<PAGE> 1
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QUARTERLY REPORT UNDER SECTION 13 0R 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the quarterly period ended June 30, 1996
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the transition period from
______________ to _____________
Commission File Number 0-23232
ARCH COMMUNICATIONS GROUP, INC.
(Exact name of Registrant as specified in its Charter)
DELAWARE 31-1358569
(State of incorporation) (I.R.S. Employer Identification No.)
1800 WEST PARK DRIVE, SUITE 250
WESTBOROUGH, MASSACHUSETTS 01581
(address of principal executive offices) (Zip Code)
(508) 870-6700
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months or for such shorter period that the Registrant was
required to file such reports, and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 20,642,928 shares of the
Company's Common Stock ($.01 par value) were outstanding as of August 8, 1996.
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ARCH COMMUNICATIONS GROUP, INC.
QUARTERLY REPORT ON FORM 10-Q
INDEX
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION Page
--------------------- ----
<S> <C>
Item 1. Financial Statements:
Consolidated Condensed Balance Sheets as of June 30, 1996
and December 31, 1995 3
Consolidated Condensed Statements of Operations for the
Three and Six Months Ended June 30, 1996 and 1995 4
Consolidated Condensed Statements of Cash Flows for the
Six Months Ended June 30, 1996 and 1995 5
Notes to Consolidated Condensed Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 9
PART II. OTHER INFORMATION 17
</TABLE>
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
2
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PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
ARCH COMMUNICATIONS GROUP, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
June 30, 1996 December 31, 1995
------------- -----------------
(unaudited)
ASSETS
Current assets:
<S> <C> <C>
Cash and equivalents $ 11,549 $ 3,643
Accounts receivable, net 21,436 14,278
Inventories 12,790 11,801
Prepaid expenses and other 6,775 3,949
----------- -----------
Total current assets 52,550 33,671
----------- -----------
Property and equipment, at cost 314,914 205,636
Less accumulated depreciation and amortization (60,893) (36,390)
----------- -----------
Property and equipment, net 254,021 169,246
----------- -----------
Intangible and other assets, net 898,934 582,459
----------- -----------
$ 1,205,505 $ 785,376
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ 84 $ 166
Accounts payable 24,370 22,463
Accrued interest 7,951 7,845
Accrued expenses and other liabilities 25,896 18,698
----------- -----------
Total current liabilities 58,301 49,172
----------- -----------
Long-term debt, less current maturities 862,318 457,044
----------- -----------
Deferred income taxes 66,908 28,900
----------- -----------
Redeemable preferred stock 3,544 3,376
----------- -----------
Stockholders' equity:
Common stock-$.01 par 206 197
Additional paid-in capital 349,325 334,825
Accumulated deficit (135,097) (88,138)
----------- -----------
Total stockholders' equity 214,434 246,884
----------- -----------
$ 1,205,505 $ 785,376
=========== ===========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
3
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ARCH COMMUNICATIONS GROUP, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(unaudited and in thousands, except share and per share amounts)
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
-------------------------------- --------------------------------
1996 1995 1996 1995
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Service, rental, and maintenance
revenues $ 69,700 $ 24,979 $ 128,033 $ 47,580
Product sales 9,283 4,841 18,121 9,270
------------ ------------ ------------ ------------
Total revenues 78,983 29,820 146,154 56,850
Cost of products sold (7,021) (4,304) (13,566) (8,340)
------------ ------------ ------------ ------------
71,962 25,516 132,588 48,510
------------ ------------ ------------ ------------
Operating expenses:
Service, rental, and maintenance 14,972 5,387 27,343 10,300
Selling 12,704 4,624 23,746 8,857
General and administrative 19,262 7,903 35,141 15,021
Depreciation and amortization 43,845 7,795 78,128 14,842
------------ ------------ ------------ ------------
Total operating expenses 90,783 25,709 164,358 49,020
------------ ------------ ------------ ------------
Operating income (loss) (18,821) (193) (31,770) (510)
Interest expense, net (17,353) (2,814) (31,541) (4,652)
Equity in earnings (loss) of affiliate (384) -- (384) --
------------ ------------ ------------ ------------
Income (loss) before income tax benefit
and extraordinary charge (36,558) (3,007) (63,695) (5,162)
Benefit from income taxes 10,880 -- 18,640 --
------------ ------------ ------------ ------------
Income (loss) before extraordinary
charge (25,678) (3,007) (45,055) (5,162)
Extraordinary charge from early
extinguishment of debt (1,904) (1,684) (1,904) (1,684)
------------ ------------ ------------ ------------
Net income (loss) (27,582) (4,691) (46,959) (6,846)
Accretion of redeemable preferred stock (84) -- (168) --
------------ ------------ ------------ ------------
Net loss to common stockholders $ (27,666) $ (4,691) $ (47,127) $ (6,846)
============ ============ ============ ============
Net income (loss) per common share
before extraordinary charge $ (1.26) $ (0.27) $ (2.24) $ (0.49)
Extraordinary charge per common share (0.09) (0.15) (0.09) (0.16)
------------ ------------ ------------ ------------
Net income (loss) per common share $ (1.35) $ (0.42) $ (2.33) $ (0.65)
============ ============ ============ ============
Weighted average number of common shares
outstanding 20,564,770 11,187,592 20,237,317 10,597,863
============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
4
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ARCH COMMUNICATIONS GROUP, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(unaudited and in thousands)
<TABLE>
<CAPTION>
Six Months Ended June 30,
1996 1995
--------- ---------
<S> <C> <C>
Net cash provided by operating activities $ 14,832 $ 6,043
--------- ---------
Cash flows used for investing activities:
Additions to property and equipment, net (72,959) (14,527)
Additions to intangible and other assets (18,678) (11,690)
Acquisitions of paging companies, net of cash acquired (326,240) (35,591)
Investment in USA Mobile Communications Holdings, Inc. -- (83,930)
--------- ---------
Net cash used for investing activities (417,877) (145,738)
--------- ---------
Cash flows from financing activities:
Issuance of long-term debt 635,500 137,117
Repayment of long-term debt (225,105) (46,088)
Net proceeds from sale of common stock 556 46,548
--------- ---------
Net cash provided by financing activities 410,951 137,577
--------- ---------
Net increase (decrease) in cash and equivalents 7,906 (2,118)
Cash and equivalents, beginning of period 3,643 2,351
--------- ---------
Cash and equivalents, end of period $ 11,549 $ 233
========= =========
Supplemental disclosure:
Interest paid $ 22,382 $ 4,091
Issuance of common stock for acquisition of paging company -- $ 6,913
Issuance of common stock for convertible debentures $ 14,121 --
Accretion of redeemable preferred stock $ 168 --
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
5
<PAGE> 6
ARCH COMMUNICATIONS GROUP, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(unaudited)
(a) Preparation of Interim Financial Statements - The consolidated
condensed financial statements of Arch Communications Group, Inc. ("Arch" or the
"Company") have been prepared in accordance with the rules and regulations of
the Securities and Exchange Commission. The financial information included
herein, other than the consolidated condensed balance sheet as of December 31,
1995, has been prepared by management without audit by independent accountants
who do not express an opinion thereon. The consolidated condensed balance sheet
at December 31, 1995 has been derived from, but does not include all the
disclosures contained in, the audited consolidated financial statements for the
year ended December 31, 1995. In the opinion of management, all of these
unaudited statements include all adjustments and accruals consisting only of
normal recurring accrual adjustments which are necessary for a fair presentation
of the results of all interim periods reported herein. These consolidated
condensed financial statements should be read in conjunction with the
consolidated financial statements and accompanying notes included in Arch's
Annual Report on Form 10-K for the year ended December 31, 1995. The results of
operations for the periods presented are not necessarily indicative of the
results that may be expected for a full year.
(b) Cash Equivalents - Cash equivalents include short-term,
interest-bearing instruments purchased with remaining maturities of three months
or less. The carrying amount approximates fair value due to the relatively short
period to maturity of these instruments.
(c) Inventories - Inventories consist of new pagers which are held
specifically for resale. Inventories are stated at the lower of cost or market,
with cost determined on a first-in, first-out basis.
(d) Intangible and Other Assets - Intangible and other assets, net of
accumulated amortization, are composed of the following (in thousands):
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
-------- --------
(unaudited)
<S> <C> <C>
Goodwill $383,137 $283,814
Purchased FCC licenses 255,114 174,533
Purchased subscriber lists 221,207 96,686
Non-competition agreements 4,624 5,321
Deferred financing costs 15,255 6,012
Investment in PCS Development Corporation 6,500 6,500
Investment in Benbow PCS Ventures, Inc. 3,889 --
Other 9,208 9,593
-------- --------
$898,934 $582,459
======== ========
</TABLE>
In connection with Arch's May 1996 acquisition of Westlink Holdings,
Inc. ("Westlink") (see Note e), Arch acquired Westlink's 49.9% share of the
capital stock of Benbow PCS Ventures, Inc. ("Benbow"). Benbow has exclusive
rights to a 50kHz outbound/12.5kHz inbound narrowband personal communications
license in each of the central and western regions of the United States. Arch
has agreed, to the extent such funds are not available to Benbow from other
sources, to advance Benbow sufficient funds to build out its narrowband personal
communications system. Accordingly, Arch's investment in Benbow is accounted for
under the equity method whereby 100% of Benbow's losses since the acquisition
date of Westlink are recognized in Arch's accompanying consolidated statements
of operations under the caption equity in earnings (loss) of affiliate.
(e) Acquisitions - On May 21, 1996, Arch completed its acquisition of
all the outstanding capital stock of Westlink for $325.3 million in cash,
including direct transaction costs. The fair values of assets acquired and
liabilities assumed (including deferred income taxes arising in purchase
accounting) amounted to $394.1 million and $68.8 million, respectively. Arch
financed its acquisition of Westlink with borrowings under the Arch Enterprises
Credit Facility (see Note f) and with proceeds from Arch's March 1996 offering
of Senior Discount Notes (see Note g).
6
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ARCH COMMUNICATIONS GROUP, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)
(unaudited)
On September 7, 1995, Arch completed its acquisition of USA Mobile
Communications Holdings, Inc. ("USA Mobile"). Arch is treated as the acquirer in
the transaction for accounting and financial reporting purposes. The aggregate
consideration paid or exchanged in the transaction was $582.2 million,
consisting of cash paid of $88.9 million, including direct transaction costs,
7,599,493 shares of Arch common stock valued at $209.0 million and the
assumption of liabilities of $284.3 million, including $241.2 million of
long-term debt.
During 1995, Arch completed five acquisitions of paging companies, in
addition to the USA Mobile acquisition, for purchase prices aggregating
approximately $43.0 million, consisting of cash of $36.1 million and 395,000
shares of Arch common stock valued at $6.9 million. Goodwill resulting from the
acquisitions is being amortized over a ten-year period using the straight-line
method. These acquisitions have been accounted for as purchases, and the results
of their operations have been included in the consolidated financial statements
from the dates of the respective acquisitions. The following unaudited pro forma
summary presents the consolidated results of operations as if the acquisitions
completed during 1995 and 1996 (through June 30, 1996) had occurred on January
1, 1995, after giving effect to certain adjustments, including primarily
depreciation and amortization of acquired assets and interest expense on
acquisition debt. These pro forma results for the six months ended June 30, 1996
and 1995 do not purport to be indicative of what would have occurred had the
acquisitions been made on January 1, 1995, or of results that may occur in the
future.
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1996 1995
---- ----
(in thousands, except per share amounts)
<S> <C> <C>
Total revenues $173,684 $148,189
Net income (loss) (62,645) (50,253)
Net income (loss) per common share (3.09) (2.76)
</TABLE>
(f) Senior Debt - On June 25, 1996, Arch Communications Enterprises,
Inc. ("Arch Enterprises"), a wholly-owned subsidiary of Arch, entered into an
amended and restated credit agreement (the "Credit Agreement") with a group of
banks and financial institutions who have agreed, subject to certain terms and
conditions set forth in the agreement, to provide (i) a $250 million, seven-year
reducing revolver facility (the "Arch Enterprises Revolver"), (ii) a $150
million, seven-year term loan (the "Tranche A Term Loan"), and (iii) a $100
million, eight-year term loan (the "Tranche B Term Loan"). The Arch Enterprises
Revolver, Tranche A Term Loan and Tranche B Term Loan are collectively referred
to as the Arch Enterprises Credit Facility. Arch and the operating subsidiaries
of Arch Enterprises have guaranteed all obligations under the Arch Enterprises
Credit Facility.
The extinguishment of the prior credit facility resulted in an
extraordinary charge of $1.9 million. This charge represents the write-off of
unamortized deferred financing costs.
Availability under the Arch Enterprises Revolver is subject to
scheduled mandatory reductions commencing on December 31, 1999. The Tranche A
Term Loan and the Tranche B Term Loan will be amortized in quarterly
installments commencing on March 31, 1998. Availability under the Arch
Enterprises Credit Facility is reduced to the extent that Arch Enterprises
receives proceeds, above a specified limit, from the sale of assets outside the
ordinary course of business or insurance proceeds that are not used to repair or
replace damaged property. Availability is also reduced to the extent that the
cash flow of Arch Enterprises exceeds certain levels.
Borrowings under the Arch Enterprises Revolver and the Tranche A Term
Loan bear interest based on a reference rate equal to either (i) the bank's
Alternate Base Rate, or (ii) the bank's LIBOR rate, in each case plus a margin
which is based on the ratio of total debt to annualized operating cash flow.
Borrowings under the Tranche B Term Loan bear interest at either the bank's
Alternate Base Rate plus 1.75%, or the bank's LIBOR rate plus 3.00%. Arch
Enterprises is required to maintain interest rate protection on at least 50% of
outstanding borrowings. At June 30, 1996, Arch Enterprises had outstanding
borrowings of $296.5 million under the Arch Enterprises Credit Facility at a
weighted average annual interest rate of 8.25%.
7
<PAGE> 8
ARCH COMMUNICATIONS GROUP, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)
(unaudited)
The Credit Agreement requires payment of a fee of .375% to .5% per
annum on the daily average available revolving commitment, depending on the
ratio of total debt to annualized operating cash flow, and an annual agency fee
of $50,000.
The Arch Enterprises Credit Facility is secured by all of the assets of
the operating subsidiaries of Arch Enterprises and the pledge of all of the
stock of Arch's direct and indirect subsidiaries.
The Credit Agreement contains restrictions that limit, among other
things, additional indebtedness and encumbrances on assets; mergers and sales of
assets; repurchase or redemption of capital stock; capital expenditures;
acquisitions that exceed certain dollar limitations without the lenders prior
approval; and prepayment of indebtedness other than indebtedness under the Arch
Enterprises Credit Facility. The Credit Agreement also, in effect, prohibits the
payment of cash dividends. Additionally, the Credit Agreement requires that Arch
Enterprises meet certain financial covenants, including covenants with respect
to ratios of cash flow to fixed charges, cash flow to debt service, cash flow to
interest service and total indebtedness to cash flow. As of June 30, 1996, Arch
Enterprises was in compliance with the covenants of the Credit Agreement.
(g) Senior Discount Notes Due 2008 - On March 12, 1996, Arch completed
a public offering of 10 7/8% Senior Discount Notes due 2008 (the "Senior
Discount Notes") in the aggregate principal amount at maturity of $467.4 million
($275.0 million initial accreted value). Interest does not accrue on the Senior
Discount Notes prior to March 15, 2001. Commencing September 15, 2001, interest
on the Senior Discount Notes is payable semi-annually at an annual rate of
10 7/8%. The $266.1 million net proceeds from the issuance of the Senior
Discount Notes, after deducting underwriting discounts and commissions and
offering expenses, were used principally to fund a portion of the purchase
price of Arch's acquisition of Westlink (see Note e). Prior to the completion
of the Westlink acquisition, Arch used $225.0 million of the net proceeds to
repay existing indebtedness under Arch's credit facilities with the remainder
primarily invested in short-term, interest-bearing instruments.
(h) Convertible Subordinated Debentures - On March 6, 1996, the holders
of $14.1 million principal amount of Arch's 6 3/4% Convertible Subordinated
Debentures due 2003 ("Arch Convertible Debentures") elected to convert their
Arch Convertible Debentures into Arch common stock at a conversion price of
$16.75 per share and received approximately 843,000 shares of Arch common stock
together with a $1.6 million cash premium.
(i) Net Income (Loss) Per Common Share - Net income (loss) per common
share is based on the weighted average number of common shares outstanding for
each period presented. Shares of stock issuable pursuant to stock options and
upon conversion of the Arch Convertible Debentures have not been considered as
their effect would be antidilutive.
8
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS
This Form 10-Q contains forward-looking statements. For this purpose,
any statements contained herein that are not statements of historical fact may
be deemed to be forward-looking statements. Without limiting the foregoing, the
words "believes", "anticipates", "plans", "expects" and similar expressions are
intended to identify forward-looking statements. There are a number of important
factors that could cause the Company's actual results to differ materially from
those indicated or suggested by such forward-looking statements. These factors
include, without limitation, those set forth below under the caption "Factors
Affecting Future Operating Results".
RESULTS OF OPERATIONS
Total revenues increased to $79.0 million (a 164.9% increase), and
$146.2 million (a 157.1% increase) in the three and six months ended June 30,
1996, respectively, from $29.8 million and $56.9 million in the three and six
months ended June 30, 1995, respectively. Net revenues (total revenues less cost
of products sold) increased to $72.0 million (a 182.0% increase) and $132.6
million (a 173.3% increase) in the three and six months ended June 30, 1996,
respectively, from $25.5 million and $48.5 million in the three and six months
ended June 30, 1995, respectively. Service, rental and maintenance revenues,
which consist primarily of recurring revenues associated with the sale or lease
of pagers, increased to $69.7 million (a 179.0% increase) and $128.0 million a
(169.1% increase) in the three and six months ended June 30, 1996, respectively,
from $25.0 million and $47.6 million in the three and six months ended June 30,
1995, respectively. These increases in revenues were due primarily to the
increase in the number of pagers in service from 806,000 at June 30, 1995 to
2,861,000 at June 30, 1996. Acquisitions of paging companies added 1,433,000
pagers in service, with the remaining 622,000 pagers added through internal
growth. Maintenance revenues represented less than 10% of total service, rental
and maintenance revenues in the three and six months ended June 30, 1996 and
1995. Arch does not differentiate between service and rental revenues. Product
sales, less cost of products sold, increased to $2.3 million (a 321.2% increase)
and $4.6 million (a 390.0% increase) in the three and six months ended June 30,
1996, respectively, from $0.5 million and $0.9 million in the three and six
months ended June 30, 1995, respectively, as a result of a greater number of
pager unit sales.
Service, rental and maintenance expenses, which consist primarily of
telephone line and site rental expenses, increased to $15.0 million (20.8% of
net revenues) and $27.3 million (20.6% of net revenues) in the three and six
months ended June 30, 1996, respectively, from $5.4 million (21.1% of net
revenues) and $10.3 million (21.2% of net revenues) in the three and six months
ended June 30, 1995, respectively. The increases in absolute dollars were due
primarily to increased expenses associated with system expansions and the
provision of paging services to a greater number of subscribers. The decreases
as a percentage of net revenues resulted from the increase in Arch's subscriber
base described above. As existing paging systems become more populated through
the addition of new subscribers, the fixed costs of operating these paging
systems are spread over a greater subscriber base. Annualized service, rental
and maintenance expenses per subscriber decreased to $24 and $22 in the three
and six months ended June 30, 1996, respectively, from $29 and $31 in the
corresponding 1995 periods.
Selling expenses increased to $12.7 million (17.7% of net revenues) and
$23.7 million (17.9% of net revenues) in the three and six months ended June 30,
1996, respectively, from $4.6 million (18.1% of net revenues) and $8.9 million
(18.3% of net revenues) in the three and six months ended June 30, 1995,
respectively. The increases in selling expenses were due to the addition of
sales personnel to support continued growth in the subscriber base, as the
number of net new pagers in service resulting from internal growth increased by
187.1% and 204.8% from the three and six months ended June 30, 1995 to the three
and six months ended June 30, 1996, respectively. Arch's selling cost per net
new pager in service decreased to $63 and $62 in the three and six months ended
June 30, 1996, respectively, from $66 and $71 in the three and six months ended
June 30, 1995, respectively. Most selling expenses are directly related to the
number of net new subscribers added. Therefore, such expenses may increase in
the future if pagers in service are added at a more rapid rate than in the past.
9
<PAGE> 10
General and administrative expenses increased to $19.3 million (26.8%
of net revenues) and $35.1 million (26.5% of net revenues) in the three and six
months ended June 30, 1996, respectively, from $7.9 million (31.0% of net
revenues) and $15.0 million (31.0% of net revenues) in the three and six months
ended June 30, 1995, respectively. The increases in absolute dollars were due
primarily to increased expenses associated with supporting more pagers in
service.
Depreciation and amortization expenses increased to $43.8 million and
$78.1 million in the three and six months ended June 30, 1996, respectively,
from $7.8 million and $14.8 million in the three and six months ended June 30,
1995, respectively. These expenses principally reflect Arch's acquisitions of
paging businesses, accounted for as purchases, as well as continued investment
in pagers and other system expansion equipment to support continued growth. As a
result of its acquisition of Westlink, which was accounted for under the
purchase method of accounting, Arch expects its depreciation and amortization
expenses to increase by approximately $50 million annually through the year
ending December 31, 2003.
Operating loss increased to $18.8 million and $31.8 million in the
three and six months ended June 30, 1996, respectively, from $0.2 million and
$0.5 million in the three and six months ended June 30, 1995, respectively, as a
result of the factors outlined above.
Net interest expense increased to $17.4 million and $31.5 million in
the three and six months ended June 30, 1996, respectively, from $2.8 million
and $4.7 million in the three and six months ended June 30, 1995, respectively.
The increases were attributable to an increase in Arch's outstanding debt and
higher interest rates. Arch expects its future interest expense to increase
significantly as a result of the additional debt incurred in connection with its
May 1996 Westlink acquisition and other acquisitions.
During the three and six months ended June 30, 1996, the Company
recognized an income tax benefit of $10.9 million and $18.6 million,
respectively, representing the tax benefit of operating losses which were
available to offset previously established deferred tax liabilities arising from
the Company's acquisitions of USA Mobile in September 1995 and Westlink in May
1996. The Company expects to recognize the $66.9 million balance of such tax
benefit through the year ending December 31, 1997.
In May 1996 and 1995, Arch recognized an extraordinary charge of $1.9
million and $1.7 million, respectively, representing the write-off of
unamortized deferred financing costs associated with the prepayment of
indebtedness under separate prior credit facilities.
Net loss increased to $27.6 million and $47.0 million in the three and
six months ended June 30, 1996, respectively, from $4.7 million and $6.8 million
in the three and six months ended June 30, 1995, respectively, as a result of
the factors outlined above. The increases in depreciation and amortization
expenses attributable to the Company's May 1996 acquisition of Westlink, as
described above, will increase the Company's future net losses (or decrease its
future net income, if any).
Earnings before interest, taxes, depreciation and amortization
("EBITDA") increased 229.2% to $25.0 million (34.8% of net revenues) and 223.5%
to $46.4 million (35.0% of net revenues) in the three and six months ended June
30, 1996, respectively, from $7.6 million (29.8% of net revenues) and $14.3
million (29.5% of net revenues) in the three and six months ended June 30, 1995,
respectively, as a result of the factors outlined above. EBITDA is a standard
measure of financial performance in the paging industry and is also one of the
financial measures used to calculate whether Arch and its subsidiaries are in
compliance with the covenants under their respective debt agreements, but should
not be construed as an alternative to operating income or cash flows from
operating activities as determined in accordance with generally accepted
accounting principles. EBITDA does not reflect income tax benefit and interest
expense.
LIQUIDITY AND CAPITAL RESOURCES
Arch's business strategy requires the availability of substantial funds
to finance the expansion of existing operations, to fund capital expenditures
for pagers and paging system equipment, to finance acquisitions and to service
debt.
10
<PAGE> 11
CAPITAL EXPENDITURES AND COMMITMENTS
Excluding acquisitions of paging businesses, Arch's capital
expenditures increased from $26.2 million in the six months ended June 30, 1995
to $91.6 million (inclusive of $15.3 million of deferred financing costs
incurred in connection with the Senior Discount Notes and the Arch Enterprises
Credit Facility) in the six months ended June 30, 1996. To date, Arch has funded
its capital expenditures with net cash provided by operating activities, the
issuance of equity securities and the incurrence of debt.
Arch currently anticipates capital expenditures of approximately $100
million to $125 million in total for the year ending December 31, 1996,
primarily for the purchase of pagers and paging system equipment. Such amounts
are subject to change based on the Company's internal growth rate and
acquisition activity during 1996. Arch believes that it will have sufficient
cash available from operations and credit facilities to fund these expenditures.
RECENT ACQUISITIONS
On September 7, 1995, Arch Communications Group, Inc., a Delaware
corporation ("Old Arch"), completed its acquisition of USA Mobile, a Delaware
corporation, through the merger (the "Merger") of Old Arch with and into USA
Mobile, which simultaneously changed its name to Arch Communications Group, Inc.
The consideration for Arch's acquisition of USA Mobile was $582.2 million,
consisting of $88.9 million in cash (including direct transaction costs),
7,599,493 shares of common stock valued at $209.0 million on the date of
completion and the assumption of liabilities of $284.3 million, including $241.2
million of long-term debt. In accordance with generally accepted accounting
principles, Old Arch was treated as the acquirer in the Merger for accounting
and financial reporting purposes, and the Company reports the historical
financial statements of Old Arch as the historical financial statements of the
Company. As used herein, unless the context otherwise requires, the terms "Arch"
or the "Company" refer to Arch Communications Group, Inc. from and after the
Merger and Old Arch prior to the Merger, in each case together with its
wholly-owned direct and indirect subsidiaries, and the term "USA Mobile" refers
to USA Mobile Communications Holdings, Inc. prior to the Merger together with
its wholly-owned direct and indirect subsidiaries.
During 1995, the Company also completed five additional acquisitions
for aggregate consideration of $36.1 million in cash plus the issuance of
395,000 shares of common stock valued at $6.9 million on the date of completion.
See Note e to the Company's Consolidated Condensed Financial Statements.
On May 21, 1996, Arch completed its acquisition of Westlink for
approximately $325.3 million in cash, including direct transaction costs. The
acquisition was financed with borrowings under the Arch Enterprises Credit
Facility and from the proceeds of Arch's Senior Discount Notes Offering
completed in March 1996. See Note e to the Company's Consolidated Condensed
Financial Statements.
The Company has pursued and intends to continue to pursue acquisitions
of paging businesses as part of its growth strategy. As a result, the Company
evaluates acquisition opportunities on an ongoing basis and from time to time is
engaged in discussions with respect to possible acquisitions.
SOURCES OF FUNDS
Arch's net cash provided by operating activities was $14.8 million and
$6.0 million in the six months ended June 30, 1996 and 1995, respectively.
On February 7, 1996, the Company commenced an offer (the "Conversion
Offer") to pay a cash premium of $110 for each $1,000 principal amount of the
Arch Convertible Debentures converted into common stock at $16.75 per share.
Effective upon the expiration of the Conversion Offer on March 6, 1996, the
Company accepted for conversion $14.1 million in principal amount of Arch
Convertible Debentures in exchange for an aggregate of approximately 843,000
shares of common stock and $1.6 million in cash.
11
<PAGE> 12
On March 12, 1996, Arch completed a public offering of 10-7/8% Senior
Discount Notes due 2008 (the "Senior Discount Notes") generating net proceeds of
$266.1 million, net of underwriting discounts and commissions and offering
expenses. The Senior Discount Notes will accrete to a principal amount of $467.4
million at March 15, 2001. Commencing September 15, 2001, interest on the Senior
Discount Notes is payable semi-annually at an annual rate of 10-7/8%. The net
proceeds from the issuance of the Senior Discount Notes were used principally to
fund a portion of the purchase price of Arch's acquisition of Westlink on May
21, 1996. Prior to completion of the Westlink acquisition, Arch used $225.0
million of the net proceeds to repay existing indebtedness under the Arch
Enterprises Credit Facility and the USA Mobile II Credit Facility with the
remainder primarily invested in short-term, interest-bearing instruments.
CREDIT FACILITIES
Arch Enterprises Credit Facility - On June 25, 1996, Arch Enterprises
entered into an amended and restated credit agreement (the "Credit Agreement")
with a group of banks and financial institutions who have agreed, subject to
certain terms and conditions set forth in the agreement, to provide (i) a $250
million, seven-year reducing revolver facility (the "Arch Enterprises
Revolver"), (ii) a $150 million, seven-year term loan (the "Tranche A Term
Loan"), and (iii) a $100 million, eight-year term loan (the "Tranche B Term
Loan"). The Arch Enterprises Revolver, Tranche A Term Loan and Tranche B Term
Loan are collectively referred to as the Arch Enterprises Credit Facility. Arch
and the operating subsidiaries of Arch Enterprises have guaranteed all
obligations under the Arch Enterprises Credit Facility.
The extinguishment of the prior credit facility resulted in an
extraordinary charge of $1.9 million. This charge represents the write-off of
unamortized deferred financing costs.
Availability under the Arch Enterprises Revolver is subject to
scheduled mandatory reductions commencing on December 31, 1999. The Tranche A
Term Loan and the Tranche B Term Loan will be amortized in quarterly
installments commencing on March 31, 1998. Availability under the Arch
Enterprises Credit Facility is reduced to the extent that Arch Enterprises
receives proceeds, above a specified limit, from the sale of assets outside the
ordinary course of business or insurance proceeds that are not used to repair or
replace damaged property. Availability is also reduced to the extent that the
cash flow of Arch Enterprises exceeds certain levels.
Borrowings under the Arch Enterprises Revolver and the Tranche A Term
Loan bear interest based on a reference rate equal to either (i) the bank's
Alternate Base Rate, or (ii) the bank's LIBOR rate, in each case plus a margin
which is based on the ratio of total debt to annualized operating cash flow.
Borrowings under the Tranche B Term Loan bear interest at either the bank's
Alternate Base Rate plus 1.75%, or the bank's LIBOR rate plus 3.00%. Arch
Enterprises is required to maintain interest rate protection on at least 50% of
outstanding borrowings. At June 30, 1996, Arch Enterprises had outstanding
borrowings of $296.5 million under the Arch Enterprises Credit Facility at a
weighted average annual interest rate of 8.25%.
The Credit Agreement requires payment of a fee of .375% to .5% per
annum on the daily average available revolving commitment, depending on the
ratio of total debt to annualized operating cash flow, and an annual agency fee
of $50,000.
The Arch Enterprises Credit Facility is secured by all of the assets of
the operating subsidiaries of Arch Enterprises and the pledge of all of the
stock of Arch's direct and indirect subsidiaries.
The Credit Agreement contains restrictions that limit, among other
things, additional indebtedness and encumbrances on assets; mergers and sales of
assets; repurchase or redemption of capital stock; capital expenditures;
acquisitions that exceed certain dollar limitations without the lenders prior
approval; and prepayment of indebtedness other than indebtedness under the Arch
Enterprises Credit Facility. The Credit Agreement also, in effect, prohibits the
payment of cash dividends. Additionally, the Credit Agreement requires that Arch
Enterprises meet certain financial covenants, including covenants with respect
to ratios of cash flow to fixed charges, cash flow to debt service, cash flow to
interest service and total indebtedness to cash flow. As of June 30, 1996, Arch
Enterprises was in compliance with the covenants of the Credit Agreement.
12
<PAGE> 13
USA Mobile II Facility. USA Mobile Communications, Inc. II, a
wholly-owned subsidiary of Arch ("USA Mobile II"), and the direct subsidiaries
of USA Mobile II (the "USA Mobile II Borrowing Subsidiaries") are parties to a
Credit Agreement dated September 8, 1995, as amended, with the Bank and other
lenders establishing the USA Mobile II Credit Facility.
Under the USA Mobile II Credit Facility, the Bank and the other lenders
have agreed to advance up to $50 million to the USA Mobile II Borrowing
Subsidiaries for working capital purposes under a reducing revolving credit
facility, subject to annual reductions commencing December 31, 1998, with a
final maturity of December 31, 2000. Upon the closing of the USA Mobile II
Credit Facility, the bank and the other lenders did not require the
contemporaneous grant of a security interest in the assets of USA Mobile II and
its subsidiaries but they have reserved the right to require such a security
interest upon the occurrence of certain triggering events. Arch and USA Mobile
II have guaranteed the obligations of the USA Mobile II Borrowing Subsidiaries
under the USA Mobile II Credit Facility. Arch's guarantee is secured by the
pledge of the stock of Arch Enterprises and USA Mobile II.
Obligations under the USA Mobile II Credit Facility bear interest at
either (i) the bank's alternative reference rate or (ii) the Bank's
reserve-adjusted LIBOR rate, in each case plus a margin keyed to the ratio of
USA Mobile II's total indebtedness to annualized operating cash flow from time
to time. The margin applicable to alternative reference rate loans ranges from
1.375% to 2.00%. The margin applicable to LIBOR rate loans ranges from 2.625% to
3.25%. Interest is payable quarterly in arrears. The USA Mobile II Borrowing
Subsidiaries are required to pay an annual commitment fee of 0.50% of the
average daily unused portion on the USA Mobile II Credit Facility, payable
quarterly in arrears, and an annual agency fee.
The obligation of the Bank and the other lenders to provide advances
under the USA Mobile II Credit Facility is subject to the fulfillment of certain
conditions, including the absence of a material adverse change in the financial
condition, operations, prospects or property of USA Mobile II and its
subsidiaries, taken as a whole, or of Arch, USA Mobile II and its subsidiaries,
taken as a whole.
The covenants under the USA Mobile II Credit Facility limit the ability
of USA Mobile II and its subsidiaries to pay dividends to Arch and the ability
of Arch to pay dividends to its stockholders. In addition, the USA Mobile II
Credit Facility imposes limitations on the incurrence of indebtedness, whether
secured or unsecured, on acquisitions, mergers and investments, and on the sale
of assets. The USA Mobile II Credit Facility also contains various financial
covenants that require USA Mobile II and its subsidiaries to meet certain
specified financial ratios, including a fixed charge coverage ratio, a pro forma
debt service coverage ratio, an interest coverage ratio and a leverage ratio.
As of June 30, 1996, $43.5 million was outstanding under the USA Mobile
II Credit Facility and an additional $6.5 million was available thereunder. At
June 30, 1996, such advances bore interest at an average annual rate of 8.5%.
FUTURE CAPITAL NEEDS
Arch believes that its capital needs for the foreseeable future will be
funded with borrowings under current and future credit facilities, net cash
provided by operations and, depending on the Company's needs and market
conditions, possible sales of equity securities.
FACTORS AFFECTING FUTURE OPERATING RESULTS
The following important factors, among others, could cause the
Company's actual operating results to differ materially from those indicated or
suggested by forward-looking statements made in this Form 10-Q or presented
elsewhere by the Company's management from time to time.
13
<PAGE> 14
INDEBTEDNESS AND HIGH DEGREE OF LEVERAGE
The Company is highly leveraged. At June 30, 1996, the Company had
total debt and total assets of $862.4 million and $1,205.5 million,
respectively. The ability of the Company to make payments of principal and
interest on its indebtedness will be dependent upon the Company's subsidiaries
achieving and sustaining levels of performance in the future that will permit
such subsidiaries to pay sufficient dividends, distributions or fees to the
Company. Many factors, some of which will be beyond the Company's control, such
as prevailing economic conditions, will affect the performance of the Company
and its subsidiaries. In addition, covenants imposed by the current and future
credit facilities and other indebtedness of the Company and its subsidiaries
will restrict the ability of the Company and its subsidiaries to incur
additional indebtedness and prohibit certain activities and may limit other
aspects of the Company's operations. There can be no assurance that the Company
or its subsidiaries will be able to generate sufficient cash flow to cover
required interest and principal payments on their current and future
indebtedness. If the Company is unable to meet interest and principal payments
in the future, it may, depending upon the circumstances which then exist, seek
additional equity or debt financing, attempt to refinance its existing
indebtedness or sell all or part of its business or assets to raise funds to
repay its indebtedness. There can be no assurance that sufficient equity or debt
financing will be available or, if available, that it will be on terms
acceptable to the Company, that the Company will be able to refinance its
existing indebtedness or that sufficient funds could be raised through asset
sales. The Company's high degree of leverage may have important consequences for
the Company, including: (i) the ability of the Company and its subsidiaries to
obtain additional financing for acquisitions, working capital, capital
expenditures or other purposes, if necessary, may be impaired or such financing
may not be on favorable terms; (ii) a substantial portion of the cash flow of
the Company's subsidiaries will be used to pay interest expense, which will
reduce the funds which would otherwise be available for operations and future
business opportunities; (iii) the Company may be more highly leveraged than its
competitors which may place it at a competitive disadvantage; and (iv) the
Company's high degree of leverage will make it more vulnerable to a downturn in
its business or the economy generally.
FUTURE CAPITAL NEEDS
The Company's business strategy requires the availability of
substantial funds to finance the continued development and future growth and
expansion of its operations, including future possible acquisitions. The amount
of capital required by the Company will depend upon a number of factors,
including subscriber growth, technological developments, marketing and sales
expenses, competitive conditions, acquisition strategy and acquisition
opportunities. No assurance can be given that additional equity or debt
financing will be available to the Company on acceptable terms, if at all. The
unavailability of sufficient financing when needed would have a material adverse
effect on the Company.
HISTORY OF LOSSES
The Company has not reported any net income since its inception. The
Company reported net losses of $47.0 million, $36.6 million, $3.3 million and
$5.1 million in the six months ended June 30, 1996, the year ended December 31,
1995, the four months ended December 31, 1994 and the year ended August 31,
1994, respectively. These net losses have resulted principally from (i)
substantial depreciation and amortization expenses, primarily related to
intangible assets and pager depreciation, and (ii) interest expense on debt
incurred primarily to finance acquisitions of paging operations and other costs
of growth. Substantial and increased amounts of debt are expected to be
outstanding for the foreseeable future, which will result in significant
additional interest expense which could have a substantial negative impact on
the Company. The Company expects to continue to report net losses for the
foreseeable future. The Company also expects that its depreciation and
amortization expenses will increase by approximately $50 million annually
through the year ending December 31, 2003 as a result of its May 1996
acquisition of Westlink. Such increased depreciation and amortization expenses
will increase the Company's future net losses (or decrease its future net
income, if any).
GROWTH AND ACQUISITION STRATEGY
The Company has pursued and intends to continue to pursue acquisitions
of paging businesses as well as the continued internal growth of the Company's
paging business. The process of integrating acquired paging businesses may
involve unforeseen difficulties and may require a disproportionate amount of the
time and attention of the Company's management and the financial and other
resources of the Company. No assurance can be given that suitable additional
acquisitions can be identified, financed and completed on acceptable terms, or
that the Company's future acquisitions will be successful. Implementation of the
Company's growth strategies will be subject to numerous other contingencies
beyond the control of the Company, including general and regional economic
conditions, interest rates, competition, changes in regulation
14
<PAGE> 15
or technology and the ability to attract and retain skilled employees.
Accordingly, no assurance can be given that the Company's growth strategies will
prove effective or that the goals of the Company will be achieved.
DEPENDENCE ON KEY PERSONNEL
The success of the Company will be dependent, to a significant extent,
upon the continued services of a relatively small group of executive personnel.
The Company does not have employment agreements with any of its current
executive officers, although all current executive officers have entered into
non-competition agreements with the Company. The loss or unavailability of one
or more of its executive officers or the inability to attract or retain key
employees in the future could have an adverse effect upon the Company's
operations.
COMPETITION AND TECHNOLOGICAL CHANGE
The Company faces competition from other paging service providers in
all markets in which it operates as well as from certain competitors who hold
nationwide licenses. The Company believes that competition for paging
subscribers is based on quality of service, geographic coverage and price and
that the Company generally competes effectively based on these factors. Monthly
fees for basic paging services have, in general, declined since the Company
commenced operations in September 1986, due in part to competitive conditions,
and the Company may face significant price-based competition in the future which
could adversely affect the Company. Some of the Company's competitors possess
greater financial, technical and other resources than the Company. A trend
towards increasing consolidation in the paging industry in particular and the
wireless communications industry in general in recent years has led to
competition from increasingly larger and better capitalized competitors. If any
of such competitors were to devote additional resources to the paging business
or focus its strategy on the Company's markets, the Company's results of
operations could be adversely affected. A variety of wireless two-way
communication technologies currently are in use or under development. Although
such technologies generally are higher priced than paging services or not widely
available, technological improvements could result in increased capacity and
efficiency for wireless two-way communication and, accordingly, could result in
increased competition for the Company. Two-way service providers also could
elect to provide paging service as an adjunct to their primary services. Future
technological advances in the telecommunications industry could increase new
services or products competitive with the paging services provided by the
Company or could require the Company to reduce the price of its paging services
or incur additional capital expenditures to meet competitive requirements.
Recent and proposed regulatory changes by the FCC are aimed at encouraging such
technological advances and new services. Entities offering service on wireless
two-way communications technology, including cellular telephones and specialized
mobile radio services, also compete with the paging services that the Company
provides. There can be no assurance that the Company will be able to compete
successfully with its current and future competitors in the paging business or
with competitors offering alternative communication technologies.
SUBSCRIBER TURNOVER
The results of operations of wireless messaging service providers, such
as the Company, can be significantly affected by subscriber cancellations. The
sales and marketing costs associated with attracting new subscribers are
substantial relative to the costs of providing service to existing customers.
Because the paging business is characterized by high fixed costs, disconnections
directly and adversely affect operating cash flow. An increase in its subscriber
cancellation rate may adversely affect the Company's results of operations.
DEPENDENCE ON SUPPLIERS
The Company does not manufacture any of the pagers used in its paging
operations. The Company buys pagers primarily from Motorola, Inc. ("Motorola")
and NEC America, Inc. ("NEC") and therefore is dependent on such manufacturers
to obtain sufficient pager inventory for new subscriber and replacement needs.
In addition, the Company purchases terminals and transmitters primarily from
Glenayre Technologies, Inc. ("Glenayre") and Motorola and thus is dependent on
such manufacturers for sufficient terminals and transmitters to meet its
expansion and replacement requirements. To date, the Company has not experienced
significant delays in obtaining pagers, terminals or transmitters, but there can
be no assurance that the Company will not experience such delays in the future.
The Company has never had a purchase agreement with Glenayre or NEC. The
Company's most recent one-year purchase agreement with Motorola expired on
December 31,
15
<PAGE> 16
1995 and the Company is in the process of negotiating a new agreement with
Motorola. Although Motorola has in the past entered into a new agreement with
the Company annually, there can be no assurance that Motorola will enter into a
new agreement with the Company or that the terms and conditions of a new
agreement will be as favorable to the Company as under past agreements with
Motorola. Although the Company believes that sufficient alternative sources of
pagers, terminals and transmitters exist, there can be no assurance that the
Company would not be adversely affected if it were unable to obtain these items
from current supply sources or on terms comparable to existing terms.
GOVERNMENT REGULATION, FOREIGN OWNERSHIP AND POSSIBLE REDEMPTION
The paging operations of the Company are subject to regulation by the
FCC and various state regulatory agencies. There can be no assurance that those
agencies will not propose or adopt regulations or take actions that would have a
material adverse effect on the Company's business. Changes in regulation of the
Company's paging business or the allocation of radio spectrum for services that
compete with the Company's business could adversely affect the Company's results
of operations. For example, the FCC has proposed adopting a market area
licensing scheme and the ability of Arch to make major modifications to its
current paging systems may be affected during the transition to the market area
licensing process. In addition, some aspects of the recently enacted
Telecommunications Act of 1996 could have a beneficial effect on Arch's
business, but other provisions may place additional burdens upon Arch or subject
Arch to increased competition. Consummation of the Company's pending acquisition
of Westlink requires prior approvals from the FCC. Although the Company has
submitted applications to the FCC for such approvals and expects to obtain all
necessary approvals, there can be no assurance that such approvals will be
obtained or that any conditions to obtaining such approvals would not adversely
affect the Company. The Communications Act of 1934, as amended, limits foreign
ownership of entities that hold certain licenses from the FCC. Because the
Company, through its subsidiaries, holds FCC licenses, in general, no more than
25% of the Company's stock can be owned or voted by aliens or their
representatives, a foreign government or its representative or a foreign
corporation, the Company's Restated Certificate of Incorporation permits the
redemption of shares of the Company's capital stock from foreign stockholders
where necessary to protect the Company's regulatory licenses, but such
redemption would be subject to the availability of capital to the Company and
any restrictions contained in the debt instruments of the Company and under
Delaware law. The failure to redeem such shares promptly could jeopardize the
Company's FCC licenses.
16
<PAGE> 17
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On April 4, 1995, a stockholder of USA Mobile filed a complaint
entitled Newman v. Fuellhart, et. al., in the Court of Chancery of
the State of Delaware in and for New Castle County, C.A. No.
14179. The action, which was purportedly brought as a class action
on behalf of all stockholders of USA Mobile, named USA Mobile and
certain directors and executive officers of USA Mobile as
defendants, and requested that the court enjoin Arch's acquisition
of USA Mobile and order unspecified damages and costs. The
complaint alleged, among other things, that the price to be paid
by Arch for its acquisition of USA Mobile was inadequate, that
certain agreements entered into in connection with Arch's
acquisition of USA Mobile would act as impediments to USA Mobile's
stockholders receiving the highest price available and that the
individual defendants would be in breach of their fiduciary duties
if Arch's acquisition of USA Mobile was consummated. In December
1994, the same plaintiff had filed a purported class action
complaint against the same defendants alleging breaches of
fiduciary duty because of purported conflicts of interests by the
defendants in rejecting Metrocall, Inc.'s proposal to acquire USA
Mobile for $13.00 of Metrocall, Inc. common stock per share of USA
Mobile stock. The court did not enjoin Arch's acquisition of USA
Mobile and Arch succeeded to these lawsuits. The first lawsuit was
dismissed without prejudice in March 1996. Arch believes that the
remaining lawsuit is without merit and intends to defend it
vigorously.
Arch, from time to time, is also involved in lawsuits arising in
the normal course of business. Arch believes that its currently
pending lawsuits will not have a material adverse effect on Arch.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Company's Annual Meeting of Stockholders held on May 28,
1996 the following proposals were adopted by the vote specified
below:
<TABLE>
<CAPTION>
Broker
Proposal For Against Abstain Nonvotes
-------- ---------- --------- ------- ---------
<S> <C> <C> <C> <C>
1. To elect one director of the Company
(James S. Hughes) 15,971,208 - 733,212 -
2. To approve the Company's 1996 Employee
Stock Purchase Plan 15,417,277 1,273,792 13,351 -
3. To approve an amendment to the Company's
Restated Certificate of Incorporation to
eliminate Article TWELFTH thereof 12,683,718 861,102 22,154 3,137,446
4. To ratify the selection by the Board of Directors
of Arthur Andersen LLP as independent public
accountants for the Company for the fiscal
year ending December 31, 1996 16,118,996 579,086 6,338 -
</TABLE>
The other directors whose terms of office continued after the
Annual Meeting of Stockholders are C. Edward Baker, Jr., John B.
Saynor, John A. Shane and R. Schorr Berman.
ITEM 5. OTHER INFORMATION
None.
17
<PAGE> 18
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The exhibits on the accompanying Index to Exhibits are filed
as part of this quarterly report on Form 10-Q.
(b) The following report on Form 8-K was filed during the quarter
for which this report is filed:
Current Report dated May 21, 1996 (reporting the Company's
acquisition of Westlink Holdings, Inc.) filed June 3, 1996.
18
<PAGE> 19
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report on Form 10-Q for the quarter ended
June 30, 1996, to be signed on its behalf by the undersigned thereunto duly
authorized.
ARCH COMMUNICATIONS GROUP, INC.
Dated: August 14, 1996 By: /s/ William A. Wilson
-----------------------
William A. Wilson
Executive Vice President and
Chief Financial Officer
19
<PAGE> 20
INDEX TO EXHIBITS
Exhibit Description of Exhibit
10.1(a) First Amended and Restated Credit Agreement Dated May 21, 1996 By
and Among Arch Communications Enterprises, Inc., the Lenders party
thereto, the Co-Agents party thereto, and The Bank of New York as
Administrative Agent.
10.2(a) Amendment No. 1 to the First Amended and Restated Credit Agreement
Dated June 25, 1996 By and Among Arch Communications Enterprises,
Inc., The Lenders party thereto, the Co-Agents party thereto, and
The Bank of New York as Administrative Agent.
10.3(a) Letter Agreement Dated May 1, 1996 Between the Company and
Motorola, Inc.
- - ----------------------
(a) Confidential treatment requested with respect to this exhibit.
<PAGE> 1
Exhibit 10.1
*CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS
HAVE BEEN OMITTED AND FILED SEPARATELY
FIRST AMENDED AND RESTATED CREDIT AGREEMENT, dated as of May 21, 1996, by and
among ARCH COMMUNICATIONS ENTERPRISES, INC., a Delaware corporation (the
"Borrower"), ARCH COMMUNICATIONS GROUP, INC., a Delaware corporation (the
"Parent"), the Lenders party hereto, the Co- Agents party hereto (each, a
"Co-Agent" and collectively, the "Co-Agents") and THE BANK OF NEW YORK, as
administrative agent for the Lenders hereunder (in such capacity, the
"Administrative Agent").
RECITALS
A. The Borrower together with certain other Subsidiaries of the Parent
as additional borrowers (collectively, the "Initial Borrowers"), the Parent,
certain lenders (the "Existing Lenders"), certain of the Co-Agents and the
Administrative Agent entered into a Credit Agreement, dated as of May 5, 1995,
which agreement was amended by Amendment No. 1, dated as of June 19, 1995,
Amendment No. 2 and Consent No. 1, dated as of September 5, 1995, Amendment No.
3, dated as of February 15, 1996 and Amendment No. 4, dated as of May 20, 1996
(as so amended, the "Existing Credit Agreement").
B. In connection with the Restructuring (as defined in the Existing
Credit Agreement), all of the Initial Borrowers (other than the Borrower) ceased
to be borrowers under the Existing Credit Agreement and became Subsidiary
Guarantors, and the Borrower became the sole borrower under the Existing Credit
Agreement.
C. On March 12, 1996, in connection with the issuance of the Discount
Notes, the Borrower prepaid the outstanding principal balance of the Loans (as
defined in the Existing Credit Agreement) then outstanding, but the Aggregate
Revolving Credit Commitments (as defined in the Existing Credit Agreement) were
not reduced.
D. The Parent, the Borrower and Westlink have agreed to modify the
purchase price to be paid in connection with the Westlink Acquisition. In
connection with that modification, the Parent, the Borrower and Westlink agreed
to close the transactions contemplated by the Transaction Documents (as
hereinafter defined) on May 21, 1996, before the banks, mutual funds or other
financial institutions which were going to be parties to this Agreement as
Co-Agents and/or Lenders would have an opportunity to prepare for and join in
this Agreement. Accordingly, each Existing
<PAGE> 2
Lender (other than BNY) assigned its Revolving Credit Commitment to BNY, and BNY
assumed the same, in order that BNY, together with the Credit Parties, could
provide bridge financing (the "Bridge Financing") to the Borrower by amending
and restating the Existing Credit Agreement and other existing collateral and
other loan documents on May 21, 1996 without the logistical difficulties which
would be faced if all of the contemplated Lenders and Co-Agents needed to be
parties hereto. In connection with the Bridge Financing and in order not to
disturb the existing security interests, BNY, the Parent and the Borrower agreed
to amend and restate the Existing Credit Agreement with certain agreed upon
changes, including, without limitation, the reduction of the term of all Loans
to a period of six months from the Restatement Effective Date.
E. The banks, mutual funds and other financial institutions which were
going to become Lenders and/or Co-Agents will be provided the opportunity to
become parties hereto. In order to avoid substantial revisions to this Agreement
in connection with the Bridge Financing, including, without limitation, the
amortization provisions applicable to the Term Loans and the provisions relating
to the mandatory reduction of the Aggregate Revolving Credit Commitments, the
parties hereto have agreed to leave such provisions in this Agreement, it being
understood that the inclusion of such provisions shall not in any way modify the
definitions of the "Revolving Credit Maturity Date", "Tranche A Term Loan
Maturity Date" or the "Tranche B Term Loan Maturity Date".
F. As of the Restatement Effective Date (as hereinafter defined), the
Borrower, the Parent, the Lenders, the Co-Agents and the Administrative Agent
desire to, among other things, (i) reduce the Aggregate Revolving Credit
Commitments (as defined in the Existing Credit Agreement) from $150,000,000 to
$50,000,000, (ii) provide for the making of Tranche A Term Loans and Tranche B
Term Loans and (iii) make certain other changes to the Existing Credit Agreement
by amending and restating the Existing Credit Agreement in its entirety as
hereinafter set forth.
G. For convenience, this Agreement is dated as of May 21, 1996, and
references to certain matters related to the period prior thereto have been
deleted.
1. DEFINITIONS
1.1. Defined Terms.
As used in this Agreement, the following terms have the
following meanings:
-2-
<PAGE> 3
"ABR Advances": the Loans (or any portions thereof) at such
time as they (or such portions) are made and/or being maintained at a rate of
interest based upon the Alternate Base Rate.
"Accountants": Arthur Andersen LLP, or such other firm of
certified public accountants of recognized national standing selected by the
Borrower and reasonably satisfactory to the Required Lenders.
"Accreted Value": as defined in the Discount Note Indenture as
in effect on the date of the issuance of the Discount Notes.
"Acquisition": the acquisition of a Paging-Related Business by
the Borrower or any of its Subsidiaries through either a merger with another
Person or the purchase of all or substantially all of the capital Stock of
another Person or all or substantially all of the assets of another Person or of
a division of another Person, which Person or division is in the paging business
or a Paging Related Business or which assets have been and are to be used in the
paging business or a Paging Related Business.
"Additional Benbow Investments": investments by Westlink
Company in Benbow made after the Restatement Effective Date in accordance with
Section 8.6(o).
"Adjustment Event": an increase in the Aggregate Revolving
Credit Commitments in connection with (i) the effectiveness of this Agreement or
(ii) pursuant to Section 2.7; provided, however, that an Adjustment Event shall
not be deemed to have occurred on any Adjustment Event Date if immediately prior
thereto, no Revolving Credit Loans were outstanding.
"Adjustment Event Date": any date on which an Adjustment Event
occurs, which date shall be (i) the Restatement Effective Date with respect to
the Adjustment Event described in clause (i) of the definition thereof and (ii)
the effective date of any increase in the Aggregate Revolving Credit Commitments
with respect to the Adjustment Event described in clause (ii) of the definition
thereof.
"Administrative Agent": as defined in the preamble.
"Advance": an ABR Advance or a Eurodollar Advance, as the case
may be.
"Affected Advance": as defined in Section 2.11.
"Affected Eurodollar Advance": as defined in Section 2.20.
-3-
<PAGE> 4
"Affected Principal Amount": in the event that (i) the
Borrower shall fail for any reason to borrow, convert or continue after the
Borrower shall have notified the Administrative Agent of its intent to do so in
any instance in which the Borrower shall have requested a Eurodollar Advance, an
amount equal to the principal amount of such requested Eurodollar Advance; (ii)
a Eurodollar Advance shall terminate for any reason prior to the last day of the
Interest Period applicable thereto, an amount equal to the principal amount of
such Eurodollar Advance; and (iii) the Borrower shall prepay or repay all or any
part of the principal amount of a Eurodollar Advance prior to the last day of
the Interest Period applicable thereto, an amount equal to the principal amount
of such Eurodollar Advance so prepaid or repaid.
"Affiliate": as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person. For purposes of this definition, control of a Person
shall mean the power, direct or indirect, (i) to vote 10% or more of the
securities or other interests having ordinary voting power for the election of
directors or other managing Persons thereof or (ii) to direct or cause direction
of the management and policies of such Person whether by contract or otherwise.
"Aggregate Accreted Value": as of any date of determination,
the aggregate of the Accreted Value of all Discount Notes outstanding on such
date.
"Aggregate Commitments": on any date, the sum of the
Commitments of all Lenders on such date.
"Aggregate Revolving Credit Commitments": on any date, the sum
of the Revolving Credit Commitments on such date.
"Aggregate Term Loan Commitments": on any date, the sum of the
Aggregate Tranche A Term Loan Commitments and the Aggregate Tranche B Term Loan
Commitments on such date.
"Aggregate Tranche A Term Loan Commitments": on any date, the
sum of the Tranche A Term Loan Commitments on such date.
"Aggregate Tranche B Term Loan Commitments": on any date, the
sum of the Tranche B Term Loan Commitments on such date.
"Agreement": this First Amended and Restated Credit Agreement,
as the same may be amended, supplemented or otherwise modified from time to
time.
"Alternate Base Rate": on any date, a rate of interest per
annum equal to the higher of (i) the Federal Funds Rate in effect on such date
plus 1/2 of 1% or (ii) the BNY Rate in effect on such date.
4
<PAGE> 5
*CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS
HAVE BEEN OMITTED AND FILED SEPARATELY
"Annualized Operating Cash Flow": at any time of determination, an amount equal
to (i) Operating Cash Flow for the fiscal quarter ending on such date of
determination or, if such date of determination is not a fiscal quarter ending
date, the immediately preceding fiscal quarter multiplied by (ii) four.
"Answer Iowa": Answer Iowa, Inc., an Iowa corporation and a
Subsidiary of Westlink Company in which Lund Products has a minority equity
interest.
"Answer Iowa Licensee Corp.": Answer Iowa Licensee
Corporation, a Delaware corporation and a wholly-owned Subsidiary of Answer
Iowa.
"Applicable Lending Office": in respect of any Lender, (i) in
the case of such Lender's ABR Advances, its Domestic Lending Office and (ii) in
the case of such Lender's Eurodollar Advances, its Eurodollar Lending Office.
"Applicable Margin":
(a) As to the Revolving Credit Loans and the
Tranche A Term Loans, at all times during the applicable periods set forth
below: (i) with respect to the unpaid principal amount thereof consisting of ABR
Advances, the applicable percentage set forth below next to the words "Alternate
Base Rate" and (ii) with respect to the unpaid principal amount thereof
consisting of Eurodollar Advances, the applicable percentage set forth below
next to the words "Eurodollar Rate":
<TABLE>
<CAPTION>
Applicable
Period Rate Margin
------ ---- ------
<S> <C> <C>
when the Leverage Alternate Base Rate 1.375%
Ratio is greater Eurodollar Rate 2.625%
than or equal to
*
when the Leverage Alternate Base Rate 1.000%
Ratio is greater Eurodollar Rate 2.250%
than or equal to
* but less than *
</TABLE>
<PAGE> 6
*CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL
PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY
<TABLE>
<S> <C> <C>
when the Leverage Alternate Base Rate 0.625%
Ratio is greater Eurodollar Rate 1.875%
than or equal to
* but less than *
when the Leverage Alternate Base Rate 0.250%
Ratio is greater Eurodollar Rate 1.500%
than or equal to
* but less than *
when the Leverage Alternate Base Rate 0.000%
Ratio is less than Eurodollar Rate 1.250%.
*
</TABLE>
(b) As to the Tranche B Term Loans (i) with respect
to the unpaid principal amount thereof consisting of ABR Advances, 1.75%, and
(ii) with respect to the unpaid principal amount thereof consisting of
Eurodollar Advances, 3.00%.
(c) Changes in the Applicable Margin resulting from a
change in the Leverage Ratio, as set forth in a Compliance Certificate delivered
pursuant to Section 7.1(c) evidencing such a change, shall become effective upon
the fifth day following the delivery by the Borrower to the Administrative Agent
of a new Compliance Certificate pursuant to Section 7.1(c) evidencing a change
in the Leverage Ratio. If the Borrower shall fail to deliver a Compliance
Certificate within 45 days after the end of each of the first three fiscal
quarters (or 90 days after the end of the last fiscal quarter) as required by
Section 7.1(c), the Applicable Margin for the Revolving Credit Loans and the
Tranche A Term Loans from and including the 46th day (the 91st day in the case
of the last quarter) after the end of such fiscal quarter to the fifth day
following the delivery by the Borrower to the Administrative Agent of a
Compliance Certificate shall be 1.375% with respect to ABR Advances and 2.625%
with respect to Eurodollar Advances, in each case subject to Section 2.10(b).
"Arch Canada": Arch Canada, Inc., a Canadian corporation and a
wholly-owned Subsidiary of the Borrower.
"Arch Collateral": as defined in the Intercreditor Agreement.
"Arch Capitol": Arch Capitol District, Inc., a New York
corporation and a wholly-owned Subsidiary of the Borrower.
<PAGE> 7
"Arch Connecticut": Arch Connecticut Valley, Inc., a
Massachusetts corporation and a wholly-owned Subsidiary of the Borrower.
"Arch Michigan": Arch Michigan, Inc., a Delaware corporation
and a wholly-owned Subsidiary of the Borrower.
"Arch Services": Arch Communications Services, Inc., a New
York corporation and a wholly-owned Subsidiary of the Borrower.
"Arch Southeast": Arch Southeast Communications, Inc., a
Delaware corporation and a wholly-owned Subsidiary of the Borrower.
"Assignment and Acceptance Agreement": an assignment and
acceptance agreement executed by an assignor and an assignee pursuant to which
the assignor, subject to and in accordance with the terms hereof, assigns to the
assignee all or any portion of such assignor's Loans and Commitments,
substantially in the form of Exhibit E.
"Assignment Fee": as defined in Section 12.7(b).
"Authorized Signatory": as to (i) any Person which is a
corporation, the president, any vice president, the treasurer or any other duly
authorized officer (acceptable to the Administrative Agent) of such Person and
(ii) any Person which is not a corporation, the general partner or other
Managing Person thereof.
"Available Amount": as of any date of determination, an amount
equal to 50% of Excess Cash Flow for the immediately preceding fiscal year,
minus (i) all Restricted Payments made pursuant to Section 8.5(e) during the
fiscal year in which such determination is being made, and minus (ii) all
Additional Benbow Investments made pursuant to Section 8.6(o)(ii)(B) during the
fiscal year in which such determination is being made.
"BNY": The Bank of New York.
"BNY Rate": a rate of interest per annum equal to the rate of
interest publicly announced in New York City by BNY from time to time as its
prime commercial lending rate, such rate to be adjusted automatically (without
notice) on the effective date of any change in such publicly announced rate.
"Becker": Becker Beeper, Inc., an Illinois corporation and a
wholly-owned Subsidiary of the Borrower.
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<PAGE> 8
"Beeper": The Beeper Company of America, Inc., a Colorado
corporation and a wholly-owned Subsidiary of the Borrower.
"Benbow": Benbow PCS Ventures, Inc., a California corporation.
"Benefited Lender": as defined in Section 12.9.
"Borrower": as defined in the preamble.
"Borrower Security Agreement": the Amended and Restated
Borrower Security Agreement in substantially the form of Exhibit G, as the same
may be amended, supplemented or otherwise modified from time to time.
"Borrowing Date": any Business Day specified in a Borrowing
Request as a day on which the Borrower requests the Lenders to make Loans to the
Borrower.
"Borrowing Request": a request for Loans in the form of
Exhibit C.
"BTP": BTP Acquisition Corporation, a Delaware corporation and
a wholly-owned Subsidiary of the Borrower.
"Business Day": for all purposes other than as set forth in
clause (ii) below, (i) any day other than a Saturday, a Sunday or a day on which
commercial banks located in New York City are authorized or required by law or
other governmental action to close and (ii) with respect to all notices and
determinations in connection with, and payments of principal and interest on,
Eurodollar Advances, any day which is a Business Day described in clause (i)
above and which is also a day on which dealings in foreign currency and exchange
and Eurodollar funding between banks may be carried on in London, England.
"Capital Expenditures": any expenditures made or costs
incurred that are required or permitted to be capitalized for financial
reporting purposes in accordance with GAAP other than deferred financing fees.
"Capital Leases": leases that are required or permitted to be
capitalized for financial reporting purposes in accordance with GAAP.
"Cascade": Cascade Mobile Communications Limited Partnership,
a Delaware limited partnership and a Subsidiary of Westlink Company in which
Kelley's Telephone has a minority equity interest.
-9-
<PAGE> 9
"Cash Interest Expense": for any period, the sum of (i)
interest expense on Total Debt (adjusted to give effect to all Interest Rate
Protection Agreements and fees and expenses paid in connection with the same,
all as determined in accordance with GAAP), to the extent paid or accrued in
cash during such period, as determined in accordance with GAAP and (ii) without
duplication, Restricted Payments made to the Parent to satisfy the interest
payment obligations of the Parent under the Discount Note Indenture.
"Class": with respect to the Lenders, the Revolving Credit
Lenders, the Tranche A Lenders or the Tranche B Lenders.
"Co-Agent": as defined in the preamble.
"Code": the Internal Revenue Code of 1986, as the same may be
amended from time to time, or any successor thereto, and the rules and
regulations issued thereunder, as from time to time in effect.
"Collateral": collectively, the collateral under and as
defined in the Collateral Documents.
"Collateral Documents": collectively, the Borrower Security
Agreement, the Parent Security Agreement, the Subsidiary Guaranty and the
Intercreditor Agreement.
"Commitment": as to any (i) Revolving Credit Lender, such
Revolving Credit Lender's Revolving Credit Commitment, (ii) Tranche A Lender,
such Tranche A Lender's Tranche A Term Loan Commitment and (iii) Tranche B
Lender, such Tranche B Lender's Tranche B Term Loan Commitment.
"Commitment Fee": as defined in Section 3.1.
"Commitment Percentage": as of any date and with respect to
any (i) Revolving Credit Lender, a fraction the numerator of which is such
Revolving Credit Lender's Revolving Credit Commitment on such date, and the
denominator of which is the Aggregate Revolving Credit Commitments on such date
and (ii) Tranche A Lender, a fraction the numerator of which is the outstanding
principal balance of such Tranche A Lender's Tranche A Term Loan on such date,
and the denominator of which is the aggregate outstanding principal balance of
all Tranche A Term Loans on such date, and (iii) Tranche B Lender, a fraction
the numerator of which is the outstanding principal balance of such Tranche B
Lender's Tranche B Term Loan on such date, and the denominator of which is the
aggregate outstanding principal balance of all Tranche B Term Loans on such
date.
-10-
<PAGE> 10
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Parent or any of the
Restricted Subsidiaries within the meaning of Section 414(b) or 414(c) of the
Code.
"Communications Act": the Communications Act of 1934, as
amended, and the rules and regulations issued thereunder, as from time to time
in effect.
"Compliance Certificate": a certificate substantially in the
form of Exhibit D.
"Consolidated": each of the Restricted Subsidiaries taken
together.
"Consolidating": each of the Restricted Subsidiaries taken
separately.
"Consents to Partnership Pledge": as defined in Section
5.6(o).
"Contingent Obligation": as to any Person, any obligation of
such Person guaranteeing or in effect guaranteeing any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(a) to purchase any such primary obligation or any Property constituting direct
or indirect security therefor, (b) to advance or supply funds (i) for the
purchase or payment of any such primary obligation or (ii) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain net
worth, solvency or other financial statement condition of the primary obligor,
(c) to purchase Property, securities or services primarily for the purpose of
assuring the beneficiary of any such primary obligation of the ability of the
primary obligor to make payment of such primary obligation or (d) otherwise to
assure, protect from loss, or hold harmless the beneficiary of such primary
obligation against loss in respect thereof; provided, however, that the term
Contingent Obligation shall not include the indorsement of instruments for
deposit or collection in the ordinary course of business. The term Contingent
Obligation shall also include the liability of a general partner in respect of
the recourse liabilities of the partnership in which it is a general partner.
The amount of any Contingent Obligation of a Person shall be deemed to be an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Contingent Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof as
determined by such Person in good faith.
"Conversion/Continuation Date": the date on which (i) a
Eurodollar Advance is converted to an ABR Advance, (ii) the date on which an ABR
Advance is con-
-11-
<PAGE> 11
verted to a Eurodollar Advance or (iii) the date on which a Eurodollar Advance
is continued as a new Eurodollar Advance.
"Default": any of the events specified in Section 9, whether
or not any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.
"Discount Note Indenture": the Indenture, dated as of March
12, 1996, between the Parent and the Discount Note Trustee, pursuant to which
the Parent issued Discount Notes, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with Section 8.15.
"Discount Notes": the 10-7/8% Senior Discount Notes, due 2008,
issued by the Parent pursuant to the Discount Note Indenture, as the same may be
amended, supplemented or otherwise modified from time to time in accordance with
Section 8.15.
"Discount Note Trustee": IBJ Schroder Bank & Trust Company, as
trustee under the Discount Note Indenture or any successor trustee thereunder.
"Dollars" and "$": lawful currency of the United States of
America.
"Domestic Lending Office": in respect of any Lender,
initially, the office or offices of such Lender designated as such on Schedule
1.1; thereafter, such other office, if any, of such Lender through which it
shall be making or maintaining ABR Advances, as reported by such Lender to the
Administrative Agent and the Borrower.
"Environmental Laws": any and all federal, state and local
laws relating to the environment, the use, storage, transporting, manufacturing,
handling, discharge, disposal or recycling of hazardous substances, hazardous
materials or pollutants or industrial hygiene and including, without limitation,
(i) the Comprehensive Environmental Response, Compensation and Liability Act, as
amended, 42 USCA Section 9601 et seq. ("CERCLA"); (ii) the Resource Conservation
and Recovery Act of 1976, as amended, 42 USCA Section 6901 et seq.; (iii) the
Toxic Substance Control Act, as amended, 15 USCA Section 2601 et seq.; (iv) the
Water Pollution Control Act, as amended, 33 USCA Section 1251 et seq.; (v) the
Clean Air Act, as amended, 42 USCA Section 7401 et seq.; (vi) the Hazardous
Material Transportation Act, as amended, 49 USCA Section 1801 et seq. and (viii)
all rules, regulations judgments decrees injunctions and restrictions thereunder
and any analogous state law.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the rules and regulations issued thereunder,
as from time to time in effect.
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<PAGE> 12
"Eurodollar Advances": collectively, the Loans (or any
portions thereof) at such time as they (or such portions) are made and/or being
maintained at a rate of interest based upon the Eurodollar Rate. Each Eurodollar
Advance shall mature on the last day of the Interest Period applicable thereto.
"Eurodollar Lending Office": in respect of any Lender,
initially, the office or branch of such Lender designated as such on Schedule
1.1 (or, if no such office or branch is specified, its Domestic Lending Office);
thereafter, such other office or branch, if any, of such Lender which shall be
making or maintaining Eurodollar Advances, as reported by such Lender to the
Administrative Agent and the Borrower.
"Eurodollar Rate": with respect to the Interest Period
applicable to any Eurodollar Advance, a rate of interest per annum, as
determined by the Administrative Agent, obtained by dividing (and then rounding
to the nearest 1/16 of 1% or, if there is no nearest 1/16 of 1%, then to the
next higher 1/16 of 1%):
(a) the rate, as reported by BNY to the
Administrative Agent, quoted by BNY to leading banks in the interbank eurodollar
market as the rate at which BNY is offering Dollar deposits in an amount equal
approximately to the Eurodollar Advance of BNY to which such Interest Period
shall apply for a period comparable to such Interest Period, as quoted at
approximately 11:00 a.m. two Business Days prior to the first day of such
Interest Period, by
(b) a number equal to 1.00 minus the aggregate of the
then stated maximum rates during such Interest Period of all reserve
requirements (including, without limitation, marginal, emergency, supplemental
and special reserves), expressed as a decimal, established by the Board of
Governors of the Federal Reserve System and any other banking authority to which
BNY and other major United States money center banks are subject, in respect of
eurocurrency funding (currently referred to as "Eurocurrency liabilities" in
Regulation D of the Board of Governors of the Federal Reserve System). Such
reserve requirements shall include, without limitation, those imposed under such
Regulation D. Eurodollar Advances shall be deemed to constitute Eurocurrency
liabilities and as such shall be deemed to be subject to such reserve
requirements without benefit of credits for proration, exceptions or offsets
which may be available from time to time to any Lender under such Regulation D.
The Eurodollar Rate shall be adjusted automatically on and as of the effective
date of any change in any such reserve requirement.
"Event of Default": any of the events specified in Section 9,
provided that any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
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<PAGE> 13
"Excess Cash Flow": with respect to any fiscal year, Operating
Cash Flow for such fiscal year less the sum of, without duplication (i) the
amount, if positive, equal to (a) the amount of the Revolving Credit Loans
outstanding at the beginning of such fiscal year minus (b) the Aggregate
Revolving Credit Commitments at the end of such fiscal year (without giving
effect to reductions thereof during such period required by Section 2.6(c)),
(ii) payments of the principal of the Term Loans during such fiscal year (other
than mandatory prepayments thereof required by Section 2.8(c), (d) or (e)),
(iii) scheduled payments of principal of other Indebtedness of the Restricted
Subsidiaries on a Consolidated basis during such fiscal year (including, without
limitation, Capital Leases), (iv) Capital Expenditures made by the Restricted
Subsidiaries on a Consolidated basis during such fiscal year, (v) without
duplication, taxes and payments under the Tax Sharing Agreement paid by the
Restricted Subsidiaries in cash during such period, and (vi) Cash Interest
Expense for such fiscal year.
"Exchange Act": the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Existing Credit Agreement": as defined in Recital A.
"Existing Lenders": as defined in Recital A.
"Existing Westlink Bank Indebtedness": collectively, the
Indebtedness of Westlink and its Subsidiaries under the Existing Westlink Loan
Documents, including, without limitation, all outstanding principal, unpaid and
accrued interest, unpaid and accrued fees and other unpaid sums thereunder.
"Existing Westlink Loan Documents": collectively, (i) the
Credit Agreement, dated as of June 30, 1994, among Westlink, Westlink Company,
the lenders party thereto, Canadian Imperial Bank of Commerce, as co-agent, and
Bankers Trust Company, as agent, as amended by the First Amendment and Limited
Waiver, dated as of March 23, 1995, the Second Amendment, dated as of June 30,
1995 and that certain Limited Waiver and Consent, dated as of March 15, 1996,
and the other Loan Documents as therein defined, and (ii) the Line of Credit
Agreement and the Demand Promissory Note, each dated March 18, 1996, between
Westlink Company and Bankers Trust Company.
"FCC": the Federal Communications Commission, or any
Governmental Body succeeding to the functions thereof.
"Federal Funds Rate": for any day, a rate per annum (expressed
as a decimal, rounded upwards, if necessary, to the next higher 1/100 of 1%),
equal to the
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<PAGE> 14
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day, provided that (i) if the day for which such rate is to
be determined is not a Business Day, the Federal Funds Rate for such day shall
be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (ii) if such rate is not so
published for any day, the Federal Funds Rate for such day shall be the average
of the quotations for such day on such transactions as determined by BNY and
reported to the Administrative Agent.
"Financial Statements": as defined in Section 4.18.
"Fixed Charge Coverage Ratio": as of the last day of any
fiscal quarter, the ratio of Operating Cash Flow to Fixed Charges with respect
to the four consecutive fiscal quarters ending on such day.
"Fixed Charges": for any period, with respect to the
Restricted Subsidiaries on a Consolidated basis, the sum of (i) scheduled
payments of principal on Total Debt made or required to be made during such
period, (ii) the amount, if positive, equal to (a) the amount of the Revolving
Credit Loans outstanding at the beginning of such period minus (b) the Aggregate
Revolving Credit Commitments at the end of such period (without giving effect to
reductions thereof during such period required by Section 2.6(c)), (iii) Capital
Expenditures made during such period, (iv) payments under Capital Leases made or
required to be made in such period, (v) without duplication, taxes and payments
under the Tax Sharing Agreement, in each case paid or required to be paid in
cash during such period, and (vi) Cash Interest Expense.
"Foreign Subsidiary": as to any Person, a Subsidiary of such
Person that is organized under the laws of a country other than the United
States.
"GAAP": generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and in the statements and
pronouncements of the Financial Accounting Standards Board or in such other
statement by such other entity as may be approved by a significant segment of
the accounting profession, which are applicable to the circumstances as of the
date of determination, consistently applied. If at any time any change in GAAP
would affect the computation of any financial ratio or requirement set forth in
this Agreement, the Administrative Agent, the Co-Agents, the Lenders and the
Borrower shall negotiate in good faith to amend such ratio or requirement to
reflect such change in GAAP (subject to the approval of the Required Lenders),
provided that, until so amended, (i) such ratio or requirement shall continue to
be computed in accordance with GAAP prior to such change therein and (ii) the
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<PAGE> 15
Borrower shall provide to the Administrative Agent, the Co-Agents and the
Lenders financial statements and other documents required under this Agreement
or as reasonably requested hereunder setting forth a reconciliation between
calculations of such ratio or requirement made before and after giving effect to
such change in GAAP.
"Governmental Body": any nation or government, any state or
other political subdivision thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government and any court or arbitrator.
"Groome": Groome Enterprises, Inc., a Louisiana corporation
and a wholly-owned Subsidiary of the Borrower.
"Guarantors": collectively, the Parent and the Subsidiary
Guarantors.
"Highest Lawful Rate": as to any Lender or BNY, the maximum
rate of interest, if any, that at any time or from time to time may be
contracted for, taken, charged or received by such Lender or BNY on the Note or
Notes held thereby, as the case may be, or which may be owing to such Lender or
BNY pursuant to this Agreement and the other Loan Documents under the laws
applicable to such Lender or BNY and this transaction.
"HSR Act": the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
"Hudson": Hudson Valley Mobile Telephone, Inc., a New York
corporation and a wholly-owned Subsidiary of Arch Capitol.
"Indebtedness": as to any Person, at a particular time, all
items which constitute, without duplication, (i) indebtedness for borrowed money
or the deferred purchase price of Property (other than trade payables incurred
in the ordinary course of business), (ii) indebtedness evidenced by notes,
bonds, debentures or similar instruments, (iii) obligations with respect to any
conditional sale or title retention agreement, (iv) indebtedness arising under
acceptance facilities and the amount available to be drawn under all letters of
credit issued for the account of such Person and, without duplication, all
drafts drawn thereunder to the extent such Person shall not have reimbursed the
issuer in respect of the issuer's payment of such drafts, (v) all liabilities
secured by any Lien on any Property owned by such Person even though such Person
has not assumed or otherwise become liable for the payment thereof (other than
carriers', warehousemen's, mechanics', repairmen's or other like non-consensual
Liens arising in the ordinary course of business), (vi) obligations under
Capital Leases, (vii) all Contingent Obligations and (viii) obligations under
the Non-Competition Agreements.
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<PAGE> 16
"Indemnified Liabilities": as defined in Section 12.5.
"Initial Borrowers": as defined in Recital A.
"Insurance Proceeds Prepayment Date": with respect to
insurance proceeds described in Section 7.5(b), the earliest to occur of (i) the
date on which the Borrower delivers written notice to the Administrative Agent
that such proceeds are not to be used in whole or in part to repair, restore or
replace the Property subject to the insurance claim which gave rise to such
proceeds within 270 days after the receipt of such proceeds by any Restricted
Subsidiary, (ii) the date which is 181 days after the date of such receipt, in
the event that such Restricted Subsidiary has not entered into a binding
commitment to repair or restore such Property or acquire a replacement therefor
on or before the date which is 270 days after the date of such receipt, (iii)
the date which is 270 days after the date of such receipt, provided that such
Property has been repaired, restored or replaced on or before the date which is
270 days after the date of such receipt, and (iv) the occurrence of an Event of
Default, provided that such Event of Default is not waived.
"Intellectual Property": all copyrights, trademarks,
servicemarks, patents, trade names and service names.
"Intercompany Loans": Indebtedness owed by any Restricted
Subsidiary to another Restricted Subsidiary.
"Intercompany Notes": collectively, (i) the Intercompany
Notes, each dated September 7, 1995, made by each of Arch Capitol, Arch
Connecticut, Arch Michigan, Arch Services, Arch Southeast, Becker, Beeper, BTP,
Groome, and ProPage to the Borrower, (ii) the Restated Intercompany Note, dated
May 16, 1995, made by Hudson to Arch Capitol, (iii) the Intercompany Notes, each
dated May 16, 1995, made by each of Arch Capitol, Arch Connecticut, Arch
Michigan, Arch Services, Arch Southeast, Becker, Beeper, BTP, Groome, ProPage
and the Borrower to the Parent, (iv) the Intercompany Note, dated the
Restatement Effective Date, made by Westlink Company to the Borrower, (v) the
Intercompany Notes, each dated the Restatement Effective Date, made by each of
Lund Products, Answer Iowa, Westlink New Mexico, Kelley's Telephone, Westlink
Licensee Corp., Cascade and Telecomm/KRT to Westlink Company, (vi) the
Intercompany Notes, each dated the Restatement Effective Date, made by each of
Kelley's Licensee Corp., Cascade and Telecomm/KRT to Kelley's Telephone, (vii)
the Intercompany Note, dated the Restatement Effective Date, made by Westlink
New Mexico Licensee Corp. to Westlink New Mexico, (viii) the Intercompany Note,
dated the Restatement Effective Date, made
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by Answer Iowa Licensee Corp. to Answer Iowa, (ix) the Intercompany Note, dated
the Restatement Effective Date, made by Answer Iowa to Lund Products, (x) the
Parent Intercompany Notes and (xi) each other promissory note from time to time
made by a Loan Party to evidence Intercompany Loans as permitted under the terms
herein in the form of Exhibit F.
"Intercreditor Agreement": the Amended and Restated
Intercreditor and Subordination Agreement, by and among the Administrative Agent
and the USA Mobile Agent, in substantially the form of Exhibit P, as the same
may be amended, supplemented or otherwise modified from time to time.
"Interest Coverage Ratio": as of the last day of any fiscal
quarter, the ratio of Operating Cash Flow to Cash Interest Expense for the
applicable period hereinafter set forth: (i) as of the last day of the first
full fiscal quarter ending after the Restatement Effective Date, such ratio for
such fiscal quarter, (ii) as of the last day of the second full fiscal quarter
ending after the Restatement Effective Date, such ratio for such two fiscal
quarters, (iii) as of the last day of the third full fiscal quarter ending after
the Restatement Effective Date, such ratio for such three fiscal quarters and
(iv) as of the last day of the fourth fiscal quarter ending after the
Restatement Effective Date and each fiscal quarter thereafter, such ratio for
the four consecutive fiscal quarters ending on such day.
"Interest Payment Date": (i) as to any ABR Advance, the last
day of each March, June, September and December commencing on the first of such
days to occur after such ABR Advance is made or any Eurodollar Advance is
converted to an ABR Advance, (ii) as to any Eurodollar Advance in respect of
which the Borrower has selected an Interest Period of one, two or three months,
the last day of such Interest Period, and (iii) as to any Eurodollar Advance in
respect of which the Borrower has selected an Interest Period of greater than
three months, the last day of each three month interval occurring during such
Interest Period and the last day of such Interest Period.
"Interest Period": with respect to any Eurodollar Advance
requested by the Borrower, the period commencing on, as the case may be, the
Borrowing Date or Conversion/Continuation Date with respect to such Eurodollar
Advance and ending one, two, three or six months or, if made available by each
Lender, nine or twelve months, thereafter, as selected by the Borrower, in its
irrevocable Borrowing Request or its irrevocable Notice of
Conversion/Continuation; provided, however, that all of the foregoing provisions
relating to Interest Periods are subject to the following:
(a) if any Interest Period would otherwise
end on a day which is not a Business Day, such Interest Period shall be extended
to the next succeeding Business Day unless the result of such extension would be
to carry such Interest Period into another calendar month, in which event such
Interest Period shall end on the immediately preceding Business Day;
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(b) any Interest Period pertaining to a
Eurodollar Advance that begins on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last Business Day of
a calendar month;
(c) no Interest Period selected in respect
of any Eurodollar Advance comprising of all or a part of (i) a Revolving Credit
Loan shall end after the Revolving Credit Maturity Date, (ii) a Tranche A Term
Loan shall end after the Tranche A Term Loan Maturity Date or (iii) a Tranche B
Term Loan shall end after the Tranche B Term Loan Maturity Date;
(d) the Borrower shall select Interest
Periods so as not to have more than eight Interest Periods outstanding at any
one time;
(e) the Borrower shall select Interest
Periods such that on each date that (i) a mandatory scheduled reduction of the
Aggregate Revolving Credit Commitments occurs pursuant to Section 2.6(b), or
(ii) a scheduled repayment of the Tranche A Term Loans under Section 2.4(a)(ii)
or the Tranche B Term Loans under Section 2.4(b)(ii) is due, the outstanding
principal amount of all ABR Advances, when added to the aggregate principal
amount of each Eurodollar Advance the applicable Interest Period of which shall
end on such date, shall equal or exceed the aggregate amount of the Loans which
may be required to be repaid on such date pursuant to Sections 2.8(b),
2.4(a)(ii) and 2.4(b)(ii), respectively; and
(f) notwithstanding the foregoing, until the closing
of the Syndication Amendment, the Borrower may only select Interest Periods of
not greater than one month.
"Interest Rate Protection Agreements": collectively, all
interest rate swap, cap, ceiling, hedge or other interest rate protection
agreements designed to hedge against fluctuations in interest rates entered into
by the Borrower with any financial institution.
"Investments": as defined in Section 8.6.
"Kelley's Licensee Corp.": Kelley's Licensee Corporation, a
Delaware corporation and a wholly-owned Subsidiary of Kelley's Telephone.
"Kelley's Telephone": Kelley's Radio Telephone, Inc., a
Washington corporation and a wholly-owned Subsidiary of Westlink Company.
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"Lender": each lender signatory to this Agreement and each
Person which becomes a lender pursuant to Section 2.7, 2.19 or 12.7, in each
case, including, without limitation, each Revolving Credit Lender, each Tranche
A Lender and each Tranche B Lender.
"Leverage Ratio": at any date of determination, the ratio of
Total Debt to Annualized Operating Cash Flow.
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit or preferential arrangement, encumbrance, lien (statutory or other), or
other security agreement or security interest of any kind or nature whatsoever,
including, without limitation, any conditional sale or other title retention
agreement and any Capital Lease or other financing lease having substantially
the same economic effect as any of the foregoing.
"Loan Documents": collectively, this Agreement, the Notes, the
Subordination Agreement, the Consents to Partnership Pledge and the Collateral
Documents.
"Loan Party": the Borrower and each other party (other than
the Administrative Agent, the Lenders and the USA Mobile Agent) that is a
signatory to a Loan Document.
"Loans": the Revolving Credit Loans and/or the Term Loans, as
the case may be.
"Lund Products": Lund Products Sales Company, an Iowa
corporation and a wholly-owned Subsidiary of Westlink Company.
"Management Agreement": the Management Services Agreement,
dated as of the Original Effective Date, by and among the Borrower and the
Parent, as the same may be amended, supplemented or otherwise modified from time
to time in accordance with Section 8.15.
"Management Fees": all fees and expenses paid by the
Restricted Subsidiaries to the Parent, or to any of their respective Affiliates
or Restricted Subsidiaries, or to any employees thereof, for general corporate,
administrative or management services received.
"Managing Person": with respect to any Person that is a (i)
corporation, its board of directors, (ii) a limited liability company, its board
of control or managing member or members, (iii) a limited partnership, its
general partner, (iv) a general partnership, its managing partner or executive
committee or (v) such other managing body or Person analogous to the foregoing.
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"Margin Stock": any "margin stock", as said term is defined in
Regulation U of the Board of Governors of the Federal Reserve System, as the
same may be amended or supplemented from time to time.
"Material Adverse Change": a material adverse change in the
financial condition, operations, prospects or Property of (i) the Restricted
Subsidiaries taken as a whole or (ii) the Parent and the Restricted Subsidiaries
taken as a whole.
"Material Adverse Effect": a material adverse effect on the
financial condition, operations, prospects or Property of (i) the Restricted
Subsidiaries taken as a whole or (ii) the Parent and the Restricted Subsidiaries
taken as a whole.
"Material Foreign Subsidiary": at any time of determination, a
Foreign Subsidiary of the Borrower once it either (i) has more than $10,000,000
in revenue in any period of four consecutive fiscal quarters or (ii) owns more
than $10,000,000 in assets.
"Maturity Date": the Revolving Credit Maturity Date, the
Tranche A Term Loan Maturity Date or the Tranche B Term Loan Maturity Date, as
the case may be.
"Maximum Excess Cash Flow Amount": as defined in Section 2.8
(c).
"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Sales Proceeds": the aggregate gross sales proceeds
received from each sale or other disposition, direct or indirect, of Property
(other than inventory or Property sold or otherwise disposed of in the ordinary
course of business) less (i) sales and other commissions and legal and other
expenses incurred in connection with such sale, including, without limitation,
reasonable expenses incurred in connection with the preparation of such Property
for sale, (ii) taxes reasonably estimated to be payable with respect to such
sale by the Restricted Subsidiaries for the taxable year in which such sale
occurred (taking into consideration the Borrower's overall Consolidated tax
position for such year) and (iii) the amount of Indebtedness secured by such
Property which is required to be repaid upon such sale.
"New Subsidiary": as defined in Section 8.13.
"Non-Competition Agreements": any non-competition or similar
agreement (to the extent permitted by Section 8.1(vi)), entered into by the
Parent or any
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Restricted Subsidiaries in connection with an Acquisition permitted by Sections
8.6(h), (i) or (j), as each may be amended, supplemented or otherwise modified
from time to time in accordance with Section 8.15.
"Non-Material Foreign Subsidiary": any Foreign Subsidiary that
is not a Material Foreign Subsidiary.
"Non-U.S. Lender": any Lender that is not a U.S. Person.
"Note": a Revolving Credit Note or a Term Note, as the case
may be.
"Notes": the Revolving Credit Notes and/or the Term Notes, as
the case may be.
"Notice of Conversion/Continuation": a notice substantially in
the form of Exhibit O.
"Obligations": as defined in Section 11.1.
"Operating Cash Flow": for any period, net income (or loss) of
the Restricted Subsidiaries on a Consolidated basis for such period, determined
in accordance with GAAP, without giving effect to extraordinary gains and losses
from sales, exchanges and other dispositions of Property not in the ordinary
course of business, and non-recurring items, plus the sum of, without
duplication, (i) Cash Interest Expense for such period, (ii) taxes and payments
under the Tax Sharing Agreement, in each case paid or accrued by the Restricted
Subsidiaries during such period and (iii) depreciation, amortization and other
non-cash charges for such period. Any Management Fees paid or accrued will be
treated as an operating expense and deducted in the calculation of Operating
Cash Flow. Solely for purposes of calculating the Leverage Ratio, Operating Cash
Flow shall be adjusted on a consistent basis satisfactory to the Administrative
Agent to give pro-forma effect to any acquisition, sale, exchange or disposition
of Property.
"Organizational Documents": as to any Person which is (i) a
corporation, the certificate or articles of incorporation and by-laws of such
Person, (ii) a limited liability company, the limited liability company
operating agreement or similar agreement of such Person, (iii) a partnership,
the partnership agreement or similar agreement of such Person, or (iv) any other
form of entity or organization, the organizational documents analogous to the
foregoing.
"Original Effective Date": May 5, 1995.
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"Pagers in Service": at any time, pager units which are
producing revenue at such time at standard and customary billing rates.
"Paging-Related Business": the business of selling or renting
paging equipment or the offering of paging services, which business is located
in the United States or Canada. For purpose hereof, paging services include all
forms of one-way wireless communications.
"Parent": as defined in the preamble.
"Parent Guaranty": the guaranty set forth in Section 11.
"Parent Intercompany Loans": collectively, the loans made by
the Borrower, Arch Capitol, Arch Connecticut, Arch Michigan, Arch Services, Arch
Southeast, Becker, Beeper, BTP, Groome, and ProPage to the Parent on May 16,
1995 out of the proceeds of the initial Loans made under the Existing Credit
Agreement to enable the Parent to purchase shares of Stock of USA Mobile
Communications Holdings, Inc. and to repay certain Indebtedness and to pay
transaction costs in connection therewith.
"Parent Intercompany Notes": collectively, the Intercompany
Notes, each dated May 16, 1995, made by the Parent to each of the Borrower, Arch
Capitol, Arch Connecticut, Arch Michigan, Arch Services, Arch Southeast, Becker,
Beeper, BTP, Groome, and ProPage evidencing the obligations of the Parent to
each thereof in respect of the Parent Intercompany Loans.
"Parent Security Agreement": the Amended and Restated Parent
Security and Subordination Agreement made by the Parent to the Administrative
Agent in substantially the form of Exhibit I, as the same may be amended,
supplemented or otherwise modified from time to time.
"PCSD": PCS Development Corporation, a Delaware corporation.
"Permitted Liens": Liens permitted to exist pursuant to
Section 8.2.
"Person": an individual, a partnership, a corporation, a
business trust, a joint stock company, a trust, an unincorporated association, a
joint venture, a Governmental Body or any other entity of whatever nature.
"Plan": any employee benefits or other plan which is covered
by or subject to the minimum funding standards of Title IV of ERISA and which is
maintained, or to which contributions are made, by the Parent or any of its
Subsidiaries
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or a Commonly Controlled Entity or in respect of which the Parent or any of its
Subsidiaries or a Commonly Controlled Entity has or may have any liability.
"Pledgor": as defined in Section 8.13.
"Pro-forma Debt Service": at any date of determination, the
sum of (i) Cash Interest Expense for the period of the four fiscal quarters
immediately succeeding such date of determination, (ii) all current maturities
of Total Debt of the Restricted Subsidiaries (determined on a Consolidated basis
accordance with GAAP) for such four fiscal quarter period and (iii) the amount,
if positive, equal to (a) the amount of the Revolving Credit Loans outstanding
at the beginning of such period minus (b) the Aggregate Revolving Credit
Commitments at the end of such period (after giving effect to any mandatory
reductions during such period pursuant to Section 2.6(b). Where any item of
interest varies or depends upon a variable rate of interest (or other rate of
interest which is not fixed for such entire four fiscal quarter period), such
rate, for purposes of calculating Pro-forma Debt Service, shall be assumed to
equal the Alternate Base Rate plus the Applicable Margin in effect on the date
of such calculation, or, if such rate is a Eurodollar Rate, the applicable
Eurodollar Rate plus the Applicable Margin in effect on the date of such
calculation. Also, for purposes of calculating Pro-forma Debt Service, the
principal amount of Total Debt outstanding on the date of any calculation of
Pro-forma Debt Service shall be assumed to be outstanding during the entire four
fiscal quarter period immediately succeeding such date, except to the extent
that such Indebtedness is subject to mandatory payment of principal during such
period.
"Pro-forma Debt Service Coverage Ratio": as of the last day of
any fiscal quarter, the ratio of Annualized Operating Cash Flow to Pro-forma
Debt Service as of such date.
"ProPage": ProPage Acquisition Corporation, a Delaware
corporation and a wholly-owned Subsidiary of the Borrower.
"Property": all types of real, personal, tangible, intangible
or mixed property.
"Purchasing Lender": as defined in Section 2.20(a).
"Register": as defined in Section 2.21(c).
"Registered Note": as defined in Section 2.21(a).
"Registered Noteholder": as defined in Section 2.21(b).
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"Relevant Date": (i) in the case of each Existing Lender and
each Person that becomes a Lender on the Restatement Effective Date, the
Restatement Effective Date or (ii) in the case of each other Lender, the
effective date of the Assignment and Acceptance Agreement pursuant to which it
became a Lender.
"Remaining Interest Period": (i) in the event that the
Borrower shall fail for any reason to borrow a Loan in respect of which the
Borrower shall have requested a Eurodollar Advance, or to convert an Advance to,
or continue an Advance as, a Eurodollar Advance after the Borrower shall have
notified the Administrative Agent of its intent to do so, a period equal to the
Interest Period that the Borrower elected in respect of such Eurodollar Advance;
(ii) in the event that a Eurodollar Advance shall terminate for any reason prior
to the last day of the Interest Period applicable thereto, a period equal to the
remaining portion of such Interest Period if such Interest Period had not been
so terminated; or (iii) in the event that the Borrower shall prepay or repay all
or any part of the principal amount of a Eurodollar Advance prior to the last
day of the Interest Period applicable thereto, a period equal to the period from
and including the date of such prepayment or repayment to but excluding the last
day of such Interest Period.
"Replaced Lender" as defined in Section 2.19.
"Replacement Lender": as defined in Section 2.19.
"Required Lenders": (i) at any time when no Loans are
outstanding, Revolving Credit Lenders having not less than 51% of the Aggregate
Revolving Credit Commitments, and (ii) at any time when Loans are outstanding
hereunder, Lenders having Revolving Credit Commitments and Term Loans of not
less than 51% of the sum of the Aggregate Revolving Credit Commitments and the
outstanding principal balance of the Term Loans.
"Restatement Effective Date": May 21, 1996.
"Restricted Payment": as to any Restricted Subsidiary, (i) the
payment or declaration by such Restricted Subsidiary of any dividend on any
class of capital Stock or other equity interest (other than dividends payable
solely in common Stock of the such Restricted Subsidiary or other capital Stock
(to the extent the same is permitted to be issued pursuant to Section 8.13), or
warrants, rights or options to acquire common Stock of such Restricted
Subsidiary or other capital Stock to the extent the same is permitted to be
issued pursuant to Section 8.13) or the making of any other distribution on
account of any class of its capital Stock or other equity interest, or (ii) the
retirement, redemption, purchase or acquisition, directly or indirectly, of (a)
any shares of the capital Stock of such Restricted Subsidiary (except shares
acquired solely upon the conversion thereof
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into other shares of its capital Stock) and (b) any security convertible into,
or any option, warrant or other right to acquire, shares of the capital Stock of
such Restricted Subsidiary.
"Restricted Subsidiaries": collectively, the Borrower and each
of its Subsidiaries.
"Revolving Credit Commitment": in respect of any Revolving
Credit Lender, such Revolving Credit Lender's undertaking during the Revolving
Credit Commitment Period to make Revolving Credit Loans, subject to the terms
and conditions hereof, in an aggregate outstanding principal amount not
exceeding the amount set forth next to the name of such Revolving Credit Lender
in Exhibit A under the heading "Revolving Credit Commitment", as the same may be
reduced pursuant to Section 2.6 or increased pursuant to Section 2.7.
"Revolving Credit Commitment Period": the period from the
Original Effective Date until the Business Day immediately preceding the
Revolving Credit Maturity Date.
"Revolving Credit Lender": each Lender having a Revolving
Credit Commitment.
"Revolving Credit Loan" and "Revolving Credit Loans": as
defined in Section 2.1.
"Revolving Credit Maturity Date": November 20, 1996, or such
earlier date on which the Revolving Credit Notes shall become due and payable,
whether by acceleration or otherwise.
"Revolving Credit Note" and "Revolving Credit Notes": as
defined in Section 2.2.
"SEC": the Securities and Exchange Commission or any
Governmental Body succeeding to the functions thereof.
"Selling Lender": as defined in Section 2.20(a).
"Single Employer Plan": any Plan which is not a Multiemployer
Plan.
"Solvent": with respect to any Person on a particular date,
the condition that on such date, (i) the fair value of the Property of such
Person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such
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Person, (ii) the present fair salable value of the assets of such Person is not
less than the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured, (iii) such Person does
not intend to, and does not believe that it will, incur debts or liabilities
beyond such Person's ability to pay as such debts and liabilities mature, and
(iv) such Person is not engaged in business or a transaction, and is not about
to engage in business or a transaction, for which such Person's Property would
constitute an unreasonably small amount of capital.
"Special Counsel": Emmet, Marvin & Martin, LLP, special
counsel to BNY.
"Stock": any and all shares, interests, participations,
warrants or other equivalents (however designated) of corporate stock.
"Subordinated Debentures": the 6-3/4% Convertible Subordinated
Debentures, due 2003, issued by the Parent pursuant to the Subordinated
Indenture, as the same may be amended, supplemented or otherwise modified from
time to time in accordance with the Section 8.15.
"Subordinated Indenture": the Indenture, dated as of December
1, 1993, between the Parent and BNY, as trustee, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with Section
8.15.
"Subordinated Indenture Trustee": BNY, as trustee under the
Subordinated Indenture, or any successor trustee thereunder.
"Subordination Agreement": the Subordination Agreement
substantially in the form of Exhibit Q, as the same may be amended, supplemented
or otherwise modified from time to time in accordance
with Section 8.15.
"Subsidiary": as to any Person, any corporation, association,
partnership, joint venture or other business entity of which such Person and/or
any Subsidiary of such Person, directly or indirectly, either (i) in respect of
a corporation, owns or controls more than 50% of the outstanding Stock having
ordinary voting power to elect a majority of the Managing Person, irrespective
of whether a class or classes shall or might have voting power by reason of the
happening of any contingency, or (ii) in respect of an association, partnership,
joint venture or other business entity, is entitled to share in more than 50% of
the profits and losses, however determined.
"Subsidiary Guaranty": the Amended and Restated Subsidiary
Guaranty, Security and Subordination Agreement, made by each Subsidiary
Guarantor party thereto
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to the Administrative Agent in substantially the form of Exhibit H, as the same
may be amended, supplemented or otherwise modified from time to time.
"Subsidiary Guarantors": collectively (i) Arch Capitol, Arch
Connecticut, Arch Michigan, Arch Services, Arch Southeast, Becker, Beeper, BTP,
Groome, ProPage, Hudson, Westlink Company, Westlink Licensee Corp., Lund
Products, Answer Iowa, Answer Iowa Licensee Corp., Westlink New Mexico, Westlink
New Mexico Licensee Corp., Kelley's Telephone, Kelley's Licensee Corp., Cascade
and Telecomm/KRT, (ii) in the event that the Westlink Merger shall not have been
consummated on the Restatement Effective Date and the Administrative Agent shall
have so requested pursuant to Section 7.16, Westlink, and (iii) each Subsidiary
which becomes a party to the Subsidiary Guaranty after the Restatement Effective
Date pursuant to Section 8.13(b).
"Syndication Amendment": an amendment to this Agreement
pursuant to which, among other things, (i) the Revolving Credit Maturity Date,
Tranche A Term Loan Maturity Date and the Tranche B Term Loan Maturity Date are
extended to December 31, 2002, December 31, 2002 and December 31, 2003,
respectively and (ii) a portion of BNY's Revolving Credit Commitment Term Loans
are assigned to other Lenders.
"Tax": any present or future tax, levy, impost, duty, charge,
fee, deduction or withholding of any nature and whatever called, by a
Governmental Body, on whomsoever and wherever imposed, levied, collected,
withheld or assessed.
"Tax on the Overall Net Income": as to any Person, a Tax
imposed by the jurisdiction in which that Person's principal office (and/or, in
the case of a Lender, its Domestic Lending Office) is located or by any
political subdivision or taxing authority thereof or in which that Person is
deemed to be doing business on all or part of the net income, profits or gains
of that Person (whether worldwide, or only insofar as such income, profits or
gains are considered to arise in or to relate to a particular jurisdiction, or
otherwise).
"Tax Sharing Agreement": the Tax Sharing Agreement, dated as
of the Original Effective Date, between the Parent and certain of its
Subsidiaries, as the same may be amended, supplemented or otherwise modified
from time to time in accordance with Section 8.15.
"Telecomm/KRT": Telecomm/KRT Partnership, a California general
partnership and a Subsidiary of Westlink Company in which Kelley's Telephone has
a minority equity interest.
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"Term Loan": a Tranche A Term Loan or a Tranche B Term Loan,
as the case may be.
"Term Loans": the Tranche A Term Loans and/or the Tranche B
Term Loans, as the case may be.
"Term Notes": the Tranche A Term Notes and/or the Tranche B
Term Notes, as the case may be.
"Total Debt": at any date of determination, the sum of (i) the
aggregate outstanding principal balance of the Loans and (ii) all other
Indebtedness for borrowed money (other than trade payables incurred in the
ordinary course of business) of the Restricted Subsidiaries, determined on a
Consolidated basis in accordance with GAAP.
"Tranche A Lender": each Lender having a Tranche A Term Loan
Commitment or having a Tranche A Term Loan outstanding.
"Tranche A Term Loan" and "Tranche A Term Loans": as defined
in Section 2.3(a).
"Tranche A Term Loan Commitment": in respect of any Tranche A
Lender, such Tranche A Lender's undertaking to make a Tranche A Term Loan to the
Borrower on the Restatement Effective Date, subject to the terms and conditions
hereof, in a principal amount not exceeding the amount set forth next to the
name of such Tranche A Lender in Exhibit A under the heading "Tranche A Term
Loan Commitments".
"Tranche A Term Loan Maturity Date": November 20, 1996, or
such earlier date on which the Tranche A Term Notes shall become due and
payable, whether by acceleration or otherwise.
"Tranche A Term Note" and "Tranche A Term Notes": as defined
in Section 2.4(a).
"Tranche B Lender": each Lender having a Tranche B Term Loan
Commitment or having a Tranche B Term Loan outstanding.
"Tranche B Term Loan" and "Tranche B Term Loans": as defined
in Section 2.3(b).
"Tranche B Term Loan Commitment": in respect of any Tranche B
Lender, such Tranche B Lender's undertaking to make a Tranche B Term Loan to the
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Borrower on the Restatement Effective Date, subject to the terms and conditions
hereof, in a principal amount not exceeding the amount set forth next to the
name of such Tranche B Lender in Exhibit A under the heading "Tranche B Term
Loan Commitments".
"Tranche B Term Loan Maturity Date": November 20, 1996, or
such earlier date on which the Tranche B Term Notes shall become due and
payable, whether by acceleration or otherwise.
"Tranche B Term Note" and "Tranche B Term Notes": as defined
in Section 2.4(b).
"Transaction Documents": collectively, the Loan Documents, the
Westlink Acquisition Documents and the Westlink Merger Documents.
"United States": the United States of America (including the
States thereof and the District of Columbia).
"U.S. Person": a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in or under any
laws of the United States, or any estate or trust that is subject to Federal
income taxation regardless of the source of its income.
"U.S. Tax": any Tax, imposed by or on behalf of the United
States or any taxing authority thereof.
"USA Mobile": USA Mobile Communications, Inc. II, a Delaware
corporation.
"USA Mobile Agent": BNY in its capacity as agent under the USA
Mobile Credit Agreement.
"USA Mobile Borrowers": collectively, Premiere Page of Kansas,
Inc., a Kansas corporation, Q Media Paging-Alabama, Inc., a Delaware
corporation, USA Mobile Communications, Inc. III, a Delaware corporation, Q
Media Company-Paging, Inc., a Kansas corporation, and W.Q. Communications, Inc.,
a Kansas corporation.
"USA Mobile Credit Agreement": the Credit Agreement, dated as
of September 8, 1995, among the USA Mobile Borrowers, the lenders party thereto,
and the USA Mobile Agent, as the same may be amended, supplemented or otherwise
modified from time to time.
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"USA Mobile Indentures": collectively, the USA Mobile 9 1/2%
Indenture and the USA Mobile 14% Indenture.
"USA Mobile Intercompany Note": the Intercompany Note, dated
March 12, 1996, made by the USA Mobile Borrowers to the Borrower in the
principal amount of $32,500,000.
"USA Mobile Parent Guaranty": the Arch Guaranty, Security and
Subordination Agreement, dated as of September 8, 1995, among the Parent, the
USA Mobile Borrowers, USA Mobile and the USA Mobile Agent, as the same may be
amended, supplemented or otherwise modified from time to time.
"USA Mobile Senior Notes": collectively, (i) the 9-1/2% Senior
Notes due 2004 issued by USA Mobile pursuant to the USA Mobile 9- 1/2% Indenture
and (ii) the 14% Senior Notes due 2004 issued by USA Mobile under the USA Mobile
14% Indenture.
"USA Mobile Trustee": as the context may require, United
States Trust Company of New York, as trustee of the USA Mobile 9-1/2% Indenture,
or any successor trustee thereunder, or United States Trust Company of New York,
as trustee of the USA Mobile 14% Indenture, or any successor trustee thereunder.
"USA Mobile 9 1/2% Indenture": the Indenture, dated as of
February 7, 1994, between USA Mobile and the USA Mobile Trustee, pursuant to
which USA Mobile issued $125,000,000 9 1/2% Senior Notes due 2004.
"USA Mobile 14% Indenture": the Indenture, dated as of
December 15, 1994, between USA Mobile and the USA Mobile Trustee, pursuant to
which USA Mobile issued $100,000,000 14% Senior Notes due 2004.
"Westlink": Westlink Holdings, Inc., a Delaware corporation.
"Westlink Acquisition": the acquisition by the Borrower of all
of the issued and outstanding capital stock of Westlink in a manner in all
respects satisfactory to the Administrative Agent.
"Westlink Acquisition Agreement": the Stock Purchase
Agreement, dated as of December 17, 1995, among the Parent, the Westlink Sellers
and Westlink, as such document may be amended, supplemented or otherwise
modified in accordance with the provisions of Section 8.15.
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<PAGE> 31
"Westlink Acquisition Documents": collectively, the Westlink
Acquisition Agreement and all other documents executed in connection therewith,
as each may be amended, supplemented or otherwise modified in accordance with
the provisions of Section 8.15.
"Westlink Company": The Westlink Company, a Delaware
corporation and (i) prior to the Westlink Merger, a wholly-owned Subsidiary of
Westlink and (ii) on and after the Westlink Merger, a wholly-owned Subsidiary of
the Borrower.
"Westlink Licensee Corp.": Westlink Licensee Corporation, a
Delaware corporation and a wholly-owned Subsidiary of Westlink Company.
"Westlink Merger": the merger of Westlink with and into the
Borrower pursuant to and in accordance with the Westlink Merger Documents, with
the Borrower as the survivor thereof.
"Westlink Merger Certificate": the Certificate of Ownership
and Merger, dated as of May 21, 1996, filed by the Borrower to effect the
Westlink Merger, as such document may be amended, supplemented or otherwise
modified in accordance with the provisions of Section 8.15.
"Westlink Merger Documents": collectively, the Westlink Merger
Certificate and all other documents executed in connection therewith, as each
may be amended, supplemented or otherwise modified in accordance with the
provisions of Section 8.15.
"Westlink Merger Effective Date": the date upon which the
Westlink Merger shall become effective.
"Westlink New Mexico": The Westlink Paging Company of New
Mexico, Inc., a New Mexico corporation and a wholly-owned Subsidiary of Westlink
Company.
"Westlink New Mexico Licensee Corp.": Westlink of New Mexico
Licensee Corporation, a Delaware corporation and a wholly-owned Subsidiary of
Westlink New Mexico.
"Westlink Sellers": the Sellers as defined in the Westlink
Acquisition Agreement.
1.2. Principles of Construction.
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<PAGE> 32
(a) All terms defined in this Agreement shall have the
meanings given such terms herein when used in the other Loan Documents or any
certificate, opinion or other document made or delivered pursuant thereto,
unless otherwise defined therein.
(b) As used in the Loan Documents and in any certificate or
other document made or delivered pursuant thereto, accounting terms not defined
in Section 1.1, and accounting terms partly defined in Section 1.1, to the
extent not defined, shall have the respective meanings given to them under GAAP.
(c) The words "hereof", "herein", "hereto" and "hereunder" and
similar words when used in a Loan Document shall refer to such Loan Document as
a whole and not to any particular provision thereof, and Section, schedule and
exhibit references contained therein shall refer to Sections thereof or
schedules or exhibits thereto unless otherwise expressly provided therein.
(d) The word "or" shall not be exclusive; "may not" is
prohibitive and not permissive.
(e) Unless the context otherwise requires, words in the
singular number include the plural, and words in the plural include the
singular.
(f) Unless specifically provided in a Loan Document to the
contrary, references to a time shall refer to New York City time.
(g) Unless specifically provided in a Loan Document to the
contrary, in the computation of periods of time from a specified date to a later
specified date, the word "from" means "from and including" and the words "to"
and "until" each means "to but excluding".
(h) References in any Loan Document to a fiscal period shall
refer to that fiscal period of the Borrower.
2. AMOUNT AND TERMS OF LOANS.
2.1. Revolving Credit Loans.
Subject to the terms and conditions hereof, each Revolving
Credit Lender severally agrees to make revolving credit loans (each a "Revolving
Credit Loan" and, as the context may require, collectively with all other
Revolving Credit Loans of such Revolving Credit Lender and/or with the Revolving
Credit Loans of each other Revolving Credit Lender, the "Revolving Credit
Loans") to the Borrower from time to time during
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<PAGE> 33
the Revolving Credit Commitment Period, provided that immediately after giving
effect thereto (i) the outstanding principal balance of such Revolving Credit
Lender's Revolving Credit Loans shall not exceed such Revolving Credit Lender's
Revolving Credit Commitment, and (ii) the outstanding principal balance of all
Revolving Credit Lenders' Revolving Credit Loans shall not exceed the Aggregate
Revolving Credit Commitments. During the Revolving Credit Commitment Period, the
Borrower may borrow, prepay in whole or in part and reborrow under the Aggregate
Revolving Credit Commitments, all in accordance with the terms and conditions of
this Agreement.
2.2. Revolving Credit Notes.
The Revolving Credit Loans made by each Revolving Credit
Lender shall be evidenced by a promissory note of the Borrower, substantially in
the form of Exhibit B-1, with appropriate insertions therein as to date and
principal amount (each, as indorsed or modified from time to time, including
replacements and substitutions therefor and including Registered Notes, a
"Revolving Credit Note" and, collectively with the Revolving Credit Notes of the
other Revolving Credit Lenders, the "Revolving Credit Notes"), payable to the
order of such Revolving Credit Lender for the account of its Applicable Lending
Office and representing the obligation of the Borrower to pay the lesser of (i)
the original amount of the Revolving Credit Commitment of such Revolving Credit
Lender and (ii) the aggregate unpaid principal balance of all Revolving Credit
Loans made by such Revolving Credit Lender to the Borrower, in each case with
interest thereon as prescribed in Section 2.10. Each Revolving Credit Note shall
(a) be dated the Restatement Effective Date, (b) be stated to mature on the
Revolving Credit Maturity Date and (c) bear interest from the date thereof on
the unpaid principal balance thereof at the applicable interest rate or rates
per annum determined as provided in Section 2.10. Interest on each Revolving
Credit Note shall be payable as specified in Section 2.10.
2.3. Term Loans.
(a) Tranche A Term Loans. Subject to the terms and conditions
hereof, each Tranche A Lender severally agrees to make a loan (each a "Tranche A
Term Loan" and, collectively with the Tranche A Term Loans of the other Tranche
A Lenders, the "Tranche A Term Loans") to the Borrower on the Restatement
Effective Date in a principal amount not to exceed such Tranche A Lender's
Tranche A Term Loan Commitment.
(b) Tranche B Term Loans. Subject to the terms and conditions
hereof, each Tranche B Lender severally agrees to make a loan (each a "Tranche B
Term Loan" and, collectively with the Tranche B Term Loans of the other Tranche
B Lenders, the "Tranche B Term Loans") to the Borrower on the Restatement
Effective Date in a
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<PAGE> 34
principal amount not to exceed such Tranche B Lender's Tranche B Term Loan
Commitment.
2.4. Term Notes.
(a) Tranche A Term Notes.
(i) The Tranche A Term Loan made by each Tranche A Lender
shall be evidenced by a promissory note of the Borrower, substantially in the
form of Exhibit B-2, with appropriate insertions therein as to date and
principal amount (each, as indorsed or modified from time to time, including
replacements and substitutions therefor and including Registered Notes, a
"Tranche A Term Note" and, collectively with the Tranche A Term Notes of the
other Tranche A Lenders, the "Tranche A Term Notes"), payable to the order of
such Tranche A Lender for the account of its Applicable Lending Office and
representing the obligation of the Borrower to pay the unpaid principal balance
of the Tranche A Term Loan made by such Tranche A Lender, with interest thereon
as prescribed in Section 2.10. Each Tranche A Term Note shall (A) be dated the
Restatement Effective Date, (B) be stated to mature on the Tranche A Term Loan
Maturity Date and (C) bear interest from the date thereof on the unpaid
principal balance thereof at the applicable interest rate or rates per annum
determined as provided in Section 2.10. Interest on each Tranche A Term Note
shall be payable as specified in Section 2.10.
(ii) The principal amount of the Tranche A Term Notes
shall be payable on the following dates in the following percentages of the
aggregate outstanding principal balance of the Tranche A Term Notes as of March
31, 1998:
<TABLE>
<CAPTION>
Date Percentage
---- ----------
<S> <C>
March 31, 1998 3.750%
June 30, 1998 3.750%
September 30, 1998 3.750%
December 31, 1998 3.750%
March 31, 1999 4.375%
June 30, 1999 4.375%
September 30, 1999 4.375%
December 31, 1999 4.375%
March 31, 2000 5.000%
June 30, 2000 5.000%
September 30, 2000 5.000%
December 31, 2000 5.000%
March 31, 2001 5.625%
</TABLE>
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<PAGE> 35
<TABLE>
<S> <C>
June 30, 2001 5.625%
September 30, 2001 5.625%
December 31, 2001 5.625%
March 31, 2002 6.250%
June 30, 2002 6.250%
September 30, 2002 6.250%
December 31, 2002 the remaining unpaid
principal amount
of the Tranche A
Term Notes
together with all
accrued and unpaid
interest thereon.
</TABLE>
(b) Tranche B Term Notes.
(i) The Tranche B Term Loan made by each Tranche B Lender
shall be evidenced by a promissory note of the Borrower, substantially in the
form of Exhibit B-3, with appropriate insertions therein as to date and
principal amount (each, as indorsed or modified from time to time, including
replacements and substitutions therefor and including Registered Notes, a
"Tranche B Term Note" and, collectively with the Tranche B Term Notes of the
other Tranche B Lenders, the "Tranche B Term Notes"), payable to the order of
such Tranche B Lender for the account of its Applicable Lending Office and
representing the obligation of the Borrower to pay the unpaid principal balance
of the Tranche B Term Loan made by such Tranche B Lender, with interest thereon
as prescribed in Section 2.10. Each Tranche B Term Note shall (A) be dated the
Restatement Effective Date, (B) be stated to mature on the Tranche B Term Loan
Maturity Date and (C) bear interest from the date thereof on the unpaid
principal balance thereof at the applicable interest rate or rates per annum
determined as provided in Section 2.10. Interest on each Tranche B Term Note
shall be payable as specified in Section 2.10.
(ii) The principal amount of the Tranche B Term Notes
shall be payable on the following dates in the following percentages of the
aggregate outstanding principal balance of the Tranche B Term Notes as of March
31, 1998:
<TABLE>
<CAPTION>
Date Percentage
---- ----------
<S> <C>
March 31, 1998 0.250%
June 30, 1998 0.250%
September 30, 1998 0.250%
December 31, 1998 0.250%
</TABLE>
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<PAGE> 36
<TABLE>
<S> <C>
March 31, 1999 0.250%
June 30, 1999 0.250%
September 30, 1999 0.250%
December 31, 1999 0.250%
March 31, 2000 0.250%
June 30, 2000 0.250%
September 30, 2000 0.250%
December 31, 2000 0.250%
March 31, 2001 0.250%
June 30, 2001 0.250%
September 30, 2001 0.250%
December 31, 2001 0.250%
March 31, 2002 7.500%
June 30, 2002 7.500%
September 30, 2002 7.500%
December 31, 2002 7.500%
March 31, 2003 16.500%
June 30, 2003 16.500%
September 30, 2003 16.500%
December 31, 2003 the remaining unpaid
principal amount
of the Tranche B
Term Notes
together with all
accrued and unpaid
interest thereon.
</TABLE>
2.5. Procedure for Borrowing.
(a) The Borrower may borrow (i) under the Aggregate Revolving
Credit Commitments on any Business Day during the Revolving Credit Commitment
Period and (ii) under the Aggregate Term Loan Commitments on the first Borrowing
Date occurring on or after the Restatement Effective Date, provided that the
Borrower shall notify the Administrative Agent (by telephone or fax) no later
than 11:00 a.m. (A) three Business Days prior to the requested Borrowing Date in
the case of Eurodollar Advances and (B) one Business Day prior to the requested
Borrowing Date in the case of ABR Advances, in each case specifying (1) the
aggregate principal amount to be borrowed under the Aggregate Revolving Credit
Commitments, the Aggregate Tranche A Term Loan Commitments and the Aggregate
Tranche B Term Loan Commitments, (2) the requested Borrowing Date, (3) whether
such borrowing is to consist of one or more Eurodollar Advances, ABR Advances,
or a combination thereof and (4) if the borrowing is to consist of one or more
Eurodollar Advances, the length of the Interest Period or
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<PAGE> 37
Periods for each such Eurodollar Advance (subject to the provisions of the
definition of Interest Period). Each such notice shall be irrevocable and
confirmed immediately by delivery to the Administrative Agent of a Borrowing
Request. Each ABR Advance shall be in an aggregate principal amount equal to
$100,000 or such amount plus a whole multiple of $100,000 in excess thereof, or,
if less, the unused amount of the Aggregate Revolving Credit Commitments, and
each Eurodollar Advance shall be in an aggregate principal amount equal to
$500,000 or such amount plus a whole multiple of $100,000 in excess thereof. If,
with respect to any borrowing, the Borrower shall fail to give due notice as
provided in this Section, the Borrower shall be deemed to have selected an ABR
Advance for such borrowing.
(b) Upon receipt of such notice of borrowing from the
Borrower, the Administrative Agent shall promptly notify each Lender which is a
member of the Class from which a Loan has been requested of such notice of
borrowing. Subject to its receipt of the notice referred to in the preceding
sentence, (i) each Revolving Credit Lender will make the amount of its
Commitment Percentage of each such borrowing of Revolving Credit Loans, (ii)
each Tranche A Lender will make the amount of its Commitment Percentage of each
such borrowing of Tranche A Term Loans and (iii) each Tranche B Lender will make
the amount of its Commitment Percentage of each such borrowing of Tranche B Term
Loans, available to the Administrative Agent for the account of the Borrower at
the office of the Administrative Agent set forth in Section 12.2 not later than
1:00 p.m., on the relevant Borrowing Date requested by the Borrower, in funds
immediately available to the Administrative Agent at such office. The amounts so
made available to the Administrative Agent on such Borrowing Date will then,
subject to the satisfaction of the terms and conditions of this Agreement as
determined by the Administrative Agent, be made available on such date to the
Borrower by the Administrative Agent at the office of the Administrative Agent
specified in Section 12.2 by crediting the account of the Borrower on the books
of such office with the aggregate of said amounts received by the Administrative
Agent. Unless the Administrative Agent shall have received prior notice from a
Lender (by telephone or otherwise, such notice to be confirmed by telecopy or
other writing) that it will not make available to the Administrative Agent its
Commitment Percentage of any Loans requested by the Borrower and with respect to
which it has a Commitment, the Administrative Agent may assume that such Lender
has made such share available to the Administrative Agent on the requested
Borrowing Date in accordance with this Section, provided that such Lender
received notice of the proposed borrowing from the Administrative Agent, and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower on such Borrowing Date a corresponding amount. If and to the extent
such Lender shall not have so made such share available to the Administrative
Agent, such Lender and the Borrower severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount (to the extent not
previously paid by the other), together with interest thereon for each day from
the date such amount is made available to the
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<PAGE> 38
Borrower until the date such amount is paid to the Administrative Agent, at a
rate per annum equal to, in the case of the Borrower, the applicable interest
rate set forth in Section 2.10, and, in the case of such Lender, the Federal
Funds Rate in effect on such date (as determined by the Administrative Agent).
Such payment by the Borrower, however, shall be without prejudice to its rights
against such Lender. If such Lender shall pay to the Administrative Agent such
corresponding amount, such amount so paid (excluding, however, any interest
payable on such amount) shall constitute such Lender's Loan as part of such
Loans for purposes of this Agreement, which Loan shall be deemed to have been
made by such Lender on the Borrowing Date applicable to such Loans.
(c) If a Revolving Credit Lender makes a new Revolving Credit
Loan to the Borrower on a Borrowing Date on which the Borrower is to repay a
Revolving Credit Loan from such Revolving Credit Lender or make a scheduled
amortization payment on a Term Loan of such Lender, such Revolving Credit Lender
shall apply the proceeds of such new Revolving Credit Loan to make such
repayment or scheduled amortization payment, and only the excess of the proceeds
of such new Revolving Credit Loan over the Revolving Credit Loan being repaid or
scheduled amortization payment being made need be made available to the
Administrative Agent.
(d) Notices of borrowing given by telephone shall be deemed
given when made by telephone and the Administrative Agent and the Lenders may
rely thereon whether or not such notice is confirmed by the delivery of a
Borrowing Request.
2.6. Termination or Reduction of the Aggregate Revolving Credit
Commitments.
(a) Voluntary Reductions. The Borrower shall have the right,
upon at least three Business Days' prior written notice from the Borrower to the
Administrative Agent, at any time to terminate the Aggregate Revolving Credit
Commitments or from time to time to reduce permanently the unused amount of the
Aggregate Revolving Credit Commitments to an amount not less than the aggregate
principal amount of the Revolving Credit Loans then outstanding (after giving
effect to any contemporaneous payment or prepayment thereof). Any such reduction
shall be in the amount of $5,000,000 or such amount plus a whole multiple of
$500,000.
(b) Mandatory Scheduled Reductions. On the dates set forth
below, the Aggregate Revolving Credit Commitments shall be permanently reduced
to the following amounts:
<TABLE>
<CAPTION>
Amount of
Revolving Credit
Date Commitments
---- -----------
<S> <C>
</TABLE>
39
<PAGE> 39
<TABLE>
<S> <C>
December 31, 1999 $100,000,000
December 31, 2000 $ 50,000,000
December 31, 2001 $ 25,000,000
December 31, 2002 $ - 0 -
</TABLE>
(c) Mandatory Reductions of the Aggregate Revolving Credit
Commitment Relating to Sales of Property; Insurance Proceeds. The Aggregate
Revolving Credit Commitments shall be permanently reduced at the time and in the
amounts provided by Section 2.8(f)(iv).
(d) In General. (i) Any reduction of the Aggregate Revolving
Credit Commitments pursuant to Section 2.6(c) shall be applied to the reduction,
on a "pro rata weighted basis" (as described in clause (ii) below), of the
remaining reductions in the amount of the Aggregate Revolving Credit Commitments
set forth in Section 2.6(b). Reductions of the Aggregate Revolving Credit
Commitments shall be applied pro rata according to the Revolving Credit
Commitment of each Revolving Credit Lender. Simultaneously with each reduction
of the Aggregate Revolving Credit Commitments, the Borrower shall pay the
Commitment Fee accrued through the date of such reduction on the amount by which
the Aggregate Revolving Credit Commitments have been reduced.
(ii) The application of reductions of the Aggregate
Revolving Credit Commitments pursuant to Section 2.6(c) to the remaining
scheduled reductions of the Aggregate Revolving Credit Commitments set forth in
Section 2.6(b), shall be determined by multiplying the amount of the reduction
of the Aggregate Revolving Credit Commitments pursuant to Section 2.6(c) by a
fraction (not in excess of 1), the numerator of which shall be the difference
between (x) the amount of the Aggregate Revolving Credit Commitments immediately
prior to the scheduled reduction in question (without giving effect to the
contemporaneous reduction pursuant to Section 2.6(c)) and (y) the maximum amount
of the Aggregate Revolving Credit Commitments after giving effect to such
scheduled reduction and the denominator of which shall be the amount of the
Aggregate Revolving Credit Commitments on December 30, 1999 without giving
effect to any reduction in the amount of the Aggregate Revolving Credit
Commitments required on or before such date pursuant to Section 2.6(c). The
application of this clause (ii) is illustrated on Schedule 2.6.
2.7. Increases in Aggregate Revolving Credit Commitments.
(a) Provided that no Default or Event of Default shall exist
immediately before and after giving effect thereto, the Borrower may, subject to
the provisions of this Section, from time to time elect that the Aggregate
Revolving Credit
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<PAGE> 40
Commitments be increased to an amount not in excess of $350,000,000. Any such
increase shall be in an amount equal to $25,000,000 or such amount plus an
integral multiple of $5,000,000. Such election shall be made in a writing
delivered by the Borrower to the Administrative Agent which shall, in turn,
promptly deliver a copy thereof to each Lender.
(b) In the event that the Borrower elects to increase the
Aggregate Revolving Credit Commitments (i) any Revolving Credit Lender may (but
is not obligated to) elect to increase its Revolving Credit Commitment, (ii) any
other Lender with the consent of the Borrower (such consent not to be
unreasonably withheld) may elect to undertake a Revolving Credit Commitment and
become a Revolving Credit Lender, and (iii) with the written consent of the
Administrative Agent (such consent not to be unreasonably withheld), one or more
additional banks or other financial institutions may, by execution of this
Agreement, become parties hereto and undertake Revolving Credit Commitments
hereunder and any such Lender, bank or other financial institution shall
thereafter for all purposes be treated as a Revolving Credit Lender as though it
had been an original signatory to this Agreement. To the extent that no such
Lender or acceptable additional bank or other financial institution is willing
to increase its Revolving Credit Commitment or undertake a Revolving Credit
Commitment, as the case may be, the Aggregate Revolving Credit Commitments shall
not be increased.
(c) On and as of the date upon which an increase in the
Aggregate Revolving Credit Commitments shall become effective, each Revolving
Credit Lender increasing its Revolving Credit Commitment and each existing
Lender or new bank or financial institution assuming a Revolving Credit
Commitment shall pay to the Administrative Agent such amount as may be necessary
so that such Revolving Credit Lender's or such existing Lender's or such new
bank's or financial institution's outstanding principal balance of Revolving
Credit Loans shall equal its Commitment Percentage of the aggregate outstanding
principal balance of the Revolving Credit Loans after giving effect to such
increase, and the Administrative Agent shall distribute such amounts among the
other Lenders accordingly.
(d) Upon any increase of the Aggregate Revolving Credit
Commitments pursuant to this Section, (i) the Administrative Agent shall revise
Exhibit A and Schedule 1.1 accordingly and (ii) the Borrower shall issue to each
such Revolving Credit Lender increasing its Revolving Credit Commitment and each
such existing Lender or each such new bank or financial institution assuming a
Revolving Credit Commitment pursuant to this Section 2.7 a Revolving Credit Note
in the aggregate principal amount equal to such Revolving Credit Lender's or
such existing Lender's or such new bank's or financial institution's new
Revolving Credit Commitment, in form and substance satisfactory to the
Administrative Agent.
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<PAGE> 41
*CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL
PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY
2.8. Prepayments of the Loans.
(a) Voluntary Prepayments. The Borrower may, at its option,
prepay the Loans, in whole or in part, at any time and from time to time, by
notifying the Administrative Agent in writing at least one Business Day prior to
the proposed prepayment date in the case of ABR Advances, and at least three
Business Days prior to the proposed prepayment date in the case of Eurodollar
Advances, in each case specifying (i) whether the Loans to be prepaid consist of
(A) Revolving Credit Loans and/or Tranche A Term Loans and Tranche B Term Loans,
and (B) an ABR Advance, a Eurodollar Advance or a combination thereof, (ii) the
amount to be prepaid and (iii) the date of prepayment. Such notice shall be
irrevocable and the payment amount specified in such notice shall be due and
payable on the date specified, together with accrued interest to the date of
such payment on the amount prepaid. Upon receipt of such notice, the
Administrative Agent shall promptly notify each Lender in respect thereof.
Partial prepayments of the Loans shall be in an aggregate principal amount of
$1,000,000 or such amount plus a whole multiple of $100,000 or, if less, the
outstanding principal balance of the Loans. After giving effect to any partial
prepayment with respect to Eurodollar Advances which were made (whether as the
result of a borrowing or a conversion) on the same date and which had the same
Interest Period, the outstanding principal amount of such Eurodollar Advances
made (whether as the result of a borrowing or a conversion) shall not be less
than (subject to Section 2.9) $500,000.
(b) Mandatory Prepayments of Revolving Credit Loans Relating
to Reductions of the Aggregate Revolving Credit Commitments. Simultaneously with
each reduction of the Aggregate Revolving Credit Commitments under Section 2.6,
the Borrower shall prepay the Revolving Credit Loans by the amount, if any, by
which the aggregate unpaid principal balance of the Revolving Credit Loans
exceeds the amount of the Aggregate Revolving Credit Commitments as so reduced.
(c) Excess Cash Flow Prepayments. On the date which is 90 days
after the end of each fiscal year, the Borrower shall make a prepayment (to be
applied as set forth in Section 2.8(f)) in an aggregate amount equal to the
following: (i) if the Leverage Ratio at the end of such fiscal year is greater
than *, the lesser of (A) 80% of Excess Cash Flow (the "Maximum Excess Cash Flow
Amount") and (B) an amount equal to the sum of (1) the portion of the Maximum
Excess Cash Flow Amount which will reduce the Leverage Ratio to * at the end of
such fiscal year, plus (2) 50% of the amount equal to Excess Cash Flow minus
such portion referred to in clause (B)(1)
<PAGE> 42
*CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL
PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY
above, or (ii) if the Leverage Ratio at the end of such fiscal year is less than
or equal to *, 50% of Excess Cash Flow.
(d) Mandatory Prepayments Relating to Sales of Property. The
Borrower shall make a prepayment (to be applied as set forth in Section 2.8(f))
in the amounts, at the times and to the extent required by Section 8.8(ii)(e) in
connection with the sale of Property by any of the Restricted Subsidiaries
(other than sales in the ordinary course of business).
(e) Mandatory Prepayments Relating to Insurance. The Borrower
shall make a prepayment (to be applied as set forth in Section 2.8(f)) in the
amounts, at the times and to the extent required by Section 7.5(b) in connection
with the receipt of insurance proceeds.
(f) Application of Prepayments.
(i) Each prepayment of the Term Loans pursuant to Section
2.8(a) shall be applied pro rata against the outstanding principal balance of
the Tranche A Term Loans and the Tranche B Term Loans and against the remaining
installments of principal required to be paid pursuant to Sections 2.4(a)(ii)
and 2.4(b)(ii), as the case may be, pro rata against such installments.
(ii) Each prepayment pursuant to Section 2.8(c) shall be
applied to the prepayment of the Term Loans pro rata against the outstanding
principal balance of the Tranche A Term Loans and the Tranche B Term Loans and
against the remaining installments of principal required to be paid pursuant to
Sections 2.4(a)(ii) and 2.4(b)(ii), as the case may be, in the inverse order of
the maturity thereof.
(iii) Each prepayment pursuant to Section 2.8(d) or (e)
shall be applied to the prepayment of the Term Loans pro rata against the
outstanding principal balance of the Tranche A Term Loans and the Tranche B Term
Loans and against the remaining installments of principal required to be paid
pursuant to Sections 2.4(a)(ii) and 2.4(b)(ii), as the case may be, pro rata
against such installments.
(iv) If after applying all or any portion of a prepayment
required by Section 2.8(d) or (e) to the prepayment of the Term Loans as
provided by clause (iii) above, the Term Loans shall have been paid in full or,
if at the time of such prepayment no Term Loans are outstanding, such portion of
such prepayment (or all thereof) not applied to the prepayment of the Term Loans
shall be applied to the permanent reduction of the Aggregate Revolving Credit
Commitments pursuant to Section 2.6(c) and to the prepayment of the Revolving
Credit Loans pursuant to and to the extent required by Section 2.8(b).
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<PAGE> 43
(g) In General. Unless otherwise specified by the Borrower,
each prepayment of the Loans shall first be applied to ABR Advances. If any
prepayment is made in respect of any Eurodollar Advance, in whole or in part,
prior to the last day of the applicable Interest Period, the Borrower agrees to
indemnify the Lenders in accordance with Section 2.15.
2.9. Conversions and Continuations.
(a) The Borrower may elect from time to time to convert its
Eurodollar Advances to ABR Advances giving the Administrative Agent at least one
Business Day's prior irrevocable notice of such election (confirmed by the
delivery of a Notice of Conversion/Continuation), specifying (A) whether such
ABR Advance is to comprise all or a portion of the Revolving Credit Loans, the
Tranche A Term Loans or the Tranche B Term Loans, (B) the amount to be so
converted and (C) the Interest Period relating thereto. In addition, the
Borrower may elect from time to time to (i) convert its ABR Advances to
Eurodollar Advances and (ii) to continue its Eurodollar Advances by selecting a
new Interest Period therefor, in each case giving the Administrative Agent at
least three Business Days' prior irrevocable notice of such election (confirmed
by the delivery of a Notice of Conversion/Continuation), in the case of a
conversion to or continuation of Eurodollar Advances, specifying (A) whether
such Eurodollar Advance is to comprise all or a portion of the Revolving Credit
Loans, the Tranche A Term Loans or the Tranche B Term Loans, (B) the amount to
be so converted and (C) the Interest Period relating thereto, provided that any
such conversion of ABR Advances to Eurodollar Advances shall only be made on a
Business Day and any such conversion or continuation of Eurodollar Advances
shall only be made on the last day of the Interest Period applicable to the
Eurodollar Advances which are to be converted to ABR Advances or continued as
new Eurodollar Advances. The Administrative Agent shall promptly provide the
applicable Class of Lenders with a copy of each such Notice of
Conversion/Continuation. ABR Advances and Eurodollar Advances may be converted
or continued pursuant to this Section in whole or in part, provided that
conversions of ABR Advances to Eurodollar Advances or continuations of
Eurodollar Advances, shall be in an aggregate principal amount of $500,000 or
such amount plus a whole multiple of $100,000. If, with respect to any
conversion of a Loan from one interest rate basis to another, the Borrower shall
fail to give due notice as provided in this Section, such Loan shall be
automatically converted to an ABR Advance upon the expiration of the Interest
Period with respect thereto.
(b) Notwithstanding anything in this Section to the contrary,
no ABR Advance may be converted to a Eurodollar Advance, and no Eurodollar
Advance may be continued, if the Borrower or the Administrative Agent has
knowledge that a Default or Event of Default has occurred and is continuing
either (i) at the time the Borrower shall
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<PAGE> 44
notify the Administrative Agent of its election to convert or continue or (ii)
on the requested Conversion/Continuation Date. In such event, such ABR Advance
shall be automatically continued as an ABR Advance or such Eurodollar Advance
shall be automatically converted to an ABR Advance on the last day of the
Interest Period applicable to such Eurodollar Advance. If an Event of Default
shall have occurred and be continuing, the Administrative Agent shall, at the
request of the Required Lenders, notify the Borrower (by telephone or otherwise)
that all, or such lesser amount as the Administrative Agent and the Required
Lenders shall designate, of the outstanding Eurodollar Advances shall be
automatically converted to ABR Advances, in which event such Eurodollar Advances
shall be automatically converted to ABR Advances on the date such notice is
given. In the event that Eurodollar Advances are converted to ABR Advances at
the request of the Required Lenders pursuant to the preceding sentence, no
Lender shall be entitled to an indemnity described in Section 2.15 with respect
to the Eurodollar Advances so converted.
(c) Each conversion or continuation shall be effected by each
member of the applicable Class of Lenders by applying the proceeds of its new
ABR Advance or Eurodollar Advance, as the case may be, to its Advances (or
portion thereof) being converted or continued (it being understood that such
conversion or continuation shall not constitute a borrowing for purposes of
Sections 4, 5 or 6). Accrued interest on the Advance (or portion thereof) being
converted shall be paid by the Borrower at the time of conversion.
(d) Without in any way limiting the obligation of the Borrower
to confirm in writing any telephonic notice of a conversion or continuation
given to the Administrative Agent, the Administrative Agent may act without
liability upon the basis of telephonic notice of such conversion or continuation
believed by the Administrative Agent in good faith to be from an authorized
officer of the Borrower prior to receipt of written confirmation. In each such
case, the Borrower waives the right to dispute the Administrative Agent's record
of the terms of such telephone notice of such conversion or continuation.
(e) Except as provided in the last sentence of subsection (b)
above, if any prepayment is made under this Section with respect to any
Eurodollar Advances, in whole or in part, prior to the last day of the
applicable Interest Period, the Borrower agrees to indemnify the Lenders in
accordance with Section 2.15.
2.10. Interest Rate and Payment Dates.
(a) Prior to Maturity. Prior to maturity, the outstanding
principal balance of the Loans shall bear interest on the unpaid principal
amount thereof at the applicable interest rate or rates per annum set forth
below:
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<PAGE> 45
ADVANCES RATE
Each ABR Advance Alternate Base Rate plus the
Applicable Margin applicable to ABR Advances.
Each Eurodollar Advance Eurodollar Rate for the applicable
Interest Period plus the Applicable Margin applicable to
Eurodollar Advances.
(b) Late Charges. If all or any portion of the principal
amount of or interest payable on any of the Loans or any other amount payable by
the Borrower to the Administrative Agent or any Lender under the Loan Documents
shall not be paid when due (whether at the stated maturity thereof, by
acceleration or otherwise), such overdue principal shall bear interest at a rate
of interest per annum equal to 2% above the rate which would otherwise be
applicable pursuant to Section 2.10(a) and such overdue interest or other amount
shall, to the extent permitted by law, bear interest at a rate per annum equal
to the Alternate Base Rate plus the Applicable Margin plus 2%, in each case from
the date of such nonpayment until paid in full (before as well as after
judgment). All such interest shall be payable on demand.
(c) In General. Interest on (i) ABR Advances to the extent
based on the BNY Rate shall be calculated on the basis of a 365 or 366- day year
(as the case may be) and (ii) ABR Advances to the extent based on the Federal
Funds Rate and Eurodollar Advances shall be calculated on the basis of a 360-day
year, in each case for the actual number of days elapsed, including the first
day but excluding the last. Except as otherwise provided in Section 2.10(b),
interest on each Loan shall be payable in arrears on each Interest Payment Date
applicable thereto and upon payment (including prepayment) in full thereof. Any
change in the interest rate on a Loan resulting from a change in the Alternate
Base Rate shall become effective as of the opening of business on the day on
which such change in the Alternate Base Rate shall become effective. The
Administrative Agent shall, as soon as practicable following request therefor,
notify the Borrower and the Lenders of the effective date and the amount of each
such change in the Alternate Base Rate, but any failure to so notify shall not
in any manner affect the obligation of the Borrower to pay interest on the Loans
in the amounts and on the dates required. Each determination of the Alternate
Base Rate or a Eurodollar Rate by the Administrative Agent pursuant to this
Agreement shall be conclusive and binding on the Borrower and the Lenders absent
manifest error. At no time shall the interest rate payable on the Loans,
together with the Commitment Fees and all other fees and other amounts payable
under the Loan Documents, to the extent same are construed to constitute
interest, exceed the Highest Lawful Rate. If interest payable to a Lender on any
date would exceed the maximum amount per-
<PAGE> 46
mitted by the Highest Lawful Rate, such interest payment shall automatically be
reduced to such maximum permitted amount, and interest for any subsequent
period, to the extent less than the maximum amount permitted for such period by
the Highest Lawful Rate, shall be increased by the unpaid amount of such
reduction. Any interest actually received for any period in excess of such
maximum allowable amount for such period shall be deemed to have been applied as
a prepayment of the Loans. The Borrower acknowledges that to the extent interest
payable on the ABR Advances is based on the BNY Rate, the BNY Rate is only one
of the bases for computing interest on loans made by the Lenders, and by basing
interest payable on the ABR Advances on the BNY Rate, the Lenders have not
committed to charge, and the Borrower has not in any way bargained for, interest
based on a lower or the lowest rate at which the Lenders may now or in the
future make loans to other borrowers.
2.11. Substituted Interest Rate
In the event that (i) the Administrative Agent shall have
determined (which determination shall be conclusive and binding upon the
Borrower) that by reason of circumstances affecting the interbank eurodollar
market either adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate applicable pursuant to Section 2.10 or (ii) the Required Lenders
shall have notified the Administrative Agent that they have determined (which
determination shall be conclusive and binding on the Borrower) that the
applicable Eurodollar Rate will not adequately and fairly reflect the cost to
such Lenders of maintaining or funding loans bearing interest based on such
Eurodollar Rate, with respect to any portion of the Loans that the Borrower has
requested be made as Eurodollar Advances or Eurodollar Advances that will result
from the requested conversion of any portion of the Loans into Eurodollar
Advances (each, an "Affected Advance"), the Administrative Agent shall promptly
notify the Borrower and the Lenders (by telephone or otherwise, to be promptly
confirmed in writing) of such determination, on or, to the extent practicable,
prior to the requested Borrowing Date or Conversion/Continuation Date for such
Affected Advances. If the Administrative Agent shall give such notice, (a) any
Affected Advances shall be made as ABR Advances, (b) the Loans (or any portion
thereof) that were to have been converted to Affected Advances shall be
converted to ABR Advances and (c) any outstanding Affected Advances shall be
converted, on the last day of the then current Interest Period with respect
thereto, to ABR Advances. Until any notice under clauses (i) or (ii), as the
case may be, of this Section has been withdrawn by the Administrative Agent (by
notice to the Borrower promptly upon either (x) the Administrative Agent having
determined that such circumstances affecting the interbank eurodollar market no
longer exist and that adequate and reasonable means do exist for determining the
Eurodollar Rate pursuant to Section 2.10 or (y) the Administrative Agent having
been notified by such Required Lenders that circumstances no longer render the
Loans (or any portion thereof) Affected Advances, no further Eurodollar Advances
shall be required to be made by the Lenders, nor shall the Borrower have the
right to convert all or any portion of the Loans to Eurodollar Advances.
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2.12. Taxes.
(a) Payments to Be Free and Clear. Provided that all
documentation, if any, then required to be delivered by any Lender or the
Administrative Agent pursuant to subsection (c) has been delivered, all sums
payable by the Borrower under the Loan Documents shall be paid free and clear of
and (except to the extent required by law) without any deduction or withholding
on account of any Tax (other than a Tax on the Overall Net Income of any Lender
(for which payment need not be free and clear but no deduction or withholding
shall be made unless then required by applicable law)) imposed, levied,
collected, withheld or assessed by or within the United States or any political
subdivision in or of the United States or any other jurisdiction from or to
which a payment is made by or on behalf of the Borrower or by any federation or
organization of which the United States or any such jurisdiction is a member at
the time of payment.
(b) Grossing-up of Payments. If the Borrower or any other
Person is required by law to make any deduction or withholding on account of any
such Tax from any sum paid or payable by the Borrower to the Administrative
Agent or any Lender under any of the Loan Documents:
(i) The Borrower shall notify the Administrative Agent and
such Lender of any such requirement or any change in any such requirement as
soon as the Borrower becomes aware of it;
(ii) The Borrower shall pay any such Tax before the date
on which penalties attach thereto, such payment to be made (if the liability to
pay is imposed on the Borrower) for its own respective account or (if that
liability is imposed on the Administrative Agent or such Lender, as the case may
be) on behalf of and in the name of the Administrative Agent or such Lender;
(iii) the sum payable by the Borrower to the
Administrative Agent or a Lender in respect of which the relevant deduction,
withholding or payment is required shall be increased to the extent necessary to
ensure that, after the making of that deduction, withholding or payment, the
Administrative Agent or such Lender, as the case may be, receives on the due
date therefor a net sum equal to what it would have received had no such
deduction, withholding or payment been required or made; and
(iv) within 30 days after paying any sum from which it is
required by law to make any deduction or withholding, and within 30 days after
the due date of payment of any Tax which it is required by clause (b) above to
pay, the Borrower shall deliver to the Administrative Agent and the applicable
Lender evidence
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<PAGE> 48
satisfactory to the other affected parties of such deduction, withholding or
payment and of the remittance thereof to the relevant Governmental Body;
provided that no such additional amount shall be required to be paid to any
Lender under clause (iii) above except to the extent that any change after the
date hereof (in the case of each Lender listed on the signature pages hereof) or
after the date of the Assignment and Acceptance Agreement pursuant to which such
Lender became a Lender (in the case of each other Lender) in any such
requirement for a deduction, withholding or payment as is mentioned therein
shall result in an increase in the rate of such deduction, withholding or
payment from that in effect at the date of this Agreement or at the date of such
Assignment and Acceptance, as the case may be, in respect of payments to such
Lender.
(c) U.S. Tax Certificates. Each Lender that is organized under
the laws of any jurisdiction other than the United States shall deliver to the
Administrative Agent for transmission to the Borrower, on or prior to the
Restatement Effective Date (in the case of each Lender listed on the signature
pages hereof) or on the effective date of the Assignment and Acceptance
Agreement pursuant to which it becomes a Lender (in the case of each other
Lender), and at such other times as may be necessary in the determination of the
Borrower or the Administrative Agent (each in the reasonable exercise of its
discretion), such certificates, documents or other evidence, properly completed
and duly executed by such Lender (including, without limitation, Internal
Revenue Service Form 1001 or Form 4224 or any other certificate or statement of
exemption required by Treasury Regulations Section 1.1441- 4(a) or Section
1.1441-6(c) or any successor thereto) to establish that such Lender is not
subject to deduction or withholding of United States federal income tax under
Section 1441 or 1442 of the Code or otherwise (or under any comparable
provisions of any successor statute) with respect to any payments to such Lender
of principal, interest, fees or other amounts payable under any of the Loan
Documents. In the event that a Non-U.S. Lender which is not a "bank" within the
meaning of Section 881(c)(3)(A) of the Code cannot deliver either of such forms
but can legally claim exemption from such deduction or withholding if its Loans
were in registered form, such Lender may request the issuance to it of
Registered Notes pursuant to Section 2.21. The Borrower shall not be required to
pay any additional amount to any such Lender under subsection (b)(iii) if such
Lender shall have failed to provide the Borrower and the Administrative Agent
with either (i) Internal Revenue Service Form 1001 or Form 4224 or any other
certificate or statement of exemption required by Treasury Regulations Section
1.1441-4(a) or Section 1.1441- 6(c) or any successor thereto or (ii) the
certificate and Internal Revenue Service Form W-8 as provided by Section
2.21(b), in each case together with such other certificates, documents or other
evidence as may be required by the Borrower or the Administrative Agent.
Notwithstanding the foregoing, if such Lender shall have satisfied such
requirements on the Restatement Effective Date (in the case of each Lender
listed on the signature pages hereof) or on the effective date of the Assignment
and Acceptance
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<PAGE> 49
Agreement pursuant to which it became a Lender (in the case of each other
Lender), nothing in this subsection shall relieve the Borrower of its obligation
to pay any additional amounts pursuant to subsection (b)(iii) in the event that,
as a result of any change in applicable law, such Lender is no longer properly
entitled to deliver certificates, documents or other evidence at a subsequent
date establishing the fact that such Lender is not subject to withholding as
described in the immediately preceding sentence.
2.13. Illegality.
Notwithstanding any other provisions herein, if any law,
regulation, treaty or directive, or any change therein or in the interpretation
or application thereof, shall make it unlawful for any Lender to make or
maintain its Eurodollar Advances as contemplated by this Agreement, (a) the
commitment of such Lender hereunder to make Eurodollar Advances or convert ABR
Advances to Eurodollar Advances, as the case may be, shall forthwith be
suspended and (b) such Lender's Loans then outstanding as Eurodollar Advances
affected hereby, if any, shall be converted automatically to ABR Advances on the
last day of the then current Interest Period applicable thereto or within such
earlier period as required by law. If the commitment of any Lender with respect
to Eurodollar Advances is suspended pursuant to this Section and such Lender
shall notify the Administrative Agent and the Borrower that it is once again
legal for such Lender to make or maintain Eurodollar Advances, such Lender's
commitment to make or maintain such Eurodollar Advances shall be reinstated.
2.14. Increased Costs.
In the event that any law, regulation, treaty or directive
enacted or promulgated, approved or issued after the Relevant Date, or any
change after the Relevant Date in any presently existing law, regulation, treaty
or directive therein or in the interpretation or application thereof by any
Governmental Body charged with the administration thereof or compliance by any
Lender (or any corporation directly or indirectly owning or controlling such
Lender) with any request or directive from any central bank or other
Governmental Body:
(a) does or shall subject any Lender to any Tax of any kind
whatsoever with respect to any Eurodollar Advances or its obligations under this
Agreement to make Eurodollar Advances, or change the basis of taxation of
payments to any Lender of principal, interest or any other amount payable
hereunder in respect of its Eurodollar Advances, including any Tax required to
be withheld from any amounts payable under the Loan Documents (except for
imposition of, or change in the rate of, Tax on the Overall Net Income of such
Lender or its Applicable Lending Office by the jurisdiction in which such Lender
is incorporated or has its principal office or such
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<PAGE> 50
Applicable Lending Office, including, in the case of Lenders incorporated in any
state in the United States, such tax imposed by the United States); or
(b) does or shall impose, modify or make applicable any
reserve, special deposit, compulsory loan, assessment, increased cost or similar
requirement against assets held by, or deposits of, or advances or loans by, or
other credit extended by, or any other acquisition of funds by, any office of
such Lender in respect of its Eurodollar Advances which is not otherwise
included in the determination of the Eurodollar Rate;
and the result of any of the foregoing is to increase the cost to such Lender of
making, renewing, converting or maintaining its Eurodollar Advances hereunder or
its commitment to make such Loans, or to reduce any amount receivable hereunder
in respect of its Eurodollar Advances, then, in any such case, the Borrower
shall, within 10 days of such Lender's demand therefor, pay such Lender any
additional amounts necessary to compensate such Lender for such additional cost
or reduction in such amount receivable which such Lender deems to be material as
determined by such Lender, provided, however, that nothing in this Section shall
require the Borrower to indemnify the Lenders with respect to withholding Taxes
for which the Borrower has no obligation under Section 2.12. No failure by any
Lender to demand compensation for any increased cost under this Section shall
constitute a waiver of such Lender's right to demand such compensation at any
time, provided that such Lender shall notify the Borrower of any such increased
cost within 90 days after the officer of such Lender having primary
responsibility for this Agreement has obtained knowledge of such increased cost.
A statement in reasonable detail setting forth the calculations of any
additional amounts payable pursuant to the foregoing sentence submitted by a
Lender to the Borrower shall be conclusive absent manifest error. Nothing in
this Section is intended to affect the right of the Existing Lenders to payment
of amounts under this Section for the period prior to the Restatement Effective
Date and such right shall be determined under the provisions of the Existing
Credit Agreement.
2.15. Indemnification for Loss.
(a) Notwithstanding anything contained herein to the contrary
but subject to Section 2.20, if the Borrower shall fail to borrow or convert or
continue on a Borrowing Date or Conversion/Continuation Date after the Borrower
shall have given notice to do so in which it shall have requested a Eurodollar
Advance pursuant to Section 2.5(a) or 2.9 or if a Eurodollar Advance shall be
terminated for any reason (subject the last sentence of Section 2.9(b)), prior
to the last day of the Interest Period applicable thereto, or if, while a
Eurodollar Advance is outstanding, any repayment or prepayment of such
Eurodollar Advance is made or deemed made for any reason (including, without
limitation, as a result of acceleration or illegality) on a date which is prior
to the last day of the Interest Period applicable thereto, the Borrower agrees
to indemnify each Lender
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<PAGE> 51
against, and to pay directly to such Lender within ten days after such Lender's
demand therefor, any loss or expense suffered by such Lender as a result of such
failure to borrow, termination or repayment, including without limitation, an
amount, if greater than zero, equal to:
A x (B-C) x D
360
where:
"A" equals such Lender's pro rata share of the Affected Principal Amount;
"B" equals the Eurodollar Rate (expressed as a decimal) applicable to such
Advance;
"C" equals the applicable Eurodollar Rate (expressed as a decimal) in effect on
or about the first day of the applicable Remaining Interest Period, based on the
applicable rates offered or bid on or about such date, for deposits in an amount
equal approximately to such Lender's pro rata share of the Affected Principal
Amount with an Interest Period equal approximately to the applicable Remaining
Interest Period, as determined by the Administrative Agent;
"D" equals the number of days from and including the first day of the applicable
Remaining Interest Period to but excluding the last day of such Remaining
Interest Period;
and any other out-of-pocket loss or expense (including any internal processing
charge customarily charged by such Lender) suffered by such Lender in
liquidating or employing deposits acquired to fund or maintain the funding of
the Affected Principal Amount, or redeploying funds prepaid or repaid, in
amounts which correspond to such Lender's pro rata share of such proposed
borrowing, conversion, terminated Eurodollar Advance, prepayment or repayment.
Each determination by the Administrative Agent or a Lender pursuant to this
Section shall be conclusive and binding on the Borrower absent manifest error.
Each Lender has indicated that, if the Borrower elects to borrow or convert to
or continue Eurodollar Advances, such Lender may wish to purchase one or more
deposits in order to fund or maintain its funding of its Eurodollar Advances
during the Interest Period in question; it being understood that the provisions
of this Agreement relating to such funding are included only for the purpose of
determining the rate of interest to be paid on such Eurodollar Advances and for
purposes of determining amounts owing under Sections 2.12, 2.14 and 2.15. Each
Lender shall be entitled to fund and maintain its funding of all or any part of
each Eurodollar Advance made by it in any manner it sees fit, but all such
determinations shall be made as if such Lender had actually funded and
maintained its funding of such Eurodollar Advance during the ap-
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<PAGE> 52
plicable Interest Period through the purchase of deposits in an amount equal to
such Eurodollar Advance and having a maturity corresponding to such Interest
Period.
2.16. Survival of Certain Obligations.
The obligations of each of the Borrower and the Parent under
Sections 2.11, 2.12, 2.13, 2.14, 2.15, 2.18, 12.5 and 12.10 shall survive the
termination of the Aggregate Commitments, the payment of the Notes and all other
amounts payable under the Loan Documents.
2.17. Use of Proceeds.
The proceeds of the Loans shall be used solely, directly or
indirectly, (i) on the Restatement Effective Date, to finance a portion of the
purchase price of the Westlink Acquisition and to repay in full the Existing
Westlink Bank Indebtedness, (ii) for the Restricted Subsidiaries' general
corporate purposes not inconsistent with the provisions hereof, including,
without limitation, to finance Acquisitions to the extent permitted by Section
8.6, for Capital Expenditures, for working capital purposes and (iii) to pay the
reasonable out-of- pocket fees and expenses incurred by the Borrower in
connection with the transactions contemplated by the Transaction Documents.
Notwithstanding anything to the contrary contained in any Loan Document, the
Borrower agrees that no part of the proceeds of any Loan will be used, directly
or indirectly, for a purpose which violates any law, including, without
limitation, the provisions of Regulations G, U or X of the Board of Governors of
the Federal Reserve System, as amended.
2.18. Capital Adequacy.
If (i) the enactment or promulgation of, or any change or
phasing in of, any United States or foreign law or regulation or in the
interpretation thereof after the Relevant Date by any Governmental Body charged
with the administration thereof, (ii) compliance with any directive or guideline
from any central bank or United States or foreign Governmental Body (whether
having the force of law) promulgated or made after the Relevant Date, or (iii)
compliance with the Risk-Based Capital Guidelines of the Board of Governors of
the Federal Reserve System as set forth in 12 CFR Parts 208 and 225, or of the
Comptroller of the Currency, Department of the Treasury, as set forth in 12 CFR
Part 3, or similar legislation, rules, guidelines, directives or regulations of
any applicable United States or foreign Governmental Body affects or would
affect the amount of capital required to be maintained by a Lender (or any
lending office of such Lender) or any corporation directly or indirectly owning
or controlling such Lender, or imposes any restriction on or otherwise adversely
affects such Lender (or any lending office of such Lender) or any corporation
directly or indirectly owning or controlling such Lender, and such Lender shall
have determined that such enactment, promulgation,
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<PAGE> 53
change or compliance has the effect of reducing the rate of return on such
Lender's capital or the asset value to such Lender of any Loan made by such
Lender as a consequence, directly or indirectly, of its obligations to make and
maintain the funding of its Loans at a level below that which such Lender could
have achieved but for such enactment, promulgation, change or compliance (after
taking into account such Lender's policies regarding capital adequacy) by an
amount deemed by such Lender to be material, then, upon demand by such Lender,
the Borrower shall promptly pay to such Lender such additional amount or amounts
as shall be sufficient to compensate such Lender for such reduction in such rate
of return or asset value. A certificate in reasonable detail as to such amounts
submitted to the Borrower and the Administrative Agent setting forth the
determination of such amount or amounts that will compensate such Lender for
such reductions shall be presumed correct absent manifest error. Nothing in this
Section is intended to affect the right of the Existing Lenders to payment of
amounts under this Section for the period prior to the Restatement Effective
Date and such right shall be determined under the provisions of the Existing
Credit Agreement.
2.19. Substitution of Lender.
(a) In the event that the Borrower becomes obligated to pay
additional amounts to any Lender pursuant to Sections 2.12, 2.14 or 2.18 in an
aggregate amount in excess of $50,000, the Borrower may, within 60 days of the
demand by such Lender for such additional amounts in excess of $50,000, (i)
request one or more of the other Lenders (a "Replacement Lender") to elect to
increase its Revolving Credit Commitment or assume a Revolving Credit
Commitment, as the case may be, by an amount up to the amount of the Revolving
Credit Commitment of such Lender (a "Replaced Lender") and purchase the Term
Loans of such Replaced Lender or (ii) designate another lender (also a
"Replacement Lender") reasonably acceptable to the Administrative Agent and the
Lenders (other than such Replaced Lender) willing to assume the Revolving Credit
Commitment, and purchase the Term Loans, of such Replaced Lender. Upon the
Revolving Credit Commitment and Term Loans of such Replaced Lender being taken
up by a Replacement Lender, such Replacement Lender shall assume the Revolving
Credit Commitment and Term Loans of such Replaced Lender by purchasing such
Replaced Lender's Notes without recourse or warranty (except as to the amount
due thereon, its title to such Notes and its right to sell the same), at a price
in immediately available funds equal to the outstanding principal balance of
such Replaced Lender's Loans, together with accrued and unpaid interest thereon
to the date of such assumption and purchase, accrued and unpaid Commitment Fees
due to such Replaced Lender and any other amounts due to such Replaced Lender
under the Loan Documents. Effective upon such sale, each Replacement Lender
shall be deemed to be a "Lender" for purposes of this Agreement, and such
Replaced Lender shall cease to be a "Lender" for all purposes of this Agreement
(except with respect to its rights hereunder to be reimbursed for costs and
expenses, and to indemnification, with respect to matters attributable to
events, acts
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or conditions occurring prior to such assumption and purchase) and shall no
longer have any obligations hereunder. The Borrower shall execute and deliver to
such Replacement Lender Notes in an aggregate principal amount equal to the
Loans assigned to, and the Commitment assumed by, such Replacement Lender.
(b) Notwithstanding anything herein to the contrary, a
Replaced Lender shall be entitled to receive the additional amounts to which it
would be entitled pursuant to Section 2.12, 2.14, 2.15 or 2.18 had it not been
replaced pursuant hereto.
2.20. Certain Adjustments to Revolving Credit Lenders' Revolving Credit
Loans and Commitment Percentages.
(a) Certain Sales of Revolving Credit Loans. In the event that
as the result of the occurrence of any Adjustment Event, any Revolving Credit
Lender's Commitment Percentage is greater or less than such Revolving Credit
Lender's Commitment Percentage immediately before the occurrence of such
Adjustment Event, whether as the result of new Revolving Credit Lenders becoming
parties hereto, an increase in the Revolving Credit Commitment of any Revolving
Credit Lender or otherwise, each Revolving Credit Lender whose Commitment
Percentage is increasing and each new Revolving Credit Lender assuming a
Revolving Credit Commitment (each a "Purchasing Lender") shall pay to the
Administrative Agent for the account of each Revolving Credit Lender whose
Commitment Percentage is decreasing (each a "Selling Lender"), such amount as
may be necessary so that the outstanding principal balance of Revolving Credit
Loans of each Purchasing Lender and each Selling Lender, respectively, shall
equal its Commitment Percentage of the aggregate outstanding principal balance
of all Revolving Credit Loans after giving effect to such Adjustment Event, and
the Administrative Agent shall distribute such amounts among the Selling Lenders
accordingly. Such amounts shall be paid by each Purchasing Lender on the
applicable Adjustment Event Date in immediately available funds.
(b) Compensation of Selling Lenders. For purposes of Section
2.15, each sale or adjustment under subsection (a) shall be deemed to be a
partial prepayment by the Borrower, on the applicable Adjustment Event Date, of
each Eurodollar Advance then outstanding (an "Affected Eurodollar Advance").
Each Selling Lender shall be entitled to compensation payable on the Applicable
Adjustment Event Date in an amount equal to the amount determined under Section
2.15 (calculated on the assumption that the Borrower had repaid such Affected
Eurodollar Advance in full on the applicable Adjustment Event Date) multiplied
by a fraction, the numerator of which is such Selling Lender's Commitment
Percentage immediately after the Adjustment Event and the denominator of which
is such Selling Lender's Commitment Percentage immediately before the Adjustment
Event.
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(c) Compensation of Purchasing Lenders. Each Purchasing Lender
shall be entitled to compensation with respect to an Affected Eurodollar Advance
only if the Eurodollar Rate in effect two Business Days prior to the applicable
Adjustment Event Date (as may reasonably be determined by such Purchasing
Lender) exceeds the Eurodollar Rate applicable to such Affected Eurodollar
Advance. In such event, each Purchasing Lender shall be entitled to compensation
payable on the last day of the Interest Period applicable to such Affected
Eurodollar Advance in the amount determined under Section 2.15 (calculated on
the assumption that such Affected Eurodollar Advance was terminated prior to the
last day of the Interest Period applicable thereto and that such Purchasing
Lender was a Lender on the first day of such Interest Period), provided,
however, that in applying the formula set forth in Section 2.15, "A" shall be
such Purchasing Lender's Commitment Percentage immediately after the Adjustment
Event Date minus its Commitment Percentage, if any, immediately before the
Adjustment Event Date; "C" shall be the Eurodollar Rate in effect two Business
Days prior to the applicable Adjustment Event Date and "D" shall be the number
of days from and including the applicable Adjustment Event Date to but excluding
the last day of such Interest Period.
(d) For purposes of this Section, references to "Commitment
Percentage" shall refer to the Commitment Percentage applicable to Revolving
Credit Loans.
2.21. Registered Notes.
(a) Any Non-U.S. Lender which is not a "bank" within the
meaning of Section 881(c)(3)(A) of the Code and which could become completely
exempt from withholding of U.S. Taxes in respect of payment of any obligations
due to such Lender under the Loan Documents relating to any of its Loans if such
Loans were in registered form for United States Federal income tax purposes may
request the Borrower (through the Administrative Agent), and the Borrower agrees
thereupon, (i) in the case of a Lender listed on the signature pages hereof, to
exchange such Lender's Revolving Credit Note, Tranche A Term Note and/or Tranche
B Term Note, as applicable, for a promissory note or notes registered as
provided in subsection (c) (each, a "Registered Note") and (ii) in the case of
each other Lender, to issue to such Lender a Registered Note as its Revolving
Credit Note, Tranche A Term Note and/or Tranche B Term Note, as applicable. A
Registered Note may not be exchanged for a Note that is not in registered form.
(b) Each Non-U.S. Lender holding a Registered Note (a
"Registered Noteholder") (or, if such Registered Noteholder is not the
beneficial owner thereof, such beneficial owner) shall deliver to the Borrower
and the Administrative Agent prior to or at the time such Non- U.S. Lender
becomes a Registered Noteholder, a Form W-8 (Certificate of Foreign Status of
the Department of Treasury of the United States ) (or
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such successor and related forms as may from time to time be adopted by the
relevant taxing authorities of the United States ). Each Registered Noteholder
shall also deliver to the Borrower and the Administrative Agent an annual
certificate stating that such Registered Noteholder or beneficial owner, as the
case may be, is not a "bank" within the meaning of section 881(c)(3)(A) of the
Code and is not otherwise described in Section 881(c)(3) of the Code. Each
Registered Noteholder or beneficial owner, as the case may be, shall promptly
notify the Borrower and the Administrative Agent if at any time such Registered
Noteholder or beneficial owner, as the case may be, determines that it is no
longer in a position to provide such certificate (or any other form of
certification adopted by the relevant taxing authorities of the United States
for such purposes).
(c) The Borrower shall maintain, or cause to be maintained, a
register (the "Register") (which shall be kept by the Administrative Agent on
behalf of the Borrower at no extra charge to the Borrower at the address of the
Administrative Agent set forth in Section 12.2) which shall set forth (i) the
names and addresses of each Lender, including, without limitation, each
registered owner of Loans evidenced by a Registered Note, (ii) whether such
Lender is a Revolving Credit Lender, a Tranche A Lender, a Tranche B Lender or a
combination of the foregoing, (iii) if such Lender is a Revolving Credit Lender,
the amount of its Revolving Credit Commitment and the principal amount of its
Revolving Credit Loans outstanding from time to time, (iv) if such Lender is a
Tranche A Lender, the principal amount of its Tranche A Term Loan outstanding
from time to time and (v) if such Lender is a Tranche B Lender, the principal
amount of its Tranche B Term Loan outstanding from time to time. The entries in
the Register shall be binding and conclusive for all purposes, absent manifest
error, and the Borrower, the Administrative Agent, the Co-Agents and each Lender
shall treat each Person whose name is recorded in the Register as a Lender for
all purposes under this Agreement.
(d) In addition to the requirements of Section 12.7, a
Registered Note and the Loans evidenced thereby may be assigned or otherwise
transferred in whole or in part only by registration of such assignment or
transfer of such Registered Note and the Loans evidenced thereby on the Register
(and each Registered Note shall expressly so provide). Any assignment or
transfer of all or part of such Loans and the Registered Note evidencing the
same shall be registered on the Register only upon compliance with the
requirements of Section 12.7 and surrender for registration of assignment or
transfer of the Registered Note evidencing such Loans, duly endorsed by (or
accompanied by a written instrument of assignment or transfer fully executed by)
the Registered Noteholder thereof, and thereupon one or more new Registered
Notes in the same aggregate principal amount shall be issued to the designated
assignee(s) or transferee(s). Prior to the due presentation for registration of
transfer of any Registered Note, the Borrower and the Administrative Agent shall
treat the Person in whose name such Loans and the Registered Note evidencing the
same is registered as the owner thereof for the
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purpose of receiving all payments thereon and for all other purposes,
notwithstanding any notice to the contrary.
(e) Each Registered Note shall bear the following legend:
[THIS IS A REGISTERED NOTE, AND THIS REGISTERED NOTE AND THE
[_______] LOANS EVIDENCED HEREBY MAY BE ASSIGNED OR OTHERWISE
TRANSFERRED IN WHOLE OR IN PART ONLY BY REGISTRATION OF SUCH
ASSIGNMENT OR TRANSFER ON THE REGISTER, TOGETHER WITH
COMPLIANCE WITH ALL OTHER REQUIREMENTS PROVIDED FOR IN THE
CREDIT AGREEMENT REFERRED TO BELOW.]
3. FEES; PAYMENTS
3.1. Commitment Fee.
The Borrower agrees to pay to the Administrative Agent, for
the account of the Revolving Credit Lenders in accordance with the Commitment
Percentage with respect to Revolving Credit Loans of each Revolving Credit
Lender, a fee (the "Commitment Fee"), during the Revolving Credit Commitment
Period equal to (i) when the Leverage Ratio is greater than or equal to
4.00:1.00, 0.500%, and (ii) when the Leverage Ratio is less than 4.00:1.00,
0.375%, per annum of the average daily unused portion of the Aggregate Revolving
Credit Commitments. The Commitment Fee shall be payable quarterly in arrears on
the last day of each March, June, September and December and on the date of the
expiration or other termination of the Revolving Credit Commitments. The
Commitment Fee shall be calculated on the basis of a 365 or 366-day year for the
actual number of days elapsed.
3.2. Agent's Fees
The Borrower agrees to pay to the Administrative Agent, for
its own account, such other fees as have been agreed to in writing by the
Borrower and the Administrative Agent.
3.3. Treatment and Application of Principal Payments.
Each borrowing by the Borrower of Loans, any conversion of
such Loans from one interest rate basis to another, and any reduction of any of
the Commitments
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shall be made pro rata according to the applicable Commitment Percentage of each
Lender. All payments (including prepayments) made by the Borrower to the
Administrative Agent on account of principal of or interest on the Revolving
Credit Loans, Tranche A Term Loans and Tranche B Term Loans shall be made to the
Lenders pro rata according to the outstanding principal amount of each Lender's
Revolving Credit Loans, Tranche A Term Loans and Tranche B Term Loans, as the
case may be. All payments by the Borrower shall be made without set-off or
counterclaim and shall be made prior to 12:00 noon on the date such payment is
due to the Administrative Agent for the account of the applicable Lenders at the
Administrative Agent's office specified in Section 12.2, in each case in lawful
money of the United States and in immediately available funds, and, as between
the Borrower and the Lenders, any payment by the Borrower to the Administrative
Agent for the account of the Lenders shall be deemed to be payment by the
Borrower to the Lenders. The failure of the Borrower to make any such payment to
the Administrative Agent by 12:00 noon on such due date shall not constitute a
Default or Event of Default hereunder, provided that such payment is made on
such due date, but any such payment received by the Administrative Agent on any
Business Day after 12:00 noon shall be deemed to have been received on the
immediately succeeding Business Day for the purpose of calculating any interest
payable in respect thereof. The Administrative Agent agrees promptly to notify
the Borrower if it shall receive any such payment after 12:00 noon on the due
date hereof, provided that the failure of the Administrative Agent to give such
prompt notice shall in no way affect the Borrower's obligation to make any
payment hereunder on the date such payment is due. The Administrative Agent
shall distribute such payments to the Lenders promptly upon receipt in like
funds as received. If any payment hereunder or on any Note becomes due and
payable on a day other than a Business Day, the maturity thereof shall be
extended to the next succeeding Business Day (unless, in the case of Eurodollar
Advances, the result of such extension would be to extend such payment into
another calendar month, in which event such payment shall be made on the
immediately preceding Business Day) and, with respect to payments of principal,
interest thereon shall be payable at the then applicable rate or rates during
such extension. Payments by the Borrower for the account of the Lenders shall,
if received by the Administrative Agent by 12:00 noon, be remitted to the
Lenders on the same day and such payments received by the Administrative Agent
after 12:00 noon on any day shall be remitted to the Lenders on the next
Business Day. If and to the extent the Administrative Agent shall not have
remitted funds received by it when required by the preceding sentence, the
Administrative Agent agrees to pay to the Lenders forthwith on demand interest
thereon for each day from the date such payment was required to be remitted to,
but not including, the date such amount is remitted to the Lenders at a rate per
annum equal to the Federal Funds Rate in effect on such date (as determined by
the Administrative Agent).
4. REPRESENTATIONS AND WARRANTIES
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In order to induce the Administrative Agent and the Lenders to enter
into this Agreement and to make the Loans, the Parent and the Borrower each
hereby makes the following representations and warranties as to itself and, as
the context may require, as to its Subsidiaries to the Administrative Agent and
to each Lender:
4.1. Subsidiaries; Capitalization.
As of the Restatement Effective Date and after giving effect
to the consummation of the Westlink Acquisition and the Westlink Merger, the
Parent has only the Subsidiaries set forth on Schedule 4.1. The issued and
outstanding shares of each corporate Subsidiary of the Parent are duly
authorized, validly issued, fully paid and nonassessable and are owned free and
clear of any Liens, except Permitted Liens. The interest of the Parent and any
of its Subsidiaries in each of its non-corporate Subsidiaries is owned free and
clear of any Liens, except Permitted Liens. The outstanding capital Stock of
each corporate Subsidiary of the Parent and the ownership interest in each
non-corporate Subsidiary of the Parent, in each case as of the Restatement
Effective Date, are as set forth on Schedule 4.1. The owner of each issue of
capital Stock listed on Schedule 4.1 is the registered and beneficial owner
thereof. None of the Restricted Subsidiaries has issued any securities
convertible into capital Stock (or other equity interest) and there are no
outstanding options or warrants to purchase capital Stock of any such Restricted
Subsidiary of any class or kind, and there are no agreements, voting trusts or
understandings with respect thereto or affecting in any manner the sale, pledge,
assignment or other disposition thereof, including, without limitation, any
right of first refusal, option, redemption, call or other rights with respect
thereto, whether similar or dissimilar to any of the foregoing. In addition, as
of the Restatement Effective Date, Arch Canada is the only Foreign Subsidiary of
the Parent and is a Non-Material Foreign Subsidiary.
4.2. Existence and Power.
The Parent and each Restricted Subsidiary is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation or formation, has all requisite legal power and authority to own
its Property and to carry on its business as now conducted, and is in good
standing and authorized to do business in each jurisdiction in which the failure
to be so authorized could reasonably be expected to have a Material Adverse
Effect.
4.3. Authority and Execution.
The Parent and each Restricted Subsidiary has full legal power
and authority to enter into, execute, deliver and carry out the terms of the
Transaction Documents to which it is a party, and, in the case of the Borrower,
to make the borrowings
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contemplated hereby, to execute, deliver and carry out the terms of the Notes
and to incur the obligations provided for therein, all of which have been duly
authorized by all proper and necessary action and are in full compliance with
its Organizational Documents. The Parent and each Restricted Subsidiary has duly
executed and delivered the Transaction Documents to which it is a party.
4.4. Governmental Body Approvals.
(a) Except as set forth on Schedule 4.4, no consent,
authorizations or approval of, filing with, notice to, or exemption by,
stockholders, any Governmental Body or any other Person (except for those which
have been obtained, made or given) is required to authorize, or is required in
connection with the execution, delivery and performance by the Parent and each
Restricted Subsidiary of the Loan Documents to which it is a party or is
required as a condition to the validity or enforceability of the Loan Documents.
No provision of any applicable statute, law (including, without limitation, any
applicable usury or similar law), rule or regulation of any Governmental Body
will prevent the execution, delivery or performance of, or affect the validity
of, the Loan Documents.
(b) Except as provided in the Westlink Acquisition Documents,
no consent, authorizations or approval of, filing with, notice to, or exemption
by, stockholders, any Governmental Body or any other Person (except for those
which have been obtained, made or given) is required to authorize, or is
required in connection with the execution, delivery and performance of the
Westlink Acquisition Documents or is required as a condition to the validity or
enforceability of the Westlink Acquisition Documents.
(c) No consent, authorizations or approval of, filing with,
notice to, or exemption by, stockholders, any Governmental Body or any other
Person (except for those which have been obtained, made or given) is required to
authorize, or is required in connection with the execution, delivery and
performance of the Westlink Merger Documents or is required as a condition to
the validity or enforceability of the Westlink Merger Documents.
4.5. Binding Agreement.
The Transaction Documents constitute, and the Notes, when
issued and delivered pursuant hereto for value received, will constitute, the
valid and legally binding obligations of the Parent and each Restricted
Subsidiary, in each case to the extent that it is a party thereto, enforceable
in accordance with their respective terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency,
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reorganization or other similar laws affecting the enforcement of creditors'
rights generally.
4.6. Litigation.
Except as set forth on Schedule 4.6, there are no actions,
suits or proceedings at law or in equity or by or before any Governmental Body
(whether or not purportedly on behalf of the Parent or any Restricted Subsidiary
or any other Loan Party) pending or, to the knowledge of the Borrower or the
Parent, threatened against the Parent or any Restricted Subsidiary or any other
Loan Party or any of their respective Properties or rights, which (i) if
adversely determined, could reasonably be expected to have a Material Adverse
Effect, (ii) call into question the validity or enforceability of any of the
Transaction Documents or (iii) seek to prevent or delay the consummation of the
Westlink Acquisition or the Westlink Merger.
4.7. No Conflicting Agreements.
Except as set forth on Schedule 4.7, neither the Parent nor
any Restricted Subsidiary is in default under any mortgage, indenture, contract,
agreement, judgment, decree or order to which it is a party or by which it or
any of its Property is bound, which defaults, taken as a whole, could reasonably
be expected to have a Material Adverse Effect. The execution, delivery or
carrying out of the terms of the Transaction Documents will not constitute a
default under, conflict with, require any consent under (other than consents
which have been obtained) or result in the creation or imposition of, or
obligation to create, any Lien upon the Property of the Parent or any Restricted
Subsidiary pursuant to the terms of any such mortgage, indenture, contract,
agreement, judgment, decree or order, which defaults, conflicts and consents, if
not obtained, taken as a whole, could reasonably be expected to have a Material
Adverse Effect. The execution, delivery or carrying out of the terms of the Loan
Documents will not constitute a default under, conflict with, require any
consent under (other than consents which have been obtained), the Subordinated
Indenture, the Discount Note Indenture or either of the USA Mobile Indentures,
or result in the creation or imposition of, or obligation to create, any Lien
upon the Property of the Parent pursuant to the terms of the Subordinated
Indenture, the Discount Note Indenture or either of the USA Mobile Indentures.
4.8. Taxes.
Each of the Parent and each Restricted Subsidiary has filed or
caused to be filed all tax returns required to be filed and has paid, or has
made adequate provision for the payment of, all taxes shown to be due and
payable on said returns or in any assessments made against it (other than those
being contested as required under Section
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7.4) which would be material to the Parent or any Restricted Subsidiary, and no
tax Liens have been filed with respect thereto except Permitted Liens described
in 8.2(i). The charges, accruals and reserves on the books of the Parent and
each Restricted Subsidiary with respect to all federal, state, local and other
taxes are, to the best knowledge of the Borrower and the Parent, adequate for
the payment of all such taxes, and neither the Borrower nor the Parent knows of
any unpaid assessment which is due and payable against it or any Restricted
Subsidiary or any claims being asserted which could reasonably be expected to
have a Material Adverse Effect, except such thereof as are being contested as
required under Section 7.4, and for which adequate reserves have been set aside
in accordance with GAAP.
4.9. Compliance with Applicable Laws.
Neither the Parent nor any Restricted Subsidiary is in default
with respect to any judgment, order, writ, injunction, decree or decision of any
Governmental Body which default could reasonably be expected to have a Material
Adverse Effect. The Parent and each Restricted Subsidiary is complying in all
material respects with all applicable statutes and regulations of all
Governmental Bodies, including, without limitation, ERISA and Environmental
Laws, a violation of which could reasonably be expected to have a Material
Adverse Effect.
4.10. Governmental Regulations.
Neither the Parent nor any Restricted Subsidiary nor any
Person controlling either the Parent or any Restricted Subsidiary or under
common control with the Parent or any Restricted Subsidiary is subject to
regulation under the Public Utility Holding Company Act of 1935, as amended, the
Federal Power Act or the Investment Company Act of 1940, as amended, and, except
as set forth on Schedule 4.4, neither the Parent nor any Restricted Subsidiary
is subject to any statute or regulation which prohibits or restricts the
incurrence of Indebtedness under the Loan Documents, including, without
limitation, statutes or regulations relative to common or contract carriers or
to the sale of electricity, gas, steam, water, telephone, telegraph or other
public utility services.
4.11. Property.
The Parent and each Restricted Subsidiary has (i) good and
marketable title to all of its owned Property, title to which is material to
either the Parent and the Restricted Subsidiaries taken as a whole or to the
Restricted Subsidiaries taken as a whole and (ii) a valid leasehold interest in
all leased Property, a leasehold interest in which is material to either the
Parent and the Restricted Subsidiaries taken as a whole or
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to the Restricted Subsidiaries taken as a whole, in each case subject to no
Liens, except Permitted Liens.
4.12. FCC Matters.
The Parent and each Restricted Subsidiary (i) has duly and
timely filed all filings which are required to be filed by it under the
Communications Act, the failure to file of which could reasonably be expected to
have a Material Adverse Effect and (ii) is in all material respects in
compliance with the Communications Act, including, without limitation, the rules
and regulations of the FCC relating to the carriage of radio common carrier
signals, the failure to be in compliance with which could reasonably be expected
to have a Material Adverse Effect. Arch Services does not engage in any business
subject to regulation by the FCC.
4.13. Federal Reserve Regulations; Use of Loan Proceeds.
Neither the Parent nor any Restricted Subsidiary is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock. No part of
the proceeds of the Loans will be used, directly or indirectly, for a purpose
which violates any law, rule or regulation of any Governmental Body, including
without limitation the provisions of Regulations G, T, U or X of the Board of
Governors of the Federal Reserve System, as amended.
4.14. Tariffs.
No action to change, alter, rescind or otherwise terminate the
tariffs containing service regulations or any rates and charges for radio common
carrier services which, if adversely determined, would have a Material Adverse
Effect, is pending or known by the Borrower or any Restricted Subsidiary to be
under consideration.
4.15. No Misrepresentation.
No representation or warranty contained herein and no
certificate or report furnished or to be furnished pursuant to any of the
Transaction Documents by the Parent or any Restricted Subsidiary in connection
with the transactions contemplated thereby contains or will contain a
misstatement of material fact, or, to the best knowledge of the Borrower and the
Parent, omits or will omit to state a material fact required to be stated in
order to make the statements herein or therein contained not misleading in the
light of the circumstances under which made, provided, however, that with
respect to the representations and warranties made in the Westlink Acquisition
Documents by Westlink, such representations and warranties shall be made to the
best knowledge of the Parent. With respect to projections or pro-forma financial
statements
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furnished by the Parent or any Restricted Subsidiary, such projections have been
or will be prepared in good faith on the assumptions stated therein, which
assumptions are or will be fair and reasonable in light of the circumstances
existing at the time of delivery of such projections or statements and
represent, at the time of delivery, the Parent's or such Restricted Subsidiary's
best estimate of its future financial performance.
4.16. Plans.
None of the Parent, any Restricted Subsidiary or any Commonly
Controlled Entity maintains or is obligated to contribute to any Single Employer
Plan or Multiemployer Plan. Since the effective date of ERISA, there have not
been, nor are there now existing, any events or conditions which would permit
any Single Employer Plan at any time maintained by the Parent or any Restricted
Subsidiary or any Commonly Controlled Entity or, to the best knowledge of the
Borrower and the Parent, any Multiemployer Plan to which the Parent, any
Restricted Subsidiary or any Commonly Controlled Entity at any time contributed
to be terminated under circumstances which would cause the Lien provided under
Section 4068 of ERISA to attach to the Property of the Parent or any Restricted
Subsidiary.
4.17. Burdensome Obligations.
Neither the Parent nor any Restricted Subsidiary is a party to
or bound by any franchise, agreement, deed, lease or other instrument, or
subject to any legal restriction which, in the opinion of the management of the
Parent or such Restricted Subsidiary, is so unusual or burdensome, in the
context of its business, as in the foreseeable future might materially and
adversely affect or impair the revenue of the Restricted Subsidiaries taken as a
whole, or Operating Cash Flow, or the ability of the Borrower, the Parent or the
Restricted Subsidiaries to perform their respective obligations under the Loan
Documents. Neither the Borrower nor the Parent presently anticipates that future
expenditures by the Parent or any Restricted Subsidiary needed to meet the
provisions of federal or state statutes, orders, rules or regulations will be so
burdensome as to affect or impair, in a materially adverse manner, the business
or condition, financial or otherwise, of the Restricted Subsidiaries taken as a
whole.
4.18. Financial Statements.
The Parent has heretofore delivered to the Administrative
Agent and the Lenders copies of its (i) Annual Report on Form 10-K for the
fiscal year ending December 31, 1995, containing the audited Consolidated
Balance Sheets of the Parent and its Subsidiaries as of December 31, 1995 and
December 31, 1994, and the related Consolidated Statements of Operations,
Stockholders' Equity and Cash Flows for the period then ended and (ii) unaudited
Consolidating Balance Sheets of the Restricted
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Subsidiaries as of December 31, 1995, and the related Consolidating Statements
of Operations, Stockholders' Equity and Cash Flows for the period then ended
(collectively with the related notes and schedules, the "Financial Statements").
The Financial Statements fairly present the Consolidated financial condition and
results of the operations of the Parent and its Subsidiaries as of the dates and
for the periods indicated therein and have been prepared in conformity with
GAAP. Except as reflected in the Financial Statements or in the footnotes
thereto, neither the Parent nor any of its Subsidiaries has any obligation or
liability of any kind (whether fixed, accrued, contingent, unmatured or
otherwise) which, in accordance with GAAP, should have been shown in the
Financial Statements and was not. Except for the issuance of the Discount Notes,
the Westlink Acquisition and the Westlink Merger, since December 31, 1995, the
Parent and each of the Restricted Subsidiaries has conducted its business only
in the ordinary course and there has been no Material Adverse Change.
4.19. Environmental Matters.
Neither the Parent nor any Restricted Subsidiary (i) has
received written notice or otherwise learned of any claim, demand, action,
event, condition, report or investigation indicating or concerning any potential
or actual liability which individually or in the aggregate could reasonably be
expected to have a Material Adverse Effect arising in connection with (a) any
non-compliance with or violation of the requirements of any applicable
Environmental Laws or (b) the release or threatened release of any toxic or
hazardous waste, substance or constituent, or other hazardous substance into the
environment, (ii) to the best knowledge of the Borrower and the Parent, has any
threatened or actual liability in connection with the release or threatened
release of any toxic or hazardous waste, substance or constituent, or other
hazardous substance into the environment which individually or in the aggregate
could reasonably be expected to have a Material Adverse Effect, (iii) has
received notice of any federal or state investigation evaluating whether any
remedial action is needed to respond to a release or threatened release of any
toxic or hazardous waste, substance or constituent or other hazardous substance
into the environment for which the Parent or any Restricted Subsidiary is or may
be liable, or (iv) has received notice that the Parent or any Restricted
Subsidiary is or may be liable to any Person under CERCLA or any analogous state
law. The Parent and each Restricted Subsidiary is in compliance in all material
respects with the financial responsibility requirements of federal and state
environmental laws to the extent applicable, including, without limitation,
those contained in 40 C.F.R., parts 264 and 265, subpart H, and any analogous
state law.
4.20. Westlink Acquisition Documents.
The Parent or the Borrower has delivered to the Administrative
Agent a complete and correct copy of each of the Westlink Acquisition Documents,
each of
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which is in full force and effect and has not been amended or otherwise modified
(except with the written consent of the Administrative Agent), and all actions
required to be taken by the Parent, the Borrower, Westlink and the Westlink
Sellers as a condition to the consummation of the Westlink Acquisition have been
taken on or prior to the Restatement Effective Date, and neither the Borrower,
the Parent nor, to the best of the knowledge of the Borrower or the Parent, any
Westlink Seller, is in default and each is in compliance with its obligations
thereunder.
4.21. Franchises, Intellectual Property, Etc.
The Parent and each Restricted Subsidiary possesses or has the
right to use all franchises, Intellectual Property, licenses, permits and other
rights as are material and necessary for the conduct of its business, and with
respect to which it is in compliance in all material respects, with no known
conflict with the valid rights of others which could reasonably be expected to
have a Material Adverse Effect. Except as set forth on Schedule 4.21, no event
has occurred which permits or, to the best knowledge of the Borrower and the
Parent, after notice or lapse of time or both, could reasonably be expected to
permit, the revocation or termination of any such franchise, Intellectual
Property, license, permit or other right and which revocation or termination
could reasonably be expected to have a Material Adverse Effect.
4.22. Solvency
The Parent and each Restricted Subsidiary is, and after giving
effect to the incurrence of all Indebtedness under the Loan Documents and the
consummation of the transactions contemplated by the Transaction Documents will
be, Solvent.
4.23. Absence of Certain Restrictions.
No indenture, certificate of designation for preferred Stock,
agreement or instrument to which the Parent or any Restricted Subsidiary is a
party, prohibits or restrains, directly or indirectly, the payment of dividends
or other payments to the Parent or any Restricted Subsidiary.
4.24. Insurance.
Each Restricted Subsidiary's insurance policies are and will
be sufficient for compliance with all requirements of law as well as for
compliance with all agreements to which such Restricted Subsidiary is a party,
and none of the Restricted Subsidiaries suffers self insurance for any material
risks.
4.25. Indebtedness of the Parent.
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(a) The Indebtedness of the Parent under the Parent
Intercompany Notes constitutes Senior Indebtedness under and as defined in the
Subordinated Indenture, and, after giving effect to the Subordination Agreement,
Subordinated Debt under and as defined in the Discount Note Indenture.
(b) The Indebtedness of the Parent under the Loan Documents to
which it is a party constitutes Pari Passu Debt under as defined in the Discount
Note Indenture.
5. CONDITIONS TO EFFECTIVENESS AND TO FIRST LOANS
The effectiveness of this Agreement and the obligation of each Lender
to make its first Loan on or after the Restatement Effective Date is subject to
the prior or simultaneous fulfillment of the following conditions precedent:
5.1. Evidence of Action
(a) The Borrower. The Administrative Agent shall have received
a certificate, dated the Restatement Effective Date, of the Secretary or
Assistant Secretary of the Borrower (i) attaching a true and complete copy of
the resolutions of its Managing Person and of all documents evidencing other
necessary corporate action (in form and substance satisfactory to the
Administrative Agent) taken by it to authorize the Transaction Documents to
which it is a party and all transactions contemplated thereby, (ii) as to its
Organizational Documents not having been amended, modified or changed in any
manner since September 7, 1995, or, if so, setting forth the same, (iii) setting
forth the incumbency of its officer or officers who may sign such Transaction
Documents, including therein a signature specimen of such officer or officers
and (iv) attaching a certificate of good standing of the Secretary of State of
the jurisdiction of its incorporation and of each other jurisdiction in which it
is qualified to do business.
(b) The Parent. The Administrative Agent shall have received a
certificate, dated the Restatement Effective Date, of the Secretary or Assistant
Secretary of the Parent (i) attaching a true and complete copy of the
resolutions of its Managing Person and of all documents evidencing other
necessary corporate action (in form and substance satisfactory to the
Administrative Agent) taken by it to authorize the Transaction Documents to
which it is a party and all transactions contemplated thereby, (ii) as to its
Organizational Documents not having been amended, modified or changed in any
manner since September 7, 1995, or, if so, setting forth the same, (iii) setting
forth the incumbency of its officer or officers who may sign such Transaction
Documents, including therein a signature specimen of such officer or officers
and (iv) attaching a
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certificate of good standing of the Secretary of State of the jurisdiction of
its incorporation and of each other jurisdiction in which it is qualified to do
business.
(c) Subsidiary Guarantors. The Administrative Agent shall have
received a certificate, dated the Restatement Effective Date, of the Secretary
or Assistant Secretary of each Subsidiary Guarantor party to the Subsidiary
Guaranty on the Restatement Effective Date (i) attaching a true and complete
copy of the resolutions of its Managing Person and of all documents evidencing
other necessary legal action (in form and substance satisfactory to the
Administrative Agent) taken by it to authorize the Transaction Documents to
which it is a party and all transactions contemplated thereby, (ii) in the case
of (x) each Subsidiary Guarantor which was a Subsidiary Guarantor prior to the
Restatement Effective Date, as to its Organizational Documents having not been
amended, modified or changed in any manner since September 7, 1995, or, if so,
setting forth the same, and (y) each other Subsidiary Guarantor, attaching true
and complete copy of its Organizational Documents, (iii) setting forth the
incumbency of its officer or officers who may sign such Transaction Documents,
including therein a signature specimen of such officer or officers and (iv)
attaching a certificate of good standing of the Secretary of State of the
jurisdiction of its incorporation and of each other jurisdiction in which it is
qualified to do business.
(d) Westlink. The Administrative Agent shall have received a
certificate, dated the Restatement Effective Date, of the Secretary or Assistant
Secretary of Westlink (i) attaching a true and complete copy of the resolutions
of its Managing Person and of all documents evidencing other necessary corporate
action (in form and substance satisfactory to the Administrative Agent) taken by
it to authorize the Transaction Documents to which it is a party and all
transactions contemplated thereby, (ii) attaching a true and complete copy of
its Organizational Documents, (iii) setting forth the incumbency of its officer
or officers who may sign such Transaction Documents, including therein a
signature specimen of such officer or officers and (iv) attaching a certificate
of good standing of the Secretary of State of the jurisdiction of its
incorporation and of each other jurisdiction in which it is qualified to do
business.
5.2. This Agreement.
The Administrative Agent shall have received counterparts of
this Agreement signed by each of the parties hereto (or receipt by the
Administrative Agent from a party hereto of a fax signature page signed by such
party which shall have agreed to promptly provide the Administrative Agent with
originally executed counterparts hereof).
5.3. Notes.
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The Administrative Agent shall have received the Notes, duly
executed by an Authorized Signatory of the Borrower.
5.4. Borrower Security Agreement.
The Administrative Agent shall have received the Borrower
Security Agreement, duly executed by an Authorized Signatory of the Borrower,
together with the following:
(a) certificates representing the issued and
outstanding shares of Stock owned by the Borrower in Westlink Company together
with undated stock powers with respect thereto duly executed in blank by the
Borrower;
(b) An Intercompany Note, dated the Restatement
Effective Date, made by Westlink Company to the Borrower, indorsed in blank;
(c) the Secured Promissory Notes, made by Benbow to
Westlink Company, in each case indorsed in blank; and
(d) all other certificates, instruments or documents
representing the Pledged Collateral (under and as defined in the Borrower
Security Agreement), in each case indorsed in blank and in each case not
heretofore delivered to the Administrative Agent.
5.5. Parent Security Agreement.
The Administrative Agent shall have received the Parent
Security Agreement, duly executed by an Authorized Signatory of the Parent,
together with the following, in each case to the extent not heretofore delivered
to the Administrative Agent: (i) certificates representing the Pledged Equity
Interests (under and as defined in the Parent Security Agreement) and undated
stock powers with respect thereto duly executed in blank by the Parent, (ii) a
Transaction Statement in the form of Annex 1 to the Parent Security Agreement
with respect to each Uncertificated Security (as defined therein) constituting
Collateral thereunder and (iii) Intercompany Notes constituting the Pledged Debt
(under and as defined in the Parent Security Agreement) indorsed in blank.
5.6. Subsidiary Guaranty.
The Administrative Agent shall have received the Subsidiary
Guaranty, duly executed by an Authorized Signatory of the Subsidiary Guarantors,
together with the following:
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(a) certificates representing the issued and
outstanding shares of Stock owned by Westlink Company in each of Lund Products,
Answer Iowa, Westlink New Mexico, Kelley's Telephone and Westlink Licensee
Corp., in each case together with undated stock powers with respect thereto duly
executed in blank by Westlink Company;
(b) certificates representing the issued and
outstanding shares of Stock owned by Lund Products in Answer Iowa, together with
undated stock powers with respect thereto duly executed in blank by Lund
Products;
(c) certificates representing the issued and
outstanding shares of Stock owned by Kelley's Telephone in Kelley's Licensee
Corp., together with undated stock powers with respect thereto duly executed in
blank by Kelley's Telephone;
(d) certificates representing the issued and
outstanding shares of Stock owned by Answer Iowa in Answer Iowa Licensee Corp.,
together with undated stock powers with respect thereto duly executed in blank
by Answer Iowa;
(e) certificates representing the issued and
outstanding shares of Stock owned by Westlink New Mexico in Westlink New Mexico
Licensee Corp., together with undated stock powers with respect thereto duly
executed in blank by Westlink New Mexico;
(f) certificates, if any, representing the issued and
outstanding Equity Interests (as defined in the Subsidiary Guaranty) owned by
Westlink Company in each of Cascade and Telcomm/KRT, in each case together with
undated powers with respect thereto duly executed in blank by Westlink Company;
(g) certificates, if any, representing the issued and
outstanding Equity Interests (as defined in the Subsidiary Guaranty) owned by
Kelley's Telephone in each of Cascade and Telcomm/KRT, in each case together
with undated powers with respect thereto duly executed in blank by Kelley's
Telephone;
(h) with respect to each Equity Interest referred to
in subsections (f) and (g) above which is not evidenced by a certificate, a
Transaction Statement in the form of Annex 3 to the Subsidiary Guaranty;
(i) Intercompany Notes, each dated the Restatement
Effective Date, made by each of Lund Products, Answer Iowa, Westlink New Mexico,
Kelley's Telephone, Westlink Licensee Corp., Cascade and Telecomm/KRT to
Westlink Company, in each case indorsed in blank;
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(j) Intercompany Note, dated the Restatement
Effective Date, made by Answer Iowa to Lund Products, indorsed in blank;
(k) Intercompany Note, dated the Restatement
Effective Date, made by Westlink New Mexico Licensee Corp. to Westlink New
Mexico, indorsed in blank;
(l) Intercompany Notes, each dated the Restatement
Effective Date, made by Kelley's Licensee Corp., Cascade and Telecomm/KRT to
Kelley's Telephone, indorsed in blank;
(m) Intercompany Note, dated the Restatement
Effective Date, made by Answer Iowa Licensee Corp. to Answer Iowa, indorsed in
blank;
(n) a Grant of Security Interest (Trademarks) in the
form of Annex 2 to the Subsidiary Guaranty, duly executed by each of Westlink
Company and Answer Iowa;
(o) the Consents to Partnership Pledge with respect
to the interests of Kelly's Telephone in Cascade and Telecomm/KRT, substantially
in the form of Exhibit R (collectively, the "Consents to Partnership Pledge");
and
(p) all other certificates, instruments or documents
representing the Pledged Collateral (under and as defined in the Subsidiary
Guaranty), in each case indorsed in blank and in each case not heretofore
delivered to the Administrative Agent.
5.7. Intercreditor Agreement.
The Administrative Agent shall have received the Intercreditor
Agreement, duly executed by an Authorized Signatory of the USA Mobile Agent.
5.8. Subordination Agreement.
The Administrative Agent shall have received the Subordination
Agreement, duly executed by an Authorized Signatory of the Parent and the
Restricted Subsidiaries.
5.9. Consummation of Westlink Acquisition.
(a) The Administrative Agent shall receive and be satisfied
with an amendment to the Westlink Acquisition Agreement which (i) designates the
Borrower as
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the Buyer, (ii) authorizes the Borrower to directly repay the Existing Westlink
Bank Debt and (iii) reduces the purchase price to an amount not in excess of
$310,000,000.
(b) Each of the conditions precedent to the consummation of
the Westlink Acquisition shall have been satisfied (with no waiver of any
condition thereof without the prior written consent of the Administrative
Agent), and, substantially simultaneously with the making of the Term Loans and
the Revolving Credit Loans on the Restatement Effective Date, the Westlink
Acquisition shall have been consummated in accordance with the terms of the
Westlink Acquisition Documents and all applicable laws, governmental policies,
rules and regulations.
(c) All representations and warranties made in the Westlink
Acquisition Documents by the Parent, the Borrower, Westlink and the Westlink
Sellers shall be true and correct in all material respects.
(d) The Administrative Agent shall have received a certificate
of the Secretary or Assistant Secretary of the Parent, in all respects
satisfactory to the Administrative Agent, (i) attaching a true and complete copy
of each of the fully executed Westlink Acquisition Documents, including, without
limitation, the amendment referred to in subsection (a) above, all of which
shall be satisfactory to the Administrative Agent, and (ii) certifying that (A)
each Westlink Acquisition Document is in full force and effect, (B) no default
or event of default by the Parent or the Borrower or, to the best of the
knowledge of the Parent and the Borrower, any other party, has occurred and is
continuing thereunder, and (C) each of the conditions specified in subsections
(a), (b) and (c) of this Section has been satisfied, provided, however, that
with respect to the representations and warranties made in the Westlink
Acquisition Documents by Westlink and the Westlink Sellers, such certification
shall be made to the best knowledge of the Parent.
5.10. Existing Westlink Bank Indebtedness.
On or prior to the Restatement Effective Date, (i) the
Borrower shall have elected in writing to directly repay the Existing Westlink
Bank Indebtedness with the proceeds of the Loans, (ii) the Borrower shall have
repaid in full the Existing Westlink Bank Indebtedness, (iii) the Existing
Westlink Loan Documents shall have been cancelled or terminated, (iv) all Liens
securing the Existing Westlink Bank Indebtedness shall have been terminated, and
(v) the Administrative Agent shall have received satisfactory evidence of the
foregoing.
5.11. Absence of Material Adverse Change.
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Since December 31, 1995, there shall have occurred no material
adverse change in the financial condition, operations, business or prospects of
(i) the Parent and its Subsidiaries taken as a whole, (ii) the Restricted
Subsidiaries taken as a whole, or (iii) Westlink and its Subsidiaries taken as a
whole, provided, however, that Westlink's first quarter results as disclosed to
the Administrative Agent by the Borrower and the Parent prior to the Restatement
Effective Date will not be deemed to be a material adverse change in the
financial condition, operations, business or prospects of Westlink and its
Subsidiaries taken as a whole, and the Administrative Agent shall have received
a certificate from the chief financial officer (or other officer acceptable to
the Administrative Agent) of the Parent to the foregoing effect.
5.12. Tax Sharing Agreement.
The Administrative Agent shall have received an instrument
duly executed by Westlink's Subsidiaries pursuant to which such entities become
party and subject to the Tax Sharing Agreement.
5.13. USA Mobile Intercompany Note.
The USA Mobile Intercompany Note shall have been repaid in
full, and the Administrative Agent shall have received satisfactory evidence of
the foregoing.
5.14. PCSD Stock Contribution.
The Parent shall have contributed to the Borrower, on terms
satisfactory to the Administrative Agent, all of the Parent's equity interest in
PCSD, and the Administrative Agent shall have received satisfactory evidence of
the foregoing.
5.15. Amendment to USA Mobile Parent Guaranty.
The Administrative Agent shall have received an amendment to
the USA Mobile Parent Guaranty, in form and substance satisfactory to the
Administrative Agent, duly executed by an Authorized Signatory of the Parent,
the USA Mobile Borrowers, USA Mobile and the USA Mobile Agent.
5.16. Search Reports and Related Documents.
The Administrative Agent shall have received (i) such UCC,
tax, trademark and judgment lien search reports with respect to such applicable
public offices where Liens are filed, as shall be acceptable to the
Administrative Agent, disclosing that there are no Liens of record in such
official's office covering any Collateral or showing the Parent, any Restricted
Subsidiary, Westlink or any of its Subsidiaries as a debtor
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thereunder (other than Liens being released in connection with the repayment of
Existing Westlink Bank Indebtedness and Permitted Liens, (ii) a certificate of
the Borrower and each Guarantor signed by an Authorized Signatory of each
thereof, dated the Restatement Effective Date, certifying that, as of the
Restatement Effective Date, there will exist no Liens on the Collateral other
than Permitted Liens and (iii) duly executed UCC-1 Financing Statements with
respect to the Collateral (other than Pledged Collateral (as defined in the
applicable Collateral Documents) and to the extent not heretofore filed), to be
filed in each office as determined by the Administrative Agent.
5.17. Approvals and Consents.
Except as set forth on Schedule 4.4, all approvals and
consents of all Persons required to be obtained prior to the Restatement
Effective Date in connection with the consummation of the transactions
contemplated by the Transaction Documents have been obtained and all required
notices have been given and all required waiting periods have expired,
including, without limitation, final approvals and consents of the FCC and under
the HSR Act (or expiration of applicable waiting periods), and no provision of
any applicable statute, law, rule or regulation of any Governmental Body will
prevent the execution, delivery or performance of, or affect the validity of,
the Transaction Documents and the Administrative Agent shall have received a
certificate of an Authorized Signatory of the Borrower to the foregoing effects.
5.18. Property, Public Liability and Other Insurance.
The Administrative Agent shall have received a certificate of
insurance maintained by the Borrower and its Subsidiaries, in form and substance
reasonably satisfactory to the Administrative Agent, together with the
endorsements required by Section 7.5.
5.19. Litigation.
There shall be no injunction, writ, preliminary restraining
order or other order of any nature issued by any Governmental Body in any
respect affecting the transactions contemplated by the Transaction Documents,
and, except as set forth on Schedule 4.6, no action or proceeding by or before
any Governmental Body shall have been commenced and be pending or, to the
knowledge of the Borrower or the Parent, be threatened, seeking to prevent or
delay the transactions contemplated by the Transaction Documents or challenging
any other terms and provisions hereof or thereof or seeking any damages in
connection therewith, and the Administrative Agent shall have received a
certificate of an Authorized Signatory of the Borrower to the foregoing effects.
5.20. Pro-forma Financial Statements.
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The Administrative Agent shall have received unaudited
Consolidated pro-forma balance sheets and the Consolidated pro-forma statements
of operations of (i) the Parent and its Subsidiaries, and (ii) the Restricted
Subsidiaries, in each case (A) presenting the pro-forma Consolidated financial
condition of such entities and the pro-forma Consolidated statements of
operations of such entities for the 1996 through 2003 fiscal years, (B) prepared
after giving effect to the making of the Loans hereunder and the consummation of
the Westlink Acquisition and (C) in form and substance reasonably satisfactory
to the Administrative Agent and the Lenders.
5.21. Opinions of Counsel to the Parent and the Restricted
Subsidiaries.
The Administrative Agent shall have received (i) an opinion of
Hale and Dorr, counsel to the Parent and the Restricted Subsidiaries,
substantially in the form of Exhibit J, (ii) an opinion of Garry Watzke, Esq.,
General Counsel of the Parent and the Restricted Subsidiaries, substantially in
the form of Exhibit K, and (iii) an opinion of Georgia local counsel,
substantially in the form of Exhibit L, each addressed to the Administrative
Agent, the Lenders and Special Counsel and each dated the Restatement Effective
Date.
5.22. Opinion of FCC Counsel.
The Administrative Agent shall have received an opinion of
Paul, Hastings, Janofsky & Walker, FCC counsel to the Parent and the Restricted
Subsidiaries, addressed to the Administrative Agent and the Lenders, dated the
Restatement Effective Date, substantially in the form of Exhibit M.
5.23. Opinion of Special Counsel.
The Administrative Agent shall have received an opinion of
Special Counsel, dated the Restatement Effective Date, substantially in the form
of Exhibit N.
5.24. Closing Certificate.
The Administrative Agent shall have received a certificate of
an Authorized Signatory of the Borrower, in form and substance satisfactory to
the Administrative Agent, certifying that as of the Restatement Effective Date
the conditions specified in Section 6.1 are true and correct.
5.25. Fees.
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The Borrower or the Parent shall have paid to the
Administrative Agent, the Co-Agents and the Lenders the fees which are payable
on the Restatement Effective Date.
5.26. Fees and Expenses of Special Counsel.
The reasonable fees and expenses of Special Counsel incurred
to date shall have been paid, which fees and expenses shall be represented by a
bill which shall recite in narrative form the services rendered by Special
Counsel and shall be determined at regular hourly billing rates.
5.27. Other Documents.
The Administrative Agent shall have received such other
documents and assurances as the Administrative Agent shall reasonably require.
6. CONDITIONS OF LENDING - ALL LOANS.
The obligation of each Lender to make any Loan on a Borrowing Date is
subject to the satisfaction of the following conditions precedent as of the date
of such Loan:
6.1. Compliance.
On each Borrowing Date and after giving effect to the Loans to
be made thereon, (i) each Loan Party shall be in compliance with all of the
terms, covenants and conditions of the Loan Documents, (ii) there shall exist no
Default or Event of Default, (iii) the representations and warranties contained
in the Loan Documents (other than the representations and warranties made as of
a specific date) shall be true and correct in all material respects with the
same effect as though such representations and warranties had been made on such
Borrowing Date, except to the extent that such representations and warranties
are no longer true or correct as a result of events, acts, transactions or
occurrences after the Restatement Effective Date which are permitted under this
Agreement and (iv) there shall have occurred no Material Adverse Change since
December 31, 1995. Each borrowing by the Borrower shall constitute a
certification by the Borrower as of the date of such borrowing that each of the
foregoing matters is true and correct in all respects.
6.2. Loan Closings.
All documents required by the provisions of the Loan Documents
to be executed or delivered to the Administrative Agent on or before the
applicable Borrowing
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Date shall have been executed and shall have been delivered at the office of the
Administrative Agent set forth in Section 12.2 on or before such Borrowing Date.
6.3. Borrowing Request.
The Administrative Agent shall have received a Borrowing
Request duly executed by an Authorized Signatory of the Borrower.
7. AFFIRMATIVE COVENANTS
The Parent and the Borrower each hereby covenants and agrees that until
all obligations of the Borrower and the Parent under the Loan Documents have
been paid in full and all Commitments of the Lenders have been terminated and no
obligations of the Administrative Agent, the Co- Agents or any of the Lenders
exist under any of the Loan Documents, it shall:
7.1. Financial Statements.
Maintain a standard system of accounting in accordance with
GAAP, and furnish or cause to be furnished to the Administrative Agent and each
Lender:
(a) As soon as available but in any event within 90
days after the end of each fiscal year, a copy of the (i) Consolidated Balance
Sheet of the Restricted Subsidiaries as at the end of such fiscal year, together
with the related Consolidated Statements of Operations, Stockholders' Equity and
Cash Flows of the Restricted Subsidiaries as of and through the end of such
fiscal year and (ii) Consolidating balance sheets of the Restricted Subsidiaries
as at the end of such fiscal year, together with the related unaudited
Consolidating Statements of Operations and Stockholders' Equity of the
Restricted Subsidiaries as of and through the end of such fiscal year, setting
forth in the case of Consolidated Statements, in comparative form the figures
for the preceding fiscal year. The Consolidated Balance Sheet and Consolidated
Statements of Operations, Stockholders' Equity and Cash Flows referred to in
clause (i) of the preceding sentence shall be audited and certified without
qualification, which certification shall (i) state that the examination by such
Accountants in connection with such Consolidated financial statements has been
made in accordance with generally accepted auditing standards and, accordingly,
included such tests of the accounting records and such other auditing procedures
as were considered necessary in the circumstances, and (ii) include the opinion
of such Accountants that such Consolidated financial statements have been
prepared in accordance with GAAP in a manner consistent with prior fiscal
periods, except as otherwise specified in such opinion. In addition, as soon as
available but in any event within 90 days after the end of each fiscal year, the
Parent shall deliver to the Adminis-
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trative Agent and each Lender a copy of its Annual Report on Form 10-K in
respect of such fiscal year together with the financial statements required
to be attached thereto.
(b) As soon as available but in any event within 45
days after the end of each of the first three fiscal quarters of each fiscal
year (i) a copy of the Consolidated and Consolidating balance sheets of the
Restricted Subsidiaries as at the end of each such quarterly period, together
with the Consolidated and Consolidating Statements of Operations, and
Stockholders' Equity and a Consolidated Statement of Cash Flows of the
Restricted Subsidiaries for such period and for the elapsed portion of the
fiscal year through such date, setting forth in the case of Consolidated
Statements, in comparative form the figures for the corresponding periods of the
preceding fiscal year, certified by the Chief Financial Officer of the Borrower
(or such other officer acceptable to the Administrative Agent), as being
complete and correct in all material respects and as presenting fairly the
Consolidated and Consolidating financial condition and the Consolidated and
Consolidating results of operations of the Restricted Subsidiaries, and (ii) a
certificate of the Chief Financial Officer of the Borrower (or such other
officer as shall be acceptable to the Administrative Agent) in detail reasonably
satisfactory to the Administrative Agent stating that there exists no violation
of any of the terms or provisions of the Loan Documents, or the occurrence of
any condition or event which would constitute a Default or Event of Default, or,
if so, specifying in such certificate all such violations, conditions and
events, and the nature and status thereof. Capital Expenditures shall be broken
down on such report into Capital Expenditures made in the following categories:
(A) purchases of pagers (including the number of pagers purchased, the average
price per pager and the cost of pagers sold) and (B) other Capital Expenditures.
In addition, as soon as available but in any event within 45 days after the end
of the first three fiscal quarters of each fiscal year, the Parent shall deliver
to the Administrative Agent and each Lender a copy of its Quarterly Report on
Form 10-Q in respect of such fiscal quarter together with the financial
statements required to be attached thereto.
(c) Within 45 days after the end of each of the first
three fiscal quarters of each fiscal year (90 days after the end of the last
fiscal quarter of each fiscal year), a Compliance Certificate, certified by the
Chief Financial Officer of the Borrower (or such other officer as shall be
acceptable to the Administrative Agent).
(d) Simultaneously with the delivery of the annual
statements required by Section 7.1(a) and the quarterly statements required by
Section 7.1(b), a certificate of the Chief Financial Officer of the Borrower (or
such other officer as shall be acceptable to the Administrative Agent) in detail
reasonably satisfactory to the Administrative Agent setting forth information,
on a Consolidated and Consolidating basis, with respect to pager activations
during the preceding fiscal quarter, and informa-
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tion for such fiscal quarter indicating the net increase or decrease in the
number of Pagers in Service.
(e) Promptly upon the request of the Administrative
Agent or Required Lenders, copies of the projected Consolidated and
Consolidating Balance Sheets and Statements of Operations of the Restricted
Subsidiaries for the next fiscal year, together with such other information and
documentation as the Administrative Agent or any Lender may reasonably request
in connection therewith.
(f) No later than 45 days after the beginning of each
fiscal year, a copy of the Consolidated and Consolidating annual budgets of the
Restricted Subsidiaries for such fiscal year.
(g) Such other information and documentation with
respect to the Parent and the Restricted Subsidiaries as the Administrative
Agent or any Lender may reasonably request from time to time.
7.2. Certificates; Other Information.
Furnish to the Administrative Agent and each Lender:
(a) Prompt written notice if: (i) any Indebtedness of
the Parent or any Restricted Subsidiary is declared or shall become due and
payable prior to its stated maturity, or called and not paid when due, (ii) a
default shall have occurred under any note (other than the Notes) or the holder
of any such note, or other evidence of Indebtedness, certificate or security
evidencing any such Indebtedness or any obligee with respect to any other
Indebtedness of the Parent or any Restricted Subsidiary has the right to declare
any such Indebtedness due and payable prior to its stated maturity, or (iii)
there shall occur and be continuing a Default or an Event of Default;
(b) Prompt written notice of: (i) any citation,
summons, subpoena, order to show cause or other document naming the Parent or
any Restricted Subsidiary a party to any proceeding before any Governmental Body
which might have a Material Adverse Effect or which calls into question the
validity or enforceability of any of the Loan Documents, and include with such
notice a copy of such citation, summons, subpoena, order to show cause or other
document, (ii) any lapse or other termination of any material license, permit,
franchise or other authorization issued to the Parent or any Restricted
Subsidiary by any Person or Governmental Body, except for the lapse or other
termination thereof in accordance with the terms thereof, provided that such
lapse or termination could not reasonably be expected to have a Material Adverse
Effect, and (iii) any refusal by any Person or Governmental Body to renew or
extend any such material
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license, permit, franchise or other authorization, which lapse, termination,
refusal or dispute might have a Material Adverse Effect;
(c) Promptly upon becoming available, copies of all
(i) regular, periodic or special reports, schedules and other material which the
Parent or any Restricted Subsidiary may now or hereafter be required to file
with or deliver to any securities exchange or the SEC, or any other Governmental
Body succeeding to the functions thereof, (ii) material reports, schedules and
other material which the Parent or any Restricted Subsidiary may now or
hereafter be required to file with or deliver to the FCC and (iii) material news
releases and annual reports relating to the Parent or any Restricted Subsidiary;
(d) Prompt written notice of the occurrence of (i) a
Fundamental Change (as defined in the Subordinated Indenture), (ii) a Change in
Control (under and as defined in either of the USA Mobile Indentures), (iii) a
Change in Control (under and as defined in the Discount Note Indenture) or (iv)
any other event which gives holders of the Subordinated Debentures, the USA
Mobile Senior Notes or the Discount Notes, as the case may be, the right to
require the issuer thereof to repurchase or redeem the same prior to the stated
maturity thereof, together with copies of all notices with respect thereto given
to the Subordinated Indenture Trustee, the applicable USA Mobile Trustee or the
Discount Note Trustee, as the case may be, and/or the holders of the
Subordinated Debentures, the applicable USA Mobile Senior Notes or the Discount
Notes, as the case may be;
(e) Prompt written notice of the occurrence of a
default or event of default under and as defined in any of the Subordinated
Indenture, either of the USA Mobile Indentures or the Discount Note Indenture,
together with copies of all notices with respect thereto given to the
Subordinated Indenture Trustee, the applicable USA Mobile Trustee or the
Discount Note Trustee, as the case may be, and/or the holders of the
Subordinated Debentures, the applicable USA Mobile Senior Notes or the Discount
Notes, as the case may be; and
(f) Prompt written notice upon obtaining knowledge or
otherwise determining that any Foreign Subsidiary has become a Material Foreign
Subsidiary.
7.3. Legal Existence.
Except as provided in Section 8.3(a)(ii), maintain, and cause
each of the Restricted Subsidiaries to maintain, its legal existence, and
maintain its good standing in the jurisdiction of its incorporation or
organization and in each other jurisdiction in which the failure so to do could
reasonably be expected to have a Material Adverse Effect, except that Arch
Capitol may dissolve Hudson and the Borrower may dissolve Arch
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Services, provided that (i) no Default or Event of Default shall exist
immediately before and after giving effect thereto (other than a Default or
Event of Default which would exist solely by virtue of such dissolution but for
the provisions of this Section), (ii) Arch Capitol or the Borrower, as the case
may be, shall have given the Administrative Agent and the Lenders at least 20
days prior written notice thereof and (iii) all actions deemed by the
Administrative Agent to be necessary or appropriate in connection with the
maintenance of its first priority perfected security interest in the assets
thereof shall have been taken.
7.4. Taxes.
Pay and discharge when due, and cause each of the Restricted
Subsidiaries so to do, all taxes, assessments and governmental charges, license
fees and levies upon or with respect to it and upon the income, profits and
Property of the Restricted Subsidiaries taken as a whole or the Parent and the
Restricted Subsidiaries taken as a whole, which if unpaid, could reasonably be
expected to have a Material Adverse Effect or become a Lien on the Property of
the Parent or such Restricted Subsidiary not permitted under Section 8.2, unless
and to the extent only that such taxes, assessments, charges, license fees and
levies shall be contested in good faith and by appropriate proceedings
diligently conducted by the Parent or such Restricted Subsidiary and provided
that any such contested Tax, assessment, charge, license fee or levy shall not
constitute, or create, a Lien on any Property of the Parent or such Restricted
Subsidiary senior to the Liens granted to the Administrative Agent and the
Lenders by the Collateral Documents on such Property, and further provided that
the Borrower and the Parent shall give the Administrative Agent prompt notice of
such contest and that such reserve or other appropriate provision as shall be
required by the Accountants in accordance with GAAP shall have been made
therefor.
7.5. Insurance.
(a) Maintain, and cause each of the Restricted Subsidiaries to
maintain, insurance with financially sound insurance carriers on such of its
Property, against at least such risks, and in at least such amounts, as are
usually insured against by similar businesses and which, in the case of property
insurance, shall be in amounts sufficient to prevent the Borrower or such
Restricted Subsidiary from becoming a co- insurer, and which shall be on terms
reasonably satisfactory to the Administrative Agent, and file with the
Administrative Agent within 10 days after request therefor a detailed list of
such insurance then in effect, stating the names of the carriers thereof, the
policy numbers, the insureds thereunder, the amounts of insurance, dates of
expiration thereof, and the Property and risks covered thereby, together with a
certificate of the Chief Financial Officer (or such other officer as shall be
acceptable to the Administrative Agent) of the Borrower certifying that in the
opinion of such officer such insurance is adequate in
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nature and amount, complies with the obligations of the Parent and the
Restricted Subsidiaries under this Section, and is in full force and effect.
(b) Insurance Covering Collateral. At all times insure, and
cause each of the Restricted Subsidiaries to insure, all of the tangible
Collateral against all risks as are customarily insured against by companies
engaged in similar businesses, and maintain at all times general public
liability insurance with respect to all tangible Collateral against damage
resulting from bodily injury, including death or damage to Property of others,
all such insurance being in amounts equal to no less than that customarily
carried by companies engaged in similar businesses, which insurance shall be on
terms reasonably satisfactory to the Administrative Agent. Promptly upon request
therefor, the Borrower will deliver or cause to be delivered to the
Administrative Agent originals or duplicate originals of all such policies of
insurance. All such insurance policies shall be endorsed to provide that, in
respect of the interests of the Administrative Agent: (i) the Administrative
Agent shall be an additional insured, (ii) thirty days' prior written notice of
any cancellation, reduction of amounts payable, or any changes and amendments
shall be given to the Administrative Agent, except that ten days' prior written
notice of cancellation shall be given to the Administrative Agent if
cancellation results from the failure to pay premiums, and (iii) the
Administrative Agent shall have the right, but not the obligation, to pay any
premiums due or to acquire other such insurance upon the failure of the Parent
or such Restricted Subsidiary to pay the same or to so insure. All property
insurance policies (other than public liability insurance policies) shall name
the Administrative Agent as an additional insured and sole loss payee in respect
of each claim relating to the Collateral and resulting in a payment under any
such insurance policy exceeding $250,000. Provided that no Default or Event of
Default shall exist, the Administrative Agent agrees, promptly upon its receipt
thereof, to pay over to the appropriate Restricted Subsidiary the proceeds of
such payment to enable such Restricted Subsidiary to repair, restore or replace
the Property subject to such claim. To the extent that such Restricted
Subsidiary does not elect to use all of such proceeds to repair, restore or
replace such Property, on the Insurance Proceeds Prepayment Date, the Borrower
shall prepay the Loans and permanently reduce the Aggregate Revolving Credit
Commitments in an amount equal to the amount of such proceeds which have not
been employed to repair, restore or replace such Property prior to such date,
such prepayment and reduction to be applied in accordance with Section 2.8(f).
If a Default or Event of Default shall exist, the Administrative Agent shall
place such insurance proceeds into a cash collateral account under the exclusive
control of the Administrative Agent and shall (A) hold such insurance proceeds
as Collateral until such Default or Event of Default shall no longer exist and
then pay over same to the appropriate Restricted Subsidiary to enable such
Restricted Subsidiary to repair or replace the Property subject to the claim
which resulted in such payment or (B) hold such insurance proceeds as Collateral
and apply same to the obligations of such Restricted Subsidiary
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<PAGE> 83
under the Loan Documents in such order, in such amounts and at such times as the
Administrative Agent shall decide.
(c) Concurrent Insurance. Neither the Parent nor any of the
Restricted Subsidiaries shall take out separate insurance concurrent in form or
contributing in the event of loss with that required to be maintained pursuant
to subsection (b) above unless the Administrative Agent has approved the carrier
and the form and content of the insurance policy, including, without limitation,
naming of the Administrative Agent as additional insured and sole loss payee
thereunder.
7.6. Payment of Indebtedness and Performance of Obligations.
Pay and discharge when due, and cause each of the Restricted
Subsidiaries so to do, all lawful Indebtedness, obligations and claims for
labor, materials and supplies or otherwise which, if unpaid, might (i) have a
Material Adverse Effect, or (ii) become a Lien upon the Property of the Parent
or such Restricted Subsidiary other than a Permitted Lien, unless and to the
extent only that the validity of such Indebtedness, obligation or claim shall be
contested in good faith and by appropriate proceedings diligently conducted by
the Parent or such Restricted Subsidiary, and that any such contested
Indebtedness, obligations or claims shall not constitute, or create, a Lien on
any Property of the Parent or any Restricted Subsidiary senior to the Lien
granted to the Administrative Agent under the Collateral Documents on such
Property, and further provided that the Borrower and the Parent shall give the
Administrative Agent prompt notice of any such contest and that such reserve or
other appropriate provision as shall be required by the Accountants in
accordance with GAAP shall have been made therefor.
7.7. Condition of Property.
At all times, maintain, protect and keep in good repair,
working order and condition (ordinary wear and tear excepted), and cause each of
the Restricted Subsidiaries so to do, all Property reasonably deemed by the
Parent's or such Restricted Subsidiary's management to be necessary to the
operation of its business.
7.8. Observance of Legal Requirements; ERISA.
Observe and comply in all respects, and cause each of the
Restricted Subsidiaries so to do, with all laws (including ERISA), ordinances,
orders, judgments, rules, regulations, certifications, franchises, permits,
licenses, directions and requirements of all Governmental Bodies, which now or
at any time hereafter may be applicable to the Parent or such Restricted
Subsidiary, a violation of which could reasonably be expected to have a
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*CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS
HAVE BEEN OMITTED AND FILED SEPARATELY
Material Adverse Effect, except such thereof as shall be contested in good faith
and by appropriate proceedings diligently conducted by the Parent or such
Restricted Subsidiary, provided that Borrower and the Parent shall give the
Administrative Agent and the Lenders prompt notice of such contest and that such
reserve or other appropriate provision as shall be required by the Accountants
in accordance with GAAP shall have been made therefor.
7.9. Inspection of Property; Books and Records; Discussions.
Keep proper books of record and account in which full, true
and correct entries in conformity with GAAP and all requirements of law shall be
made of all dealings and transactions in relation to its business and activities
and permit representatives of the Administrative Agent and any Lender, upon at
least one Business Day's prior notice, to visit its offices, to inspect any of
its Property and examine and make copies or abstracts from any of its books and
records at any reasonable time and as often as may reasonably be desired, and to
discuss the business, operations, prospects, licenses, Property and financial
condition of the Parent or any Restricted Subsidiary with the executive officers
of the Parent and the Restricted Subsidiaries.
7.10. Licenses, Etc.
Maintain and cause each of the Restricted Subsidiaries to
maintain, in full force and effect, all material licenses, Intellectual
Property, franchises, authorizations and other rights as are necessary for the
conduct of its business.
7.11. Interest Rate Protection Agreements.
Within 90 days after the Restatement Effective Date, enter
into and maintain for a period of 2 years from the Restatement Effective Date,
Interest Rate Protection Agreements, in form and substance reasonably
satisfactory to the Administrative Agent, with respect to an amount equal to not
less than 50% of the principal amount of the Loans outstanding from time to
time.
7.12. Fixed Charge Coverage Ratio.
Maintain, or cause to be maintained, as of the last day of
each fiscal quarter commencing with the fiscal quarter ending June 30, 1998, a
Fixed Charge Coverage Ratio of not less than *.
<PAGE> 85
*CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL
PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY
7.13. Pro-forma Debt Service Coverage Ratio.
Maintain, or cause to be maintained, as of the last day of
each fiscal quarter, a Pro-forma Debt Service Coverage Ratio of not less than *
commencing with the first full fiscal quarter ending after the effectiveness of
the Syndication Amendment.
7.14. Interest Coverage Ratio.
Maintain, or cause to be maintained, as of the last day of
each fiscal quarter during the periods set forth below, an Interest Coverage
Ratio of not less than the ratios set forth below:
Periods Ratio
Restatement Effective Date through
September 30, 1996 *
December 31, 1996 through
June 30, 1997 *
September 30, 1997 through
December 31, 1997 *
March 31, 1998 through
December 31, 1998 *
March 31, 1999 and
thereafter *
<PAGE> 86
*CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS
HAVE BEEN OMITTED AND FILED SEPARATELY
7.15. Leverage Ratio.
Maintain, or cause to be maintained, at all times during the
periods set forth below, a Leverage Ratio of not greater than the ratios set
forth below:
Periods Ratio
Restatement Effective Date
through June 29, 1997 *
June 30, 1997 through
December 30, 1997 *
December 31, 1997 through
June 29, 1998 *
June 30, 1998 and
thereafter *
Notwithstanding the foregoing, in the event that the Borrower makes a
Restricted Payment permitted by Section 8.5(e), the maximum permitted Leverage
Ratio shall be reduced for all periods after such payment to *.
7.16. Westlink Merger.
Consummate the Westlink Merger in accordance with the
provisions of Section 8.3(b) immediately after the consummation of the Westlink
Acquisition and on the Restatement Effective Date, provided, however, in the
event that the Westlink Merger is not consummated on the Restatement Effective
Date, Westlink shall, if so requested by the Administrative Agent in its
discretion or as directed by the Required Lenders at any time on or after the
Restatement Effective Date, become party to the Subsidiary Guaranty (either by
the execution thereof on the Restatement Effective Date or by a Supplement (as
defined therein) thereto after the Restatement Effective Date) and shall deliver
to the Administrative Agent such documents and opinions as the Administrative
Agent may require. Nothing in this Section is intended to relieve the Borrower
or Westlink from their obligation to consummate the Westlink Merger on the date
required or to affect the status of the failure to timely consummate the
Westlink Merger
<PAGE> 87
as a Default, and the Administrative Agent and the Lenders shall have all of the
rights accorded to them under the Loan Documents with respect to such Default.
7.17. Material Foreign Subsidiary
Not later than 30 days after the Parent or any of the
Restricted Subsidiaries determines that a Foreign Subsidiary has become a
Material Foreign Subsidiary, deliver or cause to be delivered to the
Administrative Agent (i) a supplement to the Subsidiary Guaranty, in accordance
with the terms thereof, duly executed by such Material Foreign Subsidiary, (ii)
certificates representing 100% of the issued and outstanding capital Stock of
such Material Foreign Subsidiary owned by such Restricted Subsidiary together
with an undated stock power with respect thereto duly executed by the registered
owner thereof, (iii) opinions of counsel (including foreign counsel, if so
requested by the Administrative Agent) and (iv) such other documentation as the
Administrative Agent shall reasonably request. All such items delivered to the
Administrative Agent pursuant to this Section shall be in all respects
satisfactory to the Administrative Agent.
7.18. Georgia Approval
File an application, in form and substance satisfactory to the
Administrative Agent, with the Georgia Public Service Commission with respect to
(i) the acquisition in May, 1995 by Arch Southeast of "radio utility" assets or
a "radio utility" business, as the case may be, in the State of Georgia, (ii)
the incurrence by the Borrower and Arch Southeast of the Indebtedness under the
Existing Credit Agreement (and the Loan Documents as defined therein), under the
Loan Documents and in respect of Intercompany Loans of Arch Southeast and,
within 120 days after the Restatement Effective Date, receive an approval
thereof from the Georgia Public Service Commission.
8. NEGATIVE COVENANTS
The Parent and the Borrower each hereby covenants and agrees that,
until all obligations of the Borrower and the Parent under the Loan Documents
have been paid in full and all Commitments of the Lenders have been terminated
and no obligations of the Administrative Agent, the Co- Agents or any of the
Lenders exist under any of the Loan Documents, it shall not:
8.1. Indebtedness.
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Create, incur, assume or suffer to exist any liability for
Indebtedness, or permit any of the Restricted Subsidiaries so to do, except (i)
Indebtedness due under the Loan Documents, (ii) Indebtedness of the Parent or
any of the Restricted Subsidiaries existing on the Restatement Effective Date as
set forth on Schedule 8.1, including, except as set forth in the proviso below,
refinancings thereof but not increases in the amount of any thereof, provided
that refinancings of such existing Indebtedness shall not be permitted unless
the interest rate on any such refinanced Indebtedness is not in excess of the
rate available for similar borrowings by similar borrowers at the time of the
refinancing, the final maturity of such refinanced Indebtedness is not earlier
than the Tranche B Term Loan Maturity Date, the average weighted life to
maturity of such refinanced Indebtedness shall be greater than the average
weighted life to maturity of the Indebtedness under the Loan Documents
determined as of the date of such refinancing and if the Indebtedness being
refinanced is subordinated to the Indebtedness under the Loan Documents, such
refinanced Indebtedness shall be so subordinated on the same terms and to the
same extent as such Indebtedness being so refinanced, (iii) purchase money
Indebtedness of the Restricted Subsidiaries (other than any such Indebtedness
described in clause (ii)) incurred in connection with the purchase, after the
date hereof, of any Property, in a principal amount not in excess of $5,000,000
at any one time outstanding, (iv) Indebtedness of the Restricted Subsidiaries
consisting of obligations under Capital Leases not in excess of $5,000,000 in
the aggregate at any one time, (v) Intercompany Loans to the extent permitted by
Section 8.6, (vi) Indebtedness of any Restricted Subsidiary consisting of
obligations under the Non-Competition Agreements (in addition to those set forth
on Schedule 8.1) not in excess of $5,000,000 in the aggregate, (vii) Contingent
Obligations to the extent permitted by Section 8.4, (viii) the Parent
Intercompany Loans, (ix) Indebtedness of the Parent in respect of the
Subordinated Debentures, and (x) Indebtedness of the Parent in respect of the
Discount Notes in an aggregate principal amount not in excess of the Aggregate
Accreted Value thereof.
8.2. Liens.
Create, incur, assume or suffer to exist any Lien upon any of
its Property, whether now owned or hereafter acquired, or permit any of the
Restricted Subsidiaries so to do, except (i) Liens for taxes, assessments or
similar charges, incurred in the ordinary course of business, not delinquent or,
if delinquent, being contested in accordance with Section 7.4, (ii) Liens
created in favor of the Administrative Agent pursuant to the Collateral
Documents, (iii) mechanics', carriers', warehousemen's, workmen's, repairmen's
or other like statutory Liens incurred in the ordinary course of business,
provided that the obligations secured thereby are not past due or are being
contested in good faith by appropriate proceedings in accordance with Section
7.6, (iv) Liens existing on the Restatement Effective Date as set forth in
Schedule 8.2, (v) purchase money Liens on Property of any of the Restricted
Subsidiaries acquired after
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<PAGE> 89
the date hereof to secure Indebtedness of any of the Restricted Subsidiaries, to
the extent permitted by Section 8.1(iii), incurred in connection with the
acquisition of such Property, provided that the Lien thereon is limited to such
Property so acquired, (vi) Liens relating to Capital Leases, to the extent
permitted by Section 8.1(iv), (vii) Liens or deposits in connection with
workers' compensation, unemployment insurance or social security or other
similar statutory obligations (but not ERISA), (viii) to the extent that any
Property of the Parent or any of the Restricted Subsidiaries is subject to a
Lien on the Restatement Effective Date in respect of Indebtedness permitted
under Section 8.1(ii) and such Indebtedness is refinanced in accordance with
such Section, such Property may be subject to a Lien with respect to such
refinanced Indebtedness to the same extent as such Property was so subject on
the Restatement Effective Date in respect of the Indebtedness being refinanced,
and (ix) Liens on Arch Collateral in connection with Contingent Obligations of
the Parent to the extent such Contingent Obligations are permitted pursuant to
Section 8.4(iv).
8.3. Merger or Sale of Property.
(a) Consolidate with, be acquired by, or merge into or with
any Person, or sell, lease or otherwise dispose of all or substantially all of
its Property or any of its Stock (except as permitted by Section 8.13), or
otherwise alter or modify its corporate name, structure, status or existence, or
permit any Restricted Subsidiary so to do, except (i) the Westlink Merger,
subject to the conditions set forth in subsection (b), (ii) provided that (A)
the Administrative Agent shall have received ten days prior written notice and
(B) immediately before and after giving effect thereto no Default or Event of
Default shall exist, any of the Restricted Subsidiaries may merge or consolidate
with any other Restricted Subsidiary, provided that in the event of a merger of
the Borrower and any other Restricted Subsidiary the Borrower shall be the
survivor, (iii) sales of Property to the extent permitted under Section 8.8 and
(iv) mergers involving Restricted Subsidiaries as part of an Acquisition
permitted by Section 8.6, provided that no Stock is issued in connection
therewith except to the extent permitted by Section 8.13.
(b) The Borrower may consummate the Westlink Merger subject to
the prior or simultaneous fulfillment of the following conditions precedent:
(i) The Borrower shall have delivered to the
Administrative Agent a complete and correct copy of each of the Westlink Merger
Documents, each of which shall be in full force and effect and in form and
substance satisfactory to the Administrative Agent, and all actions required to
be taken by the Borrower and Westlink as a condition to the consummation of the
Westlink Merger shall have been taken on or prior to the Westlink Merger
Effective Date, and neither the Borrower nor, to the best of the knowledge of
the Borrower, Westlink shall be in default and each shall be in compliance with
its obligations thereunder.
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<PAGE> 90
(ii) The Westlink Merger shall have been consummated
in accordance with the terms of the Westlink Merger Documents and all applicable
laws, rules and regulations.
(iii) There shall be no actions, suits or proceedings
at law or in equity or by or before any Governmental Body (whether or not
purportedly on behalf of the Parent or any Restricted Subsidiary or any other
Loan Party) pending or, to the knowledge of the Borrower or the Parent,
threatened against the Parent or any Restricted Subsidiary or any other Loan
Party or any of their respective Properties or rights, which (A) if adversely
determined, could reasonably be expected to have a Material Adverse Effect, (B)
call into question the validity or enforceability of the Westlink Merger or (C)
seek to prevent or delay the consummation of the Westlink Merger.
(iv) The Borrower shall have filed the Westlink
Merger Certificate, duly executed by the Borrower, with the Secretary of State
of the State of Delaware, which such certificate shall evidence the merger of
Westlink with and into the Borrower with the Borrower being the survivor
thereof. The Westlink Merger Certificate shall comply as to form and substance
with the General Corporation Law of Delaware.
(v) The Administrative Agent shall have received a
certificate of an Authorized Signatory of the Borrower, dated the Westlink
Merger Effective Date, certifying that all of the conditions set forth in
subsection 8.3(b)(i) through (iv) above have been met, attaching thereto a true
and complete copy of the duly executed Westlink Merger Documents.
(vi) The Administrative Agent shall have received (A)
an opinion of Hale and Dorr, counsel to the Parent and the Borrower,
substantially in the form of Exhibit J-1, (B) an opinion of Garry Watzke, Esq.,
General Counsel of the Parent and the and the Borrower, substantially in the
form of Exhibit K-1 and (C) an opinion of Paul, Hastings, Janofsky & Walker, FCC
counsel to the Parent and the Borrower, substantially in the form of Exhibit
M-1, each addressed to the Administrative Agent, the Lenders and Special Counsel
and each dated the Westlink Merger Effective Date.
(vii) The Administrative Agent shall have received
such other documents and assurances as the Administrative Agent shall require.
8.4. Contingent Obligations.
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<PAGE> 91
Assume, guarantee, indorse, contingently agree to purchase or
perform, or otherwise become liable upon any Contingent Obligation or permit any
of the Restricted Subsidiaries so to do, except (i) the Contingent Obligations
of the Subsidiary Guarantors under the Subsidiary Guaranty, (ii) the Contingent
Obligations of the Parent under the Parent Guaranty, (iii) guarantees by the
Parent of Indebtedness or operating leases of any of the Restricted Subsidiaries
or by any Restricted Subsidiary of Indebtedness or operating leases of any other
Restricted Subsidiary, provided that (x) in the case of guarantees of
Indebtedness, such Indebtedness would be permitted by Section 8.1 if directly
incurred and
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<PAGE> 92
*CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS
HAVE BEEN OMITTED AND FILED SEPARATELY
(y) in the case of operating leases, such operating leases are incurred in the
ordinary course of business, and (iv) Contingent Obligations of the Parent under
the USA Mobile Parent Guaranty.
8.5. Restricted Payments.
Declare or make any Restricted Payment, or permit any of the
Restricted Subsidiaries so to do, except that:
(a) any wholly-owned Subsidiary of the Borrower may
make Restricted Payments to its parent;
(b) the Borrower may make Restricted Payments to the
Parent for purposes of paying taxes, pursuant to the terms set forth in the Tax
Sharing Agreement;
(c) provided that immediately before or after giving
effect to such declaration and payment no Default or Event of Default shall
exist, the Borrower may make Restricted Payments to the Parent to enable the
Parent to satisfy interest payment obligations of the Parent under the Discount
Note Indenture, on the dates and in the amounts required by the Discount Note
Indenture as in effect on the date of the issuance of the Discount Notes;
(d) the Borrower may pay a Management Fee to the
Parent in an aggregate amount not exceeding * of the net revenue of the
Restricted Subsidiaries during any fiscal year in accordance with the terms set
forth in the Management Agreement for services rendered by the Parent to the
Borrower, provided that (i) no Default or Event of Default has occurred or is
continuing (provided that during the continuance of a Default or an Event of
Default, the Management Fee may be accrued, but not paid) and (ii) any such
Management Fee accrued or paid shall be treated as an operating expense and
deducted from the calculation of Operating Cash Flow;
(e) provided that no Default or Event of Default
would exist immediately before or after giving effect thereto, after the
Borrower has delivered financial statements pursuant to Section 7.1(a) or (b)
that demonstrate that the Leverage Ratio has been less than * for the
immediately preceding two consecutive fiscal quarters, the Borrower may make
Restricted Payments to the Parent in any fiscal year in an amount
<PAGE> 93
not to exceed (after giving effect to any such Restricted Payments) the then
Available Amount, and the Parent may thereafter make Restricted Payments to its
shareholders; and
(f) provided that no Default or Event of Default
would exist immediately before or after giving effect thereto, the Borrower may
declare and pay dividends to the Parent (i) in an aggregate amount not exceeding
$1,000,000 to enable the Parent to repurchase shares of its common Stock and
(ii) in an aggregate amount not exceeding $4,000,000 to enable the Parent to
repurchase shares of its preferred Stock.
8.6. Investments, Loans, Acquisitions, Etc.
At any time, purchase or otherwise acquire, hold or invest in
the Stock of, or any other interest in, any Person, or make any loan or advance
to, or enter into any arrangement for the purpose of providing funds or credit
to, or make any other investment, whether by way of capital contribution or
otherwise, in or with any Person including, without limitation, an Acquisition,
or permit any of the Restricted Subsidiaries so to do, (all of which are
sometimes referred to herein as "Investments") except:
(a) Investments in short-term domestic and eurodollar
certificates of deposit issued by any Lender, or any other commercial bank,
trust company or national banking association incorporated under the laws of the
United States or any State thereof and having undivided capital surplus and
retained earnings exceeding $500,000,000;
(b) Investments in short-term direct obligations of the United
States of America or agencies thereof which obligations are guaranteed by the
United States of America;
(c) Investments existing on the Restatement Effective Date as
set forth in Schedule 8.6;
(d) normal business banking accounts and short-term
certificates of deposit and time deposits in, or issued by, federally insured
institutions;
(e) Investments by the Borrower after the Restatement
Effective Date in minority interests in personal communications services
businesses (other than in Benbow) including, without limitation, in PCSD, and
minority interests in Paging-Related Businesses, provided that (i) no Default or
Event of Default shall exist immediately before or after giving effect thereto,
and (ii) the aggregate amount of such Investments shall not exceed $25,000,000;
(f) [Reserved]
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(g) Except as provided in clause (n) with respect to
Investments in Foreign Subsidiaries, Investments made after the Restatement
Effective Date by the Borrower
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<PAGE> 95
*CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS
HAVE BEEN OMITTED AND FILED SEPARATELY
in its Subsidiaries and Investments by the Parent in the Restricted
Subsidiaries, provided that (i) each such Investment shall be made as a demand
loan, (ii) such loan is evidenced by a promissory note pledged to the
Administrative Agent under the Borrower Security Agreement or the Parent
Security Agreement, as the case may be, and (iii) no Default or Event of Default
shall exist immediately before or after giving effect thereto;
(h) subject to subsection (k) below and provided that no
Default or Event of Default shall exist before and after giving effect thereto,
Acquisitions by the Borrower made solely from contributions to the capital of
the Borrower made by the Parent with the proceeds of equity issuances of the
Parent permitted under Section 8.13(c), provided that (i) no Indebtedness for
borrowed money shall be incurred or assumed by or transferred to the Borrower or
any Restricted Subsidiary in connection with such Acquisition, (ii) Total Debt
shall not increase as a result of such Acquisition and (iii) the Leverage Ratio,
on a pro-forma basis, shall decrease as a result thereof and the Administrative
Agent shall have a received a certificate of an Authorized Signatory of the
Borrower to such effect;
(i) subject to subsection (k) below and provided that no
Default or Event of Default shall exist before and after giving effect thereto,
and provided that the pro-forma Leverage Ratio is less than *, Acquisitions by
the Borrower, the total cash purchase consideration of which is not greater than
$10,000,000 per Acquisition nor $30,000,000 in the aggregate;
(j) subject to subsection (k) below and provided that no
Default or Event of Default shall exist before and after giving effect thereto,
and provided that the pro-forma Leverage Ratio is less than *, Acquisitions by
the Borrower, the total cash purchase consideration of which is not greater than
$20,000,000 per Acquisition;
(k) prior to any Acquisition permitted under subsection (h),
(i) or (j), in addition to any requirements set forth in such subsections, the
Borrower shall have provided to the Administrative Agent and the Lenders (i) ten
Business Days' prior written notice thereof, (ii) a certificate of an Authorized
Signatory of the Borrower stating (1) that immediately before or after giving
effect to such Acquisition, no Default or Event of Default shall exist and (2)
all representations and warranties set forth in Section 4 (other than Section
4.1 to the extent that Schedule 4.1 does not reflect the Acquisition in
question) are true and correct before and after giving effect to such
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*CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS
HAVE BEEN OMITTED AND FILED SEPARATELY
Acquisition, (iii) unaudited Consolidated pro-forma balance sheets and the
Consolidated pro-forma statements of operations of the Restricted Subsidiaries
presenting the pro-forma Consolidated financial condition of the Restricted
Subsidiaries and the pro-forma Consolidated statements of operations of the
Restricted Subsidiaries through the Tranche B Term Loan Maturity Date, (iv) a
Compliance Certificate on a pro forma basis giving effect to such Acquisition,
(v) such documents as may be requested by the Administrative Agent or its
counsel in order for the Administrative Agent to obtain a perfected first
priority security interest in the Property or Stock so acquired under the
Collateral Documents and (vi) such other information or documents as the
Administrative Agent shall have reasonably requested;
(l) Investments by the Restricted Subsidiaries consisting of
(i) the Parent Intercompany Loans, and (ii) Intercompany Loans, provided,
however, that (A) any such Intercompany Loan is evidenced by an Intercompany
Note pledged to the Administrative Agent under the Borrower Security Agreement
or the Subsidiary Guaranty, as the case may be, and (B) no Default or Event of
Default would exist before or after giving effect thereto;
(m) Investments by the Parent consisting of loans to the
Restricted Subsidiaries, provided, however, that (A) any such loan is evidenced
by an Intercompany Note pledged to the Administrative Agent under the Parent
Security Agreement and (B) no Default or Event of Default would exist before or
after giving effect thereto;
(n) Investments in Foreign Subsidiaries in an amount not in
excess of * in the aggregate, provided that no Default or Event of Default shall
exist immediately before or after giving effect thereto; and
(o) Additional Benbow Investments, provided that (i) each such
Additional Benbow Investment shall be made as a demand loan evidenced by a
promissory note in form and substance satisfactory to the Administrative Agent,
which note shall be pledged to the Administrative Agent under the Subsidiary
Guaranty and (ii) on and after the date upon which the Additional Benbow
Investments exceed * in the aggregate, any further Additional Benbow Investment
shall be made either:
(A) with the proceeds of the issuance by the Parent
of additional equity securities to the extent permitted by Section 8.13(c); or
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*CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS
HAVE BEEN OMITTED AND FILED SEPARATELY
(B) out of Excess Cash Flow for a fiscal year in an
amount not to exceed (after giving effect to any such Additional Benbow
Investment) the then Available Amount, provided however, that (1) no Default or
Event of Default would exist immediately before or after giving effect thereto
and (2) the Borrower has delivered financial statements pursuant to Section
7.1(a) or (b) that demonstrate that the Leverage Ratio has been less than * for
the immediately preceding two consecutive fiscal quarters.
(p) In connection with the making of any Additional Benbow
Investment, the Parent may contribute the proceeds of any issuance of equity
made in connection therewith as additional equity to the Borrower, and the
Borrower may, upon receipt of such equity contribution, contribute the amount
thereof, together with the amount, if any, of Excess Cash Flow permitted to be
contributed to Benbow as an Additional Benbow Investment under subsection
(o)(ii)(B) above, to Westlink Company as additional equity and Westlink Company
shall, upon receipt of such equity contribution, make such Additional Benbow
Investment.
8.7. Business and Name Changes.
(a) With respect to the Restricted Subsidiaries, (i)
materially change, or permit any Restricted Subsidiary to materially change, the
nature of its respective business as conducted on the Restatement Effective
Date, or (ii) without giving the Administrative Agent thirty days' prior written
notice, change the name of any Restricted Subsidiary.
(b) With respect to the Parent (i) materially change the
nature of its business from that of owning (A) 100% of the issued and
outstanding capital Stock of the Borrower, (B) 100% of the issued and
outstanding capital Stock of USA Mobile, and activities relating directly to
such Stock ownership or otherwise set forth in the Management Agreement or (ii)
without giving the Administrative Agent thirty days' prior written notice,
change the name of the Parent.
8.8. Sale of Property.
Sell, exchange, lease, transfer or otherwise dispose of any
Property to any Person, or permit any Restricted Subsidiary so to do, except (i)
sales or dispositions of Property (other than Stock of any of the Restricted
Subsidiaries) in the ordinary course of business, including normal retirements
and replacements of Property in the ordinary
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course of business, and (ii) sales or other dispositions of Property (other than
Stock of any of the Restricted Subsidiaries) provided that the Property being
sold, together with all such other Property sold pursuant to this clause (ii),
has not contributed in the aggregate more than 10% of Operating Cash Flow during
the fiscal quarter immediately preceding the sale of such Property, provided
further that in connection with any sale pursuant to this clause (ii) the
following conditions shall be satisfied:
(a) the Borrower shall give the Administrative Agent
at least 10 Business Days' prior written notice of each such sale identifying
the Property to be sold and the total consideration to be paid in respect
thereof,
(b) no Default or Event of Default shall exist
immediately before or after giving effect thereto,
(c) the consideration received or to be received by
any of the Restricted Subsidiaries shall be payable in cash on or before the
closing of such sale and shall not be less than the fair market value of the
Property so sold, as reasonably determined by the Managing Person of such
Restricted Subsidiary,
(d) Net Sales Proceeds in excess of $500,000 received
by any Restricted Subsidiary which is not the Borrower shall be immediately
distributed by such Restricted Subsidiary pursuant to a dividend to the
Borrower,
(e) 100% of the Net Sales Proceeds in excess of
$500,000 in the aggregate for all Property sold pursuant to clause (ii) above,
upon the receipt by the Borrower of any such Net Sales Proceeds received from
the sale or disposition of Property by the Borrower or a dividend from any
Restricted Subsidiary in respect of Net Sales Proceeds received by such
Restricted Subsidiary pursuant to subsection (d), shall be applied to the
prepayment of the Loans and the permanent reduction of the Aggregate Revolving
Credit Commitments in accordance with Section 2.8(f).
For purposes of Section 8.8(ii), in order to calculate the
aggregate percentage of Operating Cash Flow contributed by all Property sold
pursuant to such subsection, at any date of determination, any Property sold at
any time pursuant to such clause shall be deemed to have contributed that
percentage of Operating Cash Flow as it contributed during the fiscal quarter
immediately preceding its sale.
8.9. Subsidiaries.
Create or acquire any Subsidiary, or permit any of the
Restricted Subsidiaries so to do, except as otherwise provided pursuant to and
in accordance with Sections 8.6 and 8.13.
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8.10. Organizational Documents.
Amend or otherwise modify its Organizational Documents in any
way which would adversely affect the interests of the Lenders under any of the
Loan Documents or the obligations the Parent or any Restricted Subsidiary under
any of the Loan Documents, or permit any of the Restricted Subsidiaries so to
do.
8.11. Prepayments of Indebtedness.
Except as provided in Section 8.19, prepay or obligate itself
to prepay, in whole or in part, any Indebtedness (other than Indebtedness under
the Loan Documents), or permit any Subsidiary so to do, including, without
limitation, by the exercise of any right to redeem the Subordinated Debentures
or the Discount Notes. For purposes of the preceding sentence, the Parent shall
not be deemed to have obligated itself to prepay the Indebtedness in respect of
the Subordinated Debentures or the Discount Notes solely by reason of the
existence of the right of a holder thereof to require the Parent to redeem the
same upon the occurrence of a Fundamental Change (as defined in the Subordinated
Indenture as in effect on the Original Effective Date) or a Change of Control
(as defined in the Discount Note Indenture as in effect on the date of the
issuance of the Discount Notes), respectively.
8.12. Sale and Leaseback.
Enter into any arrangement with any Person providing for the
leasing by it of Property which has been or is to be sold or transferred by it
to such Person or to any other Person to whom funds have been or are to be
advanced by such Person on the security of such Property or its rental
obligations, or permit any of the Restricted Subsidiaries so to do.
8.13. Creation, Acquisition or Issuance of Capital Stock.
Create or acquire the Stock or other equity or ownership in,
or Property of, any Person which shall thereupon become a Restricted Subsidiary
(each, a "New Subsidiary"), or issue any additional Stock or other equity or
ownership interest, or permit any of the Restricted Subsidiaries so to do,
except as follows:
(a) a Restricted Subsidiary may issue additional
Stock or other equity or ownership interests to its immediate parent provided
that (i) the same is not otherwise prohibited under the Loan Documents, (ii)
simultaneously therewith (1) such Stock or other equity or ownership interest
shall be pledged by the holder thereof (the "Pledgor") to the Administrative
Agent, for the ratable benefit of the Lenders (and any
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Lenders or affiliates of Lenders which have entered into one or more Interest
Rate Protection Agreements with the Borrower), under the Parent Security
Agreement, the Borrower Security Agreement or the Subsidiary Guaranty, as the
case may be, (2) appropriate stock powers, UCC Financing Statements, trademark
assignments and such other documentation as the Administrative Agent shall
reasonably request shall be delivered to the Administrative Agent, and (3) an
opinion of counsel to the Pledgor and the issuer, in all respects satisfactory
to the Administrative Agent, shall have been delivered to the Administrative
Agent, and (iii) there shall be no Lien upon such Stock or other equity or
ownership interest except for the Lien created in favor of the Administrative
Agent, for the ratable benefit of the Lenders (and any Lenders or affiliates of
Lenders which have entered into one or more Interest Rate Protection Agreements
with the Borrower), under the Parent Security Agreement, the Borrower Security
Agreement or the Subsidiary Guaranty, as the case may be;
(b) a Restricted Subsidiary may create or acquire a
New Subsidiary provided that (i) the Administrative Agent shall have received 10
Business Days' advance written notice thereof, (ii) such New Subsidiary (other
than a Non-Material Foreign Subsidiary) shall execute and deliver to the
Administrative Agent a supplement to the Subsidiary Guaranty in accordance with
the respective terms thereof, (iii) 100% of the Stock of such New Subsidiary
(65% in the case of a Non-Material Foreign Subsidiary) shall be pledged by the
Restricted Subsidiary to the Administrative Agent, for the ratable benefit of
the Lenders (and any Lenders or affiliates of Lenders which have entered into
one or more Interest Rate Protection Agreements with the Borrower), under the
Borrower Security Agreement or Subsidiary Guaranty, as the case may be, together
with appropriate stock powers and such other documentation as the Administrative
Agent shall reasonably request and an opinion of counsel to the New Subsidiary,
in all respects satisfactory to the Administrative Agent, and (iv) no Default or
Event of Default shall exist immediately before or after giving effect thereto,
and provided further that if a Restricted Subsidiary acquires a New Subsidiary,
such acquisition is permitted by Section 8.6; and
(c) the Parent may issue (i) additional common Stock
provided that the terms thereof are substantially the same as the common Stock
of the Parent on the Restatement Effective Date and (ii) other perpetual Stock,
provided that (1) the terms thereof are satisfactory to Required Lenders and (2)
no such Stock shall provide for (A) mandatory dividends (except for dividends
payable solely in such Stock), mandatory redemptions or other similar payments,
(B) preemptive rights, (C) different voting rights from other classes of common
Stock (including cumulative voting rights and increased voting power if the
Borrower fails to make a required dividend payment) and (D) rights to dividends
(unless the Parent is only required to declare and pay any such dividend if it
is permitted to do so hereunder).
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8.14. Fiscal Year.
Change its fiscal year from that in effect on the Restatement
Effective Date or permit any of the Restricted Subsidiaries so to do.
8.15. Amendments, Etc. of Certain Agreements.
Enter into or agree to any amendment, modification or waiver
of any term or condition of any of the Intercompany Notes, the Management
Agreement, any Non-Competition Agreement, the Subordinated Indenture, the
Subordinated Debentures, the Discount Note Indenture, the Discount Notes, the
Tax Sharing Agreement, the Subordination Agreement or any of the Westlink Merger
Documents or the Westlink Acquisition Documents, in each case in any way which
could adversely affect either (i) the interests of the Administrative Agent and
the Lenders under the Loan Documents or (ii) any Loan Party's ability to perform
its obligations under the Loan Documents.
8.16. Transactions with Affiliates.
Except for the Westlink Merger, become a party to any
transaction with an Affiliate (other than a Subsidiary Guarantor), or permit any
of the Restricted Subsidiaries so to do, unless its Managing Person shall have
determined that the terms and conditions relating to such transaction are as
favorable to it as those which would be obtainable at that time in a comparable
arms-length transaction with a Person other than an Affiliate, except for
Investments made by the Parent, or one of the Restricted Subsidiaries in any of
the other of such entities provided that any such transaction shall comply with
the provisions of Section 8.6.
8.17. Payment of Management Fees and Other Amounts.
Pay any Management Fees or any other amounts to the Parent or
any Affiliate of the Borrower or the Parent, or permit any Restricted Subsidiary
so to do, except that (i) the Borrower and their Subsidiaries may pay Management
Fees to the Parent to the extent permitted by Section 8.5 and (ii) the Borrower
and their Subsidiaries may make the payments required under the Tax Sharing
Agreement.
8.18. ERISA.
Adopt or become obligated to contribute to any Plan or
Multiemployer Plan, or permit any Restricted Subsidiary or Commonly Controlled
Entity so to do.
8.19. Subordinated Debt.
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Make any payment in respect of principal of, or premium or
interest on, or purchase, voluntarily redeem or otherwise retire, or make any
payment in respect of all or any part of the Indebtedness under the Subordinated
Indenture or the Subordinated Debentures or any other subordinated Indebtedness,
or permit any Restricted Subsidiary so to do, except (i) subject to the
subordination provisions of the Subordinated Indenture (as in effect on the
Original Effective Date), payments required to be made under the Subordinated
Indenture or with respect to the Subordinated Debentures and (ii) provided that
no Default or Event of Default would exist before and after giving effect
thereto, the Parent may prepay interest on, or pay a premium in connection with,
the conversion of Subordinated Debentures.
8.20. Designated Senior Indebtedness.
Designate any Indebtedness as "Designated Senior Indebtedness"
as defined in the Subordinated Indenture.
9. DEFAULT
9.1. Events of Default.
The following shall each constitute an "Event of Default"
hereunder:
(a) The failure of the Borrower to pay any principal
on any Note on the date when due and payable; or
(b) The failure of the Borrower to pay any interest
or any other fees or expenses payable under any Loan Document or otherwise to
the Administrative Agent with respect to the loan facilities established
hereunder within three Business Days of the date when due and payable; or
(c) The use of the proceeds of any Loan in a manner
inconsistent with or in violation of Section 2.17; or
(d) The failure of the Borrower or the Parent to
observe or perform any covenant or agreement contained in Sections 7.3, 7.11,
7.12, 7.13, 7.14, 7.15, Section 8 or Section 11.1; or
(e) The failure of (i) the Borrower to comply with
the provisions of Section 7.16 and such failure shall have continued unremedied
for a period of three Business Days from the Restatement Effective Date, or (ii)
any Loan Party to observe or perform any other term, covenant, or agreement
contained in any Loan Docu-
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<PAGE> 103
ment and such failure shall have continued unremedied for a period of 30 days
from the earlier of the date when the Borrower or the Parent shall have obtained
knowledge thereof; or
(f) Any representation or warranty of any Restricted
Subsidiary or the Parent (or of any officer of the Borrower or the Parent on its
behalf) made in any Loan Document or in any certificate, report, opinion (other
than an opinion of counsel) or other document delivered or to be delivered
pursuant to this Agreement, shall prove to have been incorrect or misleading
(whether because of misstatement or omission) in any material respect when made;
or
(g) Any obligation of any Restricted Subsidiary
(other than the obligations of the Borrower under the Notes) or the Parent,
whether as principal, guarantor, surety or other obligor, for the payment of any
Indebtedness or operating leases (other than Contingent Obligations of the
Parent in respect of the USA Mobile Parent Guaranty or operating leases of any
Subsidiary of the Parent (other than the Restricted Subsidiaries)) in an
aggregate amount greater than $1,000,000 (i) shall become or shall be declared
to be due and payable prior to the expressed maturity thereof, or (ii) shall not
be paid when due or within any grace period for the payment thereof, or (iii)
the holder of any such obligation shall have the right to declare such
obligation due and payable prior to the expressed maturity thereof;
(h) The Parent or any of the Restricted Subsidiaries
shall (i) suspend or discontinue its business (except as provided in Section 7.3
with respect to Hudson and Arch Services), or (ii) make an assignment for the
benefit of creditors, or (iii) generally not be paying its debts as such debts
become due, or (iv) admit in writing its inability to pay its debts as they
become due, or (v) file a voluntary petition in bankruptcy, or (vi) become
insolvent (however such insolvency shall be evidenced), or (vii) file any
petition or answer seeking for itself any reorganization, arrangement,
composition, readjustment of debt, liquidation or dissolution or similar relief
under any present or future statute, law or regulation of any jurisdiction, or
(viii) petition or apply to any tribunal for any receiver, custodian or any
trustee for any substantial part of its Property, or (ix) be the subject of any
such proceeding filed against it which remains undismissed for a period of 60
days, or (x) file any answer admitting or not contesting the material
allegations of any such petition filed against it or any order, judgment or
decree approving such petition in any such proceeding, or (xi) seek, approve,
consent to, or acquiesce in any such proceeding, or in the appointment of any
trustee, receiver, custodian, liquidator, or fiscal agent for it, or any
substantial part of its Property, or an order is entered appointing any such
trustee, receiver, custodian, liquidator or fiscal agent and such order remains
in effect for 60 days, or (xii) take any formal action for the purpose of
effecting any of the foregoing or looking to the liquidation or dissolution of
the Parent
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or such Restricted Subsidiary (except as provided in Section 7.3 with respect to
Hudson and Arch Services); or
(i) An order for relief is entered under the United
States bankruptcy laws or any other decree or order is entered by a court having
jurisdiction (i) adjudging the Parent or any of the Restricted Subsidiaries
bankrupt or insolvent, or (ii) approving as properly filed a petition seeking
reorganization, liquidation, arrangement, adjustment or composition of or in
respect of the Parent or any of the Restricted Subsidiaries under the United
States bankruptcy laws or any other applicable Federal or state law, or (iii)
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator
(or other similar official) of the Parent or any of the Restricted Subsidiaries
or of any substantial part of the Property thereof, or (iv) ordering the winding
up or liquidation of the affairs of the Parent or any of the Restricted
Subsidiaries, and any such decree or order continues unstayed and in effect for
a period of 60 days; or
(j) Any judgment or decree against the Parent or any
of the Restricted Subsidiaries aggregating in excess of $250,000 (other than
judgments against the Parent relating to its Contingent Obligations with respect
to the USA Mobile Credit Agreement) shall remain unpaid, unstayed on appeal,
undischarged, unbonded or undismissed for a period of 30 days; or
(k) The occurrence of an Event of Default under and
as defined in any Collateral Document; or
(l) Any Loan Document shall cease, for any reason, to
be in full force and effect, or any Loan Party shall so assert in writing; or
(m) The FCC or any other Governmental Body cancels or
revokes any of the Parent's or any Restricted Subsidiary's material licenses, or
fails to renew any such license or licenses, which cancellation, revocation or
failure to renew could reasonably be expected to have a Material Adverse Effect;
or
(n) There shall occur (i) a Fundamental Change (as
defined in the Subordinated Indenture as in effect on the Original Effective
Date), (ii) an event which, after the giving of notice, the lapse of time, or
both or the satisfaction of any other condition, would give the holders of
Subordinated Debentures the right to require the Parent to repurchase or redeem
the same pursuant to the Subordinated Indenture or, in the event that the
Subordinated Indenture is no longer in effect, would have given such holders
such right under the Subordinated Indenture if it were then in effect and
subject to the provisions thereof as in effect on the Original Effective Date,
or (iii) a Default or Event of Default (under and as defined in the Subordinated
Indenture); or
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(o) There shall occur (i) a Change of Control (as
defined in the Discount Note Indenture as in effect on the date of the issuance
thereof), (ii) an event which, after the giving of notice, the lapse of time, or
both or the satisfaction of any other condition, would give the holders of
Discount Notes the right to require the Parent to repurchase or redeem the same
pursuant to the Discount Note Indenture or, in the event that the Discount Note
Indenture is no longer in effect, would have given such holders such right under
the Subordinated Indenture if it were then in effect and subject to the
provisions thereof as in effect on the Original Effective Date, or (iii) a
Default or Event of Default (under and as defined in the Discount Note
Indenture).
Upon the occurrence of an Event of Default or at any time
thereafter during the continuance thereof, (a) if such event is an Event of
Default specified in clauses (h) or (i) above, the Commitments shall immediately
and automatically terminate and the Loans, all accrued and unpaid interest
thereon and all other amounts owing under the Loan Documents shall immediately
become due and payable without any further action, and the Administrative Agent,
upon the direction of the Required Lenders shall, exercise any and all remedies
and other rights provided in the Loan Documents, and (b) if such event is any
other Event of Default, any or all of the following actions may be taken: (i)
upon the direction of the Required Lenders, the Administrative Agent shall, by
notice to the Borrower, declare the Commitments to be terminated, forthwith,
whereupon the Commitments shall immediately terminate, and (ii) upon the
direction of the Required Lenders, the Administrative Agent shall, by notice of
default to the Borrower, declare the Loans, all accrued and unpaid interest
thereon and all other amounts owing under the Loan Documents to be due and
payable forthwith, whereupon the same shall immediately become due and payable,
and the Administrative Agent shall, and upon the direction of the Required
Lenders, exercise any and all remedies and other rights provided pursuant to the
Loan Documents. Except as otherwise provided in this Section, presentment,
demand, protest and all other notices of any kind are hereby expressly waived.
To the extent not prohibited by applicable law, the Borrower, the Parent and the
Subsidiary Guarantors hereby further expressly waive and covenant not to assert
any appraisement, valuation, stay, extension, redemption or similar laws, now or
at any time hereafter in force which might delay, prevent or otherwise impede
the performance or enforcement of any Loan Document.
In the event that the Aggregate Commitments shall have been
terminated or the Notes and the Loans shall have been declared due and payable
pursuant to the provisions of this Section, any funds received by the
Administrative Agent and the Lenders from or on behalf of the Borrower, the
Parent or any Subsidiary Guarantor shall be applied by the Administrative Agent
and the Lenders in liquidation of the Loans and the obligations of the Borrower,
the Parent and the Subsidiary Guarantors under the Loan Documents in the
following manner and order: (i) first, to reimburse the Administrative Agent and
the Lenders for any expenses due from the Borrower, the
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Parent and the Subsidiary Guarantors pursuant to the provisions of Section 12.5;
(ii) second, to the payment of the accrued and unpaid Commitment Fees and all
other fees, expenses and amounts due under the Loan Documents (other than
principal and interest on the Notes); (iii) third, to the payment of interest
due on the Notes, on a pro rata basis; (iv) fourth, to the payment of principal
outstanding on the Notes, on a pro rata basis, and to the payment of obligations
of the Borrower to the Lenders (and any affiliate of any Lender) arising out of
Interest Rate Protection Agreements to the extent such obligations arising out
of such Interest Rate Protection Agreements are secured by the Collateral; and
(v) fifth, to the payment of any other amounts owing to the Administrative Agent
and the Lenders under any Loan Document.
10. THE ADMINISTRATIVE AGENT
10.1. Appointment.
Each Lender hereby irrevocably designates and appoints BNY as
the Administrative Agent of such Lender under the Loan Documents and each such
Lender hereby irrevocably authorizes BNY, as the Administrative Agent for such
Lender, to take such action on its behalf under the provisions of the Loan
Documents and to exercise such powers and perform such duties as are expressly
delegated to the Administrative Agent by the terms of the Loan Documents,
together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in any Loan Document,
the Administrative Agent shall not have any duties or responsibilities, except
those expressly set forth therein, or any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into the Loan Documents or otherwise
exist against the Administrative Agent.
10.2. Delegation of Duties.
The Administrative Agent may execute any of its duties under
the Loan Documents by or through agents or attorneys-in-fact and shall be
entitled to rely upon the advice of counsel concerning all matters pertaining to
such duties.
10.3. Exculpatory Provisions.
Neither the Administrative Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates shall be (i)
liable for any action lawfully taken or omitted to be taken by it or such Person
under or in connection with the Loan Documents (except for its own gross
negligence or willful misconduct), or (ii) responsible in any manner to any of
the Lenders for any recitals, statements,
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representations or warranties made by any Loan Party or any officer thereof
contained in the Loan Documents or in any certificate, report, statement or
other document referred to or provided for in, or received by the Administrative
Agent under or in connection with, the Loan Documents or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of any of
the Loan Documents or for any failure of any Loan Party or any other Person to
perform its obligations thereunder. The Administrative Agent shall not be under
any obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, the Loan
Documents, or to inspect the properties, books or records of any Loan Party. The
Administrative Agent shall not be under any liability or responsibility
whatsoever, as Administrative Agent, to any Loan Party or any other Person as a
consequence of any failure or delay in performance, or any breach, by any Lender
of any of its obligations under any of the Loan Documents.
10.4. Reliance by Administrative Agent.
The Administrative Agent shall be entitled to rely, and shall
be fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, opinion, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to any Loan Party), independent accountants and
other experts selected by the Administrative Agent. The Administrative Agent may
treat each Lender, or the Person designated in the last notice filed with it
under this Section, as the holder of all of the interests of such Lender in its
Loans and in its Note 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. The Administrative Agent shall not be under any
duty to examine or pass upon the validity, effectiveness or genuineness of the
Loan Documents or any instrument, document or communication furnished pursuant
thereto or in connection therewith, and the Administrative Agent shall be
entitled to assume that the same are valid, effective and genuine, have been
signed or sent by the proper parties and are what they purport to be. The
Administrative Agent shall be fully justified in failing or refusing to take any
action under the Loan Documents unless it shall first receive such advice or
concurrence of the Required Lenders as it deems appropriate. The Administrative
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under the Loan Documents in accordance with a request of the Required
Lenders, and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all future holders of the
Notes.
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10.5. Notice of Default.
The Administrative Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default unless the
Administrative Agent has received written notice thereof from a Lender, the
Borrower, the Parent or any Subsidiary Guarantor. In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall
promptly give notice thereof to the Lenders. The Administrative Agent shall take
such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders, provided, however, that unless and
until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem to be in the best interests of the Lenders.
10.6. Non-Reliance on Administrative Agent and Other Lenders.
Each Lender expressly acknowledges that neither the
Administrative Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates has made any representations or warranties to it
and that no act by the Administrative Agent hereinafter, including any review of
the affairs of any Loan Party, shall be deemed to constitute any representation
or warranty by the Administrative Agent to any Lender. Each Lender represents to
the Administrative Agent that it has, independently and without reliance upon
the Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own evaluation of and
investigation into the business, operations, Property, financial and other
condition and creditworthiness of the Loan Parties and made its own decision to
enter into this Agreement. Each Lender also represents that it will,
independently and without reliance upon the Administrative Agent or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit analysis, evaluations and decisions
in taking or not taking action under this Agreement or any Loan Document, and to
make such investigation as it deems necessary to inform itself as to the
business, operations, Property, financial and other condition and
creditworthiness of the Loan Parties. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, Property, financial and other condition or
creditworthiness of the Loan Parties which may come into the possession of the
Administrative Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates.
10.7. Indemnification.
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Each Lender agrees to indemnify and reimburse the
Administrative Agent in its capacity as such (to the extent not promptly
reimbursed by the Borrower or the Parent and without limiting the obligation of
any Loan Party to do so), ratably according to (i) the sum of its Commitment
Percentages with respect to each of its Commitments at such time when no Loans
are outstanding and (ii) the outstanding principal balance of the Loans when
Loans are outstanding, from and against any and all liabilities, obligations,
claims, losses, damages, penalties, actions, judgments, suits, costs, expenses
or disbursements of any kind whatsoever including, without limitation, any
amounts paid to the Lenders (through the Administrative Agent) by the Borrower,
the Parent or any Subsidiary Guarantor pursuant to the terms of the Loan
Documents, that are subsequently rescinded or avoided, or must otherwise be
restored or returned) which may at any time (including, without limitation, at
any time following the payment of the Notes) be imposed on, incurred by or
asserted against the Administrative Agent in any way relating to or arising out
of this Agreement, the other Loan Documents or any other documents contemplated
by or referred to herein or the transactions contemplated hereby or any action
taken or omitted to be taken by the Administrative Agent under or in connection
with any of the foregoing; provided, however, that no Lender shall be liable for
the payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements to the
extent resulting solely from the gross negligence or willful misconduct of the
Administrative Agent. The agreements in this Section shall survive the payment
of all amounts payable under the Loan Documents.
10.8. Administrative Agent in Its Individual Capacity.
BNY and its affiliates may make loans to, accept deposits
from, issue letters of credit for the account of and generally engage in any
kind of business with, any Loan Party as though BNY was not Administrative Agent
hereunder. With respect to the Commitments made by BNY and any Notes issued to
BNY, BNY shall have the same rights and powers under the Loan Documents as any
Lender and may exercise the same as though it was not the Administrative Agent,
and the terms "Lender" and "Lenders" shall in each case include BNY.
10.9. Successor Administrative Agent.
If at any time the Administrative Agent deems it advisable, in
its sole discretion, it may submit to each of the Lenders a written notice of
its resignation as Administrative Agent under the Loan Documents, such
resignation to be effective upon the earlier of (i) the written acceptance of
the duties of the Administrative Agent under the Loan Documents by a successor
Administrative Agent and (ii) on the 30th day after the date of such notice.
Upon any such resignation, the Required Lenders shall have the right to appoint
from among the Lenders a successor Administrative Agent with the
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written consent of the Borrower, which consent shall not be unreasonably
withheld (except that the Borrower's consent shall not be required during the
continuance of an Event of Default). If no successor Administrative Agent shall
have been so appointed by the Required Lenders and accepted such appointment in
writing within 30 days after the retiring Administrative Agent's giving of
notice of resignation, then the retiring Administrative Agent may, on behalf of
the Lenders, appoint a successor Administrative Agent, which successor
Administrative Agent shall be a commercial bank organized under the laws of the
United States of America or any State thereof and having a combined capital and
surplus of at least $100,000,000. 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 and duties of the retiring Administrative
Agent, and the retiring Administrative Agent's rights, powers, privileges and
duties as Administrative Agent under the Loan Documents shall be terminated. The
Borrower and the Lenders shall execute such documents as shall be necessary to
effect such appointment. After any retiring Administrative Agent's resignation
or removal hereunder as Administrative Agent, the provisions of the Loan
Documents shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent under the Loan Documents. If at
any time hereunder there shall not be a duly appointed and acting Administrative
Agent, the Borrower agrees to make each payment due under the Loan Documents
directly to the Lenders entitled thereto during such time.
10.10. Co-Agents.
The Co-Agents shall have no duties or obligations under the
Loan Documents in their capacity as Co-Agents. The Co-Agents in such capacity
shall be entitled to the same protections, indemnities and rights, and subject
to the same standards with respect to their actions, inactions and duties, as
the Administrative Agent.
11. PARENT GUARANTY.
In order to induce the Administrative Agent and the Lenders to enter
into this Agreement and make the Commitments and Loans, the Parent hereby agrees
as follows:
11.1. Guaranty.
The Parent hereby absolutely, irrevocably and unconditionally
guarantees to the Administrative Agent and the Lenders the full and prompt
payment when due (including all grace periods), whether at stated maturity, by
acceleration, by mandatory prepayment, by notice of intention to prepay or
otherwise, of all obligations, now existing and hereafter arising, of the
Borrower, including all principal and interest
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(whether accruing before or after any event set forth in Section 9.1(h) or (i)
and whether or not allowed in any bankruptcy or similar proceeding of the
Borrower) under the Loan Documents to which it is a party and under any Interest
Rate Protection Agreements between the Borrower and any Lender or any affiliate
of any Lender, and whether direct, indirect or contingent, incurred as primary
obligor or otherwise, secured or unsecured and whether or not on open account,
and all costs and expenses incurred by the Administrative Agent and the Lenders
in enforcing any thereof, whether or not suit is instituted (as the same may be
amended, increased, modified, renewed, refunded, extended, or refinanced from
time to time, collectively, the "Obligations"). Regardless of whether the
Administrative Agent or the Lenders are prevented or otherwise hindered by law
from collecting or otherwise enforcing any of the Obligations in accordance with
their terms, whether as the result of the commencement of any bankruptcy or
similar proceedings against the Borrower or otherwise, the Administrative Agent
and the Lenders shall be entitled to receive hereunder from the Parent upon
demand therefor the sums which would have been otherwise due had such collection
or enforcement not been prevented or hindered. The obligations of the Parent
under the Parent Guaranty shall be joint and several with the obligations of the
Subsidiary Guarantors under the Subsidiary Guaranty.
11.2. Absolute Obligation.
The obligations of the Parent hereunder shall be absolute,
irrevocable, unconditional and continuing until the Commitments have terminated
and all of the Obligations are indefeasibly paid in full in cash notwithstanding
the fact that the Borrower may have repaid the Loans and may not be borrowing
hereunder from time to time, and shall not be subject to any counterclaim, right
of set-off or any defense whatsoever. The Parent acknowledges and agrees that
the Administrative Agent and the Lenders have no responsibility or liability,
and shall not be deemed to have made any representation or warranty, with
respect to the validity, enforceability or collectability of any of the Loan
Documents or any document executed or delivered in connection therewith, or any
preference or priority ranking with respect to the payment of the Loans or the
validity or perfection of any security interest under any Loan Document. The
Administrative Agent and the Lenders shall have no obligation to enforce any
Loan Document or any collateral security thereunder, by any action, including,
without limitation, making or perfecting any claim against the Borrower, prior
to being entitled to the benefits of this Parent Guaranty. Nothing except the
indefeasible cash payment in full of the Obligations shall release the Parent
from liability under this Parent Guaranty, and the Parent shall not succeed to
any of the rights of the Administrative Agent or the Lenders against the
Borrower, whether by way of subrogation or otherwise, until the Obligations have
been indefeasibly paid in full in cash.
11.3. Guaranty of Payment.
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This Parent Guaranty is a guaranty of payment. The liability
and obligations of the Parent shall be primary, direct and absolute, and the
Parent hereby waives any right to require that resort be had by the
Administrative Agent or the Lenders against the Borrower or any other Person, or
to require that resort be had by the Administrative Agent or the Lenders to any
direct or indirect collateral security. The Administrative Agent may, at its
option, proceed against the Parent in the first instance to enforce any
obligation to collect any monies, the payment of which is guaranteed hereby,
without first proceeding against the Borrower or any other Person and without
first resorting to any other remedies, as the Administrative Agent may deem
advisable. The liability of the Parent hereunder shall in no way be affected or
impaired by any acceptance by the Administrative Agent or the Lenders of any
direct or indirect security for, or other guarantor upon, any indebtedness,
liability or obligation of the Borrower to the Administrative Agent and the
Lenders, or by any failure, delay, neglect or omission of the Administrative
Agent or any Lender to realize upon or perfect any such security, indebtedness,
liability or obligation, or by any direct or indirect collateral security
therefor, or by the bankruptcy, reorganization or insolvency of, or by any other
proceeding for the relief of debtors commenced against, the Borrower or any
other Person, or by the release, exchange, substitution or any loss or
impairment of any collateral security, or the liability of any other Person in
respect of the Obligations, including, without limitation, the release of any
other guarantor or any collateral security provided thereby, or by the
invalidity or unenforceability of this Agreement, the Notes or any other Loan
Document, or any of the Obligations against the Borrower for any reason, or by
any amendment or waiver of or any consent to or departure from this Agreement,
or the Notes or any other Loan Document, or by any other reason whatsoever.
11.4. Repayment in Bankruptcy.
If, at any time or times subsequent to the performance by the
Parent of its obligations hereunder or the termination of this Parent Guaranty,
the Administrative Agent or any Lender shall be required to repay any amounts
previously paid by or on behalf of the Borrower in reduction of the Obligations
under any Loan Document by virtue of an order of any court having jurisdiction
in the premises, including, without limitation, as a result of an adjudication
that such amounts constituted preferential payments or fraudulent conveyances,
the Parent unconditionally agrees to pay to the Administrative Agent or such
Lender on demand a sum in cash equal to the amount of such repayment, together
with interest on such amount from the date of such demand to the date of payment
to the Administrative Agent or such Lender at the applicable after-maturity rate
set forth in Section 2.10(b).
11.5. Other Provisions in Parent Guaranty.
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(a) No failure by the Administrative Agent and the Lenders to
exercise, and no delay by the Administrative Agent or any of the Lenders in
exercising, any right or remedy hereunder shall operate as a waiver thereof.
(b) This Parent Guaranty, and the obligations of the Parent
under this Parent Guaranty, may not be assigned or otherwise delegated.
(c) The Parent waives all errors or omissions of the
Administrative Agent or any Lender in connection with the administration of the
Loans and any collateral security therefor, except errors or omissions which
constitute gross negligence or willful misconduct.
(d) Without limiting the foregoing, the Parent waives any act
or omission of the Administrative Agent or any Lender with respect to the
Restricted Subsidiaries which may affect or change in any way the liability of
the Parent under this Parent Guaranty.
(e) Each and every right, remedy and power granted to the
Administrative Agent and the Lenders hereunder or allowed at law or by any other
agreement shall be cumulative and not exclusive, and may be exercised by the
Administrative Agent and the Lenders from time to time.
(f) This Parent Guaranty shall be binding upon the Parent and
its successors and assigns and shall inure to the benefit of the Administrative
Agent and the Lenders and their respective successors and assigns.
(g) The Parent hereby waives presentment, demand for payment,
notice of default, non-performance and dishonor, protest and notice of protest
of or in respect of this Agreement, the Notes and any other Loan Documents and
the incurrence of the Obligations, notice of acceptance of this Parent Guaranty
and reliance hereupon by the Administrative Agent and the Lenders, and notice of
the making of any Loans pursuant to this Agreement, notice of any sale of
collateral security or any default of any sort.
(h) The Parent agrees that the Administrative Agent and the
Lenders may at any time, without notice to or consent of the Parent, and without
in any manner affecting the liability of the Parent hereunder, amend, increase,
extend, modify, supplement or waive any term or condition of this Agree-
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ment, the Notes, any other Loan Document or all or any part of the Obligations
and any collateral security therefor and otherwise deal with the Borrower as if
this Parent Guaranty did not exist, and the Parent shall be bound by, and this
Parent Guaranty shall automatically extend to, this Agreement, the Notes and the
other Loan Documents and the Obligations as so amended, increased, extended,
modified, supplemented or waived without any action required by the Parent.
(i) No provision of this Parent Guaranty may be waived,
modified or otherwise changed by any means, including, without limitation, any
course of dealing, course of performance or trade usage, or oral evidence of any
nature, except pursuant to a writing executed by the party against which
enforcement of such waiver, modification or change is sought.
(j) The Parent hereby agrees to pay upon demand all reasonable
expenses (including the reasonable fees and disbursements of counsel) incurred
by the Administrative Agent in connection with the interpretation,
administration, or any amendment or modification, hereof, and incurred by the
Administrative Agent and the Lenders in connection with the enforcement,
protection or collection of any provisions hereof, whether or not suit is
instituted.
(k) The Parent agrees that any statement of account from the
Administrative Agent or any Lender to the Borrower which binds the Borrower
shall also be binding upon the Parent and that copies of the Administrative
Agent's or such Lender's said statements of account maintained in the regular
course of business may be used in evidence against the Parent and the Borrower
in order to establish the obligations of the Parent hereunder.
(l) The Parent acknowledges that it has received a copy of the
Loan Documents and has approved of the same. In addition, the Parent
acknowledges having read the Loan Documents and having had the advice of counsel
in connection with all matters concerning the execution and delivery of the Loan
Documents to which it is a party.
12. MISCELLANEOUS
12.1. Amendments and Waivers.
With the written consent of the Required Lenders, the
Administrative Agent and the appropriate parties to the Loan Documents may, from
time to time, enter into written amendments, supplements or modifications
thereof and, with the consent of the Required Lenders, the Administrative Agent
on behalf of the Lenders may execute and deliver to any such parties a written
instrument waiving or a consent to a departure from, such terms and conditions
as the Administrative Agent may specify in such instrument, any of the
requirements of the Loan Documents or any Default or Event of
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Default and its consequences; provided, however, that (i) without the consent of
all of the Lenders, no such amendment, supplement, modification, waiver or
consent shall (A) increase the Term Loan Commitment or Revolving Credit
Commitment of any Lender (except as provided in Section 2.7 with respect to the
Revolving Credit Commitment of a Revolving Credit Lender), (B) decrease the rate
of interest of any Note, (C) extend the time or manner of payment, or forgive
all or any portion, of the principal amount of or interest on, any Note, (D)
release all or any part of the Collateral except to the extent that the sale or
disposition of such Collateral is permitted under the terms and provisions of
Section 8.8, (E) release or discharge any Guarantor from its obligations under a
guarantee; (F) change the provisions of Section 2.6(b), 2.6(d), 3.3 or 12.1 or
any other provision which requires the consent of all Lenders; or (G) change the
definition of Required Lenders; (ii) without the consent of each of the
Revolving Credit Lenders, no such amendment, supplement, modification, waiver or
consent shall decrease the Commitment Fee or extend the time of payment thereof;
(iii) without the consent of Lenders of each Class of Lenders having not less
than 66-2/3% of the Aggregate Revolving Credit Commitments in the case of
Revolving Credit Lenders, Tranche A Term Loans in the case of Tranche A Lenders
and Tranche B Term Loans in the case of Tranche B Lenders, no such amendment,
supplement, modification, waiver or consent shall change the provisions of
Section 2.8(f); and (iv) without the written consent of the Administrative
Agent, amend, modify, waive or consent to a departure from any provision of
Section 10 or otherwise change any of the rights or obligations of the
Administrative Agent under the Loan Documents. Any such amendment, supplement,
modification, waiver or consent shall apply equally to each of the Lenders and
shall be binding upon the parties to the applicable agreement, the Lenders, the
Administrative Agent and all future holders of the Notes. In the case of any
waiver, the parties to the applicable agreement, the Lenders and the
Administrative Agent shall be restored to their former position and rights under
the Loan Documents, and any Default or Event of Default waived shall not extend
to any subsequent or other Default or Event of Default, or impair any right
consequent thereon.
12.2. Notices.
All notices, requests and demands to or upon the respective
parties hereto to be effective shall be in writing and, unless otherwise
expressly provided herein, shall be deemed to have been duly given or made when
delivered by hand, or when deposited in the mail, first-class postage prepaid,
or, in the case of telecopier notice, when sent, addressed as follows in the
case of the Borrower, the Parent or the Administrative Agent, at the Domestic
Lending Office in the case of each Lender, and to the address of a Loan Party
set forth in a Loan Document, or to such other addresses as to which the
Administrative Agent may be hereafter notified by the respective parties thereto
or any future holders of the Notes:
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The Borrower:
c/o Arch Communications Group, Inc.
1800 West Park Drive, Suite 250
Westborough, Massachusetts 01581
Attention: William A. Wilson,
Vice President, Finance
Telephone: (508) 898-0962
Telecopy: (508) 366-0846
The Parent:
Arch Communications Group, Inc.
1800 West Park Drive, Suite 250
Westborough, Massachusetts 01581
Attention: William A. Wilson,
Vice President, Finance
Telephone: (508) 898-0962
Telecopy: (508) 366-0846
The Administrative Agent:
The Bank of New York
One Wall Street
Agency Function Administration
18th Floor
New York, New York 10286
Attention: Michael Pizarro
Telephone: (212) 635-4697
Telecopy: (212) 635-6365 or 6366 or 6367
with a copy to:
The Bank of New York
One Wall Street
16th Floor
New York, New York 10286
Attention: Geoffrey C. Brooks,
Vice President
Communications, Entertainment &
Publishing Division
Telephone: (212) 635-8475
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Telecopy: (212) 635-8593 or
(212) 635-8679,
except that any notice, request or demand by the Borrower to or upon the
Administrative Agent or the Lenders pursuant to Sections 2.5 or 2.9 shall not be
effective until received. Any party to a Loan Document may rely on signatures of
the parties thereto which are transmitted by telecopier or other electronic
means as fully as if originally signed.
12.3. No Waiver; Cumulative Remedies.
No failure to exercise and no delay in exercising, on the part
of the Administrative Agent or any Lender, any right, remedy, power or privilege
under any Loan Document shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, remedy, power or privilege under any Loan
Document preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. The rights, remedies, powers and
privileges under the Loan Documents are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
12.4. Survival of Representations and Warranties.
All representations and warranties made under the Loan
Documents and in any document, certificate or statement delivered pursuant
thereto or in connection therewith shall survive the execution and delivery of
the Loan Documents.
12.5. Payment of Expenses and Taxes.
The Borrower and the Parent each agrees, jointly and
severally, promptly upon presentation of a statement or invoice therefor, and
whether any Loan is made (i) to pay or reimburse the Administrative Agent for
all its out-of-pocket costs and expenses (other than any interest payable by the
Agent to the Lenders pursuant to Section 3.3) reasonably incurred in connection
with the development, preparation and execution of, the Loan Documents (to the
extent not paid on or before the Restatement Effective Date), including, without
limitation, the reasonable fees and disbursements of Special Counsel, and any
amendment, supplement or modification thereto (whether or not executed), any
documents prepared in connection therewith and the consummation of the
transactions contemplated thereby, the syndication of the transactions
contemplated hereby, including, without limitation, the reasonable fees and
disbursements of its counsel, (ii) to pay or reimburse the Administrative Agent
and the Lenders for all of their respective costs and expenses, including,
without limitation, reasonable fees and disbursements of counsel, incurred in
connection with (a) any appraisal required by law in connection with any real
Property taken as collateral security for any obligations under
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any Loan Documents, (b) any Default or Event of Default and any enforcement or
collection proceedings resulting therefrom or in connection with the negotiation
of any restructuring or "work-out" (whether or not consummated) of the
obligations of the Loan Parties under any of the Loan Documents and (c) the
enforcement of this Section , (iii) to pay, indemnify, and hold each Lender and
the Administrative Agent harmless from and against, any and all recording and
filing fees and any and all liabilities with respect to, or resulting from any
delay in paying, stamp, excise and other similar taxes, if any, which may be
payable or determined to be payable in connection with the execution and
delivery of, or consummation of any of the transactions contemplated by, or any
amendment, supplement or modification of, or any waiver or consent under or in
respect of, the Loan Documents and any such other documents, and (iv) to pay,
indemnify and hold each Lender and the Administrative Agent and each of their
respective officers, directors and employees harmless from and against any and
all other liabilities, obligations, claims, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever (including, without limitation, reasonable counsel fees and
disbursements) with respect to the enforcement and performance of the Loan
Documents, the use of the proceeds of the Loans and the enforcement and
performance of the provisions of any subordination agreement in favor of the
Administrative Agent and the Lenders (all the foregoing, collectively, the
"Indemnified Liabilities") and, if and to the extent that the foregoing
indemnity may be unenforceable for any reason, the Borrower and the Parent each
agrees to make the maximum payment permitted or not prohibited under applicable
law; provided, however, that the Borrower and the Parent shall have no
obligation hereunder to pay Indemnified Liabilities to the Administrative Agent
or any Lender arising from the gross negligence or willful misconduct of the
Administrative Agent or such Lender or any claims asserted by one or more
Lenders against the Administrative Agent or another Lender or Lenders.
12.6. Lending Offices.
Each Lender shall have the right at any time and from time to
time on notice to the Administrative Agent and the Borrower to transfer any Loan
to a different office. Such office shall thereupon become such Lender's Domestic
Lending Office or Eurodollar Lending Office, as the case may be. Each Lender
will designate a different Lending Office if such designation will avoid the
need for, or reduce the amount of, such compensation demanded by such Lender
pursuant to Section 2.12, 2.14, 2.15 or 2.18 unless such Lender or its lending
office may suffer, it its sole determination, an economic, legal or regulatory
disadvantage from so transferring the lending office and provided that such
change shall not be in conflict with such Lender's internal policies.
12.7. Assignments and Participations.
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(a) The Loan Documents shall be binding upon and inure to the
benefit of the Borrower, the Parent, the Subsidiary Guarantors, the Lenders, the
Administrative Agent, all future holders of the Notes and their respective
successors and assigns, except that the Borrower, the Parent or any Subsidiary
Guarantor may not assign, delegate or transfer any of their rights or
obligations under the Loan Documents without the prior written consent of the
Administrative Agent and each Lender.
(b) Each Lender shall have the right at any time, with the
written consent of the Borrower and the Administrative Agent, which consents
shall not be unreasonably withheld (except that the Borrower's consent shall not
be required during the continuance of an Event of Default) to sell, assign,
transfer or negotiate all or a portion of such Lender's rights under the Loan
Documents to one or more affiliates of such Lender or to one or more of the
other Lenders (or to affiliates of such other Lenders) or to any other bank,
insurance company, mutual fund, pension fund or similar fund or financial
institution, provided that (i) except for sales, assignments, transfers or
negotiations by a Lender of all or a portion of such Lender's rights under the
Loan Documents to one or more affiliates of such Lender or to one or more of the
other Lenders (or to affiliates of such other Lenders), each such sale,
assignment, transfer or negotiation shall be in a minimum amount equal to the
lesser of (A) $10,000,000 or (B) the full amount of such assigning Lender's
Loans and Commitments, (ii) there shall be paid to the Administrative Agent by
the assigning Lender a fee (the "Assignment Fee") of $3,000 and (iii) for each
assignment, the parties to such assignment shall execute and deliver to the
Administrative Agent an Assignment and Acceptance Agreement. Upon such
execution, delivery, acceptance and consent, and recording by the Administrative
Agent, from and after the effective date specified in such Assignment and
Acceptance Agreement and agreed to by the Administrative Agent, the assignee
thereunder shall be a party hereto and a "Lender" and, to the extent that such
Lender's obligations hereunder have been assumed by the Lender under such
Assignment and Acceptance Agreement, the assignor Lender thereunder shall be
released from its obligations under the Loan Documents. The Borrower agrees upon
written request of the Administrative Agent to execute and deliver (i) to such
assignee, a Revolving Credit Note and a Tranche A Term Note and, if the assignor
is a Tranche B Lender, a Tranche B Term Note, dated the effective date of such
Assignment and Acceptance Agreement, in an aggregate principal amount equal to
the amount of the Revolving Credit Commitment assumed by such assignee and the
amount of the Tranche A Term Loan and, if the assignor is a Tranche B Lender,
Tranche B Term Loan, respectively, assigned to, such assignee and (ii) to such
assignor Lender, if applicable, a Revolving Credit Note, a Tranche A Term Note
and, if the assignor is a Tranche B Lender, a Tranche B Term Note, dated the
effective date of such Assignment and Acceptance Agreement, in an aggregate
principal amount equal to the amount of the Revolving Credit Commitment retained
by such assignee and the amount of the Tranche A Term Loan and, if the assignor
is a Tranche B Lender, Tranche B Term Loan, respectively, retained by such
assignor Lender. Upon any such
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<PAGE> 120
sale, assignment or other transfer, the Commitments set forth in Exhibit A shall
be adjusted accordingly by the Administrative Agent. Notwithstanding anything in
this Agreement to the contrary, each Revolving Credit Lender shall also be a
Tranche A Lender and its Commitment Percentages of the Aggregate Revolving
Credit Commitment and the Tranche A Term Loans shall at all times be the same.
(c) Each Lender may grant participations in all or a portion
of its Loans, its Notes and its Commitments to one or more banks, insurance
companies, mutual funds, pension funds or similar funds or financial
institutions, provided that (i) such Lender's obligations under the Loan
Documents shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties to the Loan Documents for the performance of
such obligations, (iii) the Borrower, the Parent, the Administrative Agent and
the other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under the Loan Documents,
(iv) each such participation shall be in a minimum amount of $2,500,000, (v)
such Lender shall continue at all times to hold at least a 50% beneficial
interest in the original amounts of its Loans, its Notes and its Commitments
(except that a Lender may sell participations in all or any portion of its
Loans, Commitments and Notes to affiliates of such Lender at any time), (vi) no
sub-participations shall be permitted and (vii) the voting rights of any holder
of any participation shall be limited to decisions that only do any of the
following: (A) subject the participant to any additional obligation, (B) reduce
the principal of, or interest on, the Notes or reduce any fees or other amounts
payable hereunder, (C) postpone any date fixed for the payment of principal of,
or interest on the Notes or any fees or other amounts payable hereunder or any
amendment to Section 2.6(b), (D) release any security interest or collateral
except to the extent that the release thereof is specifically provided for in
any Loan Document or (E) release any Guarantor under any guarantee. The Borrower
and the Parent each hereby acknowledges and agrees that any such participant
shall for purposes of Sections 2.12, 2.14, 2.15, 2.18, 2.20 and 12.10 be deemed
to be a "Lender"; provided, however, that the Borrower and the Parent shall not,
at any time, be obligated to pay any participant in any interest of any Lender
hereunder any sum in excess of the sum which the Borrower or the Parent would
have been obligated to pay to such Lender in respect of such interest had such
Lender not sold such participation.
(d) No Lender shall, as between and among the Borrower, the
Parent, the Administrative Agent, and such Lender, be relieved of any of its
obligations under the Loan Documents as a result of any sale, assignment,
transfer or negotiation of, or granting of participations in, all or any part of
its Loans, its Commitments or its Notes, except that a Lender shall be relieved
of its obligations to the extent of any such sale, assignment, transfer, or
negotiation of all or any part of its Loans, its Commitments or its Notes
pursuant to subsection (b) above.
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<PAGE> 121
(e) Notwithstanding anything herein to the contrary, any
Lender may at any time assign all or any portion of its rights under the Loan
Documents to a Federal Reserve Bank. No such assignment shall release such
Lender from its obligations thereunder.
(f) If any (i) assignment is made pursuant to subsection (b)
above or (ii) any participation is granted pursuant to subsection (c) above, to
any Non-U.S. Lender, such Non-U.S. Lender shall furnish such certificates,
documents or other evidence to the Borrower and the Administrative Agent, in the
case of clause (i) and to the Borrower and the Lender which sold such
participation in the case of clause (ii), as shall be required by Section
2.12(c) or Section 2.21(b), as applicable.
(g) In addition to the requirements set forth in this Section
12.7, any assignment or transfer of a Registered Note shall be subject to the
requirements and limitations set forth in Section 2.21.
12.8. Counterparts.
The Loan Documents may be executed by one or more of the
parties to this Agreement on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of the Loan Documents signed by all the parties
shall be lodged with each of the Borrower, the Parent and the Administrative
Agent. Any party to a Loan Document may rely upon the signatures of any other
party thereto which are transmitted by fax or other electronic means to the same
extent as if originally signed.
12.9. Adjustments; Set-off.
(a) If any Lender (a "Benefited Lender") shall at any time
receive any payment of all or any part of its Loans, or interest thereon, or
receive any collateral in respect thereof (whether voluntarily or involuntarily,
by set-off, pursuant to events or proceedings of the nature referred to in
Section 9.1(h) or (i), or otherwise) in a greater proportion than any such
payment to and collateral received by any other Lender, if any, in respect of
such other Lender's Loans, or interest thereon, such Benefited Lender shall
purchase for cash from the other Lenders such portion of each such other
Lender's Loans, and shall provide such other Lenders with the benefits of any
such collateral, or the proceeds thereof, as shall be necessary to cause such
Benefited Lender to share the excess payment or benefits of such collateral or
proceeds ratably with each of the Lenders; provided, however, that if all or any
portion of such excess payment or benefits is thereafter recovered from such
Benefited Lender, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest. The
Borrower agrees that each Lender so purchasing a portion of another
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<PAGE> 122
Lender's Loans may exercise all rights of payment (including, without
limitation, rights of set-off) with respect to such portion as fully as if such
Lender were the direct holder of such portion.
(b) In addition to any rights and remedies of the Lenders
provided by law, upon the occurrence of an Event of Default and the acceleration
of the obligations owing in connection with the Loan Documents, or at any time
upon the occurrence and during the continuance of an Event of Default under
Section 9.1(a) or 9.1(b), each Lender shall have the right, without prior notice
to the Borrower, the Parent or any other Loan Party, any such notice being
expressly waived by each Loan Party to the extent permitted by applicable law,
to set off and apply against any indebtedness, whether matured or unmatured, of
such Loan Party to such Lender, any amount owing from such Lender to such Loan
Party, at, or at any time after, the happening of any of the above- mentioned
events. To the extent permitted by applicable law, the aforesaid right of
set-off may be exercised by such Lender against such Loan Party or against any
trustee in bankruptcy, custodian, debtor in possession, assignee for the benefit
of creditors, receiver, or execution, judgment or attachment creditor of such
Loan Party, or against anyone else claiming through or against such Loan Party
or such trustee in bankruptcy, custodian, debtor in possession, assignee for the
benefit of creditors, receivers, or execution, judgment or attachment creditor,
notwithstanding the fact that such right of set-off shall not have been
exercised by such Lender prior to the making, filing or issuance, or service
upon such Lender of, or of notice of, any such petition, assignment for the
benefit of creditors, appointment or application for the appointment of a
receiver, or issuance of execution, subpoena, order or warrant. Each Lender
agrees promptly to notify the applicable Loan Party and the Administrative Agent
after any such set-off and application made by such Lender, provided that the
failure to give such notice shall not affect the validity of such set-off and
application.
12.10. Indemnity.
The Borrower and the Parent each agrees, jointly and
severally, to indemnify and hold harmless the Administrative Agent and each
Lender from and against any loss, cost, liability, damage or expense (including
the reasonable fees and disbursements of counsel to the Administrative Agent and
each Lender, including all local counsel hired by any such counsel) incurred by
the Administrative Agent or such Lender in investigating, preparing for,
defending against, or providing evidence, producing documents or taking any
other action in respect of, any commenced or threatened litigation,
administrative proceeding or investigation under any federal securities law or
any other statute of any jurisdiction, or any regulation, or at common law or
otherwise, which is alleged to arise out of or is based upon (i) any untrue
statement or alleged untrue statement of any material fact of any Loan Party, in
any document or schedule executed or filed with the FCC or any other
Governmental Body by or on behalf of any Loan Party;
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<PAGE> 123
(ii) any omission or alleged omission to state any material fact required to be
stated in such document or schedule, or necessary to make the statements made
therein, in light of the circumstances under which made, not misleading; (iii)
any acts, practices or omissions or alleged acts, practices or omissions of any
Loan Party or their respective agents relating to the use of the proceeds of any
or all borrowings made by the Borrower which are alleged to be in violation of
Section 2.17, or in violation of any federal securities law or of any other
statute, regulation or other law of any jurisdiction applicable thereto; (iv)
any Acquisition or proposed Acquisition; (v) any sale of assets of the Borrower,
the Parent or any Restricted Subsidiary; (vi) the Westlink Merger Documents, the
Westlink Merger or any transactions in connection therewith or related thereto;
or (vii) the Westlink Acquisition Documents, the Westlink Acquisition or any
transactions in connection therewith or related thereto. The indemnity set forth
herein shall be in addition to any other obligations or liabilities of the
Borrower or the Parent to the Administrative Agent and the Lenders hereunder or
at common law or otherwise, provided that the Borrower and the Parent shall have
no obligation under this Section to the Administrative Agent or any Lender with
respect to any of the foregoing to the extent determined in a final judgment,
after available appeals, to have arisen primarily and directly out of the gross
negligence or willful misconduct of the Administrative Agent or such Lender.
12.11. Governing Law.
The Loan Documents and the rights and obligations of the
parties thereunder shall be governed by, and construed and interpreted in
accordance with, the internal laws of the State of New York, without regard to
principles of conflict of laws.
12.12. Headings, Plurals.
Section headings have been inserted in the Loan Documents for
convenience only and shall not be construed to be a part hereof or thereof.
Unless the context otherwise requires, words in the singular number include the
plural, and words in the plural include the singular.
12.13. Severability.
Every provision of the Loan Documents is intended to be
severable, and if any term or provision thereof shall be invalid, illegal or
unenforceable for any reason, the validity, legality and enforceability of the
remaining provisions hereof or thereof shall not be affected or impaired
thereby, and any invalidity, illegality or unenforceability in any jurisdiction
shall not affect the validity, legality or enforceability of any such term or
provision in any other jurisdiction.
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<PAGE> 124
12.14. Integration.
All exhibits to the Loan Documents shall be deemed to be a
part of the applicable Loan Document. Except for agreements among the
Administrative Agent and the Borrower and/or the Parent with respect to certain
fees, the Loan Documents embody the entire agreement and understanding among the
Loan Parties, the Administrative Agent and the Lenders with respect to the
subject matter thereof and supersede all prior agreements and understandings
among the Loan Parties, the Administrative Agent and the Lenders with respect to
the subject matter thereof.
12.15. Consent to Jurisdiction.
Each Loan Party hereby irrevocably submits to the jurisdiction
of any New York State or Federal court sitting in the City of New York over any
suit, action or proceeding arising out of or relating to the Loan Documents.
Each of the parties to the Loan Documents hereby irrevocably waives, to the
fullest extent permitted by law, any objection which it may now or hereafter
have to the laying of the venue of any such suit, action or proceeding brought
in such a court and any claim that any such suit, action or proceeding brought
in such a court has been brought in an inconvenient forum. Each of the parties
to the Loan Documents hereby agrees that a final judgment in any such suit,
action or proceeding brought in such a court, after all appropriate appeals,
shall be conclusive and binding upon it.
12.16. Service of Process.
Each Loan Party hereby agrees that process may be served in
any suit, action, counterclaim or proceeding of the nature referred to in
Section 12.15 by mailing copies thereof by registered or certified mail, postage
prepaid, return receipt requested, to, with respect to the Borrower and the
Parent, the address therefor set forth in Section 12.2, with respect to any
Subsidiary Guarantor, at the address therefor set forth in the Subsidiary
Guaranty, or to any other address of which the Borrower, the Parent or any
Subsidiary Guarantor shall have given written notice to the Administrative
Agent. Each of the parties to the Loan Documents hereby agrees that such service
(i) shall be deemed in every respect effective service of process upon it in any
such suit, action, counterclaim or proceeding, and (ii) shall to the fullest
extent enforceable by law, be taken and held to be valid personal service upon
and personal delivery to it.
12.17. No Limitation on Service or Suit.
Nothing in the Loan Documents or any modification, waiver,
consent or amendment thereto shall affect the right of the Administrative Agent
or any Lender to serve process in any manner permitted by law or limit the right
of the Administrative
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<PAGE> 125
Agent or any Lender to bring proceedings against any Loan Party in the courts of
any jurisdiction or jurisdictions in which such Loan Party may be served. Except
as otherwise provided in Section 12.15, nothing herein shall be deemed a consent
by any Loan Party to the jurisdiction of the courts of any particular state.
12.18. WAIVER OF TRIAL BY JURY.
EACH LOAN PARTY HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION ARISING OUT OF, UNDER OR IN CONNECTION WITH THE LOAN DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED THEREIN. FURTHER, EACH LOAN PARTY HEREBY CERTIFIES
THAT NO REPRESENTATIVE OR ADMINISTRATIVE AGENT OF THE ADMINISTRATIVE AGENT OR
THE LENDERS, OR COUNSEL TO THE ADMINISTRATIVE AGENT OR THE LENDERS, HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE ADMINISTRATIVE AGENT OR THE
LENDERS WOULD NOT, IN THE EVENT OF SUCH LITIGATION, SEEK TO ENFORCE THIS WAIVER
OF RIGHT TO JURY TRIAL PROVISION. EACH LOAN PARTY ACKNOWLEDGES THAT THE
ADMINISTRATIVE AGENT AND THE LENDERS HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, INTER ALIA, THE PROVISIONS OF THIS SECTION.
12.19. Savings Clause.
This Agreement is intended solely as an amendment of, and
contemporaneous restatement of, the terms and conditions of the Existing Credit
Agreement and the Notes delivered pursuant hereto are intended to amend and
restate the notes issued under the Existing Credit Agreement and neither this
Agreement or the Notes is intended and neither should be construed as in any way
extinguishing or terminating the Existing Credit Agreement. The Collateral
Documents remain in full force and effect and continue to secure the obligations
of the Loan Parties as set forth therein, including, without limitation, (i) all
obligations of the Parent and the Borrower under this Agreement and under each
other Loan Document to which the Parent and/or the Borrower is a party and (ii)
all obligations of each Subsidiary Guarantor under the Subsidiary Guaranty and
under each other Loan Document to which such Subsidiary Guarantor is a party.
12.20. Concerning Certain Provisions
As set forth in the Recitals, this Agreement is being executed
on the Restatement Effective Date as a Bridge Financing with the expectation
that the Syndication Amendment will be executed in due course. At such time, it
is contemplated that the
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<PAGE> 126
Revolving Credit Maturity Date, the Tranche A Term Loan Maturity Date and the
Tranche B Term Loan Maturity Date will be extended to the dates initially agreed
to by the parties. Under the circumstances and in recognition of the time
pressures which exist in connection with the closing hereof and the Westlink
Acquisition, certain provisions in this Agreement have been deleted to reflect
the current definitions of the Revolving Credit Maturity Date, the Tranche A
Term Loan Maturity Date and the Tranche B Term Loan Maturity Date, including,
without limitation, provisions relating the amortization of the Term Loans and
the mandatory reduction of the Aggregate Revolving Credit Commitments. It is
agreed that the inclusion of any such provisions is not intended to affect the
Revolving Credit Maturity Date, the Tranche A Term Loan Maturity Date and the
Tranche B Term Loan Maturity Date and each such date will be November 20, 1996.
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<PAGE> 127
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
ARCH COMMUNICATIONS ENTERPRISES, INC.
By:
---------------------------------
Name: Gerald J. Cimmino,
Title: Treasurer
ARCH COMMUNICATIONS GROUP, INC.
By:
---------------------------------
Name: Gerald J. Cimmino,
Title: Treasurer
THE BANK OF NEW YORK, individually and as
Administrative Agent
By:
---------------------------------
Name: Geoffrey C. Brooks
Title: Vice President
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<PAGE> 1
Exhibit 10.2
*CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS
HAVE BEEN OMITTED AND FILED SEPARATELY.
AMENDMENT NO. 1
TO
FIRST AMENDED AND RESTATED CREDIT AGREEMENT
AMENDMENT NO. 1 (this "Amendment"), dated as of June 25, 1996, to the
First Amended and Restated Credit Agreement (the "Credit Agreement"), dated as
of May 21, 1996, by and among ARCH COMMUNICATIONS ENTERPRISES, INC., a Delaware
corporation (the "Borrower"), ARCH COMMUNICATIONS GROUP, INC., a Delaware
corporation (the "Parent"), the Lenders party thereto, the Co-Agents party
thereto and THE BANK OF NEW YORK, as administrative agent for the Lenders (in
such capacity, the "Administrative Agent").
RECITALS
A. Capitalized terms used herein which are not defined herein shall
have the respective meanings ascribed thereto in the Credit Agreement.
B. Prior to the effectiveness of this Amendment, the Aggregate
Revolving Credit Commitments were $50,000,000 and the outstanding principal
balance of the Term Loans was $250,000,000.
C. The Borrower desires to increase the Aggregate Revolving Credit
Commitments from $50,000,000 to $250,000,000 and The Bank of New York, as the
sole Lender under the Credit Agreement, desires to assign portions of its
outstanding Loans and Revolving Credit Commitment to the Purchasing Lenders (as
defined below), in each case subject to the terms and conditions set forth
herein.
D. After giving effect to this Amendment, the Aggregate Revolving
Credit Commitments will be $250,000,000, the outstanding principal balance of
the Tranche A
<PAGE> 2
Term Loans will be $150,000,000 and the outstanding principal balance of the
Tranche B Term Loans will be $100,000,000.
E. The Borrower, the Administrative Agent and the Lenders desire to
extend each of the Revolving Credit Maturity Date, the Tranche A Term Loan
Maturity Date and the Tranche B Term Loan Maturity Date as hereinafter set
forth.
Accordingly, in consideration of the covenants, conditions and
agreements hereinafter set forth, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties hereto
agree as follows:
1. The Borrower and the Parent hereby appoint each of Fleet National
Bank, PNC Bank, National Association, Toronto Dominion (New York), Inc., The
First National Bank of Boston, First Union National Bank of North Carolina,
Mellon Bank, N.A. and Royal Bank of Canada as a Co-Agent under the Credit
Agreement.
2. Notwithstanding anything to the contrary contained in the Credit
Agreement, the parties hereto hereby agree that (i) upon the increase in the
Aggregate Revolving Credit Commitments as set forth in Section 3 hereof, the
Revolving Credit Commitment of each Revolving Credit Lender shall be as set
forth in Exhibit A to the Credit Agreement, as amended hereby and (ii) the
Tranche A Term Loan of each Tranche A Lender and the Tranche B Term Loan of each
Tranche B Lender shall each be as set forth in Exhibit A to the Credit
Agreement, as amended hereby. On and as of the date on which this Amendment
shall become effective (the "Purchase Date"), each of Fleet National Bank, PNC
Bank, National Association, Toronto Dominion (New York), Inc., The First
National Bank of Boston, First Union National Bank of North Carolina, Mellon
Bank, N.A., Royal Bank of Canada, Bank of Montreal, Banque Nationale de Paris,
CIBC, Inc., Compagnie Financiere de CEC et de L'Union Europeenne, CoreStates
Bank, N.A., The Fuji Bank, Limited, New York Branch, LTCB Trust Company, Merita
Bank Ltd., Societe Generale, USTrust, Bank of Hawaii, Thoroughbred Limited
Partnership, ING Capital Advisors, Inc., Merrill Lynch Senior Floating Rate
Fund, Inc., Van Kampen American Capital Prime Rate Income Trust, Merrill Lynch
Prime Rate Portfolio, Senior Debt Portfolio and Indosuez Capital Funding II,
Limited (collectively, the "Purchasing Lenders") shall purchase at par and
without recourse, representation or warranty (other than as to its title
thereto) from The Bank of New York (the "Selling Lender"), and the Selling
Lender shall sell to each Purchasing Lender, at par and without recourse,
representation or warranty (other than as to its title thereto) such principal
amount of the Selling Lender's (i) Revolving Credit Loans as will result in such
Purchasing Lender's outstanding Revolving Credit Loans being equal to its
Commitment Percentage of the outstanding Revolving Credit Loans of all Lenders
(calculated
-2-
<PAGE> 3
after giving effect to the increase in the Aggregate Revolving Credit
Commitments as set forth in Section 3 hereof and the new Revolving Credit
Commitment of each Revolving Credit Lender as set forth in Exhibit A to the
Credit Agreement, as amended hereby), (ii) Tranche A Term Loan equal to the
amount, if any, set forth on Exhibit A to the Credit Agreement, as amended
hereby, opposite such Lender's name under the column entitled "Tranche A Term
Loan" and (iii) Tranche B Term Loan equal to the amount, if any, set forth on
Exhibit A to the Credit Agreement, as amended hereby, opposite such Lender's
name under the column entitled "Tranche B Term Loan." All payments to the
Selling Lender shall be made in immediately available funds to the
Administrative Agent, for the account of the Selling Lender, at the office of
the Administrative Agent set forth in Section 12.2 of the Credit Agreement.
Notwithstanding the foregoing, in the event that on the effectiveness of this
Amendment, the outstanding principal balance of the Tranche A Term Loan is less
than $150,000,000 or the Tranche B Term Loan is less than $100,000,000, each
Purchasing Lender purchasing a portion of the Selling Lender's Tranche A Term
Loan and/or Tranche B Term Loan shall purchase a pro rata portion thereof based
upon the amounts thereof set forth in Exhibit A to the Credit Agreement, as
amended hereby. Upon the effectiveness of this Amendment, each Purchasing Lender
shall become a Lender for all purposes under the Credit Agreement, and shall
have all of the rights, duties and obligations of a Lender under the Loan
Documents.
3. Immediately after giving effect to the purchases and sales referred
to in Section 2 hereof and pursuant to Section 2.7 of the Credit Agreement, the
Aggregate Revolving Credit Commitments are increased from $50,000,000 to
$250,000,000.
4. The Borrower hereby elects to prepay on June 25, 1996 and
immediately prior to the effectiveness of this Amendment, all outstanding
Eurodollar Advances, if any, which do not otherwise expire on such date. The
Borrower will pay to the Administrative Agent for the account of the Selling
Lender any indemnification for loss due it as a result thereof pursuant to the
provisions of Section 2.15 of the Credit Agreement.
-3-
<PAGE> 4
*CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS
HAVE BEEN OMITTED AND FILED SEPARATELY
5. Subsection (a) of the definition of "Applicable Margin" contained
in Section 1.1 of the Credit Agreement is hereby amended by substituting the
following for the pricing grid contained therein:
<TABLE>
<CAPTION>
Applicable
Period Rate Margin
------ ---- ------
<S> <C> <C> <C>
when the Leverage Alternate Base Rate 1.625%
Ratio is greater Eurodollar Rate 2.875%
than or equal to
*
when the Leverage Alternate Base Rate 1.375%
Ratio is greater Eurodollar Rate 2.625%
than or equal to
* but less than *
when the Leverage Alternate Base Rate 1.000%
Ratio is greater Eurodollar Rate 2.250%
than or equal to
* but less than *
when the Leverage Alternate Base Rate 0.625%
Ratio is greater Eurodollar Rate 1.875%
than or equal to
* but less than *
when the Leverage Alternate Base Rate 0.250%
Ratio is greater Eurodollar Rate 1.500%
than or equal to
* but less than *
when the Leverage Alternate Base Rate 0.000%
Ratio is less than * Eurodollar Rate 1.250%.
</TABLE>
<PAGE> 5
6. The definition of "Interest Period" contained in Section 1.1 of
the Credit Agreement is hereby amended by inserting the word "and" at the end of
clause (d) thereof, by substituting a period for the semicolon at the end of
clause (e) and by deleting clause (f) thereof.
7. The following definitions contained in Section 1.1 of the Credit
Agreement are hereby amended in their entirety to read as follows:
"Revolving Credit Maturity Date": December 31, 2002, or
such earlier date on which the Revolving Credit Notes shall become
due and payable, whether by acceleration or otherwise.
"Syndication Amendment": Amendment No. 1, dated as of
June 25, 1996, to this Agreement pursuant to which, among other
things, (i) the Revolving Credit Maturity Date, Tranche A Term
Loan Maturity Date and the Tranche B Term Loan Maturity Date are
extended to December 31, 2002, December 31, 2002 and December 31,
2003, respectively, (ii) the Aggregate Revolving Credit
Commitments are increased to $250,000,000 and (iii) a portion of
BNY's Revolving Credit Commitment and Term Loans are assigned to
other Lenders.
"Tranche A Term Loan Maturity Date": December 31, 2002,
or such earlier date on which the Tranche A Term Notes shall
become due and payable, whether by acceleration or otherwise.
"Tranche B Term Loan Maturity Date": December 31, 2003,
or such earlier date on which the Tranche B Term Notes shall
become due and payable, whether by acceleration or otherwise.
<PAGE> 6
8. Section 2.4(b)(ii) of the Credit Agreement is amended in its
entirety to read as follows:
(ii) The principal amount of the Tranche B Term Notes
shall be payable on the following dates in the following
percentages of the aggregate outstanding principal balance of
the Tranche B Term Notes as of March 31, 1998:
<TABLE>
<CAPTION>
Date Percentage
---- ----------
<S> <C>
March 31, 1998 0.500%
June 30, 1998 0.500%
September 30, 1998 0.500%
December 31, 1998 0.500%
March 31, 1999 0.500%
June 30, 1999 0.500%
September 30, 1999 0.500%
December 31, 1999 0.500%
March 31, 2000 0.750%
June 30, 2000 0.750%
September 30, 2000 0.750%
December 31, 2000 0.750%
March 31, 2001 0.750%
June 30, 2001 0.750%
September 30, 2001 0.750%
December 31, 2001 0.750%
March 31, 2002 2.500%
June 30, 2002 2.500%
September 30, 2002 2.500%
December 31, 2002 2.500%
March 31, 2003 20.000%
June 30, 2003 20.000%
September 30, 2003 20.000%
December 31, 2003 the remaining unpaid
principal amount
of the Tranche B
Term Notes
together with all
accrued and unpaid
interest thereon.
</TABLE>
<PAGE> 7
*CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS
HAVE BEEN OMITTED AND FILED SEPARATELY
9. Section 7.12 of the Credit Agreement is amended by substituting
"June 30, 1999" for "June 30, 1998" therein.
10. Section 7.15 of the Credit Agreement is amended in its entirety to
read as follows:
7.15. Leverage Ratio.
Maintain, or cause to be maintained, at all
times during the periods set forth below, a Leverage Ratio of not
greater than the ratios set forth below:
<TABLE>
<CAPTION>
Periods Ratio
------- -----
<S> <C>
Restatement Effective Date
through June 29, 1997 *
June 30, 1997 through
September 29, 1997 *
September 30, 1997 through
March 30, 1998 *
March 31, 1998 through
September 29, 1998 *
September 30, 1998 and
thereafter *
</TABLE>
Notwithstanding the foregoing, in the event that the
Borrower makes a Restricted Payment permitted by Section
8.5(e), the maximum permitted Leverage Ratio shall be reduced
for all periods after such payment to *.
<PAGE> 8
11. Section 8.2 of the Credit Agreement is amended by deleting the
word "and" at the end of clause (viii) thereof and by adding the following
before the period at the end of clause (ix) thereof:
and (x) Liens on Property of a Restricted Subsidiary either (1)
consisting of deposits in connection with bids for contracts in
the ordinary course of business so long as each such Lien is
limited to the deposit made in connection therewith or (2) to
secure the performance of contracts (or performance bonds issued
in connection therewith) in the ordinary course of business, and
not in connection with the borrowing of money, so long as each
such Lien is limited to the rights of such Restricted Subsidiary
under such contract.
12. Section 12.20 of the Credit Agreement is hereby deleted.
13. Exhibit A and Schedule 1.1 attached hereto are hereby substituted
for Exhibit A and Schedule 1.1, respectively, to the Credit Agreement.
14. Exhibit E to the Credit Agreement is amended by deleting the
amount "$50,000,000" located in clause (i) of Recital A thereof and replacing it
with the amount "$250,000,000".
15. The effectiveness of this Amendment is subject to the prior or
simultaneous fulfillment of the following conditions:
(a) The Administrative Agent shall have received this Amendment
executed by a duly authorized officer or officers of each party hereto.
(b) The Administrative Agent shall have received a certificate
of the Secretary or Assistant Secretary of the Borrower and the Parent (i)
attaching a true and complete copy of the resolutions of its Managing Person
authorizing this Amendment (in form and substance satisfactory to the
Administrative Agent, (ii) certifying that its certificate of incorporation and
by-laws have not been amended since May 21, 1996, or, if so, setting forth the
same and (iii) setting forth the incumbency of its officer or officers who may
sign this Amendment, including therein a signature specimen of such officer or
officers.
-8-
<PAGE> 9
(c) The Administrative Agent shall have received Revolving
Credit Notes for each Revolving Credit Lender, Tranche A Term Notes for each
Tranche A Lender and Tranche B Term Notes for each Tranche B Lender, duly
executed by an Authorized Signatory of the Borrower.
(d) The adjustments described in Sections 2 and 3 hereof shall
have been made.
(e) The Administrative Agent shall have received (i) an opinion
of Hale and Dorr, counsel to the Borrower and the Parent, substantially in the
form of Attachment A and (ii) reliance letters from each of (w) Garry Watzke,
Esq., (x) Paul, Hastings, Janofsky & Walker, (y) Gerry, Friend & Sapronov and
(z) Emmet, Marvin & Martin, LLP, each substantially in the form of Attachment B,
each addressed to the Administrative Agent and each of the Lenders.
(f) The Administrative Agent shall have received from the
Borrower, for the account of the Selling Lender, all interest accrued up to the
date of the effectiveness of this Amendment.
(g) The Administrative Agent shall have received such other
documents as it shall reasonably request.
16. The Borrower and the Parent each hereby (i) reaffirms and admits
the validity and enforceability of the Credit Agreement and the other Loan
Documents and all of its obligations thereunder, (ii) represents and warrants
that there exists no Default or Event of Default, and (iii) represents and
warrants that the representations and warranties contained in the Loan
Documents, including the Credit Agreement as amended by this Amendment (other
than the representations and warranties made as of a specific date) are true and
correct in all material respects on and as of the date hereof, except to the
extent that such representations and warranties are no longer true or correct as
a result of events, acts, transactions or occurrences after the Restatement
Effective Date which are permitted under the Credit Agreement.
17. The Selling Lender agrees that upon the receipt of the
replacement Notes as set forth above, it will return its existing Notes to the
Borrower for cancellation.
18. This Amendment may be executed in any number of counterparts, each
of which shall be an original and all of which shall constitute one amendment.
It shall not be necessary in making proof of this Amendment to produce or
account for more than one counterpart signed by the party to be charged.
-9-
<PAGE> 10
19. This Amendment is being delivered in and is intended to be
performed in the State of New York and shall be construed and enforceable in
accordance with, and be governed by, the internal laws of the State of New York
without regard to principles of conflict of laws.
20. Except as amended hereby, the Credit Agreement shall in all other
respects remain in full force and effect.
-10-
<PAGE> 11
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
ARCH COMMUNICATIONS ENTERPRISES, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
ARCH COMMUNICATIONS GROUP, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
THE BANK OF NEW YORK, individually
and as Administrative Agent
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
FLEET NATIONAL BANK, individually
and as Co- Agent
By:
-------------------------------------
Name:
-----------------------------------
-11-
<PAGE> 12
Title:
----------------------------------
PNC BANK, NATIONAL ASSOCIATION,
individually and as Co-Agent
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
TORONTO DOMINION (NEW YORK), INC.,
individually and as Co-Agent
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
THE FIRST NATIONAL BANK OF BOSTON,
individually and as Co-Agent
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
FIRST UNION NATIONAL BANK OF NORTH
CAROLINA, individually and as Co-Agent
By:
-------------------------------------
Name:
-----------------------------------
-12-
<PAGE> 13
Title:
----------------------------------
MELLON BANK, N.A., individually and as
Co-Agent
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
ROYAL BANK OF CANADA, individually
and as Co-Agent
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
BANK OF MONTREAL
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
BANQUE NATIONALE DE PARIS
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
-13-
<PAGE> 14
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
CIBC, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
COMPAGNIE FINANCIERE DE CIC ET DE L'UNION
EUROPEENNE
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
CORESTATES BANK, N.A.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
THE FUJI BANK, LIMITED, NEW YORK BRANCH
By:
-------------------------------------
-14-
<PAGE> 15
Name:
-----------------------------------
Title:
----------------------------------
LTCB TRUST COMPANY
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
MERITA BANK LTD.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
SOCIETE GENERALE
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
USTRUST
-15-
<PAGE> 16
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
BANK OF HAWAII
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
THOROUGHBRED LIMITED PARTNERSHIP
By: Appaloosa Partners,
its General Partner
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
ING CAPITAL ADVISORS, INC.,
as Agent for Bank Syndications Account
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
MERRILL LYNCH SENIOR FLOATING RATE FUND,
INC.
-16-
<PAGE> 17
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
VAN KAMPEN AMERICAN CAPITAL PRIME RATE
INCOME TRUST
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
SENIOR DERTFOLIO
By: Boston Management and Research, as
Investment Advisor
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
INDOSUEZ CAPITAL FUNDING II, LIMITED
By: Indosuez Capital Luxembourg, S.A., as
Collateral Manager
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
MERRILL LYNCH PRIME RATE PORTFOLIO
By: Merrill Lynch Asset Management, L.P., as
Investment Advisor
-17-
<PAGE> 18
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
CONSENTED TO:
ARCH MICHIGAN, INC.
ARCH CAPITOL DISTRICT, INC.
ARCH CONNECTICUT VALLEY, INC.
ARCH SOUTHEAST COMMUNICATIONS, INC.
ARCH COMMUNICATIONS SERVICES, INC.
BECKER BEEPER, INC.
THE BEEPER COMPANY OF AMERICA, INC.
GROOME ENTERPRISES, INC.
PROPAGE ACQUISITION CORPORATION
BTP ACQUISITION CORPORATION,
HUDSON VALLEY MOBILE TELEPHONE, INC.
THE WESTLINK COMPANY
LUND PRODUCTS SALES COMPANY
THE WESTLINK PAGING COMPANY OF NEW MEXICO, INC.
KELLEY'S RADIO TELEPHONE, INC.
ANSWER IOWA, INC.
WESTLINK LICENSEE CORPORATION
WESTLINK OF NEW MEXICO LICENSEE CORPORATION
ANSWER IOWA LICENSEE CORPORATION
KELLEY'S LICENSEE CORPORATION,
AS TO EACH OF THE FOREGOING:
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
-18-
<PAGE> 19
CASCADE MOBILE COMMUNICATIONS LIMITED PARTNERSHIP
By: The Westlink Company, its General Partner
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
TELECOMM/KRT PARTNERSHIP
By: The Westlink Company, a General Partner
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
By: Kelley's Radio Telephone, Inc., a General Partner
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
-19-
<PAGE> 1
Exhibit 10.3
*CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE
BEEN OMITTED AND FILED SEPARATELY.
ARCH COMMUNICATIONS GROUP, INC.
AMENDMENT "2"
May 1, 1996
This amendment is made and offered at your request and in light of the
additional competitive offers you have received. This amendment shall be
incorporated into the pager purchase proposal offered by Motorola, Inc. and
accepted by ARCH COMMUNICATIONS GROUP, INC. ("hereinafter" ARCH) on December 31,
1995.
Term
This amendment shall become effective upon written acceptance by ARCH
and shall expire July 31, 1996.
Price
The applicable prices are set forth on Attachment "A" hereto.
These prices are applicable to pagers ordered on common carrier
frequencies for which ARCH or its subsidiary companies are the licensee
or bona fide sales agent of the licensee. All prices include a primary
cell battery unless otherwise noted.
Other pagers may be ordered at standard common carrier prices in effect
at the time of the order and will be counted toward the fulfillment of
the quantity commitment. All products are quoted for sale subject to
availability.
These pagers carry Motorola's standard warranty for one year on parts
and 120 days on labor effective the date of shipment.
<PAGE> 2
Non-disclosure
Both ARCH and Motorola recognize the confidentiality of the pricing
information and agree to not disclose same to third parties during the
term of this agreement, unless required by judicial or administrative
order.
In the event of any potential merger or stock sale transactions, ARCH
will protect this confidentiality by obtaining written Non-Disclosure
Agreements from the parties.
Sales to the U.S. Government
In the event ARCH elects to sell Motorola products or services to the
Federal, State, or Local Government, or to a prime contractor selling
to a Government customer, ARCH shall do so at their own option and risk
and agrees not to obligate Motorola as a subcontractor or otherwise to
such customers except as indicated in the paragraph below. ARCH remains
solely and exclusively responsible for compliance with all statutes and
regulations governing sales to the Federal, State, or Local Government,
or to a prime contractor selling to a Government customer, except as
indicated in the paragraph below. Motorola makes no representations,
certifications, or warranties whatsoever with respect to the ability of
its goods, services, or prices to satisfy any such statutes or
regulations.
Motorola represents that it generally complies with the following FAR
clauses:
<TABLE>
<CAPTION>
FAR Clause Title
---------- -----
<S> <C>
52.221-21 Certification of Nonsegrated Facilities
52.222-22 Previous Contracts and Compliance Reports
52.222-25 Affirmative Action Compliance
52.222-26 Equal Opportunity
52.222-35 Affirmative Action for Special Disabled and Vietnam Era
Veterans
52.222-36 Affirmative Action for Handicapped Workers
52.222-37 Employment Reports on Special Disabled Veterans
and Veterans of the Vietnam Era
52.223-2 Clean Air and Water
</TABLE>
<PAGE> 3
Except as noted above, all other provisions of the agreement as originally
executed remain in force and effect.
Please indicate your acceptance of this proposed amendment by signing below.
AGREED AND ACCEPTED: ARCH COMMUNICATIONS GROUP, INC.
By:
--------------------------------
Title:
-----------------------------
Date:
------------------------------
M O T O R O L A, I N C.
James Grossi
National Sales Manager
Pan American Subscriber Paging Division
<PAGE> 4
* CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS HAVE
BEEN OMITTED AND FILED SEPARATELY.
Attachment "A" Pricing
The revised pager pricing will be as follows:
<TABLE>
<CAPTION>
Low/High UHF 900
Band Band MHz
---- ---- ---
<S> <C> <C> <C>
RENEGADE Numeric Display w/ vib. * * *
PRONTO and PRONTO FLX Numeric Display w/ vib. * * *
LIFESTYLE PLUS Numeric Display w/ vib. * * *
LIFESTYLE PLUS Synthesized Display w/ vib. * * *
BRAVO CLASSIC Numeric Display w/ vib. * * *
BRAVO CLASSIC Synthesized Display w/ vib. * * *
BRAVO PLUS Numeric Display w/ vib. * * * *
BRAVO PLUS AUTO Synthesized w/ vib. * * * *
BRAVO LX/FLX Numeric Display w/ vib. * * *
ULTRA EXPRESS Numeric Display w/ vib. * * *
GOLDLINE PEN Numeric Display w/ vib * * * *
MEMO EXPRESS Alphanumeric Display w/ vib. * * *
ADVISOR Alphanumeric Display w/ vib * * * *
ADVISOR PRO Alphanumeric Display w/ vib. * * *
ADVISOR GOLD/FLEX Alpha Display w/ vib * * *
KEYNOTE Tone and Voice w/ vib * * * *
KEYNOTE Stored Tone and Voice w/ vib. * * *
</TABLE>
This amendment reflects the addition of the Motorola PRONTO/PRONTO FLX and BRAVO
LX/FLX numeric pagers.
<PAGE> 5
MOTOROLA'S STANDARD TERMS AND CONDITIONS
ACCEPTANCE. The terms and conditions set forth herein and in Motorola's Limited
Warranty (a copy of which will accompany shipment or is available earlier upon
request) are an essential and material condition of Motorola's acceptance of
Buyer's order. Unless otherwise provided for in writing, ALL SALES ARE MADE
CONDITIONAL ONLY UPON ACCEPTANCE BY BUYER OF THESE TERMS AND CONDITIONS.
Motorola shall not be bound by Buyer's terms and conditions unless expressly
agreed to in writing. In the absence of written acceptance of these terms,
acceptance of or payment for any of the articles covered hereby by Buyer shall
constitute an acceptance of these terms.
NON-DISCLOSURE. Both Buyer and Motorola recognize the confidentiality of
Motorola's pricing information and agree to not disclose same to third parties
during the term of this agreement, unless required by judicial or administrative
order. In the event of any potential merger or stock sale transactions, Buyer
will protect this confidentiality by obtaining written Non-Disclosure Agreements
from the parties.
SHIPPING. Shipping and handling charges shall be paid by Buyer. Buyer agrees to
pay such amount quoted without regard to the actual charges applicable at the
time of shipment.
DELIVERY. All articles shall be sold and delivered FOB Motorola's shipping
facility(ies) unless otherwise expressly agreed to in writing. All stipulated
delivery or shipment dates are estimated only. Motorola reserves the right to
make deliveries in installments and the contract shall be severable as to any
such installments. Delay in delivery or other default of any installment shall
not relieve the Buyer of its obligation to accept and pay for remaining
deliveries. Claims for shipment shortage or delay in delivery shall be deemed
waived unless presented to Motorola in writing within 30 days after delivery of
each shipment. In no event shall Motorola be liable for increased manufacturing
costs, loss of profits or good will, or any other special, indirect or
consequential damages.
RESPONSIBILITY AND TITLE; SECURITY INTEREST. Risk of loss or damage to articles
sold shall pass to the Buyer when the articles are delivered to the FOB point
referred to above or to the specified FOB point. Buyer shall bear all costs of
their purchase hereunder after delivery to the FOB point including, but not
limited to, insurance, consular fees, taxes, ocean, air and/or inland freight,
shipping or handling charges and the like. Motorola shall retain and Buyer
hereby grants Motorola a security interest and right of possession in articles
sold until Buyer makes full payment. Buyer agrees to cooperate in whatever
manner necessary to assist Motorola in perfection of said security interest upon
request.
<PAGE> 6
PAYMENT. Buyer shall make net payment to Motorola at Motorola's offices at 1500
Gateway Boulevard, Boynton Beach, Florida 33426-8292, or at such other place as
Motorola may designate in writing. Payment shall be made within 30 days after
the date of invoice for each product, accessory, or other charge. Any invoiced
amount which is not paid within the terms and conditions of this agreement will
be considered delinquent. Based on acceptable credit and collection practices,
Motorola is entitled to past due interest or a late-payment charge on the
delinquent balance outstanding not to exceed 1.5% per month on the outstanding
balance. Any past due interest or late-payment charge will become due and
payable immediately at our discretion. Buyer also agrees to reimburse Motorola
for all legal fees and expenses incurred in collecting any amounts due
hereunder.
TAXES. Except for the amount, if any, of State and Local tax stated in the
Agreement, the prices set forth in the Agreement are exclusive of any amount for
Federal, State and/or Local excise, sales, use, property, retailer's occupation
or similar taxes. If any such excluded tax is determined to be applicable to
this transaction or Motorola is required to pay or bear the burden thereof, the
prices set forth herein shall be increased by the amount of such tax and any
interest or penalty thereon, and Buyer shall pay to Motorola the full amount of
any such increase no later than 30 days after receipt of an invoice therefore.
GOVERNMENT SALES. In the event Buyer elects to sell Motorola products or
services to any U.S. federal, state or local, or any foreign government agency,
or to a prime contractor or subcontractor selling to such entity, Buyer shall do
so at their own option and risk and agrees not to obligate Motorola as a
subcontractor or otherwise to such customers except as indicated in the
paragraph below. Buyer remains solely and exclusively responsible for compliance
with all statutes, regulations and clauses governing sales to any U.S. federal,
state or local, or any foreign government agency, or to a prime contractor or
subcontractor selling to such entity, except as indicated in the paragraph
below. Motorola makes no representations, certifications, or warranties
whatsoever with respect to the ability of its goods, services or prices to
satisfy any such statutes, regulations and clauses.
Motorola represents that it complies with the following FAR clauses:
<TABLE>
<CAPTION>
FAR Clause Title
<S> <C>
52.221-21 Certification of Nonsegregated Facilities
52.222-22 Previous Contracts and Compliance Reports
52.222-25 Affirmative Action Compliance
52.222-26 Equal Opportunity
52.222-35 Affirmative Action for Special Disabled and Vietnam Era Veterans
52.222-36 Affirmative Action for Handicapped Workers
52.222-37 Employment Reports on Special Disabled Veterans and Veterans
of the Vietnam Era
52.223-2 Clean Air and Water
</TABLE>
<PAGE> 7
PATENT AND COPYRIGHT INDEMNIFICATION. Motorola agrees to defend, at its expense,
any suits against Buyer based upon a claim that any Motorola manufactured
Products furnished hereunder directly infringe a U.S. patent or copyright and to
pay costs and damages finally awarded in any such suit, provided that Motorola
is notified promptly in writing of the suit and at Motorola's request and at its
expense is given control of said suit and all requested assistance for defense
of same. If the use or sale of any such Product(s) furnished hereunder is
enjoined as a result of such suit, Motorola, at its option and at no expense to
Buyer, shall obtain for Buyer the right to use or sell such Product(s) or shall
substitute an equivalent Product reasonably acceptable to Buyer and extend this
indemnity thereto or shall accept the return of such Product(s) and reimburse
Buyer the purchase price therefore, less a reasonable charge for reasonable wear
and tear. This indemnity does not extend to any suit based upon any infringement
or alleged infringement of any patent or copyright by the combination of any
such Product(s) furnished hereunder and other elements nor does it extend to any
such Product(s) of Buyer's design or formula. The foregoing states the entire
liability of Motorola for patent or copyright infringement. IN NO EVENT SHALL
MOTOROLA BE LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING FROM
INFRINGEMENT OR ALLEGED INFRINGEMENT OF PATENTS OR COPYRIGHTS.
COPYRIGHTS AND MASK WORKS. Motorola mask works and other works of authorship may
be used in and redistributed only with the Equipment associated with same. No
other use, including without limitation reproduction, modification or
disassembly of such Motorola mask works or other works of authorship is
permitted.
REVERSE ENGINEERING. Buyer acknowledges Motorola's claim that the Motorola
Equipment furnished hereunder contain valuable trade secrets of Motorola and
therefore agrees that it will not translate, reverse engineer, decompile,
disassemble or make any other unauthorized use of such Motorola Equipment. Since
unauthorized use of such Motorola Equipment will cause irreparable harm to
Motorola, Buyer agrees that Motorola, in addition to any other remedies it may
have, shall be entitled to equitable relief to protect such trade secrets,
including without limitation temporary and permanent injunctive relief without
proof of damages.
LOGOS AND TRADEMARKS. 1) The Products shipped under the terms and conditions of
this Agreement will carry Motorola's logo or such other logo as expressly agreed
to by Motorola. 2) In order that Motorola may protect and preserve its
trademarks, trade names, corporate slogans, corporate logo, goodwill and Product
designations, Buyer, without the express written consent of Motorola, shall have
no right to use any such marks, names, slogans or designations of Motorola in
the sale, lease or advertising of any Products or on any Product, Product
container, component part, business forms, sales, advertising and promotional
materials or other business supplies or materials, whether in writing, orally or
otherwise.
<PAGE> 8
LICENSE DISCLAIMER. Except for the right to use the Motorola Equipment for the
purposes provided herein which arises by operation of law and except as
expressly provided herein, nothing contained in this Agreement shall be deemed
to grant to Buyer either directly or by implication, estoppel or otherwise, any
license or right under any patents, copyrights, trademarks or trade secrets of
Motorola or any third party.
EXCUSABLE DELAY. In addition to other limitation on liability set forth in this
Agreement, Motorola shall not be liable for any delay or failure to perform due
to any cause beyond its reasonable control. Causes include, but are not limited
to, strikes, acts of God, acts of the Buyer, interruptions of transportation or
inability to obtain necessary labor, materials or facilities, default of any
supplier, or delays in FCC frequency authorization or license grant. In the
event Motorola is unable to wholly or partially perform because of any cause
beyond its reasonable control, Motorola may terminate the Agreement without any
liability to Buyer.
FCC AND OTHER GOVERNMENT MATTERS. Buyer is solely responsible for obtaining any
licenses from, and complying with any rules and regulations required by, the
Federal Communications Commission ("FCC") or any other Federal, State or Local
governmental agency.
COMMUNICATIONS SERVICES. Buyer agrees that communications services are not
provided under the Agreement. MOTOROLA DISCLAIMS LIABILITY FOR RANGE, COVERAGE,
AVAILABILITY OR OPERATION OF ANY SYSTEM.
LIMITATION OF LIABILITY. EXCEPT FOR PERSONAL INJURY AND EXCEPT AS PROVIDED FOR
IN THE SECTION "PATENT AND COPYRIGHT INDEMNIFICATION", MOTOROLA'S TOTAL
LIABILITY ARISING OUT OF OR RELATED TO THIS AGREEMENT, WHETHER FOR BREACH OF
CONTRACT, WARRANTY, MOTOROLA'S NEGLIGENCE, STRICT LIABILITY IN TORT OR
OTHERWISE, IS LIMITED TO THE PRICE OF THE PARTICULAR PRODUCTS SOLD HEREUNDER
WITH RESPECT TO WHICH LOSSES OR DAMAGES ARE CLAIMED. BUYER'S SOLE REMEDY IS TO
REQUEST MOTOROLA AT MOTOROLA'S OPTION TO EITHER REFUND THE PURCHASE PRICE OR
REPAIR OR REPLACE PRODUCTS THAT ARE NOT AS WARRANTED. IN NO EVENT WILL MOTOROLA
BE LIABLE FOR INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES, INCLUDING, BUT NOT
LIMITED TO, FRUSTRATION OF ECONOMIC OR BUSINESS EXPECTATIONS, LOSS OF PROFITS,
LOSS OF DATA, COST OF CAPITAL, COST OF SUBSTITUTE PRODUCT(S), FACILITIES OR
SERVICES, DOWNTIME COST OR ANY CLAIM AGAINST BUYER BY ANY OTHER PARTY, WHETHER
FOR BREACH OF CONTRACT, WARRANTY, MOTOROLA'S NEGLIGENCE, STRICT LIABILITY IN
TORT, OR OTHERWISE.
INSURANCE. It is further understood that Motorola is not an insurer and that
Buyer shall obtain all insurance, if any, that is desired and that Motorola does
not represent or warrant that Motorola products will avert or prevent
occurrences, or the consequences therefrom, which are monitored, detected or
controlled with the use of the products.
<PAGE> 9
TIME TO USE. Except for money due upon an open account, no action shall be
brought for any breach of this agreement more than two (2) years after the
accrual of such cause of action except where a shorter limitation period is
provided by applicable law. Except as otherwise already disclosed in writing to
Motorola, Buyer is not presently aware of any facts that could give rise to a
claim against Motorola for breach of contract, warranty, or otherwise.
NO REPRESENTATIONS. The issuance of information, advice, approvals, instructions
or cost projections by Motorola's sales personnel or other representatives shall
be deemed expressions of personal opinion only and shall not affect Motorola's
and Buyer's rights and obligations hereunder, unless the same is in writing and
signed by an officer of Motorola with the explicit statement that it constitutes
and amendment to this agreement.
WARRANTIES. Buyer will be provided with Motorola's Limited Warranty (a copy of
which will accompany the shipment or is available earlier upon request). THIS
WARRANTY IS GIVEN IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, WHICH ARE
SPECIFICALLY EXCLUDED, INCLUDING, WITHOUT LIMITATION, IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. UPON ACCEPTANCE OF A
SHIPMENT, BUYER SHALL BE DEEMED TO ACKNOWLEDGE RECEIPT OF SUCH WARRANTIES AND
LICENSE.
GENERAL. (A) Buyer acknowledges that it has read and understands the terms and
conditions of this Agreement and agrees to be bound by them. (B) No modification
of or additions to this Agreement shall be binding upon Motorola unless such
modification is in writing and signed by an officer of Motorola. (C) If any term
or provision of this Agreement shall to any extent be held invalid, void or
unenforceable, by a court or other tribunal, then that term of provision shall
be inoperative and void insofar as it is in conflict with law, but the remaining
terms and provisions shall nevertheless continue in full force and effect. (D)
The failure of Motorola to insist, in any one or more instances, upon the
performance of any of the terms, covenants or conditions of this Agreement, or
to exercise any right herein, shall not be construed as a waiver of
relinquishment of the future performance of any such term, covenant or condition
or the future exercise of such right, but the obligation of the Buyer with
respect to such future performance shall continue in full force and effect. (E)
THIS AGREEMENT AND THE RIGHTS AND DUTIES OF THE PARTIES HEREUNDER SHALL BE
GOVERNED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS.
ALTERNATIVE DISPUTE RESOLUTION. Motorola and Buyer will attempt to settle any
claim or controversy arising out of this Agreement, except for actions by
Motorola to collect payment from Buyer, through consultation and negotiation in
a spirit of mutual cooperation. If those attempts fail, then the dispute will be
mediated by a mutually-acceptable mediator to be chosen by Motorola and Buyer
within 45 days after written notice demanding mediation. Neither party may
unreasonably withhold consent to the selection of a mediator, and Motorola and
Buyer will share the costs of the mediation equally. Motorola and Buyer,
however, may postpone mediation by mutual agreement, until some specified but
limited discovery has been completed regarding the dispute. The parties may also
agree to replace mediation with some other form of alternative dispute
resolution (ADR), such as neutral fact-finding or a minitrial.
<PAGE> 10
Any dispute which cannot be resolved through negotiation, mediation or other
form of ADR within six months of the date of the initial demand for it may be
submitted to the state and federal courts within Illinois for resolution, and
Motorola and Buyer hereby consent to the jurisdiction of state and federal
courts sitting in Illinois. The use of any ADR procedures will not be construed
under the doctrines of laches, waiver or estoppel to adversely affect the rights
of either party. Nothing in this section will prevent either party from
resorting to judicial proceedings if (a) good faith efforts to resolve the
dispute under these procedures have been unsuccessful, or (b) interim relief
from a court is necessary to prevent serious and irreparable injury to one party
or to others. Motorola and Buyer knowingly, voluntarily and intentionally waive
the right each may have to a jury with respect to any such judicial proceedings.
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<NAME>
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<CURRENCY> U.S. DOLLARS
<S> <C>
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<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
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3,544
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