SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): JUNE 26, 1998
ARCH COMMUNICATIONS GROUP, INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE
(State or Other Jurisdiction of Incorporation)
0-23232/1-14248 31-1358569
(Commission File Number) (I.R.S. Employer Identification No.)
1800 WEST PARK DRIVE, SUITE 250, WESTBOROUGH, MA 01581
(Address of Principal Executive Offices) (Zip Code)
(508) 870-6700
(Registrant's Telephone Number, Including Area Code)
NOT APPLICABLE
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
ITEM 5. OTHER EVENTS.
ACE/USAM MERGER
On June 29, 1998, Arch Communications Group, Inc. ("Parent") effected a
number of restructuring transactions involving certain of its direct and
indirect wholly-owned subsidiaries. Arch Communications Enterprises, Inc.
("ACE") was merged (the "Merger") into a subsidiary of USA Mobile
Communications, Inc. II ("USAM") named Arch Paging, Inc. ("API"). In connection
with the Merger, USAM changed its name to Arch Communications, Inc. ("ACI") and
issued 100 shares of its common stock to Parent. Immediately prior to and in
connection with the Merger: (i) USAM contributed its operating assets and
liabilities to an existing subsidiary of USAM; (ii) The Westlink Company, which
held ACE's 49.9% equity interest in Benbow PCS Ventures, Inc. ("Benbow"),
distributed its Benbow assets and liabilities to a new subsidiary of ACE, The
Westlink Company II; (iii) ACE contributed its operating assets and liabilities
to an existing subsidiary of ACE; (iv) all of USAM's subsidiaries were merged
into API; and (v) The Westlink Company II was merged into a new API subsidiary,
Benbow Investments, Inc.
AMENDED CREDIT FACILITY
Contemporaneously with the Merger, ACE's existing credit facility was
amended and restated to establish senior secured revolving credit and term loan
facilities with API, as borrower, and The Bank of New York (the "Bank"), Royal
Bank of Canada and Toronto Dominion (Texas), Inc., as managing agents, in the
aggregate amount of $400.0 million (collectively, the "Amended Credit Facility")
consisting of (i) a $175.0 million reducing revolving credit facility (the
"Tranche A Facility"), (ii) a $100.0 million 364-day revolving credit facility
under which the principal amount outstanding on the 364th day following the
closing will convert to a term loan (the "Tranche B Facility") and (iii) a
$125.0 million term loan which was available in a single drawing on the closing
date (the "Tranche C Facility").
The Tranche A Facility will be subject to scheduled quarterly reductions
commencing on September 30, 2000 and will mature on June 30, 2005. The term loan
portion of the Tranche B Facility will be amortized in quarterly installments
commencing September 30, 2000, with an ultimate maturity date of June 30, 2005.
The Tranche C Facility will be amortized in annual installments commencing
December 31, 1999, with an ultimate maturity date of June 30, 2006.
API's obligations under the Amended Credit Facility are secured by its
pledge of the capital stock of the former ACE operating subsidiaries. The
Amended Credit Facility is guaranteed by Parent, ACI and the former ACE
operating subsidiaries. Parent's guarantee is secured by a pledge of Parent's
stock and notes in ACI, and the guarantees of the former ACE operating
subsidiaries are secured by a security interest in those assets of such
subsidiaries which were pledged under ACE's previous credit facility. Lenders
representing 40% of the Amended Credit Facility have the right to require ACI
and its subsidiaries to grant security interests in certain additional assets
not currently pledged thereunder, subject to granting a ratable security
<PAGE>
interest to holders of ACI's $125.0 million principal amount of 9 1/2% Senior
Notes due 2004 and ACI's $100.0 million principal amount of 14% Senior Notes due
2004.
Borrowings under the Amended Credit Facility bear interest based on a
reference rate equal to either the Bank's Alternate Base Rate or LIBOR rate, in
each case plus a margin based on ACI's or API's ratio of total debt to
annualized operating cash flow.
The Amended Credit Facility requires payment of fees on the daily
average amount available to be borrowed under the Tranche A Facility and the
Tranche B Facility, which fees vary depending on ACI's or API's ratio of total
debt to annualized operating cash flow.
The Amended Credit Facility contains restrictions that limit, among
other things: additional indebtedness and encumbrances on assets; cash dividends
and other distributions; mergers and sales of assets; the repurchase or
redemption of capital stock; investments; acquisitions that exceed certain
dollar limitations without the lenders' prior approval; and prepayment of
indebtedness other than indebtedness under the Amended Credit Facility. In
addition, the Amended Credit Facility requires ACI and its subsidiaries to meet
certain financial covenants, including covenants with respect to ratios of
operating cash flow to fixed charges, operating cash flow to debt service,
operating cash flow to interest service and total indebtedness to operating cash
flow.
ISSUANCE AND SALE OF NOTES
Contemporaneously with the Merger, ACI issued and sold $130.0 million
principal amount of 12 3/4% Senior Notes due 2007 (the "Notes") to Bear, Stearns
& Co., Inc., Barclays Capital Inc., RBC Dominion Securities Corporation, BNY
Capital Markets, Inc. and TD Securities (USA) Inc. (the "Initial Purchasers")
for net proceeds of $122.6 million (after deducting the discount to the Initial
Purchasers and estimated offering expenses payable by ACI) in a private
placement (the "Note Offering") under Rule 144A under the Securities Act of
1933. The Notes were sold at an initial price to investors of 98.049%. The
proceeds of the Note Offering were applied as described below under "Use of
Proceeds". The terms of the Notes are summarized below:
MATURITY
July 1, 2007.
INTEREST
The Notes bear interest at a rate of 12 3/4% per annum, payable
semi-annually in arrears on January 1 and July 1 of each year, commencing
January 1, 1999.
<PAGE>
RANKING
The Notes are senior unsecured obligations of ACI and rank pari passu in
right of payment with other existing and future senior indebtedness of ACI. ACI
is an intermediate holding company of Parent with no material assets other than
the stock of its subsidiaries. The Notes are structurally subordinated to all
current or future liabilities of ACI's subsidiaries, including trade payables
and indebtedness. At June 30, 1998, after giving effect to the Note Offering and
application of the estimated net proceeds therefrom as described below under
"Use of Proceeds", borrowings pursuant to the Amended Credit Facility and the
Equity Investment (as defined below) and the application of the proceeds
therefrom, the Notes were structurally subordinated to approximately $343.2
million of liabilities of ACI's subsidiaries. In addition, Parent does not have
any obligation to pay any amounts due with respect to the Notes or to make any
funds available therefor. At June 30, 1998, Parent had approximately $364.0
million of liabilities (excluding liabilities of its subsidiaries and Parent's
guarantees thereof).
OPTIONAL REDEMPTION
Except as set forth below, the Notes will not be redeemable at the
option of ACI prior to July 1, 2003. Thereafter, the Notes will be subject to
redemption at the option of ACI, in whole or in part, at the redemption prices
set forth herein plus accrued and unpaid interest and Liquidated Damages (as
defined below), if any, to the applicable redemption date. Notwithstanding the
foregoing, at any time prior to July 1, 2001, ACI may redeem up to 35% of the
Notes at a redemption price of 112 3/4% of the principal amount thereof, plus
accrued and unpaid interest and Liquidated Damages, if any, to the redemption
date, with the net cash proceeds of an equity offering for cash by ACI or
Parent; provided that at least $84.5 million aggregate principal amount of the
Notes originally issued under the indenture pursuant to which the Notes were
issued (the "Indenture") remain outstanding immediately after the occurrence of
each such redemption; and provided further, that such redemption shall occur
within 75 days following the date of the consummation of each such equity
offering.
CHANGE OF CONTROL
Upon the occurrence of a Change of Control (as defined in the Indenture)
at any time, ACI will be obligated to make an offer to repurchase each Holder's
Notes at a price equal to 101% of the aggregate principal amount thereof, plus
accrued and unpaid interest and Liquidated Damages, if any, to the date of
purchase.
CERTAIN COVENANTS
The Indenture contains certain covenants that, among other things, limit
the ability of ACI to incur additional indebtedness, issue preferred stock, pay
dividends or make other distributions, repurchase Capital Stock (as defined in
the Indenture), repay subordinated indebtedness or make other Restricted
Payments (as defined in the Indenture), create certain liens, enter into certain
transactions with affiliates, sell assets, issue or sell Capital Stock of ACI's
<PAGE>
Restricted Subsidiaries (as defined in the Indenture) or enter into certain
mergers and consolidations.
USE OF PROCEEDS
ACI used the net proceeds of the Note Offering, together with borrowings
under the Amended Credit Facility and the Equity Investment, to repay a portion
of the indebtedness under ACE's previous credit facility and all outstanding
indebtedness under USAM's previous credit facility. Amounts not repaid under
ACE's previous credit facility became outstanding under the Amended Credit
Facility.
EXCHANGE OFFER; REGISTRATION RIGHTS
Pursuant to an Exchange and Registration Rights Agreement among ACI and
the Initial Purchasers, ACI agreed to file a registration statement (the
"Exchange Offer Registration Statement") with respect to an offer to exchange
the Notes (the "Exchange Offer") for new notes of ACI (the "Exchange Notes").
The Exchange Notes will be issued under the Indenture as a separate series but
with terms identical to the Notes. ACI is required to (i) file the Exchange
Offer Registration Statement on or prior to July 29, 1998, (ii) use its best
efforts to have the Exchange Offer Registration Statement declared effective
prior to October 27, 1998 and (iii) commence the Exchange Offer and use its best
efforts to issue, on or prior to 30 business days after the date on which the
Exchange Offer Registration Statement is declared effective, Exchange Notes in
exchange for all Notes tendered prior thereto in the Exchange Offer. If (i) the
Exchange Offer is not permitted by applicable law or (ii) any Holder of Transfer
Restricted Securities (as defined in the Indenture) notifies ACI that (a) it is
prohibited by law or Securities and Exchange Commission policy from
participating in the Exchange Offer, (b) it may not resell an Exchange Note
acquired by it in the Exchange Offer to the public without delivering a
prospectus and that the prospectus contained in the Exchange Offer Registration
Statement is not appropriate or available for such resale or (c) it is a
broker-dealer and holds Notes acquired directly from ACI or an affiliate of ACI,
ACI will be required to file a shelf registration statement (the "Shelf
Registration Statement") to cover resales of the Notes by the Holders thereof.
If ACI fails to satisfy these registration obligations, it is required to pay
liquidated damages ("Liquidated Damages") to each holder of Notes of up to 100
basis points per annum of the principal amount of Notes held by such holder. ACI
expects to file the Exchange Offer Registration Statement on or prior to July
29, 1998.
EQUITY INVESTMENT
On June 29, 1998, two partnerships managed by Sandler Capital Management
Company, Inc., an investment management firm ("Sandler"), together with certain
other private investors, made an equity investment in Parent of $25.0 million in
the form of Series C Convertible Preferred Stock of Parent ("Series C Preferred
Stock"). Simultaneously, Parent contributed to ACI as an equity investment (the
"Equity Investment") $24.0 million of the net proceeds from the sale of Series C
Preferred Stock, ACI contributed such amount to API as an equity investment and
<PAGE>
API used such amount to repay indebtedness under ACE's existing credit facility
as part of the establishment of the Amended Credit Facility.
The Series C Preferred Stock: (i) is convertible into Common Stock of
Parent at an initial conversion price of $5.50 per share, subject to certain
adjustments; (ii) bears dividends at an annual rate of 8.0%, (A) payable
quarterly in cash or, at Parent's option, through the issuance of shares of
Parent's Common Stock valued at 95% of the then prevailing market price or (B)
if not paid quarterly, accumulating and payable upon redemption or conversion of
the Series C Preferred Stock or liquidation of Parent; (iii) permits the holders
after seven years to require Parent, at Parent's option, to redeem the Series C
Preferred Stock for cash or convert such shares into Parent's Common Stock
valued at 95% of the then prevailing market price of Parent's Common Stock; (iv)
is subject to redemption for cash or conversion into Parent's Common Stock at
ACI's option in certain circumstances; (v) in the event of a "Change of Control"
as defined in the Indenture governing Parent's 10 7/8% Senior Discount Notes due
2008 (the "Parent Discount Notes Indenture"), requires Parent, at its option, to
redeem the Series C Preferred Stock for cash or convert such shares into
Parent's Common Stock valued at 95% of the then prevailing market price of
Parent's Common Stock, with such cash redemption or conversion being at a price
equal to 105% of the sum of the original purchase price plus accumulated
dividends; (vi) limits certain mergers or asset sales by Parent; (vii) so long
as at least 50% of the Series C Preferred Stock remains outstanding, limits the
incurrence of indebtedness and "restricted payments" in the same manner as
contained in the Parent Discount Notes Indenture; and (viii) has certain voting
and preemptive rights. The holders of the Series C Preferred Stock also received
customary registration and information rights.
So long as at least 50% of the Series C Preferred Stock remains
outstanding, the holders of the Series C Preferred Stock have the right, voting
as a separate class, to designate one member of the Boards of Directors of
Parent and ACI, and such director has the right to be a member of any committee
of such Boards of Directors. Upon the closing of the Series C Preferred Stock
financing, John Kornreich, a Managing Director of Sandler, was elected a
director of Parent and ACI pursuant to these arrangements.
Immediately prior to the Series C Preferred Stock financing,
partnerships managed by Sandler owned 4.1% of Parent's outstanding Common Stock.
After giving effect to the issuance of the Series C Preferred Stock, the holders
of the Series C Preferred Stock beneficially owned (including the Common Stock
owned by partnerships managed by Sandler) 21.2% of Parent's Common Stock. The
investors in the Series C Preferred Stock financing agreed to certain
"standstill" provisions limiting their beneficial ownership in Parent to 24.99%
(provided that the receipt of Parent's Common Stock in payment of dividends on
the Series C Preferred Stock does not constitute a breach of this limitation).
TOWER SITE SALE
In April 1998, Parent announced an agreement to sell certain of ACI's
tower site assets (the "Tower Site Sale") for approximately $38 million in cash
(subject to adjustment), of which $1.3 million will be paid to a subsidiary of
<PAGE>
Benbow in payment for certain assets owned by such subsidiary and included in
the Tower Site Sale. In the Tower Site Sale, ACI is selling communications
towers, real estate, site management contracts and/or leasehold interests
involving 134 sites in 22 states and leasing back space on the towers on which
it currently operates communications equipment to service its own paging
network. ACI will use its net proceeds from the Tower Site Sale (estimated to be
$36 million) to repay indebtedness under the Amended Credit Facility. The
agreement for the Tower Site Sale calls for an initial closing to be followed 60
days later by a final closing. ACI held the initial closing of the Tower Site
Sale on June 26, 1998 with gross proceeds to ACI of approximately $12 million
and currently expects to hold the final closing for the balance of the
transaction in the third quarter of 1998, although no assurance can be given
that the final closing will be held as expected.
DIVISIONAL REORGANIZATION
In June 1998, Parent's Board of Directors approved a reorganization of
Parent's operations (the "Divisional Reorganization"). As part of the Divisional
Reorganization, which will be implemented over a period of 18 to 24 months,
Parent plans to consolidate its seven operating divisions into four operating
divisions, and consolidate certain regional administrative support functions,
resulting in various operating efficiencies. ACI estimates that the Divisional
Reorganization, once fully implemented, will result in annual cost savings of
approximately $15 million (approximately $11.5 million for salary and employee
benefits and $3.5 million for lease obligations). ACI expects to reinvest a
portion of these cost savings to expand its sales activities. In connection with
the Divisional Reorganization, Parent (i) anticipates a net reduction of
approximately 10% of its workforce, (ii) plans to close certain office locations
and redeploy other real estate assets and (iii) expects to record a
restructuring charge of approximately $15 million to $25 million for the second
quarter of 1998. The restructuring charge is expected to consist of
approximately (i) $8 million for employee severance and benefits, (ii) $4
million to $9 million for lease obligations and terminations, (iii) $1.5 million
to $5 million for the writedown of fixed assets and (iv) $1.5 million to $3
million for other items.
PAGE CALL ACQUISITION
Prior to June 29, 1998, Benbow held exclusive rights to a 50 KHz
outbound/12.5 KHz inbound narrowband personal communications services ("N- PCS")
license in each of the Central and Western regions of the United States, and
Page Call, Inc. ("Page Call") owned exclusive rights to a 50 KHz outbound/12.5
KHz inbound N-PCS license in each of the Northeast, South and Midwest regions of
the United States, utilizing the same radio frequency as Benbow's existing N-PCS
licenses. On June 29, 1998, Benbow acquired Page Call's outstanding stock. As a
result of the Page Call acquisition, Benbow holds (directly or through Page
Call) licenses covering all five regions of the United States. Benbow needs to
construct its N-PCS system (or make other arrangements) before it can offer
N-PCS services.
Benbow acquired Page Call's outstanding stock by issuing to Page Call's
former stockholders preferred stock and a promissory note in the aggregate face
amount of $17.2 million with a 12% annual return. Upon the closing, Benbow
entered into a five-year consulting agreement with one of Page Call's
<PAGE>
stockholders requiring consulting payments in the aggregate amount of $911,000.
Benbow's preferred stock and promissory note are exchangeable for Common Stock
of Parent (i) at any time at the option of the holders thereof, at an exchange
price equal to the higher of (A) $13.00 per share or (B) the market price of
Parent's Common Stock, (ii) mandatorily on April 8, 2000, at the then prevailing
market price of Parent's Common Stock, or (iii) automatically at an exchange
price of $13.00 per share, if the market price of Parent's Common Stock equals
or exceeds $13.00 for 20 consecutive trading days. Parent is permitted to
require Benbow to redeem its preferred stock and promissory note at any time for
cash. Parent entered into guarantees (payable in Parent's Common Stock or cash,
at Parent's election) of all obligations of Benbow under the Benbow preferred
stock, promissory note and consulting agreement described above. Benbow's
redemption of its preferred stock and promissory note for cash, or Parent's
payment of cash pursuant to its guarantees of Benbow's preferred stock and
promissory note, would be subject to the availability of capital and any
restrictions contained in applicable debt instruments and under applicable law
(which currently would not permit any such cash redemptions or payments). If
Parent issues Common Stock or pays cash pursuant to its guarantees, Parent will
receive from Benbow a promissory note and non-voting, non-convertible preferred
stock of Benbow with an annual yield of 14.5% payable upon an acquisition of
Benbow or earlier to the extent that available cash and applicable law permit.
Page Call's stockholders received customary registration rights with respect to
any shares of Parent's Common Stock issued in exchange for Benbow's preferred
stock and promissory note or pursuant to Parent's guarantees thereof.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: July 22 , 1998 ARCH COMMUNICATIONS GROUP, INC.
/S/ J. ROY POTTLE
By: J. Roy Pottle
Title: Executive Vice President and
Chief Financial Officer
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
4.1 Indenture, dated June 29, 1998, between Arch Communications, Inc. and
U.S. Bank Trust National Association, as Trustee, relating to the 12
3/4% Senior Notes due 2007 of Arch Communications, Inc. 4.2
Certificate of Designations establishing the Series C Convertible
Preferred Stock.
4.3 Amendment No. 1 to Rights Agreement, dated June 29, 1998, between Arch
Communications Group, Inc. and The Bank of New York.
99.1 Second Amended and Restated Credit Agreement (Tranche A and Tranche C
Facilities), dated June 29, 1998, among Arch Paging, Inc., the Lenders
party thereto, The Bank of New York, Royal Bank of Canada and Toronto
Dominion (Texas), Inc.
99.2 Second Amended and Restated Credit Agreement (Tranche B Facility),
dated June 29, 1998, among Arch Paging, Inc., the Lenders party
thereto, The Bank of New York, Royal Bank of Canada and Toronto
Dominion (Texas), Inc.
99.3 Asset Purchase and Sale Agreement, dated April 10, 1998, among
OmniAmerica, Inc. and certain subsidiaries of Arch Communications
Group, Inc.
99.4! Letter agreement, dated June 10, 1998, between Arch Communications
Group, Inc. and Motorola, Inc.
99.5 Stock Purchase Agreement, dated June 29, 1998, among Arch
Communications Group, Inc., Sandler Capital Partners IV, L.P., Sandler
Capital Partners IV FTE, L.P., Harvey Sandler, John Kornreich, Michael
J. Marocco, Andrew Sandler, South Fork Partners, the Georgica
International Fund Limited, Aspen Partners and Consolidated Press
International Limited.
99.6 Registration Rights Agreement, dated June 29, 1998, among Arch
Communications Group, Inc., Sandler Capital Partners IV, L.P., Sandler
Capital Partners IV FTE, L.P., Harvey Sandler, John Kornreich, Michael
J. Marocco, Andrew Sandler, South Fork Partners, The Georgica
International Fund Limited, Aspen Partners and Consolidated Press
International Limited.
99.7 Exchange Agreement, dated June 29, 1998, between Adelphia
Communications Corporation and Benbow PCS Ventures, Inc.
<PAGE>
99.8 Promissory Note, dated June 29, 1998, in the principal amount of
$285,015, issued by Benbow PCS Ventures, Inc. to Lisa-Gaye Shearing.
99.9 Guaranty, dated June 29, 1998, given by Arch Communications Group,
Inc. to Adelphia Communications Corporation.
99.10 Guaranty, dated June 29, 1998, given by Arch Communications Group,
Inc. to Lisa-Gaye Shearing.
99.11 Registration Rights Agreement, dated June 29, 1998, among Arch
Communications Group, Inc., Adelphia Communications Corporation and
Lisa-Gaye Shearing.
99.12 Press Release, dated June 8, 1998, entitled "Arch Announces Plan to
Strengthen Capital Structure, Increase Financial Flexibility for
Future Growth".
99.13 Press Release, dated June 25, 1998, entitled "Arch Prices Rule 144A
Offering".
99.14 Press Release, dated June 30, 1998, entitled "Arch Completes
Restructuring Plan: Closes New Credit Facility, Private Equity
Placement, Senior Note Offering".
! Confidential treatment requested with respect to portions of this
exhibit
EXHIBIT 4.1
ARCH COMMUNICATIONS, INC.
TO
U.S Bank Trust National Association,
Trustee
INDENTURE
Dated as of June 29, 1998
$130,000,000
aggregate principal amount
12 3/4% SENIOR SERIES A and SERIES B NOTES DUE 2007
<PAGE>
Certain Sections of this Indenture relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture Indenture
Act Section Section
ss. 310(a)(l) 609
(a)(2) 609
(a)(3) Not Applicable
(A)(4) Not Applicable
(b) 608, 609
ss. 31l(a) 613
(b) 613
ss. 312(a) 701,702(a)
(b) 702(b)
(c) 702(c)
ss. 313(a) 703(a)
(b) 703(a)
(c) 703(a)
(d) 703(b)
ss. 314(a) 1014
(b) Not Applicable
(c)(1) 102
(c)(2) 102
(c)(3) Not Applicable
(d) Not Applicable
(e) 102
ss. 315(a) 601
(b) 602
(c) 601
(d) 601
(e) 514
ss. 316(a) 101
(a)(l)(A) 502, 512
(a)(1)(B) 513
(a)(2) Not Applicable
(b) 508
(c) 104(c)
ss. 317(a)(1) 503
(a)(2) 504
(b) 1003
ss. 318(a) 107
Note: This reconciliation and tie shall not, for any
purpose, be deemed to be a part of this Indenture.
<PAGE>
INDENTURE, dated as of June 29, 1998, between Arch Communications,
Inc., a corporation duly organized and existing under the laws of the State of
Delaware (herein called the "Company"), having its principal office at 1800 West
Park Drive, Suite 250, Westborough, Massachusetts 01581 and U.S. Bank Trust
National Association, a national banking organization, as Trustee (herein called
the "Trustee"), having its principal corporate trust office at 180 East 5th
Street, St. Paul, Minnesota, 55102, Attention: Corporate Trust Administration.
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of its 123/4%
Series A Senior Notes Due 2007 (the "Series A Senior Securities") and its 123/4%
Series B Senior Notes Due 2007 (the "Series B Senior Securities" and, together
with the Series A Senior Securities, the "Securities") of substantially the
tenor and amount hereinafter set forth, and to provide therefor the Company has
duly authorized the execution and delivery of this Indenture.
All things necessary to make the Securities, when executed by the
Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company, and to make this Indenture a
valid agreement of the Company, in accordance with their and its terms, have
been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities, as follows:
ARTICLE I
DEFINITIONS AND OTHER
PROVISIONS OF GENERAL APPLICATION
SECTION I.1 DEFINITIONS
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
<PAGE>
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with Generally Accepted Accounting
Principles (whether or not such is indicated herein); and
(4) the words "herein", "hereof " and "hereunder" and other words
of similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
(5) unless otherwise specified, all references in this Indenture
to Sections, Articles, Exhibits and Schedules are to Sections of, Articles of
and Exhibits and Schedules to this Indenture.
Certain terms, used principally in Article Eight, are defined in that
Article.
"Acquired Debt" means Debt of a Person (a) existing at the time such
Person is merged with or into the Company or becomes a Subsidiary, (b) assumed
in connection with the acquisition of assets from such Person or (c) secured by
a Lien encumbering assets acquired from such Person.
"Act", when used with respect to any Holder, has the meaning specified
in Section 1.04.
"Affiliate" means, with respect to any specified Person, any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of this
definition, "control," when used with respect to any specified Person, means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Asset Sale" means any sale, issuance, conveyance, transfer, lease or
other disposition (including, without limitation, by way of merger,
consolidation or Sale and Leaseback Transaction) (collectively, a "transfer"),
directly or indirectly, in one or a series of related transactions, to any
Person of: (a) any Capital Stock of any Restricted Subsidiary; (b) all or
substantially all of the properties and assets of the Company and its Restricted
Subsidiaries representing a division or line of business; or (c) any other
properties or assets of the Company or any Restricted Subsidiary, other than in
the ordinary course of business. For the purposes of this definition, the term
"Asset Sale" shall not include any transfer of properties or assets (i) that is
governed by the provisions of this Indenture contained in Section 8.01, (ii)
between or among the Company and its Restricted Subsidiaries, (iii) constituting
an Investment in a telecommunications business, if permitted under Section
10.09, (iv) representing obsolete or permanently retired equipment and
facilities or (v) the gross proceeds of which (exclusive of indemnities) do not
exceed $1.0 million for any particular item or $2.0 million in the aggregate for
any fiscal year of the Company.
2
<PAGE>
"Attributable Value" means, with respect to any lease at the time of
determination, the present value (discounted at the interest rate implicit in
the lease, or, if not known, at the Company's incremental borrowing rate) of the
obligations of the lessee of the property subject to such lease for rental
payments during the lesser of (i) the remaining term of the lease included in
such transaction, including any period for which such lease has been extended or
may, at the option of the lessor, be extended, or (ii) until any date on which
the lessee may terminate such lease without penalty or upon payment of penalty
(in which case the rental payments shall include such penalty); provided that on
the date of determination it is the lessee's intention to terminate such lease
on such date, after excluding from such rental payments all amounts required to
be paid on account of maintenance and repairs, insurance, taxes, assessments,
water, utilities and similar charges.
"Average Life" means, as of the date of determination with respect to
any Debt or Disqualified Stock, the quotient obtained by dividing (a) the sum of
the products of (i) the number of years from the date of determination to the
date or dates of each successive scheduled principal payment (including, without
limitation, any sinking fund requirements) of such Debt or Disqualified Stock,
respectively, multiplied by (ii) the amount of each such principal payment by
(b) the sum of all such principal payments.
"Bank Credit Facilities" means one or more credit or loan agreements
or facilities (which may include revolving credit facilities or working capital
facilities or term loans), whether now existing or created after the date of
this Indenture, with a bank or other financial institution or group of banks or
other financial institutions, as such agreements or facilities may be amended
(including any amendments and restatements thereof), modified, supplemented,
increased, restated or replaced from time to time, and includes without
limitation (i) the Second Amended and Restated Credit Agreement (Tranche A and
Tranche C Facilities), dated as of June 29, 1998, among Arch Paging, Inc., the
lenders and agents party thereto, and The Bank of New York, as administrative
agent, together with all such Loan Documents under and as defined therein, as
each such agreement and document may be amended, restated, supplemented,
refinanced, increased or otherwise modified from time to time and (ii) the
Second Amended and Restated Credit Agreement (Tranche B Facility), dated as of
June 29, 1998, among Arch Paging, Inc., the lenders and agents party thereto,
and The Bank of New York, as administrative agent, together with all such Loan
Documents under and as defined therein, as each such agreement and document may
be amended, restated, supplemented, refinanced, increased or otherwise modified
from time to time.
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been, duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in the Borough of
Manhattan, The City of New York, New York are authorized or obligated by law or
executive order to close.
"Capital Lease Obligation" means, with respect to any Person, an
obligation Incurred in the ordinary course of business under or in connection
with any capital lease of real or personal property which, in accordance with
GAAP, has been recorded as a capitalized lease.
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"Capital Stock" of any Person means any and all shares, interests,
partnership interests, participation, rights in or other equivalents (however
designated) of such Person's equity interest (however designated) and any rights
(other than debt securities convertible into capital stock), warrants or options
exchangeable for or convertible into such capital stock, whether now outstanding
or issued after the date of this Indenture.
"Change of Control" has the meaning specified in Section 10.15.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or, if at any time
after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture and thereafter "Company"
shall mean such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its President, a Vice President, its Chief Financial
Officer, its Treasurer, an Assistant Treasurer, its Secretary or an Assistant
Secretary, and delivered to the Trustee.
"Consolidated Adjusted Net Income" means, for any period, the net
income (or net loss) of the Company and its Restricted Subsidiaries for such
period as determined on a consolidated basis in accordance with GAAP, adjusted
to the extent included in calculating such net income or loss by excluding (a)
any net after-tax extraordinary gains or losses (less all fees and expenses
relating thereto), (b) any net after-tax gains or losses (less all fees and
expenses relating thereto) attributable to Asset Sales, (c) the portion of net
income (or loss) of any Person (other than the Company or a Restricted
Subsidiary), including Unrestricted Subsidiaries, in which the Company or any
Restricted Subsidiary has an ownership interest, except to the extent of the
amount of dividends or other distributions actually paid to the Company or any
Restricted Subsidiary in cash dividends or distributions by such Person during
such period, and (d) the net income (or loss) of any Person combined with the
Company or any Restricted Subsidiary on a "pooling of interests" basis
attributable to any period prior to the date of combination.
"Consolidated Cash Flow" means for any period Consolidated Adjusted
Net Income for such period increased, without duplication, by (i) Consolidated
Interest Expense for such period, plus (ii) Consolidated Income Tax Expense for
such period, plus (iii) Consolidated Non-Cash Charges for such period.
"Consolidated Cash Flow Ratio" means, at any date, the ratio of
(a) the aggregate principal amount of Debt of the Company and its Restricted
Subsidiaries on a consolidated basis outstanding as of such date to (b)
Consolidated Cash Flow for the most recently ended full fiscal quarter
multiplied by four.
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"Consolidated Income Tax Expense" means, for any period, the provision
for federal, state, local and foreign income taxes of the Company and its
Restricted Subsidiaries for such period as determined on a consolidated basis in
accordance with GAAP.
"Consolidated Interest Expense" means, for any period, without
duplication, the sum of (a) the amount which, in conformity with GAAP, would be
set forth opposite the caption "interest expense" (or any like caption) on a
consolidated statement of operations of the Company and its Restricted
Subsidiaries for such period, including, without limitation, (i) amortization of
debt discount, (ii) the net cost of interest rate contracts (including
amortization of discounts), (iii) the interest portion of any deferred payment
obligation, (iv) amortization of debt issuance costs, (v) the interest component
of Capital Lease Obligations of the Company and its Restricted Subsidiaries, and
(vi) the portion of any rental obligation of the Company and its Restricted
Subsidiaries in respect of any Sale and Leaseback Transaction allocable during
such period to interest expense (determined as if it were treated as a Capital
Lease Obligation) plus (b) all interest on any Debt of any other Person
guaranteed and paid by the Company or any of its Restricted Subsidiaries;
provided, however, that Consolidated Interest Expense will not include any gain
or loss from extinguishment of debt, including write-off of debt issuance costs.
"Consolidated Non-Cash Charges" means, for any period, the aggregate
depreciation, amortization and other non-cash expenses of the Company and its
Restricted Subsidiaries reducing Consolidated Adjusted Net Income for such
period, determined on a consolidated basis in accordance with GAAP (excluding
any such non-cash charge that requires an accrual of or reserve for cash charges
for any future period).
"Corporate Trust Office" mean the principal office of the Trustee in
St. Paul, Minnesota, at which at any particular time its corporate trust
business shall be administered, which at the date hereof is 180 East 5th Street,
St. Paul, Minnesota 55102.
"corporation" means a corporation, association, limited liability
company, joint-stock company or business trust.
"Debt" means (without duplication), with respect to any Person,
whether recourse is to all or a portion of the assets of such Person, and
whether or not contingent, (a) every obligation of such Person for money
borrowed, (b) every obligation of such Person evidenced by bonds, debentures,
notes or other similar instruments, (c) every reimbursement obligation of such
Person with respect to letters of credit, bankers' acceptances or similar
facilities issued for the account of such Person, (d) every obligation of such
Person issued or assumed as the deferred purchase price of property or services,
(e) the Attributable Value of every Capital Lease Obligation and Sale and
Leaseback Transaction of such Person, (f) all Disqualified Stock of such Person
valued at its maximum fixed repurchase price, plus accrued and unpaid dividends
and (g) every obligation of the type referred to in clauses (a) through (f) of
another Person and dividends of another Person the payment of which, in either
case, such Person has guaranteed. For purposes of this definition, the "maximum
fixed repurchase price" of any Disqualified Stock that does not have a fixed
repurchase price will be calculated in accordance with the terms of such
Disqualified Stock as if such Disqualified Stock were repurchased on any date on
which Debt is required to be determined pursuant to this Indenture, and if such
price is based upon, or measured by, the fair market value of such Disqualified
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Stock, such fair market value will be determined in good faith by the board of
directors of the issuer of such Disqualified Stock. Notwithstanding the
foregoing, trade accounts payable and accrued liabilities arising in the
ordinary course of business and any liability for federal, state or local taxes
or other taxes owed by such Person shall not be considered Debt for purposes of
this definition. The amount outstanding at any time of any Debt issued with
original issue discount is the aggregate principal amount of such Debt, less the
remaining unamortized portion of the original issue discount of such Debt at
such time, as determined in accordance with GAAP.
"Default" means any event that is, or after notice or passage of time
or both would be, an Event of Default.
"Defaulted Interest" has the meaning specified in Section 3.06.
"Definitive Securities" means Securities that are in the form of the
Securities attached hereto as Exhibit A, that do not include the information
called for by footnotes 1 and 2 thereof.
"Depositary" means with respect to the Securities issuable or issued
in whole or in part in global form, the Person specified in Section 2.02 hereof
as the Depositary with respect to the Securities, until a successor shall have
been appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depositary" shall mean or include such successor.
"Disinterested Director" means, with respect to any transaction or
series of transactions in respect of which the Board of Directors is required to
deliver a resolution of the Board of Directors under this Indenture, a member of
the Board of Directors who does not have any material direct or indirect
financial interest in or with respect to such transaction or series of
transactions (other than solely by virtue of such person's ownership of Capital
Stock or other securities of the Company).
"Disqualified Stock" means any class or series of Capital Stock that,
either by its terms, by the terms of any security into which it is convertible
or exchangeable at the option of the holder thereof or by contract or otherwise,
is, or upon the happening of an event or passage of time would be, required to
be redeemed prior to the final Stated Maturity of the Notes or is redeemable at
the option of the holder thereof at any time prior to such final Stated
Maturity, or is convertible into or exchangeable at the option of the holder
thereof for debt securities at any time prior to such final Stated Maturity.
"Eligible Institution" means the Trustee or any financial institution
that is a member of the Federal Reserve System having combined capital and
surplus and undivided profits of not less than $500,000,000.
"Equity Offering" means an offering of equity securities of the
Company or Parent for cash to Persons other than the Company or Subsidiaries of
the Company.
"Event of Default" has the meaning specified in Section 5.01.
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"Excess Proceeds" has the meaning specified in Section 10.12.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Generally Accepted Accounting Principles" or "GAAP" means generally
accepted accounting principles in the United States, consistently applied, that
are in effect on the date of this Indenture.
"Global Security" means a Security that contains the paragraph
referred to in footnote 1 and the additional schedule referred to in footnote 2
to the form of the Security attached hereto as Exhibit A.
"Government Securities" means direct obligations of, obligations fully
guaranteed by, or participations in pools consisting solely of obligations of or
obligations guaranteed by, the United States of America for the payment of which
guarantee or obligations the full faith and credit of the United States of
America is pledged and which are not callable or redeemable at the option of the
issuer thereof.
"Guarantee" means, as applied to any obligation, (a) a guarantee
(other than by endorsement of negotiable instruments for collection in the
ordinary course of business), direct or indirect, in any manner, of any part or
all of such obligation and (b) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment or
performance (or payment of damages in the event of non-performance) of all or
any part of such obligation, including, without limiting the foregoing, the
obligation to reimburse amounts drawn down under letters of credit securing such
obligations.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"IAI" means an institutional "accredited investor" as defined in Rule
501(A)(1), (2), (3) or (7) of Regulation D under the Securities Act.
"Incur" means, with respect to any Debt, to incur, create, issue,
assume, Guarantee or otherwise become liable for or with respect to, or become
responsible for, the payment of, contingently or otherwise, such Debt; provided
that neither the accrual of interest nor the accretion of original issue
discount shall be considered an Incurrence of Debt.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures entered
into pursuant to applicable provisions hereof.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Securities.
"Investment" means, (a) directly or indirectly, any advance, loan or
capital contribution to, the purchase of any stock, bonds, notes, debentures or
other securities of, the acquisition, by purchase or otherwise, of all or
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substantially all of the business or assets or stock or other evidence of
beneficial ownership of, or the Guarantee of any obligation of, any Person or
making of any investment in any Person, (b) the designation of any Restricted
Subsidiary as an Unrestricted Subsidiary and (c) the transfer of any assets or
properties from the Company or a Restricted Subsidiary to any Unrestricted
Subsidiary, other than the transfer of assets or properties in the ordinary
course of business. Investments will not include extensions of trade credit on
commercially reasonable terms in accordance with normal trade practices.
"Lien" means any mortgage, charge, pledge, lien (statutory or
otherwise), privilege, security interest, hypothecation, assignment for
security, claim, preference, priority or other encumbrance upon or with respect
to any property of any kind, real or personal, movable or immovable, now owned
or hereafter acquired. A Person shall be deemed to own subject to a Lien any
property which such Person has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, capital lease or other
title retention agreement.
"Liquidated Damages" means all liquidated damages then owing pursuant
to Section 8 of the Registration Rights Agreement.
"Maturity" means, with respect to any Security, the date on which any
principal of such Security becomes due and payable as provided therein or in
this Indenture, whether at the Stated Maturity with respect to such principal or
by declaration of acceleration, call for redemption, purchase or otherwise.
"Net Cash Proceeds" means, with respect to any Asset Sale, the
proceeds thereof in the form of cash or cash equivalents, including payments in
respect of deferred payment obligations when received in the form of, or stock
or other assets when disposed for, cash or cash equivalents (except to the
extent that such obligations are financed or sold by the Company or any
Restricted Subsidiary with recourse to the Company or any Restricted
Subsidiary), net of (a) brokerage commissions and other fees and expenses
(including fees and expenses of legal counsel and investment banks) related to
such Asset Sale, (b) provisions for all taxes payable as a result of such Asset
Sale, (c) payments made to retire Debt where payment of such Debt is secured by
the assets that are the subject of such Asset Sale, (d) amounts required to be
paid to any Person (other than the Company or any Restricted Subsidiary) owning
a beneficial interest in the assets that are subject to the Asset Sale and (e)
appropriate amounts to be provided by the Company or any Restricted Subsidiary,
as the case may be, as a reserve required in accordance with GAAP against any
liabilities associated with such Asset Sale and retained by the seller after
such Asset Sale, including pension and other post-employment benefit
liabilities, liabilities related to environmental matters and liabilities under
any indemnification obligations associated with such Asset Sale.
"Note Custodian" means the Trustee, as custodian with respect to the
Securities in global form, or any successor entity thereto.
"Offer to Purchase" means a written offer (the "Offer") sent by the
Company by first class mail, postage prepaid, to each Holder at its address
appearing in the Security Register on the date of the Offer to Purchase up to
the principal amount of Securities specified in such Offer at the purchase price
specified in such Offer. Unless otherwise required by applicable law, the Offer
shall specify an expiration date (the "Expiration Date") of the Offer to
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Purchase which shall be, subject to any contrary requirements of applicable law,
a Business Day and not less than 30 days or more than 60 days after the date of
such Offer and a settlement date (the "Purchase Date") for the purchase of
Securities at least one but not more than five Business Days after the
Expiration Date. The Company shall notify the Trustee at least 15 Business Days
(or such shorter period as is acceptable to the Trustee) prior to the mailing of
the Offer of the Company's obligation to make an Offer to Purchase, and the
Offer shall be mailed by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company. The Offer shall contain
information concerning the business of the Company and its Subsidiaries which
the Company in good faith believes will enable such Holders to make an informed
decision with respect to the Offer to Purchase (which at a minimum will include
(i) the most recent annual and quarterly financial statements and "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
contained in the documents required to be filed with the Trustee pursuant to
Section 10.14, (which requirements may be satisfied by delivery of such
documents together with the Offer), (ii) a description of material developments
in the Company's business subsequent to the date of the latest of such financial
statements referred to in clause (i) (including a description of the events
requiring the Company to make the Offer to Purchase), (iii) if applicable,
appropriate pro forma financial information concerning the Offer to Purchase and
the events requiring the Company to make the Offer to Purchase and (iv) any
other information required by applicable law to be included therein. The Offer
shall contain all instructions and materials necessary to enable such Holders to
tender Securities pursuant to the Offer to Purchase. The Offer shall be governed
by all the provisions of this definition and the Section of this Indenture
pursuant to which the Offer is being made and shall also state:
(1) the Section of this Indenture pursuant to which the Offer to
Purchase is being made;
(2) the Expiration Date and the Purchase Date;
(3) the aggregate principal amount of the Outstanding Securities
offered to be purchased by the Company pursuant to the Offer to Purchase
(including, if less than 100%, the manner by which such amount has been
determined pursuant to the Section hereof requiring the Offer to Purchase)
(the "Purchase Amount");
(4) the purchase price to be paid by the Company for each $1,000
in aggregate principal amount of Securities accepted for payment (as
specified pursuant to this Indenture) (the "Purchase Price");
(5) that the Holder may tender all or any portion of the
Securities registered in the name of such Holder and that any portion of
Securities tendered must be tendered in an integral multiple of $1,000 in
principal amount;
(6) the place or places where Securities are to be surrendered
for tender pursuant to the Offer to Purchase;
(7) that interest and Liquidated Damages, if any, on any
Securities not tendered or tendered but not purchased by the Company
pursuant to the Offer to Purchase will continue to accrue;
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(8) that on the Purchase Date the Purchase Price will become due
and payable upon each Security accepted for payment pursuant to the Offer
to Purchase and that, unless the Company shall Default in payment of the
Purchase Price, interest and Liquidated Damages, if any, thereon shall
cease to accrue on and after the Purchase Date;
(9) that each Holder electing to tender a Security pursuant to
the Offer to Purchase will be required to surrender such Security at the
place or places specified in the Offer prior to the close of business on
the Expiration Date (such Security being, if the Company or the Trustee so
requires, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Trustee duly executed
by, the Holder thereof or his attorney duly authorized in writing and
bearing appropriate signature guarantees);
(10) that Holders will be entitled to withdraw all or any portion
of Securities tendered if the Company (or its Paying Agent) receives, not
later than the close of business on the Expiration Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Security the Holder tendered, the certificate
number of the Security the Holder tendered and a statement that such Holder
is withdrawing all or a portion of such tender;
(11) that (a) if Securities in an aggregate principal amount less
than or equal to the Purchase Amount are duly tendered and not withdrawn
pursuant to the Offer to Purchase, the Company shall purchase on the
Purchase Date all such Securities and (b) if Securities in an aggregate
principal amount in excess of the Purchase Amount are tendered and not
withdrawn pursuant to the Offer to Purchase, the Company shall purchase on
the Purchase Date Securities having an aggregate principal amount equal to
the Purchase Amount on a pro rata basis (with such adjustments as may be
deemed appropriate so that only Securities in denominations of $1,000 or
integral multiples thereof shall be purchased); and
(12) that in case of any Holder whose Security is purchased only
in part, the Company shall execute, and the Trustee shall authenticate and
deliver to such Holder without service charge, a new Security or
Securities, of any authorized denomination as requested by such Holder, in
an aggregate principal amount equal to and in exchange for the unpurchased
portion of the Securities so tendered.
"Offering" means the sale of the Series A Senior Securities pursuant
to the Purchase Agreement.
"Offering Memorandum" means the offering memorandum of the Company
dated June 24, 1998, with respect to the Series A Senior Securities.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, a Vice Chairman of the Board, the President or a Vice President, and
by the Chief Financial Officer, the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary, of the Company, and delivered to the
Trustee. One of the officers signing an Officers' Certificate given pursuant to
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Section 10.16 shall be the principal executive, financial or accounting officer
of the Company.
"Opinion of Counsel" means a written opinion of counsel, who may
(unless otherwise required by the Trust Indenture Act) be counsel for the
Company and who may rely as to factual matters on an Officers' Certificate. and
who shall be reasonably acceptable to the Trustee.
"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered
to the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and segregated
in trust by the Company (if the Company shall act as its own Paying Agent)
for the Holders of such Securities; provided that, if such Securities are
to be redeemed, notice of such redemption has been duly given pursuant to
this Indenture or provision therefor satisfactory to the Trustee has been
made; and
(iii) Securities which have been paid pursuant to Section 3.05 or
in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any such
Securities in respect of which there shall have been presented to the
Trustee proof satisfactory to it that such Securities are held by a bona
fide purchaser in whose hands such Securities are valid obligations of the
Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which the Trustee actually knows to be so
owned shall be so disregarded. Securities so owned which have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor.
"pari passu", when used with respect to the ranking of any Debt of any
Person in relation to other Debt of such Person, means that such Debt is equal
in right of payment to such other Debt.
"Pari Passu Debt" means Debt of the Company which ranks pari passu in
right of payment with the Securities.
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"Parent" means Arch Communications Group, Inc., a Delaware
corporation.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest and Liquidated Damages, if any,
on any Securities on behalf of the Company.
"Permitted Debt" has the meaning specified in Section 10.08.
"Permitted Investments" means any of the following:
(a) Investments in (i) any evidence of Debt consisting of Government
Securities with a maturity of 180 days or less; (ii) certificates of deposit or
acceptances with a maturity of 180 days or less of any financial institution
that is a member of the Federal Reserve System having combined capital and
surplus and undivided profits of not less than $500,000,000; and (iii)
commercial paper with a maturity of 180 days or less issued by a corporation
that is not an Affiliate of the Company and is organized under the laws of any
state of the United States or the District of Columbia and having the highest
rating obtainable from Moody's Investors Service or Standard & Poor's
Corporation;
(b) Investments by the Company or any Restricted Subsidiary in another
Person, if as result of such Investment such other Person (i) becomes a
Restricted Subsidiary or (ii) is merged or consolidated with or into, or
transfers or conveys all or substantially all of its assets to, the Company or a
Restricted Subsidiary;
(c) Investments by the Company or any Restricted Subsidiary in another
Person made pursuant to the terms of a definitive merger, stock purchase or
similar agreement providing for a business combination transaction between the
Company or a Restricted Subsidiary and such Person if, (i) within 365 days of
the date of such Investment, such other Person, pursuant to the terms of such
agreement, (A) becomes a Restricted Subsidiary or (B) is merged or consolidated
with or into, or transfers or conveys all or substantially all of its assets to,
the Company or a Restricted Subsidiary, or (ii) in the event such agreement is
terminated prior to the consummation of the transactions contemplated
thereunder, within 365 days of such termination the Company or such Restricted
Subsidiary liquidates such Investment.
(d) Investments by the Company or any of the Restricted Subsidiaries
in any one of the other of them;
(e) Investments in assets owned or used in the ordinary course of
business;
(f) Investments in existence on the date of initial issuance of the
Securities; and
(g) promissory notes received as a result of Asset Sales permitted
under Section 10.12 of this Indenture.
"Permitted Liens" has the meaning specified in Section 10.17.
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"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Property" of any Person means all types of real, personal, tangible,
intangible or mixed property owned by such Person whether or not included in the
most recent consolidated balance sheet of such Person under GAAP.
"Purchase Agreement" means the Purchase Agreement, dated as of June
24, 1998, by and among the Company and the other parties named on the signature
pages thereof, with respect to the Offering.
"Registration Rights Agreement" means the Exchange and Registration
Rights Agreement, dated as of the date of this Indenture, by and among the
Company and the other parties named on the signature pages thereof, as such
agreement may be amended, modified or supplemented from time to time.
"Qualified Equity Interest" means any Qualified Stock and all
warrants, options or other rights to acquire Qualified Stock (but excluding any
debt security that is convertible into or exchangeable for Capital Stock).
"Qualified Stock" of any Person means any and all Capital Stock of
such Person other than Disqualified Stock.
"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Regular Record Date" for the interest payable on any Interest Payment
Date means the June 15 or December 15 (whether or not a Business Day), as the
case may be, next preceding such Interest Payment Date.
"Related Person" means any beneficial owner of 10% or more of the
Company's Voting Stock.
"Responsible Officer", when used with respect to the Trustee, means
the chairman or any vice-chairman of the board of directors, the chairman or any
vice-chairman, of the executive committee of the board of directors, the
chairman of the trust committee, the president, any vice president, the
secretary, any assistant secretary, the treasurer, any assistant treasurer, the
cashier, any assistant cashier, any trust officer or assistant trust officer,
the controller or any assistant controller or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
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"Restricted Subsidiary" means any Subsidiary other than an
Unrestricted Subsidiary.
"Sale and Leaseback Transaction" means any transaction or series of
related transactions pursuant to which a Person sells or transfers any property
or asset in connection with the leasing, or the resale against installment
payments, of such property or asset to the seller or transferor.
"Securities" has the meaning ascribed to such term in the first
paragraph of the Recitals of the Company, above.
"Significant Subsidiary" means any Restricted Subsidiary of the
Company that, together with its Subsidiaries, (a) for the most recent fiscal
year of the Company, accounted for more than 10% of the consolidated revenues of
the Company and its Restricted Subsidiaries or (b) as of the end of such fiscal
year, was the owner of more than 10% of the consolidated assets of the Company
and its Restricted Subsidiaries, all as set forth on the most recently available
consolidated financial statements of the Company for such fiscal year.
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 3.06.
"Stated Maturity" means, when used with respect to any Security or any
installment of interest thereon, the date specified in such Security as the
fixed date on which the principal of such Security or such installment of
interest is due and payable and, when used with respect to any other Debt, means
the date specified in the instrument governing such Debt as the fixed date on
which the principal of such Debt or any installment of interest thereon is due
and payable.
"Subordinated Debt" means Debt of the Company that is subordinated in
right of payment to the Securities.
"Subsidiary" means any Person a majority of the equity ownership of
Voting Stock of which is at the time owned, directly or indirectly, by the
Company and/or one or more other Subsidiaries of the Company.
"Transfer Restricted Securities" means securities that bear or are
required to bear the legend set forth in Section 2.06 hereof.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed; provided, however,
that in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939 as so amended.
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"Unrestricted Subsidiary" means (a) any Subsidiary that is designated
by the Board of Directors as an Unrestricted Subsidiary in accordance with
Section 10.18 and (b) any Subsidiary of an Unrestricted Subsidiary.
"USAM Notes" means the 9 1/2% Senior Notes due 2004 and 14% Senior
Notes due 2004 issued by the Company under its prior name of USA Mobile
Communications, Inc. II.
"Vice President", when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number of a
word or words added before or after the title "vice president".
"Voting Stock" means any class or classes of Capital Stock pursuant to
which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the board of directors, managers
or trustees of any Person (irrespective of whether or not, at the time, stock of
any other class or classes shall have, or might have, voting power by reason of
the happening of any contingency).
"wholly-owned" Subsidiary of any Person means a Subsidiary of such
Person all of the outstanding Capital Stock or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more wholly-owned Subsidiaries of such Person or by
such Person and one or more wholly-owned Subsidiaries of such Person.
SECTION I.2 COMPLIANCE CERTIFICATES AND OPINIONS
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of an
Officers' Certificate, if to be given by two officers of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirement set forth in
this Indenture.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
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(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION I.3 FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or Opinion of
Counsel, unless such officer knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to the
matters upon which his certificate or opinion is based are erroneous. Any such
certificate or Opinion of Counsel may be based, insofar as it relates to factual
matters, upon a certificate or opinion of, or representations by, an officer or
officers of the Company stating that the information with respect to such
factual matters is in the possession of the Company, unless such counsel knows
that the certificate or opinion or representations with respect to such matters
are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION I.4 ACTS OF HOLDERS; RECORD DATES.
(1) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 6.01) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
(2) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
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of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(3) The Company or the Trustee may, in the circumstances permitted by
the Trust Indenture Act, fix any day as the record date for the purpose of
determining the Holders entitled to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action, or to vote on
any action, authorized or permitted to be given or taken by Holders, and the
Company agrees to notify the Trustee of any such fixing of a record date. If not
set by the Company or the Trustee prior to the first solicitation of a Holder
made by any Person in respect of any such action, or, in the case of any such
vote, prior to such vote, the record date for any such action or vote shall be
the 30th day (or, if later, the date of the most recent list of Holders required
to be provided pursuant to Section 7.01) prior to such first solicitation or
vote, as the case may be. With regard to any record date, only the Holders on
such date (or their duly designated proxies) shall be entitled to give or take,
or vote on, the relevant action.
(4) The ownership of Securities shall be proved by the Security
Register.
(5) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefore or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Security.
SECTION I.5 NOTICES, ETC., TO TRUSTEE AND COMPANY.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing to or
with the Trustee at its Corporate Trust Office, Attention: Corporate Trust
Administration, or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to the Company addressed to it
at the address of its principal office specified in the first paragraph of this
instrument or at any other address previously furnished in writing to the
Trustee by the Company.
SECTION I.6 NOTICE TO HOLDERS; WAIVER.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Security Register, not later
than the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to Holders is
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given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. Where this Indenture provides for notice
in any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver, shall be
the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
SECTION I.7 CONFLICT WITH TRUST INDENTURE ACT.
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such Act to be a
part of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or to be excluded, as the case
may be.
SECTION I.8 EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION I.9 SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION I.10 SEPARABILITY CLAUSE.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION I.11 BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and the Holders of Securities, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION I.12 GOVERNING LAW; JURISDICTION.
This Indenture and the Securities shall be governed by and construed
in accordance with the laws of the State of New York, without regard to the
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conflicts of laws principles thereof. If any action or proceeding shall be
brought by the Trustee or by a Holder of any of the Securities in order to
enforce any right or remedy under this Indenture or under the Securities, the
Company hereby consents and submits to the jurisdiction of the courts of the
State of New York and of any Federal court sitting in The City of New York,
State of New York. Any action or proceeding brought by the Company to enforce
any right, assert any claim or obtain any relief whatsoever in connection with
this Indenture or the Securities shall be brought by the Company exclusively in
the courts of the State of New York or in any Federal court sitting in The City
of New York, State of New York.
SECTION I.13 LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption Date, Purchase
Date or Stated Maturity of any Security shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of interest or principal (and premium, if any) need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the Interest Payment Date, Redemption Date, Purchase
Date or at the Stated Maturity, provided that no interest shall accrue for the
period from and after such Interest Payment Date, Redemption Date, Purchase Date
or Stated Maturity, as the case may be.
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ARTICLE II
SECURITY FORMS
SECTION II.1 FORM AND DATING
The Securities and the Trustee's certificate of authentication shall
be substantially in the form of Exhibit A hereto. The Securities may have
notations, legends or endorsements required by law, stock exchange rules or
usage. Each Security shall be dated the date of its authentication. The
Securities shall be issued in fully registered form, without coupons, in
denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Securities shall constitute,
and are hereby expressly made, a part of this Indenture and the Company and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby.
Securities issued in global form shall be substantially in the form of
Exhibit A attached hereto (including the text referred to in footnotes 1 and 2
thereto). Securities issued in definitive form shall be substantially in the
form of Exhibit A attached hereto (but without including the text referred to in
footnotes 1 and 2 thereto). Each Global Security shall represent such of the
outstanding Securities as shall be specified therein and each shall provide that
it shall represent the aggregate principal amount of outstanding Securities from
time to time endorsed thereon and that the aggregate principal amount of
outstanding Securities represented thereby may from time to time be reduced or
increased, as appropriate, to reflect exchanges and redemptions. Any endorsement
of a Global Security to reflect the amount of any increase or decrease in the
amount of outstanding Securities represented thereby shall be made by the
Trustee or the Note Custodian, at the direction of the Trustee, in accordance
with written instructions given by the Holder thereof as required by Section
2.04 hereof in such form as is reasonably satisfactory to the Trustee.
SECTION II.2 REGISTRAR, PAYING AGENT AND DEPOSITARY
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The Company shall maintain an office or agency where Securities may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Securities may be presented for payment ("Paying Agent").
The Registrar shall keep in a register of the Securities (the "Security
Register"), the names and addresses of the Holders and of their transfer and
exchange. The Company, upon prior written notice to the Trustee, may appoint one
or more co-registrars and one or more additional paying agents. The term
"Registrar" includes any co-registrar and the term "Paying Agent" includes any
additional paying agent. The Company may change any Paying Agent or Registrar
without notice to any Holder. The Company shall notify the Trustee in writing of
the name and address of any Agent not a party to this Indenture. If the Company
fails to appoint or maintain another entity as Registrar or Paying Agent, the
Trustee shall act as such. The Company or any of its Subsidiaries may act as
Paying Agent or Registrar. The Company shall enter into an appropriate agency
agreement with any Agent not a party to this Indenture, which shall incorporate
the provisions of the Trust Indenture Act. Such agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall notify
the Trustee of the name and address of such Agent. If the Company fails to
maintain a Registrar or Paying Agent, or fails to give the foregoing notice, the
Trustee shall act as such, and shall be entitled to appropriate compensation in
accordance with Section 6.07 hereof.
The Company initially appoints The Depository Trust Company to act as
Depositary with respect to the Global Securities.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Note Custodian with respect to the Global Securities.
SECTION II.3 CUSIP NUMBERS.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures ("CUSIP"), the Company may cause CUSIP
numbers (the "CUSIP Numbers") to be printed on the Securities and may direct the
Trustee to use CUSIP Numbers in notices of redemption as a convenience to
Holders of Securities. No representation is made as to the accuracy of the CUSIP
Numbers either as printed on the Securities or as contained in any notice of
redemption and reliance may be placed only on the other identification numbers
placed thereon. The Company will promptly notify the Trustee of any change in
the CUSIP Numbers.
SECTION II.4 TRANSFER AND EXCHANGE
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(a) Transfer and Exchange of Definitive Securities. When Definitive
Securities are presented by a Holder to the Registrar with a request (1) to
register the transfer of the Definitive Securities or (2) to exchange such
Definitive Securities for an equal principal amount of Definitive Securities of
other authorized denominations, the Registrar shall register the transfer or
make the exchange as requested if its requirements for such transactions are
met; provided that any Definitive Securities presented or surrendered for
registration of transfer or exchange (A) shall be duly endorsed or accompanied
by a written instruction of transfer in form satisfactory to the Registrar duly
executed by the Holder thereof or by his attorney duly authorized in writing;
(B) unless the Global Security has previously been exchanged in whole for
Definitive Securities, shall only be exchanged for an interest in the Global
Security in accordance with Section 2.04(b) if such Definitive Securities are
being transferred (i) pursuant to an effective registration statement under the
Securities Act; (ii) to a QIB in reliance on Rule 144A; or (iii) outside the
United States to a non-U.S. person in reliance on Regulation S; and (C) in the
case of a Transfer Restricted Security, such request shall be accompanied by the
following additional documents: (i) if such Transfer Restricted Security is
being delivered to the Registrar by a Holder for registration in the name of
such Holder, without transfer, a certification to that effect (in substantially
the form of Exhibit B attached hereto); or (ii) if such Transfer Restricted
Security is being transferred to an IAI in reliance on an exemption from the
registration requirements of the Securities Act, other than to a QIB in reliance
on Rule 144A or outside the United States to a non-U.S. person in reliance on
Regulation S, a certification to that effect (in substantially the form of
Exhibit B attached hereto), and a letter containing certain representations and
agreements (in substantially the form of Exhibit C attached hereto) and, if
requested by the Company or the Trustee, an opinion of counsel in a form
acceptable to the Company and the Trustee to the effect that such transfer is in
compliance with the Securities Act.
(b) Transfer of a Definitive Security for a Beneficial Interest in the
Global Security. A Definitive Security may be exchanged for a beneficial
interest in the Global Security only upon receipt by the Trustee of a Definitive
Security, duly endorsed or accompanied by appropriate instruments of transfer,
in form satisfactory to the Trustee, together with: (i) written instructions
directing the Trustee to make an endorsement on the Global Security to reflect
an increase in the aggregate principal amount of the Securities represented by
the Global Security, and (ii) if such Definitive Security is a Transfer
Restricted Security, a certification (in substantially the form of Exhibit B
attached hereto) to the effect that such Definitive Security is either being
transferred to a QIB in reliance on Rule 144A or outside the United States to a
non-U.S. person in reliance on Regulation S; in which case the Trustee shall
cancel such Definitive Security and cause the aggregate principal amount of
Securities represented by the Global Security to be increased accordingly. If no
Global Security is then outstanding, the Company shall issue and the Trustee
shall authenticate a new Global Security in the appropriate principal amount.
(c) Transfer of a Beneficial Interest in a Global Security for a
Definitive Security. A beneficial interest in the Global Security may be
exchanged for a Definitive Security only in the case of a Transfer Restricted
Security, and upon receipt by the Trustee of written transfer instructions (or
such other form of instructions as is customary for the Depositary) from the
Depositary (or its nominee) on behalf of any Person having a beneficial interest
in a Global Security that such Transfer Restricted Security is being transferred
to an IAI in reliance on an exemption from the registration requirements of the
Securities Act, other than to a QIB in reliance on Rule 144A or outside the
United States to a non-U.S. person in reliance on Regulation S, provided however
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that such request is accompanied by a certification to that effect (in
substantially the form of Exhibit B attached hereto) and a letter containing
certain representations and agreements (in substantially the form of Exhibit C
attached hereto) and, if requested by the Company or the Trustee, an opinion of
counsel in a form reasonably acceptable to the Company and the Trustee to the
effect that such transfer is in compliance with the Securities Act, in which
case the Trustee shall, in accordance with the standing instructions and
procedures existing between the Depositary and the Trustee, cause the aggregate
principal amount of the Global Security to be reduced accordingly and, following
such reduction, the Company shall execute and the Trustee shall authenticate and
make available for delivery to the transferee a Definitive Security in the
appropriate principal amount.
Definitive Securities issued in exchange for a beneficial interest in
a Global Security shall be registered in such names and in such authorized
denominations as the Depositary shall instruct the Trustee.
(d) Transfer and Exchange of Beneficial Interests in the Global
Security. The transfer and exchange of beneficial interests in the Global
Security shall be effected through the Depositary in accordance with this
Indenture and the procedures of the Depositary therefor, which shall include
restrictions on transfer comparable to those set forth herein to the extent
required by the Securities Act.
When a Global Security is presented to the Registrar with a request
(1) to register the transfer of the Global Security or (2) to exchange such
Global Securities for an equal principal amount of Securities of other
denominations, the Registrar shall register the transfer or make the exchange if
its requirements for such transactions are met; provided, however, that any
Security presented or surrendered for registration of transfer or exchange (A)
shall be duly endorsed or accompanied by a written instruction of transfer in
form satisfactory to the Registrar and the Trustee duly executed by the Holder
thereof or by his attorney duly authorized in writing and (B) in the case of a
Transfer Restricted Security, such request shall be accompanied by the following
additional documents: (i) if such Transfer Restricted Security is being
transferred to the Person designated by the Depositary as being the beneficial
owner, a certification to that effect (in substantially the form of Exhibit B
attached hereto), (ii) if such Transfer Restricted Security is being transferred
to a QIB in accordance with Rule 144A or pursuant to an effective registration
statement under the Securities Act, a certification to that effect (in
substantially the form of Exhibit B attached hereto), or (iii) if such Transfer
Restricted Security is being transferred in reliance on another exemption from
the registration requirements of the Securities Act, a certification to that
effect (in substantially the form of Exhibit B attached hereto) and, if
requested by the Company or the Trustee, an opinion of counsel in a form
reasonably acceptable to the Company and to the Trustee to the effect that such
transfer is in compliance with the Securities Act. To permit registrations of
transfer and exchanges, the Company shall issue and the Trustee shall
authenticate Securities at the Registrar's request, subject to such rules as the
Trustee may reasonably require.
(e) Cancellation and/or Adjustment of the Global Security. At such
time as all beneficial interests in the Global Security have either been
exchanged for Definitive Securities, redeemed, repurchased or canceled, the
Global Security shall be returned to or retained and canceled by the Trustee. At
any time prior to such cancellation, if any beneficial interest in the Global
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Security is exchanged for Definitive Securities, redeemed, repurchased or
canceled, the aggregate principal amount of Securities represented by such
Global Security shall be reduced accordingly and an endorsement shall be made on
such Global Security by the Trustee to reflect such reduction.
(f) General Provisions Relating to Transfers and Exchanges. To permit
registrations of transfers and exchanges effected in accordance with this
Indenture, the Company shall execute and the Trustee shall authenticate the
Global Security and any Definitive Securities at the Registrar's request. The
Global Security and any Definitive Securities issued upon any registration of
transfer or exchange of beneficial interests in the Global Security or the
Definitive Securities shall be legal, valid and binding obligations of the
Company, evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Definitive Securities or Global Securities surrendered upon
such registration of transfer or exchange.
Neither the Company nor the Registrar shall be required to (a) issue,
register the transfer of or exchange Securities during a period beginning at the
opening of business on a Business Day 15 days before the day of mailing of any
notice of redemption of Securities under Section 11.05 hereof and ending at the
close of business on the day of such mailing or (b) register the transfer of or
exchange any Security so selected for redemption in whole or in part, except the
unredeemed portion of any Security being redeemed in part.
No service fee shall be charged to any Holder of a Security for any
registration of transfer or exchange (except as otherwise expressly permitted
herein), but the Company may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in connection therewith
(other than such transfer tax or similar governmental charge payable upon
exchanges pursuant to Sections 3.04, 9.06 or 11.08 hereof, which shall be paid
by the Company).
Prior to due presentment to the Trustee for registration of the
transfer of any Security, the Trustee, any Agent and the Company may deem and
treat the Person in whose name any Security is registered as the absolute owner
of such Security for the purpose of receiving payment of principal of, premium,
if any, and interest on such Security and for all other purposes whatsoever,
whether or not such Security is overdue, and none of the Trustee, any Agent or
the Company shall be affected by notice to the contrary.
(g) General Provisions Relating to the Global Security.
Notwithstanding any other provision in this Indenture, no Global Security may be
transferred to, or registered or exchanged for Securities registered in the name
of, any Person other than the Depositary for such Global Security or any nominee
thereof, and no such transfer may be registered, unless (i) such Depositary (A)
notifies the Company that it is unwilling or unable to continue as Depositary
for such Global Security or (B) ceases to be a clearing agency registered under
the Exchange Act, (ii) the Company delivers to the Trustee an Officers'
Certificate stating that such Global Security shall be so transferable,
registrable, and exchangeable, and such transfers shall be registrable, or (iii)
there shall have occurred and be continuing an Event of Default with respect to
the Securities evidenced by such Global Security. Notwithstanding any other
provision in this Indenture, a Global Security to which the restriction set
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forth in the preceding sentence shall have ceased to apply may be transferred
only to, and may be registered and exchanged for Securities registered only in
the name or names of, such Person or Persons as the Depositary for such Global
Security shall have directed and no transfer thereof other than such a transfer
may be registered. Every Security authenticated and delivered upon registration
of transfer of, or in exchange for or in lieu of, a Global Security to which the
restriction set forth in the first sentence of this paragraph shall apply,
whether pursuant to this Section 2.04 or otherwise, shall be authenticated and
delivered in the form of, and shall be, a Global Security.
(h) Exchange of Series A Senior Securities for Series B Senior
Securities. The Series A Senior Securities may be exchanged for Series B Senior
Securities pursuant to the terms of the Exchange Offer in accordance with the
procedures set out under Section 2.5 hereof.
SECTION II.5 EXCHANGE OF SERIES A SENIOR SECURITIES FOR SERIES B SENIOR
SECURITIES
The Series A Senior Securities may be exchanged for Series B Senior
Securities pursuant to the terms of the Exchange Offer. The Trustee and
Registrar shall make the exchange as follows:
The Company shall present the Trustee with an Officers' Certificate
certifying the following:
(a) upon issuance of the Series B Senior Securities, the transactions
contemplated by the Exchange Offer have been consummated;
(b) the principal amount of Series A Senior Securities properly
tendered in the Exchange Offer that are represented by a Global
Security for Series B Senior Securities shall be registered and
sent for each such Holder; and
(c) the principal amount of Series A Senior Securities properly
tendered in the Exchange Offer that are represented by Definitive
Securities, the name of each Holder of such Definitive
Securities, the principal amount properly tendered in the
Exchange Offer by each such Holder, and the name and address to
which Definitive Securities for Series B Senior Securities shall
be registered and sent for each such Holder.
The Trustee, upon receipt of (i) such Officers' Certificate, (ii) an
Opinion of Counsel to the effect that the Series B Senior Securities have been
registered under Section 5 of the Securities Act and this Indenture has been
qualified under the TIA and (iii) a Company Order, shall authenticate (A) a
Global Security for Series B Senior Securities in an aggregate principal amount
equal to the aggregate principal amount of Series A Senior Securities
represented by a Global Security indicated in such Officers' Certificate as
having been properly tendered and (B) Definitive Securities for Series B Senior
Securities in an aggregate principal amount equal to the aggregate principal
amount of Series A Senior Securities registered in the names of the Holders and
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represented by the Definitive Securities indicated in such Officers' Certificate
as having been properly tendered.
If the principal amount of the Global Security for the Series B Senior
Securities is less than the principal amount of the Global Security for the
Series A Senior Securities, the Trustee shall make an endorsement on such Global
Security for Series A Senior Securities indicating a reduction in the principal
amount represented thereby.
The Trustee shall deliver such Definitive Securities for Series B
Senior Securities to the Holders thereof as indicated in such Officers'
Certificate.
SECTION II.6 LEGENDS.
(a) Except as permitted by subsections (b) or (c) hereof, each
Security shall bear legends relating to restrictions on transfer pursuant to the
securities laws in substantially the form set forth on Exhibit A attached
hereto.
(b) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a Global Security)
pursuant to Rule 144 under the Securities Act or pursuant to an effective
registration statement under the Securities Act: (i) in the case of any Transfer
Restricted Security that is a Definitive Security, the Registrar shall permit
the Holder thereof to exchange such Transfer Restricted Security for a
Definitive Security that does not bear the legends required by subsection (a)
above; and (ii) in the case of any Transfer Restricted Security represented by a
Global Security, such Transfer Restricted Security shall not be required to bear
the legends required by subsection (a) above, but shall continue to be subject
to the provisions of Section 2.04(d) hereof; provided however, that with respect
to any request for an exchange of a Transfer Restricted Security that is
represented by a Global Security for a Definitive Security that does not bear
the legends required by subsection (a) above, which request is made in reliance
upon Rule 144, the Holder thereof shall certify in writing to the Registrar that
such request is being made pursuant to Rule 144.
(c) The Company (and the Restricted Subsidiaries) shall issue and the
Trustee shall authenticate Series B Senior Securities in exchange for Series A
Senior Securities accepted for exchange in the Exchange Offer. The Series B
Senior Securities shall not bear the legends required by subsection (a) above
unless the Holder of such Series A Senior Securities is either (i) a
broker-dealer who purchased such Series A Senior Securities directly from the
Company to resell pursuant to Rule 144A or any other available exemption under
the Securities Act, (ii) a Person participating in the distribution of the
Series A Senior Securities or (iii) a Person who is an affiliate (as defined in
Rule 144A) of the Company.
ARTICLE III
THE SECURITIES
SECTION III.1 TITLE AND TERMS
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The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to $130,000,000.00,
except for Securities authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Securities pursuant to Section
3.04, 3.05, 9.06 or 11.08 or in connection with an Offer to Purchase pursuant to
Section 10.12 or 10.15.
The Securities shall be known and designated as the "123/4% Senior
Notes due 2007" of the Company. The Stated Maturity of the Securities shall be
July 1, 2007. Interest on the Securities will accrue at the rate of 123/4% per
annum, payable in cash semi-annually in arrears on each January 1 and July 1
commencing January 1, 1999, to the persons in whose names the Securities are
registered at the close of business on the preceding June 15 or December 15, as
the case may be. Interest will accrue from the most recent Interest Payment Date
to which interest has been paid or duly provided for or, if no interest has been
paid or duly provided for, from the date of original issuance of the Securities.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
The principal of and interest, premium and Liquidated Damages, if any,
on the Securities shall be payable at the office or agency of the Company in the
Borough of Manhattan, The City of New York, New York, maintained for such
purpose and at any other office or agency maintained by the Company for such
purpose; provided, however, that at the option of the Company payment of
interest may be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register. Payment of the
principal of (and premium, if any) on the Securities will be made upon the
presentation of the Securities at the office or agency of the Company maintained
for that purpose in the Borough of Manhattan, The City of New York, New York.
The Securities shall be subject to repurchase by the Company pursuant
to an Offer to Purchase as provided in Sections 10.12 and 10.15.
The Securities shall be redeemable as provided in Article Eleven.
The Securities shall not have the benefit of any sinking fund
obligations.
The Securities shall be subject to defeasance at the option of the
Company as provided in Article Twelve.
SECTION III.2 DENOMINATIONS
The Securities shall be issuable only in registered form without
coupons and only in denominations of $1,000 and any integral multiple thereof,
provided that any portion of the original principal amount of the Securities not
divisible by $1,000 shall be issued to the original Holder thereof in a
denomination equal to such portion and held by such Holder until maturity,
redemption or repurchase (at which time such Security shall be delivered to the
Trustee and canceled) by the Company.
SECTION III.3 EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
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The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Vice Chairman of the Board, its President or one of
its Vice Presidents and by its Chief Financial Officer, its
Vice-President-Finance, its Secretary or one of its Assistant Secretaries. The
signature of any of these officers on the Securities may be manual or facsimile.
No one officer may sign in more than one capacity.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities executed by the Company to
the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities; and the Trustee in accordance
with such Company Order shall authenticate and deliver such Securities as in
this Indenture provided and not otherwise.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder.
SECTION III.4 TEMPORARY SECURITIES.
Pending the preparation of Definitive Securities, the Company may
execute, and upon receipt of a Company Order the Trustee shall authenticate and
deliver, temporary Definitive Securities which shall be substantially in the
form of Definitive Securities in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations as the
officers executing such Securities may determine, as evidenced by their
execution of such Securities.
If temporary Securities are issued, the Company will cause Definitive
Securities to be prepared without unreasonable delay. After the preparation of
Definitive Securities, the temporary Securities shall be exchangeable for
Definitive Securities upon surrender of the temporary Securities at any office
or agency of the Company designated pursuant to Section 10.02, without charge to
the Holder. Upon surrender for cancellation of any one or more temporary
Securities the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a like principal amount of Definitive Securities of
authorized denominations. Until so exchanged the temporary Securities shall in
all respects be entitled to the same benefits under this Indenture as Definitive
Securities.
SECTION III.5 MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES
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If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of like tenor and principal amount and bearing a
certificate number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of like tenor and principal amount and bearing a number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated. destroyed, lost or stolen Securities.
SECTION III.6 PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
On or before any Interest Payment Date, the Company shall deposit with
the Trustee or with a Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 10.03) an
amount of money sufficient to pay the interest and Liquidated Damages, if any,
on all the Securities that is to be paid on such Interest Payment Date. Interest
on any Security which is payable, and is punctually paid or duly provided for,
on any Interest Payment Date shall be paid to the Person in whose name that
Security is registered at the close of business on the Regular Record Date for
such interest.
Any interest and Liquidated Damages, if any, on any Security which is
payable, but is not punctually paid or duly provided for, on any Interest
Payment Date (herein called "Defaulted Interest") shall forthwith cease to be
payable to the Holder on the relevant Regular Record Date by virtue of having
been such Holder, and such Defaulted Interest shall be paid by the Company to
the Persons in whose names the Securities (or their respective Predecessor
Securities) are registered at the close of business on a Special Record Date for
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the payment of such Defaulted Interest, which shall be fixed in the following
manner. The Company shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each Security and the date of the
proposed payment (which date shall be a date which will enable the Trustee to
comply with the provisions of the immediately following sentence), and at the
same time the Company shall deposit with the Trustee an amount of money equal to
the aggregate amount proposed to be paid in respect of such Defaulted Interest
or shall make arrangements satisfactory to the Trustee for such deposit prior to
the date of the proposed payment, such money when deposited to be held in trust
for the benefit of the Persons entitled to such Defaulted Interest as in this
Clause provided. Thereupon the Trustee shall fix a Special Record Date for the
payment of such Defaulted Interest which shall be not more than 15 days and not
less than 10 days prior to the date of the proposed payment and not less than 10
days after the receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such Special Record Date and, in
the name and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Holder at his address as it appears
in the Security Register, not less than 10 days prior to such Special Record
Date. Notice of the proposed payment of such Defaulted Interest and the Special
Record Date therefor having been so mailed, such Defaulted Interest shall be
paid to the Persons in whose names the Securities (or their respective
Predecessor Securities) are registered at the close of business on such Special
Record Date. Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration or transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
SECTION III.7 PERSONS DEEMED OWNERS.
Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of principal of (and premium, if
any) and (subject to Section 3.06) interest on such Security and for all other
purposes whatever, whether or not such Security be overdue, and neither the
Company or the Trustee shall be affected by notice to the contrary.
SECTION III.8 CANCELLATION.
All Securities surrendered for payment, redemption, registration of
transfer, exchange or pursuant to any Offer to Purchase pursuant to Section
10.12 or 10.15 shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee and shall be promptly canceled by it. The Company may
at any time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company may have acquired in any
manner whatsoever, and all Securities so delivered shall be promptly canceled by
the Trustee. No Securities shall be authenticated in lieu of or in exchange for
any Securities canceled as provided in this Section, except as expressly
permitted by this Indenture. All canceled Securities held by the Trustee shall,
unless the Trustee is otherwise directed by a Company Order or by applicable
law, be destroyed by the Trustee, and certification of such destruction shall be
delivered by the Trustee to the Company promptly following any such destruction.
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SECTION III.9 COMPUTATION OF INTEREST.
Interest on the Securities shall be computed on the basis of a 360-day
year of twelve 30 day months.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION IV.1 SATISFACTION AND DISCHARGE OF INDENTURE
Upon the written request of the Company, this Indenture will cease to
be of further effect (except as to surviving rights of registration of transfer
or exchange of the Securities herein expressly provided for), and the Trustee,
at the expense of the Company, will execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when:
(1) either
(A) all the Securities theretofore authenticated and
delivered (other than (i) Securities which have been destroyed, lost
or stolen and which have been replaced or paid as provided in Section
3.05 and (ii) Securities which have been subject to defeasance
pursuant to Article Twelve) have been delivered to the Trustee for
cancellation; or
(B) all Securities not theretofore delivered to the Trustee
for cancellation
(i) have come due and payable,
(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the
Company,
and the Company, in the case of (i), (ii) or (iii) above, has irrevocably
deposited or caused to be deposited with the Trustee funds in trust for the
purpose in an amount sufficient to pay and discharge the entire Debt on
such Securities not theretofore delivered to the Trustee for cancellation,
for principal (and premium, if any) and interest to the date of such
deposit (in the case of Securities which have become due and payable) or to
the Stated Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
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(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
Company's obligations under Sections 2.02 and 3.05, the obligations of the
Company to the Trustee under Section 6.07 and, the obligations of the Trustee
under Section 4.02 and the last paragraph of Section 10.03 shall survive.
SECTION IV.2 APPLICATION OF TRUST MONEY
Subject to the provisions of the last paragraph of Section 10.03, all
money deposited with the Trustee pursuant to Section 4.01 shall be held in trust
and applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee.
ARTICLE V
REMEDIES
SECTION V.1 EVENTS OF DEFAULT
"Event of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(a) default in the payment of any interest, or Liquidated Damages, if
any, on any Security when it becomes due and payable and continuance of such
default for a period of 30 days;
(b) default in the payment of the principal of (or premium, if any,
on) any Security at its Maturity;
(c) failure to perform or comply with the provisions of Sections 8.01
or 10.15;
(d) default in the performance, or breach, of any covenant or
agreement of the Company contained in this Indenture (other than a default in
the performance, or breach, of a covenant or warranty which is specifically
dealt with elsewhere in this Section 5.01) and continuance of such default or
breach for a period of 60 days after written notice shall have been given to the
Company by the Trustee or to the Company and the Trustee by the holders of at
least 25% in aggregate principal amount of the Securities then outstanding;
(e) (i)an event of default has occurred under any mortgage, bond,
indenture, loan agreement or other document evidencing an issue of Debt of the
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Company or a Restricted Subsidiary other than Benbow Investments, Inc. for so
long as either issue of the USAM Notes remains outstanding), which issue has an
aggregate outstanding principal amount of not less than $5.0 million, and such
default has resulted in such Debt becoming, whether by declaration or otherwise,
due and payable prior to the date on which it would otherwise become due and
payable or (ii) a default in any payment when due at final maturity of any such
Debt;
(f) any Person entitled to take the actions described in this clause
(f), after the occurrence of any event of default under any agreement or
instrument evidencing any Debt in excess of $5.0 million in the aggregate of the
Company or any Restricted Subsidiary, shall notify the Trustee of the intended
sale or disposition of any assets of the Company or any Restricted Subsidiary
that have been pledged to or for the benefit of such Person to secure such Debt
or shall commence proceedings, or take action to retain in satisfaction of any
Debt, or to collect on, seize, dispose of or apply, any such assets of the
Company or any Restricted Subsidiary, pursuant to the terms of any agreement or
instrument evidencing any such Debt of the Company or any Restricted Subsidiary
or in accordance with applicable law;
(g) one or more final judgments or orders shall have been rendered
against the Company or any Restricted Subsidiary which require the payment of
money, either individually or in an aggregate amount, in excess of $5.0 million
and shall not be discharged and there shall have been a period of 60 days during
which a stay of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, was not in effect; or
(h) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company or any of its Significant
Subsidiaries in an involuntary case or proceeding under any applicable Federal
or State bankruptcy, insolvency, reorganization or other similar law or (B) a
decree or order adjudging the Company or any of its Significant Subsidiaries a
bankrupt or insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect of the
Company or any of its Significant Subsidiaries under any applicable Federal or
State law, or appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or any of its Significant
Subsidiaries or of any substantial part of its property, or ordering the winding
up or liquidation of its affairs, and the continuance of any such decree or
order for relief or any such other decree or order unstayed and in effect for a
period of 60 consecutive days; or
(i) the commencement by the Company or any of its Significant
Subsidiaries of a voluntary case or proceeding under any applicable Federal or
State bankruptcy, insolvency, reorganization or other similar law or of any
other case or proceeding to be adjudicated a bankrupt or insolvent, or the
consent by it to the entry of a decree or order for relief in respect of the
Company or any of its Significant Subsidiaries in an involuntary case or
proceeding under any applicable Federal or state bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against it, or the filing by it of a petition or
answer or consent seeking reorganization or relief under any applicable Federal
or State law, or the consent by it to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the Company or any
of its Significant Subsidiaries or of any substantial part of its property, or
the making by it of an assignment for the benefit of creditors, or the admission
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by it in writing of its inability to pay its debts generally as they become due,
or the taking of corporate action by the Company or any of its Significant
Subsidiaries in furtherance of any such action.
SECTION V.2 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT
If an Event of Default (other than as specified in Section 5.01(h) or
5.01(i)) occurs and is continuing, then and in every such case, the Trustee or
the Holders of not less than 25% in aggregate principal amount of the Securities
then outstanding may declare the principal of and accrued and unpaid interest on
(and premium and Liquidated Damages, if any, on), in each case as of such date
of declaration, all of the outstanding Securities to be due and payable
immediately by a notice in writing to the Company (and to the Trustee if given
by the holders); and upon any such declaration all amounts payable in respect of
the Securities shall become immediately due and payable. If an Event of Default
specified in Section 5.01(h) or 5.01(i) occurs, then all of the outstanding
Securities shall ipso facto become and be immediately due and payable without
any declaration or other act on the part of the Trustee or any Holder.
At any time after a declaration of acceleration under this Indenture,
but before a judgment or decree for payment of the money due has been obtained
by the Trustee, the Holders of a majority in aggregate principal amount of the
Outstanding Securities, by written notice to the Company and the Trustee, may
rescind and annul such declaration and its consequences if: (i) the Company has
paid or deposited with the Trustee a sum sufficient to pay (A) all overdue
interest on all Securities, (B) all unpaid principal of (and premium and
Liquidated Damages, if any, on) any Outstanding Securities which has become due
otherwise than by such declaration of acceleration and interest thereon at the
rate borne by the Securities, (C) to the extent that payment of such interest is
lawful, interest upon overdue interest, premium and Liquidated Damages, if any,
and overdue principal at the rate borne by the Securities and (D) all sums paid
or advanced by the Trustee hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel; and (ii) all
Events of Default, other than the non-payment of amounts of principal of (and
premium and Liquidated Damages, if any, on) or interest on the Securities which
have become due solely by such declaration of acceleration, have been cured or
waived, as provided by Section 5.13. No such rescission shall affect any
subsequent default or impair any right consequent thereon.
SECTION V.3 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE
The Company covenants that if
(10 default is made in the payment of any interest or Liquidated
Damages, if any, on any Security when such interest or Liquidated Damages,
if any, becomes due and payable and such default continues for a period of
30 days, or
(20 default is made in the payment of principal of (or premium,
if any, on) any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal (and premium, if any) and interest and Liquidated
Damages, if any, and, to the extent that payment of such interest shall be
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legally enforceable, interest on any overdue principal (and premium, if any) and
on any overdue interest and Liquidated Damages, if any, at the rate borne by the
Securities, and, in addition thereto, such further amount as shall be sufficient
to cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION V.4 TRUSTEE MAY FILE PROOFS OF CLAIM
In case of any judicial proceeding relative to the Company (or any
other obligor upon the Securities), its property or its creditors, the Trustee
shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same; and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 6.07.
No provision of this Indenture shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.
SECTION V.5 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION V.6 APPLICATION OF MONEY COLLECTED
Any money collected by the Trustee pursuant to this Article shall
be applied in the following order, at the date or dates fixed by the Trustee
and, in case of the distribution of such money on account of principal (or
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premium, if any) or interest and Liquidated Damages, if any, upon presentation
of the Securities and the notation thereon of the payment if only partially paid
and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
6.07; and
SECOND:To the payment of the amounts then due and unpaid for principal
of (and premium, if any) and interest and Liquidated Damages, if any, on
the Securities in respect of which or for the benefit of which such money
has been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities for principal
(and premium, if any) and interest and Liquidated Damages, if any,
respectively; and
THIRD: To the payment of the remainder, if any, to the Company, its
successors or assigns or to whomsoever may be lawfully entitled to receive
the same or as a court of competent jurisdiction may direct.
SECTION V.7 LIMITATION ON SUITS
Subject to Section 5.08, no Holder of any Security shall have any
right to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(10 such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(20 the Holders of at least 25 % in aggregate principal amount of
the Outstanding Securities shall have made written request to the Trustee
to institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder;
(30 such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(40 the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding;
and
(50 no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority
in aggregate principal amount of the Outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
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SECTION V.8 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM AND
INTEREST
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of (and premium, if any) and (subject to
Section 3.06) interest and Liquidated Damages, if any, on such Security on the
respective Stated Maturities expressed in such Security (in the case of
redemption, on the Redemption Date or, in the case of an Offer to Purchase made
by the Company and required to be accepted by the Company as to such Security,
on the Purchase Date) and to institute suit for the enforcement of any such
payment, and such rights shall not be impaired without the consent of such
Holder.
SECTION V.9 RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally, and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
SECTION V.10 RIGHTS AND REMEDIES CUMULATIVE
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last paragraph
of Section 3.05, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
SECTION V.11 DELAY OR OMISSION NOT WAIVER
No delay or omission of the Trustee or of any Holder of any Security
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article or by law
to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
SECTION V.12 CONTROL BY HOLDERS
The Holders of a majority in principal amount of the Outstanding
Securities shall have the right to direct the time, method and place of
conducting any proceeding for exercising any remedy available to the Trustee or
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exercising any trust or power conferred on the Trustee, provided that
(10 such direction shall not be in conflict with any rule of law
or with this Indenture, and
(20 the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION V.13 WAIVER OF PAST DEFAULTS
The Holders of not less than a majority in aggregate principal amount
of the Outstanding Securities may, on behalf of the Holders of all the
Securities, waive any past default hereunder and its consequences, except a
default
(10 in the payment of principal of (or premium and Liquidated
Damages, if any) or interest on any Security, or
(20 in respect of a covenant or provision hereof which under
Article IX cannot be modified or amended without the consent of the Holder
of each Outstanding Security affected thereby.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
SECTION V.14 UNDERTAKING FOR COSTS
In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit (including reasonable
attorney's fees and expenses), and may assess costs against any such party
litigant, in the manner and to the extent provided in the Trust Indenture Act;
provided, that neither this Section nor the Trust Indenture Act shall be deemed
to authorize any court to require such an undertaking or to make such an
assessment in any suit instituted by the Trustee or the Company.
SECTION V.15 WAIVER OF STAY OR EXTENSION LAWS
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
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ARTICLE VI
THE TRUSTEE
SECTION VI.1 CERTAIN DUTIES AND RESPONSIBILITIES
The duties and responsibilities of the Trustee shall be as provided by
the Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it. Whether or not herein
expressly so provided, every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.
SECTION VI.2 NOTICE OF DEFAULTS
If a Default or an Event of Default occurs and is continuing and is
known to the Trustee, the Trustee shall mail to each holder of the Securities
notice of the Default or Event of Default within 30 days after the occurrence
thereof, or, if later, promptly upon the Trustee obtaining knowledge thereof.
Except in the case of a Default or an Event of Default in payment of principal
of (and premium and Liquidated Damages, if any, on) or interest on any
Securities, the Trustee may withhold the notice to the holders of such
Securities if the board of directors, executive committee or a committee of its
trust officers in good faith determines that withholding the notice is in the
interest of the holders of the Securities.
SECTION VI.3 CERTAIN RIGHTS OF TRUSTEE
Subject to the provisions of Section 6.01:
(10 the Trustee may rely and shall be protected in acting or
refraining from acting in reliance upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(20 any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order and
any resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(30 whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, request from the Company and rely upon an Officers'
Certificate and/or an Opinion of Counsel;
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(40 the Trustee may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(50 the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might be incurred by it
in compliance with such request or direction;
(60 the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note. other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit:
(70 the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder; and
(80 the Trustee shall not be liable for any action taken,
suffered or omitted to be taken by it in good faith and reasonably believed
by it to be authorized or within the discretion or rights or powers
conferred upon it by this Indenture.
(90 Except with respect to Section 10.01, the Trustee shall have
no duty to inquire as to the performance of the Company with respect to the
covenants contained in Article 10. In addition, the Trustee shall not be
deemed to have knowledge of an Event of Default except (i) any Default or
Event of Default occurring pursuant to Sections 10.01, 5.01(a) or 5.01(b)
or (ii) any Default or Event of Default of which the Trustee shall have
received written notification or obtained actual knowledge.
SECTION VI.4 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee shall not be accountable for the use
or application by the Company of Securities or the proceeds thereof.
SECTION VI.5 MAY HOLD SECURITIES
The Trustee, any Paying Agent, any Security Registrar or any other
agent of the Company, in its individual or any other capacity, may become the
owner or pledgee of Securities and, subject to Sections 6.8 and 6.3, may
otherwise deal with the Company with the same rights it would have if it were
not Trustee, Paying Agent, Security Registrar or such other agent.
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SECTION VI.6 MONEY HELD IN TRUST
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed in writing with the Company.
SECTION VI.7 COMPENSATION AND REIMBURSEMENT
The Company agrees
(10 to pay to the Trustee from time to time such compensation as
the Company and the Trustee shall from time to time agree in writing for
all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(20 except as otherwise expressly provided herein, to reimburse
the Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its gross negligence or
willful misconduct; and
(30 to indemnify each of the Trustee or any predecessor Trustee
for, and to hold it harmless against, any and all loss, liability, damage,
claim or expense incurred without gross negligence or willful misconduct on
its part, arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of defending
itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.
All such payments and reimbursements shall be made with interest at
the rate borne by the Securities.
As security for the performance of the obligations of the Company
under this Section the Trustee shall have a lien prior to the Securities upon
all property and funds held or collected by the Trustee as such, except funds
held in trust for the benefit of the Holders of particular Securities.
The Company's obligations under this Section 6.07 and any lien arising
hereunder shall survive the resignation or removal of any Trustee, the discharge
of the Company's obligations pursuant to this Indenture and/or the termination
of this Indenture.
SECTION VI.8 DISQUALIFICATION; CONFLICTING INTERESTS
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
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the provisions of, the Trust Indenture Act and this Indenture.
SECTION VI.9 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY
There shall at all times be a Trustee hereunder which shall be a
Person that is eligible pursuant to the Trust Indenture Act to act as such and
has a combined capital and surplus of (a) at least $25,000,000 and be a member
of a bank holding company that has a combined capital and surplus of at least
$100,000,000 or (b) at least $50,000,000. If such Person publishes reports of
condition at least annually, pursuant to law or to the requirements of any
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Person shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.
SECTION VI.10 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR
(10 No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 6.11. If an
instrument of acceptance by a successor Trustee shall not have been delivered to
the Trustee within 30 days after the giving of such notice of resignation or
removal, the Trustee resigning or being removed may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(20 The Trustee may resign at any time by giving written notice
thereof to the Company.
(30 The Trustee may be removed at any time by Act of the Holders of a
majority in principal amount of the Outstanding Securities, delivered to the
Trustee and to the Company.
(40 If at any time:
(10 the Trustee shall fail to comply with Section 6.08 after
written request therefor by the Company or by any Holder who has been a
bona fide Holder of a Security for at least six months, or
(20 the Trustee shall cease to be eligible under Section 6.09 and
shall fail to resign after written request therefor by the Company or by
any such Holder, or
(30 the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
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then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 5.14, any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
(50 If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment, become the
successor Trustee and supersede the successor Trustee appointed by the Company.
If no successor Trustee shall have been so appointed by the Company or the
Holders and accepted appointment in the manner hereinafter provided, any Holder
who has been a bona fide Holder of a Security for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(60 The Company shall give notice of each resignation and each removal
of the Trustee and each appointment of a successor Trustee to all Holders in the
manner provided in Section 1.06. Each notice shall include the name of the
successor Trustee and the address of its Corporate Trust Office.
SECTION VI.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee; but, on request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder, subject to its lien provided for in Section
6.07. Upon request of any such successor Trustee, the Company shall execute any
and all instruments for more fully and certainly vesting in and confirming to
such successor Trustee all such rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION VI.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
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corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
SECTION VI.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
SECTION VI.14 APPOINTMENT OF CO-TRUSTEE
It is the purpose of this Indenture that there shall be no violation
of any law of any jurisdiction, including particularly the law of New York,
denying or restricting the right of banking corporations or associations to
transact business as Trustee in such jurisdiction. It is recognized that in case
of litigation under this Indenture, and in particular in case of the enforcement
on default, or in case the Trustee deems that by reason of any present or future
law of any jurisdiction it may not exercise any of the powers, rights or
remedies herein granted to the Trustee or hold title to the properties, in
trust, as herein granted, or take any other action which may be desirable or
necessary in connection therewith, it may be necessary that the Trustee appoint
an additional individual or institution as a separate or co-trustee. The
following provisions of this Section 6.14 are adopted to these ends.
In the event that the Trustee appoints an additional individual or
institution as a separate or co-trustee, each and every remedy, power, right,
claim, demand, cause of action, immunity, estate, title, interest and lien
expressed or intended by this Indenture to be exercised by or vested in or
conveyed to the Trustee with respect thereto shall be exercisable by and vested
in such separate or co-trustee but only to the extent necessary to enable such
separate or co-trustee to exercise such powers, rights and remedies, and every
covenant and obligation necessary to the exercise thereof by such separate or
co-trustee shall run to and be enforceable by such separate or co-trustee.
Should any instrument in writing be required by the separate trustee
or co-trustee so appointed by the Trustee for more fully and certainly vesting
in and confirming to him or it such properties, rights, powers, trusts, duties
and obligations, any and all such instruments in writing shall, on request, be
executed, acknowledged and delivered by the Company. In case any separate
trustee or co-trustee, or a successor to either, shall die, become incapable of
acting, resign or be removed, all the estates, properties, rights, powers,
trusts, duties and obligation of such separate trustee or co-trustee, so far as
permitted by law, shall vest in and be exercised by the Trustee until the
appointment of a new trustee or successor to such separate trustee or
co-trustee.
ARTICLE VII
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HOLDERS' LISTS AND REPORTS BY TRUSTEE
SECTION VII.1 COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS
The Company will furnish or cause to be furnished to the Trustee:
(10 semi-annually, not more than 15 days after each Regular
Record Date, a list, in such form as the Trustee may reasonably require, of
the names and addresses of the Holders as of such Regular Record Date, and
(20 at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a list
of similar form and content as of a date not more than 15 days prior to the
time such list is furnished;
excluding from any such list names and addresses received by the Trustee in its
capacity as Registrar.
SECTION VII.2 PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS
(10 The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 7.01 and the names and
addresses of Holders received by the Trustee in its capacity as Registrar. The
Trustee may destroy any list furnished to it as provided in Section 7.01 upon
receipt of a new list so furnished.
(20 The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.
(30 Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.
SECTION VII.3 REPORTS BY TRUSTEE
(10 The Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant thereto. If
required by Section 313(a) of the Trust Indenture Act, the Trustee shall, within
sixty days after each May 15 following the date of this Indenture, deliver to
Holders a brief report, dated as of such May 15, which complies with the
provision of such Section 313(a).
(20 A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Trustee with each stock exchange upon which the
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Securities are listed, with the Commission and with the Company. The Company
will promptly notify the Trustee when the Securities are listed on or delisted
from any securities exchange.
ARTICLE VIII
CONSOLIDATION, MERGER,
CONVEYANCE, TRANSFER OR LEASE
SECTION VIII.1 COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS
The Company will not consolidate with or merge with or into any other
Person or convey, transfer or lease its properties and assets as an entirety to
any Person or Persons, and the Company will not permit any Restricted Subsidiary
to enter into any such transaction or series of transactions, if such
transaction or series of transactions, in the aggregate, would result in the
conveyance, transfer or lease of all or substantially all of the properties and
assets of the Company and its Restricted Subsidiaries on a consolidated basis to
any Person, unless:
(a) either (i) the Company is the surviving corporation or (ii) the
Person (if other than the Company) formed by such consolidation or into which
the Company or such Restricted Subsidiary is merged or the Person which
acquires, by conveyance, transfer or lease, the properties and assets of the
Company or such Restricted Subsidiary, as the case may be, substantially as an
entirety (the "Surviving Entity") (A) shall be a corporation, partnership or
trust organized and validly existing under the laws of the United States of
America, any state thereof or the District of Columbia and (B) shall expressly
assume, by a supplemental indenture executed and delivered to the Trustee, in
form satisfactory to the Trustee, the Company's obligation for the due and
punctual payment of the principal (and premium, if any, on) and interest on all
the Securities and the performance and observance of every covenant of this
Indenture on the part of the Company to be performed or observed;
(b) immediately after giving effect to such transaction or series of
transactions and treating any obligation of the Company or a Subsidiary in
connection with or as a result of such transaction as having been Incurred as of
the time of such transaction, no Default or Event of Default shall have occurred
and be continuing;
(c) immediately before and immediately after giving effect to such
transaction or series of transactions on a pro forma basis (on the assumption
that the transaction or series of transactions occurred on the first day of the
last full fiscal quarter immediately prior to the consummation of such
transaction or series of transactions with the appropriate adjustments with
respect to the transaction or series of transactions being included in such pro
forma calculation), the Company (or the Surviving Entity if the Company is not
the continuing obligor under this Indenture) could Incur at least $1.00 of
additional Debt (other than Permitted Debt) under the provisions of Section
10.08; and
(d) if any of the property or assets of the Company or any of its
Restricted Subsidiaries would thereupon become subject to any Lien, the
provisions of Section 10.17 are complied with.
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In connection with any such consolidation, merger, conveyance,
transfer or lease, the Company or the Surviving Entity shall have delivered to
the Trustee, in form and substance reasonably satisfactory to the Trustee, an
Officer's Certificate (attaching the computations to demonstrate compliance with
clause (c) above) and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease, and if a supplemental
indenture is required in connection with such transaction, such supplemental
indenture, comply with the requirements of this Section 8.01, and that all
conditions precedent herein provided for relating to such transaction have been
complied with.
SECTION VIII.2 SUCCESSOR SUBSTITUTED
Upon any transaction or series of transactions that are of the type
described in, and are effected in accordance with, conditions described in
Section 8.01, the Surviving Entity shall succeed to, and be substituted for, and
may exercise every right and power of, the Company under this Indenture with the
same effect as if such Surviving Entity had been named as the Company herein;
and when a Surviving Entity duly assumes all of the obligations and covenants of
the Company pursuant to this Indenture and the Securities, except in the case of
a lease, the predecessor Person shall be relieved of all such obligations.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION IX.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(10 to evidence the succession of another Person to the Company
and the assumption by any such successor of the covenants of the Company
herein and in the Securities; or
(20 to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the
Company; or
(30 to secure the Securities; or
(40 to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to
make any other provisions with respect to matters or questions arising
under this Indenture which shall not be inconsistent with the provisions of
this Indenture, provided that such action pursuant to this Clause (4) shall
not adversely affect the interests of the Holders in any material respect.
SECTION IX.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS
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With the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Securities, by Act of said Holders
delivered to the Company and the Trustee, the Company, when authorized by a
Board Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders under this Indenture;
provided, however, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Security affected thereby:
(1) change the Stated Maturity of the principal of, or any
installment of interest or Liquidated Damages, if any, on, any Security, or
reduce the principal amount thereof or the rate of interest or Liquidated
Damages, if any, thereon or any premium payable upon the redemption
thereof, or change the place of payment where, or the coin or currency in
which, any Security or any premium or interest or Liquidated Damages, if
any, thereon is payable, or impair the right to institute suit for the
enforcement of any such payment after the Stated Maturity thereof (or, in
the case of redemption, on or after the Redemption Date);
(2) reduce the percentage in aggregate principal amount of the
Outstanding Securities, the consent of whose Holders is required for any
such supplemental indenture or for any waiver of compliance with certain
provisions of, or certain defaults and their consequences provided for
under, this Indenture; or
(3) modify any provisions relating to this Section, Section
5.01(d), Section 5.13 or Section 10.19 except to increase the percentage of
outstanding Securities required for such actions or to provide that certain
other provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Security affected thereby.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION IX.3 EXECUTION OF SUPPLEMENTAL INDENTURES
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 6.01) shall be fully protected in relying upon, an
Officers' Certificate and an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture. The
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
SECTION IX.4 EFFECT OF SUPPLEMENTAL INDENTURES
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Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION IX.5 CONFORMITY WITH TRUST INDENTURE ACT
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.
SECTION IX.6 REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.
ARTICLE X
COVENANTS
SECTION X.1 PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST
The Company will duly and punctually pay the principal of (and
premium, if any) and interest (and Liquidated Damages, if any) on the Securities
in accordance with the terms of the Securities and this Indenture.
SECTION X.2 MAINTENANCE OF OFFICE OR AGENCY
The Company will maintain in the Borough of Manhattan, The City of New
York, New York, an office or agency where Securities may be presented or
surrendered for payment, where Securities may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Company in
respect of the Securities and this Indenture may be served. The Company will
give prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office of the Trustee, and the
Company hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands. The Trustee may resign any
agency capacity under this Indenture upon 30 days' written notice to the
Company.
The Company may also from time to time designate one or more other
offices or agencies (in or outside the Borough of Manhattan, The City of New
York, New York) where the Securities may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
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however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan The City of New York, New York for such purposes. The Company will
give prompt written notice to the Trustee of any such designation or remission
and of any change in the location of any such other office or agency.
SECTION X.3 MONEY FOR SECURITY PAYMENTS TO BE HELD IN TRUST
If the Company shall at any time act as its own Paying Agent, it will,
on or before each due date of the principal of (and premium, if any,) or
interest (and Liquidated Damages, if any) on any of the Securities, segregate
and hold in trust for the benefit of the Persons entitled thereto a sum
sufficient to pay the principal (and premium, if any) or interest (and
Liquidated Damages, if any) so becoming due until such sums shall be paid to
such Persons or otherwise disposed of as herein provided and will promptly
notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents, it will,
prior to each due date of the principal of (and premium, if any) or interest
(and Liquidated Damages, if any) on any Securities, deposit with a Paying Agent
a sum sufficient to pay the principal (and premium, if any) or interest (and
Liquidated Damages, if any) so becoming due, such sum to be held in trust for
the benefit of the Persons entitled to such principal, premium, interest or
Liquidated Damages, and (unless such Paying Agent is the Trustee) the Company
will promptly notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of
(and premium, if any) or interest (and Liquidated Damages, if any) on
Securities in trust for the benefit of the Persons entitled thereto until
such sums shall be paid to such Persons or otherwise disposed of as herein
provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities) in the making of any payment of
principal (and premium, if any) or interest (and Liquidated Damages, if
any); and
(3) at any time during the continuance of any such default, upon
the written request of the Trustee, forthwith pay to the Trustee all sums
so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
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such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of (and premium, if
any) or interest on any Security and remaining unclaimed for two years after
such principal (and premium, if any) or interest (and Liquidated Damages, if
any) has become due and payable shall be paid to the Company on Company Request,
or (if then held by the Company) shall be discharged from such trust; and the
Holder of such Security shall thereafter, as an unsecured general creditor, look
only to the Company for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however, that the
Trustee or such Paying Agent, before being required to make any, such repayment,
may at the expense of the Company cause to be published once, in a newspaper
published in the English language, customarily published on each Business Day
and of general circulation in the Borough of Manhattan, The City of New York,
New York, notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
publication, any unclaimed balance of such money then remaining will be repaid
to the Company.
SECTION X.4 EXISTENCE
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence and
rights (charter and statutory); provided, however, that the Company shall not be
required to preserve any such right or franchise if the Board of Directors shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Company and that the loss thereof is not disadvantageous in
any material respect to the Holders.
SECTION X.5 MAINTENANCE OF PROPERTIES
The Company will cause all properties (including broadcast licenses)
used or useful in the conduct of its business or the business of any of its
Subsidiaries to be maintained and kept in good condition, repair and working
order and supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in the judgment of the Company may be necessary so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times; provided, however, that nothing in this Section shall prevent the
Company from discontinuing the operation or maintenance of any of such
properties if such discontinuance is, as determined in the good faith judgment
of the Company, desirable in the conduct of its business or the business of any
of its Subsidiaries and not disadvantageous in any material respect to the
Holders.
SECTION X.6 PAYMENT OF TAXES AND OTHER CLAIMS
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all taxes, assessments and
governmental charges levied or imposed upon the Company or any of its
Subsidiaries or upon the income, profits or property of the Company or any of
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its Subsidiaries, and (2) all lawful claims for labor, materials and supplies
which, if unpaid, might by law become a lien upon the property of the Company or
any of its Subsidiaries; provided, however, that the Company shall not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or validity is being
contested in good faith by appropriate proceedings.
SECTION X.7 MAINTENANCE OF INSURANCE
The Company shall, and shall cause its Subsidiaries to keep, at all
times all of their properties which are of an insurable nature insured against
loss or damage in a manner determined appropriate by the Company (evidenced by
an Officers' Certificate, a copy of which shall be delivered to the Trustee on
an annual basis) with insurers believed by the Company to be responsible. The
Company shall, and shall cause its Subsidiaries to, (i) use the proceeds from
any such insurance as required under the terms of Bank Credit Facilities or to
repay or prepay any then outstanding Pari Passu Debt of the Company or any Debt
of a Restricted Subsidiary, (ii) use the proceeds from any such insurance policy
to repair, replace or otherwise restore the property to which such proceeds
relate or (iii) invest such proceeds in other assets related to the Company. In
lieu of or supplemental to such insurance the Company may adopt such other plan
or method of protection in respect of properties, whether by the establishment
of an insurance fund or reserve to be held and applied to make good losses from
casualties, or otherwise, and conforming to the practices of other corporations
maintaining systems of self-insurance, as may be determined by the Company
(evidenced by an Officers' Certificate, a copy of which shall be delivered to
the Trustee on an annual basis).
SECTION X.8 LIMITATION ON DEBT
The Company will not, and will not permit any Restricted Subsidiary
to, Incur any Debt; provided, however, that the Company may Incur Debt and may
permit a Restricted Subsidiary to incur Debt if at the time of such Incurrence
and after giving effect thereto the Consolidated Cash Flow Ratio would be less
than 5.5 to 1.0.
In making the foregoing calculation, there shall be excluded from Debt
for purposes of calculating the Consolidated Cash Flow Ratio all Debt of the
Company and its Restricted Subsidiaries incurred pursuant to clause (i) of the
definition of Permitted Debt, and pro forma effect will be given to (i) the
Incurrence of the Debt to be incurred and the application of the net proceeds
therefrom to refinance other Debt and (ii) the acquisition (whether by purchase,
merger or otherwise) or disposition (whether by sale, merger or otherwise) of
any company, entity or business acquired or disposed of by the Company or its
Restricted Subsidiaries, as the case may be, since the first day of the most
recent full fiscal quarter, as if such acquisition or disposition occurred at
the beginning of the most recent full fiscal quarter.
Notwithstanding the foregoing limitation, the Company may, and may
permit its Restricted Subsidiaries to, Incur the following additional Debt
("Permitted Debt"):
(i) Debt under the Bank Credit Facilities in an aggregate amount not
to exceed $100.0 million at any one time outstanding, less any amounts by which
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the commitments thereunder are permanently reduced pursuant to the provisions
thereof as described in Section 10.12;
(ii) other Debt of the Company or any Restricted Subsidiary
outstanding on the date of this Indenture;
(iii) Debt owed by the Company to any wholly-owned Restricted
Subsidiary or owed by any wholly-owned Restricted Subsidiary to the Company or
any other wholly-owned Restricted Subsidiary (provided that such Debt is held by
the Company or such wholly-owned Restricted Subsidiary and provided further that
in the case of Debt owed by the Company, such Debt is Subordinated Debt);
(iv) Debt represented by the Securities;
(v) Debt Incurred or Incurrable in respect of letters of credit,
bankers' acceptances or similar facilities not to exceed $5.0 million at any one
time outstanding;
(vi) Capital Lease Obligations whose Attributable Value does not
exceed $5.0 million at any one time outstanding;
(vii) Debt of the Company or any Restricted Subsidiary consisting of
guarantees, indemnities or obligations in respect of purchase price adjustments
in connection with the acquisition or disposition of assets, including, without
limitation, shares of Capital Stock;
(viii) Debt of the Company or any Restricted Subsidiary (including
trade letters of credit) in respect of purchase money obligations; provided that
the aggregate amount of such Debt outstanding at any time does not exceed $5.0
million;
(ix) Debt arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument drawn against insufficient
funds in the ordinary course of business, provided that such Debt is
extinguished within two Business Days of its Incurrence; and
(x) any renewals, extensions, substitutions, refinancings or
replacements (each, for purposes of this clause, a "refinancing") of any
outstanding Debt, other than Debt Incurred pursuant to clause (i), (vii) or (ix)
of this definition, including any successive refinancings thereof, so long as
(A) any such new Debt is in a principal amount that does not exceed the
principal amount (or, if such Debt being refinanced provides for an amount less
than the principal amount thereof to be due and payable upon a declaration of
acceleration thereof, such lesser amount as of the date of determination) so
refinanced, plus the amount of any premium required to be paid in connection
with such refinancing pursuant to the terms of the Debt refinanced or the amount
of any premium reasonably determined by the Company as necessary to accomplish
such refinancing by means of a tender offer or privately negotiated repurchase,
plus the amount of reasonable expenses Incurred by the Company in connection
with such refinancing, (B) in the case of any refinancing of Subordinated Debt,
such new Debt is made subordinate to the Securities at least to the same extent
as the Debt being refinanced, (C) in the case of any refinancing of the
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Securities or any Pari Passu Debt, such new Debt is made pari passu or
subordinated to the Securities, and (D) such refinancing Debt does not have an
Average Life less than the Average Life of the Debt being refinanced and does
not have a final scheduled maturity earlier than the final scheduled maturity of
the Debt being refinanced, or permit redemption at the option of the holder
earlier than the earliest date of redemption at the option of the holder of the
Debt being refinanced.
SECTION X.9 LIMITATION ON RESTRICTED PAYMENTS
The Company will not, and will not permit any Restricted Subsidiary
to, directly or indirectly, take any of the following actions:
(a) declare or pay any dividend on, or make any distribution to
holders of, any shares of the Capital Stock of the Company or any Restricted
Subsidiary (other than dividends or distributions payable solely in Qualified
Equity Interests of the Company and other than dividends or distributions by a
Restricted Subsidiary payable to the Company or another Restricted Subsidiary);
(b) purchase, redeem or otherwise acquire or retire for value,
directly or indirectly, any shares of Capital Stock (other than Disqualified
Stock) of the Company, any Restricted Subsidiary or any Affiliate of the
Company, or any options, warrants or other rights to acquire such shares of
Capital Stock (other than any such Capital Stock owned by the Company or any of
its Restricted Subsidiaries);
(c) make any principal payment on, or repurchase, redeem, defease or
otherwise acquire or retire for value, prior to any scheduled principal payment,
sinking fund payment or maturity, any Subordinated Debt (including Disqualified
Stock);
(d) make any loan, advance, capital contribution to or other
Investment in, or guarantee any obligation of, any Affiliate of the Company,
other than a Permitted Investment; and
(e) make any other Investment (other than a Permitted Investment) in
any Person;
(such payments or any other actions described in (but not excluded from) clauses
(a) through (e) being referred to as "Restricted Payments"), unless at the time
of, and immediately after giving effect to, the proposed Restricted Payment:
(i) no Default or Event of Default has occurred and is
continuing;
(ii) the Company could Incur at least $1.00 of additional Debt
(other than Permitted Debt) in accordance with Section 10.08; and
(iii) the aggregate amount of all Restricted Payments declared or
made after the issue date of the Securities does not exceed the sum of:
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(A) the remainder of (x) 100% of the aggregate Consolidated Cash
Flow of the Company (excluding, for purposes other than determining
whether the Company may, or may permit a Restricted Subsidiary to,
make Investments in any Person, the net income (but not the net loss)
of any Restricted Subsidiary to the extent that the declaration or
payment of dividends or similar distributions by such Restricted
Subsidiary is at the date of determination restricted, directly or
indirectly, except to the extent that such net income could be paid to
the Company or a Restricted Subsidiary thereof by loans, advances,
intercompany transfers, principal repayments or otherwise) measured on
a cumulative basis during the period beginning on the first day of the
Company's fiscal quarter during which the Securities are originally
issued and ending on the last day of the Company's most recent fiscal
quarter for which internal financial statements are available ending
prior to the date of such proposed Restricted Payment, minus (y) the
product of 2.0 times Consolidated Interest Expense accrued on a
cumulative basis during the period beginning on the first day of the
Company's fiscal quarter during which the Securities are originally
issued and ending on the last day of the Company's most recent fiscal
quarter for which internal financial statements are available ending
prior to the date of such proposed Restricted Payment; plus
(B) the aggregate net proceeds received by the Company after the
initial issuance of the Securities (including the fair market value of
property other than cash as determined by the Company's Board of
Directors, whose good faith determination will be conclusive) from the
issuance or sale (other than to a Restricted Subsidiary) of Qualified
Equity Interests of the Company; plus
(C) the aggregate net proceeds received by the Company after the
initial issuance of the Securities (including the fair market value of
property other than cash as determined by the Company's Board of
Directors, whose good faith determination will be conclusive) from the
issuance or sale (other than to a Restricted Subsidiary) of debt
securities or Disqualified Stock that have been converted into or
exchanged for Qualified Stock of the Company, together with the
aggregate net cash proceeds received by the Company at the time of
such conversion or exchange; plus
(D) without duplication, the lesser of (x) Net Cash Proceeds
received by the Company or a wholly-owned Restricted Subsidiary of the
Company upon the sale of any Unrestricted Subsidiary or (y) the amount
of the Company's or such Restricted Subsidiary's Investment in such
Unrestricted Subsidiary.
Notwithstanding the foregoing, the Company and its Restricted
Subsidiaries may take any one or more of the following actions, whether singly
or in combination, so long as (with respect to clauses (e) through (k) below) no
Default or Event of Default has occurred and is continuing:
(a) the payment of any dividend within 60 days after the date of
declaration thereof if at the declaration date such payment would not have
been prohibited by the foregoing provisions;
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(b) the repurchase, redemption, defeasance or other acquisition or
retirement for value of any shares of Capital Stock of the Company, in
exchange for, or out of the net cash proceeds of, a substantially
concurrent issuance and sale (other than to a Restricted Subsidiary) of
Qualified Equity Interests of the Company;
(c) the purchase, redemption, defeasance or other acquisition or
retirement for value of Subordinated Debt in exchange for, or out of the
net cash proceeds of, a substantially concurrent issuance and sale (other
than to a Restricted Subsidiary) of shares of Qualified Stock of the
Company;
(d) the purchase, redemption, defeasance or other acquisition or
retirement for value of Subordinated Debt (plus the amount of any premium
required to be paid in connection with such refinancing pursuant to the
terms of the Debt refinanced or the amount of any premium reasonably
determined by the Company as necessary to accomplish such refinancing by
means of a tender offer or privately negotiated repurchase) in exchange
for, or out of the net cash proceeds of, a substantially concurrent
Incurrence or sale (other than to a Restricted Subsidiary) of Subordinated
Debt of the Company, so long as (i) such new Subordinated Debt is
subordinated to the Securities to the same extent as such Subordinated Debt
so purchased, redeemed, acquired or retired and (ii) such new Subordinated
Debt has an Average Life longer than the Average Life of the Securities and
a final Stated Maturity of principal later than the final Stated Maturity
of the Securities;
(e) payments (whether made in cash, property or securities) by the
Company or any Subsidiary of the Company to any employee of the Company or
any Subsidiary of the Company in connection with the issuance or redemption
of stock of any such company pursuant to any employee stock option plan or
board resolution to the extent that such payments do not exceed $500,000 in
the aggregate during any fiscal year or $2.0 million in the aggregate
during the term of the Securities;
(f) the repurchase of any Subordinated Debt at a purchase price not
greater than 101% of the principal amount of such Subordinated Debt in the
event of a Change of Control in accordance with provisions similar to
Section 10.15; provided that prior to such repurchase the Company has made
the Change of Control Offer as provided in Section 10.15 with respect to
the Securities and has repurchased all Securities validly tendered for
payment in connection with such Change of Control Offer;
(g) Investments in Persons made with, or out of the net cash proceeds
of a substantially concurrent issuance and sale (other than to a Restricted
Subsidiary) of, shares of Qualified Stock of the Company;
(h) Investments in Persons all or substantially all of whose
operations are in the telecommunications business; provided that the
aggregate amount of Investments pursuant to this clause (h) in all such
Persons does not exceed $20.0 million;
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(i) payments to Parent on or after September 14, 2001 to enable Parent
to pay when due accrued but unpaid interest on Parent's 10_% Senior
Discount Notes due 2008; provided that such amounts are promptly used by
Parent to pay such interest and, provided further, that at the time of such
payment and giving pro forma effect thereto the Company's Consolidated Cash
Flow ratio would be less than 5.0 to 1.0;
(j) Investments in Benbow PCS Ventures, Inc. of up to $50.0 million in
the aggregate; and
(k) make any other payment or payments of up to $5.0 million in the
aggregate which would otherwise constitute a Restricted Payment.
The Restricted Payments described in clauses (b), (c), (e), (f), (g),
(h), (i), (j) and (k) of this paragraph will be Restricted Payments that will be
permitted to be taken in accordance with the preceding paragraph but will reduce
the amount that would otherwise be available for Restricted Payments under
clause (iii) of the first paragraph of this Section and the Restricted Payments
described in clauses (a) and (d) of the preceding paragraph will be Restricted
Payments that will be permitted to be taken in accordance with the preceding
paragraph and will not reduce the amount that would otherwise be available for
Restricted Payments under clause (iii) of the first paragraph of this Section.
For the purpose of making any calculations under this Indenture, (i)
an Investment will include the fair market value of the net assets of any
Restricted Subsidiary at the time that such Restricted Subsidiary is designated
an Unrestricted Subsidiary and will, for the purpose of this covenant, exclude
the fair market value of the net assets of any Unrestricted Subsidiary that is
designated as a Restricted Subsidiary, (ii) any property transferred to or from
an Unrestricted Subsidiary will be valued at fair market value at the time of
such transfer; provided that, in each case, the fair market value of an asset or
property is as determined by the Board of Directors of the Company in good faith
and (iii) subject to the foregoing, the amount of any Restricted Payment, if
other than cash, will be determined by the Board of Directors of the Company,
whose good faith determination will be conclusive.
If the aggregate amount of all Restricted Payments calculated under
the foregoing provision includes an Investment in an Unrestricted Subsidiary or
other Person that thereafter becomes a Restricted Subsidiary, such Investment
will no longer be counted as a Restricted Payment for purposes of calculating
the aggregate amount of Restricted Payments.
If an Investment resulted in the making of a Restricted Payment, the
aggregate amount of all Restricted Payments calculated under the foregoing
provision will be reduced by the amount of any net reduction in such Investment
(resulting from the payment of interest or dividend, loan repayment, transfer of
assets or otherwise) to the extent such net reduction is not included in the
Company's Consolidated Adjusted Net Income; provided that the total amount by
which the aggregate amount of all Restricted Payments may be reduced may not
exceed the lesser of (x) the cash proceeds received by the Company and its
Restricted Subsidiaries in connection with such net reduction and (y) the
initial amount of such Investment.
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In computing Consolidated Cash Flow of the Company under the first
paragraph of this Section 10.09, (i) the Company may use audited financial
statements for the portions of the relevant period for which audited financial
statements are available on the date of determination and unaudited financial
statements and other current financial data based on the books and records of
the Company for the remaining portion of such period and (ii) the Company will
be permitted to rely in good faith on the financial statements and other
financial data derived from the books and records of the Company that are
available on the date of determination. If the Company makes a Restricted
Payment which, at the time of the making of such Restricted Payment, would in
the good faith determination of the Board of Directors of the Company be
permitted under the requirements of this Indenture, such Restricted Payment will
be deemed to have been made in compliance with this Indenture notwithstanding
any subsequent adjustments made in good faith to the Company's financial
statements affecting Consolidated Adjusted Net Income of the Company for any
period.
SECTION X.10 LIMITATIONS ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS AFFECTING
RESTRICTED SUBSIDIARIES
The Company will not, and will not permit any Restricted Subsidiary
to, create, assume or otherwise cause or suffer to exist or to become effective
any consensual encumbrance or restriction on the ability of any Restricted
Subsidiary to (a) pay any dividends or make any other distributions on its
Capital Stock; (b) make payments in respect of any Debt owed to the Company or
any Restricted Subsidiary; (c) make loans or advances to the Company or any
Restricted Subsidiary; or (d) transfer any of its property or assets to the
Company or any Restricted Subsidiary, other than (i) those under the Bank Credit
Facilities existing as of the date of issuance of the Securities, (ii) those
under other Debt of the Company, Parent or any Restricted Subsidiary existing as
of the date of issuance of the Securities, (iii) those as may be contained in
future agreements provided that they are no more restrictive than those referred
to in the immediately preceding clauses (i) and (ii), (iv) those required by the
Securities, (v) customary non-assignment or sublease provisions of any lease
governing a leasehold interest of the Company or any Restricted Subsidiary, (vi)
consensual encumbrances or restrictions binding upon any Person at the time such
Person becomes a Subsidiary of the Company; provided, however, that such
encumbrances or restrictions were not incurred in anticipation of such Person
becoming a Subsidiary of the Company, (vii) encumbrances and restrictions
imposed by applicable law or (viii) any restrictions with respect to a
Restricted Subsidiary imposed pursuant to an agreement which has been entered
into for the sale or disposition of all or substantially all of the Capital
Stock or assets of such Subsidiary pending the closing of such sale or
disposition. Nothing contained in this covenant shall prevent the Company from
entering into any agreement permitted by Section 10.17; provided, however, that
the encumbrance or restriction in any such agreement is limited to the transfer
of the property or assets which is subject to such agreement.
SECTION X.11 LIMITATION ON TRANSACTIONS WITH AFFILIATES AND RELATED PERSONS
The Company will not, and will not permit any Restricted Subsidiary
to, directly or indirectly, enter into any transaction or series of transactions
after the date of this Indenture with any Affiliate of the Company or any
Related Person (other than the Company or a wholly-owned Restricted Subsidiary),
unless (i) such transaction or series of transactions is on terms no less
favorable to the Company or such Restricted Subsidiary than those that could be
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obtained in a comparable arm's-length transaction with an entity that is not an
Affiliate or a Related Person; and (ii) if such transaction or series of
transactions involves aggregate consideration in excess of $1.0 million, then
such transaction or series of transactions is approved by a majority of the
Board of Directors of the Company, including the approval of a majority of the
Disinterested Directors, and is evidenced by a resolution of the Board of
Directors of the Company. Any such transaction or series of transactions shall
be conclusively deemed to be on terms no less favorable to the Company or such
Restricted Subsidiary than those that could be obtained in an arm's-length
transaction if such transaction or transactions are approved by a majority of
the Board of Directors of the Company, including a majority of the Disinterested
Directors, and are evidenced by a resolution of the Board of Directors of the
Company.
This covenant will not apply to (i) transactions between the Company
or any of its Restricted Subsidiaries and any employee of the Company or any of
its Restricted Subsidiaries that are entered into in the ordinary course of
business, (ii) the payment of reasonable and customary regular fees and expenses
to directors of the Company, (iii) the making of indemnification, contribution
or similar payments to any director or officer of the Company or any Restricted
Subsidiary of the Company under the Company's or such Restricted Subsidiary's
charter or by-laws (as each may be amended after the date of this Indenture) or
any indemnification or similar agreement between the Company or any such
Restricted Subsidiary and any of its directors or officers (collectively, the
"Indemnification Agreements") or (iv) the entering into of any Indemnification
Agreements with any current or future directors or officers of the Company or
any Restricted Subsidiary of the Company.
SECTION X.12 LIMITATION ON CERTAIN ASSET SALES
(1) The Company will not, and will not permit any Restricted
Subsidiary to, engage in any Asset Sale unless (i) the consideration received by
the Company or such Restricted Subsidiary for such Asset Sale is not less than
the fair market value of the assets sold (as determined by the Board of
Directors of the Company, whose good faith determination will be conclusive) and
(ii) the consideration received by the Company or the relevant Restricted
Subsidiary in respect of such Asset Sale consists of at least 85% (A) cash or
cash equivalents and/or (B) the assumption by the transferee of Pari Passu Debt
of the Company or any Debt of a Restricted Subsidiary and release of the Company
or such Restricted Subsidiary from all liability on such Debt.
(2) If the Company or any Restricted Subsidiary engages in an Asset
Sale, the Company may use the Net Cash Proceeds thereof, within 12 months after
such Asset Sale, to (i) make a permanent reduction of amounts outstanding under
the Bank Credit Facilities or repay or prepay any then outstanding Pari Passu
Debt of the Company or any Debt of a Restricted Subsidiary or (ii) invest (or
enter into a legally binding agreement to invest (within 90 days)) in (A)
properties and assets to replace the properties and assets that were the subject
of the Asset Sale, or (B) properties and assets that will be used in the
telecommunications businesses of the Company or its Restricted Subsidiaries, as
the case may be. If any such legally binding agreement to invest such Net Cash
Proceeds is terminated, then the Company may, within 90 days of such termination
or within 12 months of such Asset Sale, whichever is later, invest such Net Cash
Proceeds as provided in clause (i) or (ii) (without regard to the parenthetical
in such clause (ii)) above. Pending application of the Net Cash Proceeds of an
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Asset Sale pursuant to clause (ii) above, the Company may use such Net Cash
Proceeds to reduce temporarily borrowings under the Bank Credit Facilities. The
amount of such Net Cash Proceeds not so used as set forth in this paragraph (b)
constitutes "Excess Proceeds."
(3) When the aggregate amount of Excess Proceeds exceeds $5.0 million,
the Company will, within 30 days, make an Offer to Purchase from all holders of
Notes, on a pro rata basis, in accordance with the procedures set forth in this
Indenture, the maximum principal amount (expressed as a multiple of $1,000) of
Notes that may be purchased with the Excess Proceeds. The offer price for each
Note will be payable in cash in an amount equal to 100% of the principal amount
of such Note, plus accrued and unpaid interest and Liquidated Damages, if any,
to the date such Offer to Purchase is consummated. To the extent that the
aggregate principal amount of Notes tendered pursuant to such Offer to Purchase
is less than the Excess Proceeds, the Company may use the then remaining Excess
Proceeds for other general corporate purposes not prohibited by this Indenture.
If the aggregate principal amount of Notes validly tendered and not withdrawn by
holders thereof exceeds the Excess Proceeds, Notes to be purchased will be
selected on a pro rata basis. Upon completion of such Offer to Purchase, the
amount of Excess Proceeds will be reset to zero.
(4) Not later than the date of the Offer with respect to an Offer to
Purchase pursuant to this Section 10.12, the Company shall deliver to the
Trustee (i) an Officers' Certificate as to the Purchase Amount and (ii) an
Officers' Certificate and an Opinion of Counsel as to the Company's compliance
with the provisions of Section 10.12.
The Company and the Trustee shall perform their respective obligations
specified in the Offer to Purchase. On or prior to the Purchase Date, the
Company shall (i) accept for payment (on a pro rata basis, if necessary, as
provided in the definition of Offer to Purchaser) Securities or portions thereof
tendered pursuant to the Offer, (ii) deposit with the Paying Agent (or, if the
Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 10.03) money sufficient to pay the Purchase Price of all
Securities or portions thereof so accepted and (iii) deliver or cause to be
delivered to the Trustee all Securities so accepted together with an Officers'
Certificate stating the Securities or portions thereof accepted for payment by
the Company. The Paying Agent (or the Company, if so acting) shall promptly mail
or deliver to Holders of Securities so accepted payment in an amount equal to
the Purchase Price, and the Trustee shall promptly authenticate and mail or
deliver to such Holders a new Security equal in principal amount to any
unpurchased portion of the Security surrendered. Any Security not accepted for
payment shall be promptly mailed or delivered by the Company to the Holder
thereof.
SECTION X.13 LIMITATION ON ISSUANCES AND SALES OF CAPITAL STOCK OF RESTRICTED
SUBSIDIARIES
The Company (a) will not permit any Restricted Subsidiary to issue any
Capital Stock (other than to the Company or a Restricted Subsidiary) and (b)
will not permit any Person (other than the Company or a Restricted Subsidiary)
to own any Capital Stock of any Restricted Subsidiary; provided, however, that
this covenant will not prohibit (i) the issuance and sale of all, but not less
than all, of the issued and outstanding Capital Stock of any Restricted
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Subsidiary owned by the Company or any Restricted Subsidiary in compliance with
the other provisions of this Indenture or (ii) the acquisition by the Company of
less than all of the equity ownership or Voting Stock of a Person that, upon the
consummation of such acquisition, will be a Subsidiary.
SECTION X.14 PROVISION OF FINANCIAL STATEMENTS
The Company will file on a timely basis with the Commission, to the
extent such filings are accepted by the Commission and whether or not the
Company has a class of securities registered under the Exchange Act, the annual
reports, quarterly reports and other documents that the Company would be
required to file if it were subject to Section 13 or 15 of the Exchange Act. The
Company will also be required (a) to file with the Trustee, and upon written
request, provide to each holder of Securities, without cost to such holder,
copies of such reports and documents within 15 days after the date on which the
Company files such reports and documents with the Commission or the date on
which the Company would be required to file such reports and documents if the
Company were so required, and (b) if filing such reports and documents with the
Commission is not accepted by the Commission or is prohibited under the Exchange
Act, to deliver to the Trustee and to supply at the Company's cost copies of
such reports and documents to any prospective holder of Securities promptly upon
written request.
Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION X.15 CHANGE OF CONTROL
(1) Upon the occurrence of a Change of Control (as defined below),
each Holder of a Security will have the right to require that the Company
purchase such Holder's Securities, in whole or in part in integral multiples of
$1,000. The Company shall, within 30 days following a Change of Control, notify
the Trustee thereof and mail to each Holder an offer with respect to an Offer to
Purchase all Outstanding Securities at a Purchase Price in cash in an amount
equal to 101% of the principal amount thereof plus accrued and unpaid interest,
and Liquidated Damages, if any, to the Purchase Date; provided, however, that
installments of interest whose Stated Maturity is on or prior to the Purchase
Date shall be payable to the Holders of such Securities, registered as such at
the close of business on the relevant Record Dates according to their terms and
the provisions of Section 3.06.
(2) The Company and Trustee shall perform their respective obligations
specified in the Offer to Purchase. Prior to the Purchase Date, the Company
shall (i) accept for payment Securities or portions thereof tendered pursuant to
the Offer to Purchase, (ii) deposit with the Paying Agent (or, if the Company is
acting as its own Paying Agent, segregate and hold in trust as provided in
Section 10.03) money sufficient to pay the Purchase Price of all Securities or
portions thereof so accepted and (iii) deliver or cause to be delivered to the
Trustee all Securities so accepted together with an Officers' Certificate
stating the Securities or portions thereof accepted for payment by the Company.
The Paying Agent shall promptly after the Purchase Date mail or deliver to
Holders of Securities so accepted payment in an amount equal to the Purchase
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Price, and the Trustee shall promptly authenticate and mail or deliver to such
Holders a new Security or Securities equal in principal amount to any
unpurchased portion of the Security surrendered as requested by the Holder. Any
Security not accepted for payment shall be promptly mailed or delivered by the
Company to the Holder thereof.
(3) A "Change of Control" means the occurrence of any of the following
events:
(1) any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Exchange Act) becomes the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a
Person shall be deemed to have "beneficial ownership" of all securities
that such Person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly of more than a majority of the voting power of all classes of
Voting Stock of the Company or Parent;
(ii) the Company or Parent consolidates with, or merges with or
into, another Person or conveys, transfers, leases or otherwise disposes of
all or substantially all of its assets to any Person, or any Person
consolidates with, or merges with or into, the Company or Parent, in any
such event pursuant to a transaction in which the outstanding Voting Stock
of the Company or Parent is converted into or exchanged for cash,
securities or other property, other than any such transaction where (i) the
outstanding Voting Stock of the Company or Parent is not converted or
exchanged at all (except to the extent necessary to reflect a change in the
jurisdiction of incorporation) or is converted into or exchanged for (A)
Capital Stock (other than Disqualified Stock) of the surviving or
transferee Person or (B) cash, securities or other property (other than
Capital Stock described in the foregoing clause (A)) of the surviving or
transferee Person in an amount that could be paid as a Restricted Payment
under Section 10.09 and (ii) immediately after such transaction, no
"person" or "group" (as such terms are used in Sections 13(d) and 14(d) of
the Exchange Act) is the "beneficial owner" (as defined in Rules 13d-3 and
13d-5 under the Exchange Act, except that a Person shall be deemed to have
"beneficial ownership" of all securities that such Person has the right to
acquire, whether such right is exercisable immediately or only after the
passage of time), directly or indirectly, of more than a majority of the
total outstanding Voting Stock of the surviving or transferee Person;
(iii) during any consecutive two-year period, individuals who at
the beginning of such period constituted the Board of Directors of the
Company or Parent (together with any new directors whose election to such
Board of Directors, or whose nomination for election by the stockholders of
the Company or Parent, was approved by a vote of 66-2/3% of the directors
then still in office who were either directors at the beginning of such
period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors of the Company or Parent then in office; or
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(iv) the Company is liquidated or dissolved or adopts a plan of
liquidation or dissolution other than in a transaction which complies with
the provisions of Section 8.01.
SECTION X.16 STATEMENT BY OFFICERS AS TO DEFAULT; NOTICE OF DEFAULT
(1) The Company will deliver to the Trustee, within 120 days after the
end of each fiscal year (which currently ends on December 31 of each year) of
the Company ending after the date hereof, an Officers' Certificate, stating
whether or not to the knowledge of the signers thereof the Company is in
compliance with all the terms, provisions, covenants and conditions of this
Indenture and if the Company shall be in Default under this Indenture,
specifying all such Defaults and the nature and status thereof of which they may
have knowledge.
(2) The Company will, so long as any of the Securities are
Outstanding, deliver to the Trustee, within five Business Days of becoming aware
of any Default or Event of Default in the performance of any covenant, agreement
or condition in this Indenture, an Officers' Certificate specifying such Default
or Event of Default.
SECTION X.17 LIMITATION ON LIENS
The Company will not, and will not permit any Restricted Subsidiary
to, Incur any Debt which is secured, directly or indirectly, with a Lien on the
Property, assets or any income or profits therefrom, of the Company or any
Restricted Subsidiary, except for Permitted Liens, unless contemporaneously
therewith or prior thereto, the Notes, including all payments of principal of,
and premium, interest and Liquidated Damages, if any, thereon, are secured
equally and ratably with (or prior to) the obligation or liability secured by
such Lien for so long as such obligation or liability is so secured.
Notwithstanding the foregoing, the Company may, and may permit any
Restricted Subsidiary to, incur the following Liens ("Permitted Liens"):
(1) Liens (other than Liens securing Debt under the Bank Credit
Facilities) existing as of the date of issuance of the Securities;
(2) Liens on Property or assets of the Company or a Restricted
Subsidiary of the Company securing Debt under or with respect to the Bank
Credit Facilities or which are required to secure the USAM Notes solely and
as a direct result of the granting of Liens with respect to the Bank Credit
Facilities;
(3) Liens securing the Securities;
(4) Liens on Property or assets of a Restricted Subsidiary
securing Debt of such Restricted Subsidiary other than Guarantees with
respect to Debt of the Company;
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(5) any interest or title of a lessor under any Capital Lease
Obligation or Sale and Leaseback Transaction under which the Company is
lessee so long as the Attributable Value secured by such Lien does not
exceed the principal amount of Debt permitted by Section 10.08;
(6) Liens securing Acquired Debt created prior to (and not in
connection with or in contemplation of) the Incurrence of such Debt by the
Company; provided that such Lien does not extend to any Property or assets
of the Company other than the assets acquired in connection with the
Incurrence of such Acquired Debt;
(7) Liens arising from purchase money mortgages and purchase
security interests Incurred in the ordinary course of the business of the
Company; provided that (i) the related Debt is not secured by any Property
or assets of the Company other than the Property and assets so acquired and
(ii) the Lien securing such Debt is created within 60 days of such
acquisition;
(8) statutory Liens or landlords' and carriers', warehousemen's,
mechanics', suppliers', materialmen's, repairmen's or other like Liens
arising in the ordinary course of business and with respect to amounts not
yet delinquent or being contested in good faith by appropriate proceedings,
if a reserve or other appropriate provision, if any, as shall be required
in conformity with GAAP shall have been made therefor;
(9) Liens for taxes, assessments, government charges or claims
that are being contested in good faith by appropriate proceedings promptly
instituted and diligently conducted, if a reserve or other appropriate
provision, if any, as is required in conformity with GAAP has been made
therefor;
(10) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security;
(11) rights of banks to set off deposits against debts owed to
said banks;
(12) other Liens incidental to the conduct of the business of the
Company or any of its Subsidiaries, as the case may be, or the ownership of
their assets that do not materially detract from the value of the Property
subject thereto;
(13) Liens incurred or deposits made to secure the performance of
tenders, bids, leases, statutory obligations, surety and appeal bonds,
government contracts, performance bonds and other obligations of a like
nature incurred in the ordinary course of business (other than contracts
for the payment of money);
(14) easements, rights-of-way, restrictions and other similar
charges or encumbrances not interfering in any material respect with the
business of the Company and the Restricted Subsidiaries, taken as a whole,
incurred in the ordinary course of business;
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(15) Liens arising by reason of any judgment, decree or order of
any court so long as such Lien is adequately bonded and any appropriate
legal proceedings that may have been duly initiated for the review of such
judgment, decree or order shall not have been finally terminated or the
period within which such proceedings may be initiated shall not have
expired; and
(16) any extension, renewal or replacement, in whole or in part,
of any Lien described in the foregoing clauses (a) through (o); provided
that any such extension, renewal or replacement shall not extend to any
additional Property or assets.
SECTION X.18 DESIGNATION OF UNRESTRICTED SUBSIDIARIES
(1) The Board of Directors of the Company may designate any Subsidiary
(including any newly acquired or newly formed Subsidiary) to be an Unrestricted
Subsidiary so long as (i) neither the Company nor any Restricted Subsidiary is
directly or indirectly liable for any Debt of such Subsidiary, (ii) no default
with respect to any Debt of such Subsidiary would permit (upon notice, lapse of
time or otherwise) any holder of any other Debt of the Company or any Restricted
Subsidiary to declare a default on such other Debt or cause the payment thereof
to be accelerated or payable prior to its stated maturity, (iii) any Investment
in such Subsidiary made as a result of designating such Subsidiary an
Unrestricted Subsidiary will not violate the provisions of Section 10.09, (iv)
neither the Company nor any Restricted Subsidiary has a contract, agreement,
arrangement, understanding or obligation of any kind, whether written or oral,
with such Subsidiary on terms other than those that might be obtained at the
time from Persons who are not Affiliates of the Company and (v) neither the
Company nor any Restricted Subsidiary has any obligation to subscribe for
additional shares of Capital Stock or other equity interest in such Subsidiary,
or to maintain or preserve such Subsidiary's financial condition or to cause
such Subsidiary to achieve certain levels of operating results. Notwithstanding
the foregoing, the Company may not designate as an Unrestricted Subsidiary any
Subsidiary which, on the date of this Indenture, is a Significant Subsidiary,
and may not sell, transfer or otherwise dispose of any properties or assets of
any such Significant Subsidiary to an Unrestricted Subsidiary, other than in the
ordinary course of business.
(2) The Board of Directors of the Company may designate any
Unrestricted Subsidiary as a Restricted Subsidiary; provided that such
designation will be deemed to be an Incurrence of Debt by a Restricted
Subsidiary of any outstanding Debt of such Unrestricted Subsidiary and such
designation will only be permitted if (i) such Debt is permitted under Section
10.08 and (ii) no Default or Event of Default would be in existence following
such designation.
SECTION X.19 WAIVER OF CERTAIN COVENANTS.
Except as otherwise provided herein, the Company may omit in any
particular instance to comply with any covenant or condition set forth in
Sections 10.04, to 10.15, inclusive, and Sections 10.17 and 10.18 if before the
time for such compliance the Holders of at least a majority in principal amount
of the Outstanding Securities shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such covenant or
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condition, but no such waiver shall extend to or affect such covenant or
condition except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Company and the duties of the Trustee
in respect of any such covenant or condition shall remain in full force and
effect.
SECTION X.20 PAYMENT FOR CONSENT.
Neither the Company nor any of its Subsidiaries will, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder of any Securities for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of this Indenture or the Securities unless such consideration is offered to be
paid or is paid to all Holders of Securities that consent, waive or agree to
amend in the time period set forth in the solicitation documents relating to
such consent, waiver or agreement.
SECTION X.21 FURTHER INSTRUMENTS AND ACTS
From time to time the Company will, at its own expense and upon
request of the Trustee, execute and deliver or cause to be executed and
delivered such further instruments and do such further acts as may reasonably be
necessary or desirable to carry out the purposes of this Indenture or to secure
the rights and remedies hereunder of the Holders.
SECTION X.22 SUBSIDIARY GUARANTEES
The Company will not (i) permit any of its Restricted Subsidiaries,
directly or indirectly, to Guarantee or secure through the granting of Liens the
payment of any Debt of the Company (other than Debt under or with respect to the
Bank Credit Facilities and Permitted Liens in respect thereof) or (ii) pledge
any intercompany notes representing obligations of any of its Restricted
Subsidiaries to secure the payment of any Debt of the Company (other than Debt
under or with respect to the Bank Credit Facilities and Permitted Liens in
respect thereof), unless such Subsidiary (A) executes a supplemental indenture
evidencing its Guarantee of the Securities or (B) in the case of a grant of a
security interest or the pledge of an intercompany note in a situation which
does not comply with clause (A) above, the holders of the Securities receive a
security interest in the asset to which such security interest relates or such
intercompany note; provided, however, that this provision will not apply to
Guarantees of, or Liens granted to secure, the USAM Notes which Guarantees or
Liens are required to be granted solely and as a direct result of the granting
of Guarantees or Liens with respect to the Bank Credit Facilities.
ARTICLE XI
REDEMPTION OF SECURITIES
SECTION XI.1 RIGHT OF REDEMPTION
(1) The Securities will be redeemable at the election of the Company,
as a whole or from time to time in part, at any time on or after July 1, 2003 on
not less than 30 nor more than 60 days' prior notice, at the Redemption Prices
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specified below (expressed as a percentage of principal amount), together with
accrued interest and Liquidated Damages, if any, to the Redemption Date, if
redeemed during the 12-month period beginning on July 1 of the years indicated
below (subject to the right of holders of record on relevant record dates to
receive interest due on an Interest Payment Date):
YEAR REDEMPTION PRICE
---- ----------------
2003 ..................... 106.375%
2004 ..................... 104.250%
2005 ..................... 102.125%
2006 and thereafter ...... 100.000%
(2) In addition, at any time or from time to time prior to July 1,
2001, the Company may redeem up to an aggregate of 35% of the original aggregate
principal amount of the Securities within 75 days of an Equity Offering with the
net proceeds of such offering at a redemption price equal to 1123/4% of the
principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages, if any, to but excluding the date of redemption; provided that,
immediately after giving effect to such redemption, Securities with an aggregate
principal amount of at least $84,500,000 remain outstanding.
SECTION XI.2 APPLICABILITY OF ARTICLE
Redemption of Securities at the election of the Company or otherwise,
as permitted or required by any provision of this Indenture, shall be made in
accordance with such provision and this Article.
SECTION XI.3 ELECTION TO REDEEM; NOTICE TO TRUSTEE
The election of the Company to redeem any Securities pursuant to
Section 11.01 shall be evidenced by a Board Resolution. In case of any
redemption at the election of the Company of the Outstanding Securities, the
Company shall, at least 60 days prior to the Redemption Date fixed by the
Company (unless a shorter notice shall be satisfactory to the Trustee), notify
the Trustee in writing of such Redemption Date and of the principal amount of
Securities to be redeemed.
SECTION XI.4 SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED
If less than all of the Securities are to be redeemed at any time,
selection of Securities for redemption will be made by the Trustee in compliance
with the requirements of the principal national securities exchange, if any, on
which the Securities are listed, or, if the Securities are not so listed, on a
pro rata basis, by lot or by such method as the Trustee shall deem fair and
appropriate; provided that no Securities of $1,000 principal amount or less
shall be redeemed in part.
The Trustee shall promptly notify the Company and each Security
Registrar in writing of the Securities selected for redemption and, in the case
of any Securities selected for partial redemption, the principal amount thereof
to be redeemed.
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For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.
SECTION XI.5 NOTICE OF REDEMPTION
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at his address appearing in
the Security Register.
All notices of redemption shall identify the Securities to be redeemed
(including CUSIP Numbers) and shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities are to be
redeemed, the identification (and, in the case of partial redemption of any
Securities, the principal amounts) of the particular Securities to be
redeemed,
(4) that on the Redemption Date the Redemption Price will become
due and payable upon each such Security to be redeemed and that, unless the
Company defaults on the payment of the Redemption Price, interest and
Liquidated Damages, if any, thereon will cease to accrue on and after said
date, and
(5) the place or places where such Securities are to be
surrendered for payment of the Redemption Price.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company; provided that the Company
has given the Trustee written notice of the Redemption Date and Redemption Price
at least 15 days prior to the date that such notice of redemption must be given
to the Holders.
SECTION XI.6 DEPOSIT OF REDEMPTION PRICE
One Business Day prior to any Redemption Date, the Company shall
deposit with the Trustee or with a Paying Agent (or, if the Company is acting as
its own Paying Agent, segregate and hold in trust as provided in Section 10.03)
an amount of money sufficient to pay the Redemption Price of, and (except if the
Redemption Date shall be an Interest Payment Date) accrued interest on, all the
Securities which are to be redeemed on that date.
SECTION XI.7 SECURITIES PAYABLE ON REDEMPTION DATE
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Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date: provided, however, that installments of interest whose
Stated Maturity is on or prior to the Redemption Date shall be payable to the
Holders of such Securities, registered as such at the close of business on the
relevant Record Dates according to their terms and the provisions of Section
3.07.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate borne by the
Security.
SECTION XI.8 SECURITIES REDEEMED IN PART
Any Security which is to be redeemed only in part shall be surrendered
at an office or agency of the Company designated for that purpose pursuant to
Section 10.02 (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or his attorney duly authorized
in writing), and the Company shall execute, and the Trustee shall authenticate
and deliver to the Holder of such Security, without service charge to the
Holder, a new Security or Securities, of any authorized denomination as
requested by such Holder, in aggregate principal amount equal to and in exchange
for the unredeemed portion of the principal of the Security so surrendered.
ARTICLE XII
DEFEASANCE
SECTION XII.1 COMPANY'S OPTION TO EFFECT DEFEASANCE OR COVENANT DEFEASANCE.
The Company may at its option by Board Resolution, at any time, elect
to have either Section 12.02 or Section 12.03 applied to the Outstanding
Securities upon compliance with the conditions set forth below in this Article
Twelve.
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SECTION XII.2 DEFEASANCE AND DISCHARGE
Upon the Company's exercise of the option provided in Section 12.01
applicable to this Section, the Company shall be deemed to have paid and
discharged its obligations with respect to the Outstanding Securities on the
date the conditions set forth below are satisfied (hereinafter, "defeasance").
For this purpose, such defeasance means that the Company shall be deemed to have
paid and discharged the entire Debt represented by the Outstanding Securities
and to have satisfied all its other obligations under such Securities and this
Indenture insofar as such Securities are concerned (and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging the
same), except for the following which shall survive until otherwise terminated
or discharged hereunder: (A) the rights of Holders of Outstanding Securities to
receive, solely from the trust fund described in Section 12.04 and as more fully
set forth in such Section, payments in respect of the principal of (and premium
and Liquidated Damages, if any) and interest on such Securities when such
payments are due, (B) the Company's obligations with respect to such Securities
under Sections 2.02, 3.05, 10.02 and 10.03, (C) the rights, powers, trusts,
duties and immunities of the Trustee hereunder (including, without limitation,
the obligations of the Company under Section 6.07) and (D) this Article Twelve.
Subject to compliance with this Article Twelve, the Company may exercise its
option under this Section 12.02 notwithstanding the prior exercise of its option
under Section 12.03.
SECTION XII.3 COVENANT DEFEASANCE
Upon the Company's exercise of the option provided in Section 12.01
applicable to this Section, (i) the Company shall be released from its
obligations under Sections 10.05 through 10.15 inclusive, Section 10.17 and
Section 10.18, and (ii) the occurrence of an event specified in Section 501(c),
Section 501(d) (with respect to Sections 10.05 through 10.15, inclusive, Section
10.17, and Section 10.18), Sections 5.01(e), 5.01(f) and 5.01(g) shall not be
deemed to be an Event of Default, on and after the date the conditions set forth
below are satisfied (hereinafter, "covenant defeasance"). For this purpose, such
covenant defeasance means that the Company may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
any such Section or Article, whether directly or indirectly by reason of any
reference elsewhere herein to any such Section or Article or by reason of any
reference in any such Section or Article to any other provision herein or in any
other document, but the remainder of this Indenture and such Securities shall be
unaffected thereby.
SECTION XII.4 CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE
The following shall be the conditions to application of either Section
12.02 or Section 12.03 to the Outstanding Securities:
(i) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or, at the option of the Trustee, another trustee
satisfying the requirements of Section 6.09 who shall agree to comply with the
provisions of this Article Twelve applicable to it) as trust funds in trust,
specifically pledged as security for, and dedicated solely to, the benefit of
the Holders of such Securities, (A) money in an amount, or (B) U.S. Government
Obligations which through the scheduled payment of principal and interest in
respect thereof will provide money in an amount, or (C) a combination thereof,
sufficient, in the opinion of a nationally recognized firm of independent public
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accountants to pay and discharge, the principal of, premium, if any, and
interest on the outstanding Securities on the Stated Maturity (or upon
redemption, if applicable), of such principal or installment of interest on the
day on which such payments are due and payable in accordance with the terms of
this Indenture and of such Securities. For this purpose, "U.S. Government
Obligations" means direct obligations of, obligations fully guaranteed by, or
participations in pools consisting solely of obligations of or obligations fully
guaranteed by, the United States of America for the payment of which guarantee
or obligations the full faith and credit of the United States of America is
pledged and which are not callable or redeemable at the option of the isuuer
thereof.
(ii) No Event of Default or Default shall have occurred and be
continuing on the date of such deposit or, insofar as subsections 5.01(h) and
(i) are concerned, at any time during the period ending on the 91st day after
the date of such deposit (it being understood that this condition shall not be
deemed satisfied until the expiration of such period).
(iii) Such defeasance or covenant defeasance shall not cause the
Trustee (or such other qualifying trustee, if any) to have a conflicting
interest as defined in Section 6.08 and for purposes of the Trust Indenture Act
with respect to any securities of the Company.
(iv) Such defeasance or covenant defeasance shall not (x) result in a
breach or violation of, or constitute a default under, any material agreement or
instrument to which the Company is a party or by which it is bound or (y) cause
the Trustee (or such other qualifying trustee, if any) or the trust so created
to be subject to the Investment Company Act of 1940.
(v) In the case of defeasance, the Company shall have delivered to the
Trustee (and such other qualifying trustee, if any) an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent provided for
relating to either the defeasance under Section 12.02 or the covenant defeasance
under Section 12.03 (as the case may be) have been complied with.
(vi) In the case of an election under Section 12.02, the Company shall
have delivered to the Trustee (and such other qualifying trustee, if any) an
Opinion of Counsel stating that (x) the Company has received a ruling from the
Internal Revenue Service or (y) since the date of this Indenture there has been
a change in the applicable Federal income tax law or there has been published by
the Internal Revenue Service a document that may be used or cited as precedent,
in either case (x) or (y) to the effect that, and based thereon such opinion
shall confirm that, the Holders of the Outstanding Securities will not recognize
income, gain or loss for Federal income tax purposes as a result of such
defeasance and will be subject to Federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such defeasance
had not occurred.
(vii) In the case of an election under Section 12.03, the Company
shall have delivered to the Trustee (and such other qualifying trustee, if any)
an Opinion of Counsel to the effect that the Holders of the outstanding
securities will not recognize income, gain or loss for Federal income tax
purposes as a result of such deposit and covenant defeasance and will be subject
to Federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such deposit and covenant defeasance had
not occurred.
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SECTION XII.5 DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS
Subject to the provisions of the last paragraph of Section 10.03, all
money and Government Securities (including the proceeds thereof) deposited with
the Trustee (or other qualifying trustee -- collectively, for purposes of this
Section 12.05 and Section 12.06, the Trustee") pursuant to Section 12.04 in
respect of the Securities shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Holders of
such Securities, of all sums due and to become due thereon in respect of
principal (and premium, and Liquidated Damages, if any) and interest, but such
money need not be segregated from other funds except to the extent required by
law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the Government Securities
deposited pursuant to Section 12.04 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of the Outstanding Securities.
Anything in this Article Twelve to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or Government Securities held by it as provided in Section
12.04 which, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount thereof which would then be required to be
deposited to effect an equivalent defeasance or covenant defeasance.
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SECTION XII.6 REINSTATEMENT
If the Trustee or the Paying Agent is unable to apply any money in
accordance with Section 12.02 or 12.03 by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Company's obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to this Article Twelve until such time as the Trustee or Paying Agent
is permitted to apply all such money in accordance with Section 12.02 or 12.03;
provided, however, that if the Company makes any payment of principal of (and
premium, and Liquidated Damages, if any) or interest on any Security following
the reinstatement of its obligations, the Company shall be subrogated to the
rights of the Holders of such Securities to receive such payment from the money
held by the Trustee or the Paying Agent.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the date first written above.
ARCH COMMUNICATIONS, INC.
By:
By:
U.S. BANK TRUST NATIONAL ASSOCIATION
By:
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EXHIBITS
Exhibit A - Form of Security
Exhibit B - Transfer Form
Exhibit C - Form of Purchaser Letter
EXHIBIT 4.2
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND
RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS
OF SERIES C CONVERTIBLE PREFERRED STOCK OF
ARCH COMMUNICATIONS GROUP, INC.
Pursuant to Section 151 of the
Delaware General Corporation Law
Arch Communications Group, Inc., a Delaware corporation (the "Corporation),
pursuant to Section 151(g) of the General Corporation Law of the State of
Delaware, files this Certificate of Designations setting forth a copy of a
resolution duly adopted by the Board of Directors of the Corporation, which
resolution remains in full force and effect as of the date hereof, to establish
the voting powers, designations, preferences and rights of 250,000 shares of the
authorized Preferred Stock of the Corporation pursuant to authority expressly
vested in the Board of Directors by Article Fourth of the Restated Certificate
of Incorporation of the Corporation:
WHEREAS, the Board of Directors of the Corporation is authorized,
within the limitations and restrictions stated in the Restated Certificate
of Incorporation, to fix by resolution or resolutions the designation of
one or more series of the Corporation's Preferred Stock, $0.01 par value
per share, and the powers, preferences and relative, participating,
optional or other special rights and qualifications, limitations or
restrictions thereof, including, without limiting the generality of the
foregoing, such provisions as may be desired concerning voting, redemption,
dividends, dissolution or the distribution of assets, conversion or
exchange, and other subjects or matters as may be fixed by resolution or
resolutions of the Board of Directors under the General Corporation Law of
the State of Delaware; and
WHEREAS, it is the desire of the Board of Directors of the
Corporation, pursuant to its authority as aforesaid, to authorize and fix
the terms of a series of preferred stock and the number of shares
constituting such series;
NOW, THEREFORE, BE IT
RESOLVED, that the Board of Directors does create, authorize and
provide for the issuance of a series of the Corporation's Preferred Stock,
$0.01 par value per share, consisting of 250,000 shares of the authorized
Preferred Stock of the Corporation, with the voting powers, designations,
preferences and rights specified below:
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Section 1. DESIGNATIONS. Two hundred fifty thousand (250,000) shares of the
Corporation's Preferred Stock shall be designated as "Series C Convertible
Preferred Stock." The Series C Convertible Preferred Stock (the "Series C
Preferred Stock") shall sometimes be referred to herein with the Corporation's
existing Series A Preferred Stock and Series B Junior Participating Preferred
Stock, collectively, as the "Preferred Stock."
Section 2. DIVIDENDS.
(a) PRIORITY OF DIVIDENDS. Subject to the rights of series of
authorized Preferred Stock which may from time to time come into existence after
the date hereof, no dividends shall be declared or set aside for the
Corporation's Common Stock, par value $0.01 per share (the "Common Stock"), or
any class or series of securities junior in rank to the Series C Preferred
Stock, including the Corporation's existing Series A Preferred Stock and Series
B Junior Participating Preferred Stock (together with the Common Stock, the
"Junior Stock"), unless prior thereto all accrued and unpaid dividends on the
Series C Preferred Stock shall be declared, set aside and paid on all of the
then outstanding shares of Series C Preferred Stock. In the event that, after
declaration of a cash dividend on the Series C Preferred Stock, funds legally
available for distribution on any Dividend Payment Date (as defined in Section
2(b)) are insufficient to fully pay the cash dividend due and payable on such
Dividend Payment Date to all holders of outstanding Series C Preferred Stock,
then all funds legally available for distribution shall be paid in cash to
holders of Series C Preferred Stock in accordance with the number of shares of
Series C Preferred Stock held by each such holder. Any remaining dividend amount
owed to holders of the Series C Preferred Stock shall be accrued in accordance
with Section 2(b). Alternatively, at the Corporation's option, dividends shall
be payable in the form of the Stock Dividend (as defined in Section 2(b)).
The Corporation shall not declare or pay any dividends or distributions on,
or redeem, repurchase, accept or otherwise acquire for value, any shares of
Junior Stock or any class or series of securities equal in rank to the Series C
Preferred Stock ("Parity Stock") hereinafter issued by the Corporation (any of
the foregoing, a "Restricted Payment") if all accrued and unpaid dividends on
all the then outstanding shares of Series C Preferred Stock have not been paid
in full, unless the Corporation shall have first offered, and provided evidence
of its ability to pay, in cash, to the holders of the Series C Preferred Stock
all such dividends on the Series C Preferred Stock. The holders of a majority of
the then outstanding shares of Series C Preferred Stock may accept or reject
such offer in their sole discretion, which decision shall be binding upon all
holders of Series C Preferred. If such offer is made, the Corporation may make
such Restricted Payment, and in the case of any Restricted Payment in the form
of a dividend or distribution payable with respect to shares of Common Stock,
the holders of the outstanding Series C Preferred Stock shall be entitled,
ratably in proportion to the shares of Common Stock into which such Series C
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Preferred Stock could then be converted, to participate therein (to the extent
the holders of Common Stock have a right to participate in any such dividend or
distribution). Notwithstanding the foregoing, the foregoing provisions of
Section 2(a) shall not apply in the event the Corporation shall dividend or
otherwise distribute rights to all holders of Common Stock entitling the holders
thereof to subscribe for or purchase shares of capital stock of the Corporation,
which rights (i) until the occurrence of a specified event or events are deemed
to be transferred with such shares of Common Stock and are not exercisable and
(ii) are issued in respect of future issuances of Common Stock ("Rights"). In
such event, the holders of shares of Series C Preferred Stock shall be entitled
to receive any such Rights ratably in proportion to the shares of Common Stock
into which such Series C Preferred Stock could be converted or shall receive
such Rights upon any conversion of the Series C Preferred Stock into shares of
Common Stock no later than the date such Rights separate from the Common Stock
or otherwise become exercisable (the "Distribution Date"), in each case to the
extent such Rights have not been redeemed, terminated or otherwise have expired.
(b) DIVIDEND RATE; FORM OF DIVIDEND PAYMENT; DIVIDEND PAYMENT DATES.
Each holder of the Series C Preferred Stock shall be entitled to receive when,
as and if declared by the Board of Directors, out of funds legally available
therefor, cumulative cash dividends, in preference and priority to dividends on
any Junior Stock, that shall accrue on the Liquidation Price (as defined in
Section 3(a)) of each share of the Series C Preferred Stock at the rate of eight
percent (8%) per annum, from and including the date on which Series C Preferred
Stock was first issued (the "Original Issue Date") to and including the date on
which the Liquidation Price of such share is paid in full to the holder of such
share pursuant to Section 3. At the Corporation's option, so long as shares of
the Common Stock remain listed on the Nasdaq National Market ("NNM") (or a
national securities exchange where the Common Stock may then be listed),
dividends may be paid in fully registered, fully paid and nonassessable shares
of the Common Stock with a value equal to the dividend amount (the "Stock
Dividend"). As used herein, "fully registered" shares of Common Stock may
include shares of Common Stock with respect to which the Corporation has filed a
registration statement with the Securities and Exchange Commission for the
resale of such shares by the holders thereof and which registration statement
remains effective and as to which such holders would otherwise be permitted to
effect the resale of such shares under applicable federal and state securities
laws. For purposes of payment, the value of the Common Stock shall be deemed to
be equal to 95% of the Market Price (as hereinafter defined) for the ten (10)
trading days immediately preceding the corresponding Dividend Payment Date (as
hereinafter defined). If any fractional share of the Common Stock would be
issuable in payment of any dividend on any share of the Series C Preferred
Stock, the Corporation shall make a cash payment for such portion of the
dividend in lieu of fractional shares of the Common Stock. The accrued
dividends, in either form, will be adjusted for stock splits, stock dividends,
recapitalizations, reclassifications and similar events (together referred to as
"Recapitalization Events") which affect the number of outstanding shares of the
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Series C Preferred Stock. Accrued dividends on the Series C Preferred Stock
shall be payable out of funds legally available therefor on March 31, June 30,
September 30 and December 31 of each year (each a "Dividend Payment Date"),
commencing on September 30, 1998, to the holders of record of the Series C
Preferred Stock as of the close of business on the applicable record date.
Dividends shall be fully cumulative and shall accrue on a daily basis based on a
365- day or 366-day year, as the case may be, without regard to the occurrence
of a Dividend Payment Date and whether or not such dividends have been declared
and whether or not there are any unrestricted funds of the Corporation legally
available for the payment of dividends. The amount of dividends "accrued" with
respect to any share of Series C Preferred Stock as of the first Dividend
Payment Date after the Original Issue Date, or as of any other date after the
Original Issue Date that is not a Dividend Payment Date, shall be calculated on
the basis of the actual number of days elapsed from and including the Original
Issue Date, in the case of the first Dividend Payment Date and any date of
determination prior to the first Dividend Payment Date, or from and including
the last preceding Dividend Payment Date, in the case of any other date of
determination, to and including such date of determination which is to be made,
in each case based on a year of 365 or 366 days, as the case may be (the
"Dividend Period"). Whenever the Board of Directors of the Corporation declares
any dividend pursuant to this Section 2, notice of the applicable record date
and related Dividend Payment Date shall be given.
As used herein, the "Market Price" of the Common Stock at any date
shall mean the closing price per share of Common Stock on such date, as
officially reported by NNM or such other national securities exchange where the
Common Stock may then be listed, and, when used with reference to shares of
Common Stock for any period shall mean the average of the daily closing prices
per share of Common Stock for such period. The closing price for each day shall
be the last quoted sale price or, if not so quoted, the average of the high bid
and low asked prices in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotation System or such other
system then in use.
(c) COMPOUNDING OF DIVIDENDS; ADDITION TO LIQUIDATION PRICE. On each
Dividend Payment Date, all dividends that have accrued on each share of Series C
Preferred Stock during the immediately preceding Dividend Period shall, to the
extent not paid on such Dividend Payment Date for any reason (whether or not
such unpaid dividends have been earned or declared or there are any unrestricted
funds of the Corporation legally available for the payment of dividends), be
added to the Liquidation Price of such share effective as of such Dividend
Payment Date and shall remain a part thereof to and including the date on which
the Liquidation Price of such share is paid in full to the holder of such share
pursuant to Section 3.
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(d) PRO RATA DECLARATION AND PAYMENT OF DIVIDENDS. All dividends paid
with respect to shares of the Series C Preferred Stock pursuant to this Section
2 shall be declared and paid PRO RATA to all the holders of the shares of Series
C Preferred Stock outstanding as of the applicable record date.
Section 3. LIQUIDATION, DISSOLUTION OR WINDING UP.
(a) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
(each such event, a "Liquidation"), except as provided in Section 3(b) below,
subject to the rights of series of authorized Preferred Stock that may from time
to time come into existence, the holders of shares of Series C Preferred Stock
then outstanding shall be entitled, ratably in proportion to the shares of the
Series C Preferred Stock held by such holders, to be paid out of the assets of
the Corporation available for distribution to its stockholders before payment to
the holders of Junior Stock, and PARI PASSU with Parity Stock, if any, by reason
of their ownership thereof, an amount equal to (A) (i) $100.00 per share of the
Series C Preferred Stock (subject to appropriate adjustment for any
Recapitalization Events), plus (ii) an amount equal to all dividends accrued on
such share of the Series C Preferred Stock since the Original Issue Date thereof
which, pursuant to Section 2(c), have been added to and remain part of the
Liquidation Price as of such time of determination, whether or not such unpaid
dividends have been earned or declared or there are any unrestricted funds of
the Corporation legally available for the payment of dividends, plus (iii) an
amount equal to all accrued and unpaid dividends accrued on such share of the
Series C Preferred Stock during the period from the immediately preceding
Dividend Payment Date through and including the determination date (the
"Liquidation Price").
(b) If upon any such Liquidation the remaining assets of the
Corporation available for distribution to its stockholders shall be insufficient
to pay the holders of shares of Series C Preferred Stock the full amount to
which they shall be entitled, then the entire assets of the Corporation shall be
distributed among the holders of shares of Series C Preferred Stock ratably in
proportion to the shares of Series C Preferred Stock held by such holders.
(c) After the payment of all preferential amounts required to be paid
to the holders of Series C Preferred Stock, upon the Liquidation of the
Corporation, the holders of shares of Junior Stock then outstanding shall be
entitled to receive the remaining assets and funds of the Corporation available
for distribution to its stockholders.
Section 4. VOTING RIGHTS.
(a) The holder of each share of Series C Preferred Stock shall have
the right to one vote for each share of Common Stock into which such Series C
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Preferred Stock could then be converted, and with respect to such vote, such
holder shall have full voting rights and powers equal to the voting rights and
powers of the holders of Common Stock and shall be entitled, notwithstanding any
provision hereof, to notice of any stockholders' meeting in accordance with the
bylaws of the Corporation and shall be entitled to vote, together with holders
of Common Stock, with respect to any questions upon which holders of Common
Stock have the right to vote. Notwithstanding the foregoing, with respect to the
election of directors, so long as at least 50% of the shares of Series C
Preferred Stock issued as of the Original Issue Date (as appropriately adjusted
for Recapitalization Events) are outstanding, the holders of the Series C
Preferred Stock, voting as a separate class (and without the voting
participation of holders of other shares of capital stock of the Corporation)
shall be entitled to elect one member of the Board of Directors. Such member
shall have the right to be a member of any committee of the Corporation's Board
of Directors.
(b) Subject to the rights of series of authorized Preferred Stock
which may from time to time come into existence, so long as any shares of Series
C Preferred Stock are outstanding, the Corporation shall not without first
obtaining the approval (by vote or written consent, as provided by law) of the
holders of a majority of the then outstanding shares of Series C Preferred
Stock, voting together as a single class:
(i) authorize, increase the authorized number of shares of, or
issue, any shares of any class or series of capital stock of the Corporation
ranking prior to or, so long as at least 50% of the shares of Series C Preferred
Stock issued as of the Original Issue Date (as appropriately adjusted for
Recapitalization Events) remain outstanding, on a parity with the Series C
Preferred Stock;
(ii) increase the authorized number of shares of, or issue any
shares of Series C Preferred Stock;
(iii) authorize, adopt or approve an amendment to the Restated
Certificate of Incorporation of the Corporation which would decrease the
aggregate number of authorized shares of Series C Preferred Stock below the
number then outstanding, or alter or change the powers, preferences or special
rights of the shares of Series C Preferred Stock so as to affect such shares of
Series C Preferred Stock adversely; or
(iv) reclassify any shares of Common Stock or any other shares of
any class or series of capital stock of the Company into shares ranking prior to
or, so long as at least 50% of the shares of Series C Preferred Stock issued as
of the Original Issue Date (as appropriately adjusted for Recapitalization
Events) remain outstanding, on a parity with the Series C Preferred Stock.
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(c) In addition to the matters described in Section 4(b) above, at any
time prior to the third anniversary of the Original Issue Date, the Corporation
shall not participate in any merger or consolidation in which its outstanding
securities are converted into securities, cash or other property, or sell all or
substantially all of its assets (each of the foregoing, a "Transaction") without
the prior written consent or affirmative vote of stockholders representing at
least a majority of the then outstanding shares of Series C Preferred Stock
voting as a single class; provided, however, that such prior written consent or
affirmative vote of stockholders representing such shares of Series C Preferred
Stock shall not be required if the conditions in any of the following paragraphs
(i), (ii) or (iii) below are satisfied:
(i) In the event that at least 50% of the total value of the
consideration being issued or paid to the Corporation or its stockholders in the
Transaction consists of cash (as determined in good faith by the Corporation's
Board of Directors), the consideration payable to each holder of Series C
Preferred Stock in connection with such Transaction, either (A) with respect to
(and in cancellation of) each share of Series C Preferred Stock or (B) on an "as
converted" basis with respect to the Common Stock underlying such share of
Series C Preferred Stock, shall be an amount that is not less than the greater
of (i) $150.00 or (ii) an amount sufficient to result in a compounded internal
rate of return of at least 30% (as measured from the Original Issue Date on the
basis of an initial investment of $100.00 per share of Series C Preferred
Stock); provided, however, that the foregoing condition is not intended to limit
the amount that such holder of Series C Preferred Stock would otherwise be
entitled to receive on an "as converted" basis in connection with such
Transaction.
(ii) In the event that less than 50% of the total value of the
consideration being issued or paid to the Corporation or its stockholders in the
Transaction consists of cash (as determined in good faith by the Corporation's
Board of Directors), (A) the Series C Preferred Stock shall be assumed by the
surviving entity or transferee entity (the "Successor") and (B) the Successor
shall have and maintain a ratio of total consolidated debt (including preferred
stock) to total consolidated operating cash flow (last quarter annualized) that
shall not exceed 6.5:1 (as determined in good faith by the Chief Financial
Officer of the Successor using generally accepted accounting principles
consistently applied).
(iii) In the event that the conditions specified in the foregoing
paragraphs (i) or (ii), as applicable, are not satisfied with respect to a
particular Transaction, the Corporation has offered, at its election, to
redeem/convert the Series C Preferred Stock by paying or causing to be paid to
each holder of Series C Preferred Stock, concurrently with the consummation of
such Transaction, an amount payable in cash with respect to (and in cancellation
of) each share of Series C Preferred Stock that is equal to the greater of (i)
$150.00 or (ii) an amount sufficient to result in a compounded internal rate of
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return of at least 30% (as measured from the Original Issue Date on the basis of
an initial investment of $100.00 per share of Series C Preferred Stock).
Section 5. CONVERSION. The holders of the Series C Preferred Stock shall
have conversion rights as follows (the "Conversion Rights"):
(a) RIGHT TO CONVERT. Each holder of Series C Preferred Stock shall
have the right to convert each share of Series C Preferred Stock, at the option
of such holder, at any time, into such number of fully paid and nonassessable
shares of Common Stock as is determined by dividing the Liquidation Price (as
defined in Section 2(a)) by the Conversion Price (as defined hereinafter) per
share in effect at the time of such conversion.
The Conversion Price per share for the Series C Preferred Stock shall
initially be $5.50. Such initial Conversion Price shall be subject to adjustment
as hereinafter provided.
(b) MANDATORY CONVERSION. The Corporation shall have the right to
cause the conversion of all of the shares of the Series C Preferred Stock on and
after the third anniversary of the Original Issue Date of the Series C Preferred
Stock into such number of fully paid and nonassessable shares of the Common
Stock as is calculable under Section 5(a); PROVIDED, HOWEVER, that the
Corporation may not exercise such conversion right unless the weighted average
(by daily trading volume) closing price per share of Common Stock for a period
of thirty (30) consecutive trading days immediately prior to such mandatory
conversion is greater than 200% of the Conversion Price. In no event shall the
Corporation cause the conversion of any Series C Preferred Stock at any time
prior to the third anniversary of the Original Issue Date of the Series C
Preferred Stock.
(c) MECHANICS OF CONVERSION. No fractional shares of Common Stock
shall be issued upon conversion of the Series C Preferred Stock. In lieu of any
fractional share to which a holder would otherwise be entitled, the Corporation
shall pay cash equal to such fraction multiplied by the Market Price (as
hereinafter defined) per share of Common Stock on the date immediately preceding
the conversion date. Before any holder of Series C Preferred Stock shall be
entitled to convert the same into shares of Common Stock, such holder shall
surrender the certificate or certificates therefor, duly endorsed, at the office
of the Corporation or of any transfer agent for the Series C Preferred Stock,
and shall give written notice to the Corporation at its principal corporate
office, of the election to convert the same and shall state therein the name or
names in which the certificate or certificates for shares of Common Stock are to
be issued. If upon such conversion the holders of Series C Preferred Stock have
received any Rights and such conversion takes place prior to the Distribution
Date with respect to such Rights, such holder shall also surrender such Rights
upon such conversion. The Corporation shall, as soon as practicable thereafter,
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issue and deliver at such office to such holder of Series C Preferred Stock, or
to the nominee or nominees of such holder, a certificate or certificates for the
number of shares of Common Stock to which such holder shall be entitled as
aforesaid. Such conversion shall be deemed to have been made immediately prior
to the close of business on the date of such surrender of the shares of Series C
Preferred Stock to be converted, and the person or persons entitled to receive
the shares of Common Stock issuable upon such conversion shall be treated for
all purposes as the record holder or holders of such shares of Common Stock as
of such date. If the conversion is in connection with an underwritten offering
of securities registered pursuant to the Securities Act of 1933, as amended, the
conversion may, at the option of any holder tendering Series C Preferred Stock
for conversion, be conditioned upon the closing with the underwriters of the
sale of securities pursuant to such offering, in which event the person(s)
entitled to receive Common Stock upon conversion of such Series C Preferred
Stock shall not be deemed to have converted such Series C Preferred Stock until
immediately prior to the closing of such sale of securities.
(d) ADJUSTMENTS TO CONVERSION PRICE FOR DILUTING ISSUES.
(i) SPECIAL DEFINITIONS. For purposes of this Section 5, the
following definitions shall apply:
(A) "OPTIONS" shall mean rights, options or warrants to
subscribe for, purchase or otherwise acquire either Common Stock or Convertible
Securities.
(B) "CONVERTIBLE SECURITIES" shall mean any evidences of
indebtedness, shares (other than Common Stock and Preferred Stock) or other
securities convertible into or exchangeable for Common Stock.
(C) "ADDITIONAL SHARES OF COMMON STOCK" shall mean all
shares of Common Stock issued (or, pursuant to paragraph 5(c)(iii), deemed to be
issued) by the Corporation after the Original Issue Date, other than shares of
Common Stock issued or issuable:
(1) in connection with the acquisition of the capital
stock of Page Call, Inc. by Benbow PCS Ventures, Inc. (the "Page Call
Transaction");
(2) upon conversion of any shares of Series C Preferred
Stock;
(3) to employees, officers or directors of, or
consultants to, the Corporation pursuant to a stock grant, option plan, purchase
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plan or other employee stock incentive program (collectively, the "Plans") or
any other agreement with any third parties so long as any such Plans or
agreements are approved by the Corporation's Board of Directors;
(4) as a dividend or distribution on Series C Preferred
Stock;
(5) by way of dividend or other distribution on shares
of Common Stock excluded from the definition of Additional Shares of Common
Stock by the foregoing clauses (1), (2), (3) and (4) or on shares of Common
Stock so excluded; or
(6) by way of adjustments made pursuant to Section
5(e).
(ii) NO ADJUSTMENT OF CONVERSION PRICE. No adjustment in the
Conversion Price of Series C Preferred Stock shall be made in respect of the
issuance of Additional Shares of Common Stock unless the consideration per share
for an Additional Share of Common Stock issued or deemed to be issued by the
Corporation is less than the Market Price on the date of, and immediately prior,
to such issue.
(iii) DEEMED ISSUE OF ADDITIONAL SHARES OF COMMON STOCK.
(A) OPTIONS AND CONVERTIBLE SECURITIES. In the event the
Corporation at any time or from time to time after the Original Issue Date shall
issue any Options or Convertible Securities or shall fix a record date for the
determination of holders of any class of securities entitled to receive any such
Options or Convertible Securities, then the maximum number of shares (as set
forth in the instrument relating thereto without regard to any provisions
contained therein for a subsequent adjustment of such number) of Common Stock
issuable upon the exercise of such Options or, in the case of Convertible
Securities and Options therefor, the conversion or exchange of such Convertible
Securities, shall be deemed to be Additional Shares of Common Stock issued as of
the time of such issue or, in case such a record date shall have been fixed, as
of the close of business on such record date, provided that Additional Shares of
Common Stock shall not be deemed to have been issued unless the consideration
per share (determined pursuant to Section 5(d)(v) hereof) of such Additional
Shares of Common Stock would be less than the Market Price on the date of and
immediately prior to such issue, or such record date, as the case may be, and
provided further that in any such case in which Additional Shares of Common
Stock are deemed to be issued:
(1) no further adjustment in the Conversion Price shall
be made upon the subsequent issue of Convertible Securities or shares of Common
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Stock upon the exercise of such Options or conversion or exchange of such
Convertible Securities;
(2) if such Options or Convertible Securities by their
terms provide, with the passage of time or otherwise, for any increase in the
consideration payable to the Corporation, or decrease in the number of shares of
Common Stock issuable, upon the exercise, conversion or exchange thereof, the
Conversion Price computed upon the original issue thereof (or upon the
occurrence of a record date with respect thereto), and any subsequent
adjustments based thereon, shall, upon any such increase or decrease becoming
effective, be recomputed to reflect such increase or decrease insofar as it
affects such Options or the rights of conversion or exchange under such
Convertible Securities; and
(3) on the expiration or cancellation of any Options or
the termination of the right to convert or exchange any Convertible Securities
which shall have not been exercised, if the Conversion Price shall have been
adjusted upon the original issuance thereof or shall have been subsequently
adjusted pursuant to clause (2) above, the Conversion Price shall be recomputed
as if:
a) in the case of Convertible Securities or
Options for Common Stock, the only Additional Shares of Common Stock issued were
shares of Common Stock, if any, actually issued upon the exercise of such
Options or the conversion or exchange of such Convertible Securities, and the
consideration received therefor was the consideration actually received by the
Corporation for the issue of all such Options, whether or not exercised, plus
the consideration actually received by the Corporation upon such exercise, or
for the issue of all such Convertible Securities which were actually converted
or exchanged plus the consideration actually received by the Corporation upon
such conversion or exchange, if any, and
b) in the case of Options for Convertible
Securities, only the Convertible Securities, if any, actually issued upon the
exercise thereof were issued at the time of issue of such Options and the
consideration received by the Corporation for the Additional Shares of Common
Stock deemed to have been then issued was the consideration actually received by
the Corporation for the issue of all such Options, whether or not exercised,
plus the consideration deemed to have been received by the Corporation
(determined pursuant to Section 5(d)(v))upon the issue of the Convertible
Securities with respect to which such Options were actually exercised;
(4) no readjustment pursuant to clause (2) or (3) above
shall have the effect of increasing the Conversion Price to an amount which
exceeds the lower of (i) the Conversion Price on the original adjustment date,
or (ii) the Conversion Price that would have resulted from any issuance of
Additional Shares of Common Stock between the original adjustment date and such
readjustment date.
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(iv) ADJUSTMENT OF CONVERSION PRICE UPON ISSUANCE OF ADDITIONAL
SHARES OF COMMON STOCK. In the event the Corporation shall issue Additional
Shares of Common Stock (including Additional Shares of Common Stock deemed to be
issued pursuant to Section 5(d)(iii)) without consideration or for a
consideration per share less than the Market Price on the date of and
immediately prior to such issuance, then and in such event, the Conversion Price
of the Series C Preferred Stock shall be reduced, concurrently with such
issuance, (A) to a price (calculated to the nearest full cent) determined by
multiplying the Conversion Price by a fraction (x) the numerator of which shall
be the sum of (1) the number of shares of Common Stock outstanding immediately
prior to such issuance, plus (2) the number of shares of Common Stock which the
aggregate consideration received by the Corporation for the total number of
Additional Shares of Common Stock so issued would purchase at the Conversion
Price; and (y) the denominator of which shall be (1) the number of shares of
Common Stock outstanding immediately prior to such issue, plus (2) the number of
such Additional Shares of Common Stock so issued; and provided further that, for
the purposes of this Section 5(d)(iv), all shares of Common Stock issuable upon
(i) conversion of all outstanding Preferred Stock, (ii) conversion of all
outstanding Convertible Securities and (iii) upon exercise of all outstanding
Options, shall be deemed to be outstanding, and immediately after any Additional
Shares of Common Stock are deemed issued pursuant to Section 5(c)(iii), such
Additional Shares of Common Stock shall be deemed to be outstanding.
(v) DETERMINATION OF CONSIDERATION. For purposes of this Section
5(c), the consideration received by the Corporation for the issue of any
Additional Shares of Common Stock shall be computed as follows:
(A) CASH AND PROPERTY. Such consideration shall:
(1) insofar as it consists of cash, be computed as the
aggregate amount of cash received by the Corporation;
(2) insofar as it consists of property other than cash,
be computed at the fair value thereof at the time of such issue, as determined
in good faith by the Board of Directors; and
(3) in the event Additional Shares of Common Stock are
issued together with other shares or securities or other assets of the
Corporation for consideration which covers both, be the proportion of such
consideration so received, computed as provided in clauses (1) and (2) above, as
determined in good faith by the Board of Directors.
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(B) OPTIONS AND CONVERTIBLE SECURITIES. The consideration
per share received by the Corporation for Additional Shares of Common Stock
deemed to have been issued pursuant to Section 5(c)(iii), relating to Options
and Convertible Securities, shall be determined by dividing
(x) the total amount, if any, received or receivable by
the Corporation as consideration for the issue of such Options or Convertible
Securities, plus the minimum aggregate amount of additional consideration (as
set forth in the instruments relating thereto, without regard to any provision
contained therein for a subsequent adjustment of such consideration) payable to
the Corporation upon the exercise of such Options or the conversion or exchange
of such Convertible Securities, or in the case of Options for Convertible
Securities, the exercise of such Options for Convertible Securities and the
conversion or exchange of such Convertible Securities by
(y) the maximum number of shares of Common Stock (as
set forth in the instruments relating thereto, without regard to any provision
contained therein for a subsequent adjustment of such number) issuable upon the
exercise of such Options or the conversion or exchange of such Convertible
Securities.
(e) ADJUSTMENTS FOR STOCK DIVIDENDS, SUBDIVISIONS, COMBINATIONS OR
CONSOLIDATIONS. In the event the Corporation shall pay a stock dividend on the
Common Stock, or the outstanding shares of Common Stock shall be subdivided,
combined or consolidated, by reclassification, stock split or otherwise, into a
greater or lesser number of shares of Common Stock, the Conversion Price for the
Series C Preferred Stock in effect immediately prior to such dividend,
subdivision, combination or consolidation shall, concurrently with the
effectiveness of such dividend, subdivision, combination or consolidation, be
proportionately adjusted.
(f) NO IMPAIRMENT. The Corporation will not, by amendment of its
Restated Certificate of Incorporation or through any reorganization, transfer of
assets, merger, dissolution, issue or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
to be observed or performed hereunder by the Corporation but will at all times
in good faith assist in the carrying out of all the provisions of this Section 5
and in the taking of all such action as may be necessary or appropriate in order
to protect the Conversion Rights of the holders of the Series C Preferred Stock
against impairment.
(g) CERTIFICATE AS TO ADJUSTMENTS. Upon the occurrence of each
adjustment of the Conversion Price pursuant to this Section 5, the Corporation,
at its expense, shall promptly compute such adjustment or readjustment in
accordance with the terms hereof and furnish to each holder of Series C
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Preferred Stock a certificate setting forth such adjustment or readjustment and
showing in reasonable detail the facts upon which such adjustment or
readjustment is based. The Corporation shall, upon the written request at any
time of any holder of Series C Preferred Stock, furnish or cause to be furnished
to such holder a like certificate setting forth (i) such adjustments and
readjustments, (ii) the Conversion Price at the time in effect, and (iii) the
number of shares of Common Stock and the amount, if any, of other property that
at the time would be received upon the conversion of Series C Preferred Stock.
(h) NOTICES OF RECORD DATE. In the event that this Corporation shall
propose at any time:
(i) to declare any dividend or distribution upon its Common
Stock, whether in cash, property, stock or other securities, whether or not a
regular cash dividend and whether or not out of earnings or earned surplus;
(ii) to offer for subscription pro rata to the holders of any
class or series of its stock any additional shares of stock of any class or
series or other rights;
(iii) to effect any reclassification or recapitalization of its
Common Stock outstanding involving a change in the Common Stock; or
(iv) to merge with or into any other corporation, or sell, lease
or convey all or substantially all its property or business, or to liquidate,
dissolve or wind up;
then, in connection with each such event, this Corporation shall send to the
holders of the Series C Preferred Stock:
(A) at least twenty (20) days' prior written notice of the
date on which a record shall be taken for such dividend, distribution or
subscription rights (and specifying the date on which the holders of Common
Stock shall be entitled thereto) or for determining rights to vote in respect of
the matters referred to in (iii) and (iv) above; and
(B) in the case of the matters referred to in (iii) and (iv)
above, at least twenty (20) days' prior written notice of the date when the same
shall take place (and specifying the date on which the holders of Common Stock
shall be entitled to exchange their Common Stock for securities or other
property deliverable upon the occurrence of such event).
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Each such written notice shall be given by first class mail, postage
prepaid, addressed to the holders of Series C Preferred Stock at the address for
each such holder as shown on the books of this Corporation.
(i) RESERVATION OF STOCK ISSUABLE UPON CONVERSION. The Corporation
shall at all times reserve and keep available out of its authorized but unissued
shares of Common Stock, solely for the purpose of effecting the conversion of
the shares of the Series C Preferred Stock, such number of its shares of Common
Stock as shall from time to time be sufficient to effect the conversion of all
outstanding shares of Series C Preferred Stock; and if at any time the number of
authorized but unissued shares of Common Stock shall not be sufficient to effect
the conversion of all then outstanding shares of Series C Preferred Stock, in
addition to such other remedies as shall be available to the holder of such
Series C Preferred Stock, the Corporation will take such corporate action as
may, in the opinion of its counsel, be necessary to increase its authorized but
unissued shares of Common Stock to such number of shares as shall be sufficient
for such purposes, including, without limitation, engaging in best efforts to
obtain the requisite stockholder approval of any necessary amendment to the
Corporation's Restated Certificate of Incorporation.
Section 6. REDEMPTION/CONVERSION.
(a) RIGHT OF REDEMPTION/CONVERSION. Subject to the rights of series of
authorized Preferred Stock which may from time to time come into existence, at
any time on or after the seventh anniversary of the Original Issue Date, each
holder of Series C Preferred Stock shall have the right to cause the
Corporation, at the Corporation's sole option, to either (i) redeem/convert such
Series C Preferred Stock, in whole or in part, in cash, at a redemption price in
an amount equal to the Liquidation Price (as defined in Section 3(a)) at the
time in effect (the "Voluntary Redemption/Conversion Price"), or (ii) so long as
shares of the Common Stock remain listed on NNM or another national securities
exchange, to convert such Series C Preferred Stock into fully registered, fully
paid and nonassessable shares of Common Stock, with the value of such Common
Stock being deemed to be equal to 95% of the Market Price of the Common Stock
for the thirty (30) trading days immediately preceding the conversion date (the
"Deemed Conversion Value"). No fractional shares of Common Stock shall be issued
upon such conversion of the Series C Preferred Stock. In lieu of any fractional
share to which a holder would otherwise be entitled, the Corporation shall pay
cash equal to such fraction multiplied by the Deemed Conversion Value. Any such
conversion shall be conducted in accordance with Section 5(c).
(b) OPTIONAL REDEMPTION/CONVERSION. From and after the third
anniversary of the Original Issue Date, the Corporation shall have the right and
option to redeem/convert all, but not less than all, shares of the outstanding
Series C Preferred Stock. The redemption/conversion price for each share of
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Series C Preferred Stock redeemed pursuant to this Section 6(b) shall be an
amount payable in cash equal to the sum of the Liquidation Price (as defined in
Section 3(a)) at the time in effect and the Make-Whole Payment (as defined
hereinafter), if any (the "Redemption/Conversion Price"). The "Make Whole
Payment" per share shall be equal to: (i) from and after the seventh anniversary
of the Original Issue Date, zero; (ii) from and after the fifth anniversary of
the Original Issue Date but prior to the seventh anniversary of the Original
Issue Date, an amount equal to the excess, if any, of (A) an amount sufficient
to provide a holder of the Series C Preferred Stock with a compounded internal
rate of return of 20% (as measured from the Original Issue Date to the date of
payment of the Redemption/Conversion Price on the basis of an initial investment
of $100.00 per share of Series C Preferred Stock) over (B) the Liquidation
Price, and (iii) from and after the third anniversary of the Original Issue Date
but prior to the fifth anniversary of the Original Issue Date, an amount equal
to the excess, if any, of (A) an amount sufficient to provide a holder of the
Series C Preferred Stock with a compounded internal rate of return of 25% (as
measured from the Original Issue Date to the date of payment of the
Redemption/Conversion Price on the basis of an initial investment of $100.00 per
share of Series C Preferred Stock) over (B) the Liquidation Price.
(c) The Corporation shall provide each holder of Series C Preferred
Stock with a written notice of redemption/conversion (addressed to the holder at
its address as it appears on the stock transfer books of the Corporation), not
earlier than sixty (60) nor later than twenty (20) days before the date fixed
for redemption. The notice of redemption/conversion shall specify (i) the class
or part of the class of shares to be redeemed; (ii) the date fixed for
redemption/conversion (the "Redemption/Conversion Date"); (iii) the Voluntary
Redemption/Conversion Price or the Redemption/Conversion Price, as
applicable;(iv) the place the holders of Series C Preferred Stock may obtain
payment of the Voluntary Redemption/Conversion Price or the
Redemption/Conversion Price, as applicable, upon surrender of their
certificates; and (v) the last date prior to the date of redemption/conversion
that the right of conversion of the Series C Preferred Stock may be exercised.
If funds are available on the date fixed for redemption/conversion, then whether
or not shares are surrendered for payment of the Voluntary Redemption/Conversion
Price or the Redemption/Conversion Price, as applicable, the shares shall no
longer be outstanding and the holders thereof shall cease to be stockholders of
the Corporation with respect to the shares redeemed/converted on and after the
date fixed for redemption/conversion and shall be entitled to receive the
Voluntary Redemption/Conversion Price or the Redemption/Conversion Price, as
applicable, without interest upon the surrender of the share certificate. If
less than all the shares represented by a share certificate are to be
redeemed/converted, the Corporation shall issue a new share certificate for the
shares not redeemed/converted.
(d) If on the Redemption Date funds of the Corporation legally
available therefor shall be insufficient to redeem all the shares of Series C
Preferred Stock required to be redeemed as provided herein, funds to the extent
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legally available shall be used for such purpose and the Corporation shall
effect such redemption PRO RATA according to the number of shares of Series C
Preferred Stock held by each holder subject to the redemption (a "Partial
Redemption"). The Corporation shall make additional Partial Redemptions
beginning thirty (30) days after the Redemption Date and each thirty (30) days
thereafter until all tendered or outstanding, as the case may be, shares of
Series C Preferred Stock have been redeemed.
Section 7. CHANGE-OF-CONTROL REDEMPTION/CONVERSION
(a) Upon the occurrence of a Change of Control (as such term is
defined hereinafter, each holder of Series C Preferred Stock shall have the
right to require the Corporation, at the Corporation's option, to either: (i)
redeem such Series C Preferred Stock, in cash, at a price per share equal to
105% of the Liquidated Price at the time in effect, or (ii) convert such Series
C Preferred Stock into fully registered, fully paid and nonassessable shares of
Common Stock, at a price of 105% of the Liquidation Price at the time in effect.
In the event the Corporation elects to convert the shares of Series C Preferred
Stock, the value of the Common Stock per share shall equal the Deemed Conversion
Value (as defined in Section 6(a)). No fractional shares of Common Stock shall
be issued upon conversion of the Series C Preferred Stock. In lieu of any
fractional share to which a holder would otherwise be entitled, the Corporation
shall pay cash equal to such fraction multiplied by the Deemed Conversion Value.
Any such conversion shall be conducted in accordance with Section 5(c). In the
event the Corporation elects to redeem the shares of Series C Preferred Stock,
if sufficient funds are not legally available to redeem all outstanding shares
of Series C Preferred Stock tendered for redemption, then redemption shall be
carried out PRO RATA according to the number of shares of Series C Preferred
Stock required to be redeemed as provided herein (a "Partial Redemption") as of
the Change of Control Redemption Date (as defined hereinafter). The Corporation
shall make additional Partial Redemptions beginning thirty (30) days after the
Change of Control Redemption Date and each thirty (30) days thereafter until all
outstanding shares of Series C Preferred Stock have been redeemed.
For purposes of this Section 7, "Change of Control" means the occurrence of
any of the following events:
(i) any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) becomes the "beneficial owner" (as defined in Rules 13d-3 and
13d-5 under the Exchange Act, except that a person or entity shall be deemed to
have "beneficial ownership" of all securities that such person or entity has the
right to acquire, whether such right is exercisable immediately or only after
the passage of time), directly or indirectly, of more than a majority of the
voting power of all classes of voting stock of the Corporation;
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(ii) the Corporation consolidates with, or merges with or into,
another person or entity or conveys, transfers, leases or otherwise disposes of
all or substantially all of its assets to any person or entity, or any person or
entity consolidates with, or merges with or into, the Corporation, in any such
event pursuant to a transaction in which the outstanding voting stock of the
Corporation is converted into or exchanged for cash, securities or other
property, other than any such transaction where (A) the outstanding voting stock
of the Corporation is not converted or exchanged at all (except to the extent
necessary to reflect a change in the jurisdiction of incorporation) or is
converted into or exchanged for (1) capital stock of the surviving or transferee
person or entity or (2) cash, securities or other property (other than capital
stock described in the foregoing clause (1)) of the surviving or transferee
person or entity in an amount that could be paid as a Restricted Payment as
described under Section 7.4 of the Corporation's Stock Purchase Agreement, dated
as of June 29, 1998, and (B) immediately after such transaction, no "person" or
"group" (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act)
is the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that a person or entity shall be deemed to have "beneficial
ownership" of all securities that such person or entity has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of more than a majority of the total
outstanding voting stock of the surviving or transferee person or entity;
(iii) during any consecutive two-year period, individuals who at
the beginning of such period constituted the Board of Directors of the
Corporation (together with any new directors whose election to such Board of
Directors, or whose nomination for election by the stockholders of the
Corporation, was approved by a vote of 66-2/3% of the directors then still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board of Directors of the Corporation
then in office; or
(iv) the Corporation is liquidated or dissolved or adopts a plan
of liquidation or dissolution other than in a Transaction which satisfies the
conditions set forth in Section 4(c).
(b) The Corporation shall provide each holder of Series C Preferred
Stock with a written notice of the occurrence of a Change of Control (addressed
to the holder at its address as it appears on the stock transfer books of the
Corporation), not earlier than sixty (60) nor later than twenty (20) days before
the date of such occurrence. Such notice shall specify the Corporation's
election pursuant to Section 7(a) and a date for redemption payments to be made,
if applicable, which shall be a date not later than the date of the occurrence
of the Change of Control (the "Change of Control Redemption Date").
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Section 8. PREEMPTIVE RIGHTS.
(a) Unless the holders of a majority of the shares of Series C
Preferred Stock then outstanding waive the applicability of this Section 8 to a
particular issuance of New Securities (as defined below), each holder of shares
of Series C Preferred Stock (a "Preemptive Right Holder") shall have a
preemptive right to purchase a PRO RATA share of all or any part of any such New
Securities which the Corporation may, from time to time, propose to sell and
issue if such issuance reflects a price per share of Common Stock that is lower
than the existing Conversion Price (subject to appropriate adjustment for any
Recapitalization Events). A Preemptive Right Holder's PRO RATA share, for
purposes of this preemptive right, is a fraction equal to the aggregate number
of shares of Series C Preferred Stock and/or Common Stock received upon
conversion of the Series C Preferred Stock then held by such Preemptive Rights
Holder divided by the total number of shares of Common Stock of the Corporation
on a fully-diluted basis then outstanding (including after giving pro forma
effect to the issuance of shares of Common Stock issuable under all options,
warrants and convertible securities of the Corporation then outstanding and the
issuance of Common Stock or Common Stock equivalents pursuant to the Page Call
Transaction).
(b) Except as set forth in the next succeeding sentence, "New
Securities" shall mean any shares of Common Stock, whether now authorized or
not, and rights, options or warrants to purchase said shares of Common Stock,
and securities of any type whatsoever that are, or may become, convertible into
said shares of Common Stock. Notwithstanding the foregoing, "New Securities" do
not include (i) securities issued in the acquisition of another corporation by
the Corporation or a subsidiary of the Corporation by merger, purchase of
securities, purchase of substantially all of the assets or other reorganization
or in a transaction governed by Rule 145 under the Securities Act, (ii) shares
of Common Stock issued or issuable, or options or other rights therefor, to
employees, officers, directors or consultants pursuant to any plan, agreement or
other arrangement approved by the Board of Directors, (iii) shares of Common
Stock issued or issuable on conversion of outstanding Preferred Stock or any
convertible securities otherwise permitted to be issued hereunder or pursuant to
the Corporation's Restated Certificate of Incorporation, (iv) shares of capital
stock issued in connection with the Page Call Transaction or (v) stock issued in
connection with a Recapitalization Event.
(c) In the event the Corporation proposes to undertake an issuance of
New Securities triggering the preemptive right hereunder, it shall give each
Preemptive Right Holder written notice of its intention, describing the type of
New Securities, and the price and terms upon which the Corporation proposes to
issue the same. Each Preemptive Right Holder shall have 15 days from the date of
receipt of any such notice to agree to purchase up to such Preemptive Right
Holder's respective PRO RATA share of such New Securities for the price and upon
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the terms specified in the notice by giving written notice to the Corporation
and stating therein the quantity of New Securities to be purchased.
(d) If a Preemptive Right Holder fails to exercise such preemptive
right within said 30-day period, the Corporation shall have 120 days thereafter
to sell or enter into an agreement (pursuant to which the sale of New Securities
covered thereby shall be closed, if at all, within 60 days from the date of said
agreement) to sell the New Securities not elected to be purchased by Preemptive
Right Holders at the price and upon the terms no more favorable to the
purchasers of such securities than specified in the Corporation's notice. In the
event the Corporation has not sold the New Securities or entered into an
agreement to sell the New Securities within said 120-day period (or sold and
issued New Securities in accordance with the foregoing within 60 days from the
date of said agreement), the Corporation shall not thereafter issue or sell any
of such New Securities, without first offering such securities in the manner
provided above.
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IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Designations to be signed by its Chairman of the Board and President and
attested by its Secretary this 29th day of June, 1998.
ARCH COMMUNICATIONS GROUP, INC.
By: /S/ C. EDWARD BAKER, JR.
Name: C. Edward Baker, Jr.
Title: Chairman of the Board and
Chief Executive Officer
EXHIBIT 4.3
AMENDMENT NO. 1 TO RIGHTS AGREEMENT
This Amendment No. 1 dated June 29, 1998 hereby amends the Rights Agreement
dated as of October 13, 1995 (the "Agreement"), between Arch Communications
Group, Inc., a Delaware corporation (the "Company"), and The Bank of New York, a
national banking association, as Rights Agent (the "Rights Agent").
W I T N E S S E T H:
WHEREAS, no Person has become an Acquiring Person as such terms are defined
in the Agreement; and
WHEREAS, the Company has directed the Rights Agent to enter into this
Amendment No. 1 pursuant to Section 27 of the Agreement;
NOW, THEREFORE, in consideration of the premises and mutual agreements set
forth herein, the parties hereby agree as follows:
1. Section 1(a) of the Agreement is hereby deleted in its entirety and the
following substituted in lieu thereof:
(a) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person,
shall be the Beneficial Owner of 15% or more of the shares
of Common Stock then outstanding, but shall not include (i)
the Company, (ii) any Subsidiary of the Company, (iii) any
employee benefit plan of the Company or of any Subsidiary of
the Company, or any Person or entity organized, appointed or
established by the Company for or pursuant to the terms of
any such plan, (iv) any such Person who becomes the
beneficial owner of 15% or more of the shares of Common
Stock then outstanding as a result of a reduction in the
number of shares of Common Stock outstanding due to the
repurchase of shares of Common Stock by the Company unless
and until such Person, after becoming aware that such Person
has become the Beneficial Owner of 15% or more of the then
outstanding shares of Common Stock, acquires beneficial
ownership of additional shares of Common Stock representing
1% or more of the shares of Common Stock then outstanding or
(v) an Exempted Person. Notwithstanding the foregoing, if
the Board of Directors of the Company determines in good
faith that a Person who would otherwise be an "Acquiring
Person," as defined pursuant to the foregoing provisions of
<PAGE>
this paragraph (a), has become such inadvertently, and such
Person divests as promptly as practicable a sufficient
number of shares of Common Stock so that such Person would
no longer be the Beneficial Owner of 10% or more of the
shares of Common Stock then outstanding, then such Person
shall not be deemed to be an "Acquiring Person" for any
purposes of this Agreement unless and until such Person
shall again become an "Acquiring Person."
2. Section 1 of the Agreement is hereby further amended by adding new
paragraph (ii) at the end thereof, as follows:
(ii) "Exempted Person" shall mean Sandler Capital Partners
IV, L.P. and Sandler Capital Partners IV FTE, L.P.
(collectively, "Sandler"), unless and until such time
as Sandler, together with its Affiliates, directly or
indirectly, becomes the Beneficial Owner of more than
24.9% of the Common Stock then outstanding (or such
greater percentage as may result solely from the
acquisition of shares of the Company's Series C
Convertible Preferred Stock or shares of Common Stock
issued to effect the payment of dividends, conversion
or redemption thereof), in which event Sandler
immediately shall cease to be an Exempted Person.
3. Section 11(a)(ii) of the Agreement is hereby deleted and the following
substituted in lieu thereof:
(a)(ii) Subject to Section 24 of this Agreement, in the
event that any Person shall become an Acquiring Person,
unless the event causing the 15% threshold (or, in the case
of an Exempted Person, the 22% threshold) to be crossed is a
transaction set forth in Section 13(a) hereof, or is a
Permitted Offer, then, promptly following the first
occurrence of such event, proper provisions shall be made so
that each holder of a Right (except as provided below and in
Section 7(e) hereof) shall thereafter have the right to
receive, upon exercise thereof at the then current Purchase
Price in accordance with the terms of this Agreement, in
lieu of a number of one one- thousandths of a share of
Preferred Stock, such number of shares of Common Stock of
the Company that equals the result obtained by (x)
multiplying the then current Purchase Price by the then
number of one one-thousandths of a share of Preferred Stock
for which a Right was exercisable immediately prior to the
first occurrence of a Section 11(a)(ii) Event, and (y)
dividing that product (which, following such first
occurrence, shall thereafter be referred to as the "Purchase
<PAGE>
Price" for each Right and for all purposes of this
Agreement) by 50% of the current market price (determined
pursuant to Section 11(d) hereof) per share of Common Stock
on the date of such occurrence (such number of shares, the
"Adjustment Shares").
IN WITNESS WHEREOF, the parties have caused this Amendment No. 1 to be duly
executed and their respective corporate seals to be hereunto affixed and
attested as of the day and year first written above.
ARCH COMMUNICATIONS GROUP, INC.
Attest:
/S/ J. ROY POTTLE By: /S/ C. E. BAKER, JR.
Name: J. Roy Pottle Name: C.E. Baker, Jr.
Title: Executive Vice President Title: Chairman of the Board
and Chief Financial Officer and Chief Executive Officer
Seal
THE BANK OF NEW YORK
Attest:
/S/ ROBERT DIETZ By: /S/ KAROL MANTZ
Name: Robert Dietz Name: Karol Mantz
Title: Vice President Title: Vice President
Seal
EXHIBIT 99.1
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
(TRANCHE A AND TRANCHE C FACILITIES)
by and among
ARCH PAGING, INC.,
THE LENDERS PARTY HERETO,
THE BANK OF NEW YORK,
ROYAL BANK OF CANADA
and
TORONTO DOMINION (TEXAS), INC.,
as Managing Agents,
ROYAL BANK OF CANADA,
AS DOCUMENTATION AGENT,
TORONTO DOMINION (TEXAS), INC.,
AS SYNDICATION AGENT,
AND
THE BANK OF NEW YORK,
AS ADMINISTRATIVE AGENT
WITH
BNY CAPITAL MARKETS, INC.,
ROYAL BANK OF CANADA
AND
TD SECURITIES (USA) INC.,
AS CO-ARRANGERS
DATED AS OF JUNE 29, 1998
<PAGE>
SECOND AMENDED AND RESTATED CREDIT AGREEMENT (Tranche A and Tranche C
Facilities), dated as of June 29, 1998, by and among ARCH PAGING, INC. (the
"Borrower"), a Delaware corporation and the survivor of the Arch Subsidiary
Merger and the ACE Merger (as defined below), the Lenders party hereto, THE BANK
OF NEW YORK, ROYAL BANK OF CANADA and TORONTO DOMINION (TEXAS), INC., as
Managing Agents (in such capacity, the "Managing Agents"), ROYAL BANK OF CANADA,
as Documentation Agent (in such capacity, the "Documentation Agent"), TORONTO
DOMINION (TEXAS), INC., as Syndication Agent (in such capacity, the "Syndication
Agent"), and THE BANK OF NEW YORK, as Administrative Agent for the Lenders
hereunder (in such capacity, the "Administrative Agent").
RECITALS
A. Reference is made to the First Amended and Restated Credit Agreement,
dated as of May 21, 1996, by and among Arch Communications Enterprises, Inc.
("ACE"), Arch Communications Group, Inc. (the "Parent"), the lenders party
thereto (the "Existing Lenders"), the Co-Agents party thereto and the
Administrative Agent, as amended by Amendment No. 1, dated as of June 25, 1996,
Amendment No. 2, dated as of March 25, 1997, Amendment No. 3, dated as of June
17, 1997, Amendment No. 4, dated as of January 7, 1998, and Amendment No. 5 and
Waiver No. 1, dated as of March 9, 1998 (as so amended, the "Existing ACE Credit
Agreement").
B. Prior to, or contemporaneously with, the effectiveness of this
Agreement, the following events will occur:
(1) ACE will deliver the ACE Subordinated Note (as hereinafter
defined) to The Westlink Company II, a wholly-owned direct Subsidiary of
ACE ("Westlink II"), and The Westlink Company ("Westlink") and the Parent
will transfer all of their respective investment (the "Benbow Assets") in
Benbow PCS Ventures, Inc. ("Benbow") to Westlink II;
(2) USA Mobile Communications, Inc. II, a Delaware corporation and a
wholly-owned Subsidiary of the Parent, will change its name (the "Arch Name
Change") to "Arch Communications, Inc." ("Arch"), each of the Subsidiaries
of Arch will be merged (the "Arch Subsidiary Merger") into USA Mobile
Communications, Inc. III, a Delaware corporation and a wholly-owned
Subsidiary of Arch ("USAM III"), USAM III will change its name to "Arch
Paging, Inc." (the "USAM Name Change"), immediately prior to the ACE
Merger, Arch will contribute all of its assets (other than its Stock in the
Borrower) to the Borrower (the "Arch Contribution"), the Borrower will
create a new Subsidiary to be known as "Benbow Investments, Inc." ("Benbow
Investments"), Benbow Investments will distribute all of its assets to the
Borrower and Arch will designate Benbow Investments as an Unrestricted
Subsidiary under and as defined in each of the Existing Arch Indentures
(collectively with the Arch Name Change, the Arch Subsidiary Merger, the
USAM Name Change and the Arch Contribution, the "Arch Transactions");
(3) each of the Credit Parties under this Agreement and the Credit
Parties under and as defined in the Tranche B Credit Agreement shall
authorize BNY as the Administrative Agent under (i) the Amended and
Restated Subsidiary Guaranty, Security and Subordination Agreement, dated
as of May 21, 1996, made
<PAGE>
by ACE and its Subsidiaries party thereto to the Administrative Agent (the
"Existing Subsidiary Guaranty"), to release the Liens granted by Westlink
thereunder in its Benbow Assets, (ii) the Existing Parent Security
Agreement (as defined in the Parent Guaranty) to release the Liens granted
by the Parent thereunder in its Benbow Assets, and (iii) the Amended and
Restated Borrower Security Agreement, dated as of May 21, 1996, as amended,
made by ACE to the Administrative Agent (the "Existing Borrower Security
Agreement"), to release the Liens granted by ACE thereunder in its Stock in
Westlink II (if any);
(4) Westlink II will merge into Benbow Investments with Benbow
Investments as the survivor (the "Benbow Merger");
(5) ACE will contribute all of its assets (other than its Stock in its
Subsidiaries and in such of the Existing Intercompany Notes as are payable
to it) to Arch Michigan (the "ACE Contribution") and ACE will be merged
into the Borrower with the Borrower as the survivor (the "ACE Merger" and,
together with the transactions referred to in clause (B)(1) above and the
ACE Contribution, the "ACE Transactions");
(6) Arch will issue the Arch 12 3/4% Senior Notes (as hereinaftER
defined);
(7) the loans and commitments of the Existing Lenders shall have been
assigned to, and assumed by the Lenders and the Lenders under the Tranche B
Credit Agreement pursuant to the Master Assignment (as hereinafter
defined).
C. As of the Second Restatement Date, (i) the Aggregate Revolving Credit
Commitments under and as defined in the Existing ACE Credit Agreement equal
$212,250,000 (the "Existing Revolving Commitments"), (ii) the outstanding
principal amount of Revolving Credit Loans under and as defined in the Existing
ACE Credit Agreement equals $132,500,000 (the "Existing Revolving Loans"), (iii)
the outstanding principal amount of Tranche A Term Loans under and as defined in
the Existing ACE Credit Agreement equals $138,750,000 (the "Existing Tranche A
Term Loans"), and (iv) the outstanding principal amount of Tranche B Term Loans
under and as defined in the Existing ACE Credit Agreement equals $99,000,000
(the "Existing Tranche B Term Loans").
D. On the Second Restatement Date, the parties hereto desire to, among
other things, (i) reduce the Existing Revolving Commitments to $175,000,000,
(ii) continue the Existing Revolving Loans as Tranche A Loans hereunder, (iii)
convert $125,000,000 of the Existing Tranche A Term Loans to Tranche C Loans
hereunder, (iv) continue the Existing Tranche B Term Loans as Tranche B Loans
under the Second Amended and Restated Credit Agreement (Tranche B Facility),
dated as of the date hereof, among the Borrower, the Lenders party thereto and
the Agents (as the same may be amended, supplemented or otherwise modified from
time to time, the "Tranche B Credit Agreement"), (v) repay in full all
Indebtedness under the Existing Arch Credit Agreement (as hereinafter defined)
out of the proceeds of the Arch 12 3/4% Senior Notes, (vi) repay the ExistiNG
Tranche A Term Loans not converted to Tranche C Loans, (vii) repay Tranche B
Loans under the Tranche B Credit Agreement out of the proceeds of the Arch 12
3/4% Senior Notes and Tranche A Loans, and (viii) make certain other changes to
the Existing ACE Credit Agreement by amending and restating the Existing ACE
Credit Agreement in its entirety as hereinafter set forth with respect to the
Tranche A Loans and the Tranche C
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<PAGE>
Loans and as set forth in the Tranche B Credit Agreement with respect to Tranche
B Loans.
E. For convenience, this Agreement is dated as of June 29, 1998 (the
"SECOND RESTATEMENT DATE"), 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:
"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.
"ACE": as defined in Recital A.
"ACE CONTRIBUTION": as defined in Recital B(5).
"ACE MERGER": as defined in Recital B(5).
"ACE SUBORDINATED NOTE": a subordinated promissory note, made by ACE
to Westlink II, in the form and substance satisfactory to the Administrative
Agent.
"ACE TRANSACTIONS": as defined in Recital B(5).
"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.
"ACQUISITION CONSIDERATION": with respect to any Acquisition, the sum
(without duplication) of (i) the cash consideration paid or agreed to be paid in
connection therewith, plus (ii) the fair market value of all non-cash
consideration paid or agreed to be paid in connection therewith, plus (iii) an
amount equal to the principal or stated amount of all liabilities assumed or
incurred in connection therewith.
"ADDITIONAL BENBOW INVESTMENTS": investments by Benbow Investments in
Benbow made after the Second Restatement Date in accordance with Section 8.6(l).
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<PAGE>
"ADJUSTED INDENTURE MATURITY DATE": the earlier to occur of (i) if the
Arch 9-1/2% Indenture is in effect, August 1, 2003, and (ii) if the Arch 14%
Indenture is in effect, May 1, 2004.
"ADJUSTED NET CASH PROCEEDS": with respect to any Disposition as of
any date of determination, the amount equal to the difference between (i) the
Net Sales Proceeds from such Disposition, and (ii) the Reinvested Proceeds in
connection with such Disposition.
"ADMINISTRATIVE AGENT": as defined in the preamble.
"ADVANCE": an ABR Advance or a Eurodollar Advance, as the case may be.
"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 25% 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.
"AGENTS": collectively, the Collateral Agent, the Managing Agents, the
Documentation Agent, the Syndication Agent and the Administrative Agent.
"AGGREGATE COMMITMENTS": on any date, the sum of the Commitments of
all Lenders on such date.
"AGGREGATE PREPAYMENT/REDUCTION AMOUNT": as defined in Section 2.4.
"AGGREGATE TRANCHE A COMMITMENTS": on any date, the sum of the Tranche
A Commitments on such date.
"AGGREGATE TRANCHE A EXPOSURE": at any time, the aggregate sum at such
time of the Tranche A Exposures of all Tranche A Lenders.
"AGGREGATE TRANCHE B COMMITMENTS": as defined in the Tranche B Credit
Agreement.
"AGGREGATE TRANCHE B EXPOSURE": as defined in the Tranche B Credit
Agreement.
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<PAGE>
"AGGREGATE TRANCHE C PERCENTAGE": on any date of determination, if
immediately prior to the prepayment or reduction with respect to which the
calculation of the Aggregate Tranche C Percentage is being made:
(i) the Aggregate Tranche B Commitment is then in existence
and/or any Tranche B Loans are then outstanding, the percentage equal
to a fraction (i) the numerator of which is the aggregate unpaid
principal balance of the Tranche C Loans on such date, and (ii) the
denominator of which is the sum of (1) the amount determined under
clause (i) of this definition on such date, plus (2) (A) prior to the
Tranche B Conversion Date, the Aggregate Tranche B Commitments on such
date, and (B) on or after the Tranche B Conversion Date, the aggregate
unpaid principal balance of the Tranche B Loans on such date, plus (3)
(A) prior to the termination (or other non-existence) of the Aggregate
Tranche A Commitments, the Aggregate Tranche A Commitments on such
date and (B) on and after the termination (or other non-existence) of
the Aggregate Tranche A Commitments, the Aggregate Tranche A Exposure
on such date; or
(ii) the Aggregate Tranche B Commitment has terminated or is
otherwise no longer in existence and no Tranche B Loans are then
outstanding, the percentage equal to a fraction (i) the numerator of
which is the aggregate unpaid principal balance of the Tranche C Loans
on such date, and (ii) the denominator of which is the sum of (1) the
amount determined under clause (i) of this definition on such date,
plus (2) (A) prior to the termination (or other non-existence) of the
Aggregate Tranche A Commitments, the Aggregate Tranche A Commitments
on such date and (B) on and after the termination (or other
non-existence) of the Aggregate Tranche A Commitments, the Aggregate
Tranche A Exposure on such date.
"AGREEMENT": this Second Amended and Restated Credit
Agreement (Tranche A and Tranche C Facilities), 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.
"ANNUALIZED OPERATING CASH FLOW": on any date of
determination, an amount equal to (i) Operating Cash Flow for the
fiscal quarter ending on such date or, if such date is not a fiscal
quarter ending date, the immediately preceding fiscal quarter,
multiplied by (ii) four.
"ANSWER IOWA": Answer Iowa, Inc., an Iowa corporation.
"ANSWER IOWA LICENSEE CORP.": Answer Iowa Licensee
Corporation, a Delaware corporation.
"API DEBT": at any date of determination, the sum of all
Indebtedness of the Borrower and its Subsidiaries, determined on a
Consolidated basis in accordance with GAAP.
"API LEVERAGE RATIO": at any date of determination, the
ratio of API Debt to Annualized Operating Cash Flow.
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<PAGE>
"APPLICABLE ARCH INDENTURE TRUSTEES": at any time, (i) if
the Arch 9 1/2% Indenture is in effect and has not been satisfieD,
defeased or discharged, United States Trust Company of New York or its
successor as trustee under the Arch 9 1/2% Indenture, and (ii) if tHE
Arch 14% Indenture is in effect and has not been satisfied, defeased
or discharged, United States Trust Company of New York or its
successor as trustee under the Arch 14% Indenture.
"APPLICABLE MARGIN":
(a) As to the Tranche A Loans and Letters of Credit, 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 (A) the unpaid principal amount thereof consisting of Eurodollar
Advances, and (B) Letter of Credit Fees, the applicable percentage set forth
below next to the words "Eurodollar and LC Rate":
Applicable
Period Rate Margin
------ ---- ------
when the Pricing Alternate Base Rate 1.750%
Leverage Ratio is Eurodollar and LC Rate 3.000%
greater than or equal
to 5.00:1.00
when the Pricing Alternate Base Rate 1.500%
Leverage Ratio is Eurodollar and LC Rate 2.750%
greater than or equal
to 4.50:1.00 but less
than 5.00:1.00
when the Pricing Alternate Base Rate 1.125%
Leverage Ratio is Eurodollar and LC Rate 2.375%
greater than or equal
to 4.00:1.00 but less
than 4.50:1.00
when the Pricing Alternate Base Rate 0.750%
Leverage Ratio is Eurodollar and LC Rate 2.000%
greater than or equal
to 3.00:1.00 but less
than 4.00:1.00
when the Pricing Alternate Base Rate 0.375%
Leverage Ratio is Eurodollar and LC Rate 1.625%
less than 3.00:1.00
(b) As to the Tranche C Loans:
(i) for the first 180 days after the Second Restatement Date,
(A) with respect to the unpaid principal amount thereof consisting of ABR
Advances, 2.00%, and (B) with respect to the unpaid principal amount thereof
consisting of Eurodollar Advances, 3.25%, and
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<PAGE>
(ii) thereafter, at all times during the applicable periods
set forth below: (A) 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 (B) with respect to the unpaid principal
amount thereof consisting of Eurodollar Advances, the applicable percentage set
forth below next to the words "Eurodollar Rate":
Applicable
Period Rate Margin
------ ---- ------
when the Pricing Alternate Base Rate 2.000%
Leverage Ratio is Eurodollar Rate 3.250%
greater than or equal
to 5.00:1.00
when the Pricing Alternate Base Rate 1.750%
Leverage Ratio is Eurodollar Rate 3.000%
greater than or equal
to 4.50:1.00 but less
than 5.00:1.00
when the Pricing Alternate Base Rate 1.500%
Leverage Ratio is Eurodollar Rate 2.750%
less than 4.50:1.00
(c) Changes in the Applicable Margin resulting from a change in the
Pricing 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 second Business 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 Pricing Leverage Ratio. If the Borrower shall fail to
deliver a Compliance Certificate within 60 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 Pricing Leverage Ratio, solely for
purposes of calculating the Applicable Margin, shall be deemed to be greater
than 5.00:1.00 from and including the date on which such Compliance Certificate
was required to be delivered to the date of delivery to the Administrative Agent
of such Compliance Certificate.
"APPLICABLE PROCEEDS": any and all proceeds of casualty insurance or
condemnation held by the Administrative Agent pursuant to the Loan Documents in
connection with a casualty or condemnation event for which the conditions for
use thereof by the Borrower or any Subsidiary, as set forth in the Loan
Documents, shall not have been satisfied.
"APPROPRIATE PARTY": at any time (i) prior to the Existing Arch Senior
Note Termination Date, (x) if none of the Collateral Documents (other than the
Borrower Pledge Agreement and the Restricted Subsidiary Security Agreement
(Bank)) or the Indenture Collateral Documents are then effective, the Escrow
Agent, or (y) if, in addition to the Borrower Pledge Agreement and the
Restricted Subsidiary Security Agreement (Bank), any of the Collateral Documents
and any of the Indenture Collateral Documents are then effective, the Collateral
Agent and the Applicable Arch Indenture Trustees and (ii) on or after the
Existing Arch Senior Note Termination Date, the Collateral Agent.
"ARCH": as defined in Recital B(2).
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<PAGE>
"ARCH 12 3/4% INDENTURE": the Indenture, dated as of June 29, 1998,
between Arch and U.S. Bank Trust National Association, or its successor, as
trustee, pursuant to which Arch issued the Arch 12 3/4% Senior Notes.
"Arch 12 3/4% Senior Notes": the 12 3/4% Senior Notes due 2007 issued
by Arch pursuant to the Arch 12 3/4% Indenture.
"ARCH 9 1/2% INDENTURE": the Indenture, dated as of February 7, 1994,
between Arch and United States Trust Company of New York or its successor, as
trustee, pursuant to which Arch issued its 9 1/2% Senior Notes due 2004.
"ARCH 14% INDENTURE": the Indenture, dated as of December 15, 1994,
between Arch and United States Trust Company of New York or its successor, as
trustee, pursuant to which Arch issued its 14% Senior Notes due 2004.
"ARCH CANADA": Arch Canada, Inc., a Canadian corporation and, prior to
the ACE Merger, a wholly-owned Subsidiary of ACE, and thereafter, a wholly-owned
Subsidiary of the Borrower.
"ARCH CAPITOL": Arch Capitol District, Inc., a New York corporation
and a wholly-owned Subsidiary of the Borrower.
"ARCH CONNECTICUT": Arch Connecticut Valley, Inc., a Massachusetts
corporation and a wholly-owned Subsidiary of the Borrower.
"ARCH CONTRIBUTION": as defined in Recital B(5).
"ARCH GUARANTY": the Arch Guaranty, in substantially the form of
Exhibit R.
"ARCH MICHIGAN": Arch Michigan, Inc., a Delaware corporation and a
wholly-owned Subsidiary of the Borrower.
"ARCH NAME CHANGE": as defined in Recital B(2).
"ARCH SECURITY AGREEMENT (9 1/2% INDENTURE)": Arch Security Agreement
(9 1/2% Indenture), in substantially the form of Exhibit I-2.
"ARCH SECURITY AGREEMENT (14% INDENTURE)": Arch Security Agreement
(14% Indenture), in substantially the form of Exhibit I-3.
"ARCH SECURITY AGREEMENT (BANK)": Arch Security Agreement (Bank), by
and between Arch and the Collateral Agent, in substantially the form of Exhibit
I-1.
"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.
"ARCH SUBSIDIARY MERGER": as defined in Recital B(2).
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<PAGE>
"ARCH TRANSACTIONS": as defined in Recital B(2).
"ASSET SALE DISPOSITION": as defined in Section 8.8(d).
"ASSIGNMENT AND ACCEPTANCE AGREEMENT": an assignment and acceptance
agreement, substantially in the form of Exhibit E.
"BECKER": Becker Beeper, Inc., an Illinois corporation and a
wholly-owned Subsidiary of the Borrower.
"BEEPER": The Beeper Company of America, Inc., a Colorado corporation
and a wholly-owned Subsidiary of the Borrower.
"BENBOW": as defined in Recital B(1).
"BENBOW ASSETS" as defined in Recital B(1).
"BENBOW INVESTMENTS": as defined in Recital B(2).
"BENBOW MERGER": as defined in Recital B(4).
"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.
"BOARD OF GOVERNORS": the Board of Governors of the Federal Reserve
System of the United States.
"BORROWER": as defined in the preamble.
"BORROWER OBLIGATIONS": collectively, (i) all of the obligations and
liabilities of the Borrower under the Loan Documents (as defined hereunder) and
the Loan Documents under and as defined in the Tranche B Credit Agreement, and
(ii) all of the obligations and liabilities of the Borrower under each Secured
Hedging Agreement, in each case whether fixed, contingent, now existing or
hereafter arising, created, assumed, incurred or acquired, and whether before or
after the occurrence of any Event of Default under Section 9.1(h) or (i) and
including any obligation or liability in respect of any breach of any
representation or warranty and all post-petition interest and funding losses,
whether or not allowed as a claim in any proceeding arising in connection with
such an event.
"BORROWER PLEDGE AGREEMENT": the Borrower Pledge Agreement, amending
and restating in part the Existing Borrower Security Agreement, in substantially
the form of Exhibit G.
"BORROWER SECURITY AGREEMENT (9 1/2% INDENTURE)": the Borrower
SecuritY Agreement (9 1/2% Indenture), in substantially the form of Exhibit H-2.
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<PAGE>
"BORROWER SECURITY AGREEMENT (14% INDENTURE)": the Borrower Security
Agreement (14% Indenture), in substantially the form of Exhibit H-3.
"BORROWER SECURITY AGREEMENT (BANK)": the Borrower Security Agreement
(Bank), amending and restating in part the Existing Borrower Security Agreement,
in substantially the form of Exhibit H-1.
"BTP": BTP Acquisition Corporation, formerly a Subsidiary of ACE
which, in or about February, 1997, was merged into Arch Southeast with Arch
Southeast as the survivor.
"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 CONTRIBUTION": collectively, the capital contribution made by
the Parent to Arch and by Arch to the Borrower in an amount equal to the net
proceeds of the Equity Investment minus $1,000,000.
"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.
"CASH INTEREST EXPENSE": for any period, the sum of (i) cash 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) during such period as determined in
accordance with GAAP, (ii) Commitment Fees and Letter of Credit Fees during such
period and (iii) without duplication, Restricted Payments made to the Parent
during such period to the extent made to enable the Parent to satisfy its
interest obligations under the Parent Discount Notes Indenture.
"CHANGE IN LAW": (i) the adoption of any law, rule or regulation after
the Relevant Date, (ii) the issuance or promulgation after the Relevant Date of
any directive, guideline or request from any Governmental Body (whether or not
having the force of law), or (iii) any change after the Relevant Date in the
interpretation of any existing law, rule, regulation, directive, guideline or
request by any Governmental Body charged with the administration thereof.
"CHANGE OF CONTROL": any change of control, fundamental change or any
similar circumstance which, under any of the Existing Arch Indentures, the Arch
12 3/4%
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Indenture, the Parent Discount Notes Indenture, the Subordinated Indenture, the
Replacement Indenture or the documentation evidencing or governing any other
Indebtedness of the Parent, Arch or the Borrower of $15,000,000 or more, results
in an obligation of the Parent, Arch or the Borrower to prepay, purchase, offer
to purchase, redeem or defease such Indebtedness.
"CLASS": with respect to (i) the Lenders, the Tranche A Lenders, the
Tranche B Lenders or the Tranche C Lenders, and (ii) the Loans, the Tranche A
Loans, the Tranche B Loans or the Tranche C Loans.
"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 AGENT": The Bank of New York, in its capacity as
collateral agent under the Collateral Documents.
"COLLATERAL DOCUMENTS": collectively, (i) upon the execution and
delivery thereof, the Borrower Pledge Agreement, the Borrower Security Agreement
(Bank), the Subsidiary Guaranty, the Arch Guaranty, the Parent Guaranty, the
Restricted Subsidiary Security Agreement (Bank), each Secured Hedging Agreement,
the Escrow Agreement, and the Powers of Attorney, (ii) upon the declaration of
the effectiveness thereof pursuant to Section 7.19, the Triggering Collateral
Documents, and (iii) all other instruments and documents delivered pursuant to
Section 7.17 or 7.18 to secure any of the Borrower Obligations.
"COMMITMENT": as to (i) any Tranche A Lender, such Tranche A Lender's
Tranche A Commitment and (ii) the Letter of Credit Issuer, its Letter of Credit
Commitment.
"COMMITMENT FEE PERCENTAGE":
(a) at all times during the applicable periods set forth below, the
applicable percentage set forth below next to the words "Tranche A Commitment":
Applicable
Period Commitment Margin
------ ---------- ------
when the Pricing Tranche A Commitment 0.5000%
Leverage Ratio is
greater than or equal
to 4.00:1.00
when the Pricing Tranche A Commitment 0.3750%
Leverage Ratio is
less than 4.00:1.00
(b) Changes in the Commitment Fee Percentage resulting from a
change in the Pricing Leverage Ratio, as set forth in a Compliance Certificate
delivered pursuant
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to Section 7.1(c) evidencing such a change, shall become effective upon the
second Business 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 Pricing Leverage Ratio. If the Borrower shall fail to deliver a
Compliance Certificate within 60 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 Pricing Leverage Ratio, solely for purposes of
calculating the Commitment Fee Percentage, shall be deemed to be greater than
4.00:1.00 from and including the date on which such Compliance Certificate was
required to be delivered to the date of delivery to the Administrative Agent of
such Compliance Certificate.
"COMMITMENT FEES": the Tranche A Commitment Fee.
"COMMONLY CONTROLLED ENTITY": an entity, whether or not incorporated,
which is under common control with Arch or any of its 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.
"CONFIDENTIAL INFORMATION": as defined in Section 11.12.
"CONSOLIDATED": each of the Borrower and its Subsidiaries taken
together.
"CONSOLIDATING": each of the Borrower and each of its Subsidiaries
taken separately.
"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 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.
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<PAGE>
"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
converted to a Eurodollar Advance or (iii) the date on which a Eurodollar
Advance is continued as a new Eurodollar Advance.
"CREDIT EXTENSION DATE": any Business Day specified in a Credit
Request as a day on which the Borrower requests (i) the Lenders to make Loans,
or (ii) the Letter of Credit Issuer to issue a Letter of Credit.
"CREDIT PARTY": an Agent, the Letter of Credit Issuer or a Lender, as
the case may be.
"CREDIT REQUEST": a request for Loans or a Letter of Credit
substantially in the form of Exhibit B.
"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.
"DISPOSITION": any Asset Sale Disposition or the Tower Sale.
"DOCUMENTATION AGENT": as defined in the preamble.
"DOLLARS" and "$": lawful currency of the United States.
"DOMESTIC SUBSIDIARY": any Subsidiary that is not a Foreign
Subsidiary.
"ELIGIBLE INSTITUTION": (i) any commercial bank, trust company,
banking association, insurance company, financial institution, mutual fund or
pension fund acceptable to the Administrative Agent and the Letter of Credit
Issuer, (ii) any Lender or any Affiliate or Subsidiary thereof, or (iii) any
commercial bank, trust company, mutual fund or banking association having
undivided capital surplus and retained earnings exceeding $100,000,000.
"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 (i) the
Comprehensive Environmental Response, Compensation and Liability Act, as
amended, 42 USCA ss.9601 et seq. ("CERCLA"); (ii) the Resource Conservation and
Recovery Act of 1976, as amended, 42 USCA ss.6901 et seq.; (iii) the Toxic
Substance Control Act, as amended, 15 USCA ss.2601 et seq.; (iv) the Water
Pollution Control Act, as amended, 33 USCA ss.1251 et seq.; (v) the Clean Air
Act, as amended, 42 USCA ss.7401 et seq.; (vi) the Hazardous Material
Transportation Act, as amended, 49 USCA ss.1801 et seq. and (vii) all rules,
regulations judgments, decrees, injunctions and restrictions thereunder and any
analogous state law.
"EQUITY INVESTMENT": the issuance by the Parent of New Parent
Preferred Stock pursuant to the Equity Investment Documents.
"EQUITY INVESTMENT DOCUMENTS": collectively, (i) the Stock Purchase
Agreement, dated as of June 29, 1998, among the Parent, Sandler Capital Partners
IV, L.P.,
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Sandler Capital Partners IV FTE, L.P. and such other investors named therein,
and (ii) all other documents executed in connection therewith.
"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.
"ESCROW AGENT": The Bank of New York Trust Company of Florida, N.A.,
or its successor as escrow agent under the Escrow Agreement.
"ESCROW AGREEMENT": the Escrow Agreement, in substantially the form of
Exhibit M.
"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 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 its
Specified Percentage of the Eurodollar Advance 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
marginal, emergency, supplemental and special reserves), expressed as a decimal,
established by the Board of Governors 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). Such reserve requirements shall include 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.
"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 Tranche A Loans outstanding at the
beginning of such fiscal year minus (b) the Aggregate Tranche A Commitments at
the end of such fiscal year (without
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giving effect to reductions thereof during such period required by Section
2.3(d)), (ii) payments of the principal of the Tranche C Loans and, after the
Tranche B Conversion Date, the Tranche B Loans during such fiscal year (other
than mandatory prepayments thereof required by Section 2.4), (iii) scheduled
payments of principal of other Indebtedness of the Borrower and its Subsidiaries
on a Consolidated basis made during such fiscal year (including Indebtedness in
respect of Capital Leases), (iv) Capital Expenditures made by the Borrower and
its Subsidiaries on a Consolidated basis during such fiscal year, (v) without
duplication, taxes and payments under the Tax Sharing Agreement paid by the
Borrower and its 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.
"EXCLUDED TAX": as to any Person, a Tax which Tax (a) is an income tax
or franchise tax imposed on all or part of the net income or net profits of such
Person or represents interest, fees or penalties for payment of any such income
tax or franchise tax and which is imposed by one of the following jurisdictions
or by any political subdivision or taxing authority thereof: (i) the United
States, (ii) the jurisdiction in which such Person is organized, (iii) the
jurisdiction in which such Person's principal office is located, and (iv) in the
case of each Credit Party, any jurisdiction in which such Credit Party is deemed
to be doing business, and (b) in the case of any Foreign Credit Party, is a
withholding tax that is imposed on amounts payable to such Foreign Credit Party
at the time such Foreign Credit Party becomes a party to this Agreement or is
attributable to such Foreign Credit Party's failure to comply with Section
3.6(c).
"EXISTING ACE CREDIT AGREEMENT": as defined in Recital A.
"EXISTING ARCH CREDIT AGREEMENT": the First Amended and Restated
Credit Agreement, dated as of March 19, 1997, among Arch, certain Subsidiaries
of Arch, the lenders party thereto, and BNY, as administrative agent.
"EXISTING ARCH INDENTURES": collectively, the Arch 9 1/2% Indenture
and thE Arch 14% Indenture.
"EXISTING ARCH SENIOR NOTE TERMINATION DATE": the first date on which
none of the Existing Arch Senior Notes remain outstanding and neither of the
Existing Arch Indentures is in effect.
"EXISTING ARCH SENIOR NOTES": collectively, (i) the 9-1/2% Senior
Notes due 2004 issued by Arch under the Arch 9-1/2% Indenture and (ii) the 14%
Senior Notes due 2004 issued by Arch under the Arch 14% Indenture.
"EXISTING BORROWER SECURITY AGREEMENT": as defined in Recital B(3).
"EXISTING 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 ACE, (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
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<PAGE>
Notes, each dated the May 21, 1996, made by each of Lund Products, Answer Iowa,
Westlink New Mexico, Kelley's Telephone, Westlink Licensee Corp., Cascade and
Telecomm/KRT to Westlink Company, (v) the Intercompany Notes, each dated the May
21, 1996, made by each of Kelley's Licensee Corp., Cascade and Telecomm/KRT to
Kelley's Telephone, (vi) the Intercompany Note, dated the May 21, 1996, made by
Westlink New Mexico Licensee Corp. to Westlink New Mexico, (vii) the
Intercompany Note, dated the May 21, 1996, made by Answer Iowa Licensee Corp. to
Answer Iowa, (viii) the Intercompany Note, dated the May 21, 1996, made by
Answer Iowa to Lund Products, and (ix) the Existing Parent Intercompany Notes.
"EXISTING LENDERS": as defined in Recital A.
"EXISTING 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.
"EXISTING REVOLVING COMMITMENTS": as defined in Recital C.
"EXISTING REVOLVING LOANS": as defined in Recital C.
"EXISTING SUBSIDIARY GUARANTY": as defined in Recital B(3).
"EXISTING TRANCHE A COMMITMENTS": as defined in Recital C.
"EXISTING TRANCHE A LOANS": as defined in Recital C.
"EXISTING TRANCHE A TERM LOANS": as defined in Recital C.
"EXISTING TRANCHE B TERM LOANS": as defined in Recital C.
"EXTENSIONS OF CREDIT": collectively, the Loans, the Letters of Credit
and any participations therein pursuant to Section 2.6(c).
"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 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.
"FEES": is defined in Section 2.9.
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"FINANCIAL OFFICER": as to any Person, the chief financial officer,
vice president-finance or treasurer of such Person or such other officer as
shall be satisfactory to the Administrative Agent.
"FIXED CHARGE COVERAGE RATIO": as of the last day of any fiscal
quarter, the ratio of (i) Annualized Operating Cash Flow to (ii) Fixed Charges
for the Four Quarter Trailing Period.
"FIXED CHARGES": for any period, with respect to the Borrower and its
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 Tranche A Loans outstanding
at the beginning of such period minus (b) the Aggregate Tranche A Commitments at
the end of such period (without giving effect to reductions thereof during such
period required by Sections 2.4(a), 2.4(c) and 2.3(d)), (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 CREDIT PARTY": any Credit Party that is organized under the
laws of a jurisdiction other than the United States.
"FOREIGN SUBSIDIARY": any Subsidiary that is a "controlled foreign
corporation" within the meaning of Section 957 of the Code.
"FOUR QUARTER TRAILING PERIOD": at any date of determination, the
period of the four fiscal quarters ending on such date, or, if such date is not
the last day of a fiscal quarter, the period of the most immediately completed
four fiscal quarters.
"GAAP": generally accepted accounting principles as in effect from
time to time in the United States.
"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., formerly a Subsidiary of ACE
which, in or about February, 1997, was merged into Arch Southeast with Arch
Southeast as the survivor.
"GUARANTORS": collectively, the Parent, Arch 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.
"HUDSON": Hudson Valley Mobile Telephone, Inc., formerly a Subsidiary
of Arch Capitol which, in or about February, 1997, was merged into Arch Capitol
with Arch Capitol as the survivor.
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"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
(excluding liabilities under Secured Hedging Agreements) 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.
"INDEMNIFIED LIABILITIES": as defined in Section 11.4(b).
"INDEMNIFIED TAX": as to any Person, any Tax, except (i) an Excluded
Tax imposed on such Person and (ii) any interest, fees or penalties for late
payment thereof imposed on such Person.
"INDENTURE COLLATERAL DOCUMENTS": collectively, the Borrower Security
Agreement (14% Indenture), the Borrower Security Agreement (9 1/2% Indenture),
ArcH Security Agreement (14% Indenture), Arch Security Agreement (9 1/2%
Indenture), thE Restricted Subsidiary Security Agreement (14% Indenture), the
Restricted Subsidiary Security Agreement (9 1/2% Indenture), the Unrestricted
Subsidiary Security Agreement (14% Indenture) and the Unrestricted Subsidiary
Security Agreement (9 1/2% Indenture).
"INTELLECTUAL PROPERTY": all copyrights, trademarks, servicemarks,
patents, trade names and service names.
"INTERCOMPANY SUBORDINATED DEBT": as defined in Section 8.1(vi).
"INTEREST COVERAGE RATIO": as of the last day of any fiscal quarter,
the ratio of Operating Cash Flow to Cash Interest Expense for the Four Quarter
Trailing Period.
"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 Credit Extension
Date or Conversion/Continuation Date with respect to such Eurodollar Advance and
ending one, two, three or six months or, if agreed by each Lender, nine or
twelve months, thereafter, as selected by the Borrower, in its irrevocable
Credit Request or its irrevocable Notice of
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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;
(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 all or a part of (i) a Tranche A Loan shall end after the
Tranche A Maturity Date or (ii) a Tranche C Loan shall end after the Tranche C
Maturity Date;
(d) the Borrower shall select Interest Periods so as not to have
more than eight outstanding Interest Periods (together with any outstanding
Interest Periods under and as defined in the Tranche B Credit Agreement) at any
one time; and
(e) the Borrower shall select Interest Periods such that on each
date that (i) a mandatory scheduled reduction of the Aggregate Tranche A
Commitments occurs pursuant to Section 2.3(b), or (ii) a scheduled repayment of
the Tranche C Loans under Section 2.5(a) 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 2.3(b) and 2.5(a),
respectively.
"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, prior to the ACE Contribution, a wholly-owned Subsidiary of
Westlink, and thereafter, a wholly-owned Subsidiary of Arch Michigan.
"LENDER": each lender signatory to this Agreement and each Person
which becomes a lender pursuant to Section 3.7 or 11.5(b), in each case,
including each Tranche A Lender and each Tranche C Lender.
"LETTER OF CREDIT": as defined in Section 2.6(a).
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"LETTER OF CREDIT COMMITMENT": means the commitment of the Letter of
Credit Issuer to issue Letters of Credit having an aggregate outstanding face
amount up to $5,000,000. "LETTER OF CREDIT DOCUMENTATION": as defined in Section
2.6(a).
"LETTER OF CREDIT EXPOSURE": in respect of any Tranche A Lender at any
time, an amount equal to (i) the sum (without duplication) at such time of (x)
the aggregate undrawn face amount of the outstanding Letters of Credit, (y) the
aggregate amount of unpaid drafts drawn on all Letters of Credit, and (z) the
aggregate unpaid Reimbursement Obligations, MULTIPLIED BY (ii) such Tranche A
Lender's Tranche A Percentage at such time.
"LETTER OF CREDIT FEES": as defined in Section 3.2(b).
"LETTER OF CREDIT ISSUER": BNY.
"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 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 Collateral Documents and all other agreements,
instruments and documents executed or delivered in connection herewith.
"LOAN PARTY": the Borrower and each other party (other than the Credit
Parties) that is a party to a Loan Document.
"LOANS": the Tranche A Loans and the Tranche C Loans.
"LUND PRODUCTS": Lund Products Sales Company, an Iowa corporation,
prior to the ACE Contribution, a wholly-owned Subsidiary of Westlink, and
thereafter, a wholly-owned Subsidiary of Arch Michigan.
"MANAGEMENT AGREEMENT": the Amended and Restated Management Services
Agreement, dated as of June 29, 1998, by and among Arch and its Subsidiaries.
"MANAGEMENT FEES": all fees and expenses paid to Arch or the Parent by
any of their respective Subsidiaries, or to any of their respective Affiliates,
or to any employees thereof, for general corporate, administrative or management
services received.
"MANAGING AGENTS": as defined in the preamble.
"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, as the same may be amended or supplemented from time to time.
"MASTER ASSIGNMENT": the Master Assignment and Assumption Agreement,
substantially in the form of Exhibit N.
"MATERIAL ADVERSE CHANGE": a material adverse change in the financial
condition, business, operations, prospects (as such prospects pertain to
Borrower's ability to repay its obligations under the Loan Documents as the same
shall become due) or Property of (i) Arch and its Subsidiaries taken as a whole
or (ii) prior to termination of the Parent Guaranty, the Parent and its
Subsidiaries taken as a whole.
"MATERIAL ADVERSE EFFECT": a material adverse effect on the financial
condition, business, operations, prospects (as such prospects pertain to
Borrower's ability to repay its obligations under the Loan Documents as the same
shall become due) or Property of (i) Arch and its Subsidiaries taken as a whole
or (ii) prior to termination of the Parent Guaranty, the Parent and its
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 Tranche A Maturity Date or the Tranche C Maturity
Date, as the case may be.
"MAXIMUM EXCESS CASH FLOW AMOUNT": as defined in Section 2.4.
"MAXIMUM PERMITTED INDEBTEDNESS": on any date of determination, the
maximum Total Leverage Ratio permitted on such date multiplied by Annualized
Operating Cash Flow.
"MINORITY LENDERS": on any date of determination, Lenders under this
Agreement and Lenders under and as defined in the Tranche B Credit Agreement
having Tranche A Commitments (or, if no Tranche A Commitments are in effect,
Tranche A Exposure), Tranche B Commitments (or if no Tranche B Commitments are
in effect, Tranche B Loans) and Tranche C Loans of not less than 40% of the sum
of (i) the Aggregate Tranche A Commitments (or, if no Tranche A Commitments are
in effect, Aggregate Tranche A Exposure), (ii) the Aggregate Tranche B
Commitments (or if no Tranche B Commitments are in effect, the Aggregate Tranche
B Exposure), and (iii) the aggregate outstanding principal balance of the
Tranche C Loans.
"MOODY'S": Moody's Investors Service, Inc. or any successor thereto.
"MULTIEMPLOYER PLAN": a Plan which is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
"NET SALES PROCEEDS": an amount equal to the greater of (i) 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 (x) sales and
other commissions and legal and other expenses incurred in connection with such
sale, including reasonable expenses incurred in connection with the preparation
of such Property for sale, (y) taxes reasonably estimated to be
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payable with respect to such sale by the Parent and its Subsidiaries for the
taxable year in which such sale occurred (taking into consideration the Parent's
overall Consolidated tax position for such year) and (z) the amount of
Indebtedness secured by such Property which is required to be repaid upon such
sale or (ii) 100% of the Net Cash Proceeds (or similar amount) as defined in any
of the Parent Discount Notes Indenture, the Existing Arch Indentures, the Arch
12 3/4% Indenture or on and after the execution anD delivery thereof, the
Replacement Indenture, in each case in effect on the date of determination of
Net Sales Proceeds.
"NEW PARENT PREFERRED STOCK": Series C Convertible Preferred Stock of
the Parent.
"NON-COMPETITION AGREEMENTS": any non-competition or similar agreement
(to the extent permitted by Section 8.1(ix)), entered into by Arch or any of its
Subsidiaries in connection with an Acquisition permitted by Section 8.6(h).
"NOTES": with respect to each Lender in respect of such Lender's
Tranche A Loans and Tranche C Loans, a promissory note, substantially in the
form of Exhibit A, in each case payable to the order of such Lender, each such
promissory note having been made by the Borrower and dated the Second
Restatement Date, including all replacements thereof and substitutions therefor.
"NOTICE OF CONVERSION/CONTINUATION": a notice substantially in the
form of Exhibit C.
"OPERATING CASH FLOW": for any period, total revenue of the Borrower
and its 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, LESS the sum of, without
duplication, the following for the Borrower and its Subsidiaries on a
Consolidated basis for such period, determined in accordance with GAAP: (i)
operating expenses (exclusive of depreciation, amortization and other non-cash
items included therein), and (ii) corporate office, general and administrative
expenses (exclusive of depreciation, amortization and other non-cash items
included therein). Any Management Fees paid or accrued will be treated as an
administrative expense. Solely for purposes of calculating the API Leverage
Ratio and the Total 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.
"OTHER TAXES": any and all current or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies that
arise from any payment made hereunder or from the execution, delivery,
registration or enforcement of, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, the Loan Documents or otherwise
with respect to, the Loan Documents.
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"PAGE CALL": Page Call, Inc., a Delaware corporation.
"PAGE CALL GUARANTY": the guaranty by the Parent of the obligations of
Benbow in respect of (i) the preferred stock of Benbow and the promissory note
of Benbow described in the definition of Page Call Purchase Agreement and (ii)
the Consulting Agreement described in the definition of Page Call Purchase
Documents.
"PAGE CALL PURCHASE AGREEMENT": the Stock Purchase Agreement, dated as
of April 30, 1997, among Page Call, Lisa-Gaye Shearing, Adelphia Communications
Corporation, Benbow and the Parent, as amended on June 29, 1998, pursuant to
which Benbow will acquire all of the issued and outstanding Stock of Page Call
in consideration of the issuance of preferred stock of Benbow and a promissory
note of Benbow in an aggregate face amount of approximately $17,200,000.
"PAGE CALL PURCHASE DOCUMENTS": collectively, (i) the Page Call
Purchase Agreement, (ii) the Page Call Guaranty, (iii) the Consulting Agreement,
dated as of June 29, 1998, between Benbow and Lisa-Gaye Shearing, and (iv) all
other documents executed in connection therewith.
"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 Recital A.
"PARENT DISCOUNT NOTES": the 10-7/8% Senior Parent Discount Notes, due
2008, issued by the Parent pursuant to the Parent Discount Notes Indenture.
"PARENT DISCOUNT NOTES INDENTURE": the Indenture, dated as of March
12, 1996, between the Parent and IBJ Schroder Bank & Trust Company or its
successor, as trustee, pursuant to which the Parent issued the Parent Discount
Notes.
"PARENT GUARANTY": the Amended and Restated Parent Guaranty and Pledge
Agreement, in substantially the form of Exhibit F.
"PAYMENT OFFICE": the office of the Administrative Agent set forth in
Section 11.2(b).
"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 or a Commonly
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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.
"PRICING LEVERAGE RATIO": (i) prior to the Existing Arch Senior Note
Termination Date, the Total Leverage Ratio, and (ii) at all other times, the API
Leverage Ratio.
"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 all
Indebtedness of the Borrower and its Subsidiaries (determined on a Consolidated
basis in accordance with GAAP) for such four fiscal quarter period and (iii) the
amount, if positive, equal to (a) the amount of the Tranche A Loans outstanding
at the beginning of such period minus (b) the Aggregate Tranche A Commitments at
the end of such period (after giving effect to any mandatory reductions during
such period pursuant to Section 2.3(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, formerly a Subsidiary of
ACE which, in or about February, 1997, was merged into Arch Southeast with Arch
Southeast as the survivor.
"PROPERTY": all types of real, personal, tangible, intangible or mixed
property.
"REGISTER": as defined in Section 2.8(b)(iii).
"REGISTERED NOTE": as defined in Section 2.8(b)(i).
"REGISTERED NOTEHOLDER": as defined in Section 2.8(b)(ii).
"REGULATION D, T, U AND X": Regulations D, T, U and X, respectively,
of the Board of Governors as from time to time in effect and all official
rulings and interpretations thereunder or thereof.
"REIMBURSEMENT OBLIGATION": collectively, the obligation of the
Borrower to the Letter of Credit Issuer with respect to each Letter of Credit
and all documents, instruments and other agreements related thereto, including
the obligation of the Borrower to reimburse the Letter of Credit Issuer for
amounts drawn under such Letter of Credit.
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"REINVESTED PROCEEDS": with respect to any Disposition as of any date
of determination, the amount of Net Sales Proceeds from such Disposition that is
used by the Borrower or any Subsidiary to acquire, during the Reinvestment
Period with respect to such Disposition, Property that is to be used in a
Paging-Related Business.
"REINVESTMENT PERIOD": the period beginning on the date that proceeds
from a Disposition are received by the Borrower or any Subsidiary, as the case
may be, and ending on the earlier of (i) 180 days after the receipt of such
proceeds, PROVIDED, HOWEVER, that if the Borrower or any Subsidiary enters into
a legally binding agreement to reinvest such proceeds which would have been
consummated within such 180 day period and such agreement is terminated, such
180 day period shall be extended for an additional 90 days, and (ii) the date on
which a Loan Party would be required to make or offer to purchase or otherwise
repay Indebtedness (other than Indebtedness under the Loan Documents) as a
result of such Disposition.
"RELATED PARTIES": with respect to any Person, such Person's
Affiliates and the respective directors, officers, employees, agents and
advisors of such Person and such Person's Affiliates.
"RELEVANT DATE": (i) in the case of each Lender signatory hereto on
the Second Restatement Date, the Second Restatement Date, or (ii) in the case of
each other Lender, the effective date of the Assignment and Acceptance Agreement
or other document 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.
"REPLACEMENT INDENTURE": the indenture pursuant to which the
Replacement Notes shall be issued.
"REPLACEMENT NOTES": any senior note issue of Arch in an amount and on
terms and conditions satisfactory to the Required Lenders.
"REQUIRED LENDERS": on any date of determination, Lenders under this
Agreement and Lenders under and as defined in the Tranche B Credit Agreement
having Tranche A Commitments (or, if no Tranche A Commitments are in effect,
Tranche A Exposure), Tranche B Commitments (or if no Tranche B Commitments are
in effect, Tranche B Loans) and Tranche C Loans of more than 50% of the sum of
(i) the Aggregate Tranche A Commitments (or, if no Tranche A Commitments are in
effect, Aggregate Tranche A Exposure), (ii) the Aggregate Tranche B Commitments
(or if no Tranche B Commitments are in effect, the Aggregate Tranche B
Exposure), and (iii) the aggregate outstanding principal balance of the Tranche
C Loans.
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"REQUIRED OBLIGATIONS": on any date, interest due and payable on such
date on the Existing Arch Senior Notes, the Arch 12 3/4% Senior Notes and any
ReplacemenT Notes.
"REQUIRED PAYMENT": as defined in Section 3.6(a).
"RESTRICTED PAYMENT": as to any Person, (i) the payment or declaration
by such Person of any dividend on any class of capital Stock or other equity
interest (other than dividends payable solely in common Stock of the such Person
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
Person (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, (ii) the retirement,
redemption, purchase or acquisition, directly or indirectly, of (a) any shares
of the capital Stock of such Person (except shares acquired solely upon the
conversion thereof 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 Person, or (iii) the payment of any Management Fees or
any payment under the Tax Sharing Agreement or the Management Agreement.
"RESTRICTED SUBSIDIARY": collectively, each of the following
wholly-owned Subsidiaries of the Borrower which were in existence on the
effective date of the ACE Merger and which are parties to the Existing
Subsidiary Guaranty: (i) Arch Capitol, (ii) Arch Connecticut, (iii) Arch
Michigan, (iv) Arch Services, (v) Arch Southeast (vi) Becker, (vii) Beeper,
(viii) Westlink Licensee Corp., (ix) Lund Products, (x) Answer Iowa, (xi) Answer
Iowa Licensee Corp., (xii) Westlink New Mexico, (xiii) Westlink New Mexico
Licensee Corp., (xiv) Kelley's Telephone, (xv) Kelley's Licensee Corp., (xvi)
Cascade, (xvii) Telecomm/KRT and (xviii) Westlink.
"RESTRICTED SUBSIDIARY SECURITY AGREEMENT (9 1/2% INDENTURE)": thE
Restricted Subsidiary Security Agreement (9 1/2% Indenture), in substantially
the form oF Exhibit K-2.
"RESTRICTED SUBSIDIARY SECURITY AGREEMENT (14% INDENTURE)": the
Restricted Subsidiary Security Agreement (14% Indenture), in substantially the
form of Exhibit K-3.
"RESTRICTED SUBSIDIARY SECURITY AGREEMENT (BANK)": the Second Amended
and Restated Restricted Subsidiary Security Agreement, in substantially the form
of Exhibit K-1.
"S&P": Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc., or any successor thereto.
"SEC": the Securities and Exchange Commission or any Governmental Body
succeeding to the functions thereof.
"SECOND RESTATEMENT DATE": as defined in Recital E.
"SECURED HEDGING AGREEMENT": any Interest Rate Protection Agreement
entered into by the Borrower with a counterparty that was a Lender or an
Existing Lender
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(or an Affiliate thereof) at the time such Interest Rate Protection Agreement
was entered into.
"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 contingent
liabilities, of such 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.
"SPECIFIED PERCENTAGE": with respect to any (i) Tranche A Lender in
connection with Tranche A Loans and Eurodollar Advances to the extent consisting
of Tranche A Loans, its Tranche A Percentage at such time, and (ii) Tranche C
Lender in connection with its Tranche C Loan and Eurodollar Advances to the
extent consisting of Tranche C Loans, its Tranche C Percentage at such time.
"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.
"SUBORDINATED INDENTURE": the Indenture, dated as of December 1, 1993,
between the Parent and BNY or its successor, as trustee, pursuant to which the
Parent issued the Subordinated Debentures.
"SUBORDINATION AGREEMENT": the Subordination Agreement, dated as of
May 21, 1996, among ACE, certain Subsidiaries of ACE, the Parent and the
Administrative Agent.
"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 GUARANTOR": each Subsidiary party to the Subsidiary
Guaranty.
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"SUBSIDIARY GUARANTY": the Amended and Restated Subsidiary Guaranty,
amending and restating in part the Existing Subsidiary Guaranty, in
substantially the form of Exhibit J.
"SYNDICATION AGENT": as defined in the preamble.
"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 SHARING AGREEMENT": the Tax Sharing Agreement, dated as of May 5,
1995, 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.
"TOTAL DEBT": at any date of determination, the sum of all
Indebtedness (other than Intercompany Subordinated Debt) of Arch and its
Subsidiaries, determined on a Consolidated basis in accordance with GAAP.
"TOTAL LEVERAGE RATIO": at any date of determination, the ratio of
Total Debt to Annualized Operating Cash Flow.
"TOTAL PERCENTAGE" means as of any date and with respect to each
Lender, the percentage equal to a fraction (i) the numerator of which is the sum
of (A) the Tranche A Commitment of such Lender on such date (or, if there are no
Tranche A Commitments on such date, such Lender's Tranche A Exposure on such
date) plus (B) the unpaid principal balance of such Lender's Tranche C Loans on
such date, and (ii) the denominator of which is sum of (A) the Aggregate Tranche
A Commitments on such date (or, if there are no Tranche A Commitments on such
date, the Aggregate Tranche A Exposure on such date) plus (B) the aggregate
unpaid principal balance of all Tranche C Loans on such date.
"TOWER SALE": the sale of transmitting tower sites pursuant to the
Asset Purchase and Sale Agreement, dated as of April 10, 1998, by and among
OmniAmerica, Inc. and certain wholly-owned Subsidiaries of the Parent.
"TRANCHE A COMMITMENT": in respect of any Tranche A Lender, the
maximum amount of such Lender's Tranche A Exposure as set forth on the signature
page of such Lender adjacent to the heading "Tranche A Commitment" or in an
Assignment and Acceptance Agreement or other document pursuant to which it
became a Tranche A Lender, as such amount may be adjusted from time to time in
accordance herewith.
"TRANCHE A COMMITMENT FEE": as defined in Section 3.2(a).
"TRANCHE A COMMITMENT PERIOD": the period from the Second Restatement
Date until the Business Day immediately preceding the Tranche A Maturity Date.
"TRANCHE A EXPOSURE": with respect to any Tranche A Lender as of any
date, the sum as of such date of (i) the outstanding principal balance of such
Lender's Tranche A Loans, PLUS (ii) such Lender's Letter of Credit Exposure.
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"TRANCHE A LENDER": each Lender having a Tranche A Commitment.
"TRANCHE A LOAN" and "TRANCHE A LOANS": as defined in Section 2.1(a).
"TRANCHE A MATURITY DATE": the earliest to occur of (i) June 30, 2005,
(ii) the Adjusted Indenture Maturity Date, and (iii) such other date on which
the Tranche A Loans shall become due and payable, whether by acceleration or
otherwise.
"TRANCHE A PERCENTAGE": as of any date and with respect to each
Tranche A Lender, the percentage equal to a fraction (i) the numerator of which
is the Tranche A Commitment of such Tranche A Lender on such date (or, if there
are no Tranche A Commitments on such date, on the last date upon which one or
more Tranche A Commitments were in effect), and (ii) the denominator of which is
sum of the Aggregate Tranche A Commitments on such date (or, if there are no
Tranche A Commitments on such date, on the last date upon which one or more
Tranche A Commitments were in effect).
"TRANCHE B COMMITMENT": as defined in the Tranche B Credit Agreement.
"TRANCHE B CONVERSION DATE": as defined in the Tranche B Credit
Agreement.
"TRANCHE B CREDIT AGREEMENT": as defined in Recital D.
"TRANCHE B LENDER": as defined in the Tranche B Credit Agreement.
"TRANCHE B LOAN" and "TRANCHE B LOANS": as defined in the Tranche B
Credit Agreement.
"TRANCHE C LENDER": each Lender having a Tranche C Loan outstanding.
"TRANCHE C LOANS": as defined in Section 2.1(b).
"TRANCHE C MATURITY DATE": the earliest to occur of (i) June 30, 2006,
(ii) 30 days after the occurrence of the Adjusted Indenture Maturity Date, and
(iii) such other date on which the Tranche C Loans shall become due and payable,
whether by acceleration or otherwise.
"TRANCHE C PERCENTAGE" means as of any date and with respect to each
Tranche C Lender, the percentage equal to a fraction (i) the numerator of which
is the aggregate outstanding principal amount of such Tranche C Lender's Tranche
C Loan, and (ii) the denominator of which is the aggregate outstanding principal
balance of the Tranche C Loans of all Tranche C Lenders.
"TRANSACTION DOCUMENTS": collectively, the Loan Documents, the Arch 12
3/4% Indenture, the Equity Investment Documents and all documents executed and
delivered in connection with the Arch Transactions, the ACE Transactions and the
Equity Investment.
"TRANSACTIONS": collectively, the transactions contemplated by the
Transaction Documents.
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"TRIGGERING COLLATERAL DOCUMENTS": collectively, upon the declaration
of the effectiveness thereof pursuant to Section 7.19, the Borrower Security
Agreement (Bank), the Arch Security Agreement (Bank) and the Unrestricted
Subsidiary Security Agreement (Bank).
"UNITED STATES": the United States of America.
"UNRESTRICTED SUBSIDIARY SECURITY AGREEMENT (9 1/2% INDENTURE)": thE
Unrestricted Subsidiary Security Agreement (9 1/2% Indenture), substantially in
the form oF Exhibit L-2.
"UNRESTRICTED SUBSIDIARY SECURITY AGREEMENT (14% INDENTURE)": the
Unrestricted Subsidiary Security Agreement (14% Indenture), substantially in the
form of Exhibit L-3.
"UNRESTRICTED SUBSIDIARY SECURITY AGREEMENT (BANK)": the Unrestricted
Subsidiary Security Agreement (Bank), substantially in the form of Exhibit L-1.
"USAM III": as defined in Recital B(2).
"USAM NAME CHANGE": as defined in Recital B(2).
"WESTLINK": as defined in Recital B(1).
"WESTLINK II": as defined in Recital B(1).
"WESTLINK LICENSEE CORP.": Westlink Licensee Corporation, a Delaware
corporation, prior to the ACE Contribution, a wholly-owned Subsidiary of
Westlink, and thereafter, a wholly-owned Subsidiary of Arch Michigan.
"WESTLINK NAME CHANGE": as defined in Recital B.
"WESTLINK NEW MEXICO": The Westlink Paging Company of New Mexico,
Inc., a New Mexico corporation, prior to the ACE Contribution, a wholly-owned
Subsidiary of Westlink, and thereafter, a wholly-owned Subsidiary of Arch
Michigan.
"WESTLINK NEW MEXICO LICENSEE CORP.": Westlink of New Mexico Licensee
Corporation, a Delaware corporation and a wholly-owned Subsidiary of Westlink
New Mexico.
"YEAR 2000 ISSUE": the failure of computer software, hardware and
firmware systems and equipment containing embedded computer chips to properly
receive, transmit, process, manipulate, store, retrieve, re- transmit or in any
other way utilize data and information due to the occurrence of the year 2000 or
the inclusion of dates on or after January 1, 2000.
1.2. ACCOUNTING TERMS.
As used in the Loan Documents and in any certificate, opinion 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.
If any change in GAAP would affect
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the computation of any financial ratio or requirement set forth in this
Agreement, the Credit Parties 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 and (ii) the Borrower shall provide to the Credit Parties
financial statements and other documents required under this Agreement (or such
other items as the Administrative Agent may reasonably request) setting forth a
reconciliation between calculations of such ratio or requirement before and
after giving effect to such change.
1.3. RULES OF INTERPRETATION.
(a) Unless expressly provided in a Loan Document to the contrary, (i)
the words "hereof", "herein", "hereto" and "hereunder" and similar words when
used in each Loan Document shall refer to such Loan Document as a whole and not
to any particular provision thereof, (ii) section, subsection, schedule and
exhibit references contained therein shall refer to section, subsection,
schedule and exhibit thereof or thereto, (iii) the words "include" and
"including", shall mean that the same shall be "included, without limitation",
(iv) any definition of, or reference to, any agreement, instrument, certificate
or other document herein shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or
otherwise modified, (v) any reference herein to any Person shall be construed to
include such Person's successors and assigns, (vi) words in the singular number
include the plural, and words used therein in the plural include the singular,
(vii) any reference to a time shall refer to such time in New York, (viii) 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", and (ix) references therein to a fiscal period
shall refer to that fiscal period of the Borrower.
(b) Section headings have been inserted in the Loan Documents for
convenience only and shall not be construed to be a part thereof.
2. AMOUNT AND TERMS OF EXTENSIONS OF CREDIT.
2.1. LOANS.
(a) TRANCHE A LOANS. On the Second Restatement Date (after giving
effect to the Master Assignment), the Existing Revolving Loans shall continue
(subject to the terms and conditions hereof) as "Tranche A Loans" hereunder.
Subject to the terms and conditions hereof, each Tranche A Lender severally
agrees to make revolving credit loans (each a "TRANCHE A LOAN" and, as the
context may require, collectively with all other Tranche A Loans of such Tranche
A Lender and/or with the Tranche A Loans of each other Tranche A Lender, the
"TRANCHE A LOANS") to the Borrower from time to time during the Tranche A
Commitment Period, PROVIDED THAT immediately after giving effect thereto (i) the
Tranche A Exposure of such Tranche A Lender shall not exceed such Tranche A
Lender's Tranche A Commitment, and (ii) the Aggregate Tranche A Exposure shall
not exceed the Aggregate Tranche A Commitments. During the Tranche A Commitment
Period, the Borrower may borrow, prepay in whole or in part and reborrow under
the Aggregate Tranche A Commitments, all in accordance with the terms and
conditions of this Agreement.
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(b) TRANCHE C LOANS. On the Second Restatement Date (after giving
effect to the Master Assignment), (i) $125,000,000 of the Existing Tranche A
Term Loans shall be converted to Tranche C Loans and shall continue as "Tranche
C Loans" hereunder (the "TRANCHE C LOANS"), and (ii) each Tranche C Lender shall
have Tranche C Loans in an outstanding principal amount equal to the amount set
forth on the signature page of such Lender adjacent to the heading "Tranche C
Loan" or in an Assignment and Acceptance Agreement or other document pursuant to
which it became a Tranche C Lender, as such amount may be adjusted from time to
time in accordance herewith. No amounts paid or prepaid with respect to Tranche
C Loans may be reborrowed.
2.2. PROCEDURE FOR BORROWING LOANS.
(a) The Borrower may borrow under the Aggregate Tranche A Commitments
on any Business Day during the Tranche A Commitment Period, provided that the
Borrower shall notify the Administrative Agent (by telephone or fax) no later
than 1:00 p.m. (A) three Business Days prior to the requested Credit Extension
Date in the case of Eurodollar Advances and (B) one Business Day prior to the
requested Credit Extension Date in the case of ABR Advances, in each case
specifying (1) the aggregate principal amount to be borrowed under the Aggregate
Tranche A Commitments, (2) the requested Credit Extension 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 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 Credit 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 Tranche A 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, each Tranche
A Lender will make the amount of its Tranche A Percentage of each such borrowing
of Tranche A Loans available to the Administrative Agent for the account of the
Borrower at the Payment Office not later than 2:30 p.m., on the relevant Credit
Extension 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 Credit Extension 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 Payment Office 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 Tranche A 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 Credit Extension Date in accordance with this
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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 Credit Extension
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 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 3.1, 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 Credit Extension Date applicable
to such Loans.
(c) If a Lender makes a new Loan to the Borrower on a Credit Extension
Date on which the Borrower is to repay a Loan of such Lender of the same type or
make a scheduled amortization payment on a Loan of such Lender of the same type,
such Lender shall apply the proceeds of such new Loan to make such repayment or
scheduled amortization payment, and only the excess of the proceeds of such new
Loan over the 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 Credit Request.
2.3. TERMINATION OR REDUCTION OF THE AGGREGATE TRANCHE A 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 Tranche A
Commitments or from time to time to reduce permanently the unused amount of the
Aggregate Tranche A Commitments to an amount not less than the Aggregate Tranche
A Exposure (after giving effect to any contemporaneous payment or prepayment of
Tranche A Loans or Reimbursement Obligations). Any such reduction shall be in
the amount of $1,000,000 or such amount plus a whole multiple of $100,000.
(b) MANDATORY SCHEDULED REDUCTIONS. On the dates set forth below, the
Aggregate Tranche A Commitments shall be permanently reduced on the following
dates in the following percentages of the Aggregate Tranche A Commitments as of
the Second Restatement Date:
Date Percentage
---- ----------
September 30, 2000 5.0%
December 31, 2000 5.0%
March 31, 2001 5.0%
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June 30, 2001 5.0%
September 30, 2001 5.0%
December 31, 2001 5.0%
March 31, 2002 5.0%
June 30, 2002 5.0%
September 30, 2002 5.0%
December 31, 2002 5.0%
March 31, 2003 5.0%
June 30, 2003 5.0%
September 30, 2003 5.0%
December 31, 2003 5.0%
March 31, 2004 5.0%
June 30, 2004 5.0%
September 30, 2004 5.0%
December 31, 2004 5.0%
March 31, 2005 5.0%
June 30, 2005 5.0%.
(c) MANDATORY TERMINATION. Notwithstanding anything to the contrary in
any Loan Document, the Aggregate Tranche A Commitments shall terminate on the
Tranche A Maturity Date.
(d) OTHER MANDATORY REDUCTIONS. If after applying all or any portion
of a reduction or prepayment required by Section 2.4 hereof, the Aggregate
Tranche B Commitments shall have been terminated or no longer exist and the
Tranche B Loans shall have been paid in full, the Aggregate Tranche A
Commitments shall be permanently reduced in an amount equal to (i) the Aggregate
Prepayment/Reduction Amount to be applied as of such date pursuant to Section
2.4 hereof (less any portion of such amount which is applied to the Aggregate
Tranche B Commitments and Tranche B Loans pursuant to the provisions of Section
2.4 of the Tranche B Credit Agreement) MINUS (ii) the product of the Aggregate
Tranche C Percentage and the Aggregate Prepayment/Reduction Amount to be applied
as of such date.
(e) REDUCTIONS OF LETTER OF CREDIT COMMITMENT. The Letter of Credit
Commitment shall not be reduced until such time as the Aggregate Tranche A
Commitments shall equal such Letter of Credit Commitment, and thereafter shall
in each case be reduced, automatically, by a sum equal to the amount of each
such reduction in the Aggregate Tranche A Commitments.
(f) IN GENERAL. Each reduction of the Aggregate Tranche A
Commitments shall be made by reducing each Lender's Tranche A Commitment by an
amount equal to such Lender's Tranche A Percentage of such reduction, and each
reduction of the Aggregate Tranche A Commitments made pursuant to Section 2.3(a)
or 2.3(d) shall be applied to the remaining Aggregate Tranche A Commitments
reductions set forth in Section 2.3(b) on a pro rata basis. Simultaneously with
each reduction of the Aggregate Tranche A Commitments, the Borrower shall pay
the Tranche A Commitment Fee accrued on the amount by which the Aggregate
Tranche A Commitments has been reduced.
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2.4. APPLICATION OF PROCEEDS.
On or before each date set forth below, the Borrower shall prepay the
aggregate unpaid principal amount of the Tranche C Loans by an amount equal to
the product of (i) the amount set forth below and applicable to such date (the
"AGGREGATE PREPAYMENT/REDUCTION AMOUNT") and (ii) the Aggregate Tranche C
Percentage:
(a) on the last day of the Reinvestment Period for each
Disposition by an amount equal to 100% of the Adjusted Net Cash Proceeds
with respect to such Disposition;
(b) for each fiscal year prior to the fiscal year in which the
Existing Arch Senior Note Termination Date occurs, commencing with the
fiscal year ended December 31, 1999, and effective on March 31st of each
immediately succeeding fiscal year, by an amount equal to (i) if the Total
Leverage Ratio at the end of such fiscal year is greater than 4.00:1.00,
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 Total Leverage Ratio
to 4.00:1:00 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)
above, or (ii) if the Total Leverage Ratio at the end of such fiscal year
is less than or equal to 4.00:1.00, 50% of Excess Cash Flow;
(c) in an amount equal to all Applicable Proceeds (i) in excess
of amounts used to replace or repair any properties or (ii) which are not
used or designated to replace or repair properties within one year after
receipt thereof, provided that the Borrower or the applicable Subsidiary
Guarantor shall have commenced the restoration or replacement process
(including the making of appropriate filings and requests for approval)
within 45 days after such casualty or after the receipt of any such
condemnation proceeds, as the case may be, and diligently pursues the same
through completion.
2.5. SCHEDULED REPAYMENTS OF TRANCHE C LOANS; PREPAYMENTS OF LOANS.
(a) SCHEDULED REPAYMENT OF TRANCHE C LOANS. The aggregate outstanding
principal balance of the Tranche C Loans shall be due and payable on the
following dates in the following percentages of the aggregate outstanding
principal balance of the Tranche C Loans as of the Second Restatement Date:
Date Percentage
---- ----------
December 31, 1999 1.0%
December 31, 2000 1.0%
December 31, 2001 1.0%
December 31, 2002 1.0%
December 31, 2003 1.0%
December 31, 2004 1.0%
December 31, 2005 1.0%
Tranche C Maturity Date the remaining unpaid princi-
pal amount of the Tranche C
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Loans together with all
accrued and unpaid interest
thereon.
(b) 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) Tranche
A Loans, Tranche C Loans or a combination thereof, 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 3.3)
$500,000.
(c) MANDATORY PREPAYMENTS RELATING TO REDUCTIONS OR TERMINATION OF
COMMITMENTS. Simultaneously with each reduction or termination (pursuant to
Section 2.3(c) or otherwise) of the Aggregate Tranche A Commitments, the
Borrower shall prepay or repay the Tranche A Loans or terminate Letters of
Credit by the amount, if any, by which the Aggregate Tranche A Exposure exceeds
the amount of the Aggregate Tranche A Commitments as so reduced or terminated,
provided, however, if the termination of the Aggregate Tranche A Commitments was
caused solely by the occurrence of the Adjusted Indenture Maturity Date, such
prepayment of Tranche A Loans and termination of Letters of Credit as required
by this Section shall be made 30 days after the occurrence of the Adjusted
Indenture Maturity Date.
(d) OTHER MANDATORY PREPAYMENTS. The Tranche C Loans shall be prepaid
at the times and in the amounts required by Section 2.4.
(e) APPLICATION OF PREPAYMENTS. Each prepayment of the Tranche C Loans
pursuant to Sections 2.4(a), (b) and (c) and Section 2.5(b) shall be applied
against the remaining installments of principal required to be paid pursuant to
Section 2.5(a) pro rata against such installments.
(f) 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 3.4.
2.6. LETTERS OF CREDIT.
(a) AVAILABILITY; PROCEDURE. (i) The Borrower may request the Letter
of Credit Issuer to issue standby letters of credit (the "LETTERS OF CREDIT";
each, individually,
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a "LETTER OF CREDIT") during the period from the Second Restatement Date to the
tenth Business Day prior to the Tranche A Maturity Date, provided that
immediately after the issuance of each Letter of Credit the Letter of Credit
Exposure of all Tranche A Lenders would not exceed the Letter of Credit
Commitment and the Aggregate Tranche A Exposure would not exceed the Aggregate
Tranche A Commitments. To request the issuance of a Letter of Credit, the
Borrower shall notify the Administrative Agent and the Letter of Credit Issuer
by the delivery of a Credit Request, which shall be sent by facsimile and shall
be irrevocable (confirmed promptly, and in any event within five Business Days,
by the delivery to the Administrative Agent of a Credit Request manually signed
by the Borrower), at least three Business Days prior to the requested date of
issuance, specifying (A) the beneficiary of such Letter of Credit, (B) the
Borrower's proposal as to the conditions under which a drawing may be made under
such Letter of Credit and the documentation to be required in respect thereof,
(C) the maximum amount to be available under such Letter of Credit, and (D) the
requested dates of issuance and expiration. Such Credit Request shall be
accompanied by a duly completed application for such Letter of Credit on such
forms as may be made available from time to time by the Letter of Credit Issuer
and such other certificates, documents (including a reimbursement agreement) and
other information as may be required by the Letter of Credit Issuer in
accordance with its customary procedures (collectively, the "LETTER OF CREDIT
DOCUMENTATION"). Upon receipt of such Credit Request from the Borrower, the
Administrative Agent shall promptly notify each Lender thereof. Subject to the
satisfaction of the terms and conditions of this Agreement, the Letter of Credit
Issuer shall issue each requested Letter of Credit. In the event of any conflict
between the provisions of this Agreement and any Letter of Credit Documentation,
the provisions of this Agreement shall control.
(b) TERMS OF LETTERS OF CREDIT. Each Letter of Credit shall (i) be
issued for the account of the Borrower and in support of obligations, contingent
or otherwise, of the Borrower or any Subsidiary arising in the ordinary course
of business, and (ii) have an expiration date that shall be not later than the
earlier of (A) twelve months after the date of issuance thereof or (B) ten
Business Days before the Tranche A Maturity Date, provided that the expiration
date of such Letter of Credit may be extended or such Letter of Credit may be
renewed, provided, further, that any renewal, or any extension of any expiry
date, of a Letter of Credit shall constitute the issuance of such Letter of
Credit for all purposes of this Agreement.
(c) LETTER OF CREDIT PARTICIPATIONS. Immediately upon the issuance of
a Letter of Credit, the Letter of Credit Issuer shall be deemed to have sold and
transferred to each Tranche A Lender, and each Tranche A Lender shall be deemed
to have irrevocably and unconditionally purchased and received from the Letter
of Credit Issuer, without recourse or warranty, an undivided interest and
participation, to the extent of such Lender's Tranche A Percentage thereof, in
such Letter of Credit and the obligations of the Borrower with respect thereto
and any security therefor and any guaranty pertaining thereto at any time
existing.
(d) DRAWINGS ON LETTERS OF CREDIT. The Letter of Credit Issuer shall
promptly notify (i) each Tranche A Lender of the Letter of Credit Issuer's
receipt of a drawing request under any Letter of Credit, stating the amount of
such Lender's Tranche A Percentage of such drawing request and the date on which
such request will be honored and (ii) the Borrower of the amount of such drawing
request and the date on which such request will be honored. Any failure of the
Letter of Credit Issuer to give or any delay in the Letter of Credit Issuer's
giving any such notice shall not release or diminish the obligations of the
Borrower or any Tranche A Lender hereunder. In determining whether to
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pay under any Letter of Credit, the Letter of Credit Issuer shall have no
obligation to any Tranche A Lender or the Borrower other than to confirm that
any documents required to be delivered under such Letter of Credit have been
delivered and that they appear to comply on their face with the requirements of
such Letter of Credit. In the absence of gross negligence or willful misconduct
on the part of the Letter of Credit Issuer, the Letter of Credit Issuer shall
have no liability to any Tranche A Lender or the Borrower for any action taken
or omitted to be taken by it under or in connection with any Letter of Credit,
including any such action negligently taken or negligently omitted to be taken
by it.
(e) REIMBURSEMENT. The Borrower shall pay to the Administrative Agent
for the account of the Letter of Credit Issuer on demand therefor, in
immediately available funds, the amount of all Reimbursement Obligations owing
to the Letter of Credit Issuer under any Letter of Credit, together with
interest thereon as provided in Section 3.1, irrespective of any claim, setoff,
defense or other right that the Borrower may have at any time against the Letter
of Credit Issuer or any other Person. In the event that the Letter of Credit
Issuer makes any payment under any Letter of Credit and the Borrower shall not
have repaid such amount to the Letter of Credit Issuer when due, the Letter of
Credit Issuer shall promptly notify each Tranche A Lender of such failure, and
each such Lender shall promptly and unconditionally pay to the Administrative
Agent, for the account of the Letter of Credit Issuer, the amount of such
Lender's Tranche A Percentage of such payment in immediately available funds on
the Business Day the Letter of Credit Issuer so notifies such Lender if such
notice is given prior to 12:00 Noon or, if such notice is given after 12:00
Noon, such Lender shall make its Tranche A Percentage of such payment available
to the Letter of Credit Issuer prior to 12:00 Noon on the next succeeding
Business Day.
(f) LENDERS' OBLIGATIONS. If and to the extent any Tranche A Lender
shall not make such Lender's Tranche A Percentage of any Reimbursement
Obligations available to the Letter of Credit Issuer when due in accordance with
Section 2.6(e), such Lender agrees to pay, on demand, interest to the Letter of
Credit Issuer on such unpaid amount for each day from the date such payment is
due until the date such amount is paid in full to the Letter of Credit Issuer at
a rate per annum equal to the greater of the Federal Funds Rate and a rate
determined by the Letter of Credit Issuer in accordance with banking industry
rates on interbank compensation. The obligations of the Lenders under this
Section 2.6(f) are several and not joint or joint and several, and the failure
of any Lender to make available to the Letter of Credit Issuer its Tranche A
Percentage of any Reimbursement Obligations when due in accordance with Section
2.6(e) shall not relieve any other Lender of its obligation hereunder to make
its Tranche A Percentage of such Reimbursement Obligations so available when so
due, but no Lender shall be responsible for the failure of any other Lender to
make such other Lender's Tranche A Percentage of such Reimbursement Obligations
so available when so due.
(g) RESCISSION. Whenever the Letter of Credit Issuer receives a
payment of a Reimbursement Obligation from or on behalf of the Borrower as to
which the Letter of Credit Issuer has received any payment from a Tranche A
Lender pursuant to Section 2.6(e), the Letter of Credit Issuer shall promptly
pay to such Lender an amount equal to such Lender's Tranche A Percentage of such
payment from or on behalf of the Borrower. If any payment by or on behalf of the
Borrower and received by the Letter of Credit Issuer with respect to any Letter
of Credit is rescinded or must otherwise be returned by the Letter of Credit
Issuer for any reason and the Letter of Credit Issuer has paid to any Lender any
portion thereof, each such Lender shall forthwith pay over to the
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Letter of Credit Issuer an amount equal to such Lender's Tranche A Percentage of
the amount that must be so returned by the Letter of Credit Issuer.
(h) EXPENSES. Each Tranche A Lender, upon the demand of the Letter of
Credit Issuer, shall reimburse the Letter of Credit Issuer, to the extent the
Letter of Credit Issuer has not been reimbursed by the Borrower after demand
therefor, for the reasonable costs and expenses (including reasonable attorneys'
fees) incurred by the Letter of Credit Issuer in connection with the collection
of amounts due under, and the preservation and enforcement of any rights
conferred by, any Letter of Credit or the performance of the Letter of Credit
Issuer's obligations as issuer of the Letters of Credit under this Agreement in
respect thereof, to the extent of such Lender's Tranche A Percentage of the
amount of such costs and expenses, 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 the same result from the gross negligence or willful misconduct of
the Letter of Credit Issuer. The Letter of Credit Issuer shall refund any costs
and expenses reimbursed by such Lender that are subsequently recovered from the
Borrower in an amount equal to such Lender's Tranche A Percentage thereof.
(i) OBLIGATIONS ABSOLUTE. The obligation of the Borrower to reimburse
the Letter of Credit Issuer pursuant to this Section 2.6, and the obligation of
each Tranche A Lender to make available to the Letter of Credit Issuer the
amounts set forth in this Section 2.6 shall be absolute, unconditional and
irrevocable under any and all circumstances, shall be made without reduction for
any set-off, counterclaim or other deduction of any nature whatsoever, may not
be terminated, suspended or delayed for any reason whatsoever, shall not be
subject to any qualification or exception and shall be made in accordance with
the terms and conditions of this Agreement under all circumstances, including
any of the following circumstances: (1) any lack of validity or enforceability
of this Agreement or any of the other Loan Documents, (2) the existence of any
claim, setoff, defense or other right that the Borrower may have at any time
against a beneficiary named in a Letter of Credit, any transferee of any Letter
of Credit (or any Person for whom any such transferee may be acting), the Letter
of Credit Issuer, any Lender or any other Person, whether in connection with
this Agreement, any other Loan Document, any Letter of Credit, the transactions
contemplated in the Loan Documents or any unrelated transactions (including any
underlying transaction between the Borrower and the beneficiary named in any
such Letter of Credit), (3) any draft, certificate or any other document
presented under any Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect, (4) the surrender or impairment of any Collateral for
the performance or observance of any of the terms of any of the Loan Documents,
or (5) the occurrence of any Default or Event of Default. Nothing contained in
this Section 2.6(i), however, shall require the Borrower or any Lender to
reimburse the Letter of Credit Issuer for any amounts that become due by reason
of the Letter of Credit Issuer's gross negligence or wilful misconduct.
2.7. USE OF PROCEEDS.
The proceeds of the Extensions of Credit shall be used solely,
directly or indirectly, (i) for general corporate purposes of the Borrower and
its Subsidiaries, including Capital Expenditures and working capital, not
inconsistent with the provisions hereof, (ii) to finance Acquisitions to the
extent permitted by Section 8.6, (iii) to make Restricted
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Payments to the extent permitted by Section 8.5, and (iv) 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 Extensions of Credit will be used, directly or
indirectly, for a purpose which violates any law, including the provisions of
Regulations T, U or X.
2.8. NOTES; REGISTRATION.
(a) IN GENERAL. The Loans made by each Lender shall be evidenced by a
Note.
(b) REGISTERED NOTES.
(i) Any Foreign Credit Party 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 it under the Loan Documents relating to any of its
Loans, if such Loans were in registered form for U.S. Federal income tax
purposes, may request the Borrower (through the Administrative Agent), and
the Borrower agrees thereupon, (A) in the case of a Foreign Credit Party
listed on the signature pages hereof, to exchange such Foreign Credit
Party's Note for a promissory note registered as provided in clause (iii)
below (each, a "REGISTERED NOTE") and (B) in the case of each other Foreign
Credit Party, to issue to such Foreign Credit Party its Note in the form of
a Registered Note. A Registered Note may not be exchanged for a Note that
is not in registered form.
(ii) Each Foreign Credit Party holding a Registered Note (a
"REGISTERED NOTEHOLDER") and, if such Foreign Credit Party 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 Foreign
Credit Party becomes a Registered Noteholder, a Form W-8 (Certificate of
Foreign Status of the Department of Treasury of the United States) or the
successor form thereto and any related forms (including, if applicable,
Form W-8C) and related forms as may from time to time be adopted by the
relevant taxing authorities of the United States which are required to
allow payments of portfolio interest (within the meaning of Code Section
871(b) to be made free of United States withholding tax. 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).
(iii) 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 Payment
Office which shall set forth (A) the names and addresses of each Lender,
including each registered owner of Loans evidenced by a Registered Note,
(B) the Class or Classes of
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the Loans of such Lender, (C) if such Lender is a Tranche A Lender, the
amount of its Tranche A Commitment and the principal amount of its Tranche
A Loans outstanding from time to time and (D) if such Lender is a Tranche C
Lender, the principal amount of its Tranche C 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, and each Credit Party
shall treat each Person whose name is recorded in the Register as a Lender
for all purposes under this Agreement.
(iv) In addition to the requirements of Section 11.5, 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 11.5 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 purpose of receiving all payments thereon and for all other
purposes, notwithstanding any notice to the contrary.
2.9. PAYMENTS; PRO RATA TREATMENT AND SHARING OF SET-OFFS.
(a) PAYMENTS GENERALLY. (i) Except as provided below, all payments,
including prepayments, of principal and interest on the Loans, of the Tranche A
Commitment Fee, the Letter of Credit Fees and of all other amounts to be paid by
the Borrower under the Loan Documents (the Tranche A Commitment Fee, the Letter
of Credit Fees, together with all of such other fees, being sometimes
hereinafter collectively referred to as the "FEES") shall be made to the
Administrative Agent, prior to 1:00 p.m. on the date such payment is due, for
the account of the applicable Credit Parties at the Payment Office, in Dollars
and in immediately available funds, without set-off, offset, recoupment or
counterclaim. The failure of the Borrower to make any such payment by such time
shall not constitute a Default, provided that such payment is made on such due
date, but any such payment made after 1:00 p.m. on such due date shall be deemed
to have been made on the next Business Day for the purpose of calculating
interest on amounts outstanding on the Loans. As between the Borrower and each
Credit Party, any payment by the Borrower to the Administrative Agent for the
account of such Credit Party shall be deemed to be payment by the Borrower to
such Credit Party. Notwithstanding the foregoing, all payments pursuant to
Sections 3.4, 3.5, 3.6 and 11.4 shall be paid directly to the Credit Party
entitled thereto. If any payment under the Loan Documents shall be due and
payable on a day which is not a Business Day, the due date thereof (except as
otherwise provided with respect to Interest Periods) shall be extended to the
next Business Day and (except with respect to payments in respect of the Fees)
interest shall be payable at the applicable rate specified herein during such
extension, provided, however, that if such next Business Day would be after the
(i) with respect to Tranche A Loans and Letters of Credit, the Tranche A
Maturity Date and (ii) the Tranche C Loans, the Tranche C Maturity Date, such
payment shall instead be due on the immediately preceding Business Day.
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(ii) If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of principal,
interest and Fees then due hereunder, such funds shall be applied (A) first,
towards payment of interest and Fees then due under the Loan Documents, ratably
among the parties entitled thereto in accordance with the amounts of interest
and Fees then due to such parties, and (B) second, towards payment of principal
then due under the Loan Documents, ratably among the parties entitled thereto in
accordance with the amounts of principal then due to such parties.
(b) SET-OFF. In addition to any rights and remedies of the Credit
Parties provided by law, upon and after the acceleration of all the obligations
of the Borrower under the Loan Documents to which it is a party, or at any time
upon the occurrence and during the continuance of an Event of Default under
Sections 9.1(a) or (b), each Credit Party shall have the right, without prior
notice to any Loan Party, any such notice being expressly waived by each Loan
Party to the extent not prohibited by applicable law, to set-off and apply
against any indebtedness, whether matured or unmatured, of such Loan Party to
such Credit Party any amount owing from such Credit Party to such Loan Party,
at, or at any time after, the happening of any of the above-mentioned events. To
the extent not prohibited by applicable law, the aforesaid right of set-off may
be exercised by any Credit Party 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, receiver, or execution, judgment or attachment creditor,
notwithstanding the fact that such right of set-off shall not have been
exercised by such Credit Party prior to the making, filing or issuance, or
service upon such Credit Party 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 Credit Party agrees promptly to notify the Borrower and the Administrative
Agent after any such set-off and application made by such Credit Party, provided
that the failure to give such notice shall not affect the validity of such
set-off and application.
(c) ADJUSTMENTS. If any Lender shall obtain any payment (whether
voluntary, involuntary, through the exercise of any right of set-off, or
otherwise) in respect of the principal of or interest on its Loans, resulting in
such Lender receiving payment of a greater proportion of the aggregate principal
amount of, or accrued interest on, such Loans than the proportion received by
any other Lender, then the Lender receiving such greater proportion shall
promptly purchase, at face value for cash, participations in the Loans to the
extent necessary so that the benefit of such payment shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Loans, provided, however, that (i) if all
or any portion of such payment is thereafter recovered or repaid in good faith
settlement of a pending or threatened avoidance claim, such participations shall
be rescinded and the purchase price returned, in each case to the extent of such
recovery or settlement payment, and (ii) the provisions of this Section 2.9(c)
shall not be construed to apply to any payment made by the Borrower pursuant to
and in accordance with the express terms of this Agreement or any payment
obtained by a Lender as consideration for the assignment of or sale of a
participation in any of its Loans to any assignee or participant, other than to
the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions
of this Section 2.9(c) shall apply). The Borrower agrees that any Lender that
purchased a participation pursuant to this subsection may exercise such rights
to payment (including the right of set-off) with
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respect to such participation as fully as such Lender were the direct creditor
of the Borrower in the amount of such participation.
3. INTEREST, FEES, YIELD PROTECTIONS, ETC.
3.1. 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:
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) EXTENT OF DEFAULT; LATE CHARGES. Notwithstanding the foregoing,
after the occurrence and during the continuance of an Event of Default, the
outstanding principal balance of all Loans shall bear interest at a rate of
interest per annum equal to 2% above the rate which would otherwise be
applicable pursuant to Section 3.1(a). If any interest, Reimbursement
Obligation, Commitment Fee, Letter of Credit Fee or other amount (other than
principal of the Loans) payable under the Loan Documents is not paid when due
(whether at the stated maturity thereof, by acceleration or otherwise), such
overdue amount shall, to the extent permitted by applicable 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 3.1(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, Letter of Credit Fees and all other fees and other amounts
payable under the Loan Documents, to the extent the same are construed to
constitute interest, exceed the
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Highest Lawful Rate. If interest payable to a Lender on any date would exceed
the maximum amount permitted 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.
3.2. FEES.
(a) TRANCHE A COMMITMENT FEE. The Borrower agrees to pay to the
Administrative Agent, for the account of the Tranche A Lenders in accordance
with each such Lender's Tranche A Percentage, a fee (the "TRANCHE A COMMITMENT
FEE") during the Tranche A Commitment Period equal to the Commitment Fee
Percentage per annum of the average daily unused portion of the Aggregate
Tranche A Commitments. The Tranche A 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 Tranche A Commitments.
The Commitment Fee shall be calculated on the basis of a 365 or 366-day year for
the actual number of days elapsed.
(b) LETTER OF CREDIT FEES. The Borrower agrees to pay to the
Administrative Agent, for the account of the Tranche A Lenders in accordance
with each such Lender's Tranche A Percentage, commissions (the "LETTER OF CREDIT
FEES") with respect to the Letters of Credit for the period from and including
the date of issuance of each thereof through the expiration date thereof, at a
rate per annum equal to the Applicable Margin applicable to Letters of Credit on
the average daily maximum amount available under any contingency to be drawn
under such Letter of Credit. The Letter of Credit Fees shall be (i) calculated
on the basis of a 360-day year for the actual number of days elapsed and (ii)
payable quarterly in arrears on the last day of each March, June, September and
December of each year, commencing on the first such day following the Second
Restatement Date, and on the date that the Tranche A Commitments shall expire.
In addition to the Letter of Credit Fees, the Borrower agrees to pay to the
Letter of Credit Issuer, for its own account, its standard fees and charges
customarily charged to customers similar to the Borrower with respect to any
Letter of Credit.
(c) AGENTS' AND LETTER OF CREDIT ISSUER'S FEES. The Borrower agrees to
pay to the Agents and the Letter of Credit Issuer, for their own respective
accounts, such other fees as have been agreed to in writing by the Borrower, the
Letter of Credit Issuer and/or any of the Agents.
3.3. CONVERSIONS AND CONTINUATIONS.
(a) The Borrower may elect from time to time to convert its Eurodollar
Advances to ABR Advances by 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
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or a portion of the Tranche A Loans or the Tranche C Loans, (B) the amount to be
so converted and (C) the Interest Period relating to such Eurodollar Advances.
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 by 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 Tranche A Loans or the Tranche C 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 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 3.4
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.
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(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
3.4.
3.4. FUNDING LOSS
(a) Notwithstanding anything contained herein to the contrary, if the
Borrower shall fail to borrow or convert or continue on a Credit Extension 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
2.2(a) or 3.3 or if a Eurodollar Advance shall be terminated for any reason
(subject to the penultimate sentence of Section 3.3(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
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
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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 3.5(a) and 3.6. 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 applicable Interest Period through the purchase of deposits
in an amount equal to such Eurodollar Advance and having a maturity
corresponding to such Interest Period.
3.5. INCREASED COSTS; ILLEGALITY, ETC.
(a) INCREASED COSTS. If any Change in Law 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 any Credit Party in respect of its Eurodollar Advances which is
not otherwise included in the determination of a Eurodollar Rate or against any
Letters of Credit issued hereunder and the result thereof is to increase the
cost to any Credit Party of making, renewing, converting or maintaining its
Eurodollar Advances or its commitment to make such Eurodollar Advances, or to
reduce any amount receivable under the Loan Documents in respect of its
Eurodollar Advances, or to increase the cost to any Credit Party of issuing or
maintaining the Letters of Credit or participating therein, as the case may be,
or the cost to any Credit Party of performing its respective functions hereunder
with respect to the Letters of Credit, then, in any such case, the Borrower
shall pay such Credit Party such additional amounts as is sufficient to
compensate such Credit Party for such additional cost or reduction in such
amount receivable which such Credit Party deems to be material as determined by
such Credit Party.
(b) CAPITAL ADEQUACY. If any Credit Party determines that any Change
in Law relating to capital requirements has or would have the effect of reducing
the rate of return on such Credit Party's capital or on the capital of such
Credit Party's holding company, if any, on the Extensions of Credit to a level
below that which such Credit Party (or its holding company) would have achieved
or would thereafter be able to achieve but for such Change in Law (after taking
into account such Credit Party's (or such holding company's) policies regarding
capital adequacy), the Borrower shall pay to such Credit Party (or such holding
company) such additional amount or amounts as will compensate such Credit Party
(or such holding company) for such reduction.
(c) ILLEGALITY. Notwithstanding any other provision hereof, if any
Lender shall reasonably determine that any law, regulation, treaty or directive,
or any change therein or in the interpretation or application thereof, shall
make it unlawful for such Lender to make or maintain any Eurodollar Advance as
contemplated by this Agreement, such Lender shall promptly notify the Borrower
and the Administrative Agent thereof, and
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(i) the commitment of such Lender to make such Eurodollar Advances or convert
ABR Advances to Eurodollar Advances shall forthwith be suspended, (ii) such
Lender shall fund its portion of each requested Eurodollar Advance as an ABR
Advance and (iii) such Lender's Loans then outstanding as such Eurodollar
Advances, if any, shall be converted automatically to ABR Advances on the last
day of the then current Interest Period applicable thereto or at such earlier
time as may be required by law. The commitment of any such Lender with respect
to Eurodollar Advances shall be suspended until such Lender shall notify the
Administrative Agent and the Borrower that the circumstances causing such
suspension no longer exist. Upon receipt of such notice by each of the
Administrative Agent and the Borrower, such Lender's commitment to make or
maintain Eurodollar Advances shall be reinstated.
(d) 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
3.1 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 or continuation of any
portion of the Advances into or of 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 Credit
Extension Date or Conversion 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 Advances (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 subsection (d) 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 3.1 or (y) the Administrative Agent having been notified by
such Required Lenders that circumstances no longer render the Advances (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 or as Eurodollar Advances.
(e) PAYMENT; CERTIFICATES. Each payment pursuant to subsections (a) or
(b) above shall be made within 10 days after demand therefor, which demand shall
be accompanied by a certificate of the Credit Party demanding such payment
setting forth the calculations of the additional amounts payable pursuant
thereto. Each such certificate shall be conclusive absent manifest error. No
failure by any Credit Party to demand, and no delay in demanding, compensation
for any increased cost shall constitute a waiver of its right to demand such
compensation at any time, provided that such Credit Party 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.
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3.6. TAXES.
(a) PAYMENTS FREE OF TAXES. All payments by or on account of the
Borrower under any Loan Document to or for the account of a Credit Party shall
be made free and clear of, and without any deduction or withholding for or on
account of, any and all present or future Indemnified Taxes or Other Taxes,
provided that if the Borrower or any other Person is required by any law, rule,
regulation, order, directive, treaty or guideline to make any deduction or
withholding in respect of such Indemnified Tax or Other Tax from any amount
required to be paid by the Borrower to or on behalf of any Credit Party under
any Loan Document (each, a "REQUIRED PAYMENT"), then (i) the Borrower shall
notify the Administrative Agent and such Credit Party of any such requirement or
any change in any such requirement as soon as the Borrower becomes aware
thereof, (ii) the Borrower shall pay such Indemnified Tax or Other Tax prior to
the date on which penalties attach thereto, such payment to be made (to the
extent that the liability to pay is imposed on the Borrower) for its own account
or (to the extent that the liability to pay is imposed on such Credit Party) on
behalf and in the name of such Credit Party, (iii) the Borrower shall pay to
such Credit Party an additional amount such that such Credit Party shall receive
on the due date therefor an amount equal to the Required Payment had no such
deduction or withholding been made or required, and (iv) the Borrower shall,
within 30 days after paying such Indemnified Tax or Other Tax, deliver to the
Administrative Agent and such Credit Party satisfactory evidence of such payment
to the relevant Governmental Body.
(b) REIMBURSEMENT FOR TAXES AND OTHER TAXES PAID BY CREDIT PARTY. The
Borrower shall reimburse each Credit Party, within ten days after written demand
therefor, for the full amount of all Indemnified Taxes or Other Taxes paid by
such Credit Party on or with respect to any payment by or on account of any
obligation of the Borrower under the Loan Documents (including Indemnified Taxes
or Other Taxes imposed or asserted on or attributable to amounts payable under
this Section) and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto (other than any such penalties, interest or
expenses that are incurred by such Credit Party's unreasonably taking or
omitting to take action with respect to such Indemnified Taxes or Other Taxes),
whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Body. A certificate as to the
amount of such payment or liability delivered to the Borrower by a Credit Party
shall be conclusive absent manifest error. In the event that any Credit Party
determines that it received a refund or credit for Indemnified Taxes or Other
Taxes paid by the Borrower under this Section, such Credit Party shall promptly
notify the Borrower of such fact and shall remit to the Borrower the amount of
such refund or credit.
(c) FOREIGN CREDIT PARTIES. Any Foreign Credit Party that is entitled
to an exemption from or reduction of withholding tax under the law of the
jurisdiction in which the Borrower is located, or any treaty to which such
jurisdiction is a party, with respect to payments under the Loan Documents shall
deliver to the Borrower (with a copy to the Administrative Agent), at the time
or times prescribed by applicable law, such properly completed and executed
documentation prescribed by applicable law (including Internal Revenue Form 4224
or Form 1001) or reasonably requested by the Borrower as will permit such
payments to be made without withholding or at a reduced rate.
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3.7. MITIGATION; REPLACEMENT LENDERS.
(a) CHANGES OF LENDING OFFICES. If any Credit Party (or its holding
company, if any) requests compensation under Section 3.5(a) or (b) or if the
Borrower is required to pay an additional amount to any Credit Party or any
Governmental Body for the account of any Credit Party pursuant to Section 3.6,
such Credit Party will, upon the request of the Borrower, use reasonable efforts
(subject to its overall policy considerations) to designate a different lending
office for funding or booking its Extensions of Credit or to assign its rights
and obligations hereunder to another of its offices, branches or affiliates, if,
in its good faith judgment, such designation or assignment (i) would eliminate
or reduce future amounts payable under Section 3.5(a) or (b) or Section 3.6, as
the case may be, (ii) would not subject such Credit Party to any unreimbursed
cost or expense and (iii) would not otherwise be disadvantageous to such Lender.
The Borrower agrees to pay the reasonable costs and expenses incurred in
connection with any such designation or assignment and the Administrative Agent
agrees that no assignment fee shall be payable to it pursuant to Section 12 in
connection therewith. Nothing in this Section shall affect or postpone any of
the obligations of the Borrower to make the payments required to a Credit Party
under Section 3.5(a) or (b) or Section 3.6, incurred prior to any such
designation or assignment.
(b) REPLACEMENT OF LENDERS. If (i) any Credit Party (or its holding
company, if any) requests compensation under Section 3.5(a) or (b) or if the
Borrower is required to pay an additional amount to any Credit Party or any
Governmental Body for the account of any Credit Party pursuant to Section 3.6 in
an aggregate amount in excess of $50,000, or (ii) any Credit Party shall give
any notice to the Borrower or the Administrative Agent pursuant to Section
3.5(c), then, in each such case, provided that no Default shall then exist and
be continuing, during the 90 day period after the receipt of such request, the
Borrower at its sole cost, expense and effort may, upon notice to the
Administrative Agent and the Letter of Credit Issuer, require Lender to assign
(in accordance with and subject to the restrictions contained in Section 11.5)
all of its rights and obligations under the Loan Documents to any other Lender
(or affiliate thereof), or any other Eligible Institution identified by the
Borrower if such other Lender (or affiliate thereof) or such Eligible
Institution agrees to assume all of the obligations of such Lender for
consideration equal to the outstanding principal amount of such Lender's Loans
and all unreimbursed sums paid by such Lender under Section 2.6, together with
interest thereon to the date of such transfer and all other amounts payable
under the Loan Documents to such Lender on or prior to the date of such transfer
(including any fees accrued hereunder and any amounts which would be payable
under Section 3.4 as if all of such Lender's Loans were being prepaid in full on
such date). In the event of a transfer to any other Eligible Institution,
subject to the satisfaction of the conditions of Section 11.5, such Eligible
Institution shall be a "Lender" for all purposes hereunder. Without prejudice to
the survival of any other agreement of the Borrower hereunder, the agreements of
the Borrower contained in Sections 3.5, 3.6(b), 11.1(a) and 11.4 (without
duplication of any payments made to such Lender by the Borrower or such other
Eligible Institution) shall survive for the benefit of any Lender replaced under
this Section with respect to the time prior to such replacement. In connection
with any transfer pursuant to this subsection, the Borrower shall be obligated
to pay the assignment fee referred to in Section 11.5(b).
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4. REPRESENTATIONS AND WARRANTIES
In order to induce the Credit Parties to enter into this Agreement and
extend or participate in the Extensions of Credit provided herein, the Borrower
hereby makes the following representations and warranties to each Credit Party:
4.1. SUBSIDIARIES; CAPITALIZATION.
As of the Second Restatement Date and after giving effect to the
consummation of the Transactions, Arch has only the Subsidiaries set forth on
Schedule 4.1. The issued and outstanding shares of each corporate Subsidiary of
Arch are duly authorized, validly issued, fully paid and nonassessable and are
owned free and clear of any Liens, except Permitted Liens. The interest of Arch
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 Arch and the ownership interest in each
non-corporate Subsidiary of Arch, in each case as of the Second Restatement
Date, are as set forth on Schedule 4.1. The owner of each such interest and each
issue of capital Stock listed on Schedule 4.1 is the registered and beneficial
owner thereof. None of the Borrower or any of its 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 the Borrower
or any such 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 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
Second Restatement Date, Arch Canada is the only Foreign Subsidiary of Arch and
is not a Material Foreign Subsidiary.
4.2. EXISTENCE AND POWER.
The Borrower and each of its Subsidiaries 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 Borrower and each of its Subsidiaries 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 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 Borrower and each of its
Subsidiaries has duly executed and delivered the Transaction Documents to which
it is a party.
4.4. GOVERNMENTAL BODY APPROVALS.
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
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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 Borrower and each of its Subsidiaries of any of the
Transaction Documents to which it is a party or is required as a condition to
the validity or enforceability of any of the Transaction Documents. No provision
of any applicable statute, law (including 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, any of the Transaction 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 Borrower and each of its Subsidiaries, 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, 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 Borrower or any of its Subsidiaries or any
other Loan Party) pending or, to the knowledge of the Borrower, threatened
against the Borrower or any of its Subsidiaries 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 or (ii) call into
question the validity or enforceability of any of the Transaction Documents.
4.7. NO CONFLICTING AGREEMENTS.
Except as set forth on Schedule 4.7, neither the Borrower nor any of
its Subsidiaries 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 Borrower or any of its
Subsidiaries 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 Parent Discount Notes Indenture, either of the Existing Arch
Indentures or the Arch 12 3/4% Indenture, oR result in the creation or
imposition of, or obligation to create, any Lien (other than Permitted Liens)
upon the Property of the Parent or Arch pursuant to the terms of the
Subordinated Indenture, the Parent Discount Notes Indenture, either of the
Existing Arch Indentures or the Arch 12 3/4% Indenture.
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4.8. TAXES.
Each of the Borrower and each of its Subsidiaries 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 7.4) which would be material to the Borrower
or any of its Subsidiaries, and no tax Liens have been filed with respect
thereto except Permitted Liens described in Section 8.2(i). The charges,
accruals and reserves on the books of the Borrower and each of its Subsidiaries
with respect to all federal, state, local and other taxes are, to the best
knowledge of the Borrower, adequate for the payment of all such taxes, and the
Borrower does not know of any unpaid assessment which is due and payable against
it or any of its Subsidiaries 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 Borrower nor any of its Subsidiaries 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 Borrower and each of its Subsidiaries is complying in all
material respects with all applicable statutes and regulations of all
Governmental Bodies, including ERISA and Environmental Laws, a violation of
which could reasonably be expected to have a Material Adverse Effect.
4.10. INVESTMENT COMPANIES AND OTHER REGULATED ENTITIES.
Neither the Borrower, any of its Subsidiaries nor any Person
controlled by, controlling, or under common control with, the Borrower or any of
its Subsidiaries, is (i) an "investment company" as defined in, or subject to
regulation under, the Investment Company Act of 1940, as amended, (ii) a
"holding company" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935 or the Federal Power Act, as amended, or
(iii) subject to any statute or regulation which prohibits or restricts the
incurrence of Indebtedness for borrowed money, including 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. PROPERTIES.
Each of the Borrower and each of its Subsidiaries has good and
marketable title to, or valid leasehold interests in, all of its property, real
and personal, material to its business, subject to no Liens, except Permitted
Liens and except for minor defects in title that do not interfere with its
ability to conduct its business as currently conducted or to utilize such
properties for their intended purposes.
4.12. FCC MATTERS.
The Borrower and each of its Subsidiaries (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 the rules and
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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.
4.13. FEDERAL RESERVE REGULATIONS.
(a) Neither the Borrower nor any 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. After giving effect to each
Transaction and the making of each Extension of Credit, Margin Stock will
constitute less than 25% of the assets (as determined by any reasonable method)
of the Borrower and the Subsidiaries.
(b) No part of the proceeds of any Extension of Credit will be used,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, for any purpose that entails a violation of, or that is inconsistent
with, the provisions of Regulation U or X.
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 of its Subsidiaries 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 any Loan Party in connection with the transactions contemplated thereby
contains or will contain a misstatement of material fact, or, to the best
knowledge of the Borrower, 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. With respect to
projections or pro-forma financial statements furnished by the Borrower or any
of its Subsidiaries, 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
Borrower or such Subsidiary's best estimate of its future financial performance.
4.16. PLANS.
None of the Borrower, any of its Subsidiaries 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 Borrower, any of its
Subsidiaries or any Commonly Controlled Entity or, to the best knowledge of the
Borrower, any Multiemployer Plan to which the Borrower, any of its Subsidiaries
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 Borrower or any of its Subsidiaries.
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4.17. BURDENSOME OBLIGATIONS.
Neither the Borrower nor any of its Subsidiaries 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 Borrower
or such 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 Borrower and its Subsidiaries taken as a whole, or Operating Cash
Flow, or the ability of the Borrower or any of its Subsidiaries to perform their
respective obligations under the Loan Documents. The Borrower does not presently
anticipate that future expenditures by the Borrower or any of its Subsidiaries
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
Borrower and its Subsidiaries taken as a whole.
4.18. FINANCIAL STATEMENTS.
(a) The Parent and Arch have heretofore furnished to each Credit Party
a copy of their respective (A) Forms 10-K for the fiscal year ending December
31, 1997, containing the audited Consolidated balance sheets of the Parent and
its Subsidiaries and of Arch and its Subsidiaries, respectively, as of December
31, 1996 and December 31, 1997, and the related Consolidated statements of
operations, stockholder's equity and cash flows for the periods then ended, and
(B) Forms 10-Q for the fiscal quarter ended March 31, 1998, containing the
unaudited Consolidated balance sheets of the Parent and its Subsidiaries and of
Arch and its Subsidiaries, respectively, for such fiscal quarter, together with
the related Consolidated statements of operations and cash flows for the fiscal
quarter then ended. Such financial statements present fairly, in all material
respects, the financial position and results of operations and cash flows of the
Parent, Arch, the Borrower and their consolidated Subsidiaries as of such dates
and for such periods in accordance with GAAP, subject to year-end audit
adjustments and the absence of footnotes in the case of the quarterly statements
referred to above. Except as fully reflected in such financial statements, there
are no material liabilities or obligations with respect to Arch or any of its
Subsidiaries of any nature whatsoever (whether absolute, contingent or otherwise
and whether or not due).
(b) Since December 31, 1997, except for the Transactions, each of the
Parent and each of its Subsidiaries has conducted its business only in the
ordinary course and there has been no Material Adverse Change.
4.19. ENVIRONMENTAL MATTERS.
Neither the Borrower nor any of its Subsidiaries (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 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, has any threatened or actual liability in connection
with the release or threatened release of any toxic or hazardous waste,
substance or constituent, or
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other hazardous substance into the environment, (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 Borrower or any of its Subsidiaries is or may be liable, or (iv) has
received notice that the Borrower or any of its Subsidiaries is or may be liable
to any Person under CERCLA or any analogous state law, which, in the case of
this Section 4.19, individually or in the aggregate could reasonably be expected
to have a Material Adverse Effect. The Borrower and each of its Subsidiaries is
in compliance in all material respects with the financial responsibility
requirements of federal and state environmental laws to the extent applicable,
including those contained in 40 C.F.R., parts 264 and 265, subpart H, and any
analogous state law.
4.20. FRANCHISES, INTELLECTUAL PROPERTY, ETC.
The Borrower and each of its Subsidiaries 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. No event has occurred which permits or, to the best
knowledge of the Borrower, 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.
4.21. SOLVENCY
The Borrower and each of its Subsidiaries is, and after giving effect
to the incurrence of all Indebtedness under the Loan Documents and the
consummation of the Transactions will be, Solvent.
4.22. ABSENCE OF CERTAIN RESTRICTIONS.
Except for the Loan Documents, the Loan Documents under and as defined
in the Tranche B Credit Agreement, the Parent Discount Notes Indenture, the
Existing Arch Indentures, the Arch 12 3/4% Indenture and any Replacement
Indenture, no indenture, certificate of designation for preferred Stock,
agreement or instrument to which the Parent, Arch or any of its Subsidiaries is
a party, prohibits or restrains, directly or indirectly, the payment of
dividends or other payments to Arch or any of its Subsidiaries.
4.23. INSURANCE.
The Borrower's and its Subsidiaries' insurance policies are and will
be sufficient for compliance with all requirements of law as well as for
compliance with all agreements to which the Borrower or any of its Subsidiaries
is a party, and neither the Borrower nor any of its Subsidiaries suffers self
insurance for any material risks.
4.24. PARI PASSU OBLIGATIONS.
The obligations of Arch under the Loan Documents to which it is a
party are pari passu with Arch's obligations under the Existing Arch Indentures
and the Arch 12 3/4% Indenture.
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4.25. YEAR 2000 ISSUE.
The Borrower and its Subsidiaries have reviewed the effect of the Year
2000 Issue on the computer software, hardware and firmware systems and equipment
containing embedded microchips owned or operated by or for the Borrower and its
Subsidiaries or used or relied upon in the conduct of their business (including
systems and equipment supplied by others or with which such computer systems of
the Borrower and its Subsidiaries interface). The costs to the Borrower and its
Subsidiaries of any reprogramming required as a result of the Year 2000 Issue to
permit the proper functioning of such systems and equipment and the proper
processing of data, and the testing of such reprogramming, and of the reasonably
foreseeable consequences of the Year 2000 Issue to the Borrower or any of its
Subsidiaries (including reprogramming errors and the failure of systems or
equipment supplied by others) are (to the best of the Borrower's and its
Subsidiaries' knowledge, with respect to such computer hardware, software or
systems used or relied upon in the conduct of their business but not owned or
leased by the Borrower or any of its Subsidiaries) not reasonably expected to
result in a Default or Event of Default or to have a Material Adverse Effect.
5. CONDITIONS TO EFFECTIVENESS AND TO FIRST EXTENSIONS OF CREDIT
In addition to the conditions precedent set forth in Section 6, this
Agreement and the obligation of the Credit Parties to make the initial Extension
of Credit shall not become effective until each of the following conditions
precedent have been satisfied (or waived in accordance with Section 11.1):
5.1. EVIDENCE OF ACTION
The Administrative Agent shall have received a certificate, dated the
Second Restatement Date, of the Secretary or Assistant Secretary of each of the
Borrower, Arch, the Parent and each Subsidiary Guarantor (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 or formation 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).
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5.3. NOTES.
The Administrative Agent shall have received a Note for each Lender,
dated the Second Restatement Date, duly executed by a duly authorized officer of
the Borrower.
5.4. BORROWER PLEDGE AGREEMENT.
The Administrative Agent shall have received the Borrower Pledge
Agreement, duly executed by a duly authorized officer of the Borrower.
5.5. PARENT GUARANTY.
The Administrative Agent shall have received the Parent Guaranty, duly
executed by a duly authorized officer of the Parent.
5.6. SUBSIDIARY GUARANTY.
The Administrative Agent shall have received the Subsidiary Guaranty,
duly executed by a duly authorized officer of each Loan Party party thereto.
5.7. RESTRICTED SUBSIDIARY SECURITY AGREEMENT (BANK).
The Administrative Agent shall have received the Restricted Subsidiary
Security Agreement (Bank), duly executed by a duly authorized officer of each
Restricted Subsidiary.
5.8. BORROWER SECURITY AGREEMENT (BANK)
The Borrower Security Agreement (Bank) shall have been duly executed
by a duly authorized officer of the Borrower and all original counterparts
thereof shall have been delivered to the Escrow Agent.
5.9. ARCH GUARANTY.
The Administrative Agent shall have received the Arch Guaranty, duly
executed by a duly authorized officer of Arch.
5.10. ARCH SECURITY AGREEMENT (BANK).
The Arch Security Agreement (Bank) shall have been duly executed by a
duly authorized officer of Arch and all original counterparts thereof shall have
been delivered to the Escrow Agent.
5.11. INDENTURE COLLATERAL DOCUMENTS.
Each of (i) the Borrower Security Agreement (14% Indenture) and the
Borrower Security Agreement (9 1/2% Indenture) shall have been duly executed by
a dulY authorized officer of the Borrower, (ii) the Arch Security Agreement (14%
Indenture) and the Arch Security Agreement (9 1/2% Indenture) shall have been
duly executed by a dulY authorized officer of Arch, and (iii) the Restricted
Subsidiary Security Agreement (14% Indenture) and the Restricted Subsidiary
Security Agreement (9-1/2% Indenture) shall
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have been duly executed by a duly authorized officer of each Restricted
Subsidiary, and all original counterparts thereof shall have been delivered to
the Escrow Agent.
5.12. ESCROW AGREEMENT.
The Administrative Agent shall have received the Escrow Agreement,
duly executed by a duly authorized officer of each of Arch, the Borrower and the
Escrow Agent, and such Escrow Agreement shall cover the following documents and
instruments: (i) certificates representing all of the issued and outstanding
shares of capital Stock of the Borrower and each of its Subsidiaries (other than
the Restricted Subsidiaries) and undated stock powers with respect thereto duly
executed in blank by the applicable Loan Parties, (ii) instruments constituting
the Pledged Debt (under and as defined in each of the Triggering Collateral
Documents) indorsed in blank by the applicable Loan Party, (iii) the Triggering
Collateral Documents and the Indenture Collateral Documents, in each case duly
executed by each of the parties thereto, (iv) Powers of Attorney, duly executed
by each of the Borrower and Arch, (v) duly executed UCC-1 Financing Statements
with respect to the Collateral (as defined in the Indenture Collateral Documents
or the Triggering Collateral Documents) for filing in each office as determined
by the Administrative Agent and naming the Administrative Agent as "Secured
Party", (vi) additional sets of UCC-1 Financing Statements in all respects
identical to UCC-1 Financing Statements referred to in clause (v) above except
that the Applicable Arch Indenture Trustees are named as "Secured Party" and
(vii) all executed original counterparts of each Triggering Collateral Document
and each Indenture Collateral Document.
5.13. SEARCH REPORTS, FINANCING STATEMENTS, ETC.
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 (other than Liens in
favor of the Administrative Agent) of record in such official's office covering
any Collateral or showing the Parent or any of its Subsidiaries as a debtor
thereunder, (ii) such Uniform Commercial Code financing statements or financing
statement amendments, executed by the appropriate Loan Party, as shall be
reasonably requested by the Administrative Agent, and (iii) a certificate of the
Borrower signed by an authorized officer of each thereof, dated the Second
Restatement Date, certifying that, as of the Second Restatement Date, there will
exist no Liens on the Collateral other than Permitted Liens.
5.14. APPROVALS AND CONSENTS.
All approvals and consents of all Persons required to be obtained in
connection with the consummation of the Transactions have been obtained, all
required notices have been given and all required waiting periods have expired.
5.15. PROPERTY, PUBLIC LIABILITY AND OTHER INSURANCE.
The Administrative Agent shall have received a certificate of
insurance maintained by the Loan Parties, in form and substance reasonably
satisfactory to the Administrative Agent, together with the endorsements
required by Section 7.5.
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5.16. 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 Arch, 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
officer of the Borrower to the foregoing effects.
5.17. TRANSACTIONS; ARCH 12 3/4% SENIOR NOTES; OFFICER'S CERTIFICATE.
(a) The Arch Transactions and the ACE Transactions shall have been
consummated in accordance with the terms and conditions of the applicable
Transaction Documents.
(b) Arch shall have (i) issued the Arch 12 3/4% Senior Notes (ii)
received net proceeds thereof in an amount not less than $121,000,000 and (iii)
shall have applied the net proceeds thereof to the repayment in full of the
Indebtedness (and the termination of the commitments) under the Existing Arch
Credit Agreement and the repayment of Tranche B Loans.
(c) The Administrative Agent shall have received a certificate of a
Financial Officer of the Borrower, dated the Second Restatement Date, in all
respects satisfactory to the Administrative Agent (i) as to the matters set
forth in subsections (a) and (b) above and (ii) attaching a true, complete and
correct copy of each of the Transaction Documents executed and delivered in
connection with the consummation of the Arch Transactions and the ACE
Transactions, the Arch 12 3/4% Indenture, a specimen of thE Arch 12 3/4% Senior
Notes and a copy of the Offering Memorandum in respect thereof, each oF which
shall be in form and substance satisfactory to the Administrative Agent.
5.18. MANAGEMENT AGREEMENT.
The Administrative Agent shall have received a certificate of a
Financial Officer of the Borrower, dated the Second Restatement Date, in all
respects satisfactory to the Administrative Agent attaching a true, complete and
correct copy of the Management Agreement, which shall be in form and substance
satisfactory to the Administrative Agent.
5.19. OFFICER'S CERTIFICATE.
The Administrative Agent shall have received a certificate of the
President, a Vice President or a Financial Officer of the Borrower, dated the
Second Restatement Date, in all respects satisfactory to the Administrative
Agent certifying that as of the Second Restatement Date (i) no Default exists,
(ii) the representations and warranties contained in the Loan Documents are true
and correct, and (iii) since December 31, 1997, no Material Adverse Change has
occurred.
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5.20. COMPLIANCE CERTIFICATE
The Administrative Agent shall have received a Compliance Certificate
signed by a Financial Officer of the Borrower, in all respects reasonably
satisfactory to the Administrative Agent, dated the Second Restatement Date, and
(i) stating that the Borrower is in compliance with all covenants on a pro-forma
basis after giving effect to the Transactions, and (ii) attaching a copy of a
pro-forma consolidated balance sheet of the Borrower utilized for purposes of
preparing such Compliance Certificate, which pro-forma consolidated balance
sheet presents the Borrower's good faith estimate of its pro-forma consolidated
financial condition at the date thereof, after giving effect to the
Transactions.
5.21. EXISTING ARCH CREDIT AGREEMENT.
The Borrower shall have fully repaid all Indebtedness under the
Existing Arch Credit Agreement and all agreements with respect thereto
(including the Escrow Agreement referred to therein) shall have been cancelled
or terminated, all Liens, if any, securing the same shall have been terminated,
and the Administrative Agent shall have received satisfactory evidence thereof.
5.22. OPINIONS OF COUNSEL TO THE LOAN PARTIES.
The Administrative Agent shall have received (i) an opinion of Hale
and Dorr, LLP, special counsel to the Loan Parties, substantially in the form of
Exhibit O, and (ii) an opinion of Garry Watzke, Esq., General Counsel of the
Loan Parties, substantially in the form of Exhibit P, each addressed to the
Administrative Agent, the Lenders and Special Counsel and each dated the Second
Restatement Date.
5.23. OPINION OF FCC COUNSEL.
The Administrative Agent shall have received an opinion of Wilkinson,
Barker, Knauer & Quinn, LLP, FCC counsel to Arch and its Subsidiaries, addressed
to the Administrative Agent and the Lenders, dated the Second Restatement Date,
substantially in the form of Exhibit Q.
5.24. FEES.
The Borrower shall have paid to the Managing Agents and the Lenders
all fees which are payable on the Second Restatement Date.
5.25. FEES AND EXPENSES OF SPECIAL COUNSEL.
The reasonable fees and expenses of Special Counsel shall have been
paid.
5.26. MASTER ASSIGNMENT.
The Administrative Agent shall have received the Master Assignment,
duly executed by each party thereto.
5.27. OTHER DOCUMENTS.
The Administrative Agent shall have received such other documents and
assurances as the Administrative Agent shall reasonably require.
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6. CONDITIONS OF LENDING - ALL EXTENSIONS OF CREDIT.
The obligation of each Credit Party to make any Extension of Credit (other
than a participation in a Letter of Credit) under this Agreement shall be
subject to the satisfaction of the following conditions precedent as of the date
thereof:
6.1. COMPLIANCE.
On each Credit Extension Date and after giving effect to the
Extensions of Credit thereon (i) no Default shall have occurred or be
continuing; and (ii) the representations and warranties contained in the Loan
Documents shall be true and correct with the same effect as though such
representations and warranties had been made on such Credit Extension Date,
except to the extent such representations and warranties specifically relate to
an earlier date, in which case such representations and warranties shall have
been true and correct on and as of such earlier date. Each Extension of Credit
and each Credit Request therefor shall constitute a certification by the
Borrower as of such Credit Extension Date that each of the foregoing matters is
true and correct in all respects.
6.2. CREDIT REQUEST.
With respect to each Extension of Credit, the Administrative Agent
shall have received a Credit Request, executed by a duly authorized officer of
the Borrower.
6.3. LAW.
Such Extension of Credit shall not be prohibited by any applicable
law, rule or regulation.
7. AFFIRMATIVE COVENANTS
The Borrower hereby covenants and agrees that, until all obligations of the
Loan Parties under the Loan Documents have been paid in full and all Commitments
of the Credit Parties have been terminated and no obligations of any Credit
Party exists 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 (which will in turn
promptly furnish a copy thereof to each Lender):
(a) As soon as available but in any event within 90 days after
the end of each fiscal year:
(i) a copy of each of the Parent's and Arch's Annual Report
on Form 10-K in respect of such fiscal year, together with the financial
statements required to be attached thereto, and
(ii) a copy of the Consolidated Balance Sheets of the
Borrower and its Subsidiaries as at the end of such fiscal year, together
with the related Consolidated Statements of Operations, Stockholders'
Equity and Cash
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Flows of the Borrower and its Subsidiaries as of and through the end of
such fiscal year.
The statements referred to in clause (i) and (ii) above shall be audited and
certified without qualification, which certification shall (x) state that the
examination by such Accountants in connection with such 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 (y)
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.
(b) As soon as available but in any event within 60 days after
the end of each of the first three fiscal quarters of each fiscal year:
(i) a copy of each of the Parent's and Arch's Quarterly
Report on Form 10-Q in respect of such fiscal quarter, together with the
financial statements required to be attached thereto, and
(ii) a copy of the Consolidated Balance Sheets of the
Borrower and its Subsidiaries as at the end of each such quarterly period,
together with the Consolidated Statements of Operations and Cash Flows of
the Borrower and its Subsidiaries for such period and for the elapsed
portion of the fiscal year through such date.
The statements referred to in clause (i) and (ii) above shall be certified by a
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 financial condition and the
Consolidated results of operations of the Borrower and its Subsidiaries,
(c) Within 60 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 a 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 a 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 basis for the relevant period, with respect to (i) pager
activations during the preceding fiscal quarter, (ii) information indicating the
net increase or decrease in the number of Pagers in Service, (iii) the amount of
Capital Expenditures incurred broken down by (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, and (iv) the amount of
Additional Benbow Investments.
(e) Promptly upon the request of the Administrative Agent on
behalf of the Required Lenders, copies of the projected Consolidated Balance
Sheets and Statements of Operations of the Borrower and its Subsidiaries for the
next fiscal year, together with such other information and documentation as any
Lender may reasonably request in connection therewith.
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(f) No later than 60 days after the beginning of each fiscal
year, a copy of the Consolidated annual budgets of the Borrower and its
Subsidiaries for such fiscal year.
(g) Such other information and documentation with respect to the
Borrower and its Subsidiaries as any Lender may reasonably request from time to
time.
7.2. CERTIFICATES; OTHER INFORMATION.
Furnish or cause to be furnished to the Administrative Agent (which
will in turn promptly furnish a copy thereof to each Lender):
(a) Prompt written notice if: (i) any Indebtedness of the
Borrower or any of its Subsidiaries 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 Borrower or any of its Subsidiaries 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 Borrower or any of
its Subsidiaries 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 Borrower or any of its Subsidiaries 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 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 Borrower or
any of its Subsidiaries 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 Borrower or any of its Subsidiaries 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 Borrower or any of its Subsidiaries;
(d) Prompt written notice of the occurrence of a Change of
Control;
(e) Prompt written notice upon obtaining knowledge or otherwise
determining that any Foreign Subsidiary has become a Material Foreign
Subsidiary; and
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(f) Written notice 120 days prior to the taking of any action
permitted under Sections 8.1(v)(A), 8.3(i), 8.5(a)(i) (other than with respect
to a Restricted Payment to Arch on a day on which Arch is obligated to make a
payment in respect of Required Obligations so long as the amount thereof does
not exceed the amount of the Required Obligation payable on such date) and
8.8(b).
7.3. LEGAL EXISTENCE.
Except as provided in Section 8.3, maintain, and cause each of its
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.
7.4. TAXES.
Pay and discharge when due, and cause each of its 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
Borrower and its 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 Borrower or such 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 Borrower or such 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 Borrower or such Subsidiary
senior to the Liens granted by the Collateral Documents on such Property, and
further provided that the Borrower 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 its 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 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 a 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 nature and amount, complies with the obligations of the Borrower and
its Subsidiaries under this Section, and is in full force and effect.
(b) INSURANCE COVERING TANGIBLE PERSONAL PROPERTY. At all times
insure, and cause each of its Subsidiaries to insure, all of its tangible
personal Property in which a security interest may be required to be granted
pursuant to the Collateral Documents 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 such tangible
personal Property against damage resulting from bodily injury, including death
or
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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 Collateral Agent: (i) the
Collateral Agent shall be an additional insured and, with respect to property
insurance, sole loss payee in respect of each claim relating to such tangible
personal Property and resulting in a payment under any such insurance policy
exceeding $250,000, (ii) thirty days' prior written notice of any cancellation,
reduction of amounts payable, or any changes and amendments shall be given to
the Collateral Agent, except that ten days' prior written notice of cancellation
shall be given to the Collateral Agent if cancellation results from the failure
to pay premiums, and (iii) the Collateral 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 Borrower or such Subsidiary to pay the same or to so insure.
Provided that no Default or Event of Default shall exist, the Collateral Agent
agrees, promptly upon its receipt thereof, to pay over to the Borrower or the
appropriate Subsidiary the proceeds of such payment to enable the Borrower or
such Subsidiary to repair, restore or replace the Property subject to such
claim. To the extent that the Borrower or such Subsidiary does not elect to
repair, restore or replace such Property, an amount equal to the proceeds which
are not employed to repair, restore or replace such Property shall be applied as
required by Section 2.4. If a Default or Event of Default shall exist, the
Administrative Agent or, if applicable pursuant to the applicable Collateral
Document, the Collateral Agent, shall hold the proceeds of such payment as
Collateral (to the extent of its security interest in such Property) and apply
such proceeds in accordance with the provisions thereof.
(c) CONCURRENT INSURANCE. Neither the Borrower nor any of the
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 Collateral 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 its 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 Borrower or such
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 Borrower or
such Subsidiary, and that any such contested Indebtedness, obligations or claims
shall not constitute, or create, a Lien on any Property of the Borrower or any
of its Subsidiaries senior to any Lien granted to the Administrative Agent under
the Collateral Documents on such Property, and further provided that the
Borrower 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.
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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 its
Subsidiaries so to do, all Property reasonably deemed by the Borrower's or such
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 its 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 Borrower or such Subsidiary, a violation of which could
reasonably be expected to have a Material Adverse Effect, except such thereof as
shall be contested in good faith and by appropriate proceedings diligently
conducted by the Borrower or such Subsidiary, provided that the Borrower 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 Borrower or any of its Subsidiaries with the executive officers
of the Borrower and its Subsidiaries.
7.10. LICENSES, ETC.
Maintain, and cause each of its 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.
Enter into and maintain for a period of 2 years from the Second
Restatement Date, Interest Rate Protection Agreements, in form and substance
reasonably satisfactory to the Administrative Agent, with respect to an amount
(if greater than zero) equal to not less than the difference between (i) 50% of
Total Debt outstanding from time to time, minus (ii) the amount of Total Debt
outstanding from time to time that is at a fixed (and not a variable) rate or
subject to Interest Rate Protection Agreements.
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, 2001, a Fixed Charge
Coverage Ratio of greater than 1.00:1.00.
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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 greater than 1.10:1.00.
7.14. INTEREST COVERAGE RATIO.
Maintain, or cause to be maintained, as of the last day of each fiscal
quarter ended during the periods or on the date set forth below, an Interest
Coverage Ratio of greater than the ratios set forth below:
Periods Ratio
------- -----
Second Restatement Date through
September 30, 1999 1.75:1.00
December 31, 1999 through
September 30, 2000 2.00:1.00
December 31, 2000 and
thereafter 2.25:1.00
7.15. TOTAL LEVERAGE RATIO.
(a) At all times prior to the Existing Arch Senior Note Termination
Date, maintain, or cause to be maintained, during the periods set forth below, a
Total Leverage Ratio of not greater than the ratios set forth below:
Periods Ratio
------- -----
Second Restatement Date through
June 29, 1999 5.25:1.00
June 30, 1999 through
June 29, 2000 5.00:1.00
June 30, 2000 through
June 29, 2001 4.50:1.00
June 30, 2001 through
June 29, 2002 4.00:1.00
June 30, 2002 and
thereafter 3.50:1.00,
(b) At all times on and after the Existing Arch Senior Note
Termination Date, maintain, or cause to be maintained, a Total Leverage Ratio of
not greater than 5.00:1.00.
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7.16. API LEVERAGE RATIO.
Maintain, or cause to be maintained, at all times, an API Leverage
Ratio of not greater than 2.50:1.00.
7.17. ADDITIONAL SUBSIDIARIES; MATERIAL FOREIGN SUBSIDIARIES.
In the event that on or after the Second Restatement Date, any Person
shall become a Subsidiary of the Borrower or a Material Foreign Subsidiary of
the Borrower or Benbow Investments ceases to be an Unrestricted Subsidiary under
and as defined in the Existing Arch Senior Indentures, the Borrower shall (i)
notify the Administrative Agent in writing thereof within five Business Days
thereof, (ii) in the event that such Person shall be a Domestic Subsidiary or a
Material Foreign Subsidiary cause such Person to execute and deliver to the
Collateral Agent a completed Guaranty Supplement and to become a party to the
Unrestricted Subsidiary Security Agreement (Bank) and each other applicable
Triggering Collateral Document in the manner provided therein, and, if
applicable, the corresponding Indenture Collateral Document in the manner
provided therein, in each case within 10 days thereafter and promptly to take
such actions to (A) prior to the earlier to occur of the Existing Arch Senior
Note Termination Date or the effectiveness of the Triggering Collateral
Documents, deliver such Triggering Collateral Documents, UCC Financing
Statements and other documents to the Escrow Agent as requested by the
Administrative Agent and (B) thereafter, create and perfect Liens on such
Person's assets to secure such Person's obligations under the Loan Documents
and, if applicable, the Existing Arch Indentures, as the Administrative Agent
shall reasonably request, (iii) cause any shares of capital Stock of, or
promissory notes evidencing Indebtedness of, such Person that are owned by or on
behalf of the Borrower or any Subsidiary Guarantor (except that, if such Person
is a Foreign Subsidiary and not a Material Foreign Subsidiary, shares of capital
Stock of such Person may be limited to 65% of the outstanding shares of capital
Stock of such Foreign Subsidiary) to be delivered within five Business Days to
the Appropriate Party, (iv) cause each such new Subsidiary to deliver to the
Appropriate Party any shares of capital Stock or promissory notes evidencing
Indebtedness of any Subsidiary of the Borrower that are owned by or on behalf of
such new Subsidiary within five Business Days after such Subsidiary is formed or
acquired (except that if the capital Stock owned by such Subsidiary is the
capital Stock of a Foreign Subsidiary that is not a Material Foreign Subsidiary,
shares of such capital Stock may be limited to 65% of the outstanding shares of
capital Stock of such Foreign Subsidiary), and (v) deliver to the Appropriate
Party such additional Financing Statements, Grants of Security Interest and
Powers of Attorney (as each such term is defined in the Security Agreement)
certificates, instruments and opinions as the Administrative Agent may request.
In addition, within ten Business Days after the Existing Arch Senior Note
Termination Date, the Borrower shall cause Benbow Investments to become a
Subsidiary Guarantor and to grant a security interest in its assets as if it was
a new Domestic Subsidiary.
7.18. ADDITIONAL COLLATERAL.
If after the Second Restatement Date, any Loan Party acquires any
Property that would constitute Collateral, as defined in a Collateral Document
or a Triggering Collateral Document and such Loan Party has theretofore granted
a security interest in such type of Property pursuant thereto, the Borrower
shall, and shall cause each such Loan Party to, execute and deliver to the
Appropriate Party any and all documents, financing statements, agreements and
instruments, and take all such further actions (including the filing and
recording of financing statements, fixture filings, mortgages, deeds
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of trust and other documents), that may be required under any applicable law, or
that the Administrative Agent may reasonably request, to effectuate the
transactions contemplated by the Loan Documents or to grant, preserve, protect
or perfect the Liens created or intended to be created by the Collateral
Documents or the validity or priority of any such Lien, all at the expense of
the Loan Parties.
7.19. ESCROWED COLLATERAL.
(a) Upon the occurrence of the Existing Arch Senior Note Termination
Date or upon the request of the Minority Lenders, the Triggering Collateral
Documents and, if applicable, the Indenture Collateral Documents, shall be
deemed effective. Each Loan Party shall deliver to the Collateral Agent such
documents as the Collateral Agent may request in connection therewith, including
(i) duly executed UCC-1 Financing Statements, (ii) duly executed Grants of
Security Interest (Trademarks), (iii) opinions of counsel, in form and substance
satisfactory to the Collateral Agent, with respect to the enforceability of the
security interests so granted and the perfection thereof and (iv) other
documents as may reasonably be requested by the Collateral Agent. In connection
therewith, the Collateral Agent is hereby irrevocably authorized and empowered
as the Borrower's and each of its Subsidiaries' attorney-in-fact, to execute
such UCC-1 Financing Statements, Grants of Security Interest (Trademarks) and
instructions to the Escrow Agent and to deliver or file the same and to make, at
the Collateral Agent's option, all other filings and to give all other notices
as it shall reasonably deem necessary with respect to any of the Collateral, all
of which may be done with or without the signature of the Borrower or any of its
Subsidiaries. The foregoing power constitutes a power coupled with an interest
which shall survive until all of the obligations under the Loan Documents have
been indefeasibly paid in full in cash and the Credit Agreement and the
Commitments have been terminated.
(b) If the Collateral Documents have become effective pursuant to
Section 7.19(a) prior to the Existing Arch Senior Note Termination Date, (x) any
declaration of the effectiveness of any Collateral Document shall automatically
be deemed to declare the corresponding Indenture Collateral Documents to be
effective, (y) any grant of a security interest to the Collateral Agent in any
Property shall also grant a ratable interest in such Collateral under the
applicable Indenture Collateral Documents to the Applicable Arch Indenture
Trustees, and (z) any direction to the Escrow Agent to deliver a Collateral
Document, UCC-1 Financing Statement, Powers of Attorney or other documents shall
also constitute a direction to deliver the corresponding document executed for
the benefit of the Applicable Arch Indenture Trustees.
(c) Notwithstanding the foregoing, prior to the Existing Arch Senior
Note Termination Date, Benbow Investments shall not be obligated to grant a
security interest in any of its assets.
7.20. YEAR 2000 ISSUE.
Take, and shall cause each of its Subsidiaries to take, all necessary
action to complete by September 29, 1999, the reprogramming of computer
software, hardware and firmware systems and equipment containing embedded
microchips owned or operated by or for the Borrower and its Subsidiaries or used
or relied upon in the conduct of their business (including systems and equipment
supplied by others or with which such systems of the Borrower or any of its
Subsidiaries interface) required as a result of the Year 2000 Issue to permit
the proper functioning of such computer systems and other equipment and
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the testing of such systems and equipment, as so reprogrammed, except where the
failure to do such reprogramming or testing could not reasonably be expected to
have a Material Adverse Effect. At the request of the Administrative Agent, the
Borrower shall provide, and shall cause each of its Subsidiaries to provide, to
the Administrative Agent reasonable assurance of its compliance with the
preceding sentence.
8. NEGATIVE COVENANTS
The Borrower hereby covenants and agrees that, until all obligations of the
Loan Parties under the Loan Documents have been paid in full and all Commitments
of the Credit Parties have been terminated and no obligations of any Credit
Party exists under any of the Loan Documents, it shall not:
8.1. INDEBTEDNESS.
Create, incur, assume or suffer to exist any liability for
Indebtedness, or permit any of its Subsidiaries so to do, except (i)
Indebtedness due under the Loan Documents and the Loan Documents under and as
defined in the Tranche B Credit Agreement, (ii) Indebtedness of the Borrower or
any of its Subsidiaries existing on the Second Restatement 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, without
the consent of the Required Lenders, 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 C 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)
Indebtedness under the Existing Intercompany Notes, (iv) Contingent Obligations
to the extent permitted by Section 8.4, (v) prior to the Existing Arch Senior
Note Termination Date, unsecured Indebtedness (A) between the Borrower and Arch,
and (B) among the Borrower and its Subsidiaries (other than Benbow Investments
until such time as Benbow Investments ceases to be an Unrestricted Subsidiary
under and as defined in the Existing Arch Senior Indentures, has become a
Subsidiary Guarantor and has granted a security interest to the Collateral Agent
in its assets), (vi) on and after the Existing Arch Senior Note Termination
Date, unsecured and subordinated Indebtedness (A) between the Borrower and Arch,
and (B) among the Borrower and its Subsidiaries (other than Benbow Investments
until such time as Benbow Investments ceases to be an Unrestricted Subsidiary
under and as defined in the Existing Arch Senior Indentures, has become a
Subsidiary Guarantor and has granted a security interest to the Collateral Agent
in its assets), which shall be subordinated to the Borrower Obligations on terms
and conditions acceptable to the Administrative Agent and the Required Lenders
("INTERCOMPANY SUBORDINATED DEBT"), (vii) Indebtedness of the Borrower in
respect of the ACE Subordinated Note in a principal amount not in excess of
$50,000,000, (viii) Indebtedness of Arch under the Existing Arch Senior Notes,
the Arch 12 3/4% Senior NoteS and the Replacement Notes, if any, provided that
the principal amount of any Replacement Notes shall not exceed the principal
amount of the Existing Arch Senior Notes or the Arch 12 3/4% Senior Notes repaid
with the proceeds thereof, and (ix) other IndebtednesS (including
Non-Competition Agreements) of the Borrower and its
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Subsidiaries (other than Benbow Investments until such time as Benbow
Investments ceases to be an Unrestricted Subsidiary under and as defined in the
Existing Arch Senior Indentures, has become a Subsidiary Guarantor and has
granted a security interest to the Collateral Agent in its assets) in an amount
not to exceed 2.5% of Maximum Permitted Indebtedness.
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 its
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 Second Restatement Date as set forth in Schedule 8.2, (v) Liens
when and if granted to the Applicable Arch Indenture Trustees, under the
Indenture Collateral Documents, and (vi) other Liens securing Indebtedness of
the Borrower and its Subsidiaries (other than Benbow Investments until such time
as Benbow Investments ceases to be an Unrestricted Subsidiary under and as
defined in the Existing Arch Senior Indentures, has become a Subsidiary
Guarantor and has granted a security interest to the Collateral Agent in its
assets) in an amount not to exceed 2.5% of Maximum Permitted Indebtedness.
8.3. MERGER.
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 or otherwise alter or modify its corporate name, structure,
status or existence, or permit any of its Subsidiaries so to do, except:
(i) prior to the Existing Arch Senior Note Termination Date, Arch
and any of its Subsidiaries (other than Benbow Investments until such time
as Benbow Investments ceases to be an Unrestricted Subsidiary under and as
defined in the Existing Arch Senior Indentures, has become a Subsidiary
Guarantor and has granted a security interest to the Collateral Agent in
its assets) may merge or consolidate with, or transfer all or substantially
all of its assets to, Arch or any such Subsidiary, provided that in any
merger involving the Borrower, the Borrower shall be the survivor;
(ii) on and after the Existing Arch Senior Note Termination Date,
the Borrower and any of its Subsidiaries may merge or consolidate with, or
transfer all or substantially all of its assets to, the Borrower or any
such Subsidiary, provided that (A) the Administrative Agent shall have
received ten days' prior written notice thereof, (B) immediately before and
after giving effect thereto no Default or Event of Default shall exist and
(C) in any merger involving the Borrower, the Borrower shall be the
survivor;
(iii) at all times, (A) sales of Property to the extent permitted
under Section 8.8 and (B) mergers involving Subsidiaries of the Borrower as
part of an
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Acquisition permitted by Section 8.6, provided that no Stock is issued in
connection therewith except to the extent permitted by Section 8.13; and
(iv) on the Second Restatement Date, the ACE Transactions and the
Arch Transactions.
8.4. CONTINGENT OBLIGATIONS.
Assume, guarantee, indorse, contingently agree to purchase or perform,
or otherwise become liable upon any Contingent Obligation or permit any of its
Subsidiaries so to do, except (i) the Contingent Obligations of Arch and the
Subsidiary Guarantors under the Collateral Documents, (ii) guarantees by the
Borrower of Indebtedness of any of its Subsidiaries (other than Benbow
Investments until such time as Benbow Investments ceases to be an Unrestricted
Subsidiary under and as defined in the Existing Arch Senior Indentures, has
become a Subsidiary Guarantor and has granted a security interest to the
Collateral Agent in its assets) or by any Subsidiary of the Borrower of
Indebtedness of the Borrower or any other Subsidiary of the Borrower (other than
Benbow Investments until such time as Benbow Investments ceases to be an
Unrestricted Subsidiary under and as defined in the Existing Arch Senior
Indentures, has become a Subsidiary Guarantor and has granted a security
interest to the Collateral Agent in its assets), provided that such Indebtedness
would be permitted by Section 8.1 if directly incurred and (iii) prior to the
Existing Arch Senior Note Termination Date, Contingent Obligations of Arch or
any of its Subsidiaries incurred to, or for the benefit of, Arch or any other
such Subsidiary.
8.5. RESTRICTED PAYMENTS.
Declare or make any Restricted Payment, or permit any of its
Subsidiaries so to do, except as follows:
(a) PRIOR TO THE EXISTING ARCH SENIOR NOTE TERMINATION DATE. Prior to
the Existing Arch Senior Note Termination Date, whether or not any of the Parent
Discount Notes are outstanding or the Existing Discount Indenture is in effect,
the following Restricted Payments shall be permitted:
(i) any Subsidiary of Arch may, directly or indirectly, make
Restricted Payments to Arch or any of its Subsidiaries (other than Benbow
Investments until such time as Benbow Investments ceases to be an
Unrestricted Subsidiary under and as defined in the Existing Arch Senior
Indentures, has become a Subsidiary Guarantor and has granted a security
interest to the Collateral Agent in its assets); and
(ii) Arch and its Subsidiaries may make Restricted Payments
to the Parent for purposes of enabling the Parent, as a consolidated
taxpayer to pay Taxes, pursuant to the terms set forth in the Tax Sharing
Agreement;
(iii) the Borrower and its Subsidiaries may pay Management
Fees to Arch in any fiscal quarter (in an aggregate amount not exceeding 1
1/2% oF the net revenue of Arch and its Subsidiaries for the immediately
preceding four fiscal quarters ending with the latest fiscal quarter for
which Arch has filed a quarterly report with the SEC on form 10-Q or an
annual report on form 10-K) in accordance with the terms set forth in the
Management Agreement for services rendered to the Borrower or any of its
Subsidiaries, provided that (i) no Default or
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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; and
(iv) provided that no Default or Event of Default shall
exist both before and after giving effect thereto, after the Borrower has
delivered financial statements pursuant to Section 7.1(a) or (b) that
demonstrate that the Total Leverage Ratio has been less than 3.00:1:00 for
the immediately preceding two consecutive fiscal quarters, and provided
that the Total Leverage Ratio would not be greater than or equal to
3.00:1.00 after giving effect thereto, (A) Arch may make any Restricted
Payments to the Parent, and (B) the Parent may make any Restricted Payments
to its shareholders.
(b) ON AND AFTER THE EXISTING ARCH SENIOR NOTE TERMINATION DATE. On
and after the Existing Arch Senior Note Termination Date, whether or not any of
the Parent Discount Notes are outstanding or the Existing Discount Indenture is
in effect, the following Restricted Payments shall be permitted:
(i) any Subsidiary of the Borrower may make a Restricted
Payment to its parent;
(ii) provided that no Default or Event of Default shall
exist both before and after giving effect thereto, a Subsidiary of Arch may
make a Restricted Payment (other than Management Fees or any payment under
the Tax Sharing Agreement or the Management Agreement) to Arch (A) on a day
on which Arch is obligated to make a payment in respect of Required
Obligations so long as the amount thereof does not exceed the amount of the
Required Obligation payable on such date, and (B) for any other purpose so
long as after giving effect thereto, the API Leverage Ratio does not exceed
2.00:1.00;
(iii) Arch and its Subsidiaries may make Restricted Payments
to the Parent for purposes of enabling the Parent, as a consolidated
taxpayer to pay Taxes, pursuant to the terms set forth in the Tax Sharing
Agreement;
(iv) the Borrower and its Subsidiaries may pay Management
Fees to Arch in any fiscal quarter (in an aggregate amount not exceeding 1
1/2% oF the net revenue of Arch and its Subsidiaries for the immediately
preceding four fiscal quarters ending with the latest fiscal quarter for
which Arch has filed a quarterly report with the SEC on form 10-Q or an
annual report on form 10-K) in accordance with the terms set forth in the
Management Agreement for services rendered to the Borrower or any of its
Subsidiaries, 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; and
(v) provided that no Default or Event of Default shall exist
both before and after giving effect thereto, after the Borrower has
delivered financial statements pursuant to Section 7.1(a) or (b) that
demonstrate that the Total
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Leverage Ratio has been less than 3.00:1:00 for the immediately preceding
two consecutive fiscal quarters, and provided that the Total Leverage Ratio
would not be greater than or equal to 3.00:1.00 after giving effect
thereto, (A) Arch may make any Restricted Payments to the Parent, and (B)
the Parent may make any Restricted Payments to its shareholders.
(c) ADDITIONAL RESTRICTED PAYMENTS TO THE PARENT. So long as any of
the Parent Discount Notes are outstanding or the Existing Discount Indenture is
in effect, and provided that immediately before or after giving effect to such
declaration and payment no Default or Event of Default shall exist, in addition
to any payments permitted under clauses (a) and (b) above, Arch may make
Restricted Payments to the Parent (A) on any day in an amount not in excess of
the amount of interest due and payable on the Parent Discount Notes on such day,
(B) to enable the Parent to repurchase shares of its Stock in an aggregate
amount not exceeding $1,000,000 minus amounts expended for such purpose on or
after March 12, 1996 and (C) to enable the Parent to make payments (not
exceeding $189,282 in any fiscal year) when due under the Consulting Agreement
constituting a part of the Page Call Purchase Documents.
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 an Acquisition, or make any payments
in respect of the ACE Subordinated Note, or permit any of its 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 Second Restatement 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) commercial paper maturing not in excess of 270 days from the date
of acquisition and rated P-1 by Moody's or A-1 by S&P on the date of acquisition
thereof;
(f) Indebtedness (which Indebtedness shall not have a maturity in
excess of one year) which is rated A or better by Moody's or S&P on the date of
acquisition thereof;
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(g) prior to the Existing Arch Senior Note Termination Date, the
Borrower or any of its Subsidiaries may make loans or advances to Arch or any of
its Subsidiaries;
(h) Acquisitions of Persons in the wireless messaging industry made by
the Borrower or any of its Subsidiaries, provided that:
(i) the Acquisition Consideration of each such Acquisition shall
not exceed $25,000,000 individually or $50,000,000 in the aggregate for all
such Acquisitions made in any 24 month period,
(ii) immediately before and after giving effect to each such
Acquisition, (A) no Default or Event of Default shall exist, (B) the Total
Leverage Ratio shall be less than or equal to 4.75:1.00, and (C) the API
Leverage Ratio shall be less than or equal to 2.50:1.00,
(iii) the 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, and
(iv) the Administrative Agent shall have received with sufficient
copies for each Lender (A) ten Business Days' prior written notice thereof,
(B) a certificate of a Financial Officer of the Borrower as to the matters
set forth in clauses (i) through (iii) above, (C) unaudited Consolidated
pro-forma balance sheets and the Consolidated pro-forma statements of
operations of the Borrower and its Subsidiaries presenting the pro-forma
Consolidated financial condition of the Borrower and its Subsidiaries and
the pro-forma Consolidated statements of operations of the Borrower and its
Subsidiaries through the Tranche C Maturity Date, (D) a Compliance
Certificate on a pro forma basis giving effect to such Acquisition, (E)
such other 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 or the Triggering Collateral Documents solely to the
extent that (x) such Collateral Documents or the Triggering Collateral
Documents are effective and (y) a security interest has been granted by the
Person making the Acquisition in the type of Property or Stock being
acquired, and (F) such other information or documents as the Administrative
Agent shall have reasonably requested;
(i) Investments consisting of the Existing Intercompany Notes;
(j) Investments by the Borrower or any of its Subsidiaries (other than
Benbow Investments until such time as Benbow Investments ceases to be an
Unrestricted Subsidiary under and as defined in the Existing Arch Senior
Indentures, has become a Subsidiary Guarantor and has granted a security
interest to the Collateral Agent in its assets) in Intercompany Subordinated
Debt, provided, however, that (A) any such loan is evidenced by a subordinated
promissory note in form and substance satisfactory to the Administrative Agent
which is delivered to the Appropriate Party under the applicable Collateral
Document, and (B) no Default or Event of Default would exist before or after
giving effect thereto;
(k) Investments by the Borrower in Benbow Investments consisting
solely of the ACE Subordinated Note, which ACE Subordinated Note shall be in
form and
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substance satisfactory to the Administrative Agent and shall, among other
things, prohibit any payments thereunder if a Default or Event of Default would
exist and be continuing immediately before and after giving effect thereto and
which shall limit any payments to be made thereunder during any period to the
amount permitted to be applied during such period to Additional Benbow
Investments pursuant to Section 8.6(l), provided that the Administrative Agent
shall have received a certificate of a Financial Officer of the Borrower,
attaching a true and correct copy of such ACE Subordinated Note;
(l) Additional Benbow Investments, PROVIDED THAT:
(i) an amendment to the Shareholders' Agreement, dated as of
September 23, 1994, among Benbow, Westlink and June Walsh, as previously
amended prior to the date hereof, shall have been executed and shall have
become effective, such amendment to be in all respects satisfactory to the
Administrative Agent, provided that the Administrative Agent shall have
received a certificate of an officer of the Borrower, attaching a true and
correct copy of such amendment;
(ii) immediately before or after giving effect to any such
Additional Benbow Investment, no Default or Event of Default shall exist,
(iii) prior to the Existing Arch Senior Note Termination Date,
the amount of such Additional Benbow Investments shall not exceed
$10,000,000 in the aggregate in any one fiscal year of the Borrower and
$25,000,000 in the aggregate for all such Additional Benbow Investments,
and
(iv) on and after the Existing Arch Senior Note Termination Date,
Additional Benbow Investments may be made so long as before and after
giving effect thereto, the API Leverage Ratio is less than or equal to
2:00:1.00;
(m) payments by the Borrower in respect of the ACE Subordinated Note,
provided that (i) no Default or Event of Default would exist and be continuing
immediately before and after giving effect thereto, (ii) the amount of any such
payment shall not exceed the amount of Additional Benbow Investments permitted
to be made to Benbow pursuant to the provisions of Section 8.6(l) as of the date
such payment is made, and (iii) the proceeds of any such payment shall be used
promptly and solely as an Additional Benbow Investment; and
(n) other Investments, provided that (i) no Default or Event of
Default shall exist both before and after giving effect thereto, (ii) the
Borrower shall have delivered financial statements pursuant to Section 7.1(a) or
(b) that demonstrate that the Total Leverage Ratio has been less than 3.00:1:00
for the immediately preceding two consecutive fiscal quarters, and (iii) the
Total Leverage Ratio would not be greater than or equal to 3.00:1.00 after
giving effect thereto.
8.7. BUSINESS AND NAME CHANGES.
Materially change, or permit any such Subsidiary to materially change,
the nature of its respective business as conducted on the Second Restatement
Date, or, without giving the Administrative Agent thirty days' prior written
notice, change its name or permit any such Subsidiary to change its name.
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8.8. SALE OF PROPERTY.
Sell, exchange, lease, transfer, assign or otherwise dispose of any
Property to any Person, or permit any of its Subsidiaries so to do, except:
(a) sales or dispositions of Property in the ordinary course of
business, including normal retirements and replacements of Property in the
ordinary course of business;
(b) prior to the Existing Arch Senior Note Termination Date,
sales or other dispositions of Property between Arch and any of its
Subsidiaries (other than Benbow Investments until such time as Benbow
Investments ceases to be an Unrestricted Subsidiary under and as defined in
the Existing Arch Senior Indentures, has become a Subsidiary Guarantor and
has granted a security interest to the Collateral Agent in its assets);
(c) the Tower Sale, provided that:
(i) no Default or Event of Default shall exist immediately
before or after giving effect thereto, and
(ii) the consideration received or to be received by Arch or
any of its Subsidiaries shall be payable at least 85% in cash on or before
the closing of such Tower Sale and shall not be less than the fair market
value of the Property so sold, as reasonably determined by the Managing
Person of Arch or such Subsidiary; and
(d) sales or other dispositions of Property by the Borrower or
any of its Subsidiaries (other than Benbow Investments until such time as
Benbow Investments ceases to be an Unrestricted Subsidiary under and as
defined in the Existing Arch Senior Indentures, has become a Subsidiary
Guarantor and has granted a security interest to the Collateral Agent in
its assets) (each, an "ASSET SALE DISPOSITION") not otherwise described in
this Section, provided that:
(i) the Borrower shall give the Administrative Agent at
least 10 Business Days' prior written notice of each such Asset Sale
Disposition identifying the Property to be sold and the total consideration
to be paid in respect thereof,
(ii) no Default or Event of Default shall exist immediately
before or after giving effect thereto,
(iii) the consideration received or to be received by the
Borrower or any of its Subsidiaries shall be payable at least 85% in cash
on or before the closing of such Asset Sale Disposition and shall not be
less than the fair market value of the Property so sold, as reasonably
determined by the Managing Person of the Borrower or such Subsidiary,
(iv) each such Asset Sale Disposition made pursuant to this
Section 8.8(d) shall not exceed $25,000,000 individually or $50,000,000 in
the aggregate in any 24 month period,
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(v) the Total Leverage Ratio shall be less than or equal to
4.75:1.00 immediately before or after giving effect thereto, and
(vi) the API Leverage Ratio shall be less than or equal to
2.50:1.00 immediately before or after giving effect thereto.
8.9. SUBSIDIARIES.
Create or acquire any Subsidiary, or permit any of its Subsidiaries so
to do, except (i) as otherwise provided pursuant to and in accordance with
Sections 7.17, 7.18 or 8.6 and (ii) with the consent of Required Lenders, the
Borrower or any of its Subsidiaries may create an unconsolidated Subsidiary not
subject to the provisions contained in Sections 7 and 8.
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 Borrower or any of its Subsidiaries under any
of the Loan Documents, or permit any of its Subsidiaries so to do.
8.11. PREPAYMENTS OF INDEBTEDNESS.
Prepay or obligate itself to prepay, in whole or in part, or
voluntarily redeem or otherwise retire prior to the maturity thereof, any
Indebtedness (other than Indebtedness under the Loan Documents and the Loan
Documents under and as defined in the Tranche B Credit Agreement), or permit any
of its Subsidiaries so to do, except (i) prepayment of the Existing Arch Senior
Notes or the Arch 12 3/4% Senior Notes with thE proceeds of any Replacement
Notes, and (ii) prior to the Existing Arch Senior Note Termination Date,
Indebtedness owed by the Borrower or any of its Subsidiaries to Arch or any of
its other Subsidiaries.
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 its Subsidiaries so to do, except that (i) the Borrower or any of
its Subsidiaries may lease any transmitting tower site which was the subject of
a Disposition, and (ii) prior to the Existing Arch Senior Note Termination Date,
the Borrower or any of its Subsidiaries may enter into any such sale and
leaseback transaction with Arch or any of its other Subsidiaries.
8.13. ISSUANCE OF CAPITAL STOCK.
Issue any additional Stock or other equity or ownership interest, or
permit any of its Subsidiaries so to do, except that the Borrower or any of its
Subsidiaries may issue additional common Stock to its immediate parent provided
that simultaneously therewith such Stock shall be delivered to the Appropriate
Party, with appropriate stock powers.
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8.14. FISCAL YEAR.
Change its fiscal year from that in effect on the Second Restatement
Date or permit any of its 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 Existing Parent Intercompany Notes, the Existing
Intercompany Notes, the Management Agreement, any Non-Competition Agreement, the
Subordinated Indenture, the Subordinated Debentures, the Parent Discount Notes
Indenture, the Parent Discount Notes, the Existing Arch Senior Notes, the
Existing Arch Indentures, the Arch 12 3/4% Senior Notes, the Arch 12 3/4%
Indenture, the Replacement Notes, the ReplaceMENT Indenture, the Tax Sharing
Agreement or the Subordination Agreement, 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.
Become a party to any transaction with an Affiliate or permit any of
its 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.
8.17. ERISA.
Adopt or become obligated to contribute to any Plan or Multiemployer
Plan, or permit any of its Subsidiaries or Commonly Controlled Entity so to do.
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 (i) any principal on any
Note or (ii) any Reimbursement Obligation, 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 2.7; or
(d) The failure of any Loan Party to observe or perform any
covenant or agreement contained in Section 7.2(f), 7.3, 7.11, 7.12, 7.13, 7.14,
7.15,
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7.16, 7.17, 7.18, 7.19 or 7.20, Section 8 or Section 11.1 of this Agreement or
Section 2 of the Subsidiary Guaranty, the Parent Guaranty or the Arch Guaranty;
or
(e) The failure of any Loan Party to observe or perform any other
term, covenant, or agreement contained in any Loan Document and such failure
shall have continued unremedied for a period of 30 days from the first date when
the Parent, Arch or the Borrower shall have obtained knowledge thereof; or
(f) Any representation or warranty of any Loan Party (or of any
officer of the Borrower or Arch 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 the Parent or any of its Subsidiaries
(other than Benbow Investments), whether as principal, guarantor, surety or
other obligor, for the payment of any Indebtedness or operating leases
(including any mandatory redemption of the Existing Arch Senior Notes, the Arch
12 3/4% Senior Notes or thE Replacement Notes) in an aggregate amount greater
than $10,000,000 (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; or
(h) the Parent or any of its Subsidiaries shall (i) suspend or
discontinue its business, 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 petition or proceeding
referred to above 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 or any of its Subsidiaries; 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 its 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 its 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
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the Parent or any of its Subsidiaries or of any substantial part of the Property
thereof, which decree or order has continued unstayed and in effect for a period
of 60 days, provided that such 60 day period shall not apply (and an immediate
Event of Default shall occur) if such decree or order has been submitted by, or
consented to, by the Parent or any of its Subsidiaries, or (iv) ordering the
winding up or liquidation of the affairs of the Parent or any of its
Subsidiaries (other than an order requested by the Parent or any of its
Subsidiaries in respect of a transaction permitted by Section 7.3); or
(j) Any judgment or decree against the Parent or any of its
Subsidiaries aggregating in excess of $1,000,000 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
the Tranche B Credit Agreement; 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 Arch's or any of its Subsidiaries' 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 a Change of Control; or
(o) There shall occur a Default or Event of Default (under and as
defined in the Parent Discount Notes Indenture, the Subordinated Note Indenture,
the Existing Arch Indentures, the Arch 12 3/4% Indenture or any Replacement
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,
the Reimbursement Obligations 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, the Reimbursement Obligations
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 hereby further expressly
waives 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.
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In the event that the Commitments shall have terminated or the Loans,
all accrued and unpaid interest thereon and all other amounts owing under the
Loan Documents shall have become due and payable pursuant to the provisions of
this Section 9, any funds received by any Credit Party from or on behalf of the
Borrower (except funds received by any Lender as a result of a purchase from any
other Lender pursuant to Section 2.9(c)) shall be remitted to, and applied by,
the Administrative Agent in the following manner and order:
(i) first, to reimburse the Administrative Agent, the Letter of
Credit Issuer and the Lenders, in that order, for any expenses due from the
Borrower pursuant to the provisions of Section 11.4,
(ii) second, to the payment of the Fees, pro rata according to
the Fees due and owing to the Credit Parties,
(iii) third, to the payment, pro rata according to the Total
Percentage of each Lender, of interest due on the Loans and the
Reimbursement Obligations,
(iv) fourth, to the payment of any other fees, expenses or other
amounts (other than the principal of and interest on the Loans) payable by
the Loan Parties to the Credit Parties under the Loan Documents,
(v) fifth, to the payment to the Lenders of, and on a pro rata
basis in accordance with, the unpaid principal amount of the Loans and the
Reimbursement Obligations and each amount then due and payable under each
Secured Hedging Agreement between the Borrower and a Lender, and
(vi) sixth, any remaining funds shall be paid to the Borrower or
as a court of competent jurisdiction shall direct.
10. THE ADMINISTRATIVE AGENT
10.1. APPOINTMENT.
Each of the Lenders hereby irrevocably appoints BNY as the
Administrative Agent and authorizes the Administrative Agent to take such
actions on its behalf and to exercise such powers as are delegated to it by the
terms hereof, together with such actions and powers as are reasonably incidental
thereto.
10.2. INDIVIDUAL CAPACITY.
The Person serving as the Administrative Agent hereunder shall have
the same rights and powers in its capacity as a Lender as any other Lender and
may exercise the same as though it were not the Administrative Agent, and such
Person and its Affiliates may accept deposits from, lend money to and generally
engage in any kind of business with the Borrower, any Subsidiary, or any
Affiliate of the Borrower as if it were not the Administrative Agent hereunder.
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10.3. EXCULPATORY PROVISIONS.
The Administrative Agent shall not have any duties or obligations
except those expressly set forth herein. Without limiting the generality of the
foregoing, (1) the Administrative Agent shall not be subject to any fiduciary or
other implied duties, regardless of whether a Default has occurred and is
continuing, (2) the Administrative Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby that the Administrative Agent is
required to exercise in writing by the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 11.1), and (3) except as expressly set forth herein, the
Administrative Agent shall not have any duty to disclose, and shall not be
liable for the failure to disclose, any information relating to the Borrower or
any Subsidiary that is communicated to or obtained by the bank serving as
Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 11.1) or in the absence of its own gross negligence or
willful misconduct. The Administrative Agent shall be deemed not to have
knowledge of any Default unless and until written notice thereof is given to the
Administrative Agent by the Borrower or another Credit Party and the
Administrative Agent shall not be responsible for or have any duty to ascertain
or inquire into (i) any statement, warranty or representation made in or in
connection with this Agreement, (ii) the contents of any certificate, report or
other document delivered hereunder or in connection herewith, (iii) the
performance or observance of any of the covenants, agreements or other terms or
conditions set forth herein, (iv) the validity, enforceability, effectiveness or
genuineness of this Agreement or any other agreements, instrument or document,
or (v) the satisfaction of any condition set forth in Sections 5 or 6 or
elsewhere herein, other than to confirm receipt of items expressly required to
be delivered to the Administrative Agent.
10.4. RELIANCE BY ADMINISTRATIVE AGENT.
The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel to the Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.
10.5. DELEGATION.
The Administrative Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent, provided that no such delegation shall
serve as a release of the Administrative Agent or waiver by the Borrower of any
rights hereunder. The Administrative Agent and any such sub-agent may perform
any and all its duties and exercise its rights and powers through their
respective Related Parties. The exculpatory provisions of this Section 10 shall
apply to any such sub-agent and to the Related Parties of the Administrative
Agent and any such sub-agent, and shall apply to their respective activities in
connection
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with the syndication of the credit facilities provided for herein as well as
activities as Administrative Agent.
10.6. RESIGNATION; SUCCESSOR ADMINISTRATIVE AGENT.
Subject to the appointment and acceptance of a successor
Administrative Agent as provided in this Section, the Administrative Agent may
resign at any time by notifying the Lenders and the Borrower. Upon any such
resignation, the Required Lenders shall have the right, with the written consent
of the Borrower (such consent not to be unreasonably withheld and not to be
required during the continuance of an Event of Default) to appoint a successor.
If no successor shall have been so appointed by the Required Lenders and shall
have accepted such appointment within 30 days after the retiring Administrative
Agent gives notice of its resignation, then the retiring Administrative Agent
may, on behalf of the Lenders, appoint a successor Administrative Agent which
shall be a bank with an office in New York, New York, or an Affiliate of any
such bank. Upon the acceptance of its appointment as Administrative Agent
hereunder by a successor, such successor shall succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its duties
and obligations hereunder. The fees payable by the Borrower to a successor
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Borrower and such successor. After the
Administrative Agent's resignation hereunder, the provisions of this Section 10
and Section 11.4 shall continue in effect for the benefit of such retiring
Administrative Agent, its sub-agents and their respective Related Parties in
respect of any actions taken or permitted to be taken by any of them while it
was acting as Administrative Agent.
10.7. NON-RELIANCE ON OTHER CREDIT PARTIES.
Each Credit Party acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Credit Party and based on
such documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Credit Party also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Credit Party and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any related agreement or any document furnished hereunder or thereunder.
10.8. COLLATERAL AGENT, MANAGING AGENTS, SYNDICATION AGENT AND
DOCUMENTATION AGENT.
The Collateral Agent, in its capacity as Collateral Agent, shall have
only the duties and obligations expressly set forth in the Loan Documents to
which it is a party. The Managing Agents, Syndication Agent and Documentation
Agent shall have no duties or obligations under the Loan Documents in their
respective capacities as Managing Agents, Syndication Agent and Documentation
Agent. The Collateral Agent, Managing Agents, Syndication Agent and
Documentation Agent shall be entitled to the same protections, indemnifies and
rights, and subject to the same standards with respect to their actions,
inactions and duties, as the Administrative Agent.
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11. MISCELLANEOUS
11.1. AMENDMENTS AND WAIVERS.
(a) No failure to exercise and no delay in exercising, on the part of
any Credit Party, 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. No waiver of any provision of any Loan Document or consent to
any departure by any Loan Party therefrom shall in any event be effective unless
the same shall be permitted by this Section, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. Without limiting the generality of the foregoing, the making of a Loan
shall not be construed as a waiver of any Default, regardless of whether any
Credit Party may have had notice or knowledge of such Default at the time.
(b) Notwithstanding anything to the contrary contained in any Loan
Document, with the written consent of the Required Lenders, the Administrative
Agent and the appropriate parties to the Loan Documents (other than the other
Credit Parties) 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 other Credit Parties, may
execute and deliver to any such parties a written instrument waiving or
consenting to the departure from, on such terms and conditions as the
Administrative Agent may specify in such instrument, any of the requirements of
the Loan Documents or any Default and its consequences; provided, however, that
no such amendment, supplement, modification, waiver or consent shall:
(i) increase the Tranche A Commitment of any Tranche A Lender
without such Lender's consent;
(ii) unless agreed to by each Credit Party affected thereby, (A)
reduce the principal amount of any Extension of Credit, or reduce the rate
of interest thereon, or reduce any fees or other obligations payable under
the Loan Documents, (B) extend any date (including any Maturity Date) fixed
for the payment of any principal of or interest on any Extension of Credit,
any fees, or any other obligation payable under the Loan Documents, (C)
extend the expiration date of any Letter of Credit beyond the Tranche A
Maturity Date, or (D) extend any date for the reduction of the Aggregate
Tranche A Commitments set forth in Section 2.3(b);
(iii) unless agreed to by all of the Tranche A Lenders, Tranche B
Lenders and Tranche C Lenders: (A) increase the Aggregate Tranche A
Commitments, (B) change this Section 11.1, the definition of "Minority
Lenders" or "Required Lenders" or any other provision hereof specifying the
number or percentage of Lenders required to waive, amend or modify any
rights hereunder or make any determination or grant any consent hereunder,
(C) change Section 2.9 in a manner that would alter the pro rata sharing of
payments required thereby, (D) consent to any assignment or delegation by
any Loan Party of any of its rights or obligations
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under any Loan Document, (E) release any Subsidiary Guarantor from its
obligations under the Subsidiary Guaranty, Arch from its obligations under
Arch Guaranty or the Parent from its obligations under the Parent Guaranty
(except as may be expressly permitted thereunder or hereunder), or (F)
release any of the Collateral from the Liens of the Collateral Documents,
except as may be expressly permitted thereunder or hereunder,
(iv) without the consent of Lenders of each Class having not less
than 66-2/3% of the (A) Aggregate Tranche A Commitments in the case of
Tranche A Lenders, (B) Aggregate Tranche B Commitments (or after the
Tranche B Conversion Date, the Aggregate Tranche B Exposure) in the case of
Tranche B Lenders and (C) the outstanding principal amount of the Tranche C
Loans in the case of Tranche C Lenders, no such amendment, supplement,
modification, waiver or consent shall change the provisions of Section 2.4
relating to the allocation of prepayments to the Tranche A Loans and the
Tranche C Loans and the reduction of the Aggregate Tranche A Commitments,
and
(v) unless agreed to by the Administrative Agent, the Collateral
Agent or the Letter of Credit Issuer, amend, modify or otherwise affect the
rights or duties of the Administrative Agent, the Collateral Agent or the
Letter of Credit Issuer, respectively, under the Loan Documents.
Any such amendment, supplement, modification, waiver or consent shall
apply equally to each Credit Party and shall be binding upon each Credit Party
and each Loan Party to the applicable Loan Document, and upon all future holders
of the Notes and the Reimbursement Obligations. In the case of any waiver, the
Credit Parties and each Loan Party party to the applicable Loan Document shall
be restored to their former position and rights hereunder and under the
outstanding Notes and other Loan Documents to the extent provided for in such
waiver, and any Default waived shall not extend to any subsequent or other
Default, or impair any right consequent thereon.
11.2. NOTICES.
All notices, requests and demands to or upon the respective parties to
the Loan Documents to be effective shall be in writing and, unless otherwise
expressly provided therein, shall be deemed to have been duly given or made when
delivered by hand, one Business Day after having been sent by overnight courier
service, or when deposited in the mail, first-class postage prepaid, or, in the
case of notice by facsimile, when sent, to the last address (including telephone
and facsimile numbers) for such party specified by such party in a written
notice delivered to the Administrative Agent and the Borrower or, if no such
written notice was so delivered, as follows:
(a) in the case of any Loan Party, to such Loan Party c/o Arch
Paging, Inc., 1800 West Park Drive, Suite 250, Westborough, Massachusetts
01581, Attention: J. Roy Pottle, Chief Financial Officer, Telephone: (508)
870-6703, Facsimile: (508) 870-6076,
(b) in the case of the Administrative Agent and the Letter of
Credit Issuer, to The Bank of New York, Agency Function Administration, One
Wall Street, 18th Floor, New York, NY 10286; Attention: Michael Pizarro,
Telephone: (212) 635-4697; with a copy to: The Bank of New York, One Wall
Street,
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16th Floor, New York, NY 10286, Attention: Geoffrey C. Brooks, Telephone:
(212) 635-8475, Facsimile (212) 635-8593; and
(c) in the case of a Lender, at its address set forth on its
signature page hereto or, in the Assignment or Acceptance Agreement or
other instrument pursuant to which it became a Lender;
provided, however, that any notice, request or demand by the Borrower pursuant
to Sections 2.2, 2.3, 2.4, 2.6 or 3.3 shall not be effective until received. Any
party to a Loan Document may rely on signatures of the parties thereto which are
transmitted by facsimile or other electronic means as fully as if originally
signed.
11.3. SURVIVAL.
All covenants, agreements, representations and warranties made by the
Borrower herein and in the certificates or other instruments delivered in
connection with or pursuant to this Agreement shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of this Agreement and the making of any Extensions of Credit,
regardless of any investigation made by any such other party or on its behalf
and notwithstanding that the Administrative Agent or any Lender may have had
notice or knowledge of any Default or incorrect representation or warranty at
the time any credit is extended hereunder.
11.4. EXPENSES; INDEMNITY.
(a) The Borrower agrees, on demand therefor and whether any Extension
of Credit is made (i) to pay or reimburse the Administrative Agent and its
Related Parties for all reasonable out-of-pocket expenses incurred thereby,
including the reasonable fees, charges and disbursements of counsel, in
connection with the development, preparation, execution, syndication and
administration of, the Loan Documents (including any amendment, supplement or
other modification thereto (whether or not executed or effective)), any
documents prepared in connection therewith and the consummation of the
transactions contemplated thereby and (ii) to pay or reimburse each Credit Party
for all of its costs and expenses, including reasonable fees and disbursements
of counsel, incurred in connection with (A) the protection or enforcement of its
rights under the Loan Documents, including any related collection proceedings
and any negotiation, restructuring or "work-out", and (B) the enforcement of
this Section.
(b) The Borrower shall, on demand therefor, indemnify each Credit
Party and each of their respective Related Parties (each, an "INDEMNIFIED
PERSON") against, and hold each Indemnified Person harmless from, any and all
losses, claims, damages, penalties, liabilities and related expenses, including
the fees, charges and disbursements of any counsel, incurred by or asserted
against any Indemnified Person in connection with or in any way arising out of
any Loan Document, any other Transaction Document or any Transaction, including
as a result of (i) any breach by the Borrower of the terms of any Loan Document,
the use of proceeds of any Extension of Credit or any action or failure to act
on the part of the Borrower, (ii) the consummation or proposed consummation of
the Transactions or any other transactions contemplated hereby, (iii) any
Extension of Credit or the use of the proceeds therefrom, (iv) any actual or
alleged presence or release of Hazardous Substance on or from any property owned
or operated by the Borrower or any of its Subsidiaries, or any liability in
respect of any Environmental Law related in any way to the Borrower or any of
its Subsidiaries, (v) any action or failure to act on the part of the
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Borrower or (vi) any actual or prospective claim, litigation, investigation or
proceeding relating to any of the foregoing, whether based on contract, tort or
any other theory and regardless of whether any Indemnified Person is a party
thereto (collectively, the "INDEMNIFIED LIABILITIES"), provided that such
indemnity shall not, as to any Indemnified Person, be available to the extent
that such losses, claims, damages, liabilities or related expenses resulted from
the gross negligence or wilful misconduct of such Indemnified Person.
(c) To the extent that the Borrower fails to pay any amount required
to be paid by it to the Administrative Agent or any of its Affiliates under
subsections (a) or (b) of this Section, each Lender severally agrees, on demand
therefor, to pay to the Administrative Agent such Lender's Total Percentage of
such amount (determined as of the time that the applicable unreimbursed expense
or Indemnified Liability is sought).
11.5. SUCCESSORS AND ASSIGNS
(a) The Loan Documents shall be binding upon and inure to the benefit
of each of the parties thereto, and their respective successors and assigns,
except that no Loan Party may assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Credit Party
(and any such attempted assignment or transfer without such consent shall be
null and void).
(b) Each Lender may assign all or a portion of its rights and
obligations under the Loan Documents to (i) any Subsidiary or Affiliate of such
Lender, (ii) any other Lender, or (iii) with the consent of the Borrower, the
Administrative Agent and the Letter of Credit Issuer (which consents shall not
be unreasonably withheld or delayed and, in the case of the Borrower's consent,
shall not be required during the continuance of an Event of Default), to any
other Eligible Institution, provided that:
(A) except in the case of an assignment to a Lender or an
Affiliate of a Lender or an assignment of the entire remaining amount of
the assigning Lender's rights and obligations under the Loan Documents, the
amount of the assigning Lender's Tranche A Commitment and Tranche C Loan
subject to such assignment, when added to the amount of the assigning
Lender's Tranche B Commitment (or, if the Tranche B Commitment no longer
exists, the Tranche B Loans) subject to a simultaneous assignment made by
such assigning Lender to the same Eligible Institution under the Tranche B
Credit Agreement (determined as of the date the Assignment and Acceptance
Agreement with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000, and
(B) for each assignment, the assignor and such assignee shall
deliver to the Administrative Agent three copies of an Assignment and
Acceptance Agreement executed by each of them, along with an assignment fee
in the sum of $3,500 for the account of the Administrative Agent and, if
the assignee is not then a Lender and is a Foreign Credit Party, the
documents required by Section 3.6(c).
Upon receipt of such number of executed copies of each such Assignment and
Acceptance Agreement together with the assignment fee therefor and the consents
required to such assignment, if required, the Administrative Agent shall record
the same and execute not less than two copies of such Assignment and Acceptance
Agreement in the appropriate place, deliver one such copy to the assignor and
one such copy to the assignee, and deliver one photocopy thereof, as executed,
to the Borrower. From and after the Assignment
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<PAGE>
Effective Date specified in, and as defined in, such Assignment and Acceptance
Agreement, the assignee thereunder shall, unless already a Lender, become a
party hereto and shall, for all purposes of the Loan Documents, be deemed a
"Lender" and, to the extent provided in such Assignment and Acceptance
Agreement, the assignor Lender thereunder shall be released from its obligations
under this Agreement and the other Loan Documents. The Borrower agrees that, if
requested, in connection with each such assignment, it shall at its own cost and
expense execute and deliver to the Administrative Agent or such assignee a Note,
each payable to the order of such assignee and dated the Second Restatement
Date. The Administrative Agent shall be entitled to rely upon the
representations and warranties made by the assignee under each Assignment and
Acceptance Agreement.
(c) Each Lender may grant participations in all or any part of its
rights and obligations under the Loan Documents to one or more Eligible
Institutions, provided that (i) such Lender's obligations under this Agreement
and the other Loan Documents shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties to this Agreement and the other
Loan Documents for the performance of such obligations, (iii) the Borrower and
the Credit Parties shall continue to deal solely and directly with such Lender
in connection with such Lender's rights and obligations under the Loan
Documents, (iv) the Borrower 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 would have been obligated to pay to such Lender in respect of
such interest had such Lender not sold such participation, and (v) the voting
rights of any holder of any participation shall be limited to decisions that in
accordance with Section 11.1 require the consent of all of the Lenders.
(d) Subject to subsection (e) below, any Lender may at any time assign
all or any portion of its rights under any Loan Document to any Federal Reserve
Bank.
(e) Except to the extent of any assignment pursuant to subsection (b)
above, no Lender shall be relieved of any of its obligations under the Loan
Documents as a result of any assignment of or granting of participations in, all
or any part of its rights and obligations under the Loan Documents.
11.6. COUNTERPARTS; INTEGRATION.
Each Loan Document (other than the Notes) may be executed by one or
more of the parties thereto on any number of separate counterparts and all of
said counterparts taken together shall be deemed to constitute one and the same
document. It shall not be necessary in making proof of any Loan Document to
produce or account for more than one counterpart signed by the party to be
charged. Delivery of an executed counterpart of a signature page of any Loan
Document by facsimile shall be effective as delivery of a manually executed
counterpart of such Loan Document. The Loan Documents and any separate letter
agreements between the Borrower and a Credit Party with respect to fees embody
the entire agreement and understanding among the Loan Parties and the Credit
Parties with respect to the subject matter thereof and supersede all prior
agreements and understandings among the Loan Parties and the Credit Parties with
respect to the subject matter thereof.
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<PAGE>
11.7. 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 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.
11.8. 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 LAW OF THE STATE OF NEW YORK.
11.9. JURISDICTION; SERVICE OF PROCESS.
Each party to a Loan Document hereby irrevocably submits to the
nonexclusive 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 party to a Loan Document hereby irrevocably waives,
to the fullest extent permitted or not prohibited 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 Loan Party 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 and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that a Credit Party may otherwise have to bring
any action or proceeding relating to Loan Documents against the Borrower or its
properties in the courts of any jurisdiction. Each party to a Loan Document
hereby irrevocably consents to service of process in the manner provided for
notices in Section 11.2. Nothing in this Agreement will affect the right of any
party to a Loan Document to serve process in any other manner permitted by law.
11.10. WAIVER OF TRIAL BY JURY.
EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION.
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<PAGE>
11.11. SAVINGS CLAUSE.
This Agreement is intended solely as an amendment of, and
contemporaneous restatement of, the terms and conditions of the Existing ACE
Credit Agreement and the Notes delivered pursuant hereto are intended to amend
and restate the notes issued under the Existing ACE 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 ACE Credit Agreement. The
Existing Borrower Security Agreement and the Existing Subsidiary Guaranty, to
the extent provided in the Borrower Pledge Agreement (Bank), the Subsidiary
Guaranty and the Restricted Subsidiary Security Agreement (Bank) remain in full
force and effect and continue to secure the obligations of the Loan Parties as
set forth therein.
11.12. CONFIDENTIALITY.
Each of the Lenders and the Administrative Agent agrees (on behalf of
itself and each of its affiliates, directors, officers, employees and
representatives) to use reasonable precautions to keep confidential, in
accordance with their customary procedures for handling confidential information
of the same nature, all non-public information supplied by Arch, the Borrower or
any of their respective Subsidiaries pursuant to this Agreement which (a) is
identified by such Person as being confidential at the time the same is
delivered to such Lender or the Administrative Agent, or (b) constitutes any
financial statement, financial projections or forecasts, budget, compliance
certificate, audit report, management letter or accountants' certification
delivered hereunder (collectively, the "CONFIDENTIAL INFORMATION"), provided,
however, that nothing herein shall limit the disclosure of any Confidential
Information (i) to the extent required by statute, rule, regulation or judicial
process, (ii) on a confidential basis, to counsel to any of the Lenders or the
Administrative Agent, (iii) to bank examiners, auditors or accountants, and any
analogous counterpart thereof, (iv) to the Administrative Agent or the Lenders,
(v) in connection with any litigation to which any one or more of the Lenders or
the Administrative Agent is a party, provided that if practicable to do so under
the circumstances, Arch or the Borrower, as the case may be, is given prior
notice of, and an opportunity to contest, the production of such Confidential
Information (which such notice and opportunity shall be reasonable under the
circumstances), (vi) to any assignee or participant (or prospective assignee or
participant) so long as such assignee or participant (or prospective assignee or
participant) agrees in writing to keep such Confidential Information
confidential on substantially the same basis as set forth in this Section, or
(vii) to affiliates of the Administrative Agent or each Lender. Notwithstanding
the provisions of clause (vii) above, neither the Administrative Agent nor any
Lender shall disclose any such Confidential Information to any of its respective
affiliates, directors, officers, employees or representatives except to the
extent that it or they have a need to know such Confidential Information in
connection with the structuring or administration of the Loans or any Loan
Document, any assignment or participation thereof or activities incidental
thereto.
11.13. RELEASE OF BENBOW ASSETS.
By executing this Agreement, each of the Credit Parties hereby
authorizes BNY as the Administrative Agent under (i) the Existing Subsidiary
Guaranty to release the Liens granted by Westlink thereunder in the Benbow
Assets, (ii) the Existing Parent Security Agreement to release the Liens granted
by the Parent thereunder in the Benbow Assets, and (iii) the Existing Borrower
Security Agreement the Liens granted by ACE in its Stock in Westlink II (if
any). Nothing herein shall affect the right of the Credit Parties to
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<PAGE>
require Benbow Investments to become a Subsidiary Guarantor and a party to the
Unrestricted Subsidiary Security Agreement (Bank) on the Existing Arch Senior
Note Termination Date.
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<PAGE>94
IN WITNESS WHEREOF, the parties hereto have caused this Second
Amended and Restated Credit Agreement (Tranche A and Tranche C Facilities) to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
ARCH PAGING, INC.
BY: _____________________________
NAME:____________________________
TITLE:___________________________
<PAGE>95
ARCH PAGING, INC.
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
(TRANCHE A AND TRANCHE C FACILITIES)
THE BANK OF NEW YORK,
Individually, as Letter Of Credit Issuer, as
Managing Agent and as Administrative Agent
By:
Name: Geoffrey C. Brooks
Title: Vice President
Tranche A Commitment: $15,312,500.00
Tranche C Loan: $10,937,500.00
Address for Notices
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
Facsimile: (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
Telephone: (212) 635-8475
Telecopy: (212) 635-8593 Or (212) 635-8679
<PAGE>96
ARCH PAGING, INC.
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
(TRANCHE A AND TRANCHE C FACILITIES)
TORONTO DOMINION (TEXAS), INC.,
Individually, as Managing Agent and as
Syndication Agent
By:
Name:
Title:
Tranche A Commitment: $16,406,250.00
Tranche C Loan: $11,718,750.00
Address for Notices
Toronto-Dominion (Texas), Inc.
Communications Finance
31 West 52nd Street
21st Floor
New York, New York 10019-6101
Attention: Mary Meduski
Telephone: (212) 827-7727
Facsimile: (212) 262-1928
With a Copy to:
Toronto-Dominion (Texas), Inc.
909 Fannin, Suite 1700
Houston, Texas 77010
Attention: Ms. Debbie Greene
Telephone: (713) 653-8245
Facsimile: (713) 951-9921
<PAGE>97
ARCH PAGING, INC.
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
(TRANCHE A AND TRANCHE C FACILITIES)
ROYAL BANK OF CANADA,
Individually, as Managing Agent and as
Documentation Agent
By:
Name:
Title:
Tranche A Commitment: $21,875,000.00
Tranche C Loan: $15,625,000.00
Address for Notices
Royal Bank of Canada
Financial Square
24th Floor
New York, New York 10005-3531
Attention: Thomas Byrne
Telephone: (212) 428-6550
Facsimile: (212) 428-6460
<PAGE>98
ARCH PAGING, INC.
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
(TRANCHE A AND TRANCHE C FACILITIES)
FIRST UNION NATIONAL BANK
By:
Name:
Title:
Tranche A Commitment: $14,005,245.94
Tranche C Loan: $10,003,747.10
Address for Notices
First Union National Bank
One First Union Center
Charlotte, North Carolina 28288-0735
Attention: Mark Hedrick
Telephone: (704) 383-0297
Facsimile: (704) 374-4092
<PAGE>99
ARCH PAGING, INC.
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
(TRANCHE A AND TRANCHE C FACILITIES)
VAN KAMPEN AMERICAN CAPITAL PRIME
RATE INCOME TRUST
By:
Name:
Title:
Tranche A Commitment: $16,843,750.00
Tranche C Loan: $12,031,250.00
Address for Notices
Van Kampen Merritt
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
Attention: Jeffrey Maillet
Telephone: (630) 684-6488
Facsimile: (630) 684-6740
<PAGE>100
ARCH PAGING, INC.
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
(TRANCHE A AND TRANCHE C FACILITIES)
VAN KAMPEN CLO I, LIMITED
By: Van Kampen American Capital
Management, Inc., As Collateral Manager
By:
Name:
Title:
Tranche A Commitment: $9,406,250.00
Tranche C Loan: $6,718,750.00
Address for Notices
Van Kampen Merritt
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
Attention: Jeffrey Maillet
Telephone: (630) 684-6488
Facsimile: (630) 684-6740
<PAGE>101
ARCH PAGING, INC.
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
(TRANCHE A AND TRANCHE C FACILITIES)
PNC BANK, NATIONAL ASSOCIATION
By:
Name:
Title:
Tranche A Commitment: $10,539,615.14
Tranche C Loan: $7,528,296.53
Address for Notices
PNC Bank, National Association
1600 Market Street
21st Floor
Philadelphia, Pennsylvania 19103
Attention: Jeffrey Hauser
Telephone: (215) 585-6466
Facsimile: (215) 585-6680
<PAGE>102
ARCH PAGING, INC.
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
(TRANCHE A AND TRANCHE C FACILITIES)
FLEET NATIONAL BANK
By:
Name:
Title:
Tranche A Commitment: $10,500,644.32
Tranche C Loan: $7,500,460.23
Address for Notices
Fleet National Bank
75 State Street
Mail Code MA-B0-F10C
Boston, Massachusetts 02109
Attention: Jeffrey Mclaughlin
Telephone: (617) 346-4373
Facsimile: (617) 346-4345
<PAGE>103
ARCH PAGING, INC.
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
(TRANCHE A AND TRANCHE C FACILITIES)
BANKBOSTON, N.A.
By:
Name:
Title:
Tranche A Commitment: $8,716,447.03
Tranche C Loan: $6,226,033.59
Address for Notices
BankBoston, N.A.
100 Federal Street
Boston, Massachusetts 02110
Attention: Michael Ashton
Telephone: (617) 434-5427
Facsimile: (617) 434-3401
<PAGE>104
ARCH PAGING, INC.
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
(TRANCHE A AND TRANCHE C FACILITIES)
GENERAL ELECTRIC CAPITAL CORPORATION
By:
Name:
Title:
Tranche A Commitment: $8,079,949.58
Tranche C Loan: $5,771,392.56
Address for Notices
General Electric Capital Corporation
120 Long Ridge Road
Stamford, Connecticut 06927
Attention: Brian Jack
Telephone: (203) 357-6859
Facsimile: (203) 357-4329
<PAGE>105
ARCH PAGING, INC.
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
(TRANCHE A AND TRANCHE C FACILITIES)
SUNTRUST BANK, CENTRAL FLORIDA, N.A.
By:
Name:
Title:
Tranche A Commitment: $5,762,623.11
Tranche C Loan: $4,116,159.36
Address for Notices
SunTrust Bank Central Florida, N.A.
200 South Orange Avenue, 4th Floor
Orlando, Florida 32801
Attention: Chris Aguilar
Telephone: (407) 237-5210
Facsimile: (407) 237-5126
<PAGE>106
ARCH PAGING, INC.
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
(TRANCHE A AND TRANCHE C FACILITIES)
SOCIETE GENERALE
By:
Name:
Title:
Tranche A Commitment: $8,020,474.88
Tranche C Loan: $5,728,910.63
Address for Notices
Societe Generale
Media & Communications
1221 Avenue Of The Americas
New York, New York 10020
Attention: Mark Vigil
Telephone: (212) 278-7350
Facsimile: (212) 278-6240
<PAGE>107
ARCH PAGING, INC.
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
(TRANCHE A AND TRANCHE C FACILITIES)
BEAR STEARNS INVESTMENT PRODUCTS INC.
By:
Name:
Title:
Tranche A Commitment: $7,656,250.00
Tranche C Loan: $5,468,750.00
Address for Notices
Bear, Stearns & Co. Inc.
245 Park Avenue
4th Floor
New York, New York 10167
Attention: Gloria Dombrowski
Telephone: (212) 272-6043
Facsimile: (212) 272-4844
<PAGE>108
ARCH PAGING, INC.
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
(TRANCHE A AND TRANCHE C FACILITIES)
BARCLAYS BANK PLC
By:
Name:
Title:
Tranche A Commitment: $21,875,000.00
Tranche C Loan: $15,625,000.00
Address for Notices
Barclays Bank PLC
388 Market Street
Suite 1700
San Francisco, California 94111
Attention: Daniele Iacovone
Telephone: (415) 765-4737
Facsimile: (415) 765-4760
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
(TRANCHE B FACILITY)
BY AND AMONG
ARCH PAGING, INC.,
THE LENDERS PARTY HERETO,
THE BANK OF NEW YORK,
ROYAL BANK OF CANADA
AND
TORONTO DOMINION (TEXAS), INC.,
AS MANAGING AGENTS,
ROYAL BANK OF CANADA,
AS DOCUMENTATION AGENT,
TORONTO DOMINION (TEXAS), INC.,
AS SYNDICATION AGENT,
AND
THE BANK OF NEW YORK,
AS ADMINISTRATIVE AGENT
WITH
BNY CAPITAL MARKETS, INC.,
ROYAL BANK OF CANADA
TD SECURITIES (USA) INC.,
AS CO-ARRANGERS
DATED AS OF JUNE 29, 1998
<PAGE>
SECOND AMENDED AND RESTATED CREDIT AGREEMENT (Tranche B Facility), dated as
of June 29, 1998, by and among ARCH PAGING, INC. (the "BORROWER"), a Delaware
corporation and the survivor of the Arch Subsidiary Merger and the ACE Merger
(as defined below), the Lenders party hereto, THE BANK OF NEW YORK, ROYAL BANK
OF CANADA and TORONTO DOMINION (TEXAS), INC., as Managing Agents (in such
capacity, the "MANAGING AGENTS"), ROYAL BANK OF CANADA, as Documentation Agent
(in such capacity, the "DOCUMENTATION Agent"), TORONTO DOMINION (TEXAS), INC.,
as Syndication Agent (in such capacity, the "SYNDICATION AGENT"), and THE BANK
OF NEW YORK, as Administrative Agent for the Lenders hereunder (in such
capacity, the "ADMINISTRATIVE AGENT").
RECITALS
A. Reference is made to the First Amended and Restated Credit Agreement,
dated as of May 21, 1996, by and among Arch Communications Enterprises, Inc.
("ACE"), Arch Communications Group, Inc. (the "PARENT"), the lenders party
thereto (the "EXISTING LENDERS"), the Co-Agents party thereto and the
Administrative Agent, as amended by Amendment No. 1, dated as of June 25, 1996,
Amendment No. 2, dated as of March 25, 1997, Amendment No. 3, dated as of June
17, 1997, Amendment No. 4, dated as of January 7, 1998, and Amendment No. 5 and
Waiver No. 1, dated as of March 9, 1998 (as so amended, the "EXISTING ACE CREDIT
AGREEMENT").
B. Prior to, or contemporaneously with, the effectiveness of this
Agreement, the following events will occur:
(1) ACE will deliver the ACE Subordinated Note (as hereinafter
defined) to The Westlink Company II, a wholly-owned direct Subsidiary of
ACE ("WESTLINK II"), and The Westlink Company ("WESTLINK") and the Parent
will transfer all of their respective investment (the "BENBOW ASSETS") in
Benbow PCS Ventures, Inc. ("BENBOW") to Westlink II;
(2) USA Mobile Communications, Inc. II, a Delaware corporation and a
wholly-owned Subsidiary of the Parent, will change its name (the "ARCH NAME
Change") to "Arch Communications, Inc." ("ARCH"), each of the Subsidiaries
of Arch will be merged (the "ARCH SUBSIDIARY MERGER") into USA Mobile
Communications, Inc. III, a Delaware corporation and a wholly-owned
Subsidiary of Arch ("USAM III"), USAM III will change its name to "Arch
Paging, Inc." (the "USAM NAME CHANGE"), immediately prior to the ACE
Merger, Arch will contribute all of its assets (other than its Stock in the
Borrower) to the Borrower (the "ARCH CONTRIBUTION"), the Borrower will
create a new Subsidiary to be known as "Benbow Investments, Inc." ("BENBOW
INVESTMENTS"), Benbow Investments will distribute all of its assets to the
Borrower and Arch will designate Benbow Investments as an Unrestricted
Subsidiary under and as defined in each of the Existing Arch Indentures
(collectively with the Arch Name Change, the Arch Subsidiary Merger, the
USAM Name Change and the Arch Contribution, the "ARCH TRANSACTIONS");
(3) each of the Credit Parties under this Agreement and the Credit
Parties under and as defined in the Tranche B Credit Agreement shall
authorize BNY as the Administrative Agent under (i) the Amended and
Restated Subsidiary Guaranty, Security and Subordination Agreement, dated
<PAGE>
as of May 21, 1996, made by ACE and its Subsidiaries party thereto to the
Administrative Agent (the "EXISTING SUBSIDIARY GUARANTY"), to release the
Liens granted by Westlink thereunder in its Benbow Assets, (ii) the
Existing Parent Security Agreement (as defined in the Parent Guaranty) to
release the Liens granted by the Parent thereunder in its Benbow Assets,
and (iii) the Amended and Restated Borrower Security Agreement, dated as of
May 21, 1996, as amended, made by ACE to the Administrative Agent (the
"EXISTING BORROWER SECURITY AGREEMENT"), to release the Liens granted by
ACE thereunder in its Stock in Westlink II (if any);
(4) Westlink will merge into Benbow Investments with Benbow
Investments as the survivor (the "BENBOW MERGER");
(5) ACE will contribute all of its assets (other than its Stock in its
Subsidiaries and in such of the Existing Intercompany Notes as are payable
to it) to Arch Michigan (the "ACE CONTRIBUTION") and ACE will be merged
into the Borrower with the Borrower as the survivor (the "ACE MERGER" and,
together with the transactions referred to in clause (B)(1) above and the
ACE Contribution, the "ACE TRANSACTIONS");
(6) Arch will issue the Arch 12 3/4% Senior Notes (as hereinaftER
defined);
(7) the loans and commitments of the Existing Lenders shall have been
assigned to, and assumed by the Lenders and the Lenders under the Tranche B
Credit Agreement pursuant to the Master Assignment (as hereinafter
defined).
C. As of the Second Restatement Date, (i) the Aggregate Revolving Credit
Commitments under and as defined in the Existing ACE Credit Agreement equal
$212,250,000 (the "EXISTING REVOLVING COMMITMENTS"), (ii) the outstanding
principal amount of Revolving Credit Loans under and as defined in the Existing
ACE Credit Agreement equals $132,500,000 (the "EXISTING REVOLVING LOANS"), (iii)
the outstanding principal amount of Tranche A Term Loans under and as defined in
the Existing ACE Credit Agreement equals $138,750,000 (the "EXISTING TRANCHE A
TERM LOANS"), and (iv) the outstanding principal amount of Tranche B Term Loans
under and as defined in the Existing ACE Credit Agreement equals $99,000,000
(the "EXISTING TRANCHE B TERM LOANS").
D. On the Second Restatement Date, the parties hereto desire to, among
other things, (i) reduce the Existing Revolving Commitments to $175,000,000,
(ii) continue the Existing Revolving Loans as Tranche A Loans under the Second
Amended and Restated Credit Agreement (Tranche A and Tranche C Facilities),
dated as of the date hereof, among the Borrower, the Lenders party thereto and
the Agents (as the same may be amended, supplemented or otherwise modified from
time to time, the "TRANCHE A AND TRANCHE C CREDIT AGREEMENT"), (iii) convert
$125,000,000 of the Existing Tranche A Term Loans to Tranche C Loans under the
Tranche A and Tranche C Credit Agreement, (iv) continue the Existing Tranche B
Term Loans as Tranche B Loans hereunder, (v) repay in full all Indebtedness
under the Existing Arch Credit Agreement (as hereinafter defined) out of the
proceeds of the Arch 12 3/4% Senior Notes, (vi) repay Existing Tranche A Term
Loans not converted to Tranche C Loans, (vii) repay the Tranche B Loans
hereunder out of the proceeds of the Arch 12 3/4% Senior Notes and Tranche A
Loans, and (viii) make certain other changes to the Existing ACE Credit
Agreement by amending and restating the Existing ACE Credit Agreement in its
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<PAGE>
entirety as hereinafter set forth with respect to the Tranche B Loans and as set
forth in the Tranche A and Tranche C Credit Agreement with respect to the
Tranche A Loans and the Tranche C Loans.
E. For convenience, this Agreement is dated as of June 29, 1998 (the
"SECOND RESTATEMENT DATE"), 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:
"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.
"ACE": as defined in Recital A.
"ACE CONTRIBUTION": as defined in Recital B(5).
"ACE MERGER": as defined in Recital B(5).
"ACE SUBORDINATED NOTE": a subordinated promissory note, made by ACE
to Westlink II, in form and substance satisfactory to the Administrative Agent.
"ACE TRANSACTIONS": as defined in Recital B(5).
"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.
"ACQUISITION CONSIDERATION": with respect to any Acquisition, the sum
(without duplication) of (i) the cash consideration paid or agreed to be paid in
connection therewith, PLUS (ii) the fair market value of all non-cash
consideration paid or agreed to be paid in connection therewith, PLUS (iii) an
amount equal to the principal or stated amount of all liabilities assumed or
incurred in connection therewith.
"ADDITIONAL BENBOW INVESTMENTS": investments by Benbow Investments in
Benbow made after the Second Restatement Date in accordance with Section 8.6(l).
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"ADJUSTED INDENTURE MATURITY DATE": the earlier to occur of (i) if the
Arch 9-1/2% Indenture is in effect, August 1, 2003, and (ii) if the Arch 14%
Indenture is in effect, May 1, 2004.
"ADJUSTED NET CASH PROCEEDS": with respect to any Disposition as of
any date of determination, the amount equal to the difference between (i) the
Net Sales Proceeds from such Disposition, and (ii) the Reinvested Proceeds in
connection with such Disposition.
"ADMINISTRATIVE AGENT": as defined in the preamble.
"ADVANCE": an ABR Advance or a Eurodollar Advance, as the case may be.
"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 25% 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.
"AGENTS": collectively, the Collateral Agent, the Managing Agents, the
Documentation Agent, the Syndication Agent and the Administrative Agent.
"AGGREGATE COMMITMENTS": on any date, the sum of the Commitments of
all Lenders on such date.
"AGGREGATE TRANCHE A COMMITMENTS": as defined in the Tranche A and
Tranche C Credit Agreement.
"AGGREGATE TRANCHE A EXPOSURE": as defined in the Tranche A and
Tranche C Credit Agreement.
"AGGREGATE TRANCHE B COMMITMENTS": on any date, the sum of the Tranche
B Commitments on such date.
"AGGREGATE TRANCHE B EXPOSURE": at any time, the aggregate sum at such
time of the outstanding principal balance of the Tranche B Loans of all Tranche
B Lenders.
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"AGGREGATE TRANCHE B PERCENTAGE": on any date of determination, the
percentage equal to a fraction (i) the numerator of which is the sum of (1) (A)
prior to the Tranche B Conversion Date, the Aggregate Tranche B Commitments on
such date, and (B) on or after the Tranche B Conversion Date, the Aggregate
Tranche B Exposure on such date, plus (2) (A) prior to the termination (or other
non-existence) of the Aggregate Tranche A Commitments, the Aggregate Tranche A
Commitments on such date, and (B) on and after the termination (or other
non-existence) of the Aggregate Tranche A Commitments, the Aggregate Tranche A
Exposure on such date, and (ii) the denominator of which is the sum of (1) the
amount determined under clause (i) of this definition on such date, plus (2) the
aggregate unpaid principal balance of the Tranche C Loans on such date.
"AGREEMENT": this Second Amended and Restated Credit Agreement
(Tranche B Facility), 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.
"ANNUALIZED OPERATING CASH FLOW": on any date of determination, an
amount equal to (i) Operating Cash Flow for the fiscal quarter ending on such
date or, if such date is not a fiscal quarter ending date, the immediately
preceding fiscal quarter, multiplied by (ii) four.
"ANSWER IOWA": Answer Iowa, Inc., an Iowa corporation.
"ANSWER IOWA LICENSEE CORP.": Answer Iowa Licensee Corporation, a
Delaware corporation.
"API DEBT": at any date of determination, the sum of all Indebtedness
of the Borrower and its Subsidiaries, determined on a Consolidated basis in
accordance with GAAP.
"API LEVERAGE RATIO": at any date of determination, the ratio of API
Debt to Annualized Operating Cash Flow.
"APPLICABLE ARCH INDENTURE TRUSTEES": at any time, (i) if the Arch 9
1/2% Indenture is in effect and has not been satisfied, defeased or discharged,
United States Trust Company of New York or its successor as trustee under the
Arch 9 1/2% Indenture, aND (ii) if the Arch 14% Indenture is in effect and has
not been satisfied, defeased or discharged, United States Trust Company of New
York or its successor as trustee under the Arch 14% Indenture.
"APPLICABLE MARGIN":
(a) As to the Tranche B 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":
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Applicable
Period Rate Margin
------ ---- ------
when the Pricing Alternate Base Rate 1.750%
Leverage Ratio is Eurodollar Rate 3.000%
greater than or equal
to 5.00:1.00
when the Pricing Alternate Base Rate 1.500%
Leverage Ratio is Eurodollar Rate 2.750%
greater than or equal
to 4.50:1.00 but less
than 5.00:1.00
when the Pricing Alternate Base Rate 1.125%
Leverage Ratio is Eurodollar Rate 2.375%
greater than or equal
to 4.00:1.00 but less
than 4.50:1.00
when the Pricing Alternate Base Rate 0.750%
Leverage Ratio is Eurodollar Rate 2.000%
greater than or equal
to 3.00:1.00 but less
than 4.00:1.00
when the Pricing Alternate Base Rate 0.375%
Leverage Ratio is Eurodollar Rate 1.625%
less than 3.00:1.00
(b) Changes in the Applicable Margin resulting from a change in
the Pricing 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 second Business 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 Pricing Leverage Ratio. If the Borrower shall fail to
deliver a Compliance Certificate within 60 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 Pricing Leverage Ratio, solely for
purposes of calculating the Applicable Margin, shall be deemed to be greater
than 5.00:1.00 from and including the date on which such Compliance Certificate
was required to be delivered to the date of delivery to the Administrative Agent
of such Compliance Certificate.
"APPLICABLE PROCEEDS": any and all proceeds of casualty insurance or
condemnation held by the Administrative Agent pursuant to the Loan Documents in
connection with a casualty or condemnation event for which the conditions for
use thereof by the Borrower or any Subsidiary, as set forth in the Loan
Documents, shall not have been satisfied.
"APPROPRIATE PARTY": at any time (i) prior to the Existing Arch Senior
Note Termination Date, (x) if none of the Collateral Documents (other than the
Borrower Pledge Agreement and the Restricted Subsidiary Security Agreement
(Bank)) or the Indenture Collateral Documents are then effective, the Escrow
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Agent, or (y) if, in addition to the Borrower Pledge Agreement and the
Restricted Subsidiary Security Agreement (Bank), any of the Collateral Documents
and any of the Indenture Collateral Documents are then effective, the Collateral
Agent and the Applicable Arch Indenture Trustees and (ii) on or after the
Existing Arch Senior Note Termination Date, the Collateral Agent.
"ARCH": as defined in Recital B(2).
"ARCH 12 3/4% INDENTURE": the Indenture, dated as of June 29, 1998,
betweEN Arch and U.S. Bank Trust National Association, or its successor, as
trustee, pursuant to which Arch issued the Arch 12 3/4% Senior Notes.
"ARCH 12 3/4% SENIOR NOTES": the 12 3/4% Senior Notes due 2007 issued
by ARCh pursuant to the Arch 12 3/4% IndenturE.
"ARCH 9 1/2% INDENTURE": the Indenture, dated as of February 7, 1994,
between Arch and United States Trust Company of New York or its successor, as
trustee, pursuant to which Arch issued its 9 1/2% Senior Notes due 2004.
"ARCH 14% INDENTURE": the Indenture, dated as of December 15, 1994,
between Arch and United States Trust Company of New York or its successor, as
trustee, pursuant to which Arch issued its 14% Senior Notes due 2004.
"ARCH CANADA": Arch Canada, Inc., a Canadian corporation and, prior to
the ACE Merger, a wholly-owned Subsidiary of ACE, and thereafter, a wholly-owned
Subsidiary of the Borrower.
"ARCH CAPITOL": Arch Capitol District, Inc., a New York corporation
and a wholly-owned Subsidiary of the Borrower.
"ARCH CONNECTICUT": Arch Connecticut Valley, Inc., a Massachusetts
corporation and a wholly-owned Subsidiary of the Borrower.
"ARCH CONTRIBUTION": as defined in Recital B(5).
"ARCH GUARANTY": the Arch Guaranty, in substantially the form of
Exhibit R.
"ARCH MICHIGAN": Arch Michigan, Inc., a Delaware corporation and a
wholly-owned Subsidiary of the Borrower.
"ARCH NAME CHANGE": as defined in Recital B(2).
"ARCH SECURITY AGREEMENT (9 1/2% INDENTURE)": Arch Security Agreement
(9 1/2% Indenture), in substantially the form of Exhibit I-2.
"ARCH SECURITY AGREEMENT (14% INDENTURE)": Arch Security Agreement
(14% Indenture), in substantially the form of Exhibit I-3.
"ARCH SECURITY AGREEMENT (BANK)": Arch Security Agreement (Bank), by
and between Arch and the Collateral Agent, in substantially the form of Exhibit
I-1.
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"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.
"ARCH SUBSIDIARY MERGER": as defined in Recital B(2).
"ARCH TRANSACTIONS": as defined in Recital B(2).
"ASSET SALE DISPOSITION": as defined in Section 8.8(d).
"ASSIGNMENT AND ACCEPTANCE AGREEMENT": an assignment and acceptance
agreement, substantially in the form of Exhibit E.
"BECKER": Becker Beeper, Inc., an Illinois corporation and a
wholly-owned Subsidiary of the Borrower.
"BEEPER": The Beeper Company of America, Inc., a Colorado corporation
and a wholly-owned Subsidiary of the Borrower.
"BENBOW": as defined in Recital B(1).
"BENBOW ASSETS": as defined in Recital B(1).
"BENBOW INVESTMENTS": as defined in Recital B(2).
"BENBOW MERGER": as defined in Recital B(4).
"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.
"BOARD OF GOVERNORS": the Board of Governors of the Federal Reserve
System of the United States.
"BORROWER": as defined in the preamble.
"BORROWER OBLIGATIONS": collectively, (i) all of the obligations and
liabilities of the Borrower under the Loan Documents (as defined hereunder) and
the Loan Documents under and as defined in the Tranche A and Tranche C Credit
Agreement, and (ii) all of the obligations and liabilities of the Borrower under
each Secured Hedging Agreement, in each case whether fixed, contingent, now
existing or hereafter arising, created, assumed, incurred or acquired, and
whether before or after the occurrence of any Event of Default under Section
9.1(h) or (i) and including any obligation or liability in respect of any breach
of any representation or warranty and all post-petition interest and funding
losses, whether or not allowed as a claim in any proceeding arising in
connection with such an event.
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<PAGE>
"BORROWER PLEDGE AGREEMENT": the Borrower Pledge Agreement, amending
and restating in part the Existing Borrower Security Agreement, in substantially
the form of Exhibit G.
"BORROWER SECURITY AGREEMENT (9 1/2% INDENTURE)": the Borrower
SecuriTY Agreement (9 1/2% Indenture), in substantially the form of Exhibit H-2.
"BORROWER SECURITY AGREEMENT (14% INDENTURE)": the Borrower Security
Agreement (14% Indenture), in substantially the form of Exhibit H-3.
"BORROWER SECURITY AGREEMENT (BANK)": the Borrower Security Agreement
(Bank), amending and restating in part the Existing Borrower Security Agreement,
in substantially the form of Exhibit H-1.
"BTP": BTP Acquisition Corporation, formerly a Subsidiary of ACE
which, in or about February, 1997, was merged into Arch Southeast with Arch
Southeast as the survivor.
"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 CONTRIBUTION": collectively, the capital contribution made by
the Parent to Arch and by Arch to the Borrower in an amount equal to the net
proceeds of the Equity Investment minus $1,000,000.
"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.
"CASH INTEREST EXPENSE": for any period, the sum of (i) cash 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) during such period as determined in
accordance with GAAP, (ii) Commitment Fees and Letter of Credit Fees during such
period and (iii) without duplication, Restricted Payments made to the Parent
during such period to the extent made to enable the Parent to satisfy its
interest obligations under the Parent Discount Notes Indenture.
"CHANGE IN LAW": (i) the adoption of any law, rule or regulation after
the Relevant Date, (ii) the issuance or promulgation after the Relevant Date of
any directive, guideline or request from any Governmental Body (whether or not
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having the force of law), or (iii) any change after the Relevant Date in the
interpretation of any existing law, rule, regulation, directive, guideline or
request by any Governmental Body charged with the administration thereof.
"CHANGE OF CONTROL": any change of control, fundamental change or any
similar circumstance which, under any of the Existing Arch Indentures, the Arch
12 3/4% Indenture, the Parent Discount Notes Indenture, the Subordinated
Indenture, the Replacement Indenture or the documentation evidencing or
governing any other Indebtedness of the Parent, Arch or the Borrower of
$15,000,000 or more, results in an obligation of the Parent, Arch or the
Borrower to prepay, purchase, offer to purchase, redeem or defease such
Indebtedness.
"CLASS": with respect to (i) the Lenders, the Tranche A Lenders, the
Tranche B Lenders or the Tranche C Lenders, and (ii) the Loans, the Tranche A
Loans, the Tranche B Loans or the Tranche C Loans.
"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 AGENT": The Bank of New York, in its capacity as
collateral agent under the Collateral Documents.
"COLLATERAL DOCUMENTS": collectively, (i) upon the execution and
delivery thereof, the Borrower Pledge Agreement, the Borrower Security Agreement
(Bank), the Subsidiary Guaranty, the Arch Guaranty, the Parent Guaranty, the
Restricted Subsidiary Security Agreement (Bank), each Secured Hedging Agreement,
the Escrow Agreement, and the Powers of Attorney, (ii) upon the declaration of
the effectiveness thereof pursuant to Section 7.19, the Triggering Collateral
Documents, and (iii) all other instruments and documents delivered pursuant to
Section 7.17 or 7.18 to secure any of the Borrower Obligations.
"COMMITMENT": as to any Tranche B Lender, such Tranche B Lender's
Tranche B Commitment.
"COMMITMENT FEE PERCENTAGE":
(a) at all times during the applicable periods set forth below,
the applicable percentage set forth below next to the words "Tranche B
Commitment":
Applicable
Period Commitment Margin
------ ---------- ------
when the Pricing Tranche B Commitment 0.1875%
Leverage Ratio is
greater than or equal
to 4.00:1.00
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when the Pricing Tranche B Commitment 0.1250%
Leverage Ratio is
less than 4.00:1.00
(b) Changes in the Commitment Fee Percentage resulting from a
change in the Pricing 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 second Business 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 Pricing Leverage Ratio. If the Borrower shall
fail to deliver a Compliance Certificate within 60 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 Pricing Leverage Ratio, solely for
purposes of calculating the Commitment Fee Percentage, shall be deemed to be
greater than 4.00:1.00 from and including the date on which such Compliance
Certificate was required to be delivered to the date of delivery to the
Administrative Agent of such Compliance Certificate.
"COMMITMENT FEES": the Tranche B Commitment Fee.
"COMMONLY CONTROLLED ENTITY": an entity, whether or not incorporated,
which is under common control with Arch or any of its 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.
"CONFIDENTIAL INFORMATION": as defined in Section 11.12.
"CONSOLIDATED": each of the Borrower and its Subsidiaries taken
together.
"CONSOLIDATING": each of the Borrower and each of its Subsidiaries
taken separately.
"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 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
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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
converted to a Eurodollar Advance or (iii) the date on which a Eurodollar
Advance is continued as a new Eurodollar Advance.
"CREDIT EXTENSION DATE": any Business Day specified in a Credit
Request as a day on which the Borrower requests the Lenders to make Loans.
"CREDIT PARTY": an Agent or a Lender, as the case may be.
"CREDIT REQUEST": a request for Loans substantially in the form of
Exhibit B.
"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.
"DISPOSITION": any Asset Sale Disposition or the Tower Sale.
"DOCUMENTATION AGENT": as defined in the preamble.
"DOLLARS" and "$": lawful currency of the United States.
"DOMESTIC SUBSIDIARY": any Subsidiary that is not a Foreign
Subsidiary.
"ELIGIBLE INSTITUTION": (i) any commercial bank, trust company,
banking association, insurance company, financial institution, mutual fund or
pension fund acceptable to the Administrative Agent, (ii) any Lender or any
Affiliate or Subsidiary thereof, or (iii) any commercial bank, trust company,
mutual fund or banking association having undivided capital surplus and retained
earnings exceeding $100,000,000.
"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 (i) the
Comprehensive Environmental Response, Compensation and Liability Act, as
amended, 42 USCA ss.9601 et seq. ("CERCLA"); (ii) thE Resource Conservation and
Recovery Act of 1976, as amended, 42 USCA ss.6901 et seq.; (iii) the Toxic
Substance Control Act, as amended, 15 USCA ss.2601 et seq.; (iv) the WateR
Pollution Control Act, as amended, 33 USCA ss.1251 et seq.; (v) the Clean Air
Act, aS amended, 42 USCA ss.7401 et seq.; (vi) the Hazardous Material
Transportation Act, aS amended, 49 USCA ss.1801 et seq. and (vii) all rules,
regulations, judgments, decrees, injunctions and restrictions thereunder and any
analogous state law.
"EQUITY INVESTMENT": the issuance by the Parent of New Parent
Preferred Stock pursuant to the Equity Investment Documents.
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"EQUITY INVESTMENT DOCUMENTS": collectively, (i) the Stock Purchase
Agreement, dated as of June 29, 1998, among the Parent, Sandler Capital Partners
IV, L.P., Sandler Capital Partners IV FTE, L.P. and such other investors named
therein, and (ii) all other documents executed in connection therewith.
"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.
"ESCROW AGENT": The Bank of New York Trust Company of Florida, N.A.,
or its successor as escrow agent under the Escrow Agreement.
"ESCROW AGREEMENT": the Escrow Agreement, in substantially the form of
Exhibit M.
"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 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 its
Specified Percentage of the Eurodollar Advance 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
marginal, emergency, supplemental and special reserves), expressed as a decimal,
established by the Board of Governors 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). Such reserve requirements shall include 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.
"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 Tranche A Loans outstanding at the
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beginning of such fiscal year minus (b) the Aggregate Tranche A Commitments at
the end of such fiscal year (without giving effect to reductions thereof during
such period required by Section 2.3(d) of the Tranche A and Tranche C Credit
Agreement), (ii) payments of the principal of the Tranche C Loans and, after the
Tranche B Conversion Date, the Tranche B Loans during such fiscal year (other
than mandatory prepayments thereof required by Section 2.4), (iii) scheduled
payments of principal of other Indebtedness of the Borrower and its Subsidiaries
on a Consolidated basis made during such fiscal year (including Indebtedness in
respect of Capital Leases), (iv) Capital Expenditures made by the Borrower and
its Subsidiaries on a Consolidated basis during such fiscal year, (v) without
duplication, taxes and payments under the Tax Sharing Agreement paid by the
Borrower and its 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.
"EXCLUDED TAX": as to any Person, a Tax which Tax (a) is an income tax
or franchise tax imposed on all or part of the net income or net profits of such
Person or represents interest, fees or penalties for payment of any such income
tax or franchise tax and which is imposed by one of the following jurisdictions
or by any political subdivision or taxing authority thereof: (i) the United
States, (ii) the jurisdiction in which such Person is organized, (iii) the
jurisdiction in which such Person's principal office is located, and (iv) in the
case of each Credit Party, any jurisdiction in which such Credit Party is deemed
to be doing business, and (b) in the case of any Foreign Credit Party, is a
withholding tax that is imposed on amounts payable to such Foreign Credit Party
at the time such Foreign Credit Party becomes a party to this Agreement or is
attributable to such Foreign Credit Party's failure to comply with Section
3.6(c).
"EXISTING ACE CREDIT AGREEMENT": as defined in Recital A.
"EXISTING ARCH CREDIT AGREEMENT": the First Amended and Restated
Credit Agreement, dated as of March 19, 1997, among Arch, certain Subsidiaries
of Arch, the lenders party thereto, and BNY, as administrative agent.
"EXISTING ARCH INDENTURES": collectively, the Arch 9 1/2% Indenture
and tHE Arch 14% Indenture.
"EXISTING ARCH SENIOR NOTE TERMINATION DATE": the first date on which
none of the Existing Arch Senior Notes remain outstanding and neither of the
Existing Arch Indentures is in effect.
"EXISTING ARCH SENIOR NOTES": collectively, (i) the 9-1/2% Senior
Notes due 2004 issued by Arch under the Arch 9-1/2% Indenture and (ii) the 14%
Senior Notes due 2004 issued by Arch under the Arch 14% Indenture.
"EXISTING BORROWER SECURITY AGREEMENT": as defined in Recital B(3).
"EXISTING 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 ACE, (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
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Borrower to the Parent, (iv) the Intercompany Notes, each dated the May 21,
1996, made by each of Lund Products, Answer Iowa, Westlink New Mexico, Kelley's
Telephone, Westlink Licensee Corp., Cascade and Telecomm/KRT to Westlink
Company, (v) the Intercompany Notes, each dated the May 21, 1996, made by each
of Kelley's Licensee Corp., Cascade and Telecomm/KRT to Kelley's Telephone, (vi)
the Intercompany Note, dated the May 21, 1996, made by Westlink New Mexico
Licensee Corp. to Westlink New Mexico, (vii) the Intercompany Note, dated the
May 21, 1996, made by Answer Iowa Licensee Corp. to Answer Iowa, (viii) the
Intercompany Note, dated the May 21, 1996, made by Answer Iowa to Lund Products,
and (ix) the Existing Parent Intercompany Notes.
"EXISTING LENDERS": as defined in Recital A.
"EXISTING 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.
"EXISTING SUBSIDIARY GUARANTY": as defined in Recital B(3).
"EXISTING REVOLVING COMMITMENTS": as defined in Recital C.
"EXISTING REVOLVING LOANS": as defined in Recital C.
"EXISTING TRANCHE A COMMITMENTS": as defined in Recital C.
"EXISTING TRANCHE A LOANS": as defined in Recital C.
"EXISTING TRANCHE A TERM LOANS": as defined in Recital C.
"EXISTING TRANCHE B TERM LOANS": as defined in Recital C.
"EXTENSIONS OF CREDIT": the Loans.
"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 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.
"FEES": is defined in Section 2.9.
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"FINANCIAL OFFICER": as to any Person, the chief financial officer,
vice president-finance or treasurer of such Person or such other officer as
shall be satisfactory to the Administrative Agent.
"FIXED CHARGE COVERAGE RATIO": as of the last day of any fiscal
quarter, the ratio of (i) Annualized Operating Cash Flow to (ii) Fixed Charges
for the Four Quarter Trailing Period.
"FIXED CHARGES": for any period, with respect to the Borrower and its
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 Tranche A Loans outstanding
at the beginning of such period minus (b) the Aggregate Tranche A Commitments at
the end of such period (without giving effect to reductions thereof during such
period required by Sections 2.4(a), 2.4(c) and 2.3(d) of the Tranche A and
Tranche C Credit Agreement, (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 CREDIT PARTY": any Credit Party that is organized under the
laws of a jurisdiction other than the United States.
"FOREIGN SUBSIDIARY": any Subsidiary that is a "controlled foreign
corporation" within the meaning of Section 957 of the Code.
"FOUR QUARTER TRAILING PERIOD": at any date of determination, the
period of the four fiscal quarters ending on such date, or, if such date is not
the last day of a fiscal quarter, the period of the most immediately completed
four fiscal quarters.
"GAAP": generally accepted accounting principles as in effect from
time to time in the United States.
"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., formerly a Subsidiary of ACE
which, in or about February, 1997, was merged into Arch Southeast with Arch
Southeast as the survivor.
"GUARANTORS": collectively, the Parent, Arch 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.
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"HUDSON": Hudson Valley Mobile Telephone, Inc., formerly a Subsidiary
of Arch Capitol which, in or about February, 1997, was merged into Arch Capitol
with Arch Capitol as the survivor.
"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
(excluding liabilities under Secured Hedging Agreements) 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.
"INDEMNIFIED LIABILITIES": as defined in Section 11.4(b).
"INDEMNIFIED TAX": as to any Person, any Tax, except (i) an Excluded
Tax imposed on such Person and (ii) any interest, fees or penalties for late
payment thereof imposed on such Person.
"INDENTURE COLLATERAL DOCUMENTS": collectively, the Borrower Security
Agreement (14% Indenture), the Borrower Security Agreement (9 1/2% Indenture),
ArCH Security Agreement (14% Indenture), Arch Security Agreement (9 1/2%
Indenture), tHE Restricted Subsidiary Security Agreement (14% Indenture), the
Restricted Subsidiary Security Agreement (9 1/2% Indenture), the Unrestricted
Subsidiary Security Agreement (14% Indenture) and the Unrestricted Subsidiary
Security Agreement (9 1/2% Indenture).
"INTELLECTUAL PROPERTY": all copyrights, trademarks, servicemarks,
patents, trade names and service names.
"INTERCOMPANY SUBORDINATED DEBT": as defined in Section 8.1(vi).
"INTEREST COVERAGE RATIO": as of the last day of any fiscal quarter,
the ratio of Operating Cash Flow to Cash Interest Expense for the Four Quarter
Trailing Period.
"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 Credit Extension
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Date or Conversion/Continuation Date with respect to such Eurodollar Advance and
ending one, two, three or six months or, if agreed by each Lender, nine or
twelve months, thereafter, as selected by the Borrower, in its irrevocable
Credit 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;
(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 shall end after the Tranche B Maturity Date;
(d) the Borrower shall select Interest Periods so as not to have
more than eight outstanding Interest Periods (together with any outstanding
Interest Periods under and as defined in the Tranche A and Tranche C Credit
Agreement) at any one time; and
(e) the Borrower shall select Interest Periods such that on each
date that a scheduled repayment of the Tranche B Loans under Section 2.5(a) 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
Section 2.5(a).
"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, prior to the ACE Contribution, a wholly-owned Subsidiary of
Westlink, and thereafter, a wholly-owned Subsidiary of Arch Michigan.
"LENDER": each lender signatory to this Agreement and each Person
which becomes a lender pursuant to Section 3.7 or 11.5(b), in each case,
including each Tranche B Lender.
"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,
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including 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 Collateral Documents and all other agreements,
instruments and documents executed or delivered in connection herewith.
"LOAN PARTY": the Borrower and each other party (other than the Credit
Parties) that is a party to a Loan Document.
"LOANS": the Tranche B Loans.
"LUND PRODUCTS": Lund Products Sales Company, an Iowa corporation,
prior to the ACE Contribution, a wholly-owned Subsidiary of Westlink, and
thereafter, a wholly-owned Subsidiary of Arch Michigan.
"MANAGEMENT AGREEMENT": the Amended and Restated Management Services
Agreement, dated as of June 29, 1998, by and among Arch and its Subsidiaries.
"MANAGEMENT FEES": all fees and expenses paid to Arch or the Parent by
any of their respective Subsidiaries, or to any of their respective Affiliates,
or to any employees thereof, for general corporate, administrative or management
services received.
"MANAGING AGENTS": as defined in the preamble.
"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.
"MARGIN STOCK": any "margin stock", as said term is defined in
Regulation U, as the same may be amended or supplemented from time to time.
"MASTER ASSIGNMENT": the Master Assignment and Assumption Agreement,
substantially in the form of Exhibit N.
"MATERIAL ADVERSE CHANGE": a material adverse change in the financial
condition, business, operations, prospects (as such prospects pertain to
Borrower's ability to repay its obligations under the Loan Documents as the same
shall become due) or Property of (i) Arch and its Subsidiaries taken as a whole
or (ii) prior to termination of the Parent Guaranty, the Parent and its
Subsidiaries taken as a whole.
"MATERIAL ADVERSE EFFECT": a material adverse effect on the financial
condition, business, operations, prospects (as such prospects pertain to
Borrower's ability to repay its obligations under the Loan Documents as the same
shall become due) or Property of (i) Arch and its Subsidiaries taken as a whole
or (ii) prior to termination of the Parent Guaranty, the Parent and its
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.
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"MATURITY DATE": the Tranche B Maturity Date.
"MAXIMUM EXCESS CASH FLOW AMOUNT": as defined in Section 2.4.
"MAXIMUM PERMITTED INDEBTEDNESS": on any date of determination, the
maximum Total Leverage Ratio permitted on such date multiplied by Annualized
Operating Cash Flow.
"MINORITY LENDERS": on any date of determination, Lenders under this
Agreement and Lenders under and as defined in the Tranche A and Tranche C Credit
Agreement having Tranche A Commitments (or, if no Tranche A Commitments are in
effect, Tranche A Exposure), Tranche B Commitments (or if no Tranche B
Commitments are in effect, Tranche B Loans) and Tranche C Loans of not less than
40% of the sum of (i) the Aggregate Tranche A Commitments (or, if no Tranche A
Commitments are in effect, Aggregate Tranche A Exposure), (ii) the Aggregate
Tranche B Commitments (or if no Tranche B Commitments are in effect, the
Aggregate Tranche B Exposure), and (iii) the aggregate outstanding principal
balance of the Tranche C Loans.
"MOODY'S": Moody's Investors Service, Inc. or any successor thereto.
"MULTIEMPLOYER PLAN": a Plan which is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
"NET SALES PROCEEDS": an amount equal to the greater of (i) 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 (x) sales and
other commissions and legal and other expenses incurred in connection with such
sale, including reasonable expenses incurred in connection with the preparation
of such Property for sale, (y) taxes reasonably estimated to be payable with
respect to such sale by the Parent and its Subsidiaries for the taxable year in
which such sale occurred (taking into consideration the Parent's overall
Consolidated tax position for such year) and (z) the amount of Indebtedness
secured by such Property which is required to be repaid upon such sale or (ii)
100% of the Net Cash Proceeds (or similar amount) as defined in any of the
Parent Discount Notes Indenture, the Existing Arch Indentures, the Arch 12 3/4%
Indenture or on and after tHE execution and delivery thereof, the Replacement
Indenture, in each case in effect on the date of determination of Net Sales
Proceeds.
"NEW PARENT PREFERRED STOCK": Series C Convertible Preferred Stock of
the Parent.
"NON-COMPETITION AGREEMENTS": any non-competition or similar agreement
(to the extent permitted by Section 8.1(ix)), entered into by Arch or any of its
Subsidiaries in connection with an Acquisition permitted by Section 8.6(h).
"NOTES": with respect to each Lender in respect of such Lender's
Tranche B Loans, a promissory note, substantially in the form of Exhibit A, in
each case payable to the order of such Lender, each such promissory note having
been made by the Borrower and dated the Second Restatement Date, including all
replacements thereof and substitutions therefor.
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"NOTICE OF CONVERSION/CONTINUATION": a notice substantially in the
form of Exhibit C.
"OPERATING CASH FLOW": for any period, total revenue of the Borrower
and its 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, LESS the sum of, without
duplication, the following for the Borrower and its Subsidiaries on a
Consolidated basis for such period, determined in accordance with GAAP: (i)
operating expenses (exclusive of depreciation, amortization and other non-cash
items included therein), and (ii) corporate office, general and administrative
expenses (exclusive of depreciation, amortization and other non-cash items
included therein). Any Management Fees paid or accrued will be treated as an
administrative expense. Solely for purposes of calculating the API Leverage
Ratio and the Total 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.
"OTHER TAXES": any and all current or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies that
arise from any payment made hereunder or from the execution, delivery,
registration or enforcement of, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, the Loan Documents or otherwise
with respect to, the Loan Documents.
"PAGE CALL": Page Call, Inc., a Delaware corporation.
"PAGE CALL GUARANTY": the guaranty by the Parent of the obligations of
Benbow in respect of (i) the preferred stock of Benbow and the promissory note
of Benbow described in the definition of Page Call Purchase Agreement and (ii)
the Consulting Agreement described in the definition of Page Call Purchase
Documents. The Parent shall be entitled to honor its obligations under the Page
Call Guaranty in shares of its common Stock.
"PAGE CALL PURCHASE AGREEMENT": the Stock Purchase Agreement, dated as
of April 30, 1997, among Page Call, Lisa-Gaye Shearing, Adelphia Communications
Corporation, Benbow and the Parent, as amended on June 29, 1998, pursuant to
which Benbow will acquire all of the issued and outstanding Stock of Page Call
in consideration of the issuance of preferred stock of Benbow and a promissory
note of Benbow in an aggregate face amount of approximately $17,200,000.
"PAGE CALL PURCHASE DOCUMENTS": collectively, (i) the Page Call
Purchase Agreement, (ii) the Page Call Guaranty, (iii) the Consulting Agreement,
dated as of June 29, 1998, between Benbow and Lisa-Gaye Shearing, and (iv) all
other documents executed in connection therewith.
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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 Recital A.
"PARENT DISCOUNT NOTES": the 10-7/8% Senior Parent Discount Notes, due
2008, issued by the Parent pursuant to the Parent Discount Notes Indenture.
"PARENT DISCOUNT NOTES INDENTURE": the Indenture, dated as of March
12, 1996, between the Parent and IBJ Schroder Bank & Trust Company or its
successor, as trustee, pursuant to which the Parent issued the Parent Discount
Notes.
"PARENT GUARANTY": the Amended and Restated Parent Guaranty and Pledge
Agreement, in substantially the form of Exhibit F.
"PAYMENT OFFICE": the office of the Administrative Agent set forth in
Section 11.2(b).
"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 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.
"PRICING LEVERAGE RATIO": (i) prior to the Existing Arch Senior Note
Termination Date, the Total Leverage Ratio, and (ii) at all other times, the API
Leverage Ratio.
"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 all
Indebtedness of the Borrower and its Subsidiaries (determined on a Consolidated
basis in accordance with GAAP) for such four fiscal quarter period and (iii) the
amount, if positive, equal to (a) the amount of the Tranche A Loans outstanding
at the beginning of such period minus (b) the Aggregate Tranche A Commitments at
the end of such period (after giving effect to any mandatory reductions during
such period pursuant to Section 2.3(b) of the Tranche A and Tranche C Credit
Agreement). 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
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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, formerly a Subsidiary of
ACE which, in or about February, 1997, was merged into Arch Southeast with Arch
Southeast as the survivor.
"PROPERTY": all types of real, personal, tangible, intangible or mixed
property.
"REGISTER": as defined in Section 2.8(b)(iii).
"REGISTERED NOTE": as defined in Section 2.8(b)(i).
"REGISTERED NOTEHOLDER": as defined in Section 2.8(b)(ii).
"REGULATION D, T, U AND X": Regulations D, T, U and X, respectively,
of the Board of Governors as from time to time in effect and all official
rulings and interpretations thereunder or thereof.
"REINVESTED PROCEEDS": with respect to any Disposition as of any date
of determination, the amount of Net Sales Proceeds from such Disposition that is
used by the Borrower or any Subsidiary to acquire, during the Reinvestment
Period with respect to such Disposition, Property that is to be used in a
Paging-Related Business.
"REINVESTMENT PERIOD": the period beginning on the date that proceeds
from a Disposition are received by the Borrower or any Subsidiary, as the case
may be, and ending on the earlier of (i) 180 days after the receipt of such
proceeds, PROVIDED, HOWEVER, that if the Borrower or any Subsidiary enters into
a legally binding agreement to reinvest such proceeds which would have been
consummated within such 180 day period and such agreement is terminated, such
180 day period shall be extended for an additional 90 days, and (ii) the date on
which a Loan Party would be required to make or offer to purchase or otherwise
repay Indebtedness (other than Indebtedness under the Loan Documents) as a
result of such Disposition.
"RELATED PARTIES": with respect to any Person, such Person's
Affiliates and the respective directors, officers, employees, agents and
advisors of such Person and such Person's Affiliates.
"RELEVANT DATE": (i) in the case of each Lender signatory hereto on
the Second Restatement Date, the Second Restatement Date, or (ii) in the case of
each other Lender, the effective date of the Assignment and Acceptance Agreement
or other document pursuant to which it became a Lender.
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"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.
"REPLACEMENT INDENTURE": the indenture pursuant to which the
Replacement Notes shall be issued.
"REPLACEMENT NOTES": any senior note issue of Arch in an amount and on
terms and conditions satisfactory to the Required Lenders.
"REQUIRED LENDERS": on any date of determination, Lenders under this
Agreement and Lenders under and as defined in the Tranche A and Tranche C Credit
Agreement having Tranche A Commitments (or, if no Tranche A Commitments are in
effect, Tranche A Exposure), Tranche B Commitments (or if no Tranche B
Commitments are in effect, Tranche B Loans) and Tranche C Loans of more than 50%
of the sum of (i) the Aggregate Tranche A Commitments (or, if no Tranche A
Commitments are in effect, Aggregate Tranche A Exposure), (ii) the Aggregate
Tranche B Commitments (or if no Tranche B Commitments are in effect, the
Aggregate Tranche B Exposure), and (iii) the aggregate outstanding principal
balance of the Tranche C Loans.
"REQUIRED OBLIGATIONS": on any date, interest due and payable on such
date on the Existing Arch Senior Notes, the Arch 12 3/4% Senior Notes and any
ReplacemeNT Notes.
"REQUIRED PAYMENT": as defined in Section 3.6(a).
"RESTRICTED PAYMENT": as to any Person, (i) the payment or declaration
by such Person of any dividend on any class of capital Stock or other equity
interest (other than dividends payable solely in common Stock of the such Person
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
Person (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, (ii) the retirement,
redemption, purchase or acquisition, directly or indirectly, of (a) any shares
of the capital Stock of such Person (except shares acquired solely upon the
conversion thereof 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 Person, or (iii) the payment of any Management Fees or
any payment under the Tax Sharing Agreement or the Management Agreement.
"RESTRICTED SUBSIDIARY": collectively, each of the following
wholly-owned Subsidiaries of the Borrower which were in existence on the
effective date of the ACE Merger and which are parties to the Existing
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Subsidiary Guaranty: (i) Arch Capitol, (ii) Arch Connecticut, (iii) Arch
Michigan, (iv) Arch Services, (v) Arch Southeast (vi) Becker, (vii) Beeper,
(viii) Westlink Licensee Corp., (ix) Lund Products, (x) Answer Iowa, (xi) Answer
Iowa Licensee Corp., (xii) Westlink New Mexico, (xiii) Westlink New Mexico
Licensee Corp., (xiv) Kelley's Telephone, (xv) Kelley's Licensee Corp., (xvi)
Cascade, (xvii) Telecomm/KRT and (xviii) Westlink.
"RESTRICTED SUBSIDIARY SECURITY AGREEMENT (9 1/2% INDENTURE)": tHE
Restricted Subsidiary Security Agreement (9 1/2% Indenture), in substantially
the form OF Exhibit K-2.
"RESTRICTED SUBSIDIARY SECURITY AGREEMENT (14% INDENTURE)": the
Restricted Subsidiary Security Agreement (14% Indenture), in substantially the
form of Exhibit K-3.
"RESTRICTED SUBSIDIARY SECURITY AGREEMENT (BANK)": the Second Amended
and Restated Restricted Subsidiary Security Agreement, in substantially the form
of Exhibit K-1.
"S&P": Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc., or any successor thereto.
"SEC": the Securities and Exchange Commission or any Governmental Body
succeeding to the functions thereof.
"SECOND RESTATEMENT DATE": as defined in Recital E.
"SECURED HEDGING AGREEMENT": any Interest Rate Protection Agreement
entered into by the Borrower with a counterparty that was a Lender or an
Existing Lender (or an Affiliate thereof) at the time such Interest Rate
Protection Agreement was entered into.
"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 contingent
liabilities, of such 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.
"SPECIFIED PERCENTAGE": with respect to any Tranche B Lender in
connection with Tranche B Loans and Eurodollar Advances to the extent consisting
of Tranche B Loans, its Tranche B Percentage at such time.
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"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.
"SUBORDINATED INDENTURE": the Indenture, dated as of December 1, 1993,
between the Parent and BNY or its successor, as trustee, pursuant to which the
Parent issued the Subordinated Debentures.
"SUBORDINATION AGREEMENT": the Subordination Agreement, dated as of
May 21, 1996, among ACE, certain Subsidiaries of ACE, the Parent and the
Administrative Agent.
"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 GUARANTOR": each Subsidiary party to the Subsidiary
Guaranty.
"SUBSIDIARY GUARANTY": the Amended and Restated Subsidiary Guaranty,
amending and restating in part the Existing Subsidiary Guaranty, in
substantially the form of Exhibit J.
"SYNDICATION AGENT": as defined in the preamble.
"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 SHARING AGREEMENT": the Tax Sharing Agreement, dated as of May 5,
1995, 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.
"TOTAL DEBT": at any date of determination, the sum of all
Indebtedness (other than Intercompany Subordinated Debt) of Arch and its
Subsidiaries, determined on a Consolidated basis in accordance with GAAP.
"TOTAL LEVERAGE RATIO": at any date of determination, the ratio of
Total Debt to Annualized Operating Cash Flow.
"TOTAL PERCENTAGE" means as of any date and with respect to each
Lender, the percentage equal to a fraction (i) the numerator of which is the
Tranche B Commitment of such Lender on such date (or, if there are no Tranche B
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Commitments on such date, such Lender's Tranche B Loans outstanding on such
date), and (ii) the denominator of which is the Aggregate Tranche B Commitments
on such date (or, if there are no Tranche B Commitments on such date, the
aggregate unpaid principal balance of all Tranche B Loans on such date).
"TOWER SALE": the sale of transmitting tower sites pursuant to the
Asset Purchase and Sale Agreement, dated as of April 10, 1998, by and among
OmniAmerica, Inc. and certain wholly-owned Subsidiaries of the Parent.
"TRANCHE A AND TRANCHE C CREDIT AGREEMENT": as defined in Recital D.
"TRANCHE A COMMITMENT": as defined in the Tranche A and Tranche C
Credit Agreement.
"TRANCHE A EXPOSURE": as defined in the Tranche A and Tranche C Credit
Agreement.
"TRANCHE A LENDER": as defined in the Tranche A and Tranche C Credit
Agreement.
"TRANCHE A LOAN" and "TRANCHE A LOANS": as defined in the Tranche A
and Tranche C Credit Agreement.
"TRANCHE B COMMITMENT": in respect of any Tranche B Lender, the
maximum amount of such Lender's commitment to make Tranche B Loans, subject to
the terms and conditions hereof, as set forth on the signature page of such
Lender adjacent to the heading "Tranche B Commitment" or in an Assignment and
Acceptance Agreement or other document pursuant to which it became an Tranche B
Lender, as such amount may be adjusted from time to time in accordance herewith.
"TRANCHE B COMMITMENT FEE": as defined in Section 3.2(a).
"TRANCHE B COMMITMENT PERIOD": the period from the Second Restatement
Date until the Tranche B Conversion Date.
"TRANCHE B CONVERSION DATE": the date that is 364 days after the
Second Restatement Date.
"TRANCHE B LENDER": each Lender having an Tranche B Commitment.
"TRANCHE B LOAN" and "TRANCHE B LOANS": as defined in Section 2.1).
"TRANCHE B MATURITY DATE": the earliest to occur of (i) June 30, 2005,
(ii) the Adjusted Indenture Maturity Date, and (iii) such other date on which
the Tranche B Loans shall become due and payable, whether by acceleration or
otherwise.
"TRANCHE B PERCENTAGE": as of any date and with respect to each
Tranche B Lender, the percentage equal to a fraction (a) the numerator of which
is the Tranche B Commitment of such Lender on such date (or, if there are no
Tranche B Commitments on such date, on the last date upon which one or more
Tranche B Commitments were in effect), and (b) the denominator of which is sum
of the Tranche B Commitments of all Lenders on such date (or, if there are no
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Tranche B Commitments on such date, on the last date upon which one or more
Tranche B Commitments were in effect).
"TRANCHE C LENDER": as defined in the Tranche A and Tranche C Credit
Agreement.
"TRANCHE C LOANS": as defined in the Tranche A and Tranche C Credit
Agreement.
"TRANCHE C MATURITY DATE": as defined in the Tranche A and Tranche C
Credit Agreement.
"TRANSACTION DOCUMENTS": collectively, the Loan Documents, the Arch 12
3/4% Indenture, the Equity Investment Documents and all documents executed and
delivered in connection with the Arch Transactions, the ACE Transactions and the
Equity Investment.
"TRANSACTIONS": collectively, the transactions contemplated by the
Transaction Documents.
"TRIGGERING COLLATERAL DOCUMENTS": collectively, upon the declaration
of the effectiveness thereof pursuant to Section 7.19, the Borrower Security
Agreement (Bank), the Arch Security Agreement (Bank) and the Unrestricted
Subsidiary Security Agreement (Bank).
"UNITED STATES": the United States of America.
"UNRESTRICTED SUBSIDIARY SECURITY AGREEMENT (9 1/2% INDENTURE)": tHE
Unrestricted Subsidiary Security Agreement (9 1/2% Indenture), substantially in
the form OF Exhibit L-2.
"UNRESTRICTED SUBSIDIARY SECURITY AGREEMENT (14% INDENTURE)": the
Unrestricted Subsidiary Security Agreement (14% Indenture), substantially in the
form of Exhibit L-3.
"UNRESTRICTED SUBSIDIARY SECURITY AGREEMENT (BANK)": the Unrestricted
Subsidiary Security Agreement (Bank), substantially in the form of Exhibit L-1.
"USAM III": as defined in Recital B(2).
"USAM NAME CHANGE": as defined in Recital B(2).
"WESTLINK": as defined in Recital B(1).
"WESTLINK II": as defined in Recital B(1).
"WESTLINK LICENSEE CORP.": Westlink Licensee Corporation, a Delaware
corporation, prior to the ACE Contribution, a wholly-owned Subsidiary of
Westlink, and thereafter, a wholly-owned Subsidiary of Arch Michigan.
"WESTLINK NAME CHANGE": as defined in Recital B.
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"WESTLINK NEW MEXICO": The Westlink Paging Company of New Mexico,
Inc., a New Mexico corporation, prior to the ACE Contribution, a wholly-owned
Subsidiary of Westlink, and thereafter, a wholly-owned Subsidiary of Arch
Michigan.
"WESTLINK NEW MEXICO LICENSEE CORP.": Westlink of New Mexico Licensee
Corporation, a Delaware corporation and a wholly-owned Subsidiary of Westlink
New Mexico.
"YEAR 2000 ISSUE": the failure of computer software, hardware and
firmware systems and equipment containing embedded computer chips to properly
receive, transmit, process, manipulate, store, retrieve, re- transmit or in any
other way utilize data and information due to the occurrence of the year 2000 or
the inclusion of dates on or after January 1, 2000.
1.2. ACCOUNTING TERMS.
As used in the Loan Documents and in any certificate, opinion 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. If any
change in GAAP would affect the computation of any financial ratio or
requirement set forth in this Agreement, the Credit Parties 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 and (ii) the Borrower shall provide to
the Credit Parties financial statements and other documents required under this
Agreement (or such other items as the Administrative Agent may reasonably
request) setting forth a reconciliation between calculations of such ratio or
requirement before and after giving effect to such change.
1.3. RULES OF INTERPRETATION.
(a) Unless expressly provided in a Loan Document to the contrary, (i)
the words "hereof", "herein", "hereto" and "hereunder" and similar words when
used in each Loan Document shall refer to such Loan Document as a whole and not
to any particular provision thereof, (ii) section, subsection, schedule and
exhibit references contained therein shall refer to section, subsection,
schedule and exhibit thereof or thereto, (iii) the words "include" and
"including", shall mean that the same shall be "included, without limitation",
(iv) any definition of, or reference to, any agreement, instrument, certificate
or other document herein shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or
otherwise modified, (v) any reference herein to any Person shall be construed to
include such Person's successors and assigns, (vi) words in the singular number
include the plural, and words used therein in the plural include the singular,
(vii) any reference to a time shall refer to such time in New York, (viii) 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", and (ix) references therein to a fiscal period
shall refer to that fiscal period of the Borrower.
(b) Section headings have been inserted in the Loan Documents for
convenience only and shall not be construed to be a part thereof.
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2. AMOUNT AND TERMS OF EXTENSIONS OF CREDIT.
2.1. TRANCHE B LOANS.
On the Second Restatement Date (after giving effect to the Master
Assignment), (i) the Existing Tranche B Term Loans shall continue as "Tranche B
Loans" hereunder and (ii) the Borrower shall have repaid the Tranche B Loans
with the proceeds of the Arch 12 3/4% Senior Notes and Tranche A Loans. Subject
to the terms and conditioNS hereof, each Tranche B Lender severally agrees to
make loans (each a "TRANCHE B LOAN" and, collectively with all other Tranche B
Loans of such Tranche B Lender and/or with the Tranche B Loans of each other
Tranche B Lender, the "TRANCHE B LOANS") to the Borrower from time to time
during the Tranche B Commitment Period, PROVIDED THAT immediately after giving
effect thereto (i) the outstanding Tranche B Loans of such Tranche B Lender
shall not exceed such Tranche B Lender's Tranche B Commitment, and (ii) the
outstanding Tranche B Loans of all Tranche B Lenders shall not exceed the
Aggregate Tranche B Commitments. During the Tranche B Commitment Period, the
Borrower may borrow, prepay in whole or in part and reborrow under the Aggregate
Tranche B Commitments, all in accordance with the terms and conditions of this
Agreement.
2.2. PROCEDURE FOR BORROWING LOANS.
(a) The Borrower may borrow under the Aggregate Tranche B Commitments
during the Tranche B Commitment Period, provided that the Borrower shall notify
the Administrative Agent (by telephone or fax) no later than 1:00 p.m. (A) three
Business Days prior to the requested Credit Extension Date in the case of
Eurodollar Advances and (B) one Business Day prior to the requested Credit
Extension Date in the case of ABR Advances, in each case specifying (1) the
aggregate principal amount to be borrowed under the Aggregate Tranche B
Commitments, (2) the requested Credit Extension 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 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 Credit 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 Tranche B 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, each Tranche
B Lender will make the amount of its Tranche B Percentage of each such borrowing
of Tranche B Loans available to the Administrative Agent for the account of the
Borrower at the Payment Office not later than 2:30 p.m., on the relevant Credit
Extension 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 Credit Extension Date will then, subject to the
satisfaction of the terms and conditions of this Agreement as determined by the
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Administrative Agent, be made available on such date to the Borrower by the
Administrative Agent at the Payment Office 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 Tranche B 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 Credit Extension 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 Credit Extension 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 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 3.1, 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 Credit Extension Date applicable to such Loans.
(c) If a Lender makes a new Loan to the Borrower on a Credit Extension
Date on which the Borrower is to repay a Loan of such Lender of the same type or
make a scheduled amortization payment on a Loan of such Lender of the same type,
such Lender shall apply the proceeds of such new Loan to make such repayment or
scheduled amortization payment, and only the excess of the proceeds of such new
Loan over the 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 Credit Request.
2.3. TERMINATION OR REDUCTION OF THE AGGREGATE TRANCHE B 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 Tranche B
Commitments or from time to time to reduce permanently the unused amount of the
Aggregate Tranche B Commitments to an amount not less than the aggregate
principal amount of outstanding Tranche B Loans (after giving effect to any
contemporaneous payment or prepayment of Tranche B Loans). Any such reduction
shall be in the amount of $1,000,000 or such amount plus a whole multiple of
$100,000.
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(b) MANDATORY TERMINATION. Notwithstanding anything to the contrary in
any Loan Document, the Aggregate Tranche B Commitments shall terminate on the
Tranche B Conversion Date.
(c) OTHER MANDATORY REDUCTIONS. The Aggregate Tranche B Commitments
shall be permanently reduced at the times and in the amounts required by Section
2.4.
(d) IN GENERAL. Each reduction of the Aggregate Tranche B Commitments
shall be made by reducing each Lender's Tranche B Commitments by an amount equal
to such Lender's Tranche B Percentage of such reduction. Simultaneously with
each reduction of the Aggregate Tranche B Commitments, the Borrower shall pay
the Tranche B Commitment Fee accrued on the amount by which the Aggregate
Tranche B Commitments has been reduced.
2.4. APPLICATION OF PROCEEDS.
On or before each date set forth below, (i) prior to the Tranche B
Conversion Date, the Aggregate Tranche B Commitments shall be permanently
reduced, and (ii) on or after the Tranche B Conversion Date, the Borrower shall
prepay the aggregate unpaid principal amount of the Tranche B Loans, by an
amount equal to the Aggregate Tranche B Percentage of the amount set forth below
and applicable to such date:
(a) on the last day of the Reinvestment Period for each
Disposition by an amount equal to 100% of the Adjusted Net Cash Proceeds
with respect to such Disposition;
(b) for each fiscal year prior to the fiscal year in which the
Existing Arch Senior Note Termination Date occurs, commencing with the
fiscal year ended December 31, 1999, and effective on March 31st of each
immediately succeeding fiscal year, by an amount equal to (i) if the Total
Leverage Ratio at the end of such fiscal year is greater than 4.00:1.00,
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 Total Leverage Ratio
to 4.00:1:00 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)
above, or (ii) if the Total Leverage Ratio at the end of such fiscal year
is less than or equal to 4.00:1.00, 50% of Excess Cash Flow;
(c) in an amount equal to all Applicable Proceeds (i) in excess
of amounts used to replace or repair any properties or (ii) which are not
used or designated to replace or repair properties within one year after
receipt thereof, provided that the Borrower or the applicable Subsidiary
Guarantor shall have commenced the restoration or replacement process
(including the making of appropriate filings and requests for approval)
within 45 days after such casualty or after the receipt of any such
condemnation proceeds, as the case may be, and diligently pursues the same
through completion.
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2.5. SCHEDULED REPAYMENTS OF TRANCHE B LOANS; PREPAYMENTS OF LOANS.
(a) SCHEDULED REPAYMENT OF TRANCHE B LOANS. The aggregate outstanding
principal balance of the Tranche B Loans shall be due and payable on the
following dates in the following percentages of the Aggregate Tranche B Exposure
as of the Tranche B Conversion Date:
Date Percentage
---- ----------
September 30, 2000 2.500%
December 31, 2000 2.500%
March 31, 2001 3.125%
June 30, 2001 3.125%
September 30, 2001 3.125%
December 31, 2001 3.125%
March 31, 2002 4.375%
June 30, 2002 4.375%
September 30, 2002 4.375%
December 31, 2002 4.375%
March 31, 2003 5.625%
June 30, 2003 5.625%
September 30, 2003 5.625%
December 31, 2003 5.625%
March 31, 2004 6.875%
June 30, 2004 6.875%
September 30, 2004 6.875%
December 31, 2004 6.875%
March 31, 2005 7.500%
Tranche B Maturity Date the remaining
unpaid principal amount of
the Tranche B Loans together
with all accrued and unpaid
interest thereon.
(b) 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 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 3.3)
$500,000.
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(c) MANDATORY PREPAYMENTS RELATING TO REDUCTIONS OR TERMINATION OF
COMMITMENTS. At any time prior to the Tranche B Conversion Date, simultaneously
with each reduction or termination of the Aggregate Tranche B Commitments, the
Borrower shall prepay the Tranche B Loans by the amount, if any, by which the
Aggregate Tranche B Exposure exceeds the amount of the Aggregate Tranche B
Commitments as so reduced or terminated.
(d) OTHER MANDATORY PREPAYMENTS. The Tranche B Loans shall be prepaid
at the times and in the amounts required by Section 2.4.
(e) APPLICATION OF PREPAYMENTS. Each prepayment of the Tranche B Loans
pursuant to Sections 2.4(a), (b) and (c) and Section 2.5(b) shall be applied
against the remaining installments of principal required to be paid pursuant to
Section 2.5(a) pro rata against such installments.
(f) 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 3.4.
2.6. [INTENTIONALLY OMITTED.]
2.7. USE OF PROCEEDS.
The proceeds of the Extensions of Credit shall be used solely,
directly or indirectly, (i) for general corporate purposes of the Borrower and
its Subsidiaries, including Capital Expenditures and working capital, not
inconsistent with the provisions hereof, (ii) to finance Acquisitions to the
extent permitted by Section 8.6, (iii) to make Restricted Payments to the extent
permitted by Section 8.5, and (iv) 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 Extensions of Credit will be used, directly or indirectly, for a
purpose which violates any law, including the provisions of Regulations T, U or
X.
2.8. NOTES; REGISTRATION.
(a) IN GENERAL. The Loans made by each Lender shall be evidenced by a
Note.
(b) REGISTERED NOTES.
(i) Any Foreign Credit Party 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 it under the Loan Documents relating to any of its
Loans, if such Loans were in registered form for U.S. Federal income tax
purposes, may request the Borrower (through the Administrative Agent), and
the Borrower agrees thereupon, (A) in the case of a Foreign Credit Party
listed on the signature pages hereof, to exchange such Foreign Credit
Party's Note for a promissory note registered as provided in clause (iii)
below (each, a "REGISTERED NOTE") and (B) in the case of each other Foreign
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Credit Party, to issue to such Foreign Credit Party its Note in the form of
a Registered Note. A Registered Note may not be exchanged for a Note that
is not in registered form.
(ii) Each Foreign Credit Party holding a Registered Note (a
"REGISTERED NOTEHOLDER") and, if such Foreign Credit Party 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 Foreign
Credit Party becomes a Registered Noteholder, a Form W-8 (Certificate of
Foreign Status of the Department of Treasury of the United States) or the
successor form thereto and any related forms (including, if applicable,
Form W-8C) and related forms as may from time to time be adopted by the
relevant taxing authorities of the United States which are required to
allow payments of portfolio interest (within the meaning of Code Section
871(b) to be made free of United States withholding tax. 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).
(iii) 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 Payment
Office which shall set forth (A) the names and addresses of each Lender,
including each registered owner of Loans evidenced by a Registered Note,
(B) the Class or Classes of the Loans of such Lender, and (C) the principal
amount of its Tranche B Loans outstanding from time to time. The entries in
the Register shall be binding and conclusive for all purposes, absent
manifest error, and the Borrower, and each Credit Party shall treat each
Person whose name is recorded in the Register as a Lender for all purposes
under this Agreement.
(iv) In addition to the requirements of Section 11.5, 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 11.5 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 purpose of receiving all payments thereon and for all other
purposes, notwithstanding any notice to the contrary.
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2.9. PAYMENTS; PRO RATA TREATMENT AND SHARING OF SET-OFFS.
(a) PAYMENTS GENERALLY. (i) Except as provided below, all payments,
including prepayments, of principal and interest on the Loans, of the Tranche B
Commitment Fee and of all other amounts to be paid by the Borrower under the
Loan Documents (the Tranche B Commitment Fee together with all of such other
fees, being sometimes hereinafter collectively referred to as the "FEES") shall
be made to the Administrative Agent, prior to 1:00 p.m. on the date such payment
is due, for the account of the applicable Credit Parties at the Payment Office,
in Dollars and in immediately available funds, without set-off, offset,
recoupment or counterclaim. The failure of the Borrower to make any such payment
by such time shall not constitute a Default, provided that such payment is made
on such due date, but any such payment made after 1:00 p.m. on such due date
shall be deemed to have been made on the next Business Day for the purpose of
calculating interest on amounts outstanding on the Loans. As between the
Borrower and each Credit Party, any payment by the Borrower to the
Administrative Agent for the account of such Credit Party shall be deemed to be
payment by the Borrower to such Credit Party. Notwithstanding the foregoing, all
payments pursuant to Sections 3.4, 3.5, 3.6 and 11.4 shall be paid directly to
the Credit Party entitled thereto. If any payment under the Loan Documents shall
be due and payable on a day which is not a Business Day, the due date thereof
(except as otherwise provided with respect to Interest Periods) shall be
extended to the next Business Day and (except with respect to payments in
respect of the Fees) interest shall be payable at the applicable rate specified
herein during such extension, provided, however, that if such next Business Day
would be after the Tranche B Maturity Date, such payment shall instead be due on
the immediately preceding Business Day.
(ii) If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of principal,
interest and Fees then due hereunder, such funds shall be applied (A) first,
towards payment of interest and Fees then due under the Loan Documents, ratably
among the parties entitled thereto in accordance with the amounts of interest
and Fees then due to such parties, and (B) second, towards payment of principal
then due under the Loan Documents, ratably among the parties entitled thereto in
accordance with the amounts of principal then due to such parties.
(b) SET-OFF. In addition to any rights and remedies of the Credit
Parties provided by law, upon and after the acceleration of all the obligations
of the Borrower under the Loan Documents to which it is a party, or at any time
upon the occurrence and during the continuance of an Event of Default under
Sections 9.1(a) or (b), each Credit Party shall have the right, without prior
notice to any Loan Party, any such notice being expressly waived by each Loan
Party to the extent not prohibited by applicable law, to set-off and apply
against any indebtedness, whether matured or unmatured, of such Loan Party to
such Credit Party any amount owing from such Credit Party to such Loan Party,
at, or at any time after, the happening of any of the above-mentioned events. To
the extent not prohibited by applicable law, the aforesaid right of set-off may
be exercised by any Credit Party 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, receiver, or execution, judgment or attachment creditor,
notwithstanding the fact that such right of set-off shall not have been
exercised by such Credit Party prior to the making, filing or issuance, or
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service upon such Credit Party 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 Credit Party agrees promptly to notify the Borrower and the Administrative
Agent after any such set-off and application made by such Credit Party, provided
that the failure to give such notice shall not affect the validity of such
set-off and application.
(c) ADJUSTMENTS. If any Lender shall obtain any payment (whether
voluntary, involuntary, through the exercise of any right of set-off, or
otherwise) in respect of the principal of or interest on its Loans, resulting in
such Lender receiving payment of a greater proportion of the aggregate principal
amount of, or accrued interest on, such Loans than the proportion received by
any other Lender, then the Lender receiving such greater proportion shall
promptly purchase, at face value for cash, participations in the Loans to the
extent necessary so that the benefit of such payment shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Loans, provided, however, that (i) if all
or any portion of such payment is thereafter recovered or repaid in good faith
settlement of a pending or threatened avoidance claim, such participations shall
be rescinded and the purchase price returned, in each case to the extent of such
recovery or settlement payment, and (ii) the provisions of this Section 2.9(c)
shall not be construed to apply to any payment made by the Borrower pursuant to
and in accordance with the express terms of this Agreement or any payment
obtained by a Lender as consideration for the assignment of or sale of a
participation in any of its Loans to any assignee or participant, other than to
the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions
of this Section 2.9(c) shall apply). The Borrower agrees that any Lender that
purchased a participation pursuant to this subsection may exercise such rights
to payment (including the right of set-off) with respect to such participation
as fully as such Lender were the direct creditor of the Borrower in the amount
of such participation.
3. INTEREST, FEES, YIELD PROTECTIONS, ETC.
3.1. 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:
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) EXTENT OF DEFAULT; LATE CHARGES. Notwithstanding the foregoing,
after the occurrence and during the continuance of an Event of Default, the
outstanding principal balance of all Loans shall bear interest at a rate of
interest per annum equal to 2% above the rate which would otherwise be
applicable pursuant to Section 3.1(a). If any interest, Commitment Fee or other
amount (other than principal of the Loans) payable under the Loan Documents is
not paid when due (whether at the stated maturity thereof, by acceleration or
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otherwise), such overdue amount shall, to the extent permitted by applicable
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 3.1(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 the 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 permitted 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.
3.2. FEES.
(a) TRANCHE B COMMITMENT FEE. The Borrower agrees to pay to the
Administrative Agent, for the account of the Tranche B Lenders in accordance
with each such Lender's Tranche B Percentage, a fee (the "TRANCHE B COMMITMENT
FEE") during the Tranche B Commitment Period equal to the Commitment Fee
Percentage per annum of the average daily unused portion of the Aggregate
Tranche B Commitments. The Tranche B 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 Tranche B Commitments.
The Commitment Fee shall be calculated on the basis of a 365 or 366-day year for
the actual number of days elapsed.
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(b) AGENTS' FEES. The Borrower agrees to pay to the Agents, for their
own respective accounts, such other fees as have been agreed to in writing by
the Borrower and/or any of the Agents.
3.3. CONVERSIONS AND CONTINUATIONS.
(a) The Borrower may elect from time to time to convert its Eurodollar
Advances to ABR Advances by 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 the amount to be so
converted and the Interest Period relating to such Eurodollar Advances. In
addition, the Borrower may elect from time to time to (i) convert its ABR
Advances to Eurodollar Advances and to continue its Eurodollar Advances by
selecting a new Interest Period therefor, in each case by 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 the amount to be so converted and 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 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 3.4
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
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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
3.4.
3.4. FUNDING LOSS
(a) Notwithstanding anything contained herein to the contrary, if the
Borrower shall fail to borrow or convert or continue on a Credit Extension 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
2.2(a) or 3.3 or if a Eurodollar Advance shall be terminated for any reason
(subject to the penultimate sentence of Section 3.3(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
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;
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"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 3.5(a) and 3.6. 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 applicable Interest
Period through the purchase of deposits in an amount equal to such Eurodollar
Advance and having a maturity corresponding to such Interest Period.
3.5. INCREASED COSTS; ILLEGALITY, ETC.
(a) INCREASED COSTS. If any Change in Law 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 any Credit Party in respect of its Eurodollar Advances which is
not otherwise included in the determination of a Eurodollar Rate and the result
thereof is to increase the cost to any Credit Party of making, renewing,
converting or maintaining its Eurodollar Advances or its commitment to make such
Eurodollar Advances, or to reduce any amount receivable under the Loan Documents
in respect of its Eurodollar Advances, then, in any such case, the Borrower
shall pay such Credit Party such additional amounts as is sufficient to
compensate such Credit Party for such additional cost or reduction in such
amount receivable which such Credit Party deems to be material as determined by
such Credit Party.
(b) CAPITAL ADEQUACY. If any Credit Party determines that any Change
in Law relating to capital requirements has or would have the effect of reducing
the rate of return on such Credit Party's capital or on the capital of such
Credit Party's holding company, if any, on the Extensions of Credit to a level
below that which such Credit Party (or its holding company) would have achieved
or would thereafter be able to achieve but for such Change in Law (after taking
into account such Credit Party's (or such holding company's) policies regarding
capital adequacy), the Borrower shall pay to such Credit Party (or such holding
company) such additional amount or amounts as will compensate such Credit Party
(or such holding company) for such reduction.
(c) ILLEGALITY. Notwithstanding any other provision hereof, if any
Lender shall reasonably determine that any law, regulation, treaty or directive,
or any change therein or in the interpretation or application thereof, shall
make it unlawful for such Lender to make or maintain any Eurodollar Advance as
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contemplated by this Agreement, such Lender shall promptly notify the Borrower
and the Administrative Agent thereof, and (i) the commitment of such Lender to
make such Eurodollar Advances or convert ABR Advances to Eurodollar Advances
shall forthwith be suspended, (ii) such Lender shall fund its portion of each
requested Eurodollar Advance as an ABR Advance and (iii) such Lender's Loans
then outstanding as such Eurodollar Advances, if any, shall be converted
automatically to ABR Advances on the last day of the then current Interest
Period applicable thereto or at such earlier time as may be required by law. The
commitment of any such Lender with respect to Eurodollar Advances shall be
suspended until such Lender shall notify the Administrative Agent and the
Borrower that the circumstances causing such suspension no longer exist. Upon
receipt of such notice by each of the Administrative Agent and the Borrower,
such Lender's commitment to make or maintain Eurodollar Advances shall be
reinstated.
(d) 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
3.1 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 or continuation of any
portion of the Advances into or of 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 Credit
Extension Date or Conversion 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 Advances (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 subsection (d) 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 3.1 or (y) the Administrative Agent having been notified by
such Required Lenders that circumstances no longer render the Advances (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 or as Eurodollar Advances.
(e) PAYMENT; CERTIFICATES. Each payment pursuant to subsections (a) or
(b) above shall be made within 10 days after demand therefor, which demand shall
be accompanied by a certificate of the Credit Party demanding such payment
setting forth the calculations of the additional amounts payable pursuant
thereto. Each such certificate shall be conclusive absent manifest error. No
failure by any Credit Party to demand, and no delay in demanding, compensation
for any increased cost shall constitute a waiver of its right to demand such
compensation at any time, provided that such Credit Party shall notify the
Borrower of any such increased cost within 90 days after the officer of such
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Lender having primary responsibility for this Agreement has obtained knowledge
of such increased cost.
3.6. TAXES.
(a) PAYMENTS FREE OF TAXES. All payments by or on account of the
Borrower under any Loan Document to or for the account of a Credit Party shall
be made free and clear of, and without any deduction or withholding for or on
account of, any and all present or future Indemnified Taxes or Other Taxes,
provided that if the Borrower or any other Person is required by any law, rule,
regulation, order, directive, treaty or guideline to make any deduction or
withholding in respect of such Indemnified Tax or Other Tax from any amount
required to be paid by the Borrower to or on behalf of any Credit Party under
any Loan Document (each, a "REQUIRED PAYMENT"), then (i) the Borrower shall
notify the Administrative Agent and such Credit Party of any such requirement or
any change in any such requirement as soon as the Borrower becomes aware
thereof, (ii) the Borrower shall pay such Indemnified Tax or Other Tax prior to
the date on which penalties attach thereto, such payment to be made (to the
extent that the liability to pay is imposed on the Borrower) for its own account
or (to the extent that the liability to pay is imposed on such Credit Party) on
behalf and in the name of such Credit Party, (iii) the Borrower shall pay to
such Credit Party an additional amount such that such Credit Party shall receive
on the due date therefor an amount equal to the Required Payment had no such
deduction or withholding been made or required, and (iv) the Borrower shall,
within 30 days after paying such Indemnified Tax or Other Tax, deliver to the
Administrative Agent and such Credit Party satisfactory evidence of such payment
to the relevant Governmental Body.
(b) REIMBURSEMENT FOR TAXES AND OTHER TAXES PAID BY CREDIT PARTY. The
Borrower shall reimburse each Credit Party, within ten days after written demand
therefor, for the full amount of all Indemnified Taxes or Other Taxes paid by
such Credit Party on or with respect to any payment by or on account of any
obligation of the Borrower under the Loan Documents (including Indemnified Taxes
or Other Taxes imposed or asserted on or attributable to amounts payable under
this Section) and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto (other than any such penalties, interest or
expenses that are incurred by such Credit Party's unreasonably taking or
omitting to take action with respect to such Indemnified Taxes or Other Taxes),
whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Body. A certificate as to the
amount of such payment or liability delivered to the Borrower by a Credit Party
shall be conclusive absent manifest error. In the event that any Credit Party
determines that it received a refund or credit for Indemnified Taxes or Other
Taxes paid by the Borrower under this Section, such Credit Party shall promptly
notify the Borrower of such fact and shall remit to the Borrower the amount of
such refund or credit.
(c) FOREIGN CREDIT PARTIES. Any Foreign Credit Party that is entitled
to an exemption from or reduction of withholding tax under the law of the
jurisdiction in which the Borrower is located, or any treaty to which such
jurisdiction is a party, with respect to payments under the Loan Documents shall
deliver to the Borrower (with a copy to the Administrative Agent), at the time
or times prescribed by applicable law, such properly completed and executed
documentation prescribed by applicable law (including Internal Revenue Form 4224
or Form 1001) or reasonably requested by the Borrower as will permit such
payments to be made without withholding or at a reduced rate.
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3.7. MITIGATION; REPLACEMENT LENDERS.
(a) CHANGES OF LENDING OFFICES. If any Credit Party (or its holding
company, if any) requests compensation under Section 3.5(a) or (b) or if the
Borrower is required to pay an additional amount to any Credit Party or any
Governmental Body for the account of any Credit Party pursuant to Section 3.6,
such Credit Party will, upon the request of the Borrower, use reasonable efforts
(subject to its overall policy considerations) to designate a different lending
office for funding or booking its Extensions of Credit or to assign its rights
and obligations hereunder to another of its offices, branches or affiliates, if,
in its good faith judgment, such designation or assignment (i) would eliminate
or reduce future amounts payable under Section 3.5(a) or (b) or Section 3.6, as
the case may be, (ii) would not subject such Credit Party to any unreimbursed
cost or expense and (iii) would not otherwise be disadvantageous to such Lender.
The Borrower agrees to pay the reasonable costs and expenses incurred in
connection with any such designation or assignment and the Administrative Agent
agrees that no assignment fee shall be payable to it pursuant to Section 12 in
connection therewith. Nothing in this Section shall affect or postpone any of
the obligations of the Borrower to make the payments required to a Credit Party
under Section 3.5(a) or (b) or Section 3.6, incurred prior to any such
designation or assignment.
(b) REPLACEMENT OF LENDERS. If (i) any Credit Party (or its holding
company, if any) requests compensation under Section 3.5(a) or (b) or if the
Borrower is required to pay an additional amount to any Credit Party or any
Governmental Body for the account of any Credit Party pursuant to Section 3.6 in
an aggregate amount in excess of $50,000, or (ii) any Credit Party shall give
any notice to the Borrower or the Administrative Agent pursuant to Section
3.5(c), then, in each such case, provided that no Default shall then exist and
be continuing, during the 90 day period after the receipt of such request, the
Borrower at its sole cost, expense and effort may, upon notice to the
Administrative Agent, require Lender to assign (in accordance with and subject
to the restrictions contained in Section 11.5) all of its rights and obligations
under the Loan Documents to any other Lender (or affiliate thereof), or any
other Eligible Institution identified by the Borrower if such other Lender (or
affiliate thereof) or such Eligible Institution agrees to assume all of the
obligations of such Lender for consideration equal to the outstanding principal
amount of such Lender's Loans, together with interest thereon to the date of
such transfer and all other amounts payable under the Loan Documents to such
Lender on or prior to the date of such transfer (including any fees accrued
hereunder and any amounts which would be payable under Section 3.4 as if all of
such Lender's Loans were being prepaid in full on such date). In the event of a
transfer to any other Eligible Institution, subject to the satisfaction of the
conditions of Section 11.5, such Eligible Institution shall be a "Lender" for
all purposes hereunder. Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreements of the Borrower contained in Sections
3.5, 3.6(b), 11.1(a) and 11.4 (without duplication of any payments made to such
Lender by the Borrower or such other Eligible Institution) shall survive for the
benefit of any Lender replaced under this Section with respect to the time prior
to such replacement. In connection with any transfer pursuant to this
subsection, the Borrower shall be obligated to pay the assignment fee referred
to in Section 11.5(b).
4. REPRESENTATIONS AND WARRANTIES
In order to induce the Credit Parties to enter into this Agreement and
extend or participate in the Extensions of Credit provided herein, the Borrower
hereby makes the following representations and warranties to each Credit Party:
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4.1. SUBSIDIARIES; CAPITALIZATION.
As of the Second Restatement Date and after giving effect to the
consummation of the Transactions, Arch has only the Subsidiaries set forth on
Schedule 4.1. The issued and outstanding shares of each corporate Subsidiary of
Arch are duly authorized, validly issued, fully paid and nonassessable and are
owned free and clear of any Liens, except Permitted Liens. The interest of Arch
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 Arch and the ownership interest in each
non-corporate Subsidiary of Arch, in each case as of the Second Restatement
Date, are as set forth on Schedule 4.1. The owner of each such interest and each
issue of capital Stock listed on Schedule 4.1 is the registered and beneficial
owner thereof. None of the Borrower or any of its 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 the Borrower
or any such 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 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
Second Restatement Date, Arch Canada is the only Foreign Subsidiary of Arch and
is not a Material Foreign Subsidiary.
4.2. EXISTENCE AND POWER.
The Borrower and each of its Subsidiaries 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 Borrower and each of its Subsidiaries 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 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 Borrower and each of its
Subsidiaries has duly executed and delivered the Transaction Documents to which
it is a party.
4.4. GOVERNMENTAL BODY APPROVALS.
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 Borrower and each of its
Subsidiaries of any of the Transaction Documents to which it is a party or is
required as a condition to the validity or enforceability of any of the
Transaction Documents. No provision of any applicable statute, law (including
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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, any of the Transaction 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 Borrower and each of its Subsidiaries, 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, 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 Borrower or any of its Subsidiaries or any
other Loan Party) pending or, to the knowledge of the Borrower, threatened
against the Borrower or any of its Subsidiaries 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 or (ii) call into
question the validity or enforceability of any of the Transaction Documents.
4.7. NO CONFLICTING AGREEMENTS.
Except as set forth on Schedule 4.7, neither the Borrower nor any of
its Subsidiaries 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 Borrower or any of its
Subsidiaries 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 Parent Discount Notes Indenture, either of the Existing Arch
Indentures or the Arch 12 3/4% Indenture, OR result in the creation or
imposition of, or obligation to create, any Lien (other than Permitted Liens)
upon the Property of the Parent or Arch pursuant to the terms of the
Subordinated Indenture, the Parent Discount Notes Indenture, either of the
Existing Arch Indentures or the Arch 12 3/4% Indenture.
4.8. TAXES.
Each of the Borrower and each of its Subsidiaries 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 7.4) which would be material to the Borrower
or any of its Subsidiaries, and no tax Liens have been filed with respect
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thereto except Permitted Liens described in Section 8.2(i). The charges,
accruals and reserves on the books of the Borrower and each of its Subsidiaries
with respect to all federal, state, local and other taxes are, to the best
knowledge of the Borrower, adequate for the payment of all such taxes, and the
Borrower does not know of any unpaid assessment which is due and payable against
it or any of its Subsidiaries 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 Borrower nor any of its Subsidiaries 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 Borrower and each of its Subsidiaries is complying in all
material respects with all applicable statutes and regulations of all
Governmental Bodies, including ERISA and Environmental Laws, a violation of
which could reasonably be expected to have a Material Adverse Effect.
4.10. INVESTMENT COMPANIES AND OTHER REGULATED ENTITIES.
Neither the Borrower, any of its Subsidiaries nor any Person
controlled by, controlling, or under common control with, the Borrower or any of
its Subsidiaries, is (i) an "investment company" as defined in, or subject to
regulation under, the Investment Company Act of 1940, as amended, (ii) a
"holding company" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935 or the Federal Power Act, as amended, or
(iii) subject to any statute or regulation which prohibits or restricts the
incurrence of Indebtedness for borrowed money, including 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. PROPERTIES.
Each of the Borrower and each of its Subsidiaries has good and
marketable title to, or valid leasehold interests in, all of its property, real
and personal, material to its business, subject to no Liens, except Permitted
Liens and except for minor defects in title that do not interfere with its
ability to conduct its business as currently conducted or to utilize such
properties for their intended purposes.
4.12. FCC MATTERS.
The Borrower and each of its Subsidiaries (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 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.
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4.13. FEDERAL RESERVE REGULATIONS.
(a) Neither the Borrower nor any 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. After giving effect to each
Transaction and the making of each Extension of Credit, Margin Stock will
constitute less than 25% of the assets (as determined by any reasonable method)
of the Borrower and the Subsidiaries.
(b) No part of the proceeds of any Extension of Credit will be used,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, for any purpose that entails a violation of, or that is inconsistent
with, the provisions of Regulation U or X.
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 of its Subsidiaries 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 any Loan Party in connection with the transactions contemplated thereby
contains or will contain a misstatement of material fact, or, to the best
knowledge of the Borrower, 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. With respect to
projections or pro-forma financial statements furnished by the Borrower or any
of its Subsidiaries, 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
Borrower or such Subsidiary's best estimate of its future financial performance.
4.16. PLANS.
None of the Borrower, any of its Subsidiaries 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 Borrower, any of its
Subsidiaries or any Commonly Controlled Entity or, to the best knowledge of the
Borrower, any Multiemployer Plan to which the Borrower, any of its Subsidiaries
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 Borrower or any of its Subsidiaries.
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4.17. BURDENSOME OBLIGATIONS.
Neither the Borrower nor any of its Subsidiaries 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 Borrower
or such 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 Borrower and its Subsidiaries taken as a whole, or Operating Cash
Flow, or the ability of the Borrower or any of its Subsidiaries to perform their
respective obligations under the Loan Documents. The Borrower does not presently
anticipate that future expenditures by the Borrower or any of its Subsidiaries
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
Borrower and its Subsidiaries taken as a whole.
4.18. FINANCIAL STATEMENTS.
(a) The Parent and Arch have heretofore furnished to each Credit Party
a copy of their respective (A) Forms 10-K for the fiscal year ending December
31, 1997, containing the audited Consolidated balance sheets of the Parent and
its Subsidiaries and of Arch and its Subsidiaries, respectively, as of December
31, 1996 and December 31, 1997, and the related Consolidated statements of
operations, stockholder's equity and cash flows for the periods then ended, and
(B) Forms 10-Q for the fiscal quarter ended March 31, 1998, containing the
unaudited Consolidated balance sheets of the Parent and its Subsidiaries and of
Arch and its Subsidiaries, respectively, for such fiscal quarter, together with
the related Consolidated statements of operations and cash flows for the fiscal
quarter then ended. Such financial statements present fairly, in all material
respects, the financial position and results of operations and cash flows of the
Parent, the Borrower and their consolidated Subsidiaries as of such dates and
for such periods in accordance with GAAP, subject to year-end audit adjustments
and the absence of footnotes in the case of the quarterly statements referred to
above. Except as fully reflected in such financial statements, there are no
material liabilities or obligations with respect to Arch or any of its
Subsidiaries of any nature whatsoever (whether absolute, contingent or otherwise
and whether or not due).
(b) Since December 31, 1997, except for the Transactions, each of the
Parent and each of its Subsidiaries has conducted its business only in the
ordinary course and there has been no Material Adverse Change.
4.19. ENVIRONMENTAL MATTERS.
Neither the Borrower nor any of its Subsidiaries (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 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, 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,
(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
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hazardous substance into the environment for which the Borrower or any of its
Subsidiaries is or may be liable, or (iv) has received notice that the Borrower
or any of its Subsidiaries is or may be liable to any Person under CERCLA or any
analogous state law, which in the case of this Section 4.19, individually or in
the aggregate could reasonably be expected to have a Material Adverse Effect.
The Borrower and each of its Subsidiaries is in compliance in all material
respects with the financial responsibility requirements of federal and state
environmental laws to the extent applicable, including those contained in 40
C.F.R., parts 264 and 265, subpart H, and any analogous state law.
4.20. FRANCHISES, INTELLECTUAL PROPERTY, ETC.
The Borrower and each of its Subsidiaries 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. No event has occurred which permits or, to the best
knowledge of the Borrower, 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.
4.21. SOLVENCY
The Borrower and each of its Subsidiaries is, and after giving effect
to the incurrence of all Indebtedness under the Loan Documents and the
consummation of the Transactions will be, Solvent.
4.22. ABSENCE OF CERTAIN RESTRICTIONS.
Except for the Loan Documents, the Loan Documents under and as defined
in the Tranche A and Tranche C Credit Agreement, the Parent Discount Notes
Indenture, the Existing Arch Indentures, the Arch 12 3/4% Indenture and any
Replacement Indenture, NO indenture, certificate of designation for preferred
Stock, agreement or instrument to which the Parent, Arch or any of its
Subsidiaries is a party, prohibits or restrains, directly or indirectly, the
payment of dividends or other payments to Arch or any of its Subsidiaries.
4.23. INSURANCE.
The Borrower's and its Subsidiaries' insurance policies are and will
be sufficient for compliance with all requirements of law as well as for
compliance with all agreements to which the Borrower or any of its Subsidiaries
is a party, and neither the Borrower nor any of its Subsidiaries suffers self
insurance for any material risks.
4.24. PARI PASSU OBLIGATIONS.
The obligations of Arch under the Loan Documents to which it is a
party are pari passu with Arch's obligations under the Existing Arch Indentures
and the Arch 12 3/4% Indenture.
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4.25. YEAR 2000 ISSUE.
The Borrower and its Subsidiaries have reviewed the effect of the Year
2000 Issue on the computer software, hardware and firmware systems and equipment
containing embedded microchips owned or operated by or for the Borrower and its
Subsidiaries or used or relied upon in the conduct of their business (including
systems and equipment supplied by others or with which such computer systems of
the Borrower and its Subsidiaries interface). The costs to the Borrower and its
Subsidiaries of any reprogramming required as a result of the Year 2000 Issue to
permit the proper functioning of such systems and equipment and the proper
processing of data, and the testing of such reprogramming, and of the reasonably
foreseeable consequences of the Year 2000 Issue to the Borrower or any of its
Subsidiaries (including reprogramming errors and the failure of systems or
equipment supplied by others) are (to the best of the Borrower's and its
Subsidiaries' knowledge, with respect to such computer hardware, software or
systems used or relied upon in the conduct of their business but not owned or
leased by the Borrower or any of its Subsidiaries) not reasonably expected to
result in a Default or Event of Default or to have a Material Adverse Effect.
5. CONDITIONS TO EFFECTIVENESS AND TO FIRST EXTENSIONS OF CREDIT
In addition to the conditions precedent set forth in Section 6, this
Agreement and the obligation of the Credit Parties to make the initial Extension
of Credit shall not become effective until each of the following conditions
precedent have been satisfied (or waived in accordance with Section 11.1):
5.1. EVIDENCE OF ACTION
The Administrative Agent shall have received a certificate, dated the
Second Restatement Date, of the Secretary or Assistant Secretary of each of the
Borrower, Arch, the Parent and each Subsidiary Guarantor (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 or formation 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).
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5.3. NOTES.
The Administrative Agent shall have received a Note for each Lender,
dated the Second Restatement Date, duly executed by a duly authorized officer of
the Borrower.
5.4. BORROWER PLEDGE AGREEMENT.
The Administrative Agent shall have received the Borrower Pledge
Agreement, duly executed by a duly authorized officer of the Borrower.
5.5. PARENT GUARANTY.
The Administrative Agent shall have received the Parent Guaranty, duly
executed by a duly authorized officer of the Parent.
5.6. SUBSIDIARY GUARANTY.
The Administrative Agent shall have received the Subsidiary Guaranty,
duly executed by a duly authorized officer of each Loan Party party thereto.
5.7. RESTRICTED SUBSIDIARY SECURITY AGREEMENT (BANK).
The Administrative Agent shall have received the Restricted Subsidiary
Security Agreement (Bank), duly executed by a duly authorized officer of each
Restricted Subsidiary.
5.8. BORROWER SECURITY AGREEMENT (BANK)
The Borrower Security Agreement (Bank) shall have been duly executed
by a duly authorized officer of the Borrower and all original counterparts
thereof shall have been delivered to the Escrow Agent.
5.9. ARCH GUARANTY.
The Administrative Agent shall have received the Arch Guaranty, duly
executed by a duly authorized officer of Arch.
5.10. ARCH SECURITY AGREEMENT (BANK).
The Arch Security Agreement (Bank) shall have been duly executed by a
duly authorized officer of Arch and all original counterparts thereof shall have
been delivered to the Escrow Agent.
5.11. INDENTURE COLLATERAL DOCUMENTS.
Each of (i) the Borrower Security Agreement (14% Indenture) and the
Borrower Security Agreement (9 1/2% Indenture) shall have been duly executed by
a duLY authorized officer of the Borrower, (ii) the Arch Security Agreement (14%
Indenture) and the Arch Security Agreement (9 1/2% Indenture) shall have been
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duly executed by a duLY authorized officer of Arch, and (iii) the Restricted
Subsidiary Security Agreement (14% Indenture) and the Restricted Subsidiary
Security Agreement (9-1/2% Indenture) shall have been duly executed by a duly
authorized officer of each Restricted Subsidiary, and all original counterparts
thereof shall have been delivered to the Escrow Agent.
5.12. ESCROW AGREEMENT.
The Administrative Agent shall have received the Escrow Agreement,
duly executed by a duly authorized officer of each of Arch, the Borrower and the
Escrow Agent, and such Escrow Agreement shall cover the following documents and
instruments: (i) certificates representing all of the issued and outstanding
shares of capital Stock of the Borrower and each of its Subsidiaries (other than
the Restricted Subsidiaries) and undated stock powers with respect thereto duly
executed in blank by the applicable Loan Parties, (ii) instruments constituting
the Pledged Debt (under and as defined in each of the Triggering Collateral
Documents) indorsed in blank by the applicable Loan Party, (iii) the Triggering
Collateral Documents and the Indenture Collateral Documents, in each case duly
executed by each of the parties thereto, (iv) Powers of Attorney, duly executed
by each of the Borrower and Arch, (v) duly executed UCC-1 Financing Statements
with respect to the Collateral (as defined in the Indenture Collateral Documents
or the Triggering Collateral Documents) for filing in each office as determined
by the Administrative Agent and naming the Administrative Agent as "Secured
Party", (vi) additional sets of UCC-1 Financing Statements in all respects
identical to UCC-1 Financing Statements referred to in clause (v) above except
that the Applicable Arch Indenture Trustees are named as "Secured Party" and
(vii) all executed original counterparts of each Triggering Collateral Document
and each Indenture Collateral Document.
5.13. SEARCH REPORTS, FINANCING STATEMENTS, ETC.
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 (other than Liens in
favor of the Administrative Agent) of record in such official's office covering
any Collateral or showing the Parent or any of its Subsidiaries as a debtor
thereunder, (ii) such Uniform Commercial Code financing statements or financing
statement amendments, executed by the appropriate Loan Party, as shall be
reasonably requested by the Administrative Agent, and (iii) a certificate of the
Borrower signed by an authorized officer of each thereof, dated the Second
Restatement Date, certifying that, as of the Second Restatement Date, there will
exist no Liens on the Collateral other than Permitted Liens.
5.14. APPROVALS AND CONSENTS.
All approvals and consents of all Persons required to be obtained in
connection with the consummation of the Transactions have been obtained, all
required notices have been given and all required waiting periods have expired.
5.15. PROPERTY, PUBLIC LIABILITY AND OTHER INSURANCE.
The Administrative Agent shall have received a certificate of
insurance maintained by the Loan Parties, in form and substance reasonably
satisfactory to the Administrative Agent, together with the endorsements
required by Section 7.5.
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5.16. 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 Arch, 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
officer of the Borrower to the foregoing effects.
5.17. TRANSACTIONS; ARCH 12 3/4% SENIOR NOTES; OFFICER'S CERTIFICATE.
(a) The Arch Transactions and the ACE Transactions shall have been
consummated in accordance with the terms and conditions of the applicable
Transaction Documents.
(b) Arch shall have (i) issued the Arch 12 3/4% Senior Notes (iI)
received proceeds thereof in an amount not less than $121,000,000 and (iii)
shall have applied the net proceeds thereof to the repayment in full of the
Indebtedness (and the termination of the commitments) under the Existing Arch
Credit Agreement and the repayment of Tranche B Loans.
(c) The Administrative Agent shall have received a certificate of a
Financial Officer of the Borrower, dated the Second Restatement Date, in all
respects satisfactory to the Administrative Agent (i) as to the matters set
forth in subsections (a) and (b) above and (ii) attaching a true, complete and
correct copy of each of the Transaction Documents executed and delivered in
connection with the consummation of the Arch transactions and the ACE
Transactions, the Arch 12 3/4% Indenture, a specimen of tHE Arch 12 3/4% Senior
Notes and a copy of the Offering Memorandum in respect thereof, each OF which
shall be in form and substance satisfactory to the Administrative Agent.
5.18. MANAGEMENT AGREEMENT.
The Administrative Agent shall have received a certificate of a
Financial Officer of the Borrower, dated the Second Restatement Date, in all
respects satisfactory to the Administrative Agent attaching a true, complete and
correct copy of the Management Agreement, which shall be in form and substance
satisfactory to the Administrative Agent.
5.19. OFFICER'S CERTIFICATE.
The Administrative Agent shall have received a certificate of the
President, a Vice President or a Financial Officer of the Borrower, dated the
Second Restatement Date, in all respects satisfactory to the Administrative
Agent certifying that as of the Second Restatement Date (i) no Default exists,
(ii) the representations and warranties contained in the Loan Documents are true
and correct, and (iii) since December 31, 1997, no Material Adverse Change has
occurred.
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5.20. COMPLIANCE CERTIFICATE
The Administrative Agent shall have received a Compliance Certificate
signed by a Financial Officer of the Borrower, in all respects reasonably
satisfactory to the Administrative Agent, dated the Second Restatement Date, and
(i) stating that the Borrower is in compliance with all covenants on a pro-forma
basis after giving effect to the Transactions, and (ii) attaching a copy of a
pro-forma consolidated balance sheet of the Borrower utilized for purposes of
preparing such Compliance Certificate, which pro-forma consolidated balance
sheet presents the Borrower's good faith estimate of its pro-forma consolidated
financial condition at the date thereof, after giving effect to the
Transactions.
5.21. EXISTING ARCH CREDIT AGREEMENT.
The Borrower shall have fully repaid all Indebtedness under the
Existing Arch Credit Agreement and all agreements with respect thereto
(including the Escrow Agreement referred to therein) shall have been cancelled
or terminated, all Liens, if any, securing the same shall have been terminated,
and the Administrative Agent shall have received satisfactory evidence thereof.
5.22. OPINIONS OF COUNSEL TO THE LOAN PARTIES.
The Administrative Agent shall have received (i) an opinion of Hale
and Dorr, LLP, special counsel to the Loan Parties, substantially in the form of
Exhibit O, and (ii) an opinion of Garry Watzke, Esq., General Counsel of the
Loan Parties, substantially in the form of Exhibit P, each addressed to the
Administrative Agent, the Lenders and Special Counsel and each dated the Second
Restatement Date.
5.23. OPINION OF FCC COUNSEL.
The Administrative Agent shall have received an opinion of Wilkinson,
Barker, Knauer & Quinn, LLP, FCC counsel to Arch and its Subsidiaries, addressed
to the Administrative Agent and the Lenders, dated the Second Restatement Date,
substantially in the form of Exhibit Q.
5.24. FEES.
The Borrower shall have paid to the Managing Agents and the Lenders
all fees which are payable on the Second Restatement Date.
5.25. FEES AND EXPENSES OF SPECIAL COUNSEL.
The reasonable fees and expenses of Special Counsel shall have been
paid.
5.26. MASTER ASSIGNMENT.
The Administrative Agent shall have received the Master Assignment,
duly executed by each party thereto.
5.27. OTHER DOCUMENTS.
The Administrative Agent shall have received such other documents and
assurances as the Administrative Agent shall reasonably require.
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6. CONDITIONS OF LENDING - ALL EXTENSIONS OF CREDIT.
The obligation of each Credit Party to make any Extension of Credit under
this Agreement shall be subject to the satisfaction of the following conditions
precedent as of the date thereof:
6.1. COMPLIANCE.
On each Credit Extension Date and after giving effect to the
Extensions of Credit thereon (i) no Default shall have occurred or be
continuing; and (ii) the representations and warranties contained in the Loan
Documents shall be true and correct with the same effect as though such
representations and warranties had been made on such Credit Extension Date,
except to the extent such representations and warranties specifically relate to
an earlier date, in which case such representations and warranties shall have
been true and correct on and as of such earlier date. Each Extension of Credit
and each Credit Request therefor shall constitute a certification by the
Borrower as of such Credit Extension Date that each of the foregoing matters is
true and correct in all respects.
6.2. CREDIT REQUEST.
With respect to each Extension of Credit, the Administrative Agent
shall have received a Credit Request, executed by a duly authorized officer of
the Borrower.
6.3. LAW.
Such Extension of Credit shall not be prohibited by any applicable
law, rule or regulation.
7. AFFIRMATIVE COVENANTS
The Borrower hereby covenants and agrees that, until all obligations of the
Loan Parties under the Loan Documents have been paid in full and all Commitments
of the Credit Parties have been terminated and no obligations of any Credit
Party exists 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 (which will in turn
promptly furnish a copy thereof to each Lender):
(a) As soon as available but in any event within 90 days after
the end of each fiscal year:
(i) a copy of each of the Parent's and Arch's Annual Report
on Form 10-K in respect of such fiscal year, together with the financial
statements required to be attached thereto, and
(ii) a copy of the Consolidated Balance Sheets of the
Borrower and its Subsidiaries as at the end of such fiscal year, together
with the related Consolidated Statements of Operations, Stockholders'
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Equity and Cash Flows of the Borrower and its Subsidiaries as of and
through the end of such fiscal year.
The statements referred to in clause (i) and (ii) above shall be audited and
certified without qualification, which certification shall (x) state that the
examination by such Accountants in connection with such 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 (y)
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.
(b) As soon as available but in any event within 60 days after
the end of each of the first three fiscal quarters of each fiscal year:
(i) a copy of each of the Parent's and Arch's Quarterly
Report on Form 10-Q in respect of such fiscal quarter, together with the
financial statements required to be attached thereto, and
(ii) a copy of the Consolidated Balance Sheets of the
Borrower and its Subsidiaries as at the end of each such quarterly period,
together with the Consolidated Statements of Operations and Cash Flows of
the Borrower and its Subsidiaries for such period and for the elapsed
portion of the fiscal year through such date.
The statements referred to in clause (i) and (ii) above shall be certified by a
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 financial condition and the
Consolidated results of operations of the Borrower and its Subsidiaries,
(c) Within 60 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 a 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 a 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 basis for the relevant period, with respect to (i) pager
activations during the preceding fiscal quarter, (ii) information indicating the
net increase or decrease in the number of Pagers in Service, (iii) the amount of
Capital Expenditures incurred broken down by (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, and (iv) the amount of
Additional Benbow Investments.
(e) Promptly upon the request of the Administrative Agent on
behalf of the Required Lenders, copies of the projected Consolidated Balance
Sheets and Statements of Operations of the Borrower and its Subsidiaries for the
next fiscal year, together with such other information and documentation as any
Lender may reasonably request in connection therewith.
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(f) No later than 60 days after the beginning of each fiscal
year, a copy of the Consolidated annual budgets of the Borrower and its
Subsidiaries for such fiscal year.
(g) Such other information and documentation with respect to the
Borrower and its Subsidiaries as any Lender may reasonably request from time to
time.
7.2. CERTIFICATES; OTHER INFORMATION.
Furnish or cause to be furnished to the Administrative Agent (which
will in turn promptly furnish a copy thereof to each Lender):
(a) Prompt written notice if: (i) any Indebtedness of the
Borrower or any of its Subsidiaries 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 Borrower or any of its Subsidiaries 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 Borrower or any of
its Subsidiaries 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 Borrower or any of its Subsidiaries 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 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 Borrower or
any of its Subsidiaries 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 Borrower or any of its Subsidiaries 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 Borrower or any of its Subsidiaries;
(d) Prompt written notice of the occurrence of a Change of
Control;
(e) Prompt written notice upon obtaining knowledge or otherwise
determining that any Foreign Subsidiary has become a Material Foreign
Subsidiary; and
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(f) Written notice 120 days prior to the taking of any action
permitted under Sections 8.1(v)(A), 8.3(i), 8.5(a)(i) (other than with respect
to a Restricted Payment to Arch on a day on which Arch is obligated to make a
payment in respect of Required Obligations so long as the amount thereof does
not exceed the amount of the Required Obligation payable on such date) and
8.8(b).
7.3. LEGAL EXISTENCE.
Except as provided in Section 8.3, maintain, and cause each of its
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.
7.4. TAXES.
Pay and discharge when due, and cause each of its 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
Borrower and its 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 Borrower or such 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 Borrower or such 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 Borrower or such Subsidiary
senior to the Liens granted by the Collateral Documents on such Property, and
further provided that the Borrower 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 its 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 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 a 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 nature and amount, complies with the obligations of the Borrower and
its Subsidiaries under this Section, and is in full force and effect.
(b) INSURANCE COVERING TANGIBLE PERSONAL PROPERTY. At all times
insure, and cause each of its Subsidiaries to insure, all of its tangible
personal Property in which a security interest may be required to be granted
pursuant to the Collateral Documents 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 such tangible
personal Property against damage resulting from bodily injury, including death
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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 Collateral Agent: (i) the
Collateral Agent shall be an additional insured and, with respect to property
insurance, sole loss payee in respect of each claim relating to such tangible
personal Property and resulting in a payment under any such insurance policy
exceeding $250,000, (ii) thirty days' prior written notice of any cancellation,
reduction of amounts payable, or any changes and amendments shall be given to
the Collateral Agent, except that ten days' prior written notice of cancellation
shall be given to the Collateral Agent if cancellation results from the failure
to pay premiums, and (iii) the Collateral 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 Borrower or such Subsidiary to pay the same or to so insure.
Provided that no Default or Event of Default shall exist, the Collateral Agent
agrees, promptly upon its receipt thereof, to pay over to the Borrower or the
appropriate Subsidiary the proceeds of such payment to enable the Borrower or
such Subsidiary to repair, restore or replace the Property subject to such
claim. To the extent that the Borrower or such Subsidiary does not elect to
repair, restore or replace such Property, an amount equal to the proceeds which
are not employed to repair, restore or replace such Property shall be applied as
required by Section 2.4. If a Default or Event of Default shall exist, the
Administrative Agent or, if applicable pursuant to the applicable Collateral
Document, the Collateral Agent, shall hold the proceeds of such payment as
Collateral (to the extent of its security interest in such Property) and apply
such proceeds in accordance with the provisions thereof.
(c) CONCURRENT INSURANCE. Neither the Borrower nor any of the
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 Collateral 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 its 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 Borrower or such
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 Borrower or
such Subsidiary, and that any such contested Indebtedness, obligations or claims
shall not constitute, or create, a Lien on any Property of the Borrower or any
of its Subsidiaries senior to any Lien granted to the Administrative Agent under
the Collateral Documents on such Property, and further provided that the
Borrower 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.
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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 its
Subsidiaries so to do, all Property reasonably deemed by the Borrower's or such
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 its 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 Borrower or such Subsidiary, a violation of which could
reasonably be expected to have a Material Adverse Effect, except such thereof as
shall be contested in good faith and by appropriate proceedings diligently
conducted by the Borrower or such Subsidiary, provided that the Borrower 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 Borrower or any of its Subsidiaries with the executive officers
of the Borrower and its Subsidiaries.
7.10. LICENSES, ETC.
Maintain, and cause each of its 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.
Enter into and maintain for a period of 2 years from the Second
Restatement Date, Interest Rate Protection Agreements, in form and substance
reasonably satisfactory to the Administrative Agent, with respect to an amount
(if greater than zero) equal to not less than the difference between (i) 50% of
Total Debt outstanding from time to time, minus (ii) the amount of Total Debt
outstanding from time to time that is at a fixed (and not a variable) rate or
subject to Interest Rate Protection Agreements.
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, 2001, a Fixed Charge
Coverage Ratio of greater than 1.00:1.00.
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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 greater than 1.10:1.00.
7.14. INTEREST COVERAGE RATIO.
Maintain, or cause to be maintained, as of the last day of each fiscal
quarter ended during the periods or on the date set forth below, an Interest
Coverage Ratio of greater than the ratios set forth below:
Periods Ratio
------- -----
Second Restatement Date through
September 30, 1999 1.75:1.00
December 31, 1999 through
September 30, 2000 2.00:1.00
December 31, 2000 and
thereafter 2.25:1.00
7.15. TOTAL LEVERAGE RATIO.
(a) At all times prior to the Existing Arch Senior Note Termination
Date, maintain, or cause to be maintained, at all times during the periods set
forth below, a Total Leverage Ratio of not greater than the ratios set forth
below:
Periods Ratio
------- -----
Second Restatement Date through
June 29, 1999 5.25:1.00
June 30, 1999 through
June 29, 2000 5.00:1.00
June 30, 2000 through
June 29, 2001 4.50:1.00
June 30, 2001 through
June 29, 2002 4.00:1.00
June 30, 2002 and
thereafter 3.50:1.00,
(b) At all times on and after the Existing Arch Senior Note
Termination Date, maintain, or cause to be maintained, Total Leverage Ratio of
not greater than 5.00:1.00.
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7.16. API LEVERAGE RATIO.
Maintain, or cause to be maintained, at all times, an API Leverage
Ratio of not greater than 2.50:1.00.
7.17. ADDITIONAL SUBSIDIARIES; MATERIAL FOREIGN SUBSIDIARIES.
In the event that on or after the Second Restatement Date, any Person
shall become a Subsidiary of the Borrower or a Material Foreign Subsidiary of
the Borrower or Benbow Investments ceases to be an Unrestricted Subsidiary under
and as defined in the Existing Arch Senior Indentures, the Borrower shall (i)
notify the Administrative Agent in writing thereof within five Business Days
thereof, (ii) in the event that such Person shall be a Domestic Subsidiary or a
Material Foreign Subsidiary cause such Person to execute and deliver to the
Collateral Agent a completed Guaranty Supplement and to become a party to the
Unrestricted Subsidiary Security Agreement (Bank) and each other applicable
Triggering Collateral Document in the manner provided therein and, if
applicable, the corresponding Indenture Collateral Document in the manner
provided therein, in each case within 10 days thereafter and promptly to take
such actions to (A) prior to the earlier to occur of the Existing Arch Senior
Note Termination Date or the effectiveness of the Triggering Collateral
Documents, deliver such Triggering Collateral Documents, UCC Financing
Statements and other documents to the Escrow Agent as requested by the
Administrative Agent and (B) thereafter, create and perfect Liens on such
Person's assets to secure such Person's obligations under the Loan Documents
and, if applicable, the Existing Arch Indentures, as the Administrative Agent
shall reasonably request, (iii) cause any shares of capital Stock of, or
promissory notes evidencing Indebtedness of, such Person that are owned by or on
behalf of the Borrower or any Subsidiary Guarantor (except that, if such Person
is a Foreign Subsidiary and not a Material Foreign Subsidiary, shares of capital
Stock of such Person may be limited to 65% of the outstanding shares of capital
Stock of such Foreign Subsidiary) to be delivered within five Business Days to
the Appropriate Party, (iv) cause each such new Subsidiary to deliver to the
Appropriate Party any shares of capital Stock or promissory notes evidencing
Indebtedness of any Subsidiary of the Borrower that are owned by or on behalf of
such new Subsidiary within five Business Days after such Subsidiary is formed or
acquired (except that if the capital Stock owned by such Subsidiary is the
capital Stock of a Foreign Subsidiary that is not a Material Foreign Subsidiary,
shares of such capital Stock may be limited to 65% of the outstanding shares of
capital Stock of such Foreign Subsidiary), and (v) deliver to the Appropriate
Party such additional Financing Statements, Grants of Security Interest and
Powers of Attorney (as each such term is defined in the Security Agreement)
certificates, instruments and opinions as the Administrative Agent may request.
In addition, within ten Business Days after the Existing Arch Senior Note
Termination Date, the Borrower shall cause Benbow Investments to become a
Subsidiary Guarantor and to grant a security interest in its assets as if it was
a new Domestic Subsidiary.
7.18. ADDITIONAL COLLATERAL.
If after the Second Restatement Date, any Loan Party acquires any
Property that would constitute Collateral, as defined in a Collateral Document
or a Triggering Collateral Document and such Loan Party has theretofore granted
a security interest in such type of Property pursuant thereto, the Borrower
shall, and shall cause each such Loan Party to, execute and deliver to the
Appropriate Party any and all documents, financing statements, agreements and
instruments, and take all such further actions (including the filing and
recording of financing statements, fixture filings, mortgages, deeds of trust
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and other documents), that may be required under any applicable law, or that the
Administrative Agent may reasonably request, to effectuate the transactions
contemplated by the Loan Documents or to grant, preserve, protect or perfect the
Liens created or intended to be created by the Collateral Documents or the
validity or priority of any such Lien, all at the expense of the Loan Parties.
7.19. ESCROWED COLLATERAL.
(a) Upon the occurrence of the Existing Arch Senior Note Termination
Date or upon the request of the Minority Lenders, the Triggering Collateral
Documents and, if applicable, the Indenture Collateral Documents, shall be
deemed effective. Each Loan Party shall deliver to the Collateral Agent such
documents as the Collateral Agent may request in connection therewith, including
(i) duly executed UCC-1 Financing Statements, (ii) duly executed Grants of
Security Interest (Trademarks), (iii) opinions of counsel, in form and substance
satisfactory to the Collateral Agent, with respect to the enforceability of the
security interests so granted and the perfection thereof and (iv) other
documents as may reasonably be requested by the Collateral Agent. In connection
therewith, the Collateral Agent is hereby irrevocably authorized and empowered
as the Borrower's and each of its Subsidiaries' attorney-in-fact, to execute
such UCC-1 Financing Statements, Grants of Security Interest (Trademarks) and
instructions to the Escrow Agent and to deliver or file the same and to make, at
the Collateral Agent's option, all other filings and to give all other notices
as it shall reasonably deem necessary with respect to any of the Collateral, all
of which may be done with or without the signature of the Borrower or any of its
Subsidiaries. The foregoing power constitutes a power coupled with an interest
which shall survive until all of the obligations under the Loan Documents have
been indefeasibly paid in full in cash and the Credit Agreement and the
Commitments have been terminated.
(b) If the Collateral Documents have become effective pursuant to
Section 7.19(a) prior to the Existing Arch Senior Note Termination Date, (x) any
declaration of the effectiveness of any Collateral Document shall automatically
be deemed to declare the corresponding Indenture Collateral Documents to be
effective, (y) any grant of a security interest to the Collateral Agent in any
Property shall also grant a ratable interest in such Collateral under the
applicable Indenture Collateral Documents to the Applicable Arch Indenture
Trustees, and (z) any direction to the Escrow Agent to deliver a Collateral
Document, UCC-1 Financing Statement, Powers of Attorney or other documents shall
also constitute a direction to deliver the corresponding document executed for
the benefit of the Applicable Arch Indenture Trustees.
(c) Notwithstanding the foregoing, prior to the Existing Arch Senior
Note Termination Date, Benbow Investments shall not be obligated to grant a
security interest in any of its assets.
7.20. YEAR 2000 ISSUE.
Take, and shall cause each of its Subsidiaries to take, all necessary
action to complete by September 29, 1999, the reprogramming of computer
software, hardware and firmware systems and equipment containing embedded
microchips owned or operated by or for the Borrower and its Subsidiaries or used
or relied upon in the conduct of their business (including systems and equipment
supplied by others or with which such systems of the Borrower or any of its
Subsidiaries interface) required as a result of the Year 2000 Issue to permit
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the proper functioning of such computer systems and other equipment and the
testing of such systems and equipment, as so reprogrammed, except where the
failure to do such reprogramming or testing could not reasonably be expected to
have a Material Adverse Effect. At the request of the Administrative Agent, the
Borrower shall provide, and shall cause each of its Subsidiaries to provide, to
the Administrative Agent reasonable assurance of its compliance with the
preceding sentence.
8. NEGATIVE COVENANTS
The Borrower hereby covenants and agrees that, until all obligations of the
Loan Parties under the Loan Documents have been paid in full and all Commitments
of the Credit Parties have been terminated and no obligations of any Credit
Party exists under any of the Loan Documents, it shall not:
8.1. INDEBTEDNESS.
Create, incur, assume or suffer to exist any liability for
Indebtedness, or permit any of its Subsidiaries so to do, except (i)
Indebtedness due under the Loan Documents and the Loan Documents under and as
defined in the Tranche A and Tranche C Credit Agreement, (ii) Indebtedness of
the Borrower or any of its Subsidiaries existing on the Second Restatement 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, without the consent of the Required Lenders, 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 C
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) Indebtedness under the Existing Intercompany Notes, (iv)
Contingent Obligations to the extent permitted by Section 8.4, (v) prior to the
Existing Arch Senior Note Termination Date, unsecured Indebtedness (A) between
the Borrower and Arch, and (B) among the Borrower and its Subsidiaries (other
than Benbow Investments until such time as Benbow Investments ceases to be an
Unrestricted Subsidiary under and as defined in the Existing Arch Senior
Indentures, has become a Subsidiary Guarantor and has granted a security
interest to the Collateral Agent in its assets), (vi) on and after the Existing
Arch Senior Note Termination Date, unsecured and subordinated Indebtedness (A)
between the Borrower and Arch, and (B) among the Borrower and its Subsidiaries
(other than Benbow Investments until such time as Benbow Investments ceases to
be an Unrestricted Subsidiary under and as defined in the Existing Arch Senior
Indentures, has become a Subsidiary Guarantor and has granted a security
interest to the Collateral Agent in its assets), which shall be subordinated to
the Borrower Obligations on terms and conditions acceptable to the
Administrative Agent and the Required Lenders ("INTERCOMPANY SUBORDINATED
DEBT"), (vii) Indebtedness of the Borrower in respect of the ACE Subordinated
Note in a principal amount not in excess of $50,000,000, (viii) Indebtedness of
Arch under the Existing Arch Senior Notes, the Arch 12 3/4% Senior NotES and the
Replacement Notes, if any, provided that the principal amount of any Replacement
Notes shall not exceed the principal amount of the Existing Arch Senior Notes or
the Arch 12 3/4% Senior Notes repaid with the proceeds thereof, and (ix) other
IndebtedneSS (including Non-Competition Agreements) of the Borrower and its
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Subsidiaries (other than Benbow Investments until such time as Benbow
Investments ceases to be an Unrestricted Subsidiary under and as defined in the
Existing Arch Senior Indentures, has become a Subsidiary Guarantor and has
granted a security interest to the Collateral Agent in its assets) in an amount
not to exceed 2.5% of Maximum Permitted Indebtedness.
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 its
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 Second Restatement Date as set forth in Schedule 8.2, (v) Liens
when and if granted to the Applicable Arch Indenture Trustees, under the
Indenture Collateral Documents, and (vi) other Liens securing Indebtedness of
the Borrower and its Subsidiaries (other than Benbow Investments until such time
as Benbow Investments ceases to be an Unrestricted Subsidiary under and as
defined in the Existing Arch Senior Indentures, has become a Subsidiary
Guarantor and has granted a security interest to the Collateral Agent in its
assets) in an amount not to exceed 2.5% of Maximum Permitted Indebtedness.
8.3. MERGER.
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 or otherwise alter or modify its corporate name, structure,
status or existence, or permit any of its Subsidiaries so to do, except:
(i) prior to the Existing Arch Senior Note Termination Date, Arch and
any of its Subsidiaries (other than Benbow Investments until such time as
Benbow Investments ceases to be an Unrestricted Subsidiary under and as
defined in the Existing Arch Senior Indentures, has become a Subsidiary
Guarantor and has granted a security interest to the Collateral Agent in
its assets) may merge or consolidate with, or transfer all or substantially
all of its assets to, Arch or any such Subsidiary, provided that in any
merger involving the Borrower, the Borrower shall be the survivor;
(ii) on and after the Existing Arch Senior Note Termination Date, the
Borrower and any of its Subsidiaries may merge or consolidate with, or
transfer all or substantially all of its assets to, the Borrower or any
such Subsidiary, provided that (A) the Administrative Agent shall have
received ten days' prior written notice thereof, (B) immediately before and
after giving effect thereto no Default or Event of Default shall exist and
(C) in any merger involving the Borrower, the Borrower shall be the
survivor,
(iii) at all times, (A) sales of Property to the extent permitted
under Section 8.8 and (B) mergers involving Subsidiaries of the Borrower as
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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; and
(iv) on the Second Restatement Date, the ACE Transactions and the Arch
Transactions.
8.4. CONTINGENT OBLIGATIONS.
Assume, guarantee, indorse, contingently agree to purchase or perform,
or otherwise become liable upon any Contingent Obligation or permit any of its
Subsidiaries so to do, except (i) the Contingent Obligations of Arch and the
Subsidiary Guarantors under the Collateral Documents, (ii) guarantees by the
Borrower of Indebtedness of any of its Subsidiaries (other than Benbow
Investments until such time as Benbow Investments ceases to be an Unrestricted
Subsidiary under and as defined in the Existing Arch Senior Indentures, has
become a Subsidiary Guarantor and has granted a security interest to the
Collateral Agent in its assets) or by any Subsidiary of the Borrower of
Indebtedness of the Borrower or any other Subsidiary of the Borrower (other than
Benbow Investments until such time as Benbow Investments ceases to be an
Unrestricted Subsidiary under and as defined in the Existing Arch Senior
Indentures, has become a Subsidiary Guarantor and has granted a security
interest to the Collateral Agent in its assets), provided that such Indebtedness
would be permitted by Section 8.1 if directly incurred and (iii) prior to the
Existing Arch Senior Note Termination Date, Contingent Obligations of Arch or
any of its Subsidiaries incurred to, or for the benefit of, Arch or any other
such Subsidiary.
8.5. RESTRICTED PAYMENTS.
Declare or make any Restricted Payment, or permit any of its
Subsidiaries so to do, except as follows:
(a) PRIOR TO THE EXISTING ARCH SENIOR NOTE TERMINATION DATE.
Prior to the Existing Arch Senior Note Termination Date, whether or not any of
the Parent Discount Notes are outstanding or the Existing Discount Indenture is
in effect, the following Restricted Payments shall be permitted:
(i) any Subsidiary of Arch may, directly or indirectly, make
Restricted Payments to Arch or any of its Subsidiaries (other than Benbow
Investments until such time as Benbow Investments ceases to be an
Unrestricted Subsidiary under and as defined in the Existing Arch Senior
Indentures, has become a Subsidiary Guarantor and has granted a security
interest to the Collateral Agent in its assets);
(ii) Arch and its Subsidiaries may make Restricted Payments
to the Parent for purposes of enabling the Parent, as a consolidated
taxpayer to pay Taxes, pursuant to the terms set forth in the Tax Sharing
Agreement;
(iii) the Borrower and its Subsidiaries may pay Management
Fees to Arch in any fiscal quarter (in an aggregate amount not exceeding 1
1/2% OF the net revenue of Arch and its Subsidiaries for the immediately
preceding four fiscal quarters ending with the latest fiscal quarter for
which Arch has filed a quarterly report with the SEC on form 10-Q or an
annual report on form 10-K) in accordance with the terms set forth in the
Management Agreement for services rendered to the Borrower or any of its
Subsidiaries, provided that (i) no Default or Event of Default has occurred
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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; and
(iv) provided that no Default or Event of Default shall
exist both before and after giving effect thereto, after the Borrower has
delivered financial statements pursuant to Section 7.1(a) or (b) that
demonstrate that the Total Leverage Ratio has been less than 3.00:1:00 for
the immediately preceding two consecutive fiscal quarters, and provided
that the Total Leverage Ratio would not be greater than or equal to
3.00:1.00 after giving effect thereto, (A) Arch may make any Restricted
Payments to the Parent and (B) the Parent may make any Restricted Payments
to its shareholders.
(b) ON AND AFTER THE EXISTING ARCH SENIOR NOTE TERMINATION DATE. On
and after the Existing Arch Senior Note Termination Date, whether or not any of
the Existing Parent Discount Notes are outstanding or the Existing Discount
Indenture is in effect, the following Restricted Payments shall be permitted:
(i) any Subsidiary of the Borrower may make a Restricted
Payment to its parent;
(ii) provided that no Default or Event of Default shall
exist both before and after giving effect thereto, a Subsidiary of Arch may
make a Restricted Payment to Arch (A) on a day on which Arch is obligated
to make a payment in respect of Required Obligations so long as the amount
thereof does not exceed the amount of the Required Obligation payable on
such date, and (B) for any other purpose so long as after giving effect
thereto, the API Leverage Ratio does not exceed 2.00:1.00;
(iii) Arch and its Subsidiaries may make Restricted Payments
to the Parent (other than Management Fees or any payment under the Tax
Sharing Agreement or the Management Agreement) for purposes of enabling the
Parent, as a consolidated taxpayer to pay Taxes, pursuant to the terms set
forth in the Tax Sharing Agreement;
(iv) the Borrower and its Subsidiaries may pay Management
Fees to Arch in any fiscal quarter (in an aggregate amount not exceeding 1
1/2% OF the net revenue of Arch and its Subsidiaries for the immediately
preceding four fiscal quarters ending with the latest fiscal quarter for
which Arch has filed a quarterly report with the SEC on form 10-Q or an
annual report on form 10-K) in accordance with the terms set forth in the
Management Agreement for services rendered to the Borrower or any of its
Subsidiaries, 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;
(v) provided that no Default or Event of Default shall exist
both before and after giving effect thereto, after the Borrower has
delivered financial statements pursuant to Section 7.1(a) or (b) that
demonstrate that the Total Leverage Ratio has been less than 3.00:1:00 for
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the immediately preceding two consecutive fiscal quarters, and provided
that the Total Leverage Ratio would not be greater than or equal to
3.00:1.00 after giving effect thereto, (A) Arch may make any Restricted
Payments to the Parent and (B) the Parent may make any Restricted Payments
to its shareholders.
(c) ADDITIONAL RESTRICTED PAYMENTS TO THE PARENT. So long as any of
the Parent Discount Notes are outstanding or the Existing Discount Indenture is
in effect, and provided that immediately before or after giving effect to such
declaration and payment no Default or Event of Default shall exist, in addition
to any payments permitted under clauses (a) and (b) above, Arch may make
Restricted Payments to the Parent (A) on any day in an amount not in excess of
the amount of interest due and payable on the Parent Discount Notes on such day,
(B) to enable the Parent to repurchase shares of its Stock in an aggregate
amount not exceeding $1,000,000 minus amounts expended for such purpose on or
after March 12, 1996 and (C) to enable the Parent to make payments not exceeding
$189,282 in any fiscal year) when due under the Consulting Agreement
constituting a part of the page Call Purchase Documents
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 an Acquisition, or make any payments
in respect of the ACE Subordinated Note, or permit any of its 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 Second Restatement 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) commercial paper maturing not in excess of 270 days from the date
of acquisition and rated P-1 by Moody's or A-1 by S&P on the date of acquisition
thereof;
(f) Indebtedness (which Indebtedness shall not have a maturity in
excess of one year) which is rated A or better by Moody's or S&P on the date of
acquisition thereof;
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(g) prior to the Existing Arch Senior Note Termination Date, the
Borrower or any of its Subsidiaries may make loans or advances to Arch or any of
its Subsidiaries;
(h) Acquisitions of Persons in the wireless messaging industry made by
the Borrower or any of its Subsidiaries, provided that:
(i) the Acquisition Consideration of each such Acquisition shall
not exceed $25,000,000 individually or $50,000,000 in the aggregate for all
such Acquisitions made in any 24 month period,
(ii) immediately before and after giving effect to each such
Acquisition, (A) no Default or Event of Default shall exist, (B) the Total
Leverage Ratio shall be less than or equal to 4.75:1.00, and (C) the API
Leverage Ratio shall be less than or equal to 2.50:1.00,
(iii) the 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, and
(iv) the Administrative Agent shall have received with sufficient
copies for each Lender (A) ten Business Days' prior written notice thereof,
(B) a certificate of a Financial Officer of the Borrower as to the matters
set forth in clauses (i) through (iii) above, (C) unaudited Consolidated
pro-forma balance sheets and the Consolidated pro-forma statements of
operations of the Borrower and its Subsidiaries presenting the pro-forma
Consolidated financial condition of the Borrower and its Subsidiaries and
the pro-forma Consolidated statements of operations of the Borrower and its
Subsidiaries through the Tranche C Maturity Date, (D) a Compliance
Certificate on a pro forma basis giving effect to such Acquisition, (E)
such other 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 or the Triggering Collateral Documents solely to the
extent that (x) such Collateral Documents or the Triggering Collateral
Documents are effective and (y) a security interest has been granted by the
Person making the Acquisition in the type of Property or Stock being
acquired, and (F) such other information or documents as the Administrative
Agent shall have reasonably requested;
(i) Investments consisting of the Existing Intercompany Notes;
(j) Investments by the Borrower or any of its Subsidiaries (other than
Benbow Investments until such time as Benbow Investments ceases to be an
Unrestricted Subsidiary under and as defined in the Existing Arch Senior
Indentures, has become a Subsidiary Guarantor and has granted a security
interest to the Collateral Agent in its assets) in Intercompany Subordinated
Debt, provided, however, that (A) any such loan is evidenced by a subordinated
promissory note in form and substance satisfactory to the Administrative Agent
which is delivered to the Appropriate Party under the applicable Collateral
Document, and (B) no Default or Event of Default would exist before or after
giving effect thereto;
(k) Investments by the Borrower in Benbow Investments consisting
solely of the ACE Subordinated Note, which ACE Subordinated Note shall be in
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form and substance satisfactory to the Administrative Agent and shall, among
other things, prohibit any payments thereunder if a Default or Event of Default
would exist and be continuing immediately before and after giving effect thereto
and which shall limit any payments to be made thereunder during any period to
the amount permitted to be applied during such period to Additional Benbow
Investments pursuant to Section 8.6(l), provided that the Administrative Agent
shall have received a certificate of a Financial Officer of the Borrower,
attaching a true and correct copy of such ACE Subordinated Note;
(l) Additional Benbow Investments, PROVIDED THAT:
(i) an amendment to the Shareholders' Agreement, dated as of
September 23, 1994, among Benbow, Westlink and June Walsh, as previously
amended prior to the date hereof, shall have been executed and shall have
become effective, such amendment to be in all respects satisfactory to the
Administrative Agent, provided that the Administrative Agent shall have
received a certificate of an officer of the Borrower, attaching a true and
correct copy of such amendment;
(ii) immediately before or after giving effect to any such
Additional Benbow Investment, no Default or Event of Default shall exist,
(iii) prior to the Existing Arch Senior Note Termination Date,
the amount of such Additional Benbow Investments shall not exceed
$10,000,000 in the aggregate in any one fiscal year of the Borrower and
$25,000,000 in the aggregate for all such Additional Benbow Investments,
and
(iv) on and after the Existing Arch Senior Note Termination Date,
Additional Benbow Investments may be made so long as before and after
giving effect thereto, the API Leverage Ratio is less than or equal to
2:00:1.00;
(m) payments by the Borrower in respect of the ACE Subordinated Note,
provided that (i) no Default or Event of Default would exist and be continuing
immediately before and after giving effect thereto, (ii) the amount of any such
payment shall not exceed the amount of Additional Benbow Investments permitted
to be made to Benbow pursuant to the provisions of Section 8.6(l) as of the date
such payment is made, and (iii) the proceeds of any such payment shall be used
promptly and solely as an Additional Benbow Investment; and
(n) other Investments, provided that (i) no Default or Event of
Default shall exist both before and after giving effect thereto, (ii) the
Borrower shall have delivered financial statements pursuant to Section 7.1(a) or
(b) that demonstrate that the Total Leverage Ratio has been less than 3.00:1:00
for the immediately preceding two consecutive fiscal quarters, and (iii) the
Total Leverage Ratio would not be greater than or equal to 3.00:1.00 after
giving effect thereto.
8.7. BUSINESS AND NAME CHANGES.
Materially change, or permit any such Subsidiary to materially change,
the nature of its respective business as conducted on the Second Restatement
Date, or, without giving the Administrative Agent thirty days' prior written
notice, change its name or permit any such Subsidiary to change its name.
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8.8. SALE OF PROPERTY.
Sell, exchange, lease, transfer, assign or otherwise dispose of any
Property to any Person, or permit any of its Subsidiaries so to do, except:
(a) sales or dispositions of Property in the ordinary course of
business, including normal retirements and replacements of Property in the
ordinary course of business;
(b) prior to the Existing Arch Senior Note Termination Date,
sales or other dispositions of Property between Arch and any of its
Subsidiaries (other than Benbow Investments until such time as Benbow
Investments ceases to be an Unrestricted Subsidiary under and as defined in
the Existing Arch Senior Indentures, has become a Subsidiary Guarantor and
has granted a security interest to the Collateral Agent in its assets);
(c) the Tower Sale, provided that:
(i) no Default or Event of Default shall exist immediately
before or after giving effect thereto, and
(ii) the consideration received or to be received by Arch or
any of its Subsidiaries shall be payable in at least 85% in cash on or
before the closing of such Tower Sale and shall not be less than the fair
market value of the Property so sold, as reasonably determined by the
Managing Person of Arch or such Subsidiary; and
(d) sales or other dispositions of Property by the Borrower or
any of its Subsidiaries (other than Benbow Investments until such time as
Benbow Investments ceases to be an Unrestricted Subsidiary under and as
defined in the Existing Arch Senior Indentures, has become a Subsidiary
Guarantor and has granted a security interest to the Collateral Agent in
its assets) (each, an "ASSET SALE DISPOSITION") not otherwise described in
this Section, provided that:
(i) the Borrower shall give the Administrative Agent at
least 10 Business Days' prior written notice of each such Asset Sale
Disposition identifying the Property to be sold and the total consideration
to be paid in respect thereof,
(ii) no Default or Event of Default shall exist immediately
before or after giving effect thereto,
(iii) the consideration received or to be received by the
Borrower or any of its Subsidiaries shall be payable at least 85% in cash
on or before the closing of such Asset Sale Disposition and shall not be
less than the fair market value of the Property so sold, as reasonably
determined by the Managing Person of the Borrower or such Subsidiary,
(iv) each such Asset Sale Disposition made pursuant to this
Section 8.8(d) shall not exceed $25,000,000 individually or $50,000,000 in
the aggregate in any 24 month period,
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(v) the Total Leverage Ratio shall be less than or equal to
4.75:1.00 immediately before or after giving effect thereto, and
(vi) the API Leverage Ratio shall be less than or equal to
2.50:1.00 immediately before or after giving effect thereto.
8.9. SUBSIDIARIES.
Create or acquire any Subsidiary, or permit any of its Subsidiaries so
to do, except (i) as otherwise provided pursuant to and in accordance with
Sections 7.17, 7.18 or 8.6 and (ii) with the consent of Required Lenders, the
Borrower or any of its Subsidiaries may create an unconsolidated Subsidiary not
subject to the provisions contained in Sections 7 and 8.
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 Borrower or any of its Subsidiaries under any
of the Loan Documents, or permit any of its Subsidiaries so to do.
8.11. PREPAYMENTS OF INDEBTEDNESS.
Prepay or obligate itself to prepay, in whole or in part, or
voluntarily redeem or otherwise retire prior to the maturity thereof, any
Indebtedness (other than Indebtedness under the Loan Documents and the Loan
Documents under and as defined in the Tranche A and Tranche C Credit Agreement),
or permit any of its Subsidiaries so to do, except (i) prepayment of the
Existing Arch Senior Notes or the Arch 12 3/4% Senior NotES with the proceeds of
any Replacement Notes, and (ii) prior to the Existing Arch Senior Note
Termination Date, Indebtedness owed by the Borrower or any of its Subsidiaries
to Arch or any of its other Subsidiaries.
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 its Subsidiaries so to do, except that (i) the Borrower or any of
its Subsidiaries may lease any transmitting tower site which was the subject of
a Disposition, and (ii) prior to the Existing Arch Senior Note Termination Date,
the Borrower or any of its Subsidiaries may enter into any such sale and
leaseback transaction with Arch or any of its other Subsidiaries.
8.13. ISSUANCE OF CAPITAL STOCK.
Issue any additional Stock or other equity or ownership interest, or
permit any of its Subsidiaries so to do, except that the Borrower or any of its
Subsidiaries may issue additional common Stock to its immediate parent provided
that simultaneously therewith such Stock shall be delivered to the Appropriate
Party, with appropriate stock powers.
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8.14. FISCAL YEAR.
Change its fiscal year from that in effect on the Second Restatement
Date or permit any of its 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 Existing Parent Intercompany Notes, the Existing
Intercompany Notes, the Management Agreement, any Non-Competition Agreement, the
Subordinated Indenture, the Subordinated Debentures, the Parent Discount Notes
Indenture, the Parent Discount Notes, the Existing Arch Senior Notes, the
Existing Arch Indentures, the Arch 12 3/4% Senior Notes, the Arch 12 3/4%
Indenture, the Replacement Notes, the ReplacEMENt Indenture, the Tax Sharing
Agreement or the Subordination Agreement, 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.
Become a party to any transaction with an Affiliate or permit any of
its 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.
8.17. ERISA.
Adopt or become obligated to contribute to any Plan or Multiemployer
Plan, or permit any of its Subsidiaries or Commonly Controlled Entity so to do.
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 2.7; or
(d) The failure of any Loan Party to observe or perform any
covenant or agreement contained in Section 7.2(f), 7.3, 7.11, 7.12, 7.13, 7.14,
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7.15, 7.16, 7.17, 7.18, 7.19 or 7.20, Section 8 or Section 11.1 of this
Agreement or Section 2 of the Subsidiary Guaranty, the Parent Guaranty or the
Arch Guaranty; or
(e) The failure of any Loan Party to observe or perform any other
term, covenant, or agreement contained in any Loan Document and such failure
shall have continued unremedied for a period of 30 days from the first date when
the Parent, Arch or the Borrower shall have obtained knowledge thereof; or
(f) Any representation or warranty of any Loan Party (or of any
officer of the Borrower or Arch 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 the Parent or any of its Subsidiaries
(other than Benbow Investments), whether as principal, guarantor, surety or
other obligor, for the payment of any Indebtedness or operating leases
(including any mandatory redemption of the Existing Arch Senior Notes, the Arch
12 3/4% Senior Notes or tHE Replacement Notes) in an aggregate amount greater
than $10,000,000 (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 its Subsidiaries shall (i) suspend or
discontinue its business, 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 petition or proceeding
referred to above 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 or any of its Subsidiaries; 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 its 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 its 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
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(or other similar official) of the Parent or any of its Subsidiaries or of any
substantial part of the Property thereof, which decree or order has continued
unstayed and in effect for a period of 60 days, provided that such 60 day period
shall not apply (and an immediate Event of Default shall occur) if such decree
or order has been submitted by, or consented to, by the Parent or any of its
Subsidiaries, or (iv) ordering the winding up or liquidation of the affairs of
the Parent or any of its Subsidiaries (other than an order requested by the
Parent or any of its Subsidiaries in respect of a transaction permitted by
Section 7.3); or
(j) Any judgment or decree against the Parent or any of its
Subsidiaries aggregating in excess of $1,000,000 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
the Tranche A and Tranche C Credit Agreement; 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 Arch's or any of its Subsidiaries' 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 a Change of Control; or
(o) There shall occur a Default or Event of Default (under and as
defined in the Parent Discount Notes Indenture, the Subordinated Note Indenture,
the Existing Arch Indentures, the Arch 12 3/4% Indenture or any Replacement
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 hereby further expressly
waives 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.
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In the event that the Commitments shall have terminated or the Loans,
all accrued and unpaid interest thereon and all other amounts owing under the
Loan Documents shall have become due and payable pursuant to the provisions of
this Section 9, any funds received by any Credit Party from or on behalf of the
Borrower (except funds received by any Lender as a result of a purchase from any
other Lender pursuant to Section 2.9(c)) shall be remitted to, and applied by,
the Administrative Agent in the following manner and order:
(i) first, to reimburse the Administrative Agent and the Lenders,
in that order, for any expenses due from the Borrower pursuant to the
provisions of Section 11.4,
(ii) second, to the payment of the Fees, pro rata according to
the Fees due and owing to the Credit Parties,
(iii) third, to the payment, pro rata according to the Total
Percentage of each Lender, of interest due on the Loans and the
Reimbursement Obligations,
(iii) fourth to the payment of any other fees, expenses or other
amounts (other than the principal of and interest on the Loans) payable by
the Loan Parties to the Credit Parties under the Loan Documents,
(v) fifth, to the payment to the Lenders of, and on a pro rata
basis in accordance with, the unpaid principal amount of the Loans and each
amount then due and payable under each Secured Hedging Agreement between
the Borrower and a Lender, and
(vi) sixth, any remaining funds shall be paid to the Borrower or
as a court of competent jurisdiction shall direct.
10. THE ADMINISTRATIVE AGENT
10.1. APPOINTMENT.
Each of the Lenders hereby irrevocably appoints BNY as the
Administrative Agent and authorizes the Administrative Agent to take such
actions on its behalf and to exercise such powers as are delegated to it by the
terms hereof, together with such actions and powers as are reasonably incidental
thereto.
10.2. INDIVIDUAL CAPACITY.
The Person serving as the Administrative Agent hereunder shall have
the same rights and powers in its capacity as a Lender as any other Lender and
may exercise the same as though it were not the Administrative Agent, and such
Person and its Affiliates may accept deposits from, lend money to and generally
engage in any kind of business with the Borrower, any Subsidiary, or any
Affiliate of the Borrower as if it were not the Administrative Agent hereunder.
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10.3. EXCULPATORY PROVISIONS.
The Administrative Agent shall not have any duties or obligations
except those expressly set forth herein. Without limiting the generality of the
foregoing, (1) the Administrative Agent shall not be subject to any fiduciary or
other implied duties, regardless of whether a Default has occurred and is
continuing, (2) the Administrative Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby that the Administrative Agent is
required to exercise in writing by the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 11.1), and (3) except as expressly set forth herein, the
Administrative Agent shall not have any duty to disclose, and shall not be
liable for the failure to disclose, any information relating to the Borrower or
any Subsidiary that is communicated to or obtained by the bank serving as
Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 11.1) or in the absence of its own gross negligence or
willful misconduct. The Administrative Agent shall be deemed not to have
knowledge of any Default unless and until written notice thereof is given to the
Administrative Agent by the Borrower or another Credit Party and the
Administrative Agent shall not be responsible for or have any duty to ascertain
or inquire into (i) any statement, warranty or representation made in or in
connection with this Agreement, (ii) the contents of any certificate, report or
other document delivered hereunder or in connection herewith, (iii) the
performance or observance of any of the covenants, agreements or other terms or
conditions set forth herein, (iv) the validity, enforceability, effectiveness or
genuineness of this Agreement or any other agreements, instrument or document,
or (v) the satisfaction of any condition set forth in Sections 5 or 6 or
elsewhere herein, other than to confirm receipt of items expressly required to
be delivered to the Administrative Agent.
10.4. RELIANCE BY ADMINISTRATIVE AGENT.
The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel to the Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.
10.5. DELEGATION.
The Administrative Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub- agents
appointed by the Administrative Agent, provided that no such delegation shall
serve as a release of the Administrative Agent or waiver by the Borrower of any
rights hereunder. The Administrative Agent and any such sub-agent may perform
any and all its duties and exercise its rights and powers through their
respective Related Parties. The exculpatory provisions of this Section 10 shall
apply to any such sub-agent and to the Related Parties of the Administrative
Agent and any such sub-agent, and shall apply to their respective activities in
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connection with the syndication of the credit facilities provided for herein as
well as activities as Administrative Agent.
10.6. RESIGNATION; SUCCESSOR ADMINISTRATIVE AGENT.
Subject to the appointment and acceptance of a successor
Administrative Agent as provided in this Section, the Administrative Agent may
resign at any time by notifying the Lenders and the Borrower. Upon any such
resignation, the Required Lenders shall have the right, with the written consent
of the Borrower (such consent not to be unreasonably withheld and not to be
required during the continuance of an Event of Default) to appoint a successor.
If no successor shall have been so appointed by the Required Lenders and shall
have accepted such appointment within 30 days after the retiring Administrative
Agent gives notice of its resignation, then the retiring Administrative Agent
may, on behalf of the Lenders, appoint a successor Administrative Agent which
shall be a bank with an office in New York, New York, or an Affiliate of any
such bank. Upon the acceptance of its appointment as Administrative Agent
hereunder by a successor, such successor shall succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its duties
and obligations hereunder. The fees payable by the Borrower to a successor
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Borrower and such successor. After the
Administrative Agent's resignation hereunder, the provisions of this Section 10
and Section 11.4 shall continue in effect for the benefit of such retiring
Administrative Agent, its sub-agents and their respective Related Parties in
respect of any actions taken or permitted to be taken by any of them while it
was acting as Administrative Agent.
10.7. NON-RELIANCE ON OTHER CREDIT PARTIES.
Each Credit Party acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Credit Party and based on
such documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Credit Party also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Credit Party and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any related agreement or any document furnished hereunder or thereunder.
10.8. COLLATERAL AGENT, MANAGING AGENTS, SYNDICATION AGENT AND
DOCUMENTATION AGENT.
The Collateral Agent, in its capacity as Collateral Agent, shall have
only the duties and obligations expressly set forth in the Loan Documents to
which it is a party. The Managing Agents, Syndication Agent and Documentation
Agent shall have no duties or obligations under the Loan Documents in their
respective capacities as Managing Agents, Syndication Agent and Documentation
Agent. The Collateral Agent, Managing Agents, Syndication Agent and
Documentation Agent shall be entitled to the same protections, indemnifies and
rights, and subject to the same standards with respect to their actions,
inactions and duties, as the Administrative Agent.
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11. MISCELLANEOUS
11.1. AMENDMENTS AND WAIVERS.
(a) No failure to exercise and no delay in exercising, on the part of
any Credit Party, 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. No waiver of any provision of any Loan Document or consent to
any departure by any Loan Party therefrom shall in any event be effective unless
the same shall be permitted by this Section, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. Without limiting the generality of the foregoing, the making of a Loan
shall not be construed as a waiver of any Default, regardless of whether any
Credit Party may have had notice or knowledge of such Default at the time.
(b) Notwithstanding anything to the contrary contained in any Loan
Document, with the written consent of the Required Lenders, the Administrative
Agent and the appropriate parties to the Loan Documents (other than the other
Credit Parties) 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 other Credit Parties, may
execute and deliver to any such parties a written instrument waiving or
consenting to the departure from, on such terms and conditions as the
Administrative Agent may specify in such instrument, any of the requirements of
the Loan Documents or any Default and its consequences; provided, however, that
no such amendment, supplement, modification, waiver or consent shall:
(i) increase the Tranche B Commitment of any Tranche B Lender,
without such Lender's consent;
(ii) unless agreed to by each Credit Party affected thereby, (A)
reduce the principal amount of any Extension of Credit, or reduce the rate
of interest thereon, or reduce any fees or other obligations payable under
the Loan Documents, or (B) extend any date (including any Maturity Date)
fixed for the payment of any principal of or interest on any Extension of
Credit, any fees, or any other obligation payable under the Loan Documents;
(iii) unless agreed to by all of the Tranche A Lenders, Tranche B
Lenders and Tranche C Lenders: (A) increase the Aggregate Tranche B
Commitments, (B) change this Section 11.1, the definition of "Minority
Lenders" or "Required Lenders" or any other provision hereof specifying the
number or percentage of Lenders required to waive, amend or modify any
rights hereunder or make any determination or grant any consent hereunder,
(C) change Section 2.9 in a manner that would alter the pro rata sharing of
payments required thereby, (D) consent to any assignment or delegation by
any Loan Party of any of its rights or obligations under any Loan Document,
(E) release any Subsidiary Guarantor from its obligations under the
Subsidiary Guaranty, Arch from its obligations under Arch Guaranty or the
Parent from its obligations under the Parent Guaranty (except as may be
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expressly permitted thereunder or hereunder), or (F) release any of the
Collateral from the Liens of the Collateral Documents, except as may be
expressly permitted thereunder or hereunder,
(iv) without the consent of Lenders of each Class having not less
than 66-2/3% of the (A) Aggregate Tranche A Commitments in the case of
Tranche A Lenders, (B) Aggregate Tranche B Commitments (or after the
Tranche B Conversion Date, the Aggregate Tranche B Exposure) in the case of
Tranche B Lenders and (C) the outstanding principal amount of the Tranche C
Loans in the case of Tranche C Lenders, no such amendment, supplement,
modification, waiver or consent shall change the provisions of Section 2.4
relating to the allocation of prepayments to the Tranche B Loans and the
reduction of the Aggregate Tranche B Commitments, and
(v) unless agreed to by the Administrative Agent or the
Collateral Agent amend, modify or otherwise affect the rights or duties of
the Administrative Agent or the Collateral Agent, respectively, under the
Loan Documents.
Any such amendment, supplement, modification, waiver or consent shall
apply equally to each Credit Party and shall be binding upon each Credit Party
and each Loan Party to the applicable Loan Document, and upon all future holders
of the Notes. In the case of any waiver, the Credit Parties and each Loan Party
party to the applicable Loan Document shall be restored to their former position
and rights hereunder and under the outstanding Notes and other Loan Documents to
the extent provided for in such waiver, and any Default waived shall not extend
to any subsequent or other Default, or impair any right consequent thereon.
11.2. NOTICES.
All notices, requests and demands to or upon the respective parties to
the Loan Documents to be effective shall be in writing and, unless otherwise
expressly provided therein, shall be deemed to have been duly given or made when
delivered by hand, one Business Day after having been sent by overnight courier
service, or when deposited in the mail, first-class postage prepaid, or, in the
case of notice by facsimile, when sent, to the last address (including telephone
and facsimile numbers) for such party specified by such party in a written
notice delivered to the Administrative Agent and the Borrower or, if no such
written notice was so delivered, as follows:
(a) in the case of any Loan Party, to such Loan Party c/o Arch
Paging, Inc., 1800 West Park Drive, Suite 250, Westborough, Massachusetts
01581, Attention: J. Roy Pottle, Chief Financial Officer, Telephone: (508)
870-6703, Facsimile: (508) 870-6076,
(b) in the case of the Administrative Agent, to The Bank of New
York, Agency Function Administration, One Wall Street, 18th Floor, New
York, NY 10286; Attention: Michael Pizarro, Telephone: (212) 635-4697; with
a copy to: The Bank of New York, One Wall Street, 16th Floor, New York, NY
10286, Attention: Geoffrey C. Brooks, Telephone: (212) 635-8475, Facsimile
(212) 635-8593; and
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(c) in the case of a Lender, at its address set forth on its
signature page hereto or, in the Assignment or Acceptance Agreement or
other instrument pursuant to which it became a Lender;
provided, however, that any notice, request or demand by the Borrower pursuant
to Sections 2.2, 2.3, 2.4 or 3.3 shall not be effective until received. Any
party to a Loan Document may rely on signatures of the parties thereto which are
transmitted by facsimile or other electronic means as fully as if originally
signed.
11.3. SURVIVAL.
All covenants, agreements, representations and warranties made by the
Borrower herein and in the certificates or other instruments delivered in
connection with or pursuant to this Agreement shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of this Agreement and the making of any Extensions of Credit,
regardless of any investigation made by any such other party or on its behalf
and notwithstanding that the Administrative Agent or any Lender may have had
notice or knowledge of any Default or incorrect representation or warranty at
the time any credit is extended hereunder.
11.4. EXPENSES; INDEMNITY.
(a) The Borrower agrees, on demand therefor and whether any Extension
of Credit is made (i) to pay or reimburse the Administrative Agent and its
Related Parties for all reasonable out-of-pocket expenses incurred thereby,
including the reasonable fees, charges and disbursements of counsel, in
connection with the development, preparation, execution, syndication and
administration of, the Loan Documents (including any amendment, supplement or
other modification thereto (whether or not executed or effective)), any
documents prepared in connection therewith and the consummation of the
transactions contemplated thereby and (ii) to pay or reimburse each Credit Party
for all of its costs and expenses, including reasonable fees and disbursements
of counsel, incurred in connection with (A) the protection or enforcement of its
rights under the Loan Documents, including any related collection proceedings
and any negotiation, restructuring or "work-out", and (B) the enforcement of
this Section.
(b) The Borrower shall, on demand therefor, indemnify each Credit
Party and each of their respective Related Parties (each, an "INDEMNIFIED
PERSON") against, and hold each Indemnified Person harmless from, any and all
losses, claims, damages, penalties, liabilities and related expenses, including
the fees, charges and disbursements of any counsel, incurred by or asserted
against any Indemnified Person in connection with or in any way arising out of
any Loan Document, any other Transaction Document or any Transaction, including
as a result of (i) any breach by the Borrower of the terms of any Loan Document,
the use of proceeds of any Extension of Credit or any action or failure to act
on the part of the Borrower, (ii) the consummation or proposed consummation of
the Transactions or any other transactions contemplated hereby, (iii) any
Extension of Credit or the use of the proceeds therefrom, (iv) any actual or
alleged presence or release of Hazardous Substance on or from any property owned
or operated by the Borrower or any of its Subsidiaries, or any liability in
respect of any Environmental Law related in any way to the Borrower or any of
its Subsidiaries, (v) any action or failure to act on the part of the Borrower
or (vi) any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
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theory and regardless of whether any Indemnified Person is a party thereto
(collectively, the "INDEMNIFIED LIABILITIES"), provided that such indemnity
shall not, as to any Indemnified Person, be available to the extent that such
losses, claims, damages, liabilities or related expenses resulted from the gross
negligence or wilful misconduct of such Indemnified Person.
(c) To the extent that the Borrower fails to pay any amount required
to be paid by it to the Administrative Agent or any of its Affiliates under
subsections (a) or (b) of this Section, each Lender severally agrees, on demand
therefor, to pay to the Administrative Agent such Lender's Total Percentage of
such amount (determined as of the time that the applicable unreimbursed expense
or Indemnified Liability is sought).
11.5. SUCCESSORS AND ASSIGNS
(a) The Loan Documents shall be binding upon and inure to the benefit
of each of the parties thereto, and their respective successors and assigns,
except that no Loan Party may assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Credit Party
(and any such attempted assignment or transfer without such consent shall be
null and void).
(b) Each Lender may assign all or a portion of its rights and
obligations under the Loan Documents to (i) any Subsidiary or Affiliate of such
Lender, (ii) any other Lender, or (iii) with the consent of the Borrower and the
Administrative Agent (which consents shall not be unreasonably withheld or
delayed and, in the case of the Borrower's consent, shall not be required during
the continuance of an Event of Default), to any other Eligible Institution,
provided that:
(A) except in the case of an assignment to a Lender or an
Affiliate of a Lender or an assignment of the entire remaining amount of
the assigning Lender's rights and obligations under the Loan Documents, the
amount of the assigning Lender's Tranche B Commitment (or after the Tranche
B Conversion Date, the outstanding principal amount of such Lender's
Tranche B Loans) subject to such assignment, when added to the amount of
the assigning Lender's Tranche A Commitment and Tranche C Loan subject to a
simultaneous assignment made by such assigning Lender to the same Eligible
Institution under the Tranche A and Tranche C Credit Agreement (determined
as of the date the Assignment and Acceptance Agreement with respect to such
assignment is delivered to the Administrative Agent) shall not be less than
$5,000,000, and
(B) for each assignment, the assignor and such assignee shall
deliver to the Administrative Agent three copies of an Assignment and
Acceptance Agreement executed by each of them, along with an assignment fee
in the sum of $3,500 for the account of the Administrative Agent and, if
the assignee is not then a Lender and is a Foreign Credit Party, the
documents required by Section 3.6(c).
Upon receipt of such number of executed copies of each such Assignment and
Acceptance Agreement together with the assignment fee therefor and the consents
required to such assignment, if required, the Administrative Agent shall record
the same and execute not less than two copies of such Assignment and Acceptance
Agreement in the appropriate place, deliver one such copy to the assignor and
one such copy to the assignee, and deliver one photocopy thereof, as executed,
to the Borrower. From and after the Assignment Effective Date specified in, and
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as defined in, such Assignment and Acceptance Agreement, the assignee thereunder
shall, unless already a Lender, become a party hereto and shall, for all
purposes of the Loan Documents, be deemed a "Lender" and, to the extent provided
in such Assignment and Acceptance Agreement, the assignor Lender thereunder
shall be released from its obligations under this Agreement and the other Loan
Documents. The Borrower agrees that, if requested, in connection with each such
assignment, it shall at its own cost and expense execute and deliver to the
Administrative Agent or such assignee a Note, each payable to the order of such
assignee and dated the Second Restatement Date. The Administrative Agent shall
be entitled to rely upon the representations and warranties made by the assignee
under each Assignment and Acceptance Agreement.
(c) Each Lender may grant participations in all or any part of its
rights and obligations under the Loan Documents to one or more Eligible
Institutions, provided that (i) such Lender's obligations under this Agreement
and the other Loan Documents shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties to this Agreement and the other
Loan Documents for the performance of such obligations, (iii) the Borrower and
the Credit Parties shall continue to deal solely and directly with such Lender
in connection with such Lender's rights and obligations under the Loan
Documents, (iv) the Borrower 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 would have been obligated to pay to such Lender in respect of
such interest had such Lender not sold such participation, and (v) the voting
rights of any holder of any participation shall be limited to decisions that in
accordance with Section 11.1 require the consent of all of the Lenders.
(d) Subject to subsection (e) below, any Lender may at any time assign
all or any portion of its rights under any Loan Document to any Federal Reserve
Bank.
(e) Except to the extent of any assignment pursuant to subsection (b)
above, no Lender shall be relieved of any of its obligations under the Loan
Documents as a result of any assignment of or granting of participations in, all
or any part of its rights and obligations under the Loan Documents.
11.6. COUNTERPARTS; INTEGRATION.
Each Loan Document (other than the Notes) may be executed by one or
more of the parties thereto on any number of separate counterparts and all of
said counterparts taken together shall be deemed to constitute one and the same
document. It shall not be necessary in making proof of any Loan Document to
produce or account for more than one counterpart signed by the party to be
charged. Delivery of an executed counterpart of a signature page of any Loan
Document by facsimile shall be effective as delivery of a manually executed
counterpart of such Loan Document. The Loan Documents and any separate letter
agreements between the Borrower and a Credit Party with respect to fees embody
the entire agreement and understanding among the Loan Parties and the Credit
Parties with respect to the subject matter thereof and supersede all prior
agreements and understandings among the Loan Parties and the Credit Parties with
respect to the subject matter thereof.
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<PAGE>
11.7. 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 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.
11.8. 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 LAW OF THE STATE OF NEW YORK.
11.9. JURISDICTION; SERVICE OF PROCESS.
Each party to a Loan Document hereby irrevocably submits to the
nonexclusive 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 party to a Loan Document hereby irrevocably waives,
to the fullest extent permitted or not prohibited 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 Loan Party 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 and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that a Credit Party may otherwise have to bring
any action or proceeding relating to Loan Documents against the Borrower or its
properties in the courts of any jurisdiction. Each party to a Loan Document
hereby irrevocably consents to service of process in the manner provided for
notices in Section 11.2. Nothing in this Agreement will affect the right of any
party to a Loan Document to serve process in any other manner permitted by law.
11.10. WAIVER OF TRIAL BY JURY.
EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION.
-85-
<PAGE>
11.11. SAVINGS CLAUSE.
This Agreement is intended solely as an amendment of, and
contemporaneous restatement of, the terms and conditions of the Existing ACE
Credit Agreement and the Notes delivered pursuant hereto are intended to amend
and restate the notes issued under the Existing ACE 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 ACE Credit Agreement. The
Existing Borrower Security Agreement and the Existing Subsidiary Guaranty, to
the extent provided in the Borrower Pledge Agreement (Bank), the Subsidiary
Guaranty and the Restricted Subsidiary Security Agreement (Bank) remain in full
force and effect and continue to secure the obligations of the Loan Parties as
set forth therein.
11.12. CONFIDENTIALITY.
Each of the Lenders and the Administrative Agent agrees (on behalf of
itself and each of its affiliates, directors, officers, employees and
representatives) to use reasonable precautions to keep confidential, in
accordance with their customary procedures for handling confidential information
of the same nature, all non-public information supplied by Arch, the Borrower or
any of their respective Subsidiaries pursuant to this Agreement which (a) is
identified by such Person as being confidential at the time the same is
delivered to such Lender or the Administrative Agent, or (b) constitutes any
financial statement, financial projections or forecasts, budget, compliance
certificate, audit report, management letter or accountants' certification
delivered hereunder (collectively, the "CONFIDENTIAL INFORMATION"), provided,
however, that nothing herein shall limit the disclosure of any Confidential
Information (i) to the extent required by statute, rule, regulation or judicial
process, (ii) on a confidential basis, to counsel to any of the Lenders or the
Administrative Agent, (iii) to bank examiners, auditors or accountants, and any
analogous counterpart thereof, (iv) to the Administrative Agent or the Lenders,
(v) in connection with any litigation to which any one or more of the Lenders or
the Administrative Agent is a party, provided that if practicable to do so under
the circumstances, Arch or the Borrower, as the case may be, is given prior
notice of, and an opportunity to contest, the production of such Confidential
Information (which such notice and opportunity shall be reasonable under the
circumstances), (vi) to any assignee or participant (or prospective assignee or
participant) so long as such assignee or participant (or prospective assignee or
participant) agrees in writing to keep such Confidential Information
confidential on substantially the same basis as set forth in this Section, or
(vii) to affiliates of the Administrative Agent or each Lender. Notwithstanding
the provisions of clause (vii) above, neither the Administrative Agent nor any
Lender shall disclose any such Confidential Information to any of its respective
affiliates, directors, officers, employees or representatives except to the
extent that it or they have a need to know such Confidential Information in
connection with the structuring or administration of the Loans or any Loan
Document, any assignment or participation thereof or activities incidental
thereto.
11.13. RELEASE OF BENBOW ASSETS.
By executing this Agreement, each of the Credit Parties hereby
authorizes BNY as the Administrative Agent under (i) the Existing Subsidiary
Guaranty to release the Liens granted by Westlink thereunder in the Benbow
Assets, (ii) the Existing Parent Security Agreement to release the Liens granted
by the Parent thereunder in the Benbow Assets, and (iii) the Existing Borrower
Security Agreement the Liens granted by ACE in its Stock in Westlink II (if
any). Nothing herein shall affect the right of the Credit Parties to require
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<PAGE>
Benbow Investments to become a Subsidiary Guarantor and a party to the
Unrestricted Subsidiary Security Agreement (Bank) on the Existing Arch Senior
Note Termination Date.
-87-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Second Amended
and Restated Credit Agreement (Tranche B Facility) to be duly executed and
delivered by their proper and duly authorized officers as of the day and year
first above written.
ARCH PAGING, INC.
BY:
NAME:
TITLE:
<PAGE>
ARCH PAGING, INC.
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
(TRANCHE B FACILITY)
THE BANK OF NEW YORK,
INDIVIDUALLY, AS MANAGING AGENT AND AS
ADMINISTRATIVE AGENT
BY:
NAME: GEOFFREY C. BROOKS
TITLE: VICE PRESIDENT
TRANCHE B COMMITMENT: $8,750,000.00
ADDRESS FOR NOTICES
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
FACSIMILE: (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
TELEPHONE: (212) 635-8475
TELECOPY: (212) 635-8593
OR (212) 635-8679
<PAGE>
ARCH PAGING, INC.
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
(TRANCHE B FACILITY)
TORONTO DOMINION (TEXAS), INC.,
INDIVIDUALLY, AS MANAGING AGENT AND
AS SYNDICATION AGENT
BY:
NAME:
TITLE:
TRANCHE B COMMITMENT: $9,375,000.00
ADDRESS FOR NOTICES
TORONTO-DOMINION (TEXAS), INC.
COMMUNICATIONS FINANCE
31 WEST 52ND STREET
21ST FLOOR
NEW YORK, NEW YORK 10019-6101
ATTENTION: MARY MEDUSKI
TELEPHONE: (212) 827-7727
FACSIMILE: (212) 262-1928
WITH A COPY TO:
TORONTO-DOMINION (TEXAS), INC.
909 FANNIN, SUITE 1700
HOUSTON, TEXAS 77010
ATTENTION: MS. DEBBIE GREENE
TELEPHONE: (713) 653-8245
FACSIMILE: (713) 951-9921
<PAGE>
ARCH PAGING, INC.
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
(TRANCHE B FACILITY)
ROYAL BANK OF CANADA,
INDIVIDUALLY, AS MANAGING AGENT AND AS
DOCUMENTATION AGENT
BY:
NAME:
TITLE:
TRANCHE B COMMITMENT: $12,500,000.00
ADDRESS FOR NOTICES
ROYAL BANK OF CANADA
FINANCIAL SQUARE
24TH FLOOR
NEW YORK, NEW YORK 10005-3531
ATTENTION: THOMAS BYRNE
TELEPHONE: (212) 428-6550
FACSIMILE: (212) 428-6460
<PAGE>
ARCH PAGING, INC.
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
(TRANCHE B FACILITY)
FIRST UNION NATIONAL BANK
BY:
NAME:
TITLE:
TRANCHE B COMMITMENT: $8,002,997.67
ADDRESS FOR NOTICES
FIRST UNION NATIONAL BANK
ONE FIRST UNION CENTER
CHARLOTTE, NORTH CAROLINA 28288-0735
ATTENTION: MARK HEDRICK
TELEPHONE: (704) 383-0297
FACSIMILE: (704) 374-4092
<PAGE>
ARCH PAGING, INC.
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
(TRANCHE B FACILITY)
VAN KAMPEN AMERICAN CAPITAL PRIME
RATE INCOME TRUST
BY:
NAME:
TITLE:
TRANCHE B COMMITMENT: $9,625,000.00
ADDRESS FOR NOTICES
VAN KAMPEN MERRITT
ONE PARKVIEW PLAZA
OAKBROOK TERRACE, ILLINOIS 60181
ATTENTION: JEFFREY MAILLET
TELEPHONE: (630) 684-6488
FACSIMILE: (630) 684-6740
<PAGE>
ARCH PAGING, INC.
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
(TRANCHE B FACILITY)
VAN KAMPEN CLO I, LIMITED
BY: VAN KAMPEN AMERICAN CAPITAL
MANAGEMENT, INC., AS COLLATERAL MANAGER
BY:
NAME:
TITLE:
TRANCHE B COMMITMENT: $5,375,000.00
ADDRESS FOR NOTICES
VAN KAMPEN MERRITT
ONE PARKVIEW PLAZA
OAKBROOK TERRACE, ILLINOIS 60181
ATTENTION: JEFFREY MAILLET
TELEPHONE: (630) 684-6488
FACSIMILE: (630) 684-6740
<PAGE>
ARCH PAGING, INC.
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
(TRANCHE B FACILITY)
PNC BANK, NATIONAL ASSOCIATION
BY:
NAME:
TITLE:
TRANCHE B COMMITMENT: $6,022,637.23
ADDRESS FOR NOTICES
PNC BANK, NATIONAL ASSOCIATION
1600 MARKET STREET
21ST FLOOR
PHILADELPHIA, PENNSYLVANIA 19103
ATTENTION: JEFFREY HAUSER
TELEPHONE: (215) 585-6466
FACSIMILE: (215) 585-6680
<PAGE>
ARCH PAGING, INC.
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
(TRANCHE B FACILITY)
FLEET NATIONAL BANK
BY:
NAME:
TITLE:
TRANCHE B COMMITMENT: $6,000,368.19
ADDRESS FOR NOTICES
FLEET NATIONAL BANK
75 STATE STREET
MAIL CODE MA-B0-F10C
BOSTON, MASSACHUSETTS 02109
ATTENTION: JEFFREY MCLAUGHLIN
TELEPHONE: (617) 346-4373
FACSIMILE: (617) 346-4345
<PAGE>
ARCH PAGING, INC.
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
(TRANCHE B FACILITY)
BANKBOSTON, N.A.
BY:
NAME:
TITLE:
TRANCHE B COMMITMENT: $4,980,826.88
ADDRESS FOR NOTICES
BANKBOSTON, N.A.
100 FEDERAL STREET
BOSTON, MASSACHUSETTS 02110
ATTENTION: MICHAEL ASHTON
TELEPHONE: (617) 434-5427
FACSIMILE: (617) 434-3401
<PAGE>
ARCH PAGING, INC.
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
(TRANCHE B FACILITY)
GENERAL ELECTRIC CAPITAL CORPORATION
BY:
NAME:
TITLE:
TRANCHE B COMMITMENT: $4,617,114.04
ADDRESS FOR NOTICES
GENERAL ELECTRIC CAPITAL CORPORATION
120 LONG RIDGE ROAD
STAMFORD, CONNECTICUT 06927
ATTENTION: BRIAN JACK
TELEPHONE: (203) 357-6859
FACSIMILE: (203) 357-4329
<PAGE>
ARCH PAGING, INC.
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
(TRANCHE B FACILITY)
SUNTRUST BANK, CENTRAL FLORIDA, N.A.
BY:
NAME:
TITLE:
TRANCHE B COMMITMENT: $3,292,927.49
ADDRESS FOR NOTICES
SUNTRUST BANK CENTRAL FLORIDA, N.A.
200 SOUTH ORANGE AVENUE, 4TH FLOOR
ORLANDO, FLORIDA 32801
ATTENTION: CHRIS AGUILAR
TELEPHONE: (407) 237-5210
FACSIMILE: (407) 237-5126
<PAGE>
ARCH PAGING, INC.
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
(TRANCHE B FACILITY)
SOCIETE GENERALE
BY:
NAME:
TITLE:
TRANCHE B COMMITMENT: $4,583,128.50
ADDRESS FOR NOTICES
SOCIETE GENERALE
MEDIA & COMMUNICATIONS
1221 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10020
ATTENTION: MARK VIGIL
TELEPHONE: (212) 278-7350
FACSIMILE: (212) 278-6240
<PAGE>
ARCH PAGING, INC.
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
(TRANCHE B FACILITY)
BEAR STEARNS INVESTMENT PRODUCTS INC.
BY:
NAME:
TITLE:
TRANCHE B COMMITMENT: $4,375,000.00
ADDRESS FOR NOTICES
BEAR, STEARNS & CO. INC.
245 PARK AVENUE
4TH FLOOR
NEW YORK, NEW YORK 10167
ATTENTION: GLORIA DOMBROWSKI
TELEPHONE: (212) 272-6043
FACSIMILE: (212) 272-4844
<PAGE>
ARCH PAGING, INC.
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
(TRANCHE B FACILITY)
BARCLAYS BANK PLC
BY:
NAME:
TITLE:
TRANCHE B COMMITMENT: $12,500,000.00
ADDRESS FOR NOTICES
BARCLAYS BANK PLC
388 MARKET STREET
SUITE 1700
SAN FRANCISCO, CALIFORNIA 94111
ATTENTION: DANIELE IACOVONE
TELEPHONE: (415) 765-4737
FACSIMILE: (415) 765-4760
EXHIBIT 99.3
ASSET PURCHASE AND SALE AGREEMENT
BETWEEN
CERTAIN OF THE SUBSIDIARIES
OF
ARCH COMMUNICATIONS GROUP, INC.
AS SELLERS
AND
OMNIAMERICA, INC.
AS BUYER
APRIL 10, 1998
<PAGE>
TABLE OF CONTENTS
1. DEFINITIONS______________________________________________________________1
2. BASIC TRANSACTION________________________________________________________9
3. REPRESENTATIONS AND WARRANTIES OF THE SELLERS____________________________13
4. REPRESENTATIONS AND WARRANTIES OF THE BUYER______________________________19
5. PRE-CLOSING COVENANTS____________________________________________________19
6. POST-CLOSING COVENANTS___________________________________________________22
7. CONDITIONS TO OBLIGATION TO CLOSE________________________________________23
8. INDEMNIFICATION__________________________________________________________28
9. TERMINATION______________________________________________________________31
10. MISCELLANEOUS___________________________________________________________31
Exhibit A List of Leased Sites
Exhibit B List of Owned Sites
Exhibit C Defects as of the Date of Agreement
Exhibit D Master Tower Space Lease
Exhibit E Site Lease
Exhibit E-1 Sites where the relevant Seller will enter a Site Lease with the
Buyer
Exhibit F Site Sublease
Exhibit F-1 Sites where the relevant Seller will enter a Site Sublease with
the Buyer
Exhibit G Allocation Schedule
Exhibit H Financial Information
Exhibit I Schedule of Repurchase Options
Exhibit J Form of Opinion of Counsel to the Sellers
Exhibit K Form of Noncompetition Agreement
Exhibit L Form of Opinion of Counsel to the Buyer
Disclosure Schedule
<PAGE>
ASSET PURCHASE AND SALE AGREEMENT
Agreement entered into as of April 10, 1998, by and between OmniAmerica,
Inc., a Delaware corporation (the "Buyer"), and certain wholly-owned
subsidiaries of Arch Communications Group, Inc., a Delaware corporation ("ACG")
which own or lease or manage the communications facility sites included in the
Acquired Assets, which subsidiaries are identified on the signature pages of
this Agreement. Such subsidiaries are referred to collectively herein as the
"Sellers", and each individually as a "Seller". The Buyer and the Sellers are
referred to collectively herein as the "Parties".
R E C I T A L S
A. The Sellers operate communications facilities consisting of
communications towers or roof-mounted antenna mounts and tower supporting
systems, electric power facilities, equipment shelter buildings and related
equipment and facilities.
B. The Sellers (i) utilize their communications facilities to operate
transmitters/antennas in connection with their wireless messaging businesses and
(ii) lease space on the communications facilities to third parties which have a
need for transmitters/antenna locations.
C. The Sellers are willing to sell and assign their interests in the
communications facilities identified in this Agreement to the Buyer, and the
Buyer is willing to pay for, and acquire such facilities, upon the terms and
conditions herein set forth.
Now, therefore, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties agree as follows.
1. DEFINITIONS.
"ACG" has the meaning set forth in the preamble above.
"ACQUIRED ASSETS" means all of the right, title, and interest that the
Sellers possess in and to the following assets:
(i) the communications Sites leased by the Sellers pursuant to ground
or rooftop leases, held by Sellers pursuant to easements or (with respect to
three Sites) which will be leased by a Seller to the Buyer, all of which are
listed on Exhibit A; except for Sites identified in Exhibit A as Managed Sites,
at each Site on Exhibit A, the relevant Seller leases the land (or rooftop
space), or holds an easement for the land and owns the communications tower and
equipment necessary to operate the tower, or (with respect to three Sites) the
relevant Seller owns the fee interest. At "Managed Sites" the relevant Sellers
lease the land and/or lease or manage the communications tower and related
equipment. All Sites listed on Exhibit A are referred to herein as the "Leased
Sites".
<PAGE>
(ii) the communications Sites listed on Exhibit B, which are owned by
the Sellers; such Sites are referred to herein as the "Owned Sites".
For each Site "Acquired Assets" includes:
(i) all communications towers, equipment shelter buildings, guy wires
and other support structures related to a tower located at the Site, electrical
wiring from the local utility connection point to such Site, electric meters
owned by the Seller at the Site which measure electricity either to the tower
only or jointly to the tower, and other equipment, fixtures and fittings owned
by a Seller related to the operation of a Site; provided that at Managed Sites,
such equipment is leased and not owned;
(ii) emergency generators owned by the Sellers and located at a Site
if (and only if) such generators are presently wired so as to provide back-up
power to the tower structure at such Site (as contrasted with generators used to
provide back-up power only to the Sellers' transmitters and antennas), except
that the emergency generator at the 10860 Hickman Road, Des Moines, Iowa Site is
excluded from the Acquired Assets;
(iii) with respect to each of the Owned Sites, fee simple title to the
real property at such Site, together with any buildings and improvements located
at such Site that are deemed real property and together with the right to the
use of any easement, right-of-way and other rights appurtenant to each Owned
Site for purposes of access to the Site and any other purposes;
(iv) with respect to each of the Leased Sites, all of the tenant's
rights and interest under the lease, easement or management agreement pursuant
to which the Seller holds the Leased Site (including, with respect to each of
the Managed Sites, the Seller's interest in any equipment leased in connection
therewith);
(v) fences, gates, locks and keys and similar items related to each
Site to the extent owned by a Seller;
(vi) all permits, licenses, registrations and approvals owned by or
granted to the Sellers by any federal, state or local governmental entity or
other jurisdiction or instrumentality and related to (or necessary for) the
ownership and operation of a Site (other than FCC authorizations for operation
of specific equipment on specified frequencies at a Site, which will be retained
by each Seller), including, without limitation, the antenna structure
registration required by 47 C.F.R. Part 17.4 (1996); and any pending
applications for any new or modified registrations, approvals, licenses or
permits pending on the Closing Date, including, without limitation, those items
identified in Section 3(k) of the Disclosure Schedule;
(vii) each Seller's respective rights and interest under tower space
leases or license agreements pursuant to which third parties (other than Sellers
or affiliates of Sellers) lease antenna space at any Site for the operation of a
communications facility at such Site;
2
<PAGE>
(viii) any security or similar deposits or unearned prepaid rent held
by Sellers pursuant to tower space leases or license agreements with third
parties at any Site;
(ix) all rights and interest of Sellers in and to all contracts,
agreements, understandings, options, commitments, personal property leases,
product warranty agreements and service agreements relating to the Owned Sites
and the Leased Sites and the towers (collectively the "Contracts") including,
without limitation, those of the foregoing listed on Section 3(r) of the
Disclosure Schedule, but in each case only to the extent such Contracts are
chosen to be included in the Acquired Assets by the Buyer;
(x) all records relating to the Owned Sites, the Leased Sites and the
towers and the maintenance thereof, including, but not limited to, all
engineering data, logs, consultants' reports and correspondence used or held for
use in the operation of the Owned Sites, the Leased Sites and the towers or
necessary or desirable to show compliance with any law or regulation applicable
to the Owned Sites, the Leased Sites, the towers or the operation of the towers
or relating to the ownership, use, maintenance or repair of any of the Acquired
Assets and not pertaining solely to Sellers' internal corporate affairs or their
other interests (including their wireless messaging businesses), it being
understood that Sellers shall have the right to retain copies of any such
records necessary for the operation of their business and filing of tax papers
after the Closing Date; and
(xi) all of the other tangible and intangible property and rights that
are owned by Sellers and used principally in connection with the Owned Sites,
the Leased Sites and the towers.
The Acquired Assets shall not include the following ("Excluded Assets"):
(i) any FCC authorizations for the operation of specific equipment on
specified frequencies at any Leased Site or Owned Site;
(ii) any transmitter, antenna, cabling, wiring, accessions, devices or
equipment related to the operation of transmitters and antennas which is used to
operate a broadcast facility at a Site;
(iii) any Cash, accounts receivable or deposits made by Sellers with
any third parties related to any Site; provided that there shall be included in
the Acquired Assets any accounts receivable or cash received by Sellers related
to occupancy by third parties of space on any Site during periods after the
Closing Date;
(iv) any generator located at a Site which is wired to provide back-up
power only to the transmitters and antennas at such Site, and the emergency
generation at 10860 Hickman Road, Des Moines, Iowa; and
(v) any electric meters owned by a Seller at a Site where the meter
exclusively measures electric power provided to Seller's antennas and
transmitters.
3
<PAGE>
"ADJUSTED PURCHASE PRICE" has the meaning set forth in ss.2(d) below.
"ADVERSE CONSEQUENCES" means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, reasonable
amounts paid in settlement, liabilities, obligations, taxes, liens, losses,
expenses, and fees, including court costs and reasonable attorneys' fees and
expenses.
"AFFILIATE" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.
"AFFILIATED GROUP" means any affiliated group within the meaning of Code
ss.1504 or any similar group defined under a similar provision of state, local,
or foreign law.
"ANNUALIZED OPERATING CASH FLOW" means the annualized Arch Rent Revenues
and Third-Party Rent Revenues derived from tenants for which the Sellers have
written or oral leases or licenses for the Sites as set forth in Exhibit H1,
minus annualized land lease expense, utilities, maintenance and managed site
expenses of the Sites as set forth on Exhibit H1.
"ARCH TOWERS BUSINESS" means Sellers' operation of the Sites as
communications facilities for the leasing of tower space to third parties for
such third parties' operation of communications facilities, or the use of tower
space by the Sellers for operation of their wireless messaging business.
"ASSUMED LIABILITIES" means all liabilities and obligations of the Sellers
related to the Acquired Assets under the agreements, contracts, leases,
licenses, and other arrangements referred to in the definition of Acquired
Assets and included in the Disclosure Schedule (including leases pursuant to
which the Sellers hold Leased Sites), to the extent such liabilities and
obligations relate to or arise during periods after the Effective Time;
provided, however, that the Assumed Liabilities shall not include:
(i) any liability or obligation of the Sellers under this Agreement
(or under any side agreement between the Sellers on the one hand and the Buyer
on the other hand entered into on or after the date of this Agreement);
(ii) any claims, liabilities, losses, damages or expenses relating to
Sellers' operation of their wireless messaging business;
(iii) any claims, liabilities, losses, damages or expenses relating to
any litigation, proceeding or investigation of any nature arising out of the
Owned Sites, the Leased Sites or the operation of the towers by Sellers,
including, without limitation, any claims against or any liabilities for injury
to or death of persons or damage to or destruction of property, any workers'
compensation claims, and any warranty claims;
(iv) tax liabilities of any and all kinds (federal, state, local and
foreign) of Sellers or their Affiliates or their Affiliated Group, including,
4
<PAGE>
without limitation, taxes with respect to the Acquired Assets, any liabilities
for taxes on or measured by income, liabilities for withheld federal and state
income and employee F.I.C.A. (Federal Insurance Contribution Act) or employer
F.I.C.A. and liabilities for income taxes arising as a result of the transfer of
the transferred assets or otherwise by virtue of the consummation of the
transactions contemplated hereby except for taxes for the period after the
Closing Date to be prorated as specifically set forth in Section 2(d)(ii) of
this Agreement, and except that sales taxes arising by reason of the
transactions contemplated by this Agreement shall be payable as provided in
ss.10(l);
(v) any liabilities of Sellers or their Affiliates or members of their
Affiliated Group as an employer, including, without limitation, liabilities for
wages, supplemental unemployment benefits, vacation benefits, severance
benefits, retirement benefits, COBRA benefits, FAMLA benefits, WARN obligations
and liabilities, or any other employee benefits, withholding tax liabilities,
workers' compensation, or unemployment compensation benefits or premiums,
hospitalization or medical claims, occupational disease or disability claims or
other claims attributable in whole or in part to employment by Sellers or
arising out of any labor matter;
(vi) any accounts payable or other indebtedness of Sellers or their
Affiliates or obligations to any persons who have lent money to Sellers;
(vii) any liabilities or obligations resulting from the failure to
comply with any environmental protection, health or safety laws or regulations
or resulting from the generation, storage, treatment, transportation, handling,
disposal, release of hazardous substances, solid wastes, and liquid and gaseous
matters by Sellers or their Affiliates and by any other person in relation to
Sellers or their Affiliates, including, without limitation, any liability or
obligation for cleaning up waste disposal sites (provided that the exclusion of
liabilities described in this clause (vii) from the definition of "Assumed
Liabilities" shall not relieve the Buyer from such liabilities arising from such
activities at the Sites after the Closing); or
(viii) any fees and expenses incurred by Sellers in connection with
negotiating, preparing, closing and carrying out this Agreement and the
transactions contemplated by this Agreement, including, without limitation, the
fees and expenses of Sellers' attorneys, accountants and consultants.
"BASE PURCHASE PRICE" has the meaning set forth in ss.2(d) below.
"BUYER" has the meaning set forth in the preface above.
"CASH" means cash and cash equivalents (including marketable securities and
short term investments) calculated in accordance with GAAP applied on a basis
consistent with the preparation of the Financial Statements.
"CLOSING" has the meaning set forth in ss.2(e) below.
"CLOSING DATE" has the meaning set forth in ss.2(e) below.
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"CODE" means the Internal Revenue Code of 1986, as amended.
"CONFIDENTIAL INFORMATION" means any information concerning the businesses
and affairs of the Arch Towers Business or the Sellers that is not already
generally available to the public.
"DEFECTS" means any of the following, unless any such item is a Permitted
Encumbrance:
(i) defects in title to any Sites;
(ii) with respect to Leased Sites, a lease, management agreement or
easement which has expired prior to the Closing Date or will expire prior to
December 31, 1998 and has not been renewed or extended (unless prior to the
Closing such lease, management agreement or easement shall have been renewed or
extended in a manner reasonably acceptable to the Buyer);
(iii) with respect to Leased Sites, a lease, management agreement or
easement wherein the term has expired and the relevant Seller does not have
written evidence of exercise (or confirmation of exercise) of an extension or
renewal right contained in the Lease (unless prior to the Closing the Seller
provides to the Buyer written evidence of renewal or extension of such lease,
management agreement or easement reasonably acceptable to the Buyer);
(iv) with respect to Leased Sites, a lease, management agreement or
easement pursuant to which a Seller holds the Site which is oral or invalid
(unless prior to the Closing the Seller provides written evidence of such
agreement signed by the lessor or grantor, reasonably acceptable to the Buyer);
(v) with respect to Leased Sites, leases, management agreements or
easements in which the description of the premises is missing or so ambiguous as
to make it extremely difficult to tell whether the premises consist of land, a
rooftop or a tower (unless prior to the Closing the Sellers provide written
clarification of such ambiguity signed by the lessor or grantor, reasonably
acceptable to the Buyer);
(vi) encroachments of any portion of the improvements (including guy
wires and anchors) on any Site beyond the boundaries of such Site or similar
problems revealed by a survey of a Site meeting the minimum standard detail
requirements for ALTA/ACSM Land Title Surveys (unless prior to the Closing the
Sellers provide written evidence of correction of such encroachment reasonably
acceptable to the Buyer);
(vii) violations of zoning or other Laws or failure to receive, prior
to the Closing, a zoning compliance letter in respect of any Site for which such
a letter has been requested within twenty days after the date hereof;
(viii) Sites which are subject to the threat or expectation of
condemnation or taking by eminent domain;
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(ix) restrictions on the use of any Site which prevent the use of such
Site as a communications facility with a tower in its present or a substantially
similar configuration (unless prior to the Closing such restrictions are
modified or amended so as to permit the use of the affected Site as a
communications facility in its present or a substantially similar
configuration); and
(x) Sites requiring easements that are unrecorded;
(xi) Managed Sites where the Buyer's rights would be unclear with
respect to successors to the underlying property;
(xii) Sites which are in material violation of Environmental, Health
and Safety Requirements;
(xiii) Sites identified on Exhibit C as having specific miscellaneous
problems until the specified issue is resolved (e.g. pending litigation, missing
documentation, etc.); and
(xiv) Leased Sites (other than those which the Sellers hold pursuant
to recorded easements) for which the applicable landlord fails or refuses to
provide a consent (if required) or an estoppel certificate to the Buyer prior to
the Closing; provided that if the Buyer has received estoppel certificates
(including estoppels which are part of consents) from landlords of Leased Sites
representing 90% of the Adjusted Operating Cash Flow of all Leased Sites, the
Buyer shall waive any Defect arising from the failure to obtain estoppel
certificates from the remaining 10% of such Leased Site landlords.
Exhibit C identifies Sites which have Defects of which the Buyer is aware
as of the date of this Agreement, based on the Buyer's review of documentation
related to the Sites. The listing on Exhibit C does not preclude the Buyer from
identifying additional Defects during the course of obtaining title commitments,
surveys, consents, estoppel certificates and environmental assessments in
respect of Sites.
"DISCLOSURE SCHEDULE" has the meaning set forth in ss.3 below.
"EFFECTIVE TIME" means 12:01 a.m. on the Closing Date.
"ENVIRONMENTAL, HEALTH, AND SAFETY REQUIREMENTS" shall mean all federal,
state, local and foreign statutes, regulations, and ordinances concerning public
health and safety, worker health and safety, and pollution or protection of the
environment, including without limitation all those relating to the presence,
use, production, generation, handling, transportation, treatment, storage,
disposal, distribution, labeling, testing, processing, discharge, release,
threatened release, control, or cleanup of any hazardous materials, substances
or wastes, as such requirements are enacted and in effect on or prior to the
Closing Date.
"FAA" means the Federal Aviation Administration.
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"FCC" means the Federal Communications Commission.
"GAAP" means United States generally accepted accounting principles as in
effect from time to time.
"HART-SCOTT-RODINO ACT" means the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended.
"INDEMNIFIED PARTY" has the meaning set forth in ss.8(d) below.
"INDEMNIFYING PARTY" has the meaning set forth in ss.8(d) below.
"INITIAL CLOSING DATE" has the meaning set forth in ss.2(e) below.
"KNOWLEDGE" means actual knowledge. When used in reference to Sellers,
Knowledge means the actual knowledge of Paul H. Kuzia and/or Robert B. Alperin
after such persons have made inquiry of those management personnel in the
Sellers' organization responsible for administration and management of the Arch
Towers Business as a whole.
"LAWS" means statutes, laws, rules, regulations, codes, judgments, orders,
decrees and rulings thereunder of federal, state and local governments and
agencies thereof.
"MASTER TOWER SPACE LEASE" means the tower space lease substantially in the
form annexed hereto as Exhibit D.
"ORDINARY COURSE OF BUSINESS" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"PARTY" has the meaning set forth in the preface above.
"PERMITTED ENCUMBRANCES" means (i) taxes and assessments, both general and
special, which are a lien but not yet due and payable; (ii) the existence of
tower space leases or license agreements pursuant to which space for
transmitting facilities is leased or licensed to third-party tenants that are
identified in Section 3(l) of the Disclosure Schedule; (iii) matters described
in clauses (i), (v), (vi), (vii), (viii), (x), (xi) and (xiii) of the definition
of "Defects", that could not reasonably be expected to impair materially the use
or operation of any Site or any tower as a communications facility in its
present configuration or in a substantially similar configuration.
"PERSON" means an individual, a partnership, a corporation, an association,
a joint stock company, a trust, a joint venture, an unincorporated organization,
or a governmental entity (or any department, agency, or political subdivision
thereof).
"SECOND CLOSING DATE" has the meaning set forth in ss.2(e) below.
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"SECURITY INTEREST" means any mortgage, pledge, lien, encumbrance, charge,
or other security interest, other than (a) mechanic's, materialmen's, and
similar inchoate liens arising between the date of performance of services and
the date when payment is due, provided such payments are made in full at or
prior to the Closing by the party which requested the service, (b) liens for
taxes not yet due and payable or for taxes that the taxpayer is contesting in
good faith through appropriate proceedings, and (c) purchase money and similar
liens arising between the date of acquisition of assets and the date of payment,
provided such payments are made in full at or prior to the Closing by the party
which acquired the goods.
"SELLER" or "SELLERS" has the meaning set forth in the preface above.
"SITE" means either a Leased Site or an Owned Site.
"SITE LEASE" means a lease substantially in the form of Exhibit E, which
will be entered by the relevant Seller and the Buyer for each Site listed on
Exhibit E-1.
"SITE SUBLEASE" means a sublease substantially in the form of Exhibit F,
which will be entered by the relevant Seller and the Buyer for each Site listed
on Exhibit F-1.
"SUBSIDIARY" means any corporation with respect to which a specified Person
(or a Subsidiary thereof) owns a majority of the common stock or has the power
to vote or direct the voting of sufficient securities to elect a majority of the
directors.
"THIRD PARTY CLAIM" has the meaning set forth in ss.8(d) below.
"TOWER SPACE LEASE" has the meaning set forth in ss.3(l) below.
2. BASIC TRANSACTION.
(a) PURCHASE AND SALE OF ASSETS. On and subject to the terms and
conditions of this Agreement, the Buyer agrees to purchase from the Sellers, and
the Sellers agree to sell, transfer, convey, and deliver to the Buyer, all of
the Acquired Assets at the Closing for the consideration specified below in this
ss.2, free and clear of any Security Interest or Defect other than Defects which
the Buyer elects to accept as herein provided. As provided in ss.2(d)(iii), in
the event that on the date which is five business days prior to the Initial
Closing Date there are Sites for which the Buyer has identified Defects which
the Buyer is unwilling to accept and which Sellers have not cured (each a
"Defect Site"), the Buyer shall not buy, and the Sellers shall not sell, such
Sites, but as to Defect Sites a Second Closing will occur which is sixty days
after the Initial Closing. References herein to the "Closing" or the "Closing
Date" shall mean the closing which occurs on the Initial Closing Date or the
Second Closing Date, as the context requires.
(b) ASSUMPTION OF LIABILITIES. On and subject to the terms and
conditions of this Agreement, the Buyer agrees to assume and become responsible
for all of the Assumed Liabilities at the Closing. The Buyer will not assume or
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have any responsibility, however, with respect to any other obligation or
liability of the Sellers not included within the definition of Assumed
Liabilities.
(c) RELATED AGREEMENTS. At the Closing the Buyer and the Sellers will
enter (i) the Master Tower Site Lease, (ii) Site Subleases for each of the Sites
indicated on Exhibit E-1 (unless the Buyer is able to negotiate a direct lease
with the master lessor for the space required for the communications facility at
such Site) and (iii) Site Leases for Sites owned by the Sellers which will be
leased to the Buyer as indicated in Exhibit F-1.
(d) PURCHASE PRICE.
(i) The Buyer agrees to pay to the Sellers at the Closing
Thirty-eight Million Dollars ($38,000,000) (the "Base Purchase Price") adjusted
as provided herein (as adjusted, the "Adjusted Purchase Price") by delivery of
cash payable by wire transfer or other delivery of immediately available funds.
In the event there are Defect Sites as of the date which is five business days
prior to the Initial Closing Date, the portion of the Base Purchase Price
payable on the Initial Closing Date shall be adjusted as provided in
ss.2(d)(iii).
(ii) All income and expenses arising from the conduct of the
business and operations of the Arch Tower Business shall be prorated between the
Buyer and the Sellers in accordance with generally accepted accounting
principles as of the Effective Time and shall, except as otherwise expressly
provided in this Agreement, be for the account of the Sellers up to the
Effective Time and from and after the Effective Time shall be for the account of
the Buyer. Such prorations shall include, without limitation, all ad valorem,
real estate, tangible and intangible personal property and other property taxes
(but excluding taxes arising by reason of the transfer of the Acquired Assets as
contemplated hereby, which shall be paid as set forth in ss.10(l) of this
Agreement), business and license fees, other license fees (including any
retroactive adjustments thereof), utility expenses, rents and similar prepaid
and deferred items, and all other income and expenses attributable to the
Sellers' operation of the business of leasing space to install and operate
communications equipment at the Sites. In the case of the deposits or prepaid
expenses of the Sellers held by third parties, the Sellers shall be entitled to
an adjustment equal to the sum of all such deposits or prepaid expenses the
benefit of which shall accrue to the Buyer following the Closing.
Any adjustments or prorations will, insofar as feasible, be
determined and paid on the Closing Date. Within sixty (60) days after the
Closing Date, the Buyer shall deliver to the Sellers a certificate (the "Closing
Certificate"), signed by a senior officer of the Buyer, providing a compilation
of the adjustments and prorations to be made pursuant to this ss.2(d)(ii),
including any adjustments and prorations made at Closing, together with a copy
of any working papers relating to such Closing Certificate and such other
supporting evidence as the Sellers may reasonably request. If the Sellers
conclude that the Closing Certificate does not accurately reflect the
adjustments and prorations to be made pursuant to this ss.2(d)(ii), the Sellers
shall, within thirty (30) days after receipt thereof, provide to the Buyer their
written statement of any discrepancies believed to exist. The Sellers and the
Buyer shall attempt jointly to resolve the discrepancies within fifteen (15)
days after receipt of the Sellers' discrepancy statement, which resolution, if
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achieved, shall be binding upon all parties to this Agreement and not subject to
dispute or review. If the Sellers and the Buyer cannot resolve the discrepancies
within such fifteen (15) day period, the Buyer and Sellers shall jointly
designate a nationally known independent public accounting firm to be retained
to review the Closing Certificate together with the Sellers' discrepancy
statement and any other relevant documents. The cost of retaining such
accounting firm shall be borne by the party found to be more in error. Such firm
shall report its conclusions as to adjustments pursuant to this ss.2(d)(ii),
which shall be conclusive and not subject to dispute or review. Once the Closing
Certificate has been approved by both parties, if the Buyer shall have been
determined to owe an amount to the Sellers, the Buyer shall within five (5) days
of the date the Closing Certificate shall have been approved by both the Buyer
and the Sellers pay such amount thereof to the Sellers, or if the Sellers shall
have been determined to owe an amount to the Buyer, the Sellers shall within
five (5) days of the date the Closing Certificate shall have been approved by
both the Buyer and the Sellers pay such amount thereof to the Buyer.
(iii) In addition to the adjustments to the Base Purchase Price
made pursuant to Section 2(d)(ii) above, if any particular Site is, on the date
which is five business days prior to the Closing Date, subject to any Security
Interest or Defect, then, at the Buyer's election, such Site shall be dealt with
as described in this clause (iii):
(A) the Buyer may notify the Sellers that it wishes to
postpone the purchase of any such Site until the Second Closing Date, in which
event the Base Purchase Price payable at the Initial Closing shall be reduced
for each such Defect Site by an amount equal to the greater of (i) the product
of 11.8 multiplied by the Annualized Operating Cash Flow for each Defect Site
which the Buyer elects not to purchase at the Initial Closing or (ii) $100,000;
or
(B) the Buyer may notify the Sellers that it wishes to
include such Defect Site in the Acquired Assets on the Initial Closing Date,
subject to the Sellers' indemnification for the Security Interest or Defect as
provided in ss.8(g). If the Buyer elects to have such Defect Sites included in
the Acquired Assets, the Buyer shall notify the Sellers not less than eight
business days prior to the Initial Closing Date, and the Sellers shall thereupon
indemnify the Buyer in respect of the identified Defects as provided in Section
8(g) unless the Sellers notify the Buyer in writing prior to the date which is
five business days before the Initial Closing Date that they will not so
indemnify the Buyer. If the Sellers elect not to indemnify the Buyer, the Buyer
may then elect either to accept the Defect Sites without the Sellers'
indemnification under Section 8(g) or postpone the purchase of such Defect Sites
until the Second Closing, in which case the Base Purchase Price at the Initial
Closing Date shall be reduced as provided in clause (a) of this subsection.
(iv) On the Second Closing Date, the Buyer shall purchase any
Sites which were Defect Sites as of the Initial Closing Date if the Defects
attributable to such Sites have been cured to the Buyer's reasonable
satisfaction not later than the five business days prior to the Second Closing
Date. Notwithstanding any other provision contained in this Agreement, the Buyer
shall not be obligated to acquire any Sites at the Initial Closing or the Second
Closing unless any Defects for such Site have been cured to the Buyer's
reasonable satisfaction. The purchase price in respect of each Site purchased at
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the Second Closing will be equal to the Base Purchase Price reduction made in
respect of such Site at the Initial Closing.
(v) If on the date which is five business days prior to the
Second Closing Date any Defect Site continues to be subject to a Security
Interest or an uncured Defect, then, at the Buyer's election:
(A) the Buyer may notify the Sellers that it wishes to
exclude such Site from the Acquired Assets, in which event such Site shall not
be transferred to the Buyer; or
(B) the Buyer may notify the Sellers that it wishes to
include such Defect Site in the Acquired Assets on the Second Closing Date,
subject to the Sellers' indemnifications for the Security Interest or Defect as
provided in ss.8(g). If the Buyer elects to have such Defect Sites included in
the Acquired Assets, the Buyer shall notify the Sellers not less than eight
business days prior to the Second Closing Date, and the Sellers shall thereupon
indemnify the Buyer in respect of the identified Defects as provided in ss.8(g)
unless the Sellers notify the Buyer in writing prior to the date which is five
business days prior to the Second Closing Date that they will not so indemnify
the Buyer. If the Sellers elect not to indemnify the Buyer, the Buyer may then
elect either to accept the Defect Sites without the Sellers' indemnification
under ss.8(g) or not to acquire such Defect Sites.
The Parties shall have no further obligations to each other in
respect of Defect Sites which the Buyer elects not to acquire on the Second
Closing Date. No further adjustment to the Base Purchase Price (in addition to
the adjustment to the Base Purchase Price effected at the Initial Closing) shall
be made in respect of Defect Sites which the Buyer elects not to acquire at the
Second Closing.
(e) THE CLOSING. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place on June 30, 1998 (the "Initial
Closing Date") at the offices of Thompson, Hine & Flory, 3900 Key Center,
Cleveland, Ohio 44114, commencing at 9:00 a.m. local time, provided the
conditions identified in Section 7 below have been satisfied (except for
conditions to be satisfied at the Closing) on or before such date. A second
Closing will be held on the date (the "Second Closing Date") which is sixty days
after the Initial Closing Date in respect of Sites which have uncured Defects or
Security Interests as of the Initial Closing Date. The "Initial Closing Date"
and the "Second Closing Date" are collectively referred to herein as the
"Closing Date".
(f) DELIVERIES AT THE CLOSING. At the Closing, (i) the Sellers will
deliver to the Buyer the various deeds, assignments, certificates, instruments
and documents referred to in ss.7(a) below; (ii) the Buyer will deliver to the
Sellers the various certificates, instruments, and documents referred to in
ss.7(b) below; (iii) the Sellers will execute, acknowledge (if appropriate), and
deliver to the Buyer such instruments of sale, transfer, conveyance, and
assignment as the Buyer and its counsel reasonably may request (including a deed
for each Owned Site with statutory warranties regarding encumbrances created by
the relevant Seller); (iv) the Buyer and the Sellers will execute and deliver
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the Master Tower Space Lease and Site Subleases substantially in the forms
annexed hereto; (v) the Buyer will execute, acknowledge (if appropriate), and
deliver to the Sellers such instruments of assumption as the Sellers and their
counsel reasonably may request; and (vi) the Buyer will deliver to the Sellers
the consideration specified in ss.2(d) above.
(g) ALLOCATION. The Parties agree to allocate the Purchase Price (and
all other capitalizable costs) among the Acquired Assets for all purposes
(including financial, accounting and tax purposes) in accordance with the
allocation schedule attached hereto as Exhibit G. The Sellers shall allocate the
Purchase Price among the Sellers as directed by Arch Communications Group, Inc.
3. REPRESENTATIONS AND WARRANTIES OF THE SELLERS. The Sellers represent and
warrant to the Buyer that the statements contained in this ss.3 are correct and
complete as of the date of this Agreement and will be correct and complete as of
the Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this ss.3), except as set
forth in the disclosure schedule accompanying this Agreement and initialed by
the Parties (the "Disclosure Schedule"). The Disclosure Schedule will be
arranged in paragraphs corresponding to the lettered and numbered paragraphs
contained in this ss.3. The Sellers make no representations or warranties
concerning the Acquired Assets or the Arch Towers Business except as set forth
in this ss.3.
(a) ORGANIZATION OF THE SELLERS. Each of the Sellers is a corporation
duly organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation as indicated on the signature pages hereof.
Each of the Sellers has full power to carry on its business as now conducted and
is qualified to do business as a foreign entity in each jurisdiction where
failure to so qualify would have a material adverse affect on the Acquired
Assets.
(b) AUTHORIZATION OF TRANSACTION. Each of the Sellers has full power
and authority (including full corporate power and authority) to execute and
deliver this Agreement and to perform its obligations hereunder. Without
limiting the generality of the foregoing, the board of directors of each of the
Sellers has duly authorized the execution, delivery, and performance of this
Agreement by the respective Seller. This Agreement constitutes the valid and
legally binding obligation of each of the Sellers, enforceable in accordance
with its terms and conditions, except as such enforcement may be limited by
applicable bankruptcy, insolvency, reorganization or similar laws from time to
time in effect affecting creditors' rights generally and by legal and equitable
limitations on the availability of specific remedies (the "Enforceability
Exceptions").
(c) NONCONTRAVENTION. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby
(including the assignments and assumptions referred to in ss.2 above), will (i)
violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which any of the Sellers is subject or any
provision of the charter or bylaws of any of the Sellers or (ii) except as to
required notice described in Section 3(c) of the Disclosure Schedule, conflict
with, result in a breach of, constitute a default under, result in the
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acceleration of, create in any party the right to accelerate, terminate, modify,
or cancel, or require any notice under any agreement, contract, lease, license,
instrument, or other arrangement to which any of the Sellers is a party or by
which it is bound or to which any of its assets is subject (or result in the
imposition of any Security Interest upon any of its assets), except where the
violation, conflict, breach, default, acceleration, termination, modification,
cancellation or failure to give notice, would not have a material adverse effect
on any of the Acquired Assets or on the ability of the Parties to consummate the
transactions contemplated by this Agreement. Except as set forth in Section 3(c)
of the Disclosure Schedule, none of the Sellers needs to give any notice to,
make any filing with, or obtain any authorization, consent, or approval of any
government or governmental agency or of any private party in order for the
Parties to consummate the transactions contemplated by this Agreement (including
the assignments and assumptions referred to in ss.2 above).
(d) BROKERS' FEES. The Sellers have no liability or obligation to pay
any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which the Buyer could become
liable or obligated. The Sellers have engaged the services of Daniels &
Associates, L. P. as an agent of the Sellers in connection with this Agreement,
and the Sellers will be solely responsible for any fees or commissions payable
to such agent.
(e) FINANCIAL INFORMATION. The financial information set forth in
Exhibit H is the only financial information provided by the Sellers to the Buyer
in connection with this Agreement. The information in Exhibit H1 under the items
entitled "Third Party Rent Revenue" and "Annual Land Lease Expenses" are
Sellers' estimates for such items for the twelve month period ending March 31,
1998, based on actual rent revenues from third parties and actual land lease
expenses during the month of March, 1998. Exhibit H2 also sets forth actual
Third Party Rent Revenue for the Sites for the months of June, 1997 through
March, 1998. The information in Exhibit H concerning Arch Rent Revenue correctly
reflects the annual rent which Sellers will pay to the Buyer pursuant to the
Master Tower Space Lease during the first twelve months after the Closing Date,
subject to adjustments permitted under the Master Tower Space Lease. The
"Squatters Rent Increase" reflected in Exhibit H1, and expenses of maintenance
and utilities, are the Sellers' estimates; the Sellers do not warrant the
correctness or reasonableness of such estimates.
(f) EVENTS SINCE MARCH 31, 1998. Since March 31, 1998, there has not
been any material adverse change in the financial condition of the Arch Towers
Business taken as a whole or any material adverse change in the condition or
operation of any tower. Without limiting the generality of the foregoing, since
that date none of the Sellers has engaged in any practice, taken any action, or
entered into any transaction outside the Ordinary Course of Business with
respect to the Arch Towers Business except in connection with the sale of the
Arch Towers Business.
(g) LEGAL COMPLIANCE. Each of the Sellers has complied with all
applicable Laws, except where the failure to comply would not have a material
adverse effect upon the financial condition of any particular Site. The Sellers
have received no notice to the effect that any Site is not in compliance with
applicable Laws.
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(h) TAX MATTERS. Sellers have filed with the appropriate governmental
agencies all tax returns and tax reports pertaining to excise taxes, sales and
use taxes, payroll taxes, real property taxes and assessments and tangible and
intangible personal property taxes required to be filed by them relating to the
Owned Sites, the Leased Sites and towers and operation thereof ("Applicable
Taxes"), and all taxes, interest and penalties shown or claimed to be due
thereon have been paid. Sellers do not have any liability, contingent or
otherwise, for any Applicable Taxes or any interest or penalties thereon except
to the extent disclosed in Section 3(i) of the Disclosure Schedule. To the
Knowledge of the Sellers, the consummation of the transactions contemplated by
this Agreement will not result in any transferee tax liability to Buyer, other
than possible sales taxes on sales of personal property included in the Acquired
Assets. None of the Sellers has waived any statute of limitations in respect of
Applicable Taxes or agreed to any extension of time with respect to an
Applicable Tax assessment or deficiency.
(i) PROPERTY.
(i) Sellers do not have any interest in any real property in
connection with the operation of the towers other than as described on Exhibit A
and Exhibit B. Each Seller is, or will be, at the time of Closing, in possession
of each of its Sites. Each Seller has, or will have at the time of Closing, (A)
good, marketable, and fee simple title to its Owned Sites and all the
improvements, (B) good and valid leasehold estates or good and valid easements
as to its Leased Sites, (C) good and valid easement rights providing all
necessary access and utilities to and from the improvements and the Sites to
public roads, and (D) good and marketable legal title to all personal property
included in the Acquired Assets, in each case, free and clear of all (i)
Security Interests except for (i) Security Interests described in the Disclosure
Schedule, which will be released and discharged prior to the Closing, (ii)
Permitted Encumbrances and (iii) Defects which, if the affected Site is conveyed
to the Buyer will be discharged or cured prior to the Closing or will be a
matter for which the Buyer is indemnified pursuant to ss.8(g).
(ii) No Seller has voluntarily granted any, is not a party to any
agreement providing for, and no Seller has any knowledge of, easements,
conditions, reservations, covenants, restrictions, leases, subleases, rights,
options or any other matters that would adversely affect the use of any of the
towers and the Sites for the same purposes and uses as the towers and Sites have
been used by such Seller, except for (i) Security Interests described in ss.3(i)
of the Disclosure Schedule, which will be released and discharged prior to the
Closing, (ii) Permitted Encumbrances and (iii) Defects which, if the affected
Site is conveyed to the Buyer, will be discharged or cured prior to the Closing
or will be a matter for which the Buyer is indemnified pursuant to ss.8(g).
(iii) To the best of each Seller's knowledge, there are no
improvements planned by any public authority any part of the cost of which might
be assessed against such Seller.
(iv) To each Seller's knowledge, with respect to its Sites, there
are no (A) applications, ordinances, petitions, resolutions or other matters
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pending before any governmental agency having jurisdiction to act on zoning
changes that would prohibit or make nonconforming the use of any of the Sites
for the operation of the towers; or (B) pending or threatened condemnation or
eminent domain proceedings, or proposed sale in lieu thereof.
(v) To each Seller's knowledge (except as reported by the Buyer),
the improvements, including the towers, are in good condition and repair,
ordinary wear and tear excepted, and do not have any structural or material
defects except as described on Section 3(j) of the Disclosure Schedule.
(vi) Exhibit A lists all of the Leased Sites, and identifies the
lease date and the lessor thereunder and the current monthly rental paid by
Sellers. To the extent that written leases, management agreements or easements
exist and are in the Sellers' possession, the Sellers have delivered to the
Buyer correct and complete copies thereof. The Sellers do not possess written
documents for all of Leased Sites, and the leases, management agreements or
easements for some locations have expired, as indicated in Exhibit A; provided,
however, the Sellers will use their commercially reasonable best efforts to
remove these Defects prior to Closing. To the Knowledge of the Sellers, there
are no disputes with the lessor or sublessor of any of the leases, management
agreements or easements listed on Exhibit A except as described in ss.3(i) of
the Disclosure Schedule or where such dispute would not have a material adverse
effect on the financial condition of any particular tower; provided however, the
Sellers will use their commercially reasonable best efforts to remove these
Defects prior to Closing. Each lease or sublease listed on Exhibit A which is
written and has not expired by its terms (as indicated on Exhibit A) is valid
and in full force and effect, unless otherwise noted in ss.3(i) of the
Disclosure Schedule. Any lease or sublease listed on Exhibit A which is not
written and in full force and effect on the Closing Date will be considered to
have a Defect, and may be dealt with as provided in ss.2(d)(iii). Except as
described on 3(i) of the Disclosure Schedule, the leases are freely assignable
to the Buyer without the consent of any landlord, tenant or third party and
there are no defaults on the part of Sellers or, to the Knowledge of the
Sellers, their landlords.
(j) INTELLECTUAL PROPERTY. None of the Sellers owns or has an interest
in any patent or registration or any pending patent application or application
for registration related to the Acquired Assets or the Arch Towers Business.
(k) GOVERNMENTAL AUTHORIZATIONS. To the knowledge of the Sellers,
there are no licenses or other governmental authorizations required for the
operation of the Acquired Assets which the Sellers do not hold; Sellers are in
compliance therewith; and such licenses and governmental authorizations are in
full force and effect. To the extent required by regulations of the FCC, the
towers owned by the Sellers on the Sites are registered with the FCC. The towers
are in compliance with all applicable FAA and FCC rules and regulations.
(l) TENANT LEASES AND OTHER CONTRACTS. Exhibit H3 lists all tower
space leases, tower license agreements and similar agreements (and the rental
and security deposits relating thereto) pursuant to which the Sellers have
leased space on any of the communications towers included in the Acquired Assets
to third parties (each a "Tower Space Lease"). In addition, except as set forth
in Section 3(l) of the Disclosure Schedule, there are no other tower space
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leases, licenses or similar occupancy agreements to which any Seller is a party
related to the operation of the Arch Towers Business. To the extent that written
documents constituting Tower Space Leases exist and are in the Sellers'
possession, the Sellers have delivered to the Buyer a correct and complete copy
of each such document (as amended to date) listed in Exhibit H3. Each Tower
Space Lease listed in Exhibit H3 which has not expired by its terms is valid and
in full force and effect and there are no material defaults pending caused by
the Sellers or their tenants (other than late payment defaults by such tenants
the aggregate amount of which as of March, 1998 is set forth in Exhibit H3). The
Sellers do not possess written documents for all the Tower Space Leases listed
in Exhibit H3, and some of the written documents so listed have expired. One of
the Sellers is the sole owner of the landlord's or licensor's interest in the
Tower Space Leases, and the Sellers' interest in the Tower Space Leases, are
fully assignable to the Buyer without the consent or approval of any landlord,
tenant or other third party. As of the Closing Date, no rents due under, or
other interest in, any of the Tower Space Leases will have been assigned to any
other party other than the Buyer or otherwise pledged or encumbered in any way.
Except as set forth in Exhibit H3, the Sellers have not received any notice from
any tenant or licensee under a Tower Space Lease of any impending cancellation
or breach of its Tower Space Lease or of any termination of its Tower Space
Lease in advance of the scheduled expiration date. Exhibit H3 and Section 3(l)
of the Disclosure Schedule will be updated as of a date within 15 days prior to
the Closing Date.
(m) LITIGATION. None of the Sellers (i) is subject to any outstanding
injunction, judgment, order, decree, ruling, or charge or (ii) is a party to any
action, suit, proceeding, hearing, or investigation of, in, or before any court
or quasi-judicial or administrative agency of any federal, state, local, or
foreign jurisdiction, where the injunction, judgment, order, decree, ruling,
action, suit, proceeding, hearing, or investigation affects the Arch Towers
Business or the Acquired Assets.
(n) ENVIRONMENTAL, HEALTH, AND SAFETY MATTERS.
(i) To the Knowledge of the Sellers, the Sellers are in
compliance with Environmental, Health, and Safety Requirements.
(ii) The Sellers have not received any written notice, report or
other information regarding any actual or alleged violation of Environmental,
Health, and Safety Requirements, or any liabilities or potential liabilities
(whether accrued, absolute, contingent, unliquidated or otherwise), including
any investigatory, remedial or corrective obligations, relating to the Sellers
or their facilities included in the Acquired Assets arising under Environmental,
Health, and Safety Requirements.
(iii) The Sellers are not aware of any underground storage tanks
on any of the land included in the Acquired Assets except as described in
ss.3(n) of the Disclosure Schedule. To the extent Sellers own any underground
storage tanks, Sellers are in compliance with all laws, rules and regulations
relating thereto.
(iv) This Section 3(n) contains the sole and exclusive
representations and warranties of the Sellers with respect to any environmental,
health, or safety matters, including without limitation any arising under any
Environmental, Health, and Safety Requirements.
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(o) CERTAIN BUSINESS RELATIONSHIPS WITH SELLERS. After the Closing,
the sole contractual relationships between the Sellers and the Buyer with
respect to the Acquired Assets will be this Agreement, the Master Tower Space
Lease, the Site Subleases and the Site Leases.
(p) SUFFICIENCY OF ASSETS. The Acquired Assets include all
Site-related equipment and real property rights used by the Sellers to operate
the Arch Towers Business, except for any generators that are specifically
excluded from the definition of "Acquired Assets" which would be necessary for
the operations of the Arch Towers Business. The Acquired Assets do not, however,
include any personnel, computers, technical expertise, vehicles, maintenance and
repair equipment or other non-Site-specific assets required to operate the Arch
Towers Business.
(q) NO CONDEMNATION. To the knowledge of the Sellers none of the Owned
Sites is the subject of any pending or proposed condemnation proceedings by any
public authority. The Sellers have not received any notice from the owner of any
Leased Site to the effect that such Site is the subject of any pending or
proposed condemnation proceedings by any public authority.
(r) CONTRACTS. Section 3(r) of the Disclosure Schedule constitutes a
complete and accurate list of all material contracts (other than (i) leases or
other agreements pursuant to which the Sellers hold real property included in
the Acquired Assets and (ii) Tower Space Leases) (the "Contracts") relating to
the Acquired Assets or the operation of the Sites to which Seller is a party or
by which it is bound. The Contracts are in full force and effect. Except as set
forth in Section 3(r) of the Disclosure Schedule, there has been no material
default by the Sellers or, to the Sellers' knowledge, by the other party, and no
event has occurred or failed to occur which with the giving of notice, the
passage of time, or both, would constitute a material default by the Sellers,
or, to the best of their knowledge, by the other party, under any of the
Contracts. Except as set forth in ss.3(l) of the Disclosure Schedule, to the
Sellers' knowledge, none of the Contracts is subject to any impending
cancellation or breach that will result in a substantial loss or otherwise
materially and adversely affect the Sites or the Acquired Assets.
(s) DISCLAIMER OF OTHER REPRESENTATIONS AND WARRANTIES. Except as
expressly set forth in this Section 3, the Sellers make no representation or
warranty, express or implied, at law or in equity, in respect of any of their
assets (including, without limitation, the Acquired Assets), liabilities or
operations, including, without limitation, with respect to merchantability or
fitness for any particular purpose, and any such other representations or
warranties are hereby expressly disclaimed. The Buyer hereby acknowledges and
agrees that, except to the extent specifically set forth in this Section 3, the
Buyer is purchasing the Acquired Assets on an "as-is, where-is" basis. Without
limiting the generality of the foregoing, the Sellers make no representation or
warranty regarding any assets other than the Acquired Assets, and none shall be
implied at law or in equity.
(t) INFORMATION CONCERNING THE REDDING, CALIFORNIA SITE. Information
provided by the Sellers in respect of the Redding, California Site is based on
information provided to the Sellers by the current owners of the Site. The
Sellers do not represent or warrant the correctness of such information. The
Sellers will represent and warrant such information at the Closing.
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4. REPRESENTATIONS AND WARRANTIES OF THE BUYER. The Buyer represents and
warrants to the Sellers that the statements contained in this ss.4 are correct
and complete as of the date of this Agreement and will be correct and complete
as of the Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this ss.4), except as set
forth in the Disclosure Schedule. The Disclosure Schedule will be arranged in
paragraphs corresponding to the lettered and numbered paragraphs contained in
this ss.4.
(a) ORGANIZATION OF THE BUYER. The Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation.
(b) AUTHORIZATION OF TRANSACTION. The Buyer has full power and
authority (including full corporate power and authority) to execute and deliver
this Agreement and to perform its obligations hereunder. This Agreement
constitutes the valid and legally binding obligation of the Buyer, enforceable
in accordance with its terms and conditions, except as such enforcement may be
limited by the Enforceability Exceptions.
(c) NONCONTRAVENTION. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby
(including the assignments and assumptions referred to in ss.2 above), will (i)
violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which the Buyer is subject or any provision of
its charter or bylaws or (ii) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
the Buyer is a party or by which it is bound or to which any of its assets is
subject. The Buyer does not need to give any notice to, make any filing with, or
obtain any authorization, consent, or approval of any government or governmental
agency, except pursuant to the Hart-Scott-Rodino Act, in order for the Parties
to consummate the transactions contemplated by this Agreement (including the
assignments and assumptions referred to in ss.2 above).
(d) BROKERS' FEES. The Buyer has no liability or obligation to pay any
fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which the Sellers could become
liable or obligated.
5. PRE-CLOSING COVENANTS. The Parties agree as follows with respect to the
period between the execution of this Agreement and the Closing.
(a) GENERAL. Each of the Parties will use its reasonable best efforts
to take all actions and to do all things necessary, proper or advisable in order
to consummate and make effective the transactions contemplated by this Agreement
(including satisfaction, but not waiver, of the closing conditions set forth in
ss.7 below).
(b) NOTICES AND CONSENTS.
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(i) The Sellers will give any notices to third parties reasonably
requested by the Buyer; without limiting the generality of the foregoing, the
Sellers will use their commercially reasonable best efforts (including the
expenditure of up to $100 per Site) to obtain any third party consents and
estoppel certificates from each lessor of a Leased Site (other than Leased Sites
held pursuant to a recorded easement).
(ii) Each of the Parties will give any notices to, make any
filings with, and use its reasonable best efforts to obtain any authorizations,
consents, and approvals of governments and governmental agencies in connection
with the matters referred to in ss.3(c) and ss.4(c) above. Without limiting the
generality of the foregoing, each of the Parties will file any Notification and
Report Forms and related material that it may be required to file with the
Federal Trade Commission and the Antitrust Division of the United States
Department of Justice under the Hart-Scott-Rodino Act, will use its reasonable
best efforts to obtain an early termination of the applicable waiting period,
and will make any further filings pursuant thereto that may be necessary,
proper, or advisable in connection therewith. The Buyer and the Sellers will use
their commercially reasonable best efforts to file the Notification and Report
Form within fifteen business days after the date of this Agreement.
(c) OPERATION OF BUSINESS. The Sellers will not engage in any
practice, take any action, or enter into any transaction outside the Ordinary
Course of Business. The Sellers will use their commercially reasonable efforts,
consistent with past practice, to maintain and preserve the Arch Towers
Business.
(d) FULL ACCESS. The Sellers will permit representatives of the Buyer
to have full access at all reasonable times, and in a manner so as not to
interfere with the normal business operations of the Sellers, or Sellers'
activities undertaken to perform their obligations under this Agreement, to all
premises, properties, personnel, books, records (including tax records),
contracts, surveys, title reports and environmental and engineering reports, and
documents of or pertaining to that portion of the Arch Towers Business owned by
each of the Sellers. The Buyer will keep confidential and hold as such any
Confidential Information it receives from any of the Sellers in the course of
the reviews contemplated by this ss.5(d) or otherwise, will not use any of the
Confidential Information except in connection with this Agreement, and, if this
Agreement is terminated for any reason whatsoever, will return to the Sellers
all tangible embodiments (and all copies) of the Confidential Information which
are in its possession.
(e) NOTICE OF DEVELOPMENTS. Each Party will give prompt written notice
to the other Party of any material adverse development, including a breach of
any of its own representations and warranties in ss.3 and ss.4 above. No
disclosure by any Party pursuant to this ss.5(e), however, shall be deemed to
amend or supplement the Disclosure Schedule or to prevent or cure any
misrepresentation or breach of warranty.
(f) EXCLUSIVITY. The Sellers will not solicit, initiate, accept, or
encourage the submission of any proposal or offer from any Person relating to
the acquisition of any, all or substantially all of the Acquired Assets
(including any acquisition structured as a merger, consolidation, or share
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exchange) or disclose any nonpublic information regarding any of the Acquired
Assets.
(g) TITLE; SURVEYS; CORRECTION OF DEFECTS.
(i) The Buyer shall use its commercially reasonable best efforts
to order all title and surveys within 10 business days of the date hereof. The
Buyer shall use its commercially reasonable best efforts to order all
environmental assessments within 15 business days of the date hereof. The Buyer
will provide to the Sellers copies of all letters requesting titles, surveys,
environmental assessments and zoning compliance letters as such request letters
are issued.
(ii) If the Buyer believes a Site has a Defect which makes the
Site subject to Section 2(d)(iii), it shall notify the Sellers within five
business days after discovering the Defect. (The Buyer hereby notifies the
Sellers that the items disclosed in Exhibit A, B and C and Section 3(i) of the
Disclosure Schedule which constitute Defects are subject to Section 2(d)(iii).).
(iii) Sellers shall use their commercially reasonable best
efforts to correct all Defects, whether or not such Defect is shown on Exhibits
A, B and C or the Disclosure Schedule, prior to the Initial Closing Date or, if
unable to do so by the Initial Closing Date, by the Second Closing Date. The
Sellers shall, if the circumstances require, expend up to $5,000 per Site to
cure or correct Defects if it is reasonably expected that such amount will cure
the Defect applicable to such Site to the reasonable satisfaction of the Buyer.
The Sellers may, but shall not be required hereby to, expend more than $5,000 to
cure Defects at any Site.
(iv) The Sellers shall promptly notify the Buyer in writing of
each Defect which the Sellers believe has been cured, and the Buyer shall
promptly notify the Sellers if it agrees that a Defect has been cured to its
satisfaction. The Buyer and the Sellers shall work cooperatively to coordinate
the Defect notification and cure process so that cures sought by the Sellers
will be acceptable to the Buyer if effected.
(v) Not less than five business days prior to the Initial Closing
Date the Buyer and the Sellers shall compile lists of Sites for which no Defects
exist, and Sites for which Defects continue to exist, and shall identify such
Sites with uncured Defects (if any) which the Buyer elects to accept
notwithstanding the Defect, such of those Sites which the Buyer has elected to
accept for which the Sellers will indemnify the Buyer pursuant to ss.8(g), such
of those Sites which the Buyer has elected to accept for which the Sellers will
not indemnify the Buyer pursuant to ss.8(b), and (of the latter group) any Sites
which the Buyer will nonetheless purchase on the Initial Closing Date.
(vi) Any Defect Sites not acquired by the Buyer on the Initial
Closing Date shall be subject to the same notification/cure/acceptance/rejection
procedures described in clause (v) prior to the Second Closing Date.
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(vii) The Sellers shall use their commercially reasonable best
efforts (but without the requirement of expending in excess of $100 per Site) to
obtain a nondisturbance agreement with each landlord of the Sites listed on
Exhibit F-1 or to obtain a direct lease between the landlord and the Buyer for
the tower and transmitter space at each such Site.
(h) If Sites representing Annualized Operating Cash Flow in excess of
10% of the Annualized Operating Cash Flow of all the Sites have uncured Defects
and the Buyer has elected not to acquire such Sites (or, if the Buyer has
elected to acquire such Sites, the Sellers have declined to indemnify the Buyer
pursuant to ss.8(g) and the Buyer has therefore elected not to acquire such
Site) as of the date which is five business days prior to the Initial Closing
Date, either Party may terminate this Agreement in accordance with ss.9.
(i) The Sellers will use their reasonable best efforts, and cooperate
with the Buyer, to obtain extensions or new leases with respect to Leased Sites
for which current leases expire in calendar 1999.
6. POST-CLOSING COVENANTS. The Parties agree as follows with respect to the
period following the Closing.
(a) GENERAL. In case at any time after the Closing any further action
is necessary or desirable to carry out the purposes of this Agreement, each of
the Parties will take such further action (including the execution and delivery
of such further instruments and documents) as the other Party reasonably may
request, all at the sole cost and expense of the requesting Party (unless the
requesting Party is entitled to indemnification therefor under ss.8 below). The
Sellers will cooperate with the Buyer, at the Buyer's sole expense, to the
extent the Buyer needs assistance with or access to the Sellers' accountants and
books and records in preparing, verifying, auditing, reviewing or certifying
financial information.
(b) LITIGATION SUPPORT. In the event and for so long as any Party
actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand in connection with
(i) any transaction contemplated under this Agreement or (ii) any fact,
situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or prior
to the Closing Date involving any of the Sellers, the other Party will cooperate
with the contesting or defending Party and its counsel in the contest or
defense, make available its personnel, and provide such testimony and access to
its books and records as shall be necessary in connection with the contest or
defense, all at the sole cost and expense of the contesting or defending Party
(unless the contesting or defending Party is entitled to indemnification
therefor under ss.8 below). This provision shall not require the Buyer's
participation in litigation between the Sellers and any person which had
previously agreed to purchase the Acquired Assets.
(c) TRANSITION. The Sellers will not take any action that is designed
or intended to have the effect of discouraging any lessor, licensor, lessee,
licensee, customer, supplier, or other business associate of any of the Sellers
from maintaining the same business relationships with the Buyer after the
Closing as it maintained with the Sellers prior to the Closing.
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(d) REPURCHASE OPTIONS. Sellers shall have the option to repurchase
portions of the Acquired Assets in forty quarterly segments commencing on June
30, 1998 and continuing on each September 30 1, December 31, March 31 and June
30 thereafter. The portion of the Acquired Assets which is subject to such
purchase option on each of the forty dates (each an "option block") is described
in Exhibit I. Exhibit I also sets forth the portion of the Purchase Price
allocable to each such portion of the Acquired Assets. The option price for each
option block is equal to the operating cash flow (determined by multiplying the
Sites' cash flow for the month most recently ended as of the exercise date by
12) for the Sites included in the option block multiplied by 28; provided, that
in no event shall the option price be less than $250,000 for any one Site. This
option may not be assigned by the Sellers other than to persons controlling,
controlled by or under common control with the Sellers. The Sellers may exercise
an option by, and only by, delivering written notice of exercise of such option
no later than the exercise date. The Sellers may elect at any time, or from time
to time, to terminate the exercisability of one or more of the quarterly option
segments. If the Sellers fail to exercise a quarterly option on an exercise
date, the option with respect to the next option group on Exhibit I shall lapse
and shall no longer be exercisable. The purchase price under each option shall
be paid in cash. If an option is exercised, the terms of sale shall include no
representations or warranties by the Buyer except the absence of Security
Interests with respect to the assets purchased.
7. CONDITIONS TO OBLIGATION TO CLOSE.
(a) CONDITIONS TO OBLIGATION OF THE BUYER. The obligation of the Buyer
to consummate the transactions to be performed by it in connection with the
Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties of the Sellers set forth
in ss.3 above shall be true and correct in all material respects at and as of
the Closing Date;
(ii) the Sellers shall have performed and complied with all of
their covenants hereunder in all material respects through the Closing;
(iii) there shall not be any injunction, judgment, order, decree
or ruling in effect preventing consummation of any of the transactions
contemplated by this Agreement or materially adversely affecting any Site or
Tower (provided, that if any such injunction, judgment, order, decree or ruling
should be in effect, the Site or Sites to which it applies would not be
transferred to the Buyer at the Initial Closing but would be transferred at the
Second Closing (provided the injunction, judgment, order, decree or ruling had
then been vacated) with a net reduction in the Base Purchase Price as provided
in ss.2(d)(iii) at the Initial Closing, and the Closing would be held as to the
remainder of the Acquired Assets);
(iv) the Sellers shall have delivered to the Buyer a certificate
to the effect that each of the conditions specified above in ss.7(a)(i)-(iii) is
satisfied in all respects;
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(v) all applicable waiting periods (and any extensions thereof)
under the Hart-Scott-Rodino Act shall have expired or otherwise been terminated,
and the Sellers and the Buyer shall have received all other authorizations,
consents, and approvals of governments and governmental agencies and private
parties identified in ss.3(c) of the Disclosure Schedule; provided that with
respect to any Leased Site the terms of the lease for which require the consent
of the landlord or other contract party, if such landlord or other contract
party shall not have consented to the transactions contemplated hereby, if the
Buyer so elects, the Buyer may elect not to purchase such Site at the Initial
Closing, and the purchase of such Site shall be postponed to the Second Closing
as provided in ss.2(d)(iii) unless the Buyer elects to include such Site,
subject to the Sellers' agreement to indemnify the Buyer in respect of any cost,
damage or expense arising from the failure to obtain such consent as provided in
ss.8(g); and further provided that if the Buyer has received estoppel
certificates (including estoppels which are part of consents) from landlords of
Leased Sites representing 90% of the Adjusted Operating Cash Flow of all Leased
Sites, the Buyer shall not require estoppel certificates as a closing condition
for the remaining 10% of the Leased Sites.
(vi) The Buyer shall have received from Lawyer's Title Insurance
Corporation (the "Title Company") (and be reasonably satisfied with) a
commitment to issue an ALTA Owner's Policy of Title Insurance (Form B, amended
10-17-70) for the Owned Sites and a commitment to issue a Leasehold Owner's
Policy of Title Insurance for certain of the Leased Sites, both in forms
acceptable to the Buyer, dated no earlier than the date of this Agreement,
naming the Buyer as the proposed insured in an amount equal to the fair market
value of each Site and reflecting the results of a special tax search with
respect to each of the Owned Sites. The title commitment(s) shall (i) set forth
a state of title to each of the Sites, together with all exceptions or
conditions to such title, including, but not limited to, all easements,
restrictions, rights-of-way, covenants, reservations, and other encumbrances
affecting each of the Sites and (ii) contain the express commitment of the Title
Company to issue the Owner's and Leasehold Policies of Title Insurance without
the standard customary printed exceptions of such policies with respect to
survey, parties in possession (except tenants of the Sellers) and mechanics'
liens, specifically stating any condition or requirement to affect the removal
thereof from such policy, if issued, (iii) include any endorsements or
affirmative insurance the Buyer may have reasonably required as of the date the
Title Commitment is issued by the Title Company, and (iv) have attached true,
correct and legible copies of each instrument referred to in the Title
Commitment as conditions or exceptions to title to the Sites;
(vii) The Title Company shall be in the position to issue an ALTA
Owner's Policy of Title Insurance (Form B Amended 10-17-70) as to the Owned
Sites and a Leasehold Owner's Policy of Title Insurance as to the Leased Sites.
The Title Policies shall be issued in the amount of the fair market value of the
Buyer's interest in the covered sites, shall insure marketable fee simple,
indefeasible title to the Owned Sites to be in the Buyer, subject only to the
Permitted Encumbrances, and such Defects as have been expressly approved by the
Buyer and shall insure a good leasehold estate to the Leased Sites to be in the
Buyer, subject only to Permitted Exceptions and such Defects as have been
expressly approved by the Buyer. The Buyer shall have the right to require such
endorsements to the Title Policies for the Owned Sites as the Buyer reasonably
deems necessary or appropriate, including, but not limited to, zoning, survey,
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contiguity and access, as well as such affirmative insurance as the Buyer or the
Buyer's counsel may reasonably require;
(viii) The Buyer shall have obtained and approved a survey of
each Site by a registered surveyor reasonably satisfactory to the Buyer. The
Seller shall cooperate with the Buyer and the surveyor in coordinating such
survey. The survey shall be certified as of a date no earlier than December 1,
1997, and should be prepared in accordance with the "minimum standard detail
requirements for ALTA/ACSM Land Title Surveys" as revised through 1992 for an
Urban survey, including any Table A optional survey items which the Buyer may
select, or in accordance with such lesser standards that the Buyer may approve.
The surveyor's certification shall run to the Buyer, the Seller and the Title
Company, as well as any lender to the Buyer that the Buyer may designate.
(ix) any title examinations and surveys of the Sites conducted by
the Buyer shall not have shown any liens, encumbrances, encroachments, lack of
access or other matters which would have a material adverse effect on the use of
such Site as a communications tower facility (provided, that if any such title
examination or survey reveals a condition which constitutes a Defect and is
unsatisfactory to the Buyer, the Buyer may elect not to purchase such Site at
the Initial Closing and to purchase such Site at the Second Closing (provided
such Defect shall then have been cured) as provided in ss.2(d)(iii) unless the
Buyer elects to include such Site, subject to the Sellers' agreement to
indemnify the Buyer in respect of any cost, damage or expense arising from such
matters as provided in ss.8(g);
(x) Arch Communications Enterprises, Inc. shall have entered into
the Master Tower Space Lease substantially in the form attached hereto as
Exhibit D, and the same shall be in full force and effect and all of the Sellers
shall have guaranteed the obligations of Arch Communications Enterprises, Inc.
thereunder;
(xi) the relevant Sellers shall have entered Site Leases for
Iota, Louisiana, Forest Avenue, Portland, Maine and Hebron, Maine substantially
in the form of Exhibit E;
(xii) the landlords of the Sites listed in Exhibit F-1 shall have
entered into direct leases with Buyer for the tower and transmitter space for
the Sites listed in Exhibit F-1 or shall have entered nondisturbance agreements
with the Buyer, or shall have entered into the Site Subleases substantially in
the form of Exhibit F hereto, and the same shall be in full force and effect
(provided that if the lessor of any of the Sites subject to the Site Subleases
refuses to enter a direct lease or to enter a nondisturbance agreement with the
Buyer and refuses to consent to the Site Sublease, the Buyer may elect not to
purchase such Site at the Initial Closing and to purchase such Site at the
Second Closing (provided such landlord shall by that date have entered a direct
lease, executed a nondisturbance agreement or consented to a Site Sublease) as
provided in ss.2(d)(iii) unless the Buyer elects to include such Site, subject
to the Sellers' agreement to indemnify the Buyer in respect of any cost, damage
or expenses arising from the failure to obtain such consent as provided in
ss.8(g);
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(xiii) the Buyer shall not have determined that any of the
Seller's representations or warranties are untrue or incorrect in any material
respect;
(xiv) there shall have occurred no material adverse change in the
Acquired Assets, taken as a whole, the Sellers' tower leasing business or the
business, prospects or financial results of the Sellers since March 31, 1998 or
in the business, prospects or financial results of Arch Communications Group,
Inc., taken as a whole, since December 31, 1997;
(xv) the Buyer shall not be dissatisfied, in its reasonable
discretion, with the results of environmental assessments which discover a
Defect with respect to any Site for which it has chosen to conduct an assessment
(provided that if the Buyer notifies the Seller that it is dissatisfied with the
results of any such assessment, the Buyer may elect to exclude such Site from
the transaction pursuant to ss.2(d)(iii) or elect to include the Site in the
transaction subject to the Sellers' agreement to indemnify the Buyer in respect
of any cost, damage or expense arising from such matter as provided in ss.8(g);
(xvi) the Buyer shall have received from counsel to the Sellers
an opinion substantially in the form and substance as set forth in Exhibit J
attached hereto, addressed to the Buyer, and dated as of the Closing Date;
(xvii) all actions to be taken by the Sellers in connection with
consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the transactions
contemplated hereby will be reasonably satisfactory in form and substance to the
Buyer;
(xviii)Each Seller shall deliver to the Buyer good standing
certificates or certificates of continued existence, dated as of a date within
30 days of the Closing Date, from the state of incorporation of such Seller and
from each state in which such Seller is qualified to do business;
(xix) The Sellers and the Buyer shall have executed and delivered
to the Buyer a cooperation and noncompetition agreement (the "Noncompetition
Agreement") substantially in the form of the agreement outline attached hereto
as Exhibit K and made a part hereof.
(xx) The Sellers shall deliver such other customary closing
certificates and documents as the Buyer may reasonably request.
(xxi) The Sellers shall have entered into an agreement with the
Buyer pursuant to which the Seller shall have agreed to provide paging and
similar communications services to the lessor under each lease, management
agreement or easement which requires such services as partial or full
consideration for the remainder of the term of each such agreement and all
extensions thereof provided for in existing agreements, but in no event longer
than ten years after the Closing Date.
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The Buyer may waive any condition specified in this ss.7(a) if it executes
a written instrument so stating at or prior to the Closing.
(b) CONDITIONS TO OBLIGATION OF THE SELLERS. The obligation of the
Sellers to consummate the transactions to be performed by them in connection
with the Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in ss.4 above
shall be true and correct in all material respects at and as of the Closing
Date;
(ii) the Buyer shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
(iii) there shall not be any injunction, judgment, order, decree,
ruling, or charge in effect preventing consummation of any of the transactions
contemplated by this Agreement;
(iv) the Buyer shall have delivered to the Sellers a certificate
to the effect that each of the conditions specified above in ss.7(b)(i)-(iii) is
satisfied in all respects;
(v) all applicable waiting periods (and any extensions thereof)
under the Hart-Scott-Rodino Act shall have expired or otherwise been terminated
and the Sellers and the Buyer shall have received all other authorizations,
consents, and approvals of governments and governmental agencies and private
parties identified in ss.4(c) of the Disclosure Schedule;
(vi) the Buyer shall have entered into the Master Tower Space
Lease, the Sites Leases and the Site Subleases (to the extent landlords
thereunder have not executed direct lease with the Buyer) substantially in the
form of Exhibits D, E and F, respectively, and the same shall be in full force
and effect;
(vii) the Sellers shall have received from the Buyer's counsel an
opinion substantially in the form as set forth in Exhibit L attached hereto,
addressed to the Sellers, and dated as of the Closing Date; and
(viii) all actions to be taken by the Buyer in connection with
consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the transactions
contemplated hereby will be reasonably satisfactory in form and substance to the
Sellers.
The Sellers may waive any condition specified in this ss.7(b) if it
executes a written instrument so stating at or prior to the Closing.
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8. INDEMNIFICATION.
(a) SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All of the
representations and warranties of the Sellers and the Buyer contained in ss.3
and ss.4 of this Agreement shall survive the Closing and continue in full force
and effect for a period of twelve months, except (i) in the case of
representations and warranties pertaining to authority and taxes, and the
Sellers' representation that personal property included in the Acquired Assets
is free of Security Interests, which shall survive indefinitely and (ii) the
Sellers' representations and warranties as to title to the real property at the
Owned Sites, which shall terminate at the Closing.
(b) INDEMNIFICATION PROVISIONS FOR BENEFIT OF THE BUYER.
(i) In the event the Sellers breach any of their representations,
warranties, and covenants contained in this Agreement, and, provided that the
Buyer makes a written claim for indemnification against the Sellers pursuant to
ss.10(g) below with respect to Sellers' representations and warranties within
the survival period pursuant to ss.8(a) above, then the Sellers jointly and
severally agree to indemnify the Buyer from and against the entirety of any
Adverse Consequences the Buyer shall suffer through and after the date of the
claim for indemnification caused by the breach; provided, however, that the
Sellers shall not have any obligation to indemnify the Buyer from and against
any Adverse Consequences caused by the breach of any representation or warranty
of the Sellers: (A) until the Buyer has suffered Adverse Consequences by reason
of all such breaches in excess of a deductible in the amount of $100,000 in the
aggregate (after which point the Sellers will be obligated only to indemnify the
Buyer from and against further such Adverse Consequences) or thereafter (B) to
the extent the Adverse Consequences the Buyer has suffered by reason of all such
breaches exceeds $5,000,000 in the aggregate (after which point the Sellers will
have no obligation to indemnify the Buyer from and against further such Adverse
Consequences).
(ii) The Sellers agree jointly and severally to indemnify the
Buyer from and against the entirety of any Adverse Consequences the Buyer shall
suffer caused proximately by any liability of the Sellers which is not an
Assumed Liability (including any liability of the Sellers that becomes a
liability of the Buyer under any bulk transfer law of any jurisdiction, under
any common law doctrine of de facto merger or successor liability, or otherwise
by operation of law) or by Sellers' ownership or operation of any of the
Acquired Assets on or prior to the Closing Date.
(c) INDEMNIFICATION PROVISIONS FOR BENEFIT OF THE SELLERS.
(i) In the event the Buyer breaches any of its representations,
warranties, and covenants contained in this Agreement, and provided that, with
respect to representations and warranties, the Sellers make a written claim for
indemnification against the Buyer pursuant to 10(g) below within the survival
period set forth in ss.8(a) above, the Buyer agrees to indemnify the Sellers
from and against the entirety of any Adverse Consequences the Sellers shall
suffer through and after the date of the claim for indemnification (but
EXCLUDING any Adverse Consequences the Sellers shall suffer after the end of any
applicable statute of limitations).
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(ii) The Buyer agrees to indemnify the Sellers from and against
the entirety of any Adverse Consequences the Sellers shall suffer caused by any
liability of the Sellers which is an Assumed Liability.
(d) MATTERS INVOLVING THIRD PARTIES.
(i) If any third party shall notify any Party (the "Indemnified
Party") with respect to any matter (a "Third Party Claim") which may give rise
to a claim for indemnification against the other Party (the "Indemnifying
Party") under this ss.8, then the Indemnified Party shall promptly (and in any
event within ten business days after receiving notice of the Third Party Claim)
notify the Indemnifying Party thereof in writing; provided, however, that any
failure to give timely notice shall limit a party's right to indemnification
only to the extent of any prejudice caused by such delay.
(ii) The Indemnifying Party will have the right at any time to
assume and thereafter conduct the defense of the Third Party Claim with counsel
of its choice reasonably satisfactory to the Indemnified Party; provided,
however, that the Indemnifying Party will not consent to the entry of any
judgment or enter into any settlement with respect to the Third Party Claim
without the prior written consent of the Indemnified Party (not to be withheld
unreasonably) unless the judgment or proposed settlement involves only the
payment of money damages and does not impose an injunction or other equitable
relief upon the Indemnified Party.
(iii) Unless and until the Indemnifying Party assumes the defense
of the Third Party Claim as provided in ss.8(d)(ii) above, however, the
Indemnified Party may defend against the Third Party Claim in any manner it
reasonably may deem appropriate.
(iv) In no event will the Indemnified Party consent to the entry
of any judgment or enter into any settlement with respect to the Third Party
Claim without the prior written consent of the Indemnifying Party (not to be
withheld unreasonably).
(e) DETERMINATION OF ADVERSE CONSEQUENCES. The Parties shall make
appropriate adjustments for tax benefits and insurance coverage and take into
account the time cost of money (using 10% as the discount rate) in determining
Adverse Consequences for purposes of this ss.8. All indemnification payments
under this ss.8 shall be deemed adjustments to the Purchase Price.
(f) EXCLUSIVE REMEDY. The Buyer and the Sellers acknowledge and agree
that after the Closing Date the foregoing indemnification provisions in this
ss.8 shall be the exclusive remedy of the Buyer and the Sellers with respect to
the Arch Tower Business, the Acquired Assets, and the transactions contemplated
by this Agreement; provided, however, that the Buyer has the right as provided
in this Agreement to cause the Sellers to reacquire certain Sites as provided in
ss.2(d)(iii) above; and further provided this clause shall not operate to
exclude other rights the Buyer may have in respect of the Sellers' breach of
Section 3(n).
(g) INDEMNIFICATION WITH RESPECT TO CERTAIN MATTERS.
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(i) To the extent the Buyer notifies the Seller in writing prior
to the Closing it wishes to avail itself of the provisions of Section
2(d)(iii)(b) in respect of matters described in clause (ii) hereof, and the
Sellers elect to indemnify the Buyer in respect of such matters and therefore an
affected Site is included in the transaction, the provisions of this ss.8(g)
shall apply.
(ii) Matters covered by this ss.8(g) are Security Interests and
Defects existing as of the Closing Date and conditions to closing with respect
to any Site which have not been satisfied as of the Closing Date.
(iii) If the Sellers elect not to indemnify the Buyer as to
Defects or Security Interests in respect of a Site, the Base Purchase Price
shall be adjusted as provided in ss.2(d)(iii).
(iv) With respect to any matter for which the Sellers have
elected in writing to indemnify the Buyer pursuant to this ss.8(g), the Sellers
shall jointly and severally indemnify the Buyer and hold the Buyer harmless from
and against any cost, liability, damage or expense related to the indemnified
matter, provided that:
(A) the Buyer promptly notifies the Seller in respect of any
third party claims related to such matter as provided in ss.8(d),
(B) the Sellers' obligation to indemnify the Buyer shall be
without regard to the $100,000 "deductible" and the $5,000,000 maximum amount
set forth in ss.8(b),
(C) the maximum amount of the Sellers' indemnification
obligation with respect to each Site shall be equal to the sum of:
(i) the greater of (x) the Annualized Operating Cash
Flow of such Site, as set forth on Exhibit H1, multiplied by 11.8, or (y)
$100,000, which amount shall decline by 20% for each year, or portion thereof
(pro rated as to such percentage for any portion of a partial year), that has
passed between the Closing Date and the date of any claim under this ss.8(g),
plus
(ii) the net book value of all of the Buyer's
improvements to such Site, provided that the maximum indemnification amount
under this clause (ii) for any Site shall be $300,000.
If the Sellers pay the Buyer as indemnification under this
ss.8(g) in respect of any Site an amount equal to the greater of (i) the
Adjusted Operating Cash Flow of the Site multiplied by 11.8 or (ii) $100,000,
plus the net book value of all the Buyer's improvements to the Site, the Buyer
shall reconvey such Site to the Sellers for no additional consideration.
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(D) the Buyer shall have given written notice to the Sellers
of such claim on or before the fifth anniversary of the Closing Date.
9. TERMINATION.
(a) TERMINATION OF AGREEMENT. Certain of the Parties may terminate
this Agreement as provided below:
(i) the Buyer and the Sellers may terminate this Agreement by
mutual written consent at any time prior to the Closing;
(ii) the Buyer may terminate this Agreement by giving written
notice to the Sellers at any time prior to the Closing (A) in the event the
Sellers have breached any material representation, warranty, or covenant
contained in this Agreement in any material respect, the Buyer has notified the
Sellers of the breach, and the breach has continued without cure for a period of
20 days after the notice of breach, (B) if the Closing shall not have occurred
on or before June 30, 1998, by reason of the failure of any condition precedent
under ss.7(a) hereof (unless the failure results primarily from the Buyer itself
breaching any representation, warranty, or covenant contained in this Agreement)
or (C) in accordance with ss.5(g); and
(iii) the Sellers may terminate this Agreement by giving written
notice to the Buyer at any time prior to the Closing (A) in the event the Buyer
has breached any material representation, warranty, or covenant contained in
this Agreement in any material respect, the Sellers have notified the Buyer of
the breach, and the breach has continued without cure for a period of 20 days
after the notice of breach, (B) if the Closing shall not have occurred on or
before June 30, 1998, by reason of the failure of any condition precedent under
ss.7(b) hereof (unless the failure results primarily from the Sellers themselves
breaching any representation, warranty, or covenant contained in this
Agreement), or (C) in accordance with ss.5(g).
(b) EFFECT OF TERMINATION. If any Party terminates this Agreement
pursuant to ss.9(a) above, all rights and obligations of the Parties hereunder
shall terminate without any liability of any Party to the other Party (except
for any liability of any Party then in breach); provided, however, that the
confidentiality provisions contained in ss.5(d) above shall survive termination.
10. MISCELLANEOUS.
(a) PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. During the term of this
Agreement, no Party shall issue any press release or make any public
announcement relating to the subject matter of this Agreement prior to the
Closing without the prior written approval of the other Party (which shall not
be unreasonably withheld or delayed); provided, however, that any Party may make
any public disclosure it believes in good faith is required by applicable law or
any listing or trading agreement concerning its publicly-traded securities (in
which case the disclosing Party will use its reasonable best efforts to advise
the other Party prior to making the disclosure). The parties will cooperate in
developing a description of the transactions contemplated hereby for purposes of
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any public announcement related to the signing of this Agreement or the closing
of the transactions contemplated hereby.
(b) NO THIRD-PARTY BENEFICIARIES. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns.
(c) ENTIRE AGREEMENT. This Agreement (including the documents referred
to herein) constitutes the entire agreement between the Parties and supersedes
any prior understandings, agreements, or representations by or between the
Parties, written or oral, to the extent they related in any way to the subject
matter hereof.
(d) SUCCESSION AND ASSIGNMENT. This Agreement shall be binding upon
and inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign either this Agreement or
any of its rights, interests, or obligations hereunder without the prior written
approval of the other Party. Notwithstanding the foregoing, (i) the Buyer may
(a) assign any or all of its rights and interests hereunder to one or more of
its Affiliates and (b) designate one or more of its Affiliates to perform its
obligations hereunder, and (ii) the Sellers may assign their rights and
obligations hereunder to any entity or entities into which they are merged or to
which all or substantially all of their assets are transferred, provided that
any such transferee or assignee shall be a wholly-owned direct or indirect
subsidiary of Arch Communications Group, Inc. Notwithstanding any assignment
permitted hereunder, the original parties hereto shall remain responsible for
the performance of all their respective obligations hereunder.
(e) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(f) HEADINGS. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(g) NOTICES. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then three
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
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If to the Sellers:
Arch Communications Group, Inc.
1800 West Park Drive, Suite 250
Westborough, Massachusetts 01581
Attn: Robert B. Alperin, Vice President-Corporate Development
Telecopier: (508) 870-6021
Copy to:
Garry B. Watzke, Esq.
745 Atlantic Avenue, 10th Floor
Boston, Massachusetts 02111-2735
Telecopier: (617) 350-7881
If to the Buyer:
OmniAmerica, Inc.
Two Summit Park Drive, Suite 105
Cleveland, Ohio 44131
Attn: F. Howard Mandel, Vice President and General Counsel
Telecopier: (216) 447-4450
Copy to:
Diane S. Leung, Esq.
Thompson Hine & Flory
3900 Key Center
Cleveland, Ohio 44114
Telecopier: (216) 556-5800
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
Party may change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other Party
notice in the manner herein set forth.
(h) GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the domestic laws of the Commonwealth of Massachusetts
without giving effect to any choice or conflict of law provision or rule
(whether of the Commonwealth of Massachusetts or any other jurisdiction) that
would cause the application of the laws of any jurisdiction other than the
Commonwealth of Massachusetts.
(i) AMENDMENTS AND WAIVERS. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
Buyer and the Sellers. No waiver by any Party of any default, misrepresentation,
or breach of warranty or covenant hereunder, whether intentional or not, shall
be deemed to extend to any prior or subsequent default, misrepresentation, or
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breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence.
(j) ACTION BY SELLERS. Any right, action or notice which may be taken
exercised or given by the Sellers hereunder may be taken on behalf of all the
Sellers by Arch Communications Enterprises ("ACE"). Each of the Sellers hereby
appoints ACE as its agent to take any action for and on behalf of such Seller
necessary or appropriate to carry out the transactions contemplated by this
Agreement.
(k) SEVERABILITY. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(l) EXPENSES. Each of the Sellers and the Buyer will bear its own
costs and expenses (including legal fees and expenses) incurred in connection
with this Agreement and the transactions contemplated hereby. The Sellers shall
bear one-half, and the Buyer shall bear one-half, of the expenses of filing a
Notification and Report Form under the Hart-Scott-Rodino Act with the Federal
Trade Commission and the Antitrust Division of the United States Department of
Justice; provided, that if either party shall default in its obligations
hereunder, the other party's damages shall include the portion of such expenses
paid by the non-defaulting party. The Buyer and the Sellers shall bear equally
the costs of recording fees, filing fees, deed stamps, realty transfer taxes and
similar real estate transfer costs. The Buyer shall be responsible for any sales
taxes arising under state law in respect of the transactions contemplated by
this Agreement.
(m) CONSTRUCTION. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation.
(n) INCORPORATION OF EXHIBITS AND SCHEDULES. The Exhibits and
Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.
(o) BULK TRANSFER LAWS. The Buyer acknowledges that the Sellers will
not comply with the provisions of any bulk transfer laws of any jurisdiction in
connection with the transactions contemplated by this Agreement.
(p) DESTRUCTION OF ASSETS. In the event of loss or damage to any Site
or tower in an amount greater than $5,000 between the date hereof and the
Closing Date, the Sellers shall promptly notify the Buyer thereof and use their
commercially reasonable best efforts to repair, replace or restore the lost or
damaged property to its former condition as soon as possible. If such repair,
replacement or restoration has not been completed prior to the Closing Date, the
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Parties shall consummate the transaction in respect of the damaged Site at the
Initial Closing (unless a Defect shall exist as to such Site) and the Base
Purchase Price shall be decreased by the amount of the loss or damage less
amounts expended by the Sellers prior to the Closing on such repair, replacement
or restoration (or, if the Sellers have not undertaken any repair, the
adjustment to the Base Purchase Price shall be equal to the estimated cost of
repair, as determined by a reasonable third-party estimate obtained by the
Sellers).
(q) SPECIFIC PERFORMANCE. The Parties acknowledge that the towers and
the Acquired Assets are of a unique and extraordinary character and that money
damages would not be a sufficient remedy for a breach by any Party of its
obligations under this Agreement; therefore, in addition to any other rights or
remedies a nondefaulting Party may have, the nondefaulting Party shall be
entitled to the remedies of specific performance or injunctive relief in
connection with a breach of a Party's obligations contained in this Agreement.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on as
of the date first above written.
BUYER:
OmniAmerica, Inc.
By: _____________________, President
SELLERS:
The Westlink Company, Q Media Company-Paging, Inc.
a Delaware corporation a Kansas corporation
By: ___________________________ By: ________________________________
Title: ________________________ Title: _____________________________
USA Mobile Communications, Inc. II, Arch Communications Enterprises, Inc.,
a Delaware corporation a Delaware corporation
By: ___________________________ By: ________________________________
Title: ________________________ Title: _____________________________
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Arch Capitol District, Inc., Arch Michigan, Inc.
a New York corporation a Delaware corporation
By: ___________________________ By: ________________________________
Title: ________________________ Title: _____________________________
Arch Southeast Communications, Inc., Professional Communications, Inc.
a Delaware corporation a Pennsylvania corporation
By: ____________________________ By: _______________________________
Title: _________________________ Title: ____________________________
The Beeper Company of America, Inc. Answer Iowa, Inc.
a Colorado corporation an Iowa corporation
By: _____________________________ By: _______________________________
Title: __________________________ Title: ____________________________
Arch Connecticut Valley, Inc., Q Media Paging-Alabama, Inc.
a Massachusetts corporation a Delaware corporation
By: ______________________________ By: _______________________________
Title: ___________________________ Title: ____________________________
The obligations of the Sellers under this Agreement are fully guaranteed by Arch
Communications Group, Inc., including the prompt payment of all amounts that may
be owing pursuant to Section 8.
Arch Communications Group, Inc.
By: _______________________________
Title: ____________________________
36
EXHIBIT 99.4
*CONFIDENTIAL TREATMENT REQUESTED
Confidential portions have been omitted and filed separately.
June 10, 1998
Mr. Paul Kuzia, Executive Vice President
of Technology and Regulatory Affairs
ARCH COMMUNICATIONS GROUP, INC.
1800 West Park Drive, Suite 250
Westborough, MA 01581
Dear Paul:
In response to your request for a quotation on a quantity of * pagers and in
light of the competitive offers you have received, Motorola is please to present
the following proposal:
QUANTITY
Motorola agrees to sell and ARCH COMMUNICATIONS GROUP, INC. hereinafter
("ARCH") agrees to order, from time to time, and accept delivery on a
minimum of * pagers within one year from date of this Agreement and any
successive one year terms.
TERM
This Agreement shall become effective upon written acceptance by ARCH
COMMUNICATIONS GROUP, INC. and shall continue in effect for a term of one
year, and will automatically renew for successive one year terms subject to
30 days written notice by either party.
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
labor effective the date of shipment.
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.
<PAGE>
ARCH COMM
June 10, 1998
Page 2 of 9
DELIVERY SCHEDULE
Prices quoted are for pagers whose delivery is scheduled five (5) weeks or
later from receipt and acceptance of your processable order at our Boynton
Beach, Florida, headquarters. In the event Motorola cannot ship pager units
on the scheduled ship date (SSD) with a plus twenty one (21) day grace
period, ARCH will have the option to: 1) accept shipment at later date; 2)
cancel shipment or not accept delivery without penalty; or 3) agree to a
mutually acceptable replacement product.
CHANGE ORDERS
Change orders requested by ARCH and accepted by Motorola within three (3)
weeks of the acknowledged shipment date may, at Motorola's option, subject
the order to a $1.50 per pager changed premium. No change orders will be
accepted by Motorola within ten (10) days of the acknowledged shipment
date. Customer agrees to accept any pagers shipped by Motorola where a
change order was rejected in writing by Motorola because said change order
was submitted within ten (10) days of the acknowledged shipment date.
SHIPPING TERMS
All pagers are sold F.O.B. Point of Origin. Freight and insurance are not
included in the prices quoted.
PAYMENT TERMS
The special prices offered to ARCH in this proposal require that payment be
made promptly after shipment of open account purchase one time per month,
with payment required on all invoices that are outstanding for 30 days or
more from invoice date, subject to acceptance of product. Payment shall be
due in immediately available funds on such date during the month that is
mutually agreed upon.
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, we are 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.
ARCH COMMUNICATIONS GROUP, INC. also agrees to reimburse Motorola for all
legal fees and expenses incurred in collecting any amounts due hereunder.
TAXES
Sales and use taxes are not included in the prices quoted. They will be
invoiced at prevailing rates unless a current Tax Exemption Certificate for
the shipping destination state has been submitted by ARCH and is on file
with Motorola.
BUSINESS METHODS IMPROVEMENT INCENTIVE
The prices in this agreement are based on the implementation of a revised
system of order placement and order management. The goal of this program is
to provide Motorola with longer-range visibility of fixed pager
requirements and to reduce the number orders which are changed within 30
days of scheduled ship date. We propose, and ARCH agrees, to work
aggressively to implement a program under which ARCH will provide at least
50% of their 120-day requirements in issued Purchase Orders. At the
beginning of each month, ARCH will add the remaining 50% requirement for
the next month (to complete the 100% requirement of
<PAGE>
ARCH COMM
June 10, 1998
Page 3 of 9
that month) and add the 50% requirement for one additional month. These
percentages will be based on current run-rate by product or forecast of
future product changes and requirements.
DISTRIBUTION SUPPORT
Motorola is poised to support ARCH's distribution efforts by continuing to
offer promotional, advertising and incentive support through its Co-op
Program. Motorola will assist ARCH to generate a greater amount of
incremental sales by extending supplemental promotional/advertising funds
for exploring new ideas to expand the demand for Motorola paging products.
PRICES CHANGES AND SPECIAL PROMOTIONS
The prices quoted herein are firm for the term of this agreement. In the
event Motorola lowers the standard common carrier price of any product
specifically enumerated in this quotation during the term of this
agreement, no price adjustment shall be made in these prices unless the new
price is lower than the price for the same product quoted herein. In which
case, all such products remaining to be shipped under this agreement shall
be shipped at the new, lower, general market price.
If, during the term of this agreement, Motorola offers a special promotion
on any product covered by this quotation, ARCH may select the lower of the
standard, general market common carrier promotional price or the price in
this agreement. The promotional allowance may not be deducted from the
price in this quotation.
GOVERNMENT SALES
In the event ARCH 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, ARCH shall do so at
their own option and risk and agrees not to obligate Motorola as a
subcontractor or otherwise to such ARCH COMMUNICATIONS GROUP, Inc. except
as indicated in the paragraph below. ARCH COMMUNICATIONS GROUP, INC.
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 generally complies with the following FAR
clauses:
FAR CLAUSE TITLE
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
<PAGE>
ARCH COMM
June 10, 1998
Page 4 of 9
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
TERMS AND CONDITIONS
All orders placed during the term of this Agreement shall, except to the extent
other wise provided herein, be subject to Motorola's Standard Terms and
Conditions, which are outlined below. By executing this Agreement, ARCH
acknowledges receipt, understanding, and acceptance of Motorola's Standard Terms
and Conditions. If any conflict arises between the terms of this Agreement and
the Standard Terms and Conditions, the terms of this Agreement shall prevail.
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.
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.
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
<PAGE>
ARCH COMM
June 10, 1998
Page 5 of 9
forth in he 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.
PATENT AND COPYRIGHT INDEMNIFICATION. Motorola agrees to defend, as its expense,
any suites against a 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
expenses 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 not 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 nay 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
not 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.
LICENSE DISCLAIMER. Except for the right to use the Motorola Equipment for the
purposes provided herein which arises by operations 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 limitations 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,
<PAGE>
ARCH COMM
June 10, 1998
Page 6 of 9
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', MOTOROL'S TOTAL LIABILITY
ARISING OUT OF OR RELATED TO THIS AGREEMENT, WHETHER FOR BREACH OF CONTRACT,
WARRANTY, MOTOROL'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 EITEHR REFUND THE PURCHASE PRICE OR REPAIR OR REPLACE
PRODUCTS THAT ARE NOT AS WARRANTED. IN NO EVENT WILL MOTOROLA BE LIABLE FOR
INCIDENTIAL, SPECIAL OR CONSEQUENTIAL DAMAGES, INCLUDING, BUT NOT LIMITED TO,
FRUSTRATION OF ECONOMIC OR BUSINESS EXPECTATIONS, LOSS OF PROFITS, LOSS OF DATE,
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.
TIME TO SUE. 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
an 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.
<PAGE>
ARCH COMM
June 10, 1998
Page 7 of 9
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 or
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.
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 for 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.
<PAGE>
ARCH COMM
June 10, 1998
Page 8 of 9
Thank you for giving Motorola the opportunity to quote on your future paging
requirements. We believe our broad line of quality products and services will
provide you with the best value in the industry. Please indicate your acceptance
of this proposal by signing below, upon which this agreement shall become a
binding obligation of the parties hereto. We look forward to continuing our long
relationship.
Very truly yours,
/s/ Jim Grossi
James Grossi
Major Account Manager
North American Paging Subscriber Division
JG:jg
AGREED AND ACCEPTED: ARCH COMMUNICATIONS GROUP, INC.
By: /S/ PAUL H. KUZIA
Title: EXECUTIVE VICE PRESIDENT
Date: 6-19-98
AGREED AND ACCEPTED: MOTOROLA, INC.
By:
Title: VP & DIR DISTRIBUTION
Date: 6/10/98
<PAGE>
ARCH COMM *CONFIDENTIAL TREATMENT REQUESTED
June 10, 1998 Confidential portions have been omitted and filed separately
Page 9 of 9
ATTACHMENT "A" PRICING
Based on a minimum quantity of * pagers, the following prices are offered
on the basic models indicated, exclusive of available options:
Low/High UHF 900
Band Band Band
---- ---- ----
PRONTO LX Numeric Display * * *
PRONTO FLX Numeric Display * * *
DIGITZTM Numeric Display FLEXTM * * *
BRAVO LX Numeric Display * * *
BRAVO FLX Numeric Display * * *
EXPRESS XTRA POCSAG Numeric Display ** * * *
EXPRESS XTRA FLX Numeric Display ** * * *
EXPRESS LUNATM FLX Synthesized Numeric * * *
EXPRESS LUNATM POCSAG Numeric Display * * *
LS 350 Numeric Display FLEXTM * * * *
LS 550 Numeric Display FLEXTM * * * *
LS 750 Numeric Display FLEXTM * * * *
BR 850 Numeric Display FLEXTM * * * *
WORDLINE Word Messaging POCSAG * * *
WORDLINE FLEXTM Word Messaging * * *
JAZZTM FLEXTM WORD Message Pager * * *
ADVISOR PRO Alpha Display w/vib. * * *
ADVISOR PRO FLEXTM Alpha Display * * *
ADVISOR GOLD Alpha Display (POCSAG) * * *
ADVISOR ELITE FLEXTM Alpha Display * * *
QUICKWORD Message Sender *
WORDTREK Message Entry Device *
WORDTREK PLUS Message Entry Device *
ALPHAMATE 250 NDN3000 Entry Device *
PAGEFINDERTM Word Messaging Pager 1.5 Version *
PAGEWRITERTM 2000 Messaging Device *
Y978AP Standard Accessory Kit (Charger w/AC Adapter) *
Y978AN Deluxe Accessory Kit (Deluxe Battery Charger/Docking
Station w/AC Adapter, PC Interface,FLEXTM PC Partner Software Pkg.) *
* Denotes all LS products will be offered for sale upon Motorola's ship
acceptance and general announcement to the public. This represents ARCH's
pricing for subject product upon announcement by Motorola.
** A Monet Mystique Housing is available for an additional charge of * ea.
over a three month period.
EXHIBIT 99.5
ARCH COMMUNICATIONS GROUP, INC.
STOCK PURCHASE AGREEMENT
JUNE 29, 1998
<PAGE>
EXHIBITS AND SCHEDULES
Exhibit A - Form of Certificate of Designations, Preferences and Relative,
Participating, Optional or Other Special Rights of the Series C
Convertible Preferred Stock
Exhibit B - Form of Registration Rights Agreement
Exhibit C - Form of Legal Opinion of Hale and Dorr LLP
Exhibit D - Form of Confidentiality Agreement
Schedule 1 Purchasers, Shares Purchased and Purchase Price
<PAGE>
ARCH COMMUNICATIONS GROUP, INC.
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of June 29,
1998, by and among ARCH COMMUNICATIONS GROUP, INC., a Delaware corporation (the
"Company"), SANDLER CAPITAL PARTNERS IV, L.P., a Delaware limited partnership,
SANDLER CAPITAL PARTNERS IV FTE, L.P., a Delaware limited partnership, HARVEY
SANDLER, JOHN KORNREICH, MICHAEL J. MAROCCO, ANDREW SANDLER, SOUTH FORK
PARTNERS, a Delaware general partnership, THE GEORGICA INTERNATIONAL FUND
LIMITED, a Bermuda corporation, ASPEN PARTNERS, a Delaware general partnership,
and CONSOLIDATED PRESS INTERNATIONAL LIMITED, a Bahamas corporation (each of the
foregoing persons or entities, other than the Company, being sometimes referred
to hereinafter individually as a "Purchaser" and collectively as the
"Purchasers").
WITNESSETH:
WHEREAS, subject to the terms and conditions set forth herein, the
Company desires to issue and sell to the Purchasers, and the Purchasers desire
to purchase from the Company, a total of 250,000 shares of the Company's Series
C Convertible Preferred Stock, par value $0.01 per share (the "Convertible
Stock"), for an aggregate purchase price of $25,000,000;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1. PURCHASE AND SALE OF PREFERRED STOCK.
1.1 SALE AND ISSUANCE OF SERIES C CONVERTIBLE PREFERRED STOCK.
(a) The Company has, or before the Closing (as defined below)
will have, authorized the sale and issuance of up to 250,000 shares of
Convertible Stock. The Company shall adopt and file with the Secretary of State
of the State of Delaware on or before the Closing the Certificate of
Designations, Preferences and Relative, Participating, Optional or Other Special
Rights of the Series C Convertible Preferred Stock in the form attached hereto
as EXHIBIT A (the "Certificate of Designations").
(b) Subject to the terms and conditions of this Agreement, each
Purchaser severally agrees to purchase at the Closing, and the Company agrees to
sell and issue to such Purchaser at the Closing, such number of shares of
Convertible Stock as set forth opposite such Purchaser's name and for the
<PAGE>
purchase price indicated with respect to such Purchaser on SCHEDULE 1,
representing an aggregate purchase price of $25,000,000.
1.2 CLOSING; DELIVERY. The purchase and sale of the Convertible Stock
shall take place at the offices of Hale and Dorr LLP, 60 State Street, Boston,
Massachusetts, at 10 a.m., on June 29, 1998, or at such other time and place as
the Company and the Purchasers mutually agree upon, orally or in writing (which
time and place are designated as the "Closing"). At the Closing, the Company
shall deliver to each Purchaser a certificate registered in the name of such
Purchaser representing the number of shares of Convertible Stock being purchased
thereby against payment of the purchase price therefor. Each Purchaser shall
deliver payment of the purchase price for the shares of Convertible Stock being
issued to such Purchaser by the wire transfer of immediately available federal
funds to such account as may be designated in writing by the Company. The
Company and each Purchaser shall take such additional actions and execute and
deliver such additional agreements and other instruments and documents as
necessary or appropriate to effect the transactions contemplated by this
Agreement in accordance with its terms.
2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY. The Company
hereby represents, warrants and covenants to the Purchasers that the statements
contained in this Section 2 are true and correct. As used herein, the
"Disclosure Schedule" refers to that certain disclosure schedule delivered by
the Company to the Purchasers prior to the execution of this Agreement. When
used in connection with the Company or any of its subsidiaries, the term
"Material Adverse Effect" means any change, event or effect that is materially
adverse to the business, assets, liabilities, financial condition, operations or
results of operations of the Company and its subsidiaries, taken as a whole.
2.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to
carry on its business as now conducted. The Company is duly qualified to
transact business and is in good standing in each jurisdiction in which the
failure so to qualify would have a Material Adverse Effect.
2.2 CAPITALIZATION. The authorized capital stock of the Company
immediately prior to the Closing will consist of:
(a) 10,000,000 shares of preferred stock, par value $0.01 per
share (the "Preferred Stock"), of which 31,874 shares have been designated as
Series A Preferred Stock, none of which are issued or outstanding, 100,000
shares have been designated as Series B Junior Participating Preferred Stock,
none of which are issued or outstanding, and 250,000 shares have been designated
as Series C Convertible Preferred Stock, none of which are issued or
outstanding. The rights, privileges and preferences of the Series C Convertible
-2-
<PAGE>
Preferred Stock are set forth on EXHIBIT A hereto.
(b) 75,000,000 shares of common stock, par value $0.01 per share
(the "Common Stock"), of which 20,958,570 shares were issued and outstanding on
June 1, 1998. All of the outstanding shares of Common Stock have been duly
authorized, are fully paid and nonassessable and have been issued in compliance
with all applicable federal and state securities laws. The Company has reserved
4,545,455 shares of Common Stock for issuance upon conversion of the Convertible
Stock.
(c) The Company has reserved 3,325,644 shares of Common Stock for
issuance to officers, directors, employees and consultants of the Company
pursuant to the stock option plans set forth in SECTION 2.2(C) of the Disclosure
Schedule, which have been duly adopted by the Company's Board of Directors and
approved by the Company's stockholders (collectively, the "Stock Plans") and
options to purchase Common Stock granted to executive officers of the Company
outside of the Stock Plans. Of such reserved shares of Common Stock, as of June
1, 1998, options to purchase 777,563 shares had been exercised, options to
purchase 2,033,137 were outstanding and 514,944 shares of Common Stock were
available for issuance to officers, directors, employees and consultants
pursuant to the Stock Plans.
(d) The Company has also reserved (i) 797,850 shares of Common
Stock for issuance upon conversion of its 6-3/4% Convertible Subordinated
Debentures due 2003 at a conversion price of $16.75 per share, (ii) 300,840
shares of Common Stock for issuance under its 1996 Employee Stock Purchase Plan,
and (iii) 100,000 shares of Series B Junior Participating Preferred Stock for
issuance in connection with its Rights Agreement, dated October 13, 1995 (the
"Rights Plan"). Further, the Company is obligated to pay approximately $21.5
million in cash or Common Stock (at the Company's option) to the former
stockholders of Page Call, Inc. ("Page Call"), on or about April 8, 2000 arising
from Page Call's pending acquisition by Benbow PCS Ventures, Inc. ("Benbow").
(e) Except as set forth in SECTION 2.2(E) of the Disclosure
Schedule or as provided in this Agreement with respect to the Convertible Stock,
(i) no subscription, warrant, option, convertible security or other right
(contingent or otherwise) to purchase or acquire any shares of capital stock of
the Company or any of its subsidiaries is authorized or outstanding, (ii)
neither the Company nor any of its subsidiaries has any obligation (contingent
or otherwise) to issue any subscription, warrant, option, convertible security
or other such right or to issue or distribute to holders of any shares of its
capital stock any evidences of indebtedness or assets of the Company or any of
its subsidiaries, and (iii) neither the Company nor any of its subsidiaries has
any obligation (contingent or otherwise) to purchase, redeem or otherwise
-3-
<PAGE>
acquire any shares of its capital stock or any interest therein or to pay any
dividend or make any other distribution in respect thereof.
(f) The Company has previously delivered to the Purchasers a true
and correct copy of the Company's Restated Certificate of Incorporation and
Bylaws, each as amended and restated to date (including a true and correct copy
of each certificate of designation filed with respect to the Preferred Stock).
(g) Except as provided in this Agreement or as set forth in
SECTION 2.2(G) of the Disclosure Schedule, there are no agreements, written or
oral, between the Company and any holder of its capital stock, or, to the
Company's knowledge, among any holders of its capital stock, relating to the
acquisition (including, without limitation, rights of first refusal or
preemptive rights), disposition, registration under the Securities Act of 1933,
as amended (the "Securities Act"), or voting of the capital stock of the
Company.
2.3 SUBSIDIARIES. Except as set forth in the Company SEC Reports (as
defined in Section 2.23), the Company does not currently have any subsidiaries,
as defined in Item 601(21) of Regulation S-K ("Subsidiaries"), or own or
control, directly or indirectly, any interest in any other corporation,
partnership, limited liability company, trust, association, or other business
entity. Each of the Company's Subsidiaries is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation and has all requisite corporate power and authority to carry on
its business as now conducted. Each of the Company's Subsidiaries is duly
qualified to transact business and is in good standing in each jurisdiction in
which the failure so to qualify would have a Material Adverse Effect.
2.4 AUTHORIZATION. All corporate action on the part of the Company,
its officers, directors and stockholders necessary for the authorization,
execution and delivery of this Agreement and the Registration Rights Agreement
in the form attached hereto as EXHIBIT B (the "Registration Rights Agreement"
and with this Agreement and the Certificate of Designations, collectively, the
"Investment Instruments"), the performance of all obligations of the Company
hereunder and thereunder and the authorization, issuance and delivery of the
Convertible Stock and the Common Stock issuable upon conversion of the
Convertible Stock has been taken or will be taken prior to the Closing, and the
Investment Instruments, when executed and delivered by the Company, shall
constitute valid and legally binding obligations of the Company, enforceable
against the Company in accordance with their respective terms, except (i) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance, and other laws of general application affecting
enforcement of creditors' rights generally, and as limited by laws relating to
the availability of specific performance, injunctive relief, or other equitable
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remedies, or (ii) to the extent the indemnification provisions contained in the
Registration Rights Agreement may be limited by applicable federal or state
securities laws.
2.5 VALID ISSUANCE OF SECURITIES. The Convertible Stock that is being
issued to the Purchasers hereunder, when issued, sold and delivered in
accordance with the terms hereof for the consideration expressed herein, will be
duly and validly issued, fully paid and nonassessable, free from all transfer or
similar taxes, liens and charges and free of restrictions on transfer other than
restrictions on transfer under this Agreement and applicable federal and state
securities laws, and, subject to the truth and accuracy of the Purchasers'
representations set forth in Section 3, will be issued in compliance with all
applicable federal and state securities laws. The Common Stock issuable upon
conversion of the Convertible Stock purchased hereunder has been duly and
validly reserved for issuance, and upon issuance in accordance with the terms of
the Certificate of Designations, will be duly and validly issued, fully paid and
nonassessable, free from all transfer or similar taxes, liens and charges and
free of restrictions on transfer other than restrictions on transfer under this
Agreement and applicable federal and state securities laws, and, subject to the
truth and accuracy of the Purchasers' representations set forth in Section 3,
will be issued in compliance with all applicable federal and state securities
laws.
2.6 CONSENTS. Except as set forth in SECTION 2.6 of the Disclosure
Schedule, no consent, approval, order or authorization of, or registration,
qualification, designation, declaration or filing with, any federal, foreign,
state or local governmental authority or any other person or entity on the part
of the Company or any of its subsidiaries is required in connection with the
consummation of the transactions contemplated by the Investment Instruments,
except for filings pursuant to applicable state securities laws and Regulation D
of the Securities Act.
2.7 LITIGATION. Except as set forth in SECTION 2.7 of the Disclosure
Schedule, there is no action, suit, proceeding or investigation pending or, to
the Company's knowledge, threatened against the Company or any of its
subsidiaries which could reasonably be expected to result in a Material Adverse
Effect, nor, to the Company's knowledge, is there any reasonable basis for the
foregoing. Neither the Company nor any of its subsidiaries is a party or subject
to the provisions of any order, writ, injunction, judgment or decree of any
court or government agency or instrumentality which has had, or could reasonably
be expected to result in, a Material Adverse Effect.
2.8 INTELLECTUAL PROPERTY RIGHTS. The Company and its subsidiaries
own, license or otherwise possess legally enforceable rights to use all patents,
pending patent applications, trademarks, service marks, trade names, copyrights,
trade secrets, licenses, information, software source code and object code and
proprietary rights and processes (collectively, the "Intellectual Property
Rights") necessary for the Company's and its subsidiaries' business as now
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conducted. Neither the Company nor any of its subsidiaries has received any
communications alleging that the Company or any of its subsidiaries has violated
any of the patents, trademarks, service marks, trade names, copyrights, trade
secrets or other proprietary rights or processes of any other person or entity
which reasonably could be considered likely to result in a Material Adverse
Effect. To the Company's knowledge, neither the Company nor any of its
subsidiaries is infringing upon, or in conflict with, the right or claimed right
of any third party with respect to any of the Intellectual Property Rights.
Neither the Company nor any of its subsidiaries has licensed any of the
Intellectual Property Rights to any other person or entity, nor does any other
person or entity have an option or any other right to acquire any of the
Intellectual Property Rights. To its knowledge, both the Company and its
subsidiaries have avoided every condition, and have not performed any act, the
occurrence of which would result in the Company's or any subsidiary's loss of
any Intellectual Property Right, the loss of which would have a Material Adverse
Effect.
2.9 COMPLIANCE WITH OTHER INSTRUMENTS. Neither the Company nor any of
its subsidiaries is in violation or default of any provisions of their
respective charters, bylaws or other organizational documents or of any
instrument, judgment, order, writ, decree or contract to which it is a party or
by which it is bound or, to its knowledge, of any provision of any federal or
state statute, rule or regulation applicable to the Company or any of its
subsidiaries which violations or defaults would, either alone or in the
aggregate, have a Material Adverse Effect. The execution, delivery and
performance of the Investment Instruments and the consummation of the
transactions contemplated hereby or thereby will not, with or without the
passage of time and/or the giving of notice, result in any such violation or be
in conflict with or constitute either a default under any such provision,
instrument, judgment, order, writ, decree or contract or an event which results
in the creation of any material lien, charge or encumbrance upon any assets of
the Company or its subsidiaries; provided, however, that in the case of any
contract (other than contracts pursuant to which the Company has incurred
indebtedness or other liabilities in an amount in excess of $1,000,000), the
foregoing representation shall not be deemed to have been breached so long as
any such resulting violation of, conflict with or default under such contract
would not reasonably be considered likely to result in a Material Adverse
Effect.
2.10 ABSENCE OF LIABILITIES. Except as set forth in SECTION 2.10 of
the Disclosure Schedule or as disclosed in the Financial Statements (as defined
below), since December 31, 1997 neither the Company nor any of its subsidiaries
has (i) declared or paid any dividends, or authorized or made any distribution
upon or with respect to any class or series of its capital stock, (ii) incurred
any indebtedness for money borrowed or incurred any other liabilities
individually in excess of $500,000 or in excess of $2,000,000 in the aggregate,
(iii) made any loans or advances to any person or entity, other than ordinary
advances for travel expenses, or (iv) sold, exchanged or otherwise disposed of
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any of its assets or rights, other than in the ordinary course of business.
2.11 NO CONFLICT OF INTEREST. Except as disclosed in the Company SEC
Reports, the Company is not a party to any transaction which would be required
to be disclosed pursuant to Item 404 of Regulation S-K ("Regulation S-K")
promulgated by the Securities and Exchange Commission (the "SEC").
2.12 RIGHTS OF REGISTRATION AND VOTING RIGHTS. Except as set forth in
Section 2.12 of the Disclosure Schedule and as contemplated in the Registration
Rights Agreement, neither the Company nor any of its subsidiaries has granted or
agreed to grant any registration rights, including piggyback rights, to any
person or entity. To the Company's knowledge, no stockholders of the Company
have entered into any agreements with respect to the voting of capital stock of
the Company.
2.13 PRIVATE PLACEMENT. Subject in part to the truth and accuracy of
the Purchasers' representations set forth in this Agreement, the offer, sale and
issuance of the Convertible Stock as contemplated by this Agreement is exempt
from the registration requirements of the Securities Act, and neither the
Company nor any authorized agent acting on its behalf will take any action
hereafter that would cause the loss of such exemption.
2.14 TITLE TO PROPERTY AND ASSETS. Each of the Company and its
subsidiaries owns or leases its properties and assets free and clear of all
mortgages, liens, loans and encumbrances, except such encumbrances and liens
which are disclosed in the financial statements included in the Company SEC
Reports or which arise in the ordinary course of business and do not materially
impair the Company's ownership or use of such properties or assets. With respect
to the properties and assets it leases, each of the Company and its subsidiaries
is in compliance with such leases, except for such instances of non-compliance
which, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect and, to its knowledge, holds a valid
leasehold interest free of any material liens, claims or encumbrances.
2.15 TAX RETURNS AND AUDITS. Each of the Company and its subsidiaries
has accurately prepared and timely filed all foreign, federal, state, local and
other tax returns required by law to be filed by it, has paid or made provision
for the payment of all taxes shown to be due and all additional assessments, and
adequate provisions have been made and are reflected in the Financial Statements
to the extent required by U.S. generally accepted accounting principles ("GAAP")
for all current taxes and other charges to which the Company or any of its
subsidiaries are subject and which are not currently due and payable. Neither
the Company nor any of its subsidiaries has filed or has been required to file
foreign income tax returns. The Company does not know of any additional
assessments or adjustments pending or threatened against the Company or any of
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its subsidiaries for any period which could reasonably be expected to result in
a Material Adverse Effect, nor of any reasonable basis for any such assessment
or adjustment.
2.16 LABOR AGREEMENTS AND ACTIONS. The Company is not bound by or
subject to (and none of its assets or properties is bound by or subject to) any
written or oral, express or implied, contract, commitment or arrangement with
any labor union, and since January 1, 1995 no labor union has requested or, to
the knowledge of the Company, has sought to represent any of the employees,
representatives or agents of the Company or any of its subsidiaries. There is no
strike or other labor dispute involving the Company and any of its subsidiaries
pending, or to the knowledge of the Company threatened, which would have a
Material Adverse Effect, nor is the Company aware of any labor organization
activity involving its employees. To the Company's knowledge, the Company has
complied with all applicable federal and state equal employment opportunity laws
and with all other laws related to employment, except for such acts of
non-compliance which, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
2.17 PERMITS. The Company and each of its subsidiaries has all
franchises, permits, licenses and any similar authority necessary for the
conduct of its business as now being conducted by it, the lack of which would
have a Material Adverse Effect. Neither the Company nor any of its subsidiaries
is in default in any material respect under any of such franchises, permits,
licenses or other similar authority , except for such defaults which,
individually or in the aggregate, would not result in a Material Adverse Effect.
2.18 REAL PROPERTY HOLDING CORPORATION. Neither the Company nor any of
its subsidiaries is a United States real property holding corporation within the
meaning of Internal Revenue Code Section 897(c)(2) and Section 1.897-2(c) of the
Treasury Regulations promulgated thereunder.
2.19 FINANCIAL STATEMENTS. The Company has made available to the
Purchasers its audited consolidated financial statements (including balance
sheet and income statement) as of, and for the year ended December 31, 1997 and
its unaudited consolidated financial statements (including balance sheet and
income statement) as of, and for the three-month period ended March 31, 1998
(collectively, the "Financial Statements"). The Financial Statements are
complete and correct in all material respects and fairly present the
consolidated financial condition and operating results of the Company and its
subsidiaries as of the dates thereof. Except as set forth in the Financial
Statements, the Company has no material liabilities, contingent or otherwise,
other than (i) liabilities paid or incurred in the ordinary course of business
subsequent to the dates thereof and (ii) obligations under contracts and
commitments incurred in the ordinary course of business, which, in both cases,
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individually or in the aggregate, are not material to the financial condition or
operating results of the Company and its subsidiaries, taken as a whole.
2.2 CHANGES. Except as set forth in SECTION 2.20 of the Disclosure
Schedule, since March 31, 1998, there has not been:
(a) any change in the assets, liabilities, financial condition or
operating results of the Company and its subsidiaries from that reflected in the
Financial Statements, except changes in the ordinary course of business that
have not resulted in a Material Adverse Effect.
(b) any waiver or compromise by the Company or its subsidiaries
of a valuable right or of a material debt owed to it;
(c) any satisfaction or discharge of any material lien, claim or
encumbrance or payment of any obligation by the Company or its subsidiaries,
except in the ordinary course of business;
(d) any material change to a material contract or agreement (as
defined in Item 601(b)(10) of Regulation S-K) by which the Company, any of its
subsidiaries or any of their respective assets is bound or subject;
(e) any material change in any compensation arrangement or
agreement with any employee, officer, director or stockholder of the Company or
any of its subsidiaries;
(f) any sale, assignment or transfer of any material patents,
trademarks, copyrights, trade secrets or other intangible assets of the Company
or any of its subsidiaries, other than in the ordinary course of business;
(g) any resignation or termination of employment of any executive
officer or key employee of the Company or any of its subsidiaries; and the
Company does not know of any impending resignation or termination of employment
of any such executive officer or key employee;
(h) receipt of notice that there has been a loss of, or order
cancellation by, any major customer of the Company or any of its subsidiaries,
which loss or cancellation would result in a Material Adverse Effect;
(i) any mortgage, pledge, transfer of a security interest in, or
lien, created by the Company or any of its subsidiaries, with respect to any
material portion of its properties or assets, except liens which are not,
individually or in the aggregate, material to the Company and its subsidiaries,
taken as a whole;
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(j) any loans or guarantees made by the Company or any of its
subsidiaries to or for the benefit of its employees, officers or directors, or
any members of their immediate families, other than travel advances and other
advances made in the ordinary course of its business;
(k) any declaration, setting aside or payment or other
distribution in respect to any of the Company's capital stock, or any direct or
indirect redemption, purchase, or other acquisition of any of such stock by the
Company; or
(l) any arrangement or commitment by the Company or any of its
subsidiaries to do anything described in this Section 2.20.
2.21 ENVIRONMENTAL AND SAFETY LAWS. Neither the Company nor any of its
subsidiaries is in violation of any applicable statute, law or regulation
relating to the environment or occupational health and safety where such
violation, either individually or in the aggregate, would reasonably be expected
to have a Material Adverse Effect and, to the Company's knowledge, no material
expenditures are required in order to comply with any such existing statute, law
or regulation.
2.22 FCPA. The Company and its subsidiaries have complied in all
material respects with the United States Foreign Corrupt Practices Act of 1977,
as amended (the "FCPA"), in obtaining any consents, licenses, approvals,
authorizations, rights, and privileges in connection with the conduct of their
business and, have otherwise conducted their business in compliance with all
material respects with the FCPA. Their internal management and accounting
practices and controls are adequate to ensure compliance in all material
respects with the FCPA.
2.23 REPORTS. Since January 1, 1995, the Company has filed all reports
(including proxy statements) and registration statements required to be filed
with the SEC (collectively, the "Company SEC Reports"). The Company has
previously furnished or made available to the Purchasers true and complete
copies of all of the Company SEC Reports filed prior to the date hereof. None of
the Company SEC Reports, as of their respective dates, contained any untrue
statement of material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. Each of the balance
sheets (including the related notes) included in the Company SEC Reports
presents fairly, in all material respects, the consolidated financial position
of the Company and its subsidiaries as of the respective dates thereof, and the
other related statements (including the related notes) included in the Company
SEC Reports present fairly, in all material respects, the results of operations
and the changes in financial position of the Company and its subsidiaries for
the respective periods or as of the respective dates set forth therein, all in
conformity with GAAP consistently applied during the periods involved, except as
otherwise noted therein and subject, in the case of unaudited interim financial
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statements, to the absence of footnotes and normal year-end adjustments. All of
the Company SEC Reports, as of their respective dates, complied as to form in
all material respects with the requirements of the Securities Exchange Act of
1934, as amended, the Securities Act and the applicable rules and regulations
thereunder.
2.24 DISCLOSURE. No representation or warranty of the Company
contained in this Agreement and the Disclosure Schedule and other exhibits
attached hereto, or in any certificate furnished or to be furnished by the
Company to the Purchasers at the Closing (when read together), contains any
untrue statement of a material fact or omits to state a material fact necessary
to make the statements contained herein or therein not misleading in light of
the circumstances under which they were made.
3. REPRESENTATIONS AND WARRANTIES OF PURCHASERS. Each Purchaser hereby,
severally and not jointly, represents and warrants to the Company, with respect
to itself only, that:
3.1 ACCREDITED INVESTOR; AUTHORIZATION. Such Purchaser is an
"accredited investor" within the meaning of Rule 501 promulgated under the
Securities Act and has the individual, partnership or corporate, as the case may
be, power and authority to enter into and perform this Agreement and to purchase
the Convertible Stock (and the Common Stock issuable upon conversion thereof).
This Agreement has been duly authorized, executed and delivered by such
Purchaser and constitutes the legal, valid and binding obligation of such
Purchaser, enforceable in accordance with its terms, except as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance, and other laws of general application affecting enforcement of
creditors' rights generally, and as limited by laws relating to the availability
of specific performance, injunctive relief, or other equitable remedies.
3.2 NO CONFLICT WITH OTHER AGREEMENTS. The execution, delivery and
performance of the Investment Instruments and the consummation of the
transactions contemplated hereby and thereby will not, with or without the
passage of time and/or the giving of notice, result in a violation or default of
any provisions of such Purchaser's limited partnership agreement, certificate of
limited partnership, certificate of incorporation, bylaws or other charter
document or of any instrument, judgment, order, writ, decree or contract to
which it is a party or by which it is bound or, to its knowledge, of any
provision of federal or state statute, rule or regulation.
3.3 INVESTMENT KNOWLEDGE. Such Purchaser has sufficient knowledge and
experience in financial and business matters so as to be capable of evaluating
the risks and merits of its investment in the Company and is capable of bearing
the economic risks of such investment, including a complete loss of its
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investment. Such Purchaser acknowledges that the Convertible Stock and the
shares of Common Stock issuable upon conversion thereof have not been registered
under the Securities Act and, except as provided in the Registration Rights
Agreement, the Company is under no obligation to file a registration statement
with the SEC with respect to the Convertible Stock or the shares of Common Stock
issuable upon conversion of the Convertible Stock.
3.4 DISTRIBUTION. The Convertible Stock (and the Common Stock issuable
upon conversion thereof) is being acquired for such Purchaser's own account for
the purpose of investment and not with a view to or for resale in connection
with any distribution thereof.
4. CONDITIONS OF PURCHASERS' OBLIGATIONS AT CLOSING. The obligations of the
Purchasers to the Company under this Agreement are subject to the fulfillment,
on or before the Closing, of each of the following conditions, unless otherwise
waived in writing by Purchasers purchasing a majority of the shares of
Convertible Stock, which waiver shall be binding upon all Purchasers:
4.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
of the Company contained in Section 2 shall be true and correct in all material
respects on and as of the date of the Closing with the same effect as though
such representations and warranties had been made on and as of the date of the
Closing, except for those representations and warranties made as of a specific
date other than the date of this Agreement, which shall be true and correct in
all material respects as of such date.
4.2 PERFORMANCE. The Company shall have performed and complied in all
material respects with all covenants, agreements, obligations and conditions
contained in this Agreement that are required to be performed or complied with
by the Company on or before the Closing.
4.3 COMPLIANCE CERTIFICATE. A duly authorized executive officer of the
Company shall have delivered to the Purchasers at the Closing a certificate
certifying that the conditions specified in Sections 4.1 and 4.2 have been
fulfilled.
4.4 QUALIFICATIONS. All authorizations, approvals or permits of any
governmental authority or regulatory body of the United States or of any state
that are set forth in SECTION 4.4 of the Disclosure Schedule shall have been
obtained and be effective as of the Closing.
4.5 OPINION OF COMPANY COUNSEL. The Purchasers shall have received
from Hale and Dorr LLP, counsel for the Company, an opinion, dated as of the
Closing, in substantially the form of EXHIBIT E.
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4.6 SUPPORTING DOCUMENTS. The Purchasers shall have received the
following:
(a) A copy of resolutions of the Board of Directors of the
Company authorizing and approving the Investment Instruments and copies of
resolutions of the Board of Directors of the Company authorizing and approving
the adoption of the Certificate of Designations, the issuance of the Convertible
Stock and the other matters contemplated by this Agreement, all such resolutions
to be certified by the Secretary of the Company;
(b) A long-form certificate as to the existence and good standing
of the Company issued by the Secretary of State of the State of Delaware, dated
not more than five (5) days before the date of Closing; and
(c) Such additional documentation as legal counsel for the
Purchasers may reasonably request.
4.7 CREDIT AGREEMENT; LENDER APPROVAL. The Company and its bank
lenders shall have entered into a Second Amended and Restated Credit Agreement,
substantially in accordance with the terms of the Summary of Principal Terms and
Conditions, dated as of April 10, 1998.
4.8 SENIOR NOTES. The Company's wholly-owned subsidiary, Arch
Communications, Inc., a Delaware corporation formerly known as USA Mobile
Communications, Inc. II, shall have issued new senior notes in an aggregate
principal amount of not less than $125,000,000, with an interest rate and other
per annum cost of capital of not greater than 15% and otherwise pursuant to an
indenture in form and substance substantially similar to that described in the
Private Offering Memorandum of Arch Communications, Inc., dated June 8, 1998, a
copy of which has previously been furnished to the Purchasers.
4.9 RESTRUCTURING. The Company shall have implemented, or publicly
announced its intention to implement, a corporate restructuring in accordance
with the restructuring plan previously disclosed to the Purchasers.
4.10 BOARD OF DIRECTORS. As of the Closing, the Company's Board of
Directors shall consist of seven members, of which one member shall be elected
by the holders of a majority of the Convertible Stock (who the Purchasers agree
shall initially be John Kornreich).
4.11 REGISTRATION RIGHTS AGREEMENT. The Company, each Purchaser that
is a party thereto and the other parties thereto shall have executed and
delivered the Registration Rights Agreement.
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4.12 CERTIFICATE OF DESIGNATIONS. The Company shall have filed the
Certificate of Designations with the Secretary of State of the State of Delaware
on or prior to the date of the Closing, which shall continue to be in full force
and effect as of the date of the Closing.
4.13 HSR ACT. Any applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended ("HSR Act"),
with respect to the transactions contemplated by this Agreement shall have
expired or been terminated.
4.14 PAYMENT OF EXPENSES. The Company shall have paid the reasonable
legal expenses and disbursements of the Purchasers, in an amount which, when
combined with the other reimbursable out-of-pocket expenses of the Purchasers as
provided in Section 9.6, shall not exceed $100,000.
4.15 NASDAQ APPROVAL. The Company shall have delivered to the
Purchasers evidence, in form and substance reasonably satisfactory to the
Purchasers and their counsel, to establish that the issuance and sale of the
Convertible Stock does not require consent of the Company's stockholders under
the applicable rules of the Nasdaq National Market.
4.16 NO LITIGATION. On the Closing Date, there shall be no effective
injunction or other pending or threatened proceeding, legal restraint or
prohibition which would prevent the consummation of the transactions
contemplated hereby.
4.17 AMENDMENT TO RIGHTS PLAN. The Company shall have amended its
Rights Plan, in a manner reasonably satisfactory to the Purchasers, to provide
that none of the Purchasers shall be deemed to be "Acquiring Persons" under the
Rights Plan in connection with the consummation of the transactions contemplated
under this Agreement.
5. CONDITIONS OF THE COMPANY'S OBLIGATIONS AT CLOSING. The obligations of
the Company to each Purchaser under this Agreement are subject to the
fulfillment, on or before the Closing, of each of the following conditions,
unless otherwise waived by the Company in writing; PROVIDED, HOWEVER, that the
non-fulfillment of a condition by a Purchaser (a "Defaulting Purchaser") will
not relieve the Company of its obligation to each other fulfilling Purchaser so
long as such other fulfilling Purchaser(s) are willing to purchase from the
Company the Convertible Stock that was to have been purchased by the Defaulting
Purchaser.
5.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
of such Purchaser contained in Section 3 shall be true and correct in all
material respects on and as of the date of the Closing with the same effect as
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though such representations and warranties had been made on and as of the date
of the Closing, except for those representations and warranties made as of a
specific date other than the date of this Agreement, which shall be true and
correct in all material respects as of such date.
5.2 PERFORMANCE. Such Purchaser shall have performed and complied in
all material respects with all covenants, agreements, obligations and conditions
contained in this Agreement that are required to be performed or complied with
by such Purchaser on or before the Closing.
5.3 REGISTRATION RIGHTS AGREEMENT. Such Purchaser shall have executed
and delivered the Registration Rights Agreement.
5.4 COMPLIANCE CERTIFICATE. A duly authorized executive officer of the
Purchaser shall have delivered to the Company at the Closing a certificate
certifying that the conditions specified in Sections 5.1 and 5.2 have been
fulfilled.
5.5 HSR ACT. Any applicable waiting period under the HSR Act with
respect to the transactions contemplated by this Agreement shall have expired or
been terminated.
5.6 NO LITIGATION. On the Closing Date, there shall be no effective
injunction or other pending or threatened proceeding, legal restraint or
prohibition which would prevent the consummation of the transactions
contemplated hereby.
6. AFFIRMATIVE COVENANTS OF THE COMPANY. The Company covenants and agrees
as follows:
6.1 CORPORATE EXISTENCE. The Company and each of its subsidiaries will
maintain its corporate existence in good standing and comply with all applicable
laws and regulations of the United States or of any state or political
subdivision thereof and of any foreign jurisdiction, and of any government
authority of any of the foregoing, where the failure to so comply would have a
Material Adverse Effect.
6.2 BOOKS OF ACCOUNT AND RESERVES. The Company will keep books of
record and account in which full, true and correct entries are made of all of
its material dealings, business and affairs, in accordance with GAAP. The
Company will employ certified public accountants of established national
reputation selected by the Board of Directors of the Company who are
"independent" within the meaning of the accounting regulations of the SEC (the
"Accountants"). The Company will have annual audits made by such Accountants in
the course of which such Accountants shall make such examinations, in accordance
with generally accepted auditing standards, as will enable them to give such
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reports or opinions with respect to the financial statements of the Company as
will satisfy the requirements of the SEC in effect at such time with respect to
reports or opinions of accountants.
6.3 FURNISHING OF FINANCIAL STATEMENTS AND INFORMATION. So long as at
least 50% of the shares of Convertible Stock issued hereunder remains
outstanding at any time after the date of this Agreement, the Company shall
deliver to each Purchaser who continues to hold, together with its affiliates,
at least 75,000 shares of Convertible Stock and who is not a competitor of the
Company (as determined in good faith by the Company's Board of Directors):
(a) annually, as soon as available, but in any event by the end
of each fiscal year, an operating plan and budget for the following year, and
quarterly updates of the Company's performance in comparison with such plan and
budget, which quarterly updates shall be provided as soon as available, but in
any event within forty-five (45) days of the close of each quarter;
(b) as soon as available, but in any event within 45 days after
the end of each quarter of each fiscal year of the Company, an unaudited balance
sheet of the Company, together with the related statements of operations,
retained earnings and cash flow for such quarter, prepared in accordance with
GAAP (provided, however, that such statements need not comply with the footnote
disclosure requirements of GAAP);
(c) as soon as available, but in any event within 90 days after
the end of each fiscal year, a balance sheet of the Company, as of the end of
such fiscal year, together with the related statements of operations, retained
earnings and cash flow statements for such fiscal year, all in reasonable detail
and duly certified by the Accountants, who shall have given the Company an
opinion, unqualified as to the scope of the audit, regarding such statements;
(d) with reasonable promptness after the Company learns of the
commencement or written threats of the commencement of any material lawsuit,
legal or equitable, or of any material administrative, arbitration or other
proceeding against the Company or its business, assets or properties, which, in
either event, could reasonably be considered likely to result in a Material
Adverse Effect, written notice of the nature and extent of such suit or
proceeding;
(e) promptly upon transmission thereof, copies of all reports,
proxy statements, registration statements and notifications filed by it with the
SEC pursuant to any act administered by the SEC or furnished to stockholders of
the Company or to Nasdaq or any national securities exchange;
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(f) with reasonable promptness, notice of any default in any
material agreement of the Company or its subsidiaries which could reasonably be
considered likely to result in a Material Adverse Effect; and
(g) with reasonable promptness, such other financial data
relating to the business, affairs and financial condition of the Company and its
subsidiaries as is available to the Company and as from time to time the
Purchasers may reasonably request.
The foregoing information rights of the Purchasers are conditioned upon
each Purchaser's execution of a confidentiality agreement with the Company
substantially in the form of EXHIBIT D attached hereto.
6.4 RESERVE FOR CONVERSION SHARES; NASDAQ LISTING.
(a) The Company shall at all times reserve and keep available out
of its authorized but unissued shares of Common Stock, for the purpose of
effecting the conversion of the Convertible Stock and otherwise complying with
the terms of this Agreement, such number of its authorized shares of Common
Stock as shall be sufficient to effect the conversion of the Convertible Stock
from time to time outstanding or otherwise to comply with the terms of this
Agreement. If at any time the number of authorized but unissued shares of Common
Stock shall not be sufficient to effect the conversion of the Convertible Stock
or otherwise to comply with the terms of this Agreement, the Company will
forthwith take such corporate action as may be necessary to increase its
authorized but unissued shares of Common Stock to such number of shares as shall
be sufficient for such purposes. The Company will obtain any authorization,
consent, approval or other action by or make any filing with any court or
administrative body that may be required under applicable state securities laws
in connection with the issuance of shares of Common Stock upon conversion of the
Convertible Stock.
(b) The Company shall, if permitted by the rules of the Nasdaq
Stock Market, list and keep listed on the Nasdaq National Market, all Common
Stock issuable upon conversion of the Convertible Stock.
6.5 SEC REPORTING. The Company shall properly report the consummation
of the transactions contemplated hereby with the SEC.
6.6 USE OF PROCEEDS. The Company shall use the proceeds from the sale
of the Convertible Stock for general corporate purposes relating to the business
and operations of the Company.
6.7 NOTICE OF TRANSACTIONS OR LIQUIDATION. The Company shall give at
least twenty (20) days' prior written notice to the Purchasers of any merger or
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consolidation in which the Company's outstanding securities are converted into
securities, cash or other property, any sale of all or substantially all of its
assets or any liquidation, dissolution or winding up of the Company.
6.8 INSPECTION. So long as at least 50% of the shares of Convertible
Stock issued hereunder remains outstanding at any time after the date of this
Agreement, the Company shall permit and cause each of its subsidiaries to permit
each Purchaser who continues to hold, together with its affiliates, at least
75,000 shares of Convertible Stock and who is not a competitor of the Company
(as determined in good faith by the Company's Board of Directors), and such
persons as it may reasonably designate, to visit and inspect any of the
properties of the Company and its subsidiaries, examine their books and discuss
the affairs, finances and accounts of the Company and its subsidiaries with
their officers, employees and Accountants (and the Company hereby authorizes
said Accountants to discuss with such Purchaser and such designees such affairs,
finances and accounts provided that the Company shall be entitled to have a
representative of the Company be present), all at such reasonable times as shall
be requested by such Purchaser; provided, however, that such Purchaser and any
such designee shall, as a condition to the exercise of this inspection right,
execute a confidentiality agreement with the Company, containing customary
provisions, in form and substance reasonably acceptable to the Company and such
Purchaser.
6.9 REPRESENTATION ON BOARD OF DIRECTORS, DIRECTORS' AND SHAREHOLDERS'
MEETINGS. The Company shall maintain its Board of Directors in accordance with
the terms of its Restated Certificate of Incorporation and the Certificate of
Designations. The Company shall maintain a provision in its Bylaws or charter
providing for the indemnification of its directors to the fullest extent
permitted by the laws of Delaware.
6.10 AMENDMENT TO RIGHTS PLAN. The Company shall cause its Rights Plan
to be amended, on or prior to July 31, 1998, to provide that the Purchasers
shall be issued Rights in respect of their shares of Convertible Stock on or
prior to a Distribution Date (as defined in the Rights Plan) equivalent to those
Rights the Purchasers would otherwise have had under the Rights Plan on an "as
converted" basis.
7. NEGATIVE COVENANTS OF THE COMPANY. So long as any of the shares of
Convertible Stock issued hereunder remain outstanding, the Company will be
limited and restricted as follows:
7.1 PROTECTIVE PROVISIONS. The Company will not amend the Restated
Certificate of Incorporation or the Certificate of Designations in any manner
other than in compliance with the provisions for amendment set forth therein.
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7.2 RESTRICTIVE AGREEMENTS PROHIBITED. Neither the Company nor any of
its subsidiaries shall become a party to any agreement which by its terms
restricts the Company's performance of the Investment Instruments or its
obligations under the Restated Certificate without the prior consent of the
holders of a majority of the shares of Convertible Stock outstanding at such
time.
7.3 LIMITATION ON DEBT. Capitalized terms used in this Section 7.3 and
in Section 7.4 but not defined herein shall have the meanings given such terms
in the Company's Indenture for the 10-7/8% Senior Discount Notes due 2008 in the
form as of the date of this Agreement (the "Senior Notes Indenture").
So long as at least 50% of the Convertible Stock issued hereunder
remains outstanding, the Company will not, and will not permit any Restricted
Subsidiary to, Incur any Debt without the prior consent of the holders of a
majority of the shares of Convertible Stock outstanding at such time; PROVIDED,
HOWEVER, that the Company may Incur Debt and may permit a Restricted Subsidiary
to Incur Debt if at the time of such Incurrence and after giving effect thereto
the Consolidated Cash Flow Ratio would be less than 6.5 to 1.0.
In making the foregoing calculation, there shall be excluded from Debt
for purposes of calculating the Consolidated Cash Flow Ratio all Debt of the
Company and its Restricted Subsidiaries incurred pursuant to clause (i) of the
definition of Permitted Debt, and pro forma effect will be given to (i) the
Incurrence of the Debt to be incurred and the application of the net proceeds
therefrom to refinance other Debt and (ii) the acquisition (whether by purchase,
merger or otherwise) or disposition (whether by sale, merger or otherwise) of
any company, entity or business acquired or disposed of by the Company or its
Restricted Subsidiaries, as the case may be, since the first day of the most
recent full fiscal quarter, as if such acquisition or disposition occurred at
the beginning of the most recent full fiscal quarter.
Notwithstanding the foregoing limitation, the Company may, and may
permit its Restricted Subsidiaries to, Incur the following additional Debt
("Permitted Debt"):
(i) Debt under Bank Credit Facilities in an aggregate amount not
to exceed $150.0 million at any one time outstanding, less any amounts by which
the commitments thereunder are permanently reduced pursuant to the provisions
thereof as described under the "Limitation on Certain Asset Sales" covenant in
the Company's Senior Notes Indenture;
(ii) other Debt of the Company or any Restricted Subsidiary
outstanding on the date of the Senior Notes Indenture and listed on Schedule A
thereto;
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(iii) Debt owed by the Company to any wholly owned Restricted
Subsidiary or owed by any wholly owned Restricted Subsidiary to the Company or
any other wholly owned Restricted Subsidiary (provided that such Debt is held by
the Company or such wholly owned Restricted Subsidiary);
(iv) Debt represented by the Notes;
(v) Debt Incurred or Incurrable in respect of letters of credit,
bankers' acceptances or similar facilities not to exceed $5.0 million at any one
time outstanding;
(vi) Capital Lease Obligations whose Attributable Value does not
exceed $5.0 million at any one time outstanding;
(vii) Debt of the Company or any Restricted Subsidiary consisting
of guarantees, indemnities or obligations in respect of purchase price
adjustments in connection with the acquisition or disposition of assets,
including, without limitation, shares of Capital Stock;
(viii) Debt of the Company or any Restricted Subsidiary
(including trade letters of credit) in respect of purchase money obligations,
provided that the aggregate amount of such Debt outstanding at any time does not
exceed $5.0 million;
(ix) Debt arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument drawn against insufficient
funds in the ordinary course of business, provided that such Debt is
extinguished within two Business Days of its Incurrence; and
(x) any renewals, extensions, substitutions, refinancings or
replacements (each, for purposes of this clause, a "refinancing") of any
outstanding Debt, other than Debt Incurred pursuant to clause (i), (vii) or (ix)
of this definition, including any successive refinancings thereof, so long as
(A) any such new Debt is in a principal amount that does not exceed the
principal amount (or, if such Debt being refinanced provides for an amount less
than the principal amount thereof to be due and payable upon a declaration of
acceleration thereof, such lesser amount as of the date of determination) so
refinanced, plus the amount of any premium required to be paid in connection
with such refinancing pursuant to the terms of the Debt refinanced or the amount
of any premium reasonably determined by the Company as necessary to accomplish
such refinancing by means of a tender offer or privately negotiated repurchase,
plus the amount of expenses Incurred by the Company in connection with such
refinancing, and (B) such refinancing Debt does not have an Average Life less
than the Average Life of the Debt being refinanced and does not have a final
scheduled maturity earlier than the final scheduled maturity of the Debt being
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refinanced, or permit redemption at the option of the holder earlier than the
earliest date of redemption at the option of the holder of the Debt being
refinanced.
7.4 RESTRICTED PAYMENTS. So long as 50% of the shares of Convertible
Stock issued hereunder remain outstanding, the Company will not, and will not
permit any Restricted Subsidiary to, directly or indirectly, take any of the
following actions (such payments or any other actions described in (but not
excluded from) clauses (a) through (d) being referred to as "Restricted
Payments"):
(a) declare or pay any dividend on, or make any distribution to
holders of, any shares of the Capital Stock of the Company or any Restricted
Subsidiary (other than dividends or distributions payable solely in Common Stock
and other than dividends or distributions by a Restricted Subsidiary payable to
the Company or a wholly owned Restricted Subsidiary);
(b) purchase, redeem or otherwise acquire or retire for value,
directly or indirectly, any shares of Capital Stock (other than any such Capital
Stock owned by the Company or any of its wholly owned Restricted Subsidiaries);
(c) make any loan, advance, capital contribution to or other
Investment in, or guarantee any obligation of, any Affiliate of the Company,
other than a Permitted Investment; and
(d) make any other Investment (other than a Permitted Investment)
in any person or entity;
unless at the time of, and immediately after giving effect to, the proposed
Restricted Payment:
(i) no Default or Event of Default has occurred and is
continuing;
(ii) the Company could Incur at least $1.00 of additional
Debt (other than Permitted Debt) in accordance with Section 7.3; and
(iii) the aggregate amount of all Restricted Payments
declared or made after the issue date of the Notes does not exceed the sum of:
(A) the remainder of (x) 100% of the aggregate
Consolidated Cash Flow of the Company (excluding, for purposes other than
determining whether the Company may, or may permit a Restricted Subsidiary to,
make Investments in any Person, the net income (but not the net loss) of any
Restricted Subsidiary to the extent that the declaration or payment of dividends
or similar distributions by such Restricted Subsidiary is at the date of
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determination restricted, directly or indirectly, except to the extent that such
net income could be paid to the Company or a Restricted Subsidiary thereof by
loans, advances, intercompany transfers, principal repayments or otherwise)
measured on a cumulative basis during the period beginning on the first day of
the Company's fiscal quarter during which the Notes were originally issued and
ending on the last day of the Company's most recent fiscal quarter for which
internal financial statements are available ending prior to the date of such
proposed Restricted Payment, minus (y) the product of 2.0 times Consolidated
Interest Expense accrued on a cumulative basis during the period beginning on
the first day of the Company's fiscal quarter during which the Notes were
originally issued] and ending on the last day of the Company's most recent
fiscal quarter for which internal financial statements are available ending
prior to the date of such proposed Restricted Payment; plus
(B) the aggregate net proceeds received by the Company
after the initial issuance of the Notes (including the fair market value of the
property other than cash as determined by the Company's Board of Directors,
whose good faith determination will be conclusive) from the issuance or sale
(other than to a Restricted Subsidiary) of Common Stock of the Company (which
shall not be deemed to include the issuance of the Convertible Stock); plus
(C) the aggregate net cash proceeds received by the
Company after the initial issuance of the Notes (including the fair market value
of the property other than cash as determined by the Company's Board of
Directors, whose good faith determination will be conclusive) from the issuance
or sale (other than to a Restricted Subsidiary) of debt securities or
convertible securities (which shall not be deemed to include the issuance of the
Convertible Stock) that have been converted into or exchanged for Common Stock
of the Company, together with the aggregate net cash proceeds received by the
Company at the time of such conversion or exchange; plus
(D) without duplication, the Net Cash Proceeds received
by the Company or a wholly owned Restricted Subsidiary of the Company upon the
sale of any Unrestricted Subsidiary.
Notwithstanding the foregoing, the Company and its Restricted Subsidiaries
may take any one or more of the following actions, whether singly or in
combination, so long as (with respect to clauses (b) through (f) below) no
Default or Event of Default has occurred and is continuing:
(a) the payment of any dividend within 60 days after the date of
declaration thereof if at the declaration date such payment would not have been
prohibited by the foregoing provisions;
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(b) payments (whether made in cash, property or securities) by the Company
or any Subsidiary of the Company to any employee of the Company or any
Subsidiary of the Company in connection with the issuance or redemption of stock
of any such company pursuant to any employee stock option plan or board
resolution to the extent that such payments do not exceed $500,000 in the
aggregate during any fiscal year or $2.0 million in the aggregate;
(c) Investments in Persons made with, or out of the net cash proceeds of a
substantially concurrent issuance and sale (other than to a Restricted
Subsidiary) of, shares of Common Stock of the Company;
(d) Investments in Persons all or substantially all of whose operations
are in the telecommunications business, provided that the aggregate amount of
Investments pursuant to this clause (d) in all such persons or entities does not
exceed $50.0 million;
(e) Debt Investments in Benbow in an aggregate amount of up to $75.0
million; and
(f) make any other payment or payments of up to $5.0 million in the
aggregate which would otherwise constitute a Restricted Payment.
The Restricted Payments described in clauses (b) through (f) of this
paragraph will be Restricted Payments that will be permitted to be taken in
accordance with the preceding paragraph but will reduce the amount that would
otherwise be available for Restricted Payments under clause (iii) of the first
paragraph of this Section 7.4 and the Restricted Payments described in clause
(a) of the preceding paragraph will be Restricted Payments that will be
permitted to be taken in accordance with the preceding paragraph and will not
reduce the amount that would otherwise be available for Restricted Payments
under clause (iii) of the first paragraph of this Section 7.4.
For the purpose of making any calculations pursuant to this Section 7.4,
(i) an Investment will include the fair market value of the net assets of any
Restricted Subsidiary at the time that such Restricted Subsidiary is designated
an Unrestricted Subsidiary and will, for the purpose of this covenant, exclude
the fair market value of the net assets of any Unrestricted Subsidiary that is
designated as a Restricted Subsidiary, (ii) any property transferred to or from
an Unrestricted Subsidiary will be valued at fair market value at the time of
such transfer, provided that, in each case, the fair market value of an asset or
property is as determined by the Board of Directors of the Company in good faith
and (iii) subject to the foregoing, the amount of any Restricted Payment, if
other than cash, will be determined by the Board of Directors of the Company,
whose good faith determination will be conclusive.
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If the aggregate amount of all Restricted Payments calculated under the
foregoing provision includes an Investment in an Unrestricted Subsidiary or
other Person that thereafter becomes a Restricted Subsidiary, such Investment
will no longer be counted as a Restricted Payment for purposes of calculating
the aggregate amount of Restricted Payments.
If an Investment resulted in the making of a Restricted Payment, the
aggregate amount of all Restricted Payments calculated under the foregoing
provision will be reduced by the amount of any net reduction in such Investment
(resulting from the payment of interest or dividend, loan repayment, transfer of
assets or otherwise) to the extent such net reduction is not included in the
Company's Consolidated Adjusted Net Income; provided that the total amount by
which the aggregate amount of all Restricted Payments may be reduced may not
exceed the lesser of (x) the cash proceeds received by the Company and its
Restricted Subsidiaries in connection with such net reduction and (y) the
initial amount of such Investment.
In computing Consolidated Cash Flow of the Company under the first
paragraph of this Section 7.4, (i) the Company may use audited financial
statements for the portions of the relevant period for which audited financial
statements are available on the date of determination and unaudited financial
statements and other current financial data based on the books and records of
the Company for the remaining portion of such period and (ii) the Company will
be permitted to rely in good faith on the financial statements and other
financial data derived from the books and records of the Company that are
available on the date of determination. If the Company makes a Restricted
Payment which, at the time of the making of such Restricted Payment, would in
the good faith determination of the Company be permitted under the requirements
of the Senior Notes Indenture, such Restricted Payment will be deemed to have
been made in compliance with the Senior Notes Indenture notwithstanding any
subsequent adjustments made in good faith to the Company's financial statements
affecting Consolidated Adjusted Net Income of the Company for any period.
8. NEGATIVE COVENANT OF THE PURCHASERS.
8.1 STANDSTILL AGREEMENT. The Purchasers and their affiliates shall
not acquire, directly or indirectly, beneficial ownership of more than 24.99% of
the outstanding securities of the Company entitled to vote in the election of
directors ("Voting Securities"); provided, that the Purchasers shall not be
deemed to be in breach of this covenant solely as a result of the acquisition of
Voting Securities issued in payment of dividends on the Convertible Stock
pursuant to the Certificate of Designations.
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9. MISCELLANEOUS.
9.1 SURVIVAL OF WARRANTIES. Unless otherwise set forth in this
Agreement, the warranties and representations of the Company and the Purchasers
contained in or made pursuant to this Agreement shall survive the execution and
delivery of this Agreement and the Closing until thirty (30) days after the
filing with the SEC of the Company's financial statements for the quarter ending
June 30, 1999 as part of the Company's Form 10-Q report for such quarter.
9.2 TRANSFER; SUCCESSORS AND ASSIGNS. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties. Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
9.3 TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
9.4 NOTICES. Any notice required or permitted by this Agreement shall
be in writing and shall be deemed given upon delivery, when delivered personally
or by overnight courier or sent by telegram or fax, or forty-eight (48) hours
after being deposited in the U.S. mail, as certified or registered mail, with
postage prepaid, addressed to the party to be notified at such party's address
as set forth below or on SCHEDULE 1 hereto, or as subsequently modified by
written notice, and
(a) if to the Company, to:
Arch Communications Group, Inc.
1800 West Park Drive, Suite 250
Westborough, MA 01581
Telephone: (508) 870-6703
Facsimile: (508) 870-6076
Attention: J. Roy Pottle
with a copy to:
Hale and Dorr LLP
60 State Street
Boston, MA 02109
Telephone: (617) 526-6000
Facsimile: (617) 526-5000
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<PAGE>
Attention: David A. Westenberg, Esq.
or (b) if to the Purchasers:
c/o Sandler Capital Management
767 Fifth Avenue
45th Floor
New York, NY 10153
Telephone: (212) 754-8100
Facsimile: (212) 826-0280
Attention: Michael J. Marocco
with a copy to:
Dow, Lohnes & Albertson, PLLC 1200
New Hampshire Avenue, N.W.
Suite 800
Washington, D.C. 20036
Telephone: (202) 776-2000
Facsimile: (202) 776-2222
Attention: Edward J. O'Connell, Esq.
9.5 FINDER'S FEE. Each party represents that it neither is nor will be
obligated for any finder's fee or commission in connection with this transaction
except as disclosed in SECTION 9.5 of the Disclosure Schedule. Each Purchaser
agrees to indemnify and to hold harmless the Company from any liability for any
commission or compensation in the nature of a finder's fee (and the costs and
expenses of defending against such liability or asserted liability) for which
such Purchaser or any of its officers, employees, or representatives is
responsible. The Company agrees to indemnify and hold harmless the Purchasers
from any liability for any commission or compensation in the nature of a
finder's fee (and the costs and expenses of defending against such liability or
asserted liability) for which the Company or any of its officers, employees or
representatives is responsible.
9.6 EXPENSES. Each party shall bear its own costs on expenses;
PROVIDED, HOWEVER, that the Company shall pay and be responsible for all
reasonable out-of-pocket expenses of the Purchasers including, but not limited
to, travel, accounting and other miscellaneous expenses and the reasonable legal
fees of the counsel for the Purchasers, incurred with respect to this Agreement,
the documents referred to herein and the transactions contemplated hereby and
thereby, up to a maximum of One Hundred Thousand Dollars ($100,000) in the
aggregate; and provided further, and in addition to the foregoing, that the
Company also shall pay all filing fees associated with HSR Act approval of the
transactions contemplated by this Agreement.
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<PAGE>
9.7 ATTORNEY'S FEES. If any action at law or in equity (including
arbitration) is necessary to enforce or interpret the terms of any of the
Investment Instruments, the prevailing party shall be entitled to reasonable
attorney's fees, costs and necessary disbursements in addition to any other
relief to which such party may be entitled.
9.8 AMENDMENTS AND WAIVERS. Any term of this Agreement may be amended
with the written consent of the Company and the holders of at least a majority
of the shares of Convertible Stock then outstanding. Any amendment or waiver
effected in accordance with this Section 9.8 shall be binding upon the
Purchasers and each transferee of the Convertible Stock (or the Common Stock
issuable upon conversion thereof), each future holder of all such securities and
the Company.
9.9 SEVERABILITY. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, the parties agree to renegotiate such
provision in good faith. In the event that the parties cannot reach a mutually
agreeable and enforceable replacement for such provision, then (a) such
provision shall be excluded from this Agreement, (b) the balance of the
Agreement shall be interpreted as if such provision were so excluded and (c) the
balance of the Agreement shall be enforceable in accordance with its terms.
9.10 DELAYS OR OMISSIONS. No delay or omission to exercise any right,
power or remedy accruing to any holder of any of the Convertible Stock (or the
Common Stock issuable upon conversion thereof), upon any breach or default of
the Company under this Agreement, shall impair any such right, power or remedy
of such holder nor shall it be construed to be a waiver of any such breach or
default, or an acquiescence therein, or of or in any similar breach or default
thereafter occurring; nor shall any waiver of any single breach or default be
deemed a waiver of any other breach or default theretofore or thereafter
occurring. Any waiver, permit, consent or approval of any kind or character on
the part of any holder of any breach or default under this Agreement, or any
waiver on the part of any holder of any provisions or conditions of this
Agreement, must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement or by law or otherwise afforded to any holder, shall be cumulative and
not alternative.
9.11 ENTIRE AGREEMENT. This Agreement, the Disclosure Schedule and the
documents referred to herein constitute the entire agreement between the parties
hereto pertaining to the subject matter hereof, and any and all other written or
oral agreements existing between the parties hereto are expressly canceled.
9.12 GOVERNING LAW. THIS AGREEMENT AND ALL ACTS AND TRANSACTIONS
PURSUANT HERETO AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE
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GOVERNED, CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.
9.13 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
[Signature Pages Follow]
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The parties have executed this Agreement as of the date first written
above.
COMPANY:
ARCH COMMUNICATIONS GROUP, INC.
By: /s/ C.E. Baker, Jr.
Name: C.E. Baker, Jr.
Title: Chairman of the Board
and Chief Executive Officer
PURCHASERS:
SANDLER CAPITAL PARTNERS IV, L.P.
By: Sandler Investment Partners, L.P., General Partner
By: Sandler Capital Management, General Partner
By: MJDM Corp., a General Partner
By: /s/ Edward G. Grinacoff
Edward G. Grinacoff
President
SANDLER CAPITAL PARTNERS IV FTE, L.P.
By: Sandler Investment Partners, L.P., General Partner
By: Sandler Capital Management, General Partner
By: MJDM Corp., a General Partner
By: /s/ Edward G. Grinacoff
Edward G. Grinacoff
President
<PAGE>
/s/ Harvey Sandler
--------------------------------
HARVEY SANDLER
/s/ John Kornreich
--------------------------------
JOHN KORNREICH
/s/ Michael J. Marocco
--------------------------------
MICHAEL J. MAROCCO
/s/ Andrew Sandler
--------------------------------
ANDREW SANDLER
<PAGE>
SOUTH FORK PARTNERS
By: /s/ Richard Reiss, Jr
Richard Reiss, Jr.
Reiss Capital Management LLC
General Partner of South Fork Partners
THE GEORGICA INTERNATIONAL FUND LIMITED
By: /s/ Richard Reiss, Jr
Richard Reiss, Jr.
Georgica Advisors LLC
Investment Advisor to The
Georgica International Fund
Limited
ASPEN PARTNERS
By: /s/ Nikos Hecht
Nikos Hecht
Reiss Capital Management LLC
General Partner of Aspen Partners
CONSOLIDATED PRESS INTERNATIONAL LIMITED
By: /s/ Nikos Hecht
Nikos Hecht
Georgica Advisors LLC
Investment Advisor to
Consolidated Press
International Limited
<PAGE>
SCHEDULE 1
NUMBER OF SHARES OF
CONVERTIBLE STOCK TO BE
PURCHASER PURCHASED PURCHASE PRICE
--------- --------- --------------
Sandler Capital Partners IV, L.P. 151,500 $15,150,000
Sandler Capital Partners IV FTE, L.P. 62,250 6,225,000
Harvey Sandler 6,250 625,000
John Kornreich 2,500 250,000
Michael J. Marocco 2,000 200,000
Andrew Sandler 500 50,000
South Fork Partners 7,000 700,000
The Georgica International Fund Limited 8,000 800,000
Aspen Partners 3,750 375,000
Consolidated Press International Limited 6,250 625,000
------- -----------
Total 250,000 $25,000,000
======= ===========
The address for each of Sandler Capital Partners IV, L.P., Sandler Capital
Partners IV FTE, L.P., Harvey Sandler, John Kornreich, Michael J. Marocco and
Andrew Sandler is:
c/o Sandler Capital Management
767 Fifth Avenue, 45th Floor
New York, New York 10153
The address for South Park Partners, The Georgica International Fund Limited,
Aspen Partners and Consolidated Press International Limited is:
c/o Georgica Advisors
1114 Avenue of the Americas, 38th Floor
New York, New York 10036
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EXHIBIT 99.6
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered into
as of June 29, 1998, by and among ARCH COMMUNICATIONS GROUP, INC., a Delaware
corporation (the "Company"), SANDLER CAPITAL PARTNERS IV, L.P., a Delaware
limited partnership, SANDLER CAPITAL PARTNERS IV FTE, L.P., a Delaware limited
partnership, HARVEY SANDLER, JOHN KORNREICH, MICHAEL J. MAROCCO, ANDREW SANDLER,
SOUTH FORK PARTNERS, a Delaware general partnership, THE GEORGICA INTERNATIONAL
FUND LIMITED, a Bermuda corporation, ASPEN PARTNERS, a Delaware general
partnership, and CONSOLIDATED PRESS INTERNATIONAL LIMITED, a Bahamas corporation
(each of the foregoing persons or entities, other than the Company, being
sometimes referred to hereinafter individually as an "Investor" and collectively
as the "Investors").
WITNESSETH:
WHEREAS, the Company has entered into that certain Stock Purchase
Agreement (the "Stock Purchase Agreement"), dated as of June 29, 1998, with the
Investors pursuant to which the Company has agreed to issue and sell to the
Investors shares of the Company's Series C Convertible Preferred Stock, par
value $0.01 per share,(the "Series C Preferred"); and
WHEREAS, the Company has agreed to grant certain registration rights
with respect to the shares of the Company's Common Stock, par value $0.01 per
share, issuable upon conversion of the Series C Preferred issued to the
Investors pursuant to the Stock Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises and covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties, intending to be legally hereby agree as follows:
ARTICLE 1
DEFINITIONS
As used herein, the following terms shall have the following respective
meanings:
1.1 "COMMISSION" shall mean the Securities and Exchange Commission, or any
other successor federal agency at the time administering the Securities Act.
<PAGE>
1.2 "COMMON STOCK" shall mean the Company's common stock, par value $0.01
per share.
1.3 "HOLDERS" shall mean and include each of the Investors and any person
or entity who shall, pursuant to Section 11.2 hereof, become a party hereto, and
any permitted transferee under Article 9 hereof who holds Registrable
Securities.
1.4 "INITIATING HOLDERS" shall mean any Holder or Holders who in the
aggregate own not less than twenty-five percent (25%) of the Registrable
Securities.
1.5 The terms "REGISTER," "REGISTERED" and "REGISTRATION" refer to a
registration effected by preparing and filing with the Commission a registration
statement in compliance with the Securities Act, and the declaration or ordering
by the Commission of the effectiveness of such registration statement.
1.6 "REGISTRABLE SECURITIES" means any and all shares of Common Stock (i)
issued or issuable upon conversion of the Series C Preferred, (ii) issued or
issuable with respect to the Series C Preferred upon any stock split, stock
dividend, recapitalization, reclassification or similar event, and (iii)
otherwise held or acquired by any of the Investors excluding in all cases,
however, Registrable Securities sold by a Holder to the public or pursuant to
Rule 144 promulgated under the Securities Act and Registrable Securities which
may be sold by a Holder without any restrictions (including, without limitation,
restrictions as to volume or manner of sale) under Rule 144(k) of the Securities
Act.
1.7 "REGISTRATION EXPENSES" shall mean all expenses incurred by the Company
in complying with Articles 2 and 3 hereof, including, without limitation, all
registration, qualification and filing fees, printing expenses, escrow fees,
fees and disbursements of legal counsel for the Company, reasonable fees and
disbursements of one legal counsel for the selling Holders (not to exceed
$10,000), blue sky fees and expenses, and the expense of any special audits
incident to or required by any such registration (but excluding the compensation
of regular employees of the Company, which shall be paid in any event by the
Company).
1.8 "S-3 REGISTRATION EXPENSES" shall mean all expenses incurred by the
Company in complying with Article 4 hereof, including, without limitation, all
registration, qualification and filing fees, printing expenses, escrow fees,
fees and disbursements of legal counsel for the Company, reasonable fees and
disbursements of one legal counsel for the selling Holders (not to exceed
$10,000), blue sky fees and expenses, and the expense of any special audits
incident to or required by any such registration (but excluding the compensation
of regular employees of the Company, which shall be paid in any event by the
Company).
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<PAGE>
1.9 "SECURITIES ACT" shall mean the Securities Act of 1933, as amended, or
any similar federal statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
1.10 "SELLING EXPENSES" shall mean all underwriting fees, discounts,
selling commissions and stock transfer taxes applicable to the Registrable
Securities registered by the Holders.
ARTICLE 2
REQUESTED REGISTRATION
2.1 REQUEST FOR REGISTRATION. At any time after the date of this Agreement,
Initiating Holders may request registration in accordance with this Article 2.
In the event the Company shall receive from the Initiating Holders a written
request that the Company effect any registration, qualification or compliance
with respect to Registrable Securities having an aggregate offering price which
exceeds $1,000,000 (based on the then current market price), the Company will:
(a) promptly give written notice of the proposed registration,
qualification or compliance to all other Holders; and
(b) use its best efforts to effect such registration, qualification or
compliance as soon as practicable (including, without limitation, undertaking to
file post-effective amendments, appropriate qualifications under applicable blue
sky or other state securities laws, and appropriate compliance with applicable
regulations issued under the Securities Act, and any other governmental
requirements or regulations) as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such Registrable
Securities as are specified in such request, together with all or such portion
of the Registrable Securities of any Holder or Holders joining in such request
as are specified in a written request received by the Company within 10 days
after the receipt of the written notice from the Company described in Section
2.1(a); PROVIDED, HOWEVER, that the Company shall not be obligated to take any
action to effect any such registration, qualification or compliance pursuant to
this Article 2:
(i) in any particular jurisdiction in which the Company would be
required to execute a general consent to service of process in effecting such
registration, qualification or compliance, unless the Company is already subject
to service in such jurisdiction and except as may be required by the Securities
Act;
(ii) within one hundred and eighty (180) days immediately
following the effective date of any registration statement pertaining to a
firmly underwritten offering of securities of the Company for its own account
(or such lesser period as the managing underwriters of such offering will
allow);
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<PAGE>
(iii) After the Company has effected two (2) such requested
registrations pursuant to this Article 2 (not including registrations on Form
S-3), each such registration has been declared or ordered effective, and the
Registrable Securities offered pursuant to each such registration have been
sold, or if the Company has effected any requested registration pursuant to this
Agreement during the previous six-month period (or such shorter period as the
managing underwriter of the Company's most recent public offering will allow);
or
(iv) If the Company then meets the eligibility requirements
applicable to the use of Form S-3 in connection with such registration and is
able to effect such requested registration pursuant to Article 4 hereof.
(c) Subject to the foregoing clauses (i) through (iv), the Company
shall file a registration statement covering the Registrable Securities so
requested to be registered as soon as practicable after receipt of the request
of the Initial Holders; PROVIDED, HOWEVER, that if the Company shall furnish to
such Holders a certificate signed by the Chairman of the Board and Chief
Executive Officer of the Company stating that in the good faith judgment of the
Board of Directors of the Company, it would be detrimental to the Company and
its stockholders for such registration statement to be filed, or, if already
filed (but prior to effectiveness of such registration statement), that the use
of the prospectus contained in such registration statement would be detrimental
to the Company and its stockholders, the Company shall have the right to defer,
postpone or interrupt such offering (including the use of any prospectus related
thereto) for a period of not more than 180 days after receipt of the request of
the Initial Holders; PROVIDED, FURTHER, that the Company shall not be permitted
to exercise such deferral right under this Section 2.1(c) or Section 4.1(c)
hereof more than once in any 360-day period.
2.2 UNDERWRITING.
(a) The distribution of the Registrable Securities covered by the
request of the Initiating Holders shall be effected by means of the method of
distribution selected by the Holders holding a majority of the Registrable
Securities covered by such registration. If such distribution is effected by
means of an underwriting, the right of any Holder to registration pursuant to
this Article 2 shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting (unless otherwise agreed by the Initiating Holders) to the extent
provided herein.
(b) If such distribution is effected by means of an underwriting, the
Company (together with all Holders proposing to distribute their securities
through such underwriting) shall enter into an underwriting agreement in
customary form with a
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<PAGE>
managing underwriter of nationally recognized standing selected for such
underwriting by a majority in interest of the Initiating Holders and approved by
the Company, which approval shall not be unreasonably withheld. Notwithstanding
any other provision of this Article 2, if the managing underwriter advises the
Initiating Holders in writing that marketing factors require a limitation of the
number of shares to be underwritten, then the underwriters may exclude shares
requested to be included in such registration. The number of shares of
Registrable Securities to be included in the registration and underwriting shall
be allocated first amongst the Initiating Holders who have requested
registration of Registrable Securities and then amongst the other Holders who
have requested registration of Registrable Securities in such registration and
underwriting in proportion, as nearly as practicable, to the respective amounts
of Registrable Securities held by such Holders at the time of filing the
registration statement. No Registrable Securities excluded from the underwriting
by reason of the managing underwriter's marketing limitation shall be included
in such registration.
(c) If any Holder disapproves of the terms of the underwriting, such
person may elect to withdraw therefrom by written notice to the Company, the
managing underwriter and the Initiating Holders. The Registrable Securities
and/or other securities so withdrawn shall also be withdrawn from registration;
PROVIDED, HOWEVER, that if by the withdrawal of such Registrable Securities a
greater number of Registrable Securities held by other Holders may be included
in such registration (up to the maximum of any limitation imposed by the
underwriters), then the Company shall offer to all Holders who have included
Registrable Securities in the registration the right to include additional
Registrable Securities in the same proportion used in determining the
underwriter limitation in this Section 2.2.
2.3 INCLUSION OF SHARES BY COMPANY. If the distribution of Registrable
Securities is being effected by means of an underwriting and if the managing
underwriter has not limited the number of Registrable Securities to be
underwritten, the Company (i) may include securities for its own account in such
registration if the managing underwriter so agrees and (ii) may include
securities for the account of stockholders other than the Holders in such
registration if the managing underwriter so agrees and if Holders holding a
majority of the Registrable Securities covered by such registration consent to
such inclusion. The inclusion of such shares by the Company or such other
holders shall be on the same terms as the registration of shares held by the
Initiating Holders. In the event that the underwriters exclude some of the
securities to be registered, the securities to be sold for the account of the
Company and any other holders shall be excluded in their entirety prior to the
exclusion of any Registrable Securities.
2.4 CANCELLATION OF REGISTRATION. A majority in interest of the Initiating
Holders shall have the right to cancel a proposed registration of Registrable
Securities pursuant to Article 2 when, in their discretion, market conditions
are so unfavorable as to be seriously
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<PAGE>
detrimental to an offering pursuant to such registration. Such cancellation of a
registration shall not be counted as one of the two (2) such requested
registrations pursuant to Section 2.1(b)(iii) subject to the condition that the
Initiating Holders shall promptly reimburse the Company for all Registration
Expenses reasonably incurred by the Company in connection with the cancelled
registration, unless such registration was cancelled after having been deferred,
postponed or interrupted by the Company pursuant to Section 2.1(c) in which case
such expense reimbursement shall not be required.
ARTICLE 3
COMPANY REGISTRATION
3.1 NOTICE OF REGISTRATION TO HOLDERS. If at any time or from time to time
the Company shall determine to register any of its securities, either for its
own account or the account of a security holder or holders, other than (i) a
registration relating solely to employee benefit plans on Form S-8 (or any
successor form), (ii) a registration relating solely to a Commission Rule 145
transaction on Form S-4 (or any successor form) or (iii) a registration relating
solely to an exchange offer, the Company will:
(a) promptly give to each Holder written notice thereof, and
(b) include in such registration (and any related qualification under
blue sky laws or other compliance), and in any underwriting involved therein
(subject to Section 3.2), all the Registrable Securities specified in a written
request or requests, made within 30 days after receipt of such written notice
from the Company described in Section 3.1(a), by any Holder or Holders.
3.2 UNDERWRITING. If the registration of which the Company gives notice is
for a registered public offering involving an underwriting, the Company shall so
advise the Holders as a part of the written notice given pursuant to Section
3.1(a). In such event, the right of any Holder to registration pursuant to this
Article 3 shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting to the extent provided herein. All Holders proposing to distribute
their securities through such underwriting shall (together with the Company)
enter into an underwriting agreement in customary form with the managing
underwriter selected for such underwriting by the Company.
(a) Notwithstanding any other provision of this Article 3, if the
managing underwriter determines that marketing factors require a limitation of
the number of shares to be underwritten, the underwriter may exclude some or all
Registrable Securities from such registration and underwriting. The Company
shall so advise all Holders of Registrable Securities, and the number of shares
of Common Stock to be
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<PAGE>
included in such registration shall be allocated as follows: first, for the
account of the Company, all shares of Common Stock proposed to be sold by the
Company; and second, for the account of the Holders and any other stockholder
participating in such registration, the number of shares of Common Stock
requested to be included in the registration by such Holders and other
stockholders, which shall be allocated on a pari passu basis in proportion, as
nearly as practicable, to the respective amounts of Common Stock that are
proposed to be offered and sold by such Holders or other stockholders at the
time of filing the registration statement. No Registrable Securities excluded
from the underwriting by reason of the underwriters' marketing limitation shall
be included in such registration.
(b) The Company shall so advise all Holders and the other holders
distributing their securities through such underwriting of any such limitation,
and the number of shares of Registrable Securities held by Holders that may be
included in the registration. If any Holder disapproves of the terms of any such
underwriting, such Holder may elect to withdraw therefrom by written notice to
the Company and the managing underwriter. Any securities excluded or withdrawn
from such underwriting shall be withdrawn from such registration, but the Holder
shall continue to be bound by Article 8 hereof.
(c) The Company shall have the right to terminate or withdraw any
registration initiated by it under this Article 3 prior to the effectiveness of
such registration, whether or not a Holder has elected to include Registrable
Securities in such registration.
ARTICLE 4
REGISTRATION ON FORM S-3
4.1 REQUEST FOR REGISTRATION.
(a) In addition to the rights set forth in Articles 2 and 3 hereof, if
a Holder or Holders request that the Company file a registration statement on
Form S-3 (or any successor form to Form S-3) for a public offering of shares of
Registrable Securities having an aggregate offering price which exceeds $500,000
(based on the then current market price) and the Company is a registrant
entitled to use Form S-3 (or any successor form to Form S-3) to register such
shares for such an offering, the Company shall use its best efforts to cause
such shares to be registered for the offering as soon as practicable on Form S-3
(or any such successor form to Form S-3).
(b) Notwithstanding the foregoing, the Company shall not be obligated
to take any action pursuant to this Article 4:
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<PAGE>
(i) in any particular jurisdiction in which the Company would be
required to execute a general consent to service of process in effecting such
registration, qualification or compliance, unless the Company is already subject
to service in such jurisdiction and except as may be required by the Securities
Act;
(ii) if the Company, within ten (10) days of the receipt of the
request of the Holder or Holders, gives notice of its BONA FIDE intention to
effect the filing of a registration statement with the Commission within
forty-five (45) days of receipt of such request (other than with respect to a
registration statement relating to a Rule 145 transaction or an offering solely
to employees);
(iii) during the period starting with the date of filing of, and
ending on a date which is 180 days following the effective date of, a
registration statement described in (ii) above or filed pursuant to this Article
4 or Articles 2 or 3 hereof (or such shorter period as the managing underwriter
of the Company's most recent public offering may agree), provided that the
Company is actively employing in good faith all reasonable efforts to cause such
registration statement to become effective and provided, further, that no other
person or entity could require the Company to file a registration statement in
such period;
(c) Subject to the foregoing clauses (b)(i) through (iii), the Company
shall file a registration statement on Form S-3 covering the Registrable
Securities so requested to be registered as soon as practicable after receipt of
the request of the Holders; PROVIDED, HOWEVER, that if the Company shall furnish
to such Holders a certificate signed by the Chairman of the Board and the Chief
Executive Officer of the Company stating that in the good faith judgment of the
Board of Directors of the Company, it would be detrimental to the Company and
its stockholders for such registration statement to be filed, or, if already
filed (but prior to effectiveness of such registration statement), that the use
of the prospectus contained in such registration statement would be detrimental
to the Company and its stockholders, the Company shall have the right to defer,
postpone or interrupt such offering (including the use of any prospectus related
thereto) for a period of not more than 90 days after receipt of the request of
the Holders; PROVIDED, FURTHER, that the Company shall not be permitted to
exercise such deferral right under this Section 4.1(c) or Section 2.1(c) hereof
more than once in any 360-day period.
4.2 UNDERWRITING.
(a) The distribution of the Registrable Securities covered by the
registration on Form S-3 shall be effected by means of the method of
distribution selected by the Holders holding a majority of the Registrable
Securities covered by such registration. If such distribution is effected by
means of an underwriting, the right of any Holder to registration pursuant to
this Article 4 shall be conditioned upon such Holder's
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<PAGE>
participation in such underwriting, if any, and the inclusion of such Holder's
Registrable Securities in such underwriting.
(b) If the distribution of the Registrable Securities pursuant to this
Section 4.2 is effected by means of an underwriting, the Company (together with
all Holders proposing to distribute their securities through such underwriting)
shall enter into an underwriting agreement in customary form with a managing
underwriter of nationally recognized standing selected for such underwriting by
a majority in interest of the Holders requesting registration on Form S-3 and
approved by the Company, which approval shall not be unreasonably withheld.
Notwithstanding any other provision of this Article 4, if the managing
underwriter advises the Holders in writing that marketing factors require a
limitation of the number of shares to be underwritten, then the underwriters may
exclude some or all of the shares requested to be included in such registration,
and the number of shares of Registrable Securities that may be included in the
registration and underwriting shall be allocated among all Holders thereof in
proportion, as nearly as practicable, to the respective amounts of Registrable
Securities held by such Holders at the time of filing the registration
statement. No Registrable Securities excluded from the underwriting by reason of
the managing underwriter's marketing limitation shall be included in such
registration.
(c) If the distribution of the Registrable Securities pursuant to this
Section 4.2 is effected by means of an underwriting and if any Holder of
Registrable Securities disapproves of the terms of the underwriting, such person
may elect to withdraw therefrom by written notice to the Company, the managing
underwriter and the Holders. The Registrable Securities and/or other securities
so withdrawn shall also be withdrawn from registration; PROVIDED, HOWEVER, that
if by the withdrawal of such Registrable Securities a greater number of
Registrable Securities held by other Holders may be included in such
registration (up to the maximum of any limitation imposed by the underwriters),
then the Company shall offer to all Holders who have included Registrable
Securities in the registration the right to include additional Registrable
Securities in the same proportion used in determining the underwriter limitation
in this Section 4.2.
4.3 INCLUSION OF SHARES BY COMPANY. If the distribution of the Registrable
Securities pursuant to this Article 4 is effected by means of an underwriting
and if the managing underwriter has not limited the number of Registrable
Securities to be underwritten, the Company may include securities for its own
account or for the account of others in such registration if the managing
underwriter so agrees and if the number of Registrable Securities held by
Holders requesting registration on Form S-3 which would otherwise have been
included in such registration and underwriting will not thereby be limited. The
inclusion of such shares shall be on the same terms as the registration of
shares held by the Holders requesting such registration. In the event that the
underwriters exclude some of the securities to be registered on Form S- 3, the
securities to be sold for
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<PAGE>
the account of the Company and any other holders shall be excluded in their
entirety prior to the exclusion of any Registrable Securities.
ARTICLE 5
EXPENSES OF REGISTRATION
All Registration Expenses incurred in connection with any registration,
qualification or compliance pursuant to Article 2 and Article 3 hereof and all
S-3 Registration Expenses shall be borne by the Company. All Selling Expenses
relating to Registrable Securities registered by the Holders shall be borne by
the Holders of such Registrable Securities PRO RATA on the basis of the number
of shares so registered.
ARTICLE 6
REGISTRATION PROCEDURES
(a) In the case of each registration effected by the Company pursuant
to this Agreement, the Company will keep each Holder advised in writing as to
the initiation of each registration and as to the completion thereof. The
Company agrees to use its best efforts to effect or cause such registration to
permit the sale of the Registrable Securities covered thereby by the Holders
thereof in accordance with the intended method or methods of distribution
thereof described in such registration statement. In connection with any
registration of any Registrable Securities pursuant to Section 2, 3 or 4 hereof,
the Company shall, as soon as reasonably possible:
(i) use its best efforts to cause the registration statement
filed for purposes of such registration to become effective as soon as
reasonably possible thereafter;
(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus included therein
as may be necessary to effect and maintain the effectiveness of such
registration statement for a period of (a) 180 days or (b) such longer period as
may be required in order to complete the distribution of Registrable Securities
in connection with a registration effected pursuant to Section 4.1(a), and
furnish to the holders of the Registrable Securities covered thereby copies of
any such supplement or amendment prior to this being used and/or filed with the
Commission; and comply with the provisions of the Securities Act with respect to
the disposition of all the Registrable Securities to be included in such
registration statement;
(iii) provide (A) the Holders of the Registrable Securities to be
included in such registration statement, (B) the underwriters (which term, for
purposes of this
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<PAGE>
Agreement, shall include a person deemed to be an underwriter within the meaning
of Section 2(11) of the Securities Act), if any, thereof, (C) the sales or
placement agent, if any, therefor, (D) one counsel for such underwriters or
agent, and (E) not more than one counsel for all the Holders of such Registrable
Securities, the opportunity to participate in the preparation of such
registration statement, each prospectus included therein or filed with the
Commission, and each amendment or supplement thereto;
(iv) for a reasonable period prior to the filing of such
registration statement, and throughout the period specified above, make
available for inspection by the parties referred to in Section 6(a)(iii) above
such financial and other information and books and records of the Company, and
cause the officers, directors, employees, counsel and independent certified
public accountants of the Company to respond to such inquiries, as shall be
reasonably necessary, in the judgment of the respective counsel referred to in
such Section 6(a)(iii), to conduct a reasonable investigation within the meaning
of the Securities Act; PROVIDED, HOWEVER, that each such party shall be required
to maintain in confidence and not disclose to any other person or entity any
information or records reasonably designated by the Company in writing as being
confidential, until such time as (a) such information becomes a matter of public
record (whether by virtue of its inclusion in such registration statement or
otherwise), or (b) such party shall be required so to disclose such information
pursuant to the subpoena or order of any court or other governmental agency or
body having jurisdiction over the matter, or (c) such information is required to
be set forth in such registration statement or the prospectus included therein
or in an amendment to such registration statement or an amendment or supplement
to such prospectus in order that such registration statement, prospectus,
amendment or supplement, as the case may be, does not include an untrue
statement of a material fact or omit to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading;
and provided, further, that the Company need not make such information
available, nor need it cause any officer, director or employee to respond to
such inquiry, unless each such Holder of Registrable Securities to be included
in a registration statement hereunder and such counsel, upon the Company's
request, execute and deliver to the Company an undertaking to substantially the
same effect contained in the second preceding proviso;
(v) promptly notify the Holders of Registrable Securities to be
included in a registration statement hereunder, the sales or placement agent, if
any, therefor and the managing underwriter of the securities being sold and
confirm such advice in writing, (A) when such registration statement or the
prospectus included therein or any prospectus amendment or supplement or
post-effective amendment has been filed, and, with respect to such registration
statement or any post-effective amendment, when the same has become effective,
(B) of any comments by the Commission and by the blue sky or securities
commissioner or regulator of any state with respect thereto or any request by
the Commission for amendments or supplements to such registration statement or
the
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<PAGE>
prospectus or for additional information, (C) of the issuance by the Commission
of any stop order suspending the effectiveness of such registration statement or
the initiation of any proceedings for that purpose, (D) of the receipt by the
Company of any notification with respect to the suspension of the qualification
of the Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose, or (E) if it shall be the case,
at any time when a prospectus is required to be delivered under the Securities
Act, that such registration statement, prospectus, or any document incorporated
by reference, in any of the foregoing contains an untrue statement of a material
fact or omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing, in which case such Holders of Registrable
Securities included in such registration statement shall suspend sales of such
Registrable Securities until they have been advised by the Company that an
appropriate prospectus amendment or supplement or post-effective amendment has
been filed; PROVIDED, HOWEVER, that in such instance the Company shall use its
best efforts to promptly file such prospectus amendment or supplement or
post-effective amendment and the period during which such Holders shall be so
required to suspend sales hereunder shall not exceed thirty (30) days;
(vi) use its best efforts to obtain the withdrawal of any order
suspending the effectiveness of such registration statement or any
post-effective amendment thereto at the earliest practicable date;
(vii) if requested by any managing underwriter or underwriter,
any placement or sales agent or any Holder of Registrable Securities to be
included in a registration statement, promptly incorporate in a prospectus,
prospectus supplement or post-effective amendment such information as is
required by the applicable rules and regulations of the Commission and as such
managing underwriter or underwriters, such agent or such Holder may reasonably
specify should be included therein relating to the terms of the sale of the
Registrable Securities included thereunder, including, without limitation,
information with respect to the number of Registrable Securities being sold by
such Holder or agent or to such underwriters, the name and description of such
Holder, the offering price of such Registrable Securities and any discount,
commission or other compensation payable in respect thereof, the purchase price
being paid therefor by such underwriters and with respect to any other terms of
the offering of the Registrable Securities to be sold in such offering; and make
all required filings of such prospectus; prospectus supplement or post-
effective amendment promptly after notification of the matters to be
incorporated in such prospectus, prospectus supplement or post-effective
amendment;
(viii) furnish to each Holder of Registrable Securities to be
included in such registration statement hereunder, each placement or sales
agent, if any, therefor, each underwriter, if any, thereof and the counsel
referred to in Section 6(a)(iii) an
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<PAGE>
executed copy of such registration statement, each such amendment and supplement
thereto (in each case excluding all exhibits and documents incorporated by
reference) and such number of copies of the registration statement (excluding
exhibits thereto and documents incorporated by reference therein unless
specifically so requested by such holder, agent or underwriter, as the case may
be) of the prospectus included in such registration statement (including each
preliminary prospectus and any summary prospectus), in conformity with the
requirements of the Securities Act, as such Holder, agent, if any, and
underwriter, if any, may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by such Holder sold by such
agent or underwritten by such underwriter and to permit such Holder, agent and
underwriter to satisfy the prospectus delivery requirements of the Securities
Act; and the Company hereby consents to the use of such prospectus and any
amendment or supplement thereto by each such Holder and by any such agent and
underwriter, in each case in the form most recently provided to such party by
the Company, in connection with the offering and sale of the Registrable
Securities covered by the prospectus (including such preliminary and summary
prospectus) or any supplement or amendment thereto;
(ix) use its best efforts to (A) register or qualify the
Registrable Securities to be included in such registration statement under such
other securities laws or blue sky laws of such jurisdictions to be designated by
the Holders of a majority of such Registrable Securities participating in such
registration and each placement or sales agent, if any, therefor and
underwriter, if any, thereof, as any Holder and each underwriter, if any, of the
securities being sold shall reasonably request, (B) keep such registrations or
qualifications in effect and comply with such laws so as to permit the
continuance of offers, sales and dealings therein in such jurisdictions for so
long as may be necessary to enable such Holder, agent or underwriter to complete
its distribution of the Registrable Securities pursuant to such registration
statement and (C) take any and all such actions as may be reasonably necessary
or advisable to enable such Holder, agent, if any, and underwriter to consummate
the disposition in such jurisdictions of such Registrable Securities; provided,
however, that the Company shall not be required for any such purpose to (1)
qualify generally to do business as a foreign company or a broker-dealer in any
jurisdiction wherein it would not otherwise be required to qualify but for the
requirements of this Section 6(a)(ix), or (2) subject itself to taxation in any
such jurisdiction;
(x) cooperate with the Holders of the Registrable Securities to
be included in a registration statement hereunder and the managing underwriters
to facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold, which certificates shall be printed,
lithographed or engraved, or produced by any combination of such methods, on
steel engraved borders and which shall not bear any restrictive legends; and
enable such Registrable Securities to be in such denominations
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and registered in such names as the managing underwriters may request at least
two business days prior to any sale of the Registrable Securities;
(xi) provide a CUSIP number for all Registrable Securities, not
later than the effective date of the registration statement;
(xii) enter into one or more underwriting agreements, engagement
letters, agency agreements, "best efforts" underwriting agreements or similar
agreements, as appropriate, and take such other actions in connection therewith
as the Holders of at least a majority of the Registrable Securities being sold
shall reasonably request in order to expedite or facilitate the disposition of
such Registrable Securities; PROVIDED, HOWEVER, that notwithstanding the
foregoing under no circumstances shall the Company be required to consent to a
"lock-up" or otherwise be subject to any restrictions on its ability to issue
shares of capital stock for a period in excess of ninety (90) days, and PROVIDED
FURTHER, HOWEVER, that the Company shall be permitted to issue Common Stock (a)
to any transferee that agrees to be bound to the same extent as the Company by
such "lock-up" provisions for the remainder of such 90-day period and (b) in
connection with the exercise of stock options pursuant to its stock option plans
or the exercise of previously outstanding stock warrants or other convertible
securities;
(xiii) whether or not an agreement of the type referred to in the
preceding subsection if entered into and whether or not any portion of the
offering contemplated by such registration statement is an underwritten offering
or is made though a placement or sales agent or any other entity, (A) make such
representations and warranties to the Holders of such Registrable Securities and
the placement or sales agent, if any, therefor and the underwriters, if any,
thereof in form, substance and scope as are customarily made in connection with
any offering of equity securities pursuant to any appropriate agreement and/or
to a registration statement filed on the form applicable to such registration
statement; (B) obtain an opinion of counsel to the Company in customary form and
covering such matters, of the type customarily covered by such an opinion, as
the managing underwriters, if any, and as the Holders of at least a majority of
such Registrable Securities may reasonably request, addressed to such Holders
and the placement or sales agent, if any, therefor and the underwriters, if any,
thereof and dated the effective date of such registration statement (and if such
registration statement contemplates an underwritten offering of a part or of all
of the Registrable Securities, dated the date of the closing under the
underwriting agreement relating thereto) (it being agreed that the matters to be
covered by such opinion shall include, without limitation, the due organization
of the Company, and its subsidiaries, if any; the qualification of the Company,
and its subsidiaries, if any, to transact business as foreign companies; the due
authorization, execution and delivery of this agreement and of any agreement of
the type referred to in Section 6(a)(xii) hereof; the due authorization, valid
issuance, and the fully paid status of the Common Stock of the Company; the
absence to the knowledge of such
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counsel of material legal or governmental proceedings involving the Company; the
absence to the knowledge of such counsel of a breach by the Company or its
subsidiaries of, or a default under, agreements binding the Company or any
subsidiary; the absence to the knowledge of such counsel of governmental
approvals required to be obtained in connection with the registration statement,
the offering and sale of the Registrable Securities, this Agreement or any
agreement of the type referred to in Section 6(a)(xii) hereof; the compliance in
all material respects as to form of such registration statement and any
documents incorporated by reference therein with the requirements of the
Securities Act; the effectiveness of such registration statement under the
Securities Act; and, in the case of a distribution of Registrable Securities
which is effected by means of an underwriting by a nationally recognized
investment banking firm, counsel to the Company shall state that in the course
of the preparation of the registration statement and the prospectus, such
counsel has participated in conferences with officers and representatives of the
Company, representatives of the Company's independent public accountants, and
with the underwriter's representatives and counsel, at which conferences the
Company's counsel made inquiries of the Company's officers, representatives and
accountants and discussed the contents of the registration statement and the
prospectus and (without taking any further action to verify independently the
statements made in the registration statement and the prospectus and, except as
stated in the Company's counsel's opinion, without assuming responsibility for
the accuracy, completeness or fairness of such statements) nothing has come to
such counsel's attention that causes such counsel to believe that either the
registration statement or the prospectus contains any untrue statement of
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading (it being understood
that such counsel need not express any opinion with respect to the financial
statements, schedules and other financial and statistical data included in the
registration statement or the prospectus); (C) obtain a "cold" comfort letter or
letters from the independent certified public accountants of the Company
addressed to the Holders and the placement or sales agent, if any, therefor and
the underwriters, if any, thereof, dated (I) the effective date of such
registration statement and (II) the effective date of any prospectus supplement
to the prospectus included in such registration statement or post-effective
amendment to such registration statement which includes unaudited or audited
financial statements as of a date or for a period subsequent to that of the
latest such statements included in such prospectus (and, if such registration
statement contemplates an underwritten offering pursuant to any prospectus
supplement to the prospectus included in such registration statement or
post-effective amendment to such registration statement which includes unaudited
or audited financial statements as of a date or for a period subsequent to that
of the latest such statements included in such prospectus, dated the date of the
closing under the underwriting agreement relating thereto), such letter or
letters to be in customary form and covering such matters of the type
customarily covered by letters of such type; (D) deliver such documents and
certificates, including officers' certificates, as may be reasonably requested
by Holders of at least a majority of the Registrable Securities being
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sold and the placement or sales agent, if any, therefor and the managing
underwriters, if any, thereof to evidence the accuracy of the representations
and warranties made pursuant to clause (A) above and the compliance with or
satisfaction of any agreements or conditions contained in the underwriting
agreement or other agreement entered into by the Company; and (E) undertake such
obligations relating to expense reimbursement, indemnification and contribution
as are provided in Sections 5 and 7 hereof;
(xiv) notify in writing each Holder of Registrable Securities of
any proposal by the Company to amend or waive any provision of this Agreement
and of any amendment or waiver effected pursuant thereto, each of which notices
shall contain the text of the amendment or waiver proposed or effected, as the
case may be;
(xv) engage to act on behalf of the Company with respect to the
Registrable Securities to be so registered a registrar and transfer agent having
such duties and responsibilities (including, without limitation, registration of
transfers and maintenance of stock registers) as are customarily discharged by
such an agent, and to enter into such agreements and to offer such indemnities
as are customary in respect thereof; and
(xvi) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available to its
Holders, as soon as practicable, but in any event not later than 18 months after
the effective date of such registration statement, an earnings statement
covering a period of at least twelve months which shall satisfy the provisions
of Section 6(a) of the Securities Act (including, at the option of the Company,
pursuant to Rule 158 thereunder).
(b) In the event that the Company would be required,
pursuant to Section 6(a)(v)(E) above, to notify the Holders of Registrable
Securities included in a registration statement hereunder, the sales or
placement agent, if any, and the managing underwriters, if any, of the
securities being sold, the Company shall prepare and furnish to each such
Holder, to each such agent, if any, and to each underwriter, if any, a
reasonable number of copies of a prospectus supplement or amendment so that, as
thereafter delivered to the purchasers of Registrable Securities, such
prospectus shall not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing.
Each Holder agrees that upon receipt of any notice from the Company pursuant to
Section 6(a)(v)(E) hereof, such Holder shall forthwith discontinue the
distribution of Registrable Securities until such Holder shall have received
copies of such amended or supplemented registration statement or prospectus, and
if so directed by the Company, such Holder shall deliver to the Company (at the
Company's expense) all
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copies, other than permanent file copies, then in such Holder's possession of
the prospectus covering such Registrable Securities at the time of receipt of
such notice.
(c) The Company may require each Holder of Registrable
Securities as to which any registration is being effected to furnish to the
Company such information regarding such Holder and such Holder's method of
distribution of such Registrable Securities as the Company may from time to time
reasonably request in writing but only to the extent that such information is
required in order to comply with the Securities Act. Each such Holder agrees to
notify the Company immediately of any inaccuracy or change in information
previously furnished by such Holder to the Company or of the occurrence of any
event in either case as a result of which any prospectus relating to such
registration contains or would contain an untrue statement of a material fact
regarding such Holder or the distribution of such Registrable Securities or
omits to state any material fact regarding such Holder or the distribution of
such Registrable Securities required to be stated therein or necessary to make
the statements therein not misleading in light of the circumstances then
existing, and promptly to furnish to the Company any additional information
required to correct and update any previously furnished information or required
so that such prospectus shall not contain, with respect to such Holder or the
distribution of such Registrable Securities, an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading in light of the circumstances then
existing.
ARTICLE 7
INDEMNIFICATION
7.1 The Company shall indemnify each Holder, each of its officers and
directors and partners, and such Holder's legal counsel and independent
accountants, if any, and each person controlling any such persons within the
meaning of Section 15 of the Securities Act, with respect to which registration,
qualification or compliance has been effected pursuant to this Agreement, and
each underwriter, if any, and each person who controls any underwriter within
the meaning of Section 15 of the Securities Act, against all expenses, claims,
losses, damages and liabilities (or actions in respect thereof), including any
of the foregoing incurred in settlement of any litigation, commenced or
threatened, arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any registration statement,
prospectus, offering circular or other document, or any amendment or supplement
thereof, incident to any such registration, qualification or compliance, or
based on any omission (or alleged omission) to state therein, a material fact
required to be stated therein or necessary to make the statements therein, not
misleading, or any violation by the Company of any rule or regulation
promulgated under the Securities Act or any state securities laws applicable to
the Company and relating to action or inaction by the Company in connection with
any such registration, qualification or compliance, and will reimburse each such
Holder, each
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of its officers and directors and partners and such Holder's legal counsel and
independent accountants, and each person controlling any such persons, each such
underwriter and each person who controls any such underwriter, for any legal and
any other expenses reasonably incurred in connection with investigating,
preparing or defending any such claim, loss, damage, liability or action;
PROVIDED, HOWEVER, that the Company will not be liable in any such case to the
extent that any such claim, loss, damage, liability or expense arises out of or
is based on any untrue statement or omission or alleged untrue statement or
omission, made in reliance upon and in conformity with written information
furnished to the Company by or on behalf of such Holder or underwriter and
expressly intended for use in such registration statement, prospectus, offering
circular or other document, or any amendment or supplement thereof.
7.2 Each Holder shall, if Registrable Securities held by such Holder are
included in the securities as to which such registration, qualification or
compliance is being effected, indemnify the Company, each of its directors and
officers and its legal counsel and independent accountants, each underwriter, if
any, of the Company's securities covered by such a registration statement, each
person who controls the Company or such underwriter within the meaning of
Section 15 of the Securities Act, and each other such Holder, each of its
officers, directors, partners, legal counsel and independent accountants, if
any, and each person controlling such Holder within the meaning of Section 15 of
the Securities Act, against all expenses, claims, losses, damages and
liabilities (or actions in respect thereof), including any of the foregoing
incurred in settlement of any litigation, commenced or threatened, arising out
of or based on any untrue statement (or alleged untrue statement) of a material
fact contained in any such registration statement, prospectus, offering circular
or other document, or any amendment or supplement thereto, incident to any such
registration, qualification or compliance or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse the
Company, such Holders, such directors, officers, partners, legal counsel,
independent accountants, underwriters or control persons for any legal or any
other expenses reasonably incurred in connection with investigating, preparing
or defending any such claim, loss, damage, liability or action, in each case to
the extent, but only to the extent, that such untrue statement (or alleged
untrue statement) or omission (or alleged omission) is made in such registration
statement, prospectus, offering circular, other document or amendment or
supplement in reliance upon and in conformity with written information furnished
to the Company by or on behalf of such Holder and expressly intended for use in
such registration statement, prospectus, offering circular or other document, or
any amendment or supplement thereof; PROVIDED, HOWEVER, that the obligations of
each Holder hereunder shall be limited to an amount equal to the proceeds to
such Holder of Registrable Securities sold as contemplated herein.
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7.3 Each party entitled to indemnification under this Section 7 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not unreasonably be
withheld). The Indemnified Party may participate in such defense at such party's
expense; PROVIDED, HOWEVER, that the Indemnifying Party shall bear the expense
of such defense of the Indemnified Party if representation of both parties by
the same counsel would be inappropriate due to actual or potential conflicts of
interest. The failure of any Indemnified Party to give notice as provided herein
shall not relieve the Indemnifying Party of its obligations under this
Agreement, unless and to the extent such failure is prejudicial to the ability
of the Indemnifying Party to defend the action. No Indemnifying Party, in the
defense of any such claim or litigation, shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnified Party of a release from all liability
in respect of such claim or litigation.
7.4 If the indemnification provided for in Section 7.1 or 7.2 is
unavailable or insufficient to hold harmless an Indemnified Party, then each
Indemnifying Party shall contribute to the amount paid or payable by such
Indemnified Party as a result of the expenses, claims, losses, damages or
liabilities (or actions or proceedings in respect thereof) referred to in
Section 7.1 or 7.2, in such proportion as is appropriate to reflect the relative
fault of the Company on the one hand and the sellers of Registrable Securities
on the other hand in connection with statements or omissions which resulted in
such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) or expenses, as well as any other relevant equitable
considerations. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the sellers of Registrable Securities and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission. The Company and the
Holders agree that it would not be just and equitable if contributions pursuant
to this Section 7.4 were to be determined by PRO RATA allocation (even if all
Sellers of Registrable Securities were treated as one entity for such purpose)
or by any other method of allocation which does not take account of the
equitable considerations referred to in the first sentence of this Section 7.4.
The amount paid by an Indemnified Party as a result of the expenses, claims,
losses, damages or liabilities (or actions or proceedings in respect thereof)
referred to in the first sentence of this Section 7.4 shall be deemed to include
any legal or other expenses reasonably incurred by such Indemnified Party in
connection with
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investigating or defending any claim, action or proceeding which is the subject
of this Section 7.4. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The obligations of sellers of Registrable Securities to
contribute pursuant to this Section 7.4 shall be several in proportion to the
respective amount of Registrable Securities sold by them pursuant to a
registration statement.
ARTICLE 8
RULE 144 REPORTING
With a view to making available the benefits of certain rules and
regulations of the Commission which may at any time permit the sale of
securities of the Company to the public without registration, after such time as
a public market exists for the Common Stock of the Company, the Company agrees
to:
8.1 Make and keep public information available as those terms are
understood and defined in Rule 144 under the Securities Act, at all times after
the effective date of the first registration under the Securities Act filed by
the Company for an offering of its securities to the general public; and
8.2 Use its best efforts to then file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Securities Exchange Act of 1934, as amended (the
"Exchange Act"); and
8.3 So long as a Holder owns any Registrable Securities, furnish to the
Holder forthwith upon request a written statement by the Company as to its
compliance with the reporting requirements of said Rule 144, and of the
Securities Act and the Exchange Act, a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents of the
Company as a Holder may reasonably request in availing itself of any rule or
regulation of the Commission allowing a Holder to sell any such securities
without registration.
ARTICLE 9
TRANSFER OF REGISTRATION RIGHTS
The rights to cause the Company to register Registrable Securities granted
Holders under Articles 2, 3 and 4 hereof may be assigned in connection with any
permitted transfer or assignment of the Holder's Registrable Securities. All
transferees and assignees of the rights to cause the Company to register
Registrable Securities granted Holders under Articles 2, 3 and 4 hereof, as a
condition to the transfer of such
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rights, shall agree in writing to be bound by the agreements set forth herein.
ARTICLE 10
LIMITATIONS ON REGISTRATION RIGHTS
GRANTED TO OTHER SECURITIES
The parties hereto agree that additional holders may, with the consent of
the Company and the Holders of a majority of the Registrable Securities then
outstanding, be added as parties to this Agreement with respect to any or all
securities of the Company held by them. Any additional parties shall execute a
counterpart of this Agreement, and upon execution by such additional parties and
by the Company, shall be considered Holders for purposes of this Agreement, and
shall be added to the Schedule of Registration Rights Holders.
ARTICLE 11
MISCELLANEOUS
11.1 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED ENTIRELY WITHIN THE STATE WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW.
11.2 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.
11.3 ENTIRE AGREEMENT. This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subject
matter hereof.
11.4 NOTICES. All notices, requests, consents, and other communications
hereunder shall be in writing and shall be deemed effectively given and received
upon delivery in person, or one business day after delivery by national
overnight courier service or by telecopier transmission with acknowledgment of
transmission receipt, or three business days after deposit via certified or
registered mail, return receipt requested, in each case addressed as follows:
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if to the Company:
Arch Communications Group, Inc.
1800 West Park Drive
Suite 250
Westborough, MA 01581
Telephone: (508) 870-6703
Facsimile: (508) 870-6076
Attention: J. Roy Pottle
with a copy to:
Hale and Dorr LLP
60 State Street
Boston, MA 02109
Telephone: (617) 526-6000
Facsimile: (617) 526-5000
Attention: David A. Westenberg, Esq.
if to the Investors:
c/o Sandler Capital Management
767 Fifth Avenue - 45th Floor
New York, New York 10153
Telephone: (212) 754-8100
Facsimile: (212) 826-0280
with copy to:
Dow, Lohnes & Albertson, PLLC
1200 New Hampshire Avenue, N.W.
Washington, D.C. 20036
Attention: Edward J. O'Connell, Esq.
Telephone: (202) 776-2000
Facsimile: (202) 776-2222
or, in any such case, at such other address or addresses as shall have been
furnished in writing by such party to the others.
11.5 SEVERABILITY. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions of this Agreement shall not in any way be affected or
impaired thereby.
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11.6 TITLES AND SUBTITLES. The titles of the sections and subsections of
this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
11.7 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
constitute one instrument.
11.8 "MARKET STAND-OFF" AGREEMENT. Each Holder agrees, if requested by the
Company and an underwriter of Common Stock (or other securities) of the Company,
not to sell or otherwise transfer or dispose of, whether in privately negotiated
or open market transactions, any Common Stock (or other securities) of the
Company held by such Holder during the ninety (90) day period following the
effective date of a registration statement of the Company filed under the
Securities Act for any underwritten registered public offering of the Company,
without the prior consent of such underwriter, PROVIDED, HOWEVER, that all
Holders, officers, directors of the Company and all other holders and
optionholders of at least 1% of the Company's voting securities on an
as-converted basis enter into similar agreements.
Such agreement shall be in writing in a form satisfactory to the Company
and such underwriter. The Company may impose stop-transfer instructions with
respect to the shares (or securities) subject to the foregoing restriction until
the end of said ninety (90) day period.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
COMPANY:
ARCH COMMUNICATIONS GROUP, INC.
By: /S/ C. E. BAKER, JR.
----------------------------
Name: C.E. Baker, Jr.
Title: Chairman of the Board
and Chief Executive Officer
INVESTORS:
SANDLER CAPITAL PARTNERS IV, L.P.
By: Sandler Investment Partners, L.P., General Partner
By: Sandler Capital Management, General Partner
By: MJDM Corp., a General Partner
By: /S/ EDWARD G. GRINACOFF
--------------------------
Edward G. Grinacoff
President
SANDLER CAPITAL PARTNERS IV, FTE, L.P.
By: Sandler Investment Partners, L.P., General Partner
By: Sandler Capital Management, General Partner
By: MJDM Corp., a General Partner
By: /S/ EDWARD G. GRINACOFF
---------------------------
Edward G. Grinacoff
President
<PAGE>
/S/ HARVEY SANDLER
- ------------------------
HARVEY SANDLER
/S/ JOHN KORNREICH
- ------------------------
JOHN KORNREICH
/S/ MICHAEL J. MAROCCO
- ------------------------
MICHAEL J. MAROCCO
/S/ ANDREW SANDLER
- ------------------------
ANDREW SANDLER
<PAGE>
SOUTH FORK PARTNERS
By: /S/ RICHARD REISS JR.
-----------------------------
Richard Reiss, Jr.
Reiss Capital Management LLC
General Partner of South Fork
Partners
THE GEORGICA INTERNATIONAL FUND
LIMITED
By: /S/ RICHARD REISS JR.
-----------------------------
Richard Reiss, Jr.
Georgica Advisors LLC
Investment Advisor to The
Georgica International Fund
Limited
ASPEN PARTNERS
By: /S/ NIKOS HECHT
-----------------------------
Nikos Hecht
Reiss Capital Management LLC
General Partner of Aspen
Partners
CONSOLIDATED PRESS INTERNATIONAL
LIMITED
By: /S/ NIKOS HECHT
-----------------------------
Nikos Hecht
Georgica Advisors LLC
Investment Advisor to
Consolidated Press
International Limited
<PAGE>
EXHIBIT B
SCHEDULE OF REGISTRATION RIGHTS HOLDERS
1. Sandler Capital Partners IV, L.P.
2. Sandler Capital Partners IV FTE, L.P.
3. Harvey Sandler
4. John Kornreich
5. Michael J. Marocco
6. Andrew Sandler
7. South Fork Partners
8. The Georgica International Fund Limited
9. Aspen Partners
10. Consolidated Press International Limited
EXHIBIT 99.7
EXCHANGE AGREEMENT
This Agreement, dated as of June 29, 1998, is entered into between Adelphia
Communications Corporation, a Delaware corporation ("Adelphia"), and Benbow PCS
Ventures, Inc., a California corporation ("Benbow").
WHEREAS, Adelphia holds 1,731,964 shares of Series A Redeemable Preferred
Shares (the "Series A Stock") of Benbow; and
WHEREAS, the parties wish to provide that the Series A Stock may be
exchanged for shares of Common Stock, $.01 par value per share ("Arch Common
Stock"), of Arch Communications Group, Inc., a Delaware corporation ("Arch"), on
the terms set forth herein;
NOW, THEREFORE, the parties hereby agree as follows:
1. OPTIONAL EXCHANGE. Series A Stock shall be exchangeable for Arch Common
Stock as follows:
(a) Each share of Series A Stock shall be exchangeable, to the extent
Benbow can legally acquire such shares of stock, at the option of the holder
thereof, at any time and from time to time on or before April 8, 2000, and
without the payment of additional consideration by the holder thereof, for such
number of fully paid and nonassessable shares of Arch Common Stock as is
determined by dividing (i) $10.00 (the "Optional Exchange Numerator") by (ii)
the Optional Exchange Price (as defined below). The "Optional Exchange Price"
shall be the higher of (x) $13.00 (the "Optional Exchange Denominator") and (y)
the unweighted average of the closing sale prices of the Arch Common Stock on
the Nasdaq National Market for the ten trading days immediately preceding the
date of exchange. In the event of a liquidation of Benbow, the right of the
holders of shares of Series A Stock to exchange such shares for Arch Common
Stock shall terminate at the close of business on the first full day preceding
the date fixed for the payment of any amounts distributable on liquidation to
the holders of Series A Stock.
(b) No fractional shares of Arch Common Stock shall be delivered upon
exchange of the Series A Stock. In lieu of any fractional shares to which the
holder would otherwise be entitled, Benbow shall pay cash equal to such fraction
multiplied by the then effective Optional Exchange Price.
(c) In order for a holder of Series A Stock to exchange shares of
Series A Stock for shares of Arch Common Stock, such holder shall surrender the
certificate or certificates for such shares of Series A Stock, at the office of
the transfer agent for the Series A Stock (or at the principal office of Benbow
if Benbow serves as its own transfer agent), together with written notice that
such holder elects to exchange all or any number of the shares of the Series A
Stock
<PAGE>
represented by such certificate or certificates. Such notice shall state such
holder's name or the names of the nominees in which such holder wishes the
certificate or certificates for shares of Arch Common Stock to be registered. If
required by Benbow, certificates surrendered for exchange shall be endorsed or
accompanied by a written instrument or instruments of transfer, in form
satisfactory to Benbow, duly executed by the registered holder or his, her or
its attorney duly authorized in writing. The date of receipt of such
certificates and notice by the transfer agent (or by Benbow if Benbow serves as
its own transfer agent) shall be the exchange date ("Optional Exchange Date").
Benbow shall, as soon as practicable after the Optional Exchange Date, deliver
at such office to such holder of Series A Stock, or to his, her or its nominees,
a certificate or certificates for the number of shares of Arch Common Stock to
which such holder shall be entitled, together with cash in lieu of any fraction
of a share.
2. MANDATORY EXCHANGE.
(a) On April 8, 2000, to the extent Benbow can legally acquire such
shares of stock, each then outstanding Series A Preferred Share shall
automatically be exchanged for such number of fully paid and nonassessable
shares of Arch Common Stock as is determined by dividing (i) $10.00 (the
"Mandatory Exchange Numerator") by (ii) the unweighted average of the closing
sale prices of the Arch Common Stock on the Nasdaq National Market for the ten
trading days immediately preceding April 8, 2000 (the "Mandatory Exchange
Price").
(b) If the closing sale price of the Arch Common Stock on the Nasdaq
National Market for any twenty consecutive trading days prior to April 8, 2000
equals or exceeds $13.00 (the "Mandatory Exchange Benchmark"), each then
outstanding share of Series A Stock shall, to the extent Benbow can legally
acquire such shares of stock, effective as of the close of business on such
twentieth trading day, automatically be exchanged for such number of fully paid
and nonassessable shares of Arch Common Stock as is determined by dividing (i)
the Mandatory Exchange Numerator by (ii) the unweighted average of the closing
sale prices of the Arch Common Stock on the Nasdaq National Market for such
twenty consecutive trading days (the "Benchmark Exchange Price").
(c) All holders of record of shares of Series A Stock shall be given
written notice of the date (the "Mandatory Exchange Date") and place designated
for mandatory exchange of all such shares of Series A Stock pursuant to this
Section 2. Such notice need not be given in advance of the Mandatory Exchange
Date. Such notice shall be sent by first class or registered mail, postage
prepaid, to each record holder of Series A Stock at such holder's address last
shown on the records of the transfer agent for the Series A Stock (or the
records of Benbow, if it serves as its own transfer agent). Upon receipt of such
notice, each holder of shares of Series A Stock shall surrender his, her or its
certificate or certificates for all such shares to Benbow at the place
designated in such notice, and shall thereafter receive certificates for the
number of shares of Arch Common Stock to which such holder is entitled pursuant
to this Section 2. If so required by Benbow, certificates surrendered for
exchange shall be endorsed or accompanied by written instrument or instruments
of transfer, in form satisfactory to Benbow, duly executed by the registered
holder or by his, her or its attorney duly authorized in writing. As soon as
practicable after the Mandatory Exchange Date and the surrender of the
certificate or certificates
<PAGE>
for Series A Stock, Benbow shall cause to be delivered to such holder, or on
his, her or its written order, a certificate or certificates for the number of
full shares of Arch Common Stock deliverable on such exchange in accordance with
the provisions hereof and cash as provided in Section 1(b) above in respect of
any fraction of a share of Arch Common Stock otherwise deliverable upon such
exchange.
3. ADJUSTMENT PROVISIONS. The Optional Exchange Numerator, Optional
Exchange Denominator, Mandatory Exchange Numerator and Mandatory Exchange
Benchmark (each, a "Base Price") shall be subject to adjustment as follows:
(i) ADJUSTMENT FOR STOCK SPLITS AND COMBINATIONS. If Arch at any time
or from time to time after the date of issuance of the Series A Stock (the
"Issue Date") effects a subdivision of the outstanding Arch Common Stock, the
Base Price then in effect immediately before such subdivision shall be
proportionately decreased, and conversely, if Arch at any time or from time to
time after the Issue Date combines the outstanding shares of Arch Common Stock
into a smaller number of shares, the Base Price then in effect immediately
before such combination shall be proportionately increased. Any adjustment under
this subsection (i) shall become effective at the open of business on the date
the subdivision or combination becomes effective.
(ii) ADJUSTMENT FOR CERTAIN DIVIDENDS AND DISTRIBUTIONS. If Arch at
any time or from time to time after the Issue Date makes, or fixes, a record
date for the determination of holders of Arch Common Stock entitled to receive a
dividend or other distribution payable in additional shares of Arch Common
Stock, then and in each such event the Base Price then in effect shall be
decreased as of the time of such issuance or, in the event such record date is
fixed, as of the opening of business on such record date, by multiplying the
Base Price then in effect by a fraction (A) the numerator of which is the total
number of shares of Arch Common Stock issued and outstanding immediately prior
to the time of such issuance or the close of business on such record date, and
(B) the denominator of which shall be the total number of shares of Arch Common
Stock issued and outstanding immediately prior to the time of such issuance or
the close of business on such record date plus the number of shares of Arch
Common Stock deliverable in payment of such dividend or distribution; PROVIDED,
HOWEVER, that if such record date is fixed and such dividend is not fully paid
or if such distribution is not fully made on the date fixed therefor, the Base
Price shall be recomputed accordingly as of the close of business on such record
date and thereafter the Base Price shall be adjusted pursuant to this subsection
(ii) as of the time of actual payment of such dividend or distribution.
(iii) ADJUSTMENTS FOR OTHER DIVIDENDS AND DISTRIBUTIONS. In the event
Arch at any time or from time to time after the Issue Date makes, or fixes, a
record date for the determination of holders of Arch Common Stock entitled to
receive a dividend or other distribution payable in securities of Arch other
than shares of Arch Common Stock, then and in each such event provision shall be
made so that the holders of Series A Stock shall receive, upon exchange thereof,
in addition to the number of shares of Arch Common Stock receivable thereupon,
the amount of securities of Arch which they would have received had their Series
A Stock been for Arch Common Stock on the date of such event and had they
thereafter, during the
<PAGE>
period from the date of such event to and including the exchange date, retained
such securities receivable by them as aforesaid during such period, subject to
all other adjustments called for during such period under this Section 3 with
respect to the rights of the holders of the Series A Stock.
(iv) ADJUSTMENT FOR RECLASSIFICATION, EXCHANGE AND SUBSTITUTION. In
the event that at any time or from time to time after the Issue Date, the Arch
Common Stock deliverable upon the exchange of the Series A Stock is changed into
the same or a different number of shares of any class or classes of shares of
stock, whether by recapitalization, reclassification or otherwise (other than a
subdivision or combination of shares or stock dividend or a reorganization,
merger, consolidation or sale of assets, provided for elsewhere in this Section
3), then and in any such event each holder of Series A Stock shall have the
right thereafter to exchange such Series A Stock for the kind and amount of
stock and other securities and property receivable upon such recapitalization,
reclassification or other change, by holders of the number of shares of Arch
Common Stock for which such shares of Series A Stock could have been exchanged
immediately prior to such recapitalization, reclassification or change, all
subject to further adjustment as provided herein.
(v) ADJUSTMENT FOR CONSOLIDATION OR MERGER. In case of any
consolidation or merger of Arch with or into another corporation or the sale of
all or substantially all of the assets of Arch to another corporation, each
share of Series A Stock shall thereafter be exchangeable (or shall be exchanged
for a security which shall be exchangeable) for the kind and amount of shares of
stock or other securities or property to which a holder of the number of shares
of Arch Common Stock deliverable upon exchange of such Series A Stock would have
been entitled upon such consolidation, merger or sale; and, in such case,
appropriate adjustment (as determined in good faith by the Board of Directors)
shall be made in the application of the provisions in this Section 3 set forth
with respect to the rights and interest thereafter of the holders of the Series
A Stock, to the end that the provisions set forth in this Section 3 shall
thereafter be applicable, as nearly as reasonably may be, in relation to any
shares of stock or other property thereafter deliverable upon the exchange of
the Series A Stock.
(vi) CERTIFICATE OF ADJUSTMENT. In each case of an adjustment or
readjustment of the Base Price or the number of shares of Arch Common Stock or
other securities deliverable upon exchange of the Series A Stock, Benbow shall
compute such adjustment or readjustment in accordance with the provisions hereof
and prepare a certificate, signed by its principal financial officer, showing
such adjustment or readjustment, and shall mail such certificate, by first class
mail, postage prepaid, to each registered holder of the Series A Stock at the
holder's address as shown in Benbow's books. The certificate shall set forth
such adjustment or readjustment, showing in reasonable detail the facts upon
which such adjustment or readjustment is based, including a statement of (A) the
Base Price at the time in effect and (B) the type and amount, if any, of other
property which at the time would be received upon exchange of the Series A
Stock.
4. EXCHANGE OF DIVIDENDS. Upon the exchange (whether optional or mandatory)
of Series A Stock for Arch Common Stock, all accrued but unpaid Mandatory
Dividends (as such term is defined in the Certificate of Determination filed
with the Secretary of State of California
<PAGE>
to establish the Series A Stock (the "Certificate of Determination")), together
with interest thereon as provided in Section 1(a) of the Certificate of
Determination, and all other declared but unpaid dividends, if any, immediately
prior to such exchange shall be exchanged for Arch Common Stock at a price equal
to (i) in the case of optional exchange, the Optional Exchange Price (as defined
in Section 1(a) above), (ii) in the case of mandatory exchange pursuant to
Section 2(a) above, the Mandatory Exchange Price (as defined in Section 2(a)
above), and (iii) in the case of mandatory exchange pursuant to Section 2(b)
above, the Benchmark Exchange Price (as defined in Section 2(b) above).
5. EFFECT OF GUARANTY. Benbow's obligations hereunder are guaranteed by
Arch pursuant to a Guaranty of even date herewith. To the extent that Arch pays
or performs under such Guaranty Agreement, Benbow is relieved from performing
the corresponding obligations hereunder.
6. TRANSFERS OF RIGHTS. This Agreement, and the rights and obligations of
Adelphia hereunder, may be assigned by Adelphia to any person or entity to which
Series A Stock is transferred by Adelphia; provided that the transferee provides
written notice of such assignment to Benbow.
7. GENERAL.
(a) NOTICES. All notices, requests, consents, and other communications
under this Agreement shall be in writing and shall be delivered by hand or
mailed by first class certified or registered mail, return receipt requested,
postage prepaid, or via a nationally recognized courier service:
If to Benbow, 1615 Highland Avenue, Eureka, California 95503, Attention:
June E. Walsh, or at such other address or addresses as may have been furnished
to Adelphia in writing by Benbow, with a copy to (which shall not constitute
notice) Young, Vogl, Harlick, Wilson & Simpson LLP, 425 California Street, Suite
2500, San Francisco, California 94104, Attention: David M. Wilson, Esq.
If to Adelphia, Adelphia Building, Main at Water Street, Coudersport,
Pennsylvania 16915, Attention: James P. Rigas, or at such other address or
addresses as may have been furnished to Benbow in writing by Adelphia, with a
copy to (which shall not constitute notice) Paul, Hastings, Janofsky & Walker
LLP, 600 Peachtree Street NE, Suite 2400, Atlanta, Georgia 30308, Attention:
Philip J. Marzetti, Esq.
Notices provided in accordance with this Section 7(a) shall be deemed
delivered upon personal delivery or two business days after deposit in the mail.
(b) ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings relating to such
subject matter.
<PAGE>
(c) AMENDMENTS AND WAIVERS. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), with the
written consent of Benbow and Adelphia. No waivers of or exceptions to any term,
condition or provision of this Agreement, in any one or more instances, shall be
deemed to be, or construed as, a further or continuing waiver of any such term,
condition or provision.
(d) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
shall be one and the same document.
(e) SEVERABILITY. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(f) GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of California.
(g) INVESTMENT LETTER. As a condition to each exchange of Series A
Stock for Arch Common Stock hereunder, Benbow shall obtain (and provide to Arch)
from the person(s) receiving the Arch Common Stock upon such exchange an
investment letter in the form of EXHIBIT A attached hereto.
[rest of page intentionally left blank]
<PAGE>
Executed as of the date first written above.
BENBOW PCS VENTURES, INC.
By:
Title:
ADELPHIA COMMUNICATIONS
CORPORATION
By:
Title:
EXHIBIT 99.8
PROMISSORY NOTE
$285,015.00 June 29, 1998
Eureka, California
FOR VALUE RECEIVED, the undersigned, Benbow PCS Ventures, Inc., a
California corporation (the "Issuer"), hereby promises to pay to the order of
Lisa-Gaye Shearing ("LGS"), an individual with a principal place of residence at
401 South Main St., Coudersport, PA 16915, or order, the principal sum of Two
Hundred Eighty-Five Thousand and Fifteen Dollars ($285,015) in immediately
available funds, together with interest, whether before or after maturity, at
the rates and on the dates hereinafter provided, on any and all principal
amounts outstanding hereunder from time to time from the date hereof until
payment in full hereof.
1. MATURITY; INTEREST RATE; INTEREST PAYMENTS.
(a) From April 8, 1998 until this Note is paid in full, interest on
principal amounts outstanding hereunder shall accrue and be payable at a rate
per annum equal to twelve percent (12%) per annum, compounded annually on each
anniversary of the date of this Note, until payment in full thereof. All
principal and interest outstanding hereunder shall be payable in full by the
Issuer on April 8, 2000 or on such earlier date as said principal may become due
and payable pursuant to the terms hereof.
(b) All payments hereunder may be made, at the sole option of the Issuer:
(i) in cash;
(ii) in such number of shares of common stock, $.01 par
value per share (the "Common Stock"), of Arch Communications
Group, Inc. ("Arch") as is determined by dividing (y) the
outstanding amount of principal and interest due under this Note,
by (z) the unweighted average of the closing sale prices of the
Common Stock on the Nasdaq National Market for ten trading days
immediately preceding the maturity date as described in sub-
paragraph (a) above; or
(iii) in a combination of cash and Common Stock as provided
above.
(c) In addition to, and not in limitation of, the foregoing, during the
continuance of an event of default hereunder, outstanding principal and, to the
extent permitted by applicable law, outstanding interest shall bear interest
from and including the due date thereof until paid at a rate
<PAGE>
per annum equal to fourteen percent (14%). Such rate shall be in effect until
all of the obligations of the Issuer to LGS are paid in full. In no event shall
any interest be at a rate in excess of the maximum rate permitted by law.
2. DEFAULT; REMEDIES.
At the option of the holder, this Note shall become immediately due and
payable upon the occurrence and during the continuance at any time of any of the
following events of default: (1) default in the payment of principal when due;
(2) default in the payment or performance of any other of the liabilities or
obligations of the Issuer hereunder and the failure of the Issuer to cure such
default within 5 days; (3) the liquidation, termination, dissolution or the
appointment of a receiver for the Issuer or Arch or their respective properties
as a whole; (4) the institution by the Issuer or Arch of any proceedings under
the United States Bankruptcy Code or any other federal or state law in which the
Issuer or Arch is alleged to be insolvent or unable to pay its debts as they
mature or the making by the Issuer or Arch of an assignment or trust mortgage
for the benefit of creditors; or (5) the institution against the Issuer or Arch
of any proceedings under the United States Bankruptcy Code or of any other
federal or state law in which the Issuer or Arch is alleged to be insolvent or
unable to pay its debts as they mature, and the failure of the Issuer or Arch to
cause such proceedings to be dismissed or stayed within 60 days.
Upon an event of default, and at all times thereafter, the holder shall
have all of the rights and remedies afforded by the Uniform Commercial Code as
from time to time in effect in the Commonwealth of Massachusetts or afforded by
other applicable law.
3. PREPAYMENT.
(a) At any time and from time to time, the Issuer may pre-pay the
Note, in whole or in part, in cash or Common Stock or a combination of cash and
Common Stock, as provided in Section 1(b) above.
(b) The Issuer shall promptly prepay principal and interest owed
hereunder upon the early redemption or early repayment by the Issuer of any
portion of its Series A Redeemable Preferred Shares with such rights,
preferences and privileges as described in EXHIBIT A hereto (the "Series A
Preferred Stock"); provided that such prepayment of this Note shall be made
ratably with such early redemption or early prepayment of the Series A Preferred
Stock.
(c) In the event of any prepayment of only a part of the then
outstanding amount due on the Note, the prepayment shall be applied first to
outstanding interest and then to outstanding principal.
4. OPTIONAL EXCHANGE. This Note may be exchanged into Common Stock as
follows:
(a) This Note may be exchanged, at the option of the holder thereof,
at any time and from time to time, and without the payment of additional
consideration by the holder thereof, into such number of fully paid and
nonassessable shares of Common Stock as is determined by dividing (y) the
outstanding amount of principal and interest due under this Note,
<PAGE>
by (z) product of (i) the unweighted average of the closing sale prices of the
Common Stock on the Nasdaq National Market for ten trading days immediately
preceding the Exchange Date (defined in Section 4(c) below) and (ii) 1.30. In
the event of a liquidation of the Issuer, the right of the holder of this Note
to exchange this Note for Common Stock shall terminate at the close of business
on the first full day preceding the date fixed for the payment of any amounts
distributable on liquidation to the holders of Series A Preferred Stock.
(b) No fractional shares of Common Stock shall be issued upon exchange
of this Note. In lieu of any fractional shares to which the holder would
otherwise be entitled, the Issuer shall pay cash in an amount equal to the
product of (i) such fraction, and (ii) the unweighted average of the closing
sale prices of the Common Stock on the Nasdaq National Market for ten trading
days immediately preceding the Exchange Date (defined in Section 4(c) below).
(c) In order for a holder of this Note to exchange this Note for
shares of Common Stock, such holder shall surrender this Note and deliver to the
Issuer written notice that such holder elects to exchange all or any portion of
the outstanding principal amount of this Note. Such notice shall state such
holder's name or the names of the nominees in which such holder wishes the
certificate or certificates for shares of Common Stock to be issued. The date of
receipt of the Note and notice by the Issuer shall be the exchange date
("Exchange Date"). The Issuer shall, as soon as practicable after the Exchange
Date, cause to be issued and delivered at such office to such holder of this
Note or to his or its nominees, a certificate or certificates for the number of
shares of Common Stock to which such holder shall be entitled, together with
cash in lieu of any fraction of a share.
(d) The Issuer shall cause Arch, at all times during which the Note
shall be outstanding, to reserve and keep available out of its authorized but
unissued stock, for the purpose of effecting the exchange of the Note, such
number of its duly authorized shares of Common Stock as shall from time to time
be sufficient to effect the exchange for Common Stock of all amounts outstanding
under the Note.
(e) If the Common Stock issuable upon the exchange of the Note shall
be changed into the same or a different number of shares of any class or classes
of stock, whether by capital reorganization, reclassification, or otherwise
(other than a subdivision or combination or shares of stock dividend provided
for above, or a merger, consolidation, or sale of assets provided for below),
then and in each such event the holder of the Note shall have the right
thereafter to exchange the Note or the amount and kind of shares of stock and
other securities and property receivable upon such reorganization,
reclassification, or other change, by holders of the number of shares of Common
Stock into which such Note might have been exchanged immediately prior to such
reorganization, reclassification, or change, all subject to further adjustment
as provided herein.
(f) In case of any consolidation or merger of Arch with or into
another corporation or the sale of all or substantially all of the assets of
Arch to another corporation, the Note shall thereafter be exchangeable (or shall
be exchanged with a security which shall be exchangeable) into the kind and
amount of shares of stock or other securities or property to which a holder of
the number of shares of Common Stock of Arch deliverable upon the exchange
<PAGE>
of such Note would have been entitled upon such consolidation, merger or sale;
and, in such case, appropriate adjustment (as determined in good faith by the
Board of Directors) shall be made in the application of the provisions in this
Section 4 set forth with respect to the rights and interest thereafter of the
holder, to the end that the provisions set forth in this Section 4 shall
thereafter be applicable, as nearly as reasonably may be, in relation to any
shares of stock or other property thereafter deliverable upon the exchange of
the Note.
5. MANDATORY EXCHANGE.
(a) In the event that the closing sale price of Common Stock on the
Nasdaq National Market is equal to or greater than $13.00 for each of twenty
consecutive days on which the Nasdaq National Market is open for trading, all
outstanding amounts due under the Note shall automatically be exchanged for such
number of fully paid and nonassessable shares of Common Stock as is determined
by dividing (i) the outstanding amount of principal and interest due under the
Note by (ii) the unweighted average of the closing sale prices of the Common
Stock on the Nasdaq National Market for such twenty trading days.
(b) In the event of a mandatory exchange pursuant to this Section 5,
the holder of this Note shall surrender, as soon as practicable after Arch or
the Issuer or both gives LGS notice of such mandatory exchange, this Note to the
Issuer and shall thereafter receive certificates for the number of shares of
Common Stock to which such holder is entitled pursuant to this Section 5. As
soon as practicable after such surrender of the Note, the Issuer shall cause to
be issued and delivered to such holder, or on his or its written order, a
certificate or certificates for the number of full shares of Common Stock
issuable on such exchange in accordance with the provisions hereof.
(c) No fractional shares of Common Stock shall be issued in exchange
of this Note. In lieu of any fractional shares to which the holder would
otherwise be entitled, the Issuer shall pay cash in an amount equal to the
product of (i) such fraction, and (ii) the unweighted average of the closing
sale prices of the Common Stock on the Nasdaq National Market for the last ten
days of the twenty day period described in Section 5(a) above.
6. MODIFICATION OF PAYMENT TERMS UPON TRANSFER TO GUARANTOR.
In the event that Arch Communications Group, Inc. (the "Guarantor"),
or its nominee, becomes the holder of this Note pursuant to the terms of that
certain Guaranty, of even date herewith, by the Guarantor in favor of LGS, the
terms of this Note shall be modified as follows:
(a) The rate of interest provided in Section 1(a) shall be increased
from twelve percent (12%) per annum to fourteen and one-half (14.5%) percent per
annum.
(b) All principal and interest due hereunder shall be payable in cash
on the Maturity Date. As used herein, "Maturity Date" shall mean the earliest of
the following events: (i) the sale of a controlling interest in the Issuer; (ii)
a sale of a substantial part of the assets of the Issuer; (iii) the termination
of the Management Agreement dated as of October 1, 1995, as amended, between The
Westlink Company ("Westlink") and the Issuer (the "Management
<PAGE>
Agreement") by Westlink due to (x) a substantial and material breach of the
Management Agreement by the Issuer which has not been cured within thirty (30)
days of the Issuer's receipt of written notice of such breach from Westlink, (y)
the insolvency or bankruptcy of the Issuer or (z) the occurrence of any other
event that materially impacts the Issuer's ability to perform its obligations
under the Management Agreement; or (iv) any date on which the Issuer has
Available Cash (as defined below), but only to the extent of such Available
Cash. "Available Cash" shall mean cash available after payment of operating
expenses (including salary and benefits under the Employment Agreement between
the Issuer and June E. Walsh), interest, taxes, principal and debt repayments,
and capital expenditures described in the Shareholders Agreement dated as of
September 23, 1994, as amended, among the Issuer, Westlink and June E. Walsh,
the Business Plan adopted by the Issuer and/or in the duly adopted budgets of
the Issuer.
(c) Sections 1(b), 1(c), 3(a), 3(b), 4 and 5 shall be deemed deleted
in their entirety and all references to "Arch" in Sections 2(3), (4) and (5)
shall be deleted (provided, however, that Issuer shall have the right to prepay
its obligations hereunder, in whole or in part, in cash, at any time without
penalty).
7. NOTICE PROVISIONS.
All notices and other communications provided to any party hereto
under this Note shall be in writing or by telex or by facsimile and addressed or
delivered to such party as follows:
If to the Issuer:
Benbow PCS Ventures, Inc.
1615 Highland Avenue
Eureka, CA 95503-3891
Attention: Ms. June Walsh
(fax) (707) 442-5732
(phone) (707) 445-0779
With a copy to (which copy shall not
constitute notice):
Young, Vogl, Harlick, Wilson & Simpson LLP
425 California Street, Suite 2500
San Francisco, CA 94104
Attention: David M. Wilson, Esq.
(fax) (415) 291-1984
(phone) (415) 291-1970
<PAGE>
If to Lisa-Gaye Shearing:
401 South Main Street
Coudersport, PA 16915
(fax) 814-274-7098
(phone) 814-274-6468
With a copy to (which copy shall not
constitute notice):
Paul, Hastings, Janofsky & Walker LLP
600 Peachtree St., N.W., Suite 2400
Atlanta, GA 30308
Attention: Philip J. Marzetti, Esq.
(fax) (404) 815-2424
(phone) (404) 815-2258
8. MISCELLANEOUS.
The Issuer hereby expressly waives presentment, dishonor, protest and
demand, diligence, notice of protest, of demand and of dishonor, and any other
notice otherwise required to be given under the law in connection with the
delivery, acceptance, performance, default, enforcement or collection of this
Note (other than any notice required to be delivered to Issuer hereunder), and
expressly agrees that this Note, or any payment hereunder, may be extended or
subordinated (by forbearance or otherwise) from time to time, without in any way
affecting the liability of the Issuer.
None of the terms or provisions of this Note may be excluded, modified or
amended except by a written instrument duly executed on behalf of the holder
expressly referring hereto and setting forth the provision so excluded, modified
or amended.
Issuer shall pay all costs of collection of this Note, including without
limitation, reasonable attorneys' fees and expenses should this Note be
collected by or through an attorney-at-law.
As a condition to the transfer of any Common Stock in accordance with this
Note, the holder agrees to provide an investment letter in the form of EXHIBIT E
attached hereto.
Payment of all obligations hereunder is secured by that certain Guaranty of
Arch Communications Group, Inc. of even date herewith and any holder of this
Note is entitled to all of the benefits of such Guaranty.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
CALIFORNIA. THIS NOTE SHALL BE DEEMED TO BE UNDER SEAL.
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this Note to be executed as of
the 29th day of June, 1998 under seal by its duly authorized officer as of the
date first above written.
WITNESS: BENBOW PCS VENTURES, INC.
___________________________ By ____________________________
Name:
Title:
Accepted and Agreed WITNESS:
Lisa-Gaye Shearing
- --------------------------- -----------------------------
EXHIBIT 99.9
GUARANTY
To induce Adelphia Communications Corporation, a Delaware corporation
("Adelphia"), to sell to Benbow PCS Ventures, Inc. (the "Buyer") Adelphia's
stock in Page Call, Inc. ("Page Call") pursuant to that certain Stock Purchase
Agreement dated April 30, 1997, as amended, in exchange for, INTER ALIA, shares
of the Buyer's Series A Redeemable Preferred shares, no par value, with such
rights, preferences and privileges as described in EXHIBIT A hereto (the "Benbow
Preferred Stock"), the undersigned Arch Communications Group, Inc. ("Arch" or
the "Guarantor") hereby guarantees to Adelphia the payment and performance by
the Buyer of all Buyer's obligations (the "Obligations") under the Benbow
Preferred Stock and under the Exchange Agreement of even date herewith, between
Adelphia and Buyer (the "Exchange Agreement") which Obligations shall be
determined without regard to Buyer's inability to perform under the Benbow
Preferred Stock or under the Exchange Agreement because of restrictions imposed
by applicable law or for any other reason.
The Guarantor also agrees: that this Guaranty shall not be impaired by any
modification, supplement, extension or amendment of any contract or agreement to
which the parties thereto may hereafter agree, nor by any modification, release
or other alteration of any of the obligations hereby guaranteed or of any
security therefor, nor by any agreements or arrangements whatever with the
holders of the Benbow Preferred Stock (the "Holders") or anyone else; that
Guarantor shall not be relieved or released of any of its obligations hereunder
by reason of the inability or failure of the Buyer to perform under the Benbow
Preferred Stock or under the Exchange Agreement because of restrictions imposed
by applicable law; that the liability of the Guarantor hereunder is direct and
unconditional and may be enforced without requiring the Holders first to resort
to any other right, remedy or security; that the Guarantor shall not have any
right of subrogation, reimbursement or indemnity whatsoever, unless and until
all of the Obligations of the Buyer have been paid and performed in full; that
if the Buyer or any Guarantor should at any time become insolvent or make a
general assignment, or if a petition in bankruptcy or any insolvency or
reorganization proceedings shall be filed or commenced by the Buyer or the
Guarantor, any and all obligations of Guarantor shall, at the option of the
Holders, forthwith become due and payable without notice; that if, after the
expiration of 30 days after a petition in bankruptcy or insolvency or
reorganization proceedings shall be commenced against the Buyer or the
Guarantor, any and all obligations of the Guarantor shall, at the Holders'
option, forthwith become due and payable without notice; that this Guaranty is a
continuing Guaranty which shall remain effective while any of the obligations of
the Buyer under the Benbow Preferred Stock or the Exchange Agreement shall be
outstanding; that this Guaranty is a continuing Guaranty which shall remain
effective during the term of the Benbow Preferred Stock and the Exchange
Agreement; that nothing shall discharge or satisfy the liability of the
Guarantor hereunder except the full payment and performance of all of the
Buyer's obligations to the Holders as provided in the Benbow Preferred Stock and
the Exchange Agreement; that any and all present and future debts and
obligations of the Buyer to the Guarantor are hereby waived and postponed in
favor of and subordinated to the full payment and performance of all present and
future debts and obligations of the Buyer to the Holders.
<PAGE>
In the event and each time that the Buyer becomes obligated to deliver
shares of Common Stock to the holder or holders of the Benbow Preferred Stock
shares in exchange for Benbow Preferred Stock, subject to the conditions set
forth herein, and further subject to the conditions set forth in Articles III
and IV of the Loan Agreement (the "Loan Agreement") of even date by and among
the Guarantor, The Westlink Company II ("Westlink") and the Buyer, Arch shall
issue such Common Stock and contribute such Common Stock to Westlink, and
Westlink shall transfer such Common Stock to the Buyer. In the event that (i)
the conditions set forth in Articles III and IV of the Loan Agreement have not
been met and the Guarantor has not waived compliance with such conditions, or
(ii) Westlink is in breach of, or fails to give adequate assurance to the
Guarantor of, the performance of its obligations under the previous sentence, or
(iii) the Guarantor otherwise determines in its sole discretion to do so, then
the Guarantor shall instead issue such shares directly to Adelphia. All such
shares of Common Stock shall be fully paid, nonassessable and free of preemptive
rights.
Adelphia represents, warrants and covenants as follows: The Common Stock
transferred to Adelphia as described above shall be acquired by Adelphia not
with a view to or in connection with any resale or distribution. Adelphia has
had such opportunity as it has deemed adequate to obtain from the Guarantor such
information as is necessary to permit Adelphia to evaluate the merits and risks
of its acquisition of the Common Stock. Without limiting the generality of the
foregoing, Adelphia acknowledges that the Guarantor is subject to the
informational requirements of the Securities Exchange Act of 1934, as amended,
and, in accordance therewith, files reports, proxy statements and other
information with the Securities and Exchange Commission. Subject to the rights
provided to Adelphia pursuant to the Registration Rights Agreement of even date
herewith, Adelphia understands that the Common Stock transferred to Adelphia as
described above will not be registered under the securities laws of the United
States or any other jurisdiction and cannot be transferred or resold except as
permitted pursuant to a valid registration statement or an applicable exemption
from registration. Each time Adelphia acquires shares of Common Stock as
described above, Adelphia shall be deemed to have reaffirmed, as of the date of
such acquisition, the representations made in this paragraph. Adelphia
understands that the certificate representing the Common Stock shall bear a
legend substantially in the following form:
"The securities represented by this certificate have
not been registered under the Securities Act of 1933,
as amended, and may not be sold, exchanged,
transferred, pledged, hypothecated or otherwise
disposed of except pursuant to registration or an
available exemption from registration under the
Securities Act of 1933."
So long as any Benbow Preferred Stock is issued and outstanding, the
Guarantor shall reserve and maintain a sufficient number of shares of Common
Stock for issuance and delivery upon exchange of all outstanding Benbow
Preferred Stock. Upon the occurrence of each and every event requiring an
adjustment in a Base Price (as defined in Section 3 of the Exchange Agreement),
Arch shall provide such notice and information to Benbow as may be reasonably
<PAGE>
required in order to enable Benbow to provide a certificate of adjustment to
each holder of Benbow Preferred Stock in the manner and time periods
contemplated by Section 3(vi) of the Exchange Agreement.
Adelphia, and any subsequent holder of the Benbow Preferred Stock by
asserting any claim under the Guaranty, confirm and agree that the Guarantor may
condition its payment and performance obligations under this Guaranty upon the
simultaneous sale, transfer and assignment of all of the Benbow Preferred Stock
to Guarantor, or its nominee, without recourse or representation, other than as
to good title and the absence of liens or encumbrances.
The Guarantor shall, as a condition to any consolidation or merger of the
Guarantor with or into another corporation, or the sale of all or substantially
all of the assets of the Guarantor to another corporation, execute and deliver
such documents and take such actions (including without limitation obtaining the
written consent of any corporation with which the Guarantor consolidates or
merges or which purchases all or substantially all of the assets of the
Guarantor) as may be reasonably necessary to effectuate the provisions of
Section 3(v) of the Exchange Agreement.
The Guarantor waives: notice of acceptance hereof, presentment and protest
of any instrument, and notice thereof; notice of default; all diligence in
collection or protection or realization upon the obligations due to Adelphia
from Buyer; and all other notices to which such Guarantor might otherwise be
entitled.
This Guaranty shall continue to be effective, or be reinstated, as the case
may be, if at any time payment, or any part thereof, of any of the obligations
of the Buyer to Adelphia is rescinded or must otherwise be restored or returned
by Adelphia upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Buyer or the Guarantor, or upon or as a result of the
appointment of a receiver or trustee or similar officer for the Buyer or the
Guarantor or any substantial part of their respective properties, or otherwise,
all as though such payments had not been made.
Guarantor shall pay all costs of collection of this Guaranty, including
without limitation, reasonable attorneys' fees and expenses should this Guaranty
be collected by or through an attorney-at-law.
This Guaranty, all acts and transactions hereunder, and the rights and
obligations of the parties hereto shall be governed, construed and interpreted
according to the laws of the State of California, shall be binding upon and
shall inure to the benefit of their respective heirs, executors, administrators,
successors and assigns.
[Intentionally Left Blank]
<PAGE>
This document shall be deemed to be executed under seal.
Dated as of June 29, 1998
THE GUARANTOR
Witnessed by: Arch Communications Group,Inc.
By
Name:
Title:
1800 West Park Drive, Suite 250
Westboro, MA 01581
Acknowledged and Agreed:
Adelphia Communications Corporation Witnessed by:
By
- -----------------------------
Name:
Title:
- ------------------------------
- ------------------------------
(Address)
The Westlink Company II Witnessed by:
By
- -----------------------------
Name:
Title:
c/o Arch Communications Group, Inc.
1800 West Park Drive, Suite 250
Westboro, MA 01581
EXHIBIT 99.10
GUARANTY
To induce Lisa-Gaye Shearing ("LGS") to sell to Benbow PCS Ventures, Inc.
(the "Buyer") her stock in Page Call, Inc. ("Page Call") pursuant to that
certain Stock Purchase Agreement dated April 30, 1997, as amended, in exchange
for, INTER ALIA, a certain Promissory Note dated the date hereof in the amount
of Two Hundred Eighty-Five Thousand and Fifteen Dollars ($285,015) (the "Note"),
the undersigned Arch Communications Group, Inc. (the "Guarantor") hereby
guarantees to LGS (a) the payment by the Buyer of all sums which may be
presently due and owing and of all sums which shall in the future become due and
owing to LGS under the Note; (b) the due performance by Buyer of all of the
Buyer's obligations under said Note; and (c) the payment by the Buyer of all
sums which may be presently due and owing and all sums which shall in the future
become due and owing by the Buyer to LGS under the Consulting Agreement of even
date herewith between the Buyer and LGS, as the same may be amended,
supplemented or modified from time to time (the "Consulting Agreement").
The Guarantor also agrees: that this Guaranty shall not be impaired by any
modification, supplement, extension or amendment of any contract or agreement to
which the parties thereto may hereafter agree, nor by any modification, release
or other alteration of any of the obligations hereby guaranteed or of any
security therefor, nor by any agreements or arrangements whatever with LGS or
anyone else; that the liability of the Guarantor hereunder is direct and
unconditional and may be enforced without requiring LGS first to resort to any
other right, remedy or security; that the Guarantor shall not have any right of
subrogation, reimbursement or indemnity whatsoever, unless and until all of the
debts and obligations of the Buyer to LGS under the Note and the Consulting
Agreement have been paid in full; that if the Buyer or any Guarantor should at
any time become insolvent or make a general assignment, or if a petition in
bankruptcy or any insolvency or reorganization proceedings shall be filed or
commenced by the Buyer or the Guarantor, any and all obligations of Guarantor
shall, at LGS's option, forthwith become due and payable without notice; that
if, after the expiration of 30 days after a petition in bankruptcy or insolvency
or reorganization proceedings shall be commenced against the Buyer or the
Guarantor, any and all obligations of the Guarantor shall, at the option of LGS,
forthwith become due and payable without notice; that this Guaranty is a
continuing Guaranty which shall remain effective while any of the obligations of
the Buyer under the Note and the Consulting Agreement shall be outstanding; that
this Guaranty is a continuing Guaranty which shall remain effective during the
term of the Note and the Consulting Agreement; that nothing shall discharge or
satisfy the liability of the Guarantor hereunder except the full payment and
performance of all of the Buyer's debts and obligations to LGS as provided in
the Note and the Consulting Agreement; that any and all present and future debts
and obligations of the Buyer to the Guarantor are hereby waived and postponed in
favor of and subordinated to the full payment and performance of all present and
future debts and obligations of the Buyer to LGS.
<PAGE>
The Guarantor shall have the right, at its sole option, to make any payments of
interest and principal due under the Note as follows:
(i) in cash; or
(ii) in such number of shares of common stock (the "Common Stock") of
the Guarantor as is determined under Sections 1(b)(ii), 4 or 5 of the
Note, as applicable; or
(iii) in a combination of cash and Common Stock as provided above.
In the event and each time that the Buyer becomes obligated to deliver
shares of the Common Stock to LGS in exchange for the Note, subject to the
conditions set forth herein, and further subject to the conditions set forth in
Articles III and IV of the Loan Agreement (the "Loan Agreement") of even date by
and among the Guarantor, The Westlink Company II ("Westlink") and the Buyer,
then the Guarantor shall issue such Common Stock and contribute such Common
Stock to Westlink, and Westlink shall transfer such Common Stock to the Buyer.
In the event that (i) the conditions set forth in Articles III and IV of the
Loan Agreement have not been met and the Guarantor has not waived compliance
with such conditions, or (ii) Westlink is in breach of, or fails to give
adequate assurance to the Guarantor of, the performance of its obligations under
the previous sentence, or (iii) the Guarantor otherwise determines in its sole
discretion to do so, then the Guarantor shall instead issue such shares directly
to LGS. All such shares of Common Stock shall be fully paid, nonassessable and
free of preemptive rights.
LGS represents, warrants and covenants as follows: The Common Stock
transferred to LGS as described above shall be acquired by LGS not with a view
to or in connection with any resale or distribution. LGS has had such
opportunity as she has deemed adequate to obtain from the Guarantor such
information as is necessary to permit LGS to evaluate the merits and risks of
her acquisition of Common Stock. Without limiting the generality of the
foregoing, LGS acknowledges that the Guarantor is subject to the informational
requirements of the Securities Exchange Act of 1934, as amended, and, in
accordance therewith, files reports, proxy statements and other information with
the Securities and Exchange Commission. LGS understands that the Common Stock
transferred to LGS as described above will not be registered under the
securities laws of the United States or any other jurisdiction and cannot be
transferred or resold except as permitted pursuant to a valid registration
statement or an applicable exemption from registration. Each time LGS acquires
shares of Common Stock as described above, LGS shall be deemed to have
reaffirmed, as of the date of such acquisition, the representations made in this
paragraph. Subject to the rights provided to LGS pursuant to the Registration
Rights Agreement of even date herewith, LGS understands that the certificate
representing the Common Stock shall bear a legend substantially in the following
form:
<PAGE>
"The securities represented by this certificate have
not been registered under the Securities Act of 1933,
as amended, and may not be sold, exchanged,
transferred, pledged, hypothecated or otherwise
disposed of except pursuant to registration or an
available exemption from registration under the
Securities Act of 1933."
So long as the Note is issued and outstanding, the Guarantor shall reserve
and maintain a sufficient number of shares of Common Stock for issuance and
delivery upon exchange of the Note.
LGS, and any subsequent holder of the Note by asserting any claim under
this Guaranty with respect to the Note, confirm and agree that Guarantor may
condition its payment and performance obligations under this Guaranty with
respect to such Note upon the simultaneous sale, transfer and assignment of such
Note (or, if the holder of this Note does not receive payment with respect to
such Note, from the Guarantor or otherwise, in an amount equal to all
obligations due and payable to the holder under the Note, by the assignment of a
participation therein in an amount equal to all amounts paid by the Guarantor
under the Guaranty with respect to the Note) to Guarantor or its nominee,
without recourse or representation, other than as to good title and the absence
of liens or encumbrances.
The Guarantor waives: notice of acceptance hereof, presentment and protest
of any instrument, and notice thereof; notice of default; all diligence in
collection or protection or realization upon the obligations due to LGS from
Buyer; and all other notices to which such Guarantor might otherwise be
entitled.
This Guaranty shall continue to be effective, or be reinstated, as the case
may be, if at any time payment, or any part thereof, of any of the obligations
of the Buyer to LGS is rescinded or must otherwise be restored or returned by
LGS upon the insolvency, bankruptcy, dissolution, liquidation or reorganization
of the Buyer or the Guarantor, or upon or as a result of the appointment of a
receiver or trustee or similar officer for the Buyer or the Guarantor or any
substantial part of their respective properties, or otherwise, all as though
such payments had not been made.
Guarantor shall pay all costs of collection of this Guaranty, including
without limitation, reasonable attorneys' fees and expenses should this Guaranty
be collected by or through an attorney-at-law.
This Guaranty, all acts and transactions hereunder, and the rights and
obligations of the parties hereto shall be governed, construed and interpreted
according to the laws of the State of California, shall be binding upon and
shall inure to the benefit of their respective heirs, executors, administrators,
successors and assigns.
<PAGE>
This document shall be deemed to be executed under seal.
Dated as of June 29, 1998
THE GUARANTOR
Witnessed by: Arch Communications Group, Inc.
_______________________ By
Name:
Title:
1800 West Park Drive
Westboro, MA 01581
Acknowledged and Agreed Witnessed by:
- -----------------------------
Lisa-Gaye Shearing
401 South Main St.
Coudersport, PA 16915
The Westlink Company II Witnessed by:
By___________________________
Name:_____________________
Title:______________________
c/o Arch Communications Group, Inc.
1800 West Park Drive, Suite 250
Westboro, MA 01581
EXHIBIT 99.11
ARCH COMMUNICATIONS GROUP, INC.
REGISTRATION RIGHTS AGREEMENT
This Agreement, dated as of June 29, 1998, is entered into by and among
Arch Communications Group, Inc., a Delaware corporation (the "Company"),
Adelphia Communications Corporation, a Delaware corporation ("Adelphia"), and
Lisa-Gaye Shearing ("Shearing") (Adelphia and Shearing together are referred to
herein as the "Selling Stockholders").
WHEREAS, pursuant to a Stock Purchase Agreement, dated as of April 30, 1997
and amended as of June 29, 1998, the Selling Stockholders agreed to sell to
Benbow PCS Ventures, Inc., a California corporation ("Benbow"), and Benbow
agreed to purchase, all the outstanding shares of capital stock of Page Call,
Inc., a Delaware corporation ("Page Call"), for an aggregate purchase price of
$17,150,000, together with interest at an annual rate of 12% on such amount from
April 8, 1998 through June 29, 1998 (the "Purchase Agreement"). In payment of
the purchase price, (i) Benbow agreed to issue to Adelphia 1,731,964 shares of
Benbow's Series A Redeemable Preferred Shares, no par value (the "Preferred
Shares"), exchangeable in certain circumstances for Common Stock of the Company,
and (ii) Benbow agreed to issue to Shearing a promissory note in the original
principal amount of $285,015, exchangeable in certain circumstances for Common
Stock of the Company (the "Note"); and
WHEREAS, the Company has guaranteed the obligations of Benbow under the
Preferred Shares and the Note pursuant to Guaranties of even date herewith (the
"Guaranties");
WHEREAS, the Company and the Selling Stockholders desire to provide for
certain arrangements with respect to the registration of shares of capital stock
of the Company under the Securities Act of 1933;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Agreement, the parties hereto agree as follows:
1. CERTAIN DEFINITIONS. As used in this Agreement, the following terms
shall have the following respective meanings:
"COMMISSION" means the Securities and Exchange Commission, or any
other Federal agency at the time administering the Securities Act.
"COMMON STOCK" means the common stock, $.01 par value per share, of
the Company.
<PAGE>
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
or any similar Federal statute, and the rules and regulations of the Commission
issued under such Act, as they each may, from time to time, be in effect.
"REGISTRABLE SHARES" means (i) the shares of Common Stock issued or
issuable upon conversion or exchange of the Note (whether pursuant to the
Guaranties or otherwise), (ii) the shares of Common Stock issued or issuable
upon conversion or exchange of the Preferred Shares (whether pursuant to the
Guaranties or otherwise) and (iii) any other shares of Common Stock issued in
respect of such shares (because of stock splits, stock dividends,
reclassifications, recapitalizations, or similar events); PROVIDED, HOWEVER,
that shares of Common Stock which are Registrable Shares shall cease to be
Registrable Shares (i) upon any sale pursuant to a Registration Statement or
Rule 144 under the Securities Act or (ii) upon any sale in any manner to a
person or entity which, by virtue of Section 13 of this Agreement, is not
entitled to the rights provided by this Agreement.
"REGISTRATION EXPENSES" means the expenses described in Section 5.
"REGISTRATION STATEMENT" means a registration statement filed by the
Company with the Commission for a public offering and sale of Common Stock
(other than a registration statement on Form S-8 or Form S-4, or their
successors, or any other form for a similar limited purpose, or any registration
statement covering only securities proposed to be issued in exchange for
securities or assets of another corporation, or any registration filed at the
request of other stockholders of the Company).
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
similar Federal statute, and the rules and regulations of the Commission issued
under such Act, as they each may, from time to time, be in effect.
"STOCKHOLDERS" means the Selling Stockholders and any persons or
entities to whom the rights granted under this Agreement are transferred by any
Selling Stockholders, their successors or assigns pursuant to Section 13 hereof.
2. REQUIRED REGISTRATION.
(a) At any time, a Stockholder or Stockholders may request the
Company, in writing, to effect the registration on Form S-3 (or any successor
form relating to secondary offerings) of all or any portion of the Registrable
Shares. If the holders initiating the registration intend to distribute the
Registrable Shares by means of an underwriting, they shall so advise the Company
in their request and shall include the identity of the proposed underwriter who
shall be acceptable to the Company. Upon receipt of any such request, the
Company shall promptly give written notice of such proposed registration to all
other Stockholders. Such Stockholders shall have the right, by giving written
notice to the Company within 10 days after the Company provides its notice, to
elect to have included in such registration such of their Registrable Shares as
such Stockholders may request in such notice of election; provided that if the
underwriter (if any) managing the offering determines that, because of marketing
factors, all of the Registrable
<PAGE>
Shares requested to be registered by all Stockholders may not be included in the
offering, then all Stockholders who have requested registration shall
participate in the registration pro rata based upon the number of Registrable
Shares which they have requested to be so registered. Thereupon, the Company
shall, as expeditiously as possible, use its best efforts to effect the
registration on Form S-3 (or such successor form) of all Registrable Shares
which the Company has been requested to so register.
(b) The Company shall only be required to effect a total of two
registrations pursuant to paragraph (a) above. In addition, the Company shall
not be required to effect any registration within six months after the effective
date of any other Registration Statement of the Company.
(c) If at the time of any request to register Registrable Shares
pursuant to this Section 2, the Company is engaged or has fixed plans to engage
within 90 days of the time of the request in a registered public offering as to
which the Stockholders may include Registrable Shares pursuant to Section 3 or
is engaged in any other activity which, in the good faith determination of the
Company's Board of Directors, would be materially adversely affected by the
requested registration to the material detriment of the Company, then the
Company may at its option direct that such request be delayed for a period not
in excess of six months from the effective date of such offering or the date of
commencement of such other material activity, as the case may be. Following the
delay of the filing of a registration statement in accordance with the above,
the Company shall promptly proceed with such filing at the earliest time
practicable, notwithstanding such six-month period has not run, if such
registered public offering is abandoned by the Company or such adverse effect on
such other activity is no longer present.
3. INCIDENTAL REGISTRATION.
(a) Whenever the Company proposes to file a Registration Statement
(other than pursuant to Section 2) at any time and from time to time, it will,
prior to such filing, give written notice to all Stockholders of its intention
to do so and, upon the written request of a Stockholder or Stockholders given
within 10 days after the Company provides such notice (which request shall state
the intended method of disposition of such Registrable Shares), the Company
shall use its best efforts to cause all Registrable Shares which the Company has
been requested by such Stockholder or Stockholders to register to be registered
under the Securities Act to the extent necessary to permit their sale or other
disposition in accordance with the intended methods of distribution specified in
the request of such Stockholder or Stockholders; provided that the Company shall
have the right to postpone or withdraw any registration effected pursuant to
this Section 3 without obligation to any Stockholder.
(b) In connection with any registration under this Section 3 involving
an underwriting, the Company shall not be required to include any Registrable
Shares in such registration unless the holders thereof accept the terms of the
underwriting as agreed upon between the Company and the underwriters selected by
it (provided that such terms must be consistent with this Agreement). If in the
opinion of the managing underwriter it is appropriate because of marketing
factors to limit the number of shares of Common Stock to be included in
<PAGE>
the offering, then the Company and the Stockholders shall reduce, on a pro rata
basis, the number of shares each intends to include in the registration so that
the aggregate number to be registered shall equal that number of shares which
the managing underwriter believes should be included therein. If the number of
Registrable Shares to be included in the offering in accordance with the
foregoing is less than the total number of shares which the holders of
Registrable Shares have requested to be included, then the holders of
Registrable Shares who have requested registration and other holders of
securities entitled to include them in such registration shall participate in
the registration pro rata based upon their total ownership of shares of Common
Stock (giving effect to the conversion into Common Stock of all securities
convertible thereinto and the exchange for Common Stock of all securities
exchangeable therefor). If any holder would thus be entitled to include more
securities than such holder requested to be registered, the excess shall be
allocated among other requesting holders pro rata in the manner described in the
preceding sentence.
4. REGISTRATION PROCEDURES. If and whenever the Company is required by the
provisions of this Agreement to use its best efforts to effect the registration
of any of the Registrable Shares under the Securities Act, the Company shall:
(a) file with the Commission a Registration Statement with respect to
such Registrable Shares and use its best efforts to cause that Registration
Statement to become and remain effective;
(b) as expeditiously as possible prepare and file with the Commission
any amendments and supplements to the Registration Statement and the prospectus
included in the Registration Statement as may be necessary to keep the
Registration Statement effective, in the case of a firm commitment underwritten
public offering, until each underwriter has completed the distribution of all
securities purchased by it and, in the case of any other offering, until the
earlier of the sale of all Registrable Shares covered thereby or 120 days after
the effective date thereof;
(c) as expeditiously as possible furnish to each selling Stockholder
such reasonable numbers of copies of the prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act, and such
other documents as the selling Stockholder may reasonably request in order to
facilitate the public sale or other disposition of the Registrable Shares owned
by the selling Stockholder; and
(d) as expeditiously as possible use its best efforts to register or
qualify the Registrable Shares covered by the Registration Statement under the
securities or Blue Sky laws of such states as the selling Stockholders shall
reasonably request, and do any and all other acts and things that may be
necessary or desirable to enable the selling Stockholders to consummate the
public sale or other disposition in such states of the Registrable Shares owned
by the selling Stockholder; PROVIDED, HOWEVER, that the Company shall not be
required in connection with this paragraph (d) to qualify as a foreign
corporation or execute a general consent to service of process in any
jurisdiction.
<PAGE>
If the Company has delivered preliminary or final prospectuses to the
selling Stockholders and after having done so the prospectus is amended to
comply with the requirements of the Securities Act, the Company shall promptly
notify the selling Stockholders and, if requested, the selling Stockholders
shall immediately cease making offers of Registrable Shares and return all
prospectuses to the Company. The Company shall promptly provide the selling
Stockholders with revised prospectuses and, following receipt of the revised
prospectuses, the selling Stockholders shall be free to resume making offers of
the Registrable Shares.
5. ALLOCATION OF EXPENSES. The Company will pay all Registration Expenses
of all registrations under this Agreement. For purposes of this Section 5, the
term "Registration Expenses" shall mean all expenses incurred by the Company in
complying with this Agreement, including, without limitation, all registration
and filing fees, exchange listing fees, printing expenses, fees and expenses of
counsel for the Company, state Blue Sky fees and expenses, and the expense of
any special audits incident to or required by any such registration, but
excluding underwriting discounts, selling commissions and the fees and expenses
of selling Stockholders' own counsel.
6. INDEMNIFICATION AND CONTRIBUTION.
(a) In the event of any registration of any of the Registrable Shares
under the Securities Act pursuant to this Agreement, the Company will indemnify
and hold harmless the seller of such Registrable Shares, each underwriter of
such Registrable Shares, and each other person, if any, who controls such seller
or underwriter within the meaning of the Securities Act or the Exchange Act
against any losses, claims, damages or liabilities, joint or several, to which
such seller, underwriter or controlling person may become subject under the
Securities Act, the Exchange Act, state securities or Blue Sky laws or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any Registration Statement
under which such Registrable Shares were registered under the Securities Act,
any preliminary prospectus or final prospectus contained in the Registration
Statement, or any amendment or supplement to such Registration Statement, or
arise out of or are based upon the omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; and the Company will reimburse such seller, underwriter
and each such controlling person for any legal or any other expenses reasonably
incurred by such seller, underwriter or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or action;
PROVIDED, HOWEVER, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any untrue statement or omission made in such Registration Statement,
preliminary prospectus or final prospectus, or any such amendment or supplement,
in reliance upon and in conformity with information furnished to the Company, in
writing, by or on behalf of such seller, underwriter or controlling person
specifically for use in the preparation thereof.
<PAGE>
(b) In the event of any registration of any of the Registrable Shares
under the Securities Act pursuant to this Agreement, each seller of Registrable
Shares, severally and not jointly, will indemnify and hold harmless the Company,
each of its directors and officers and each underwriter (if any) and each
person, if any, who controls the Company or any such underwriter within the
meaning of the Securities Act or the Exchange Act, against any losses, claims,
damages or liabilities, joint or several, to which the Company, such directors
and officers, underwriter or controlling person may become subject under the
Securities Act, Exchange Act, state securities or Blue Sky laws or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement under which
such Registrable Shares were registered under the Securities Act, any
preliminary prospectus or final prospectus contained in the Registration
Statement, or any amendment or supplement to the Registration Statement, or
arise out of or are based upon any omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, if the statement or omission was made in reliance upon
and in conformity with information relating to such seller furnished in writing
to the Company by or on behalf of such seller specifically for use in connection
with the preparation of such Registration Statement, prospectus, amendment or
supplement; PROVIDED, HOWEVER, that the obligations of such Stockholders
hereunder shall be limited to an amount equal to the proceeds to each
Stockholder of Registrable Shares sold in connection with such registration.
(c) Each party entitled to indemnification under this Section 6 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; PROVIDED, that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be unreasonably
withheld); and, PROVIDED, FURTHER, that the failure of any Indemnified Party to
give notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Section 6. The Indemnified Party may participate in such
defense at such party's expense; PROVIDED, however, that the Indemnifying Party
shall pay such expense if representation of such Indemnified Party by the
counsel retained by the Indemnifying Party would be inappropriate due to actual
or potential differing interests between the Indemnified Party and any other
party represented by such counsel in such proceeding. No Indemnifying Party, in
the defense of any such claim or litigation shall, except with the consent of
each Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect of such claim or litigation, and no Indemnified Party shall
consent to entry of any judgment or settle such claim or litigation without the
prior written consent of the Indemnifying Party.
<PAGE>
(d) In order to provide for just and equitable contribution to joint
liability under the Securities Act in any case in which either (i) any holder of
Registrable Shares exercising rights under this Agreement, or any controlling
person of any such holder, makes a claim for indemnification pursuant to this
Section 6 but it is judicially determined (by the entry of a final judgment or
decree by a court of competent jurisdiction and the expiration of time to appeal
or the denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this Section 6 provides for
indemnification in such case, or (ii) contribution under the Securities Act may
be required on the part of any such selling Stockholder or any such controlling
person in circumstances for which indemnification is provided under this Section
6; then, in each such case, the Company and such Stockholder will contribute to
the aggregate losses, claims, damages or liabilities to which they may be
subject (after contribution from others) in such proportions so that such holder
is responsible for the portion represented by the percentage that the public
offering price of its Registrable Shares offered by the Registration Statement
bears to the public offering price of all securities offered by such
Registration Statement, and the Company is responsible for the remaining
portion; PROVIDED, HOWEVER, that, in any such case, (A) no such holder will be
required to contribute any amount in excess of the proceeds to it of all
Registrable Shares sold by it pursuant to such Registration Statement, and (B)
no person or entity guilty of fraudulent misrepresentation, within the meaning
of Section 11(f) of the Securities Act, shall be entitled to contribution from
any person or entity who is not guilty of such fraudulent misrepresentation.
7. INDEMNIFICATION WITH RESPECT TO UNDERWRITTEN OFFERING. In the event that
Registrable Shares are sold pursuant to a Registration Statement in an
underwritten offering pursuant to Section 2, the Company agrees to enter into an
underwriting agreement containing customary representations and warranties with
respect to the business and operations of an issuer of the securities being
registered and customary covenants and agreements to be performed by such
issuer, including without limitation customary provisions with respect to
indemnification by the Company of the underwriters of such offering.
8. INFORMATION BY HOLDER. Each Stockholder including Registrable Shares in
any registration shall furnish to the Company such information regarding such
Stockholder and the distribution proposed by such Stockholder as the Company may
reasonably request in writing and as shall be required in connection with any
registration, qualification or compliance referred to in this Agreement.
9. "STAND-OFF" AGREEMENT. Each Stockholder, if requested by the Company and
the managing underwriter of an offering by the Company of Common Stock or other
securities of the Company pursuant to a Registration Statement, shall agree not,
without the consent of such managing underwriter, to sell publicly or otherwise
transfer or dispose of any Registrable Shares or other securities of the Company
held by such Stockholder for a specified period of time (not to exceed 120 days)
following the effective date of such Registration Statement; PROVIDED, that all
Stockholders holding not less than the number of shares of Common Stock held by
such Stockholder (including shares of Common Stock issuable upon the exchange of
Preferred Shares, or other securities convertible into or exchangeable for
Common Stock, or upon the exercise of
<PAGE>
options, warrants or rights) and all executive officers and directors of the
Company enter into similar agreements.
A. 10. RULE 144 REQUIREMENTS. The Company agrees to: comply with the
requirements of Rule 144(c) under the Securities Act with respect to current
public information about the Company; use its best efforts to file with the
Commission in a timely manner all reports and other documents required of the
Company under the Securities Act and the Exchange Act; and furnish to any holder
of Registrable Shares upon request (i) a written statement by the Company as to
its compliance with the requirements of said Rule 144(c), and the reporting
requirements of the Securities Act and the Exchange Act, (ii) a copy of the most
recent annual or quarterly report of the Company, and (iii) such other reports
and documents of the Company as such holder may reasonably request to avail
itself of any similar rule or regulation of the Commission allowing it to sell
any such securities without registration.
11. MERGERS, ETC. The Company shall not, directly or indirectly, enter into
any merger, consolidation or reorganization in which the Company shall not be
the surviving corporation unless the proposed surviving corporation shall, prior
to such merger, consolidation or reorganization, agree in writing to assume the
obligations of the Company under this Agreement, and for that purpose references
hereunder to "Registrable Shares" shall be deemed to be references to the
securities which the Stockholders would be entitled to receive in exchange for
Registrable Shares under any such merger, consolidation or reorganization;
PROVIDED, HOWEVER, that the provisions of this Section 11 shall not apply in the
event of any merger, consolidation or reorganization in which the Company is not
the surviving corporation if all Stockholders are entitled to receive in
exchange for their Registrable Shares consideration consisting solely of (i)
cash, (ii) securities of the acquiring corporation which may be immediately sold
to the public without registration under the Securities Act, or (iii) securities
of the acquiring corporation which the acquiring corporation has agreed to
register within 90 days of completion of the transaction for resale to the
public pursuant to the Securities Act.
12. TERMINATION. All of the Company's obligations to register Registrable
Shares under this Agreement shall terminate on the later of (i) the second
anniversary of this Agreement and (ii) in the case of Registrable Shares issued
or issuable upon exchange of the Note, the first anniversary of the issuance of
such shares, or in the case of Registrable Shares issued or issuable upon
exchange of the Preferred Shares, the first anniversary of such issuance.
Notwithstanding anything to the contrary in this Section 12, no holder of
Registrable Shares shall be entitled to cause the Company to register the sale
of Registrable Shares if and so long as the intended sale may then be
effectuated by such holder in compliance with Rule 144 under the Securities Act.
13. TRANSFERS OF RIGHTS. This Agreement, and the rights and obligations of
each Selling Stockholder hereunder, may be assigned by such Selling Stockholder
to any person or entity to which Registrable Shares are transferred by such
Selling Stockholder, and such transferee shall be deemed a "Selling Stockholder"
for purposes of this Agreement; provided that the transferee provides written
notice of such assignment to the Company.
<PAGE>
14. GENERAL.
(a) NOTICES. All notices, requests, consents, and other communications
under this Agreement shall be in writing and shall be delivered by hand or
mailed by first class certified or registered mail, return receipt requested,
postage prepaid, or via a nationally recognized courier service:
If to the Company, to Arch Communications Group, Inc., 1800 West Park
Drive, Suite 250, Westborough, Massachusetts 01581, Attention: President, or at
such other address or addresses as may have been furnished in writing by the
Company to the Selling Stockholders, with a copy to Hale and Dorr LLP, 60 State
Street, Boston, Massachusetts 02109, Attention: David A. Westenberg, Esq.;
If to Shearing, c/o Adelphia Communications Corporation, Adelphia Building,
Main at Water Street, Coudersport, Pennsylvania 16915, or at such other address
or addresses as may have been furnished to the Company in writing by Shearing,
with a copy to Paul, Hastings, Janofsky & Walker LLP, 600 Peachtree Street NE,
Suite 2400, Atlanta, Georgia 30308, Attention: Philip J. Marzetti, Esq.
If to Adelphia, Adelphia Building, Main at Water Street, Coudersport,
Pennsylvania 16915, Attention: James P. Rigas, or at such other address or
addresses as may have been furnished to the Company in writing by Adelphia, with
a copy to Paul, Hastings, Janovsky & Walker LLP, 600 Peachtree Street NE, Suite
2400, Atlanta, Georgia 30308, Attention: Philip J. Marzetti, Esq.
Notices provided in accordance with this Section 14(a) shall be deemed
delivered upon personal delivery or two business days after deposit in the mail.
(b) ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings relating to such
subject matter.
(c) AMENDMENTS AND WAIVERS. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), with the
written consent of the Company and the holders of at least a majority of the
Registrable Shares. No waivers of or exceptions to any term, condition or
provision of this Agreement, in any one or more instances, shall be deemed to
be, or construed as, a further or continuing waiver of any such term, condition
or provision.
(d) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
shall be one and the same document.
<PAGE>
(e) SEVERABILITY. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(f) GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the Commonwealth of Massachusetts.
[rest of page intentionally left blank]
<PAGE>
Executed as of the date first written above.
ARCH COMMUNICATIONS GROUP, INC.
By:
Title:
ADELPHIA COMMUNICATIONS CORPORATION
By:
Title:
Lisa-Gaye Shearing
EXHIBIT 99.12
NEWS RELEASE
FOR IMMEDIATE RELEASE CONTACT: Robert W. Lougee, Jr.
Monday, June 8,1998 Vice President, Investor Relations
(508) 870-6771
ARCH ANNOUNCES PLAN TO STRENGTHEN CAPITAL STRUCTURE,
INCREASE FINANCIAL FLEXIBILITY FOR FUTURE GROWTH
INITIATIVE INCLUDES NEW CREDIT FACILITY, PRIVATE EQUITY PLACEMENT,
SENIOR NOTE OFFERING
Westborough, MA (June 8, 1998) --- Arch Communications Group, Inc.
(NASDAQ:APGR), the nation's second largest paging company, today announced that
it has initiated plans to significantly strengthen its capital structure
through: (1) a new $400 million bank credit facility; (2) the private placement
of $23 million to $25 million of convertible preferred stock; (3) a $125 million
issuance of senior notes to qualified institutional buyers (in a Rule 144A
offering); and (4) the merger of certain operating subsidiaries. The initiative
is intended to simplify Arch's capital and legal structure as well as provide
increased financial flexibility for future growth.
"We are extremely pleased to announce this capital restructuring plan," said C.
Edward Baker, Jr., chairman and chief executive officer. "Completion of these
initiatives will substantially increase our financial flexibility and give us
the opportunity to effectively execute our growth strategies. We believe the
commitment of new capital resources clearly represents a strong vote of
confidence in Arch and our business plan, as well as growth prospects for the
paging sector as a whole."
<PAGE>
J. Roy Pottle, Arch executive vice president and chief financial officer, added:
"Obviously, we are very pleased with the continued support of our banks. Most
importantly, the new credit facility eliminates $156 million of principal
payments that otherwise would have been required over the next three years. The
new credit facility requires no principal payments until 2001, and is
considerably more flexible than the existing 3 1/2-year-old facility."
The strengthening of Arch's capital structure is a multi-step process that will
begin with consolidation of the Company's legal structure. Arch Communications
Enterprises, Inc. (ACE), a wholly owned subsidiary of Arch Communications Group,
Inc. (ACG), will merge with the operating subsidiaries of USA Mobile
Communications, Inc. II (USAM) and the surviving legal entity will be renamed
Arch Paging, Inc. (API). Another wholly owned subsidiary of ACG, USAM, will be
renamed Arch Communications, Inc. (ACI) and will own all of the outstanding
capital stock of API. The current operating subsidiaries of ACE will be wholly
owned by API and will continue to exist in their present form.
Arch has received commitments from a group of lenders to provide a $400 million
credit facility to API. The new facility will be comprised of a $175 million
reducing revolver, a $100 million 364-day facility which automatically converts
on the 364th day to a six-year term loan, and an eight-year $125 million term
loan. The reducing revolver and the 364-day/term loan will mature on June 30,
2005, and the $125 million term loan will mature on June 30, 2006. The new
credit facility, which includes one new lender and 12 of the Company's existing
lenders, will be led by The Bank of New York, Toronto Dominion (Texas), Inc.,
and Royal Bank of Canada. The new credit facility will be established through an
amendment and restatement of ACE's existing credit facility.
In addition, Arch has received a commitment from Sandler Capital Management to
purchase $23 million to $25 million of preferred stock convertible into Arch
common stock at an initial conversion price of $5.50 per share. A cumulative
dividend of 8.00% will accrue on the preferred stock, payable at Arch's
discretion in cash or shares of Arch common stock. The preferred stock will
include certain other redemption, voting and preemptive rights and restrictive
provisions. Also, Sandler Managing
<PAGE>
Director John Kornreich will be named to Arch's Board of Directors. Commenting
on the commitment, Kornreich said: "With a greatly improved financial footing,
we think Arch can sustain solid cash flow growth, deleverage its balance sheet,
and participate in the ongoing consolidation of the paging industry."
Founded in 1980, Sandler is a New York-based private investment management firm
with more than $1.4 billion in equity assets under management. The firm
specializes in investments in the telecommunications and media sectors. "We are
delighted to receive financial support from such a highly regarded investment
firm," said Baker, "especially one that strongly favors consolidation among
paging companies. John Kornreich is among the most knowledgeable investors in
this business and we welcome him as a member of the Arch Board."
Finally, ACI will commence a Rule 144A offering of $125 million of senior notes.
Proceeds from the issuance of the senior notes, along with those from the sale
of convertible preferred stock and borrowings under the new credit facility,
will be used to repay bank debt outstanding under the current ACE and USAM
credit facilities. Upon closing of these transactions, the existing USAM credit
facility will be terminated.
The new credit facility, preferred stock placement and senior note issuance are
mutually contingent and subject to certain other customary conditions, and are
expected to be completed simultaneously. The actual timing of these financing
activities will depend on market conditions and other factors. The preferred
stock and senior notes have not been registered under the Securities Act of 1933
and may not be offered or sold in the United States absent registration or an
applicable exemption from registration requirements. This announcement does not
constitute an offer to sell any securities.
Arch Communications Group, Inc., Westborough, MA, is the second largest paging
company in the United States as ranked by annualized operating cash flow. It
provides narrowband wireless messaging services, principally paging, to more
than four million subscribers nationwide through approximately 200 offices and
Company stores. Additional information on Arch is available on the Internet at
www.arch.com.
<PAGE>
Safe harbor statement under the Private Securities Litigation Reform Act of
1995: Statements contained in this news release which are not historical fact,
such as forward-looking statements concerning future financial performance and
growth, involve risks and uncertainties, including those described in the
Company's Annual Report on Form 10-K. Such statements are subject to various
factors that could cause actual results to differ materially from those set
forth in the forward-looking statements. Any forward-looking statements
represent the Company's best judgment as of the date of this release. The
Company disclaims any intent or obligation to update any forward-looking
statements.
Charts To Follow
EXISTING LEGAL & CAPITAL STRUCTURE
Arch Communications Group, Inc.
10 7/8% Senior Discount Notes
6 3/4% Convertible Subordinated Debentures
|
Arch Communications Enterprises, Inc. USA Mobile Communications, Inc. II
("ACE") ("USAM")
$450 Million Credit Facility 9.5% Senior Notes
14.0% Senior Notes
| |
ACE Operating Subsidiaries USAM Operating Subsidiaries
$110 Million Credit Facility
<PAGE>
NEW LEGAL & CAPITAL STRUCTURE
Arch Communications Group, Inc.
10 7/8% Senior Discount Notes
6 3/4% Convertible Subordinated Debentures
|
Arch Communications, Inc.
9.5% Senior Notes
14.0% Senior Notes
New $125 Million Senior Note Issue
|
Arch Paging, Inc.
New $400 Million Credit Facility
|
Former ACE Operating Subsidiaries
EXHIBIT 99.13
NEWS RELEASE
FOR IMMEDIATE RELEASE CONTACT Robert W. Lougee, Jr.
June 25, 1998 Vice President, Investor Relations
(508) 870-6771
ARCH PRICES RULE 144A OFFERING
Westborough, Massachusetts (June 25, 1998) - Arch Communications Group, Inc.,
the nation's second largest paging company, today announced that it has priced
its previously announced Rule 144A note offering. In the offering, which is
being made only to "qualified institutional buyers" under Rule 144A, a
subsidiary of Arch, USA Mobile Communications, Inc. II (to be renamed Arch
Communications, Inc.), is selling $130 million principal amount of 12 3/4%
Senior Notes due 2007 at an initial price to investors of 98.049%.
Proceeds from the sale will be used to refinance existing indebtedness under
credit facilities currently available to Arch Communications Enterprises, Inc.
(ACE) and USA Mobile Communications, Inc. II (USAM). The note offering is part
of Arch's previously announced plan to strengthen its capital structure. Other
elements of the plan, including a new $400 million bank credit facility and a
private placement of $25 million of convertible preferred stock, are expected to
be completed as part of the closing of the note offering, which is currently
scheduled to close on June 29.
The notes have not been registered under the Securities Act of 1933 and may not
be offered or sold in the United States absent registration or an applicable
exemption from registration requirements. This announcement does not constitute
an offer to sell any securities.
Arch Communications Group, Inc., Westborough, MA, is the second largest paging
company in the United States based on operating cash flow. It provides
narrowband wireless messaging services, principally paging, to more than four
million subscribers nationwide through approximately 200 offices and
Company-owned stores. Additional information on Arch is available on the
Internet at WWW.ARCH.COM.
# # #
EXHIBIT 99.14
NEWS RELEASE
FOR IMMEDIATE RELEASE CONTACT: Robert W. Lougee, Jr.
Tuesday, June 30, 1998 Vice President, Investor Relations
(508) 870-6771
ARCH COMPLETES RESTRUCTURING PLAN: CLOSES NEW CREDIT FACILITY,
PRIVATE EQUITY PLACEMENT, SENIOR NOTE OFFERING
Westborough, MA (June 30, 1998) --- Arch Communications Group, Inc.
(NASDAQ:APGR), the nation's second largest paging company, today said it has
completed its previously announced plan to significantly strengthen its capital
structure with the closing of: (1) a new $400 million bank credit facility; (2)
the private placement of $25 million of convertible preferred stock; (3) the
issuance of $130 million of 12 3/4% Senior Notes due 2007; and (4) the
completion of its revised legal structure. The senior notes were issued by
Arch's wholly owned subsidiary, USA Mobile Communications, Inc. II (USAM), which
has been renamed Arch Communications, Inc. (ACI).
"Completion of this restructuring is a tremendous step forward for Arch," said
C. Edward Baker, Jr., chairman and chief executive officer. "It not only
provides us with substantially increased financial flexibility, but gives us the
opportunity to pursue long-term operating strategies and focus on growing
shareholder value." Baker added: "We are especially pleased that these new
commitments reflect a strong vote of confidence both in Arch's growth
opportunities as well as those of the paging industry as a whole."
The new $400 million credit facility, which is available to an indirect wholly
owned subsidiary, Arch Paging, Inc. (API), is comprised of a $175 million
reducing revolver, a $100 million 364-day facility which automatically converts
on the 364th day into a six-year term loan, and an eight-year $125 million term
loan. The reducing revolver and the 364-day/term loan will mature on June 30,
2005,
<PAGE>
and the $125 million term loan will mature on June 30, 2006. The new credit
facility was led by The Bank of New York, Toronto Dominion (Texas), Inc., and
Royal Bank of Canada. The new facility was established through an amendment and
restatement of the prior bank facility of Arch Communications Enterprises, Inc.
(ACE), a wholly owned subsidiary of Arch.
Arch also completed the private placement of $25 million of convertible
preferred stock to partnerships managed by Sandler Capital Management and
certain other investors at an initial conversion price of $5.50 per share of
Arch common stock. A cumulative dividend of 8.00% accrues on the preferred
stock, payable at Arch's discretion in cash or shares of Arch common stock. The
preferred stock includes certain other redemption, voting and preemptive rights
and restrictive provisions. Also, Sandler Managing Director John Kornreich has
been named to the Boards of Directors of Arch and ACI.
In addition, ACI has completed its Senior Note offering. Made only to "qualified
institutional buyers" under Rule 144A, ACI sold $130 million principal amount of
12 3/4% Senior Notes due 2007 at an initial price to investors of 98.049%.
Concurrently with the above transactions, Arch completed the previously
announced consolidation of its legal structure. ACE was merged with the
operating subsidiaries of USAM and the surviving legal entity was renamed API.
USAM was renamed ACI and now owns all of the outstanding capital stock of API.
The former operating subsidiaries of ACE are now wholly owned by API.
J. Roy Pottle, Arch executive vice president and chief financial officer, noted:
"There are many benefits from this restructuring, including the elimination of
$156 million of near-term amortization. Most importantly, however, we now have a
capital structure that is easier to understand and positions Arch to participate
in ongoing industry consolidation."
The senior notes and preferred stock have not been registered under the
Securities Act of 1933 and may not be offered or sold in the United States
absent registration or an applicable exemption from
<PAGE>
registration requirements. This announcement does not constitute an offer to
sell any securities. Arch Communications Group, Inc., Westborough, MA, is the
second largest paging company in the United States based on operating cash flow.
It provides narrowband wireless messaging services, principally paging, to more
than four million subscribers nationwide through approximately 200 offices and
Company-owned stores. Additional information on Arch is available on the
Internet at www.arch.com.
Safe harbor statement under the Private Securities Litigation Reform Act of
1995: Statements contained in this news release which are not historical fact,
such as forward-looking statements concerning future financial performance and
growth, involve risk and uncertainty. Such statements are subject to various
factors that could cause actual results to differ materially from those set
forth in the forward-looking statements. Any forward-looking statements
represent the Company's best judgment as of the date of this release. The
Company disclaims any intent or obligation to update any forward-looking
statements.
# # #
