurodollar Rate as reference rates for the determination of interest on the
Loans, the Lenders 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.
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 Lenders 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 Lenders), (e) any waiver
of any Default due to the failure by the Borrower to pay any sum due to any of
the Lenders 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 Lenders), or (g) any amendment of this Section 11.12, of
the definition of Majority Lenders, or of any Section herein to the extent that
such Section requires action by all Lenders any amendment or waiver or consent
may be made only by an instrument in writing signed by each of the Lenders 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
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Agent or the Issuing Bank may be made only by an instrument in writing signed by
such affected Person and by each of the Lenders.
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 Lender 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 Lenders notwithstanding
any investigation heretofore or hereafter made by 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 Lenders 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, THE ISSUING BANK AND
THE LENDERS, HEREBY AGREE TO WAIVE AND HEREBY WAIVE THE RIGHT TO A TRIAL BY JURY
IN ANY COURT AND IN ANY ACTION OR
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PROCEEDING OF ANY TYPE IN WHICH THE BORROWER, ANY OF THE BORROWER'S
SUBSIDIARIES, ANY OF THE LENDERS, THE ADMINISTRATIVE AGENT, THE ISSUING BANK 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, ANY LENDER OR THE ISSUING BANK HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT THE ADMINISTRATIVE AGENT, ANY LENDER OR THE ISSUING
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 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]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreem
ent or caused it to be executed by their duly authorized office rs, all as of
the day and year first above written.
METROCALL, INC., a Delaware corporation
By:
--------------------------------------
Name:
---------------------------------
Title:
---------------------------------
FIFTH AMENDED AND RESTATED
LOAN AGREEMENT
METROCALL, INC.
Signature Page 1
<PAGE> 100
TORONTO DOMINION (TEXAS), INC., as
Administrative Agent, and as a Lender
By:
--------------------------------------
Name:
---------------------------------
Title:
---------------------------------
FIFTH AMENDED AND RESTATED
LOAN AGREEMENT
METROCALL, INC.
Signature Page 2
<PAGE> 101
BANK OF AMERICA, N.A., as Documentation
Agent and as a Lender
By:
--------------------------------------
Name:
---------------------------------
Title:
---------------------------------
FIFTH AMENDED AND RESTATED
LOAN AGREEMENT
METROCALL, INC.
Signature Page 3
<PAGE> 102
FIRST UNION NATIONAL BANK, as
Co-Documentation Agent and as a Lender
By:
--------------------------------------
Name:
---------------------------------
Title:
---------------------------------
FIFTH AMENDED AND RESTATED
LOAN AGREEMENT
METROCALL, INC.
Signature Page 4
<PAGE> 103
FLEET NATIONAL BANK, as Syndication
Agent and as a Lender
By:
--------------------------------------
Name:
---------------------------------
Title:
---------------------------------
FIFTH AMENDED AND RESTATED
LOAN AGREEMENT
METROCALL, INC.
Signature Page 5
<PAGE> 104
COMMERCIAL LOAN FUNDING TRUST I, as
Lender
By:
--------------------------------------
Name:
---------------------------------
Title:
---------------------------------
FIFTH AMENDED AND RESTATED
LOAN AGREEMENT
METROCALL, INC.
Signature Page 6
<PAGE> 105
KZH CNC LLC, as Lender
By:
--------------------------------------
Name:
---------------------------------
Title:
---------------------------------
FIFTH AMENDED AND RESTATED
LOAN AGREEMENT
METROCALL, INC.
Signature Page 7
<PAGE> 106
MORGAN STANLEY SENIOR FUNDING, INC., as
Lender
By:
--------------------------------------
Name:
---------------------------------
Title:
---------------------------------
FIFTH AMENDED AND RESTATED
LOAN AGREEMENT
METROCALL, INC.
Signature Page 8
<PAGE> 107
PNC BANK, National Association, as
Lender
By:
--------------------------------------
Name:
---------------------------------
Title:
---------------------------------
FIFTH AMENDED AND RESTATED
LOAN AGREEMENT
METROCALL, INC.
Signature Page 9
<PAGE> 1
EXHIBIT 11.1
STATEMENT RE COMPUTATION OF EARNINGS PER SHARE
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED MARCH 31,
---------------------
1999 2000
--------- ---------
<S> <C> <C>
Net loss.................................................... $(42,013) $(47,704)
Preferred dividends....................................... (4,003) (2,787)
Gain on repurchase of Preferred Stock..................... 2,208
Series C Preferred exchange inducement.................... (6,308)
-------- --------
Loss attributable to common stockholders.................... $(43,808) $(56,799)
======== ========
Weighted-average shares outstanding:
Shares outstanding, beginning of period................... 41,583 41,902
Shares issued for exercise of warrants.................... -- 563
Shares issued for employee stock and benefit plans........ 88 285
Shares issued in exchange for Series C Preferred.......... -- 2,061
Shares issued to equity investors......................... -- 3,641
-------- --------
Weighted-average shares outstanding......................... 41,671 48,452
-------- --------
Loss per share attributable to common stockholders.......... $ (1.05) $ (1.17)
======== ========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-1-2000
<PERIOD-END> MAR-31-2000
<CASH> 49,878
<SECURITIES> 0
<RECEIVABLES> 53,542
<ALLOWANCES> 6,446
<INVENTORY> 0
<CURRENT-ASSETS> 101,829
<PP&E> 474,372
<DEPRECIATION> 201,768
<TOTAL-ASSETS> 1,030,967
<CURRENT-LIABILITIES> 93,785
<BONDS> 793,517
53,356
0
<COMMON> 804
<OTHER-SE> (41,078)
<TOTAL-LIABILITY-AND-EQUITY> 1,030,967
<SALES> 11,545
<TOTAL-REVENUES> 140,052
<CGS> 7,765
<TOTAL-COSTS> 174,395
<OTHER-EXPENSES> (319)
<LOSS-PROVISION> 3,713
<INTEREST-EXPENSE> 21,564
<INCOME-PRETAX> (63,353)
<INCOME-TAX> (15,649)
<INCOME-CONTINUING> (56,799)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (47,704)
<EPS-BASIC> (1.17)
<EPS-DILUTED> (1.17)
</TABLE>
